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cc 2022 AR 10/11 inclusionary housing policy

Vista City Council
October 11, 2022

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® CITY COUNCIL
AGENDA ❑ COMMUNITY DEVELOPMENT COMMISSION
REPORT El SUCCESSOR AGENCY
❑ BUENA SANITATION DISTRICT
❑ JOINT POWERS FINANCING AUTHORITY
Department: Community Development Item No: D1 Prepared by: John Conley, Director Meeting Date: October 11, 2022 Approved by: Patrick Johnson, City Manager Agenda Location: Discussion SUBJECT: INCLUSIONARY HOUSING POLICY
RECOMMENDATION: Discuss the formation of an inclusionary housing policy and provide direction to staff.

CORRELATION TO CITY COUNCIL GOALS: (1) Homelessness & Housing PRIOR ACTION: On April 19, 2022, the City Council discussed an inclusionary housing policy and directed staff to develop an inclusionary housing program requiring 8 percent affordable units for residential complexes of 20 or more units throughout the City and 20 percent affordable units for residential complexes of 20 or more units located in a transit-oriented area, defined as being within three-quarters of a mile of a SPRINTER station, and to allow for density bonus throughout the City (Vote: 3-2, Ritter and Franklin opposed).

A complete list of prior actions is included as Exhibit 5.

STATEMENT ON THE SUBJECT: Inclusionary housing is a City's program to reserve a certain percentage of housing units within new developments for affordable housing. Inclusionary requirements can be imposed as mandatory conditions on new development, typically as a percentage of the total units in the project, or as a voluntary program, typically in exchange for some project benefit. Inclusionary units may be provided onsite or off-site, dependent on the preference of the City. Several jurisdictions further provide the ability for developers to pay an in-lieu fee, for which there are numerous formulas used to establish a fee and differing methods of implementation.

On April 19, 2022, the City Council discussed inclusionary housing and directed staff to develop a program requiring 20 percent inclusionary units within the Transit-Oriented Development (TOD) areas defined as within three-quarters of a mile from SPRINTER stations and eight percent inclusionary units in all other areas Citywide. The proposed inclusionary units would be required at the "low income" level, which is between 60 to 80 percent of Area Median Income (AMI) for the County. Following City Council's direction, staff contracted with Keyser Marston Associates, Inc. (KMA), to prepare a study evaluating potential in-lieu fees for a new inclusionary housing policy. The draft KMA study is included as Exhibit 1.

Some issues have been identified following preparation of the in-lieu fee study that staff would like to discuss with the City Council to obtain further direction prior to presentation of a formal inclusionary housing policy. Staff is requesting the City Council's input related to the following:

ACTION: Discussed the formation of an inclusionary housing policy and provided direction to staff.

Vote: No vote
Clerk/Se�retary
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MEETING DATE: October 11, 2022 PAGE 2
SUBJECT: INCLUSIONARY HOUSING POLICY

1. Assembly Bill 1505 (AB 1505) (Bloom, Chiu and Gloria), effective January 1, 2018, requires California Department of Housing and Community Development (HCD) to review any inclusionary housing policy that establishes a requirement exceeding 15 percent affordable (at 80 percent or less of AMI) to determine if the policy unduly constrains the production of housing. A summary of the HCD review process is attached as Exhibit 2. This review process would require staff to prepare an economic feasibility study meeting HCD's requirements, which is anticipated to cost approximately $50,000 and take up to four months to complete. Based on the direction staff received in April, the City's new inclusionary housing policy (within the TOD areas) would exceed 15 percent and would be subject to HCD's review. Therefore, staff recommends setting the inclusionary requirement in TOD areas to 15 percent. If City Council opts to maintain a 20 percent inclusionary requirement, staff will prepare an economic feasibility study utilizing the City's Affordable Housing funds for HCD's review.

2. The City Council directed staff to prepare an inclusionary policy for low-income units (60-80 percent of AMI) as well as providing information related to moderate-income units (80-120 percent of AMI). Staff is requesting the City Council's input related to the provision of low-income units versus moderate-income units in the forthcoming policy. Based on the draft KMA study, the recommended in-lieu fee for a low- income inclusionary unit within the TOD areas is between $30,000 to $35,000 per unit (or $40 to $45 per net square foot), and within the remainder of the City is recommended at$10,000 per unit (or $10 to $15 per net square foot). The recommended in-lieu fee for a moderate-income inclusionary unit within the TOD areas is between $20,000 to $25,000 per unit (or $25 to $35 per net square foot), and within the remainder of the City is recommended between $3,000 to $6,000 per unit (or$3 to $6 per net square foot). The recommended in-lieu fees assume the ability to develop affordable units offsite.

3. The prior inclusionary housing policy (rescinded in 2015) required full inclusionary units to be provided on the project site and allowed for the payment of an in-lieu fee for partial units. Based on the draft KMA study, staff recommends allowing an in-lieu fee for offsite affordable housing production due to the high cost of constructing affordable units in a market rate residential development. Any in-lieu fees that are collected will be allocated for affordable housing.

4. TOD areas are traditionally defined as within one-half mile of a transit center. In the April discussion, the City Council asked staff to include proposed developments within a three-quarter mile radius of the SPRINTER stations as TOD projects. Maps depicting the one-half mile and three-quarter mile radiuses are attached as Exhibit 3. Staff is requesting the City Council's confirmation of a preferred TOD radius for development of the inclusionary housing policy.

5. There are two active development applications in process with the Planning Division that are zoned for multi-family use, are greater than 20 units, and have not received approval, as reflected in Exhibit 4.

This list does not include: (1) projects requesting a General Plan Amendment or Zone Change since the City Council may require inclusionary housing as a condition of a land use change; or (2) projects that have submitted a Preliminary Application under Senate Bill 330 (SB 330) (Skinner) since those projects are exempt from any changes in the Development Code as of their submittal date. Staff recommends that the inclusionary housing requirements apply to projects making formal application submittals after the inclusionary ordinance has been codified.

FISCAL IMPACT: There is no direct fiscal impact associated with the staff recommendation. Potential fiscal impacts will be evaluated following direction from the City Council.

EXHIBITS:

1. Draft Inclusionary Housing In-Lieu Fee Study, KMA, Inc. (September 2022) (page 3)

2. HCD Memo Regarding Implementation of AB 1505 (page 78)

3. Maps of Transit-Oriented Development (TOD) Areas with '/2-mile and 3/4-mile radiuses (page 88)

4. Active Planning Projects for Inclusionary Policy Eligibility (page 93)

5. Prior City Council Actions (page 94)
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INCLUSIONARY HOUSING IN-LIEU FEE STUDY
Prepared for:

City of Vista
4q
Prepared by:

Keyser Marston Associates, Inc.

September 2022
EXHIBIT 1
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TABLE OF CONTENTS
I. Introduction....................................................................................................................................... 1 II. Key Findings.......................................................................................................................................3 III. In-Lieu Fee Financial Analysis: TOD Areas........................................................................................7 IV. In-Lieu Fee Financial Analysis: Citywide.........................................................................................13 V. Limiting Conditions..........................................................................................................................18 A

APPENDICES
Appendix A Comparison of Affordable Housing Fees,San Diego County A I
Appendix B Key Assumptions and Finding—TOD Areas
Appendix C Key Assumptions and Findings—Citywide
Appendix D In-Lieu Fee Financial Analysis—TOD Areas Approach 1: On-Site Production
Appendix E In-Lieu Fee Financial Analysis—TOD Areas Approach 2: Off-Site Production
Appendix F In-Lieu Fee Financial Analysis—Citywide Approach 1: On-Site Production
Appendix G In-Lieu Fee Financial Analysis—Citywide Approach 2: Off-Site Production
Appendix H Estimate of Affordable Rents
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I. INTRODUCTION
A. Objective
This report presents the economic analysis prepared by Keyser Marston Associates, Inc. (KMA) for the City of Vista (City)to evaluate the potential of establishing an inclusionary housing in-lieu fee for the City's Transit Oriented District (TOD) Areas and the balance of the City.

B. City of Vista Existing Inclusionary Housing Ordinance As background, in 1985 the City adopted a mandatory inclusionary housing program that required six percent (6%) of the units in multi-family residential projects be restricted as affordable housing. In 2006, the City further detailed the policy stating that the inclusionary units must be provided on site and allowed for payment of an in-lieu fee for partial units only. Based on a study conducted by KMA in 2006,the in- lieu fee for partial units was established at$13,000 per market-rate rental unit and $20,000 per market- rate for-sale unit. In 2015,the City's inclusionary housing policy was repealed.

The City is currently considering the re-instatement of the City's inclusionary housing policy. As part of this effort,the City seeks to review current in-lieu fee and impact fee levels charged in local jurisdictions and establish an updated inclusionary housing in-lieu fee for both the City as a whole and the TOD Areas.

The TOD Areas are generally those areas within one-half mile radius from the City's four (4)transit centers: (1) Melrose Drive Station, (2)Vista Transit Center, (3) Civic Center Vista Station, and (4) Buena Creek Station. Under the current proposal,the inclusionary requirement would be set at 20% Low Income for projects in the TOD Areas and 8% Low Income for projects in the balance of the City.

It should be noted that under Assembly Bill 1505 (AB 1505), signed into law September 29, 2017, inclusionary ordinances that require more than 15%of total units to be rented by Low Income households are subject to State of California Department of Housing and Community Development(HCD) review.

Under AB 1505, HCD may then request that a city provide an economic feasibility study as evidence that a 20% rental inclusionary requirement does not unduly constrain the production of housing. The KMA in-lieu fee economic analysis for the TOD Areas is not intended to meet the criteria established by HCD for an economic feasibility study and therefore should not be treated as such.

C. Methodology
KMA performed the following key work tasks in completing this analysis.

1. Compiled data pertaining to inclusionary housing in-lieu fees and/or affordable housing impact fees currently being charged by other cities in San Diego County.

2. Reviewed market trends data, land values, development cost estimates, and other industry standards for rental residential development.

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3. Formulated multi-family residential development prototypes for the TOD Areas and Citywide in coordination with City staff.

4. Prepared pro forma financial models to estimate the residual land value generated by each residential prototype under three scenarios: (a) at 100%market-rate; (b) an inclusionary requirement of 20%for the TOD Areas; and (c) an inclusionary requirement of 8%for the balance of the City.

D. Organization of Report
This report is organized into the following key sections:
• Following this Introduction, Section II presents the KMA key findings. • Section III presents the financial analysis for an in-lieu fee for the TOD Areas. • Section IV presents the financial analysis for an in-lieu fee Citywide. • Section V presents limiting conditions pertaining to this report.

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II. KEY FINDINGS
A. Potential Fee Levels
The City requested that KMA analyze potential inclusionary in-lieu fee levels within the TOD Areas and the balance of the City. In order to provide the City with a framework for setting possible fee levels, KMA considered two approaches: (1)the economic impact of incorporating affordable housing on-site; and (2) the funding level required for the market-rate developer or City to implement targeted inclusionary housing production in an off-site location.

Potential Fee Levels—Low Income
As presented in Table II-1, based on the findings from the two approaches noted above, within the TOD Areas, the City may wish to consider an in-lieu fee of up between $30,000 to $35,000 per market-rate unit, or between $40 and $45 per square foot (SF) of market-rate residential living area. In the balance of the City,the City may wish to consider a potential fee of up to$10,000 per market-rate unit, or between $10 and $15 per SF of market-rate residential living area.

Table II-1: Potential Fee Levels—Low Income IFF
TOD Areas Citywide
Per Market-Rate Unit $30,000 to $35,000 $10,000 Per Market-Rate Net SF $40 to $45 $10 to$15 As noted above,the fee levels are expressed on both a per-unit and per-SF basis. A per-SF in-lieu fee, as compared to a flat fee approach, recognizes the various residential unit sizes produced both within TOD Areas and Citywide and avoids overly burdening the production of small units.

Potential Fee Levels—Moderate Income
KMA also prepared an alternative evaluation of potential fee levels assuming an inclusionary requirement of 20% Moderate Income for the TOD Areas and 8% Moderate Income for the balance of the City using the same framework and assumptions described in Sections III and IV of this report. As presented in Table II- 2, the potential fee levels assuming a Moderate Income inclusionary requirement within the TOD Areas are estimated to range between $20,000 to$25,000 per market-rate unit, or between $25 and $35 per SF of market-rate residential living area. In the balance of the City, potential fee levels were estimated to range between $3,000 and $6,000 per market-rate unit, or between $3 and $6 per SF of market-rate residential living area.

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Table II-2: Potential Fee Levels—Moderate Income
TOD Areas
Per Market-Rate Unit $20,000 to $25,000 $3,000 to $6,000 Per Market-Rate Net SF $25 to $35 $3 to$6
Potential Fee Level Adjustments
Some jurisdictions apply an automatic adjustment to their in-lieu fee on an annual basis. This provision ensures that the fees charged will adjust annually to reflect changes in housing production costs. A review of potential indices that could be used to adjust the fee in the future is presented in Table II-3.

Table II-3: Potential Indices for Fee Level Adjustment
Index Concept/Description Advantages Disadvantages #1 Fees go up or down based on Very well established. May not trend with changes building construction costs. in non-construction Building Cost Consistent fee burden development costs (land, Index (BCI) Published by Engineering News over time relative to other soft costs).

Record (ENR). construction costs.

May not trend with cost to
Available at national average and produce affordable units. for 20 cities (not Vista or San
Diego; Los Angeles is nearest city Only addresses cost side of available). the equation.
#2 Also published by ENR and Same as above. Same as above. similar to Building Cost Index but
Construction with different weighting of labor
Costs Index and material cost categories.
(CCI)
#3 Published by the U.S. Bureau of Very well established. May not trend with:

Labor Statistics. Available for
Consumer Price major metro areas including San Generally tracks with - Construction costs Index (CPI) Diego. inflation. (consistent fee burden) Produced by neutral
or
governmental agency. - Cost to produce
affordable units
(consistent ability to
mitigate impacts)
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As shown in Table II-4, between 2006 and 2021,the average annual growth rate for the various indices ranged between 2.28% and 3.01%. Had the annual growth rates from these indices been applied to the City's former partial unit in-lieu fees of$13,000 per market-rate rental unit and $20,000 per market-rate for-sale unit in 2006,the in-lieu fees would have increased to between $18,224 and $20,296 per market- rate rental unit and between $28,037 and $31,225 per market-rate for-sale unit in 2021.

Table II-4: Average Annual Growth Rate Applied to 2006 In-Lieu Fee Levels 1110[• Consumer Price
TIMM Index(CPI)
Former In-Lieu Fee, 2006
Rental $13,000 $13,000 $13,000
For-Sale $20,000 $20,000 $20,000
Average Annual Growth

3.01% 2.61% 2.28%
Rate, 2006-2021
Estimated In-Lieu Fee, 2021
Rental $20,296 $19,127 $18,224
For-Sale $31,225 $29,426 $28,037
B. Survey of San Diego County Jurisdictions
KMA conducted a survey of inclusionary in-lieu fees and affordable housing impact fees in other San Diego County communities. The survey is summarized in Table II-5 in comparison with potential fee levels for the City of Vista. Detailed information on each jurisdiction's inclusionary program and fee levels is presented in Appendix A.

Table II-5: Compariso,. of Affo. 'able Housing Fees,Vista vs. San Diego County Jurisdictions San Diego County
City of Vista Jurisdictions
(range of findings) (1)
Inclusionary Housing
N/A 1 unit - 50 units
Required Threshold
% of Affordable Units 20%-TOD Areas
10% - 20%
Required 8%-Citywide
In-Lieu Fee Option
Available Available
N/A to rental or to all
fractional project of
units only all sizes
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Table II-5: Comparison of Affordable Housing Fees,Vista vs. San Diego County Jurisdictions San Diego County
City of Vista Jurisdictions
(range of findings) (1)
In-Lieu Fee Amount Potential Fee Levels:
• TOD Areas: $30,000 to $35,000/unit $500 to $9,300/Unit $40 to 45/SF $8.82/SF to $31.91/SF
• Citywide: $10,000/unit
$10 to$15/SF
(1) See Appendix A for a detailed survey of San Diego County jurisdictions.

Inclusionary housing programs and in-lieu fees vary widely throughout the County in terms of fee levels and threshold requirements for the payment of in-lieu fees. Key factors for these variations appear to relate to local housing market conditions, real estate development trends, State-mandated affordable housing obligations, and policy direction from public officials. r
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III. IN-LIEU FEE FINANCIAL ANALYSIS: TOD AREAS
A. Residential Development Prototypes
Table III-1 provides a summary of the residential development prototypes identified for the TOD Areas in- lieu fee financial analysis. The TOD Areas prototypes are illustrative of the types of development projects occurring and anticipated to occur in the TOD Areas of the City. Three new construction rental residential prototypes were identified based on discussion with City staff. While this level of feasibility analysis is useful for conceptual planning purposes,the actual circumstances for individual projects—physical, planning, market, financial, and other factors—will likely vary from the findings presented in this report.

Table III-1: Project Descriptions for Development Prototypes—TOD Areas RENTAL
• Stacked Flats over
• Podium Parking
Site Area 0.75 Acres 1.0 Acres 1.0 Acres Density(Units/Acre) 44.0 75.0 100.0
Number of Units 33 Units 75 Units 100 Units 1 and 2 1 and 2 1 and 2
Unit Mix Bedrooms Bedrooms Bedrooms
Stories 3 Stories 4 Stories 5 Stories
Average Unit Size 850 SF 785 SF 720 SF
Retail SF --- --- 10,000 SF
B. Projected Market Rents
KMA surveyed new rental developments in TOD Areas, City, and surrounding trade area. The purpose of the survey was to derive estimates of the currently achievable market rental rates for the types of developments likely to be constructed in the TOD Areas. The base case market-rate monthly rent estimates that are used in the TOD Areas financial feasibility analyses are presented in Table III-2.

Table III-2: Projected Market Rents—TOD Areas
RENTAL
Stacked Flats over e Flats over
Tuck-Under Parking Podium/Subterranean
Average$/SF $3.50/SF $3.75/SF $4.00/SF Average Unit Size 850 SF 785 SF 720 SF
Average Market $2 820 $2,940 $2,880
Monthly Rent
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C. Affordable Rent Calculation
For the purposes of this financial analysis,the maximum affordable rents for the income-restricted units were calculated based on the standards imposed by California Health and Safety Code Section 50053. The detailed calculations are presented in Appendix H; the key assumptions and results are summarized below.
• The household income information used in the calculations of affordable rent were based on 2022 income statistics for San Diego County as a whole. The household incomes are published annually by HUD.
• The household size appropriate for the unit based on one additional household person per bedroom. • Maximum monthly rental housing payment calculated as equal to 1/12 x 30%x 60%AMI (adjusted for household size), less adjustments for certain tenant-paid utilities. • Utilities based on the County of San Diego utility allowance schedule, effective December 1, 2021, and the assumption that the tenant's utility costs are comprised of electric cooking, electric water heating, electric heating, and other basic electric services.

The resulting average rents for each of the TOD Areas residential prototypes are presented in Table III-3.

Table III-3: Affordable Rents—Low Income—TOD Areas
RENTAL
rwa i In=
Average Affordable Monthly "$1,298 $1,306 7 $1,304 Rent @ Low Income(1)
(1) Reflects average rent(weighted)for one-and two-bedroom units at Low Income.

D. Approach 1: Economic Impact of Incorporating Affordable Housing On-Site To estimate the economic impact of incorporating inclusionary housing requirements on-site, KMA prepared financial pro forma models for each TOD Areas residential development prototype. The financial pro forma models present comparative impacts of: (a) a 100% market-rate residential development, as compared to (b)the City's proposed inclusionary housing requirement. Appendix D provides the detailed pro forma analyses prepared by KMA for each TOD Areas residential development prototype. Appendix D is organized as follows:

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Table 1 Project Description
Table 2 Estimate of Development Costs
Tables 3, 4, and 5 Estimate of Net Operating Income Tables 6, 7, and 8 Estimate of Residual Land Value
The financial pro forma models estimate the residual land value for: (1) a base case consisting of a 100% market-rate development; and (2) a development that complies with an inclusionary requirement, i.e., 20% at Low Income. The base case residual land value outcome can then be measured against the residual land value that is generated when the 20% Low Income requirement is imposed. The economic impact of incorporating the City's proposed inclusionary requirement on-site, is summarized in Table III-4.

Table III-4: Economic Impact of Incorporating Affordable Housing On-Site—TOD Areas RENTAL
Residual Land Value Stacked Flats over
Per Unit Podium Parking
100%Market-Rate $80,000 $38,000 $17,000 $45,000 80%Market-Rate/20%
Low Income $7,000 ($31,000) ($50,000) ($25,00On) Economic Impact of Incorporating Affordable Housing On-Site Per Market-Rate Unit ($73,000) ($69,000) ($67,000) ($70,000) Per Market-Rate Net SF ($86) ($88) ($93) ($89) As shown in Table III-4, the economic impact of including 20% Low Income units on-site in the TOD Areas are estimated to range from $67,000 to $73,000 per unit, or$86 to $93 per SF of market-rate residential living area.

E. Approach 2: Funding Level Required to Implement Inclusionary Housing Production in an Off-Site Location
KMA also prepared estimates of the affordability gaps associated with developing affordable housing in an off-site location. The purpose of this financial analysis was to estimate the funding gap that would be required for either a market-rate residential developer or the City to create the targeted inclusionary housing production in a separate off-site location.

As detailed in Appendix E,the analysis assumed the off-site affordable housing project to be rental apartments, in a stacked flat configuration over podium parking, consisting of 86 units on a 1.0-acre site.

KMA estimated the development costs, operating budget, and anticipated funding sources for the off-site affordable housing development prototype.

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The KMA analysis assumed that the affordable development is financed with 9%or 4% Low Income Housing Tax Credits (Tax Credits). The development budget for the 4%Tax Credit scenario was also assumed to include the payment of prevailing wages due to the inclusion of other State funding.

Additional key assumptions used in the affordability gap analysis are as follows:
• Total development costs, excluding acquisition, estimated at$502,000 per unit. • Acquisition costs estimated at$38,000 per unit.
• Monthly rents at an average of 50%AMI in order to competitively apply for Tax Credits.

The resulting stabilized annual net operating income generated by the affordable units are shown in Table III-5.

Table III-5: Off-Site Affordable Units—Net Operating Income—TOD Areas Per Unit Per Year 9%Tax Credits 4%Tax Credits Average Monthly Rent, 2022 $1,100 $1,100 ----------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------ Effective Gross Income $13,291 $13,291
(Less) Operating Expenses ($6,093) ($6,953)
Net Operating Income $7,198 $6,338
Funding sources available for the affordable units are assumed to include a combination of first mortgage debt,Tax Credit equity investment, State funding sources, and deferred developer fee/General Partner equity contribution. These potential funding sources are itemized in Table III-6.

Table III-6: Off-Site Affordable Units—Sources of Funds per Unit—TOD Areas 9%Tax Credits 4%Tax Credits
Supportable Permanent Loan $97,000 $97,000 Tax Credit Equity Investment $265,000 $238,000 Other State Funding Sources $0 $75,000
Deferred Developer Fee/General Partner Equity $0 $39,000 Income During Lease-Up $0 $0
Total Sources of Funds $363,000 $450,000
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As shown in Table III-7,the average affordability gap for the affordable units is estimated to average $133,000 per affordable unit. These figures are calculated as the difference between total development costs and total funding sources.

Table III-7: Off-Site Affordable Units—Affordability Gap per Unit—TOD Areas 9%Tax Credits 4%Tax Credits
Total Sources of Funds $363,000 $450,000 7($$ 07,000
(Less)Total Development Costs ($489,000) ($590,000) 540,000) (Less)Acquisition Costs ($38,000) ($38,000) ($38,000) Affordability Gap per Affordable Unit ($126,000) ($140,000) ($133,000) As shown above, KMA estimates that an affordable rental unit developed in TOD Areas has an estimated average financing gap of$133,000. In other words,for the market-rate developer or City to facilitate creation of off-site Low Income units in TOD Areas, it would need to contribute $133,000 per affordable rental unit. As shown in Table III-8, assuming a 20% inclusionary requirement,the required number of off- site Low Income units is calculated against the total number of market-rate units approved plus the inclusionary units produced off-site. This equates to $33,250 per market-rate unit developed (i.e., $133,000_80%x 20%).

Table III-8: Estimate of Funding Gap for Off-Site Low-Income Units—TOD Areas Affordability Gap per Off-Site Low Income Unit ($133,000) Per Market-Rate Unit
@ 20% Inclusionary Set-Aside ($33,250)
This funding gap outcome can be expressed on both a per-unit basis and per-SF basis relative to the market-rate residential development. KMA estimates that the City would need to receive an in-lieu fee of $33,250 per market-rate unit, or a per-SF fee ranging between $39 and $46, depending on the market-rate prototype, or an average of$43 per SF living area, as shown in Table III-9.

Table III-9: Funding Level Required to Create Affordable Housing Off-Site—TOD Areas RENTAL
Stacked Flats over
• Podium Parking • ., -
Per Market-Rate Unit 0 $33,250 $33,250 $33,250 $331250 Per Market-Rate Net SF $39 $42 $46 $43
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F. Range of Potential In-Lieu Fees
As summarized in Table III-10, in view of Approaches 1 and 2 above,the City may wish to consider a TOD Areas in-lieu fee of$30,000 to $35,000 per market-rate unit, or between $40 and $45 per SF of market- rate residential living area.

Table III-10: Potential Fee Levels—20% Low Income—TOD Areas Approach to Setting Fee Levels
Potential
Approach 1: Approach 2: Fee Levels
On-Site Production Off-Site Production
Per Market-Rate Unit Average: $70,000 $33,250 $30,000 to$35,000 Per Market-Rate Net SF Average: $89 Average: $43 $40 to$45 This fee range is based on the off-site production approach, rather than the on-site production approach. As shown in the table,the on-site production approach results in an extremely high in-lieu fee that would be infeasible for most market-rate projects. A fee of this magnitude would likely cause a slowdown or decline in market-rate multi-family housing development in the TOD Areas. It should be noted that using the off-site production approach as the benchmark results in an in-lieu fee that is higher than existing affordable housing fees throughout the County.

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IV. IN-LIEU FEE FINANCIAL ANALYSIS: CITYWIDE
A. Residential Development Prototypes
Table IV-1 provides a summary of the residential development prototypes identified for the Citywide in- lieu fee financial analysis. The Citywide prototypes are illustrative of the types of development projects occurring, and anticipated to occur, outside of the TOD Areas. Three (3) new construction rental residential prototypes were identified based on discussions with City staff. While this level of feasibility analysis is useful for conceptual planning purposes,the actual circumstances for individual projects— physical, planning, market,financial, and other factors—will likely vary from the findings presented in this report.

ProjectTable IV-1: .ns for Development • .

RENTAL
Garden Apartments
Site Area 6.0 Acres 7 2.5 Acres 3.0 Acres Density(Units/Acre) 20.0 40.0 60.0
Number of Units 120 Units 100 Units 180 Units 1, 2,and 3 1 and 2 1, 2,and 3
Unit Mix Bedrooms Bedrooms Bedrooms
Stories 2-3 Stories 3 Stories 4-5 Stories
Average Unit Size 1,015 SF 850 SF 950 SF B. Projected Market Rents
KMA surveyed new rental developments throughout the City and trade area. The purpose of the survey was to derive estimates of the currently achievable rental rates for the types of developments likely to be constructed in the City. The base case market-rate monthly rent estimates that are used in the Citywide financial feasibility analyses are presented in Table IV-2.

RENTAL
Garden Stacked Flats over Stacked Flats with
Apartments Tuck-Under Parking Wrap Parking
Average$/SF $2.78/SF $3.08/SF $3.27/SF
Average Unit Size 1,015 SF 850 SF 950 SF
Average Market
Monthly Rent $2,820 $2,620 $3,110
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C. Affordable Rent Calculation
The maximum affordable rents for the income-restricted units in the City used the same standards, assumptions, and calculations described in Section III for the TOD Areas. The detailed calculations are presented in Appendix H and the resulting average affordable rents for the Citywide residential development prototypes are presented in Table IV-3.

Table IV-3: Affordable Rents-Low Income-Citywide
RENTAL
Garden Stacked Flats over Stacked Flats with
Apartments Parking
Average Affordable Monthly $1,333 $11
313 $1,333
Rent @ Low Income(1)
(1) Reflects average rent(weighted)for one-,two-,and/or three-bedroom units at Low Income.

D. Approach 1: Economic Impact of Incorporating Affordable Housing On-Site To estimate the economic impact of incorporating inclusionary housing requirements on-site, KMA prepared financial pro forma models for each Citywide residential development prototype. The financial pro forma models present comparative impacts of: (a) a 100% market-rate residential development, as compared to (b) a residential development with an inclusionary housing requirement. Appendix F provides the detailed pro forma analyses for each Citywide residential development prototype.

Each attachment displays a financial pro forma model estimating the residual land value for: (1) a base case consisting of a 100% market-rate development; and (2) a development that assumes an inclusionary requirement, i.e., 8% at Low Income. The base case residual land value outcome can then be measured against the residual land value that is generated when the 8% Low Income requirement is imposed. The economic impact of incorporating the City's proposed inclusionary requirement on-site is summarized in Table IV-4.

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RENTAL
Garden
Residual Land Value Per Unit Apartments '
100%Market-Rate $105,000 $63,000 $57,000 $75,000 92%Market-Rate/8%Low 7
$76,000 $37,000 $15,000 $43,000
Income
Economic Impact of Incorporating Affordable Housing On-Site Per Market-Rate Unit ($29,000) ($26,000) ($42,000) ($32,000) Per Market-Rate Net SF ($29) ($31) ($44) ($34) As shown in Table IV-4,the economic impact of including 8% Low Income units on-site Citywide is estimated to range from $26,000 to$42,000 per unit, or$29 to$44 per SF, of market-rate residential living area.

E. Approach 2: Funding Level Required to Implement Inclusionary Housing Production in an Off-Site Location
KMA prepared estimates of the affordability gaps associated with developing affordable housing in an off- site location. The purpose of this financial analysis was to estimate the funding gap that would be required for either a market-rate residential developer or the City to create the targeted inclusionary housing production in a separate off-site location.

As detailed in Appendix G, the analysis assumed the off-site affordable housing project to be rental apartments, in a stacked flat configuration over tuck-under parking, consisting of 78 units on a 1.75-acre site. KMA estimated the development costs, operating budget, and anticipated funding sources for this off-site affordable housing development prototype. The KMA analysis assumed that the affordable development is financed with either 9%or 4%Tax Credits.

As shown in Table IV-5,the average affordability gap for the affordable units is estimated at$123,000 per affordable unit. This figure is calculated as the difference between total development costs and total funding sources.

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• . • • .T. . . . • Titen,I
9%Tax Credits 4%Ta7Creed�its6j
7otalSources of Funds $334,000 $412,000 $373,000 (Less)Total Development Costs ($395,000) ($469,000) ($432,000) (Less)Acquisition Costs ($63,000) ($63,000) ($63,000) Affordability Gap per Affordable Unit ($124,000) ($121,000) ($123,000) As shown above, KMA estimates that an affordable rental unit developed outside of the TOD Areas has an estimated financing gap of$123,000. In other words,for the market-rate developer or City to facilitate creation of off-site Low Income units Citywide, it would need to contribute $123,000 per affordable rental unit. As shown in Table IV-6, assuming an 8% inclusionary requirement, the required number of off-site Low Income units is calculated against the total number of market-rate units approved plus the inclusionary units produced. This equates to $10,700 per market-rate unit developed (i.e., $123,000 92%x 8%).

Off-SiteTable IV-6: Estimate of Funding Gap for
Affordability Gap per Off-Site Low-Income Unit ($123,000) Per Market-Rate Unit
@ 8% Inclusionary Set-Aside ($10,700)
This funding gap outcome can be expressed on both a per-unit basis and per-SF basis relative to the market-rate residential development. KMA estimates that the City would need to receive an in-lieu fee ranging from $11 to$13 per SF, depending on the market-rate prototype, or an average of$11 per SF market-rate residential living area, as shown in Table IV-7. •
RENTAL
Garden
7 Apartments WrTlam I. I '
Per Market-Rate Unit $10,700 $10,700 $10,700 $10,700 Per Market-Rate Net SF $11 $13 $11 $11
F. Range of Potential In-Lieu Fees
As summarized in Table IV-8, in view of Approaches 1 and 2 above, the City may wish to consider a Citywide in-lieu fee of$10,000 per unit, or between $10 and $15 per SF of market-rate residential living area.

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Approach to Setting Fee Levels
Potential
Approach 1: Approach 2:

Fee Levels
On-Site Production Off-Site Production
Per Market-Rate Unit Average: $32,000 $10,700 $10,000 Per Market-Rate Net SF Average: $34 Average: $11 $10 to$15 This fee range is based on the off-site production approach, rather than the on-site production approach. As shown in the table,the on-site production approach results in a much higher in-lieu fee that could be challenging for some Citywide market-rate projects. Even setting the in-lieu fee using the off-site production approach results in a fee level as the benchmark results in an in-lieu fee that is higher.

V
Y
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V. LIMITING CONDITIONS

1. The analysis contained in this document is based, in part, on data from secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While KMA believes that these sources are reliable, we cannot guarantee their accuracy.

2. The analysis assumes that neither the local nor national economy will experience a major recession. If an unforeseen change occurs in the economy,the conclusions contained herein may no longer be valid.

3. The findings are based on economic rather than political considerations. Therefore,they should be construed neither as a representation nor opinion that government approvals for development can be secured.

4. Development opportunities are assumed to be achievable during the specified time frame. A change in development schedule requires that the conclusions contained herein be reviewed for validity.

5. The analysis, opinions, recommendations and conclusions of this document are KMA's informed judgment based on market and economic conditions as of the date of this report. Due to the volatility of market conditions and complex dynamics influencing the economic conditions of the building and development industry, conclusions and recommended actions contained herein should not be relied upon as sole input for final business decisions regarding current and future development and planning.

6. Any estimates of development costs, capitalization rates, income and/or expense projections are based on the best available project-specific data as well as the experiences of similar projects. They are not intended to be projections of the future for the specific project. No warranty or representation is made that any of the estimates or projections will actually materialize.

7. KMA is not advising or recommending any action be taken by City of Vista with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing,terms, and other similar matters concerning such financial products or issues).

8. KMA is not acting as a Municipal Advisor to the City of Vista and does not assume any fiduciary duty hereunder, including,without limitation, a fiduciary duty to the City of Vista pursuant to Section 15B of the Exchange Act with respect to the services provided hereunder and any information and material contained in KMA's work product.

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9. The City of Vista shall discuss any such information and material contained in KMA's work product with any and all internal and/or external advisors and experts, including its own municipal advisors, that it deems appropriate before acting on the information and material.

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APPENDICES
Appendix A Comparison of Affordable Housing Fees,San Diego County Appendix B Key Assumptions and Findings-TOD Areas
Appendix C Key Assumptions and Findings-Citywide
Appendix D In-Lieu Fee Financial Analysis-TOD Areas Approach 1: On-Site Production (N
Appendix E In-Lieu Fee Financial Analysis-TOD Areas Approach 2: Off-Site Production
Appendix F In-Lieu Fee Financial Analysis-Citywide
Approach 1: On-Site Production
ilI
Appendix G In-Lieu Fee Financial Analysis-Citywide
Approach 2: Off-Site Production
Appendix H Estimate of Affordable Rents
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APPENDIX A
Comparison of Affordable Housing Fees
San Diego County
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TABLE A-1

COMPARISON OF AFFORDABLE HOUSING FEES,SAN DIEGO COUNTY

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Affordable Housing Fee
4i Amount Per
Rental For-Sale Project Size %Affordable Fee Option Project Size Threshold Fee Type Market-Rate Unit or Threshold Units Required
Market-Rate SF
Carlsbad Yes Yes 7 units 15%@ Low Income Yes Available to In-Lieu Fee $15/SF projects up to 6 units
Chula Vista(1) Yes Yes 50 units 10% Yes Available to In-Lieu Fee varies by project (5%Low Income projects of all sizes;
5%Moderate Income) <50 units exempt
Coronado Yes Yes 2 units Rental Yes Available to In-Lieu Fee $7,000/Unit 20%@ Low Income projects of all sizes
----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ For-Sale Yes Available to In-Lieu Fee $7,000/Unit 20%@ Moderate Income projects of all sizes
Del Mar Yes Yes 2-5 units 1 rental unit @ Low Income Yes Available to In-Lieu Fee $31.91/SF projects up to 5 units
------------------- ----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ 6-9 units 1 rental unit @ Low Income None None None None ------------------- ----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ 10-19 units 20%rental units @ Low None None None None Income(at least 1 unit @ Very
Low Income)
------------------- ----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ 20-29 units 20%rental units @ Low None None None None Income(at least 1 unit @ Very
Low Income and 1 unit at
Extremely Low Income)
30+units 20%rental units @ Low None None None None Income(at least 2 units @
Very Low Income and 2 units
at Extremely Low Income)
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TABLE A-1

COMPARISON OF AFFORDABLE HOUSING FEES,SAN DIEGO COUNTY

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Affordable Housing Fee
Amount Per
Rental For-Sale Project Size %Affordable Fee Option Project Size Threshold Fee Type Market-Rate Unit or Threshold Units Required
Market-Rate SF
Encinitas Yes Yes 7 units 15%@ Very Low Income Yes Available to In-Lieu Fee $20/SF or 20%Low Income projects up to 6 units and
fractional units
Escondido No No None None None None None None Requirement Requirement
Oceanside Yes Yes 3 units Rental Yes Available to In-Lieu Fee $8.82/SF 10%@ Low Income projects of all sizes
----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ For-Sale Yes Available to In-Lieu Fee $8.82/SF 10%@ Low or projects of all sizes
Moderate Income
Poway Yes Yes 1 unit Rental Yes Available to projects In-Lieu Fee $500/unit(3) 15%@ Very Low Income of all sizes
----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ For-Sale Yes Available to projects In-Lieu Fee $500/unit(3) 15%@ Low Income or of all sizes
20%@ Moderate Income
San Diego(2) Yes Yes 10 units Rental Yes Available to projects of all sizes; In-Lieu Fee $25/SF Outside FUA 10%@ 60%AMI <10 units exempt
For-Sale Yes Available to projects of all sizes; In-Lieu Fee $25/SF 10%@ 100%AMI or <10 units exempt
15%@ 120%AM I
San Diego
Inside FUA Yes Yes 2 units 20%@ 65%AMI or less None None None None Prepared by:Keyser Marston Associates,Inc.

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TABLE A-1

COMPARISON OF AFFORDABLE HOUSING FEES,SAN DIEGO COUNTY

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
.• Affordable Housing Fee
Amount Per
Rental For-Sale Project Size %Affordable Fee Option Project Size Threshold Fee Type Market-Rate Unit or 7 Threshold Units Required
Market-Rate SF
San Marcos No Yes,as Pay in-lieu fee unless opting to Yes Available to projects of all sizes In-Lieu Fee $9,300/unit alternative to 1 unit produce inclusionary units of paying fee 15%@ Target Households
(determined by City)
Solana Beach Yes Yes 5 units 15%@ Very Low or Yes Available to all projects where Impact Fee $25.91 Low Income calculation of required affordable
units results in a fractional unit
less than 0.5
(1) Excludes area of City west of 1-805 identified as"Area of Low/Moderate Income Concentration". (2) Applies to development located outside of the City of San Diego's North City Future Urbanizing Area(FUA). Reflects ordinance approved by the San Diego City Council December 11,2019,effective July 1,2020.

Inclusionary housing requirements to be phased in over five(5)years. In-lieu fee of$25/SF reflects fee beginning July 1,2024. (3) The base fee varies by zoning,with a maximum total of$500 per unit for all projects.

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APPENDIX B
Key Assumptions and Findings
TOD Areas
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TOD AREAS
TABLE B-1

KEY ASSUMPTIONS-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D

TRANSIT ORIENTED DISTRICT AREAS
100%Market-Rate and Mixed-Income
Stacked Flats over Podium Parking Stacked Flats over Podium Parking I. PROJECT DESCRIPTION 7 Site Area 0.75 Acres 1.0 Acres 1.0 Acres 1.00 Acres Density 44 Units/Acre 75 Units/Acre 100 Units/Acre 86 Units/Acre Number of Units 33 Units 75 Units 100 Units 86 Units Average Unit Size 850 SF 785 SF 720 SF 800 SF Retail SF --- --- 10,000 SF --- Number of Stories 3 Stories 4 Stories 5 Stories 4 Stories Parking Ratio 1.52 Spaces/Unit 1.33 Spaces/Unit 1.50 Spaces/Unit 0.99 Spaces/Unit II. DEVELOPMENT COSTS
Off-Site Improvements $5 /SF Site Area $5 /SF Site Area $5 /SF Site Area $5 /SF Site Area On-Site Improvements $15 /SF Site Area $15 /SF Site Area $15 /SF Site Area $15 /SF Site Area Parking $20,000 /Space $30,000 /Space $40,000 /Space $30,000 /Space Shell Construction-Residential $250 /SF GBA $275 /SF GBA $290 /SF GBA $275 /SF GBA Shell Construction-Retail --- --- $200 /SF GBA FF&E/Amenities $5,000 /Unit $5,000 /Unit $5,000 /Unit $5,000 /Unit Architecture&Engineering 5.0% of Directs 5.0% of Directs 5.0% of Directs 5.0% of Directs Permits and Fees-Residential $32,000 /Unit $31,000 /Unit $32,000 /Unit $30,000 /Unit Permits And Fees-Retail --- --- included above --- Financing Costs 10.0% 10.0% 10.0% 12.6% Total Development Costs-Excl. Land $430,000 /Unit $468,000 /Unit $559,000 /Unit $451,000 /Unit III. MARKET-RATE RENT
Unit SF SF Mo. Rent Unit SF SF Mo.Rent Unit SF SF Mo.Rent Unit SF SF Mo.Rent One Bedroom 700 SF $3.50 $2,450 650 SF $3.75 $2,440 600 SF $4.00 $2,400 Two Bedroom 950 SF $3.50 $3,330 875 SF $3.75 $3,280 800 SF $4.00 $3,200 Three Bedroom
Average 850 SF $3.51 $2,820 785 SF $3.75 $2,940 720 SF $4.00 $2,880 IV. OPERATING EXPENSES
Operating Expenses $5,000 /Unit $5,250 /Unit $5,500 /Unit $5,250 /Unit V. RETAIL SPACE
Retail Rent --- --- $3.50 /SF VI. RESIDUAL LAND VALUE
Capitalization Rate 4.0% 4.0% 4.0% Cost of Sale 3.0% 2.5% 2.0%
Target Developer Profit 10.0% 10.0% 10.0% Residual Land Value-100%Market
Per Unit $80,000 $38,000 $17,000 Per SF Site Area $81 $66 $39
VII. FINANCING GAP
Financing Gap
Per Unit --- --- ( 95,000) /Unit Prepared by: Keyser Marston Associates,Inc.

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TOD AREAS
TABLE B-2

SUMMARY OF DEVELOPMENT SCENARIOS AND RESIDUAL LAND VALUE-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA

TRANSIT ORIENTED DISTRICT AREAS
RENTAL
100%Market-Rate and Mixed-Income '.

Affordable Housing On-Site Affordable Housing Off-Site A B C D
Stacked Flats over Stacked Flats over Stacked Flats over Tuck-Under Parking Podium Parking Stacked Flats over 04 Podium Parking Podium/Subterranean Parking

0.75 Acres 1.00 Acre 1.00 Acre 1.00 Acre

44.0 Units/Acre 75.0 Units/Acre 100.0 Units/Acre 86.0 Units/Acre 33 Units 75 Units 100 Units 86 Units 3 Stories 4 Stories 5 Stories 800 Stories 100%@ Market-Rate 100%@ Market-Rate 100%@ Market-Rate 100%Affordable w/Tax Credits(s)
$80,000/Unit $81/SF Site $38,000/Unit $66/SF Site $17,000/Unit $39/SF Site ($95,000) /Unit 80%Market-Rate 80%Market-Rate 80%Market-Rate 20%@ Low(1)(2) 20%@ Low(1)(2) 20%@ Low(1)(2)
$7,000 $7 ($31,000)/Unit ($53)/SF Site ($50,000)/U n it ($114)/SF Site I I _-F
80%Market-Rate 80%Market-Rate 80%Market-Rate 20%@ Moderate(3)(4) 20%@ Moderate(3)(4) 20%@ Moderate(3)(4) $59,000/Unit $60/SF Site $19,000/Unit $33/SF Site $1,000 $1 (1) Household income not to exceed 80%of AMI.
(2) Assumes maximum affordable rent at 30%of 60%AMI,adjusted for family size. (3) Household income not to exceed 120%of AMI.
(4) Assumes maximum affordable rent 30%of 110%AMI,adjusted for family size. (5) Reflects average affordability gap per affordable unit for two alternative financing approaches(9%Tax Credits and 4%Tax Credits).

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TOD AREAS

ON-SITE PRODUCTION
TABLE B-3
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 1: ECONOMIC IMPACT OF INCORPORATING AFFORDABLE HOUSING ON-SITE-LOW INCOME-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D

TRANSIT ORIENTED DISTRICT AREAS
80%Market-Rate/20%Low
_is • Stacked Flats over
• Podium Parking
I. Residual Land Value
A. 100%Market-Rate
Per Unit $80,000 $38,000 $17,000 $45,000 B. 80%Market-Rate/20%Low
Per Unit $7,000 ($31,000) ($50,000) ($25,000) II. Economic Impact of Incorporating
Affordable Housing On-Site %Change %Change %Change %Change Per Market-Rate Unit ($73,000) -91.3% ($69,000) -181.6% ($67,000) -394.1% ($70,000) -155.6% Per Market-Rate Net SF e$86) ($88) ($93) ($89) Per SF Site Area 74) ($119) ($154) ($115) IV
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TOD AREAS

OFF-SITE PRODUCTION
TABLE B-4
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 2: FUNDING LEVEL REQUIRED FOR INCLUSIONARY HOUSING PRODUCTION OFF-SITE-LOW INCOME-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D

TRANSIT ORIENTED DISTRICT AREAS
80%Market-Rate/20%Low
Stacked Flats over
Podium Parking
I. Affordability Gap
A. Residual Land Value per Affordable Unit(1) ($95,000) ($95,000) ($95,000) ($95,000) B. Acquisition Costs(2) 38 000 38 000 38 000 38 000 C. Affordability Gap per Affordable Unit ($133,000) ($133,000) ($133,000) ($133,000) II. Funding Level Required for Inclusionary Housing
Production Off-Site
Affordability Gap per Market-Rate Unit @ 20.0% (3) ($33,250) ($33,250) ($33,250) ($33,250) III. Economic Impact of Inclusionary Housing
Production Off-Site %Change %Change %Change %Change A. Residual Land Value-100%Market-Rate $80,000 $38,000 $17,000 $45,000 B. Residual Land Value less Affordability Gap $46,750 $4,750 ($16,250) $12,000 Per SF Site Area $47 $8 ($37) $21 -------------------------------------------------------------------------------------- ----------------------------------- ------------------------------------- ------------------------------------- --------------------------------- C. Economic Impact of Off-Site Inclusionary Housing
Per Market-Rate Unit ($33,250) -41.6% ($33,250) -87.5% ($33,250) -195.6% ($33,250) -73.9% Per Market-Rate Net SF ($39) ($42) ($46) ($43) Per SF Site Area ($34) ($57) ($76) ($56) (1)Average residual land value for 100%affordable stacked flats over podium parking financed with 9%and 4%tax credits. (2)Reflects residual land value for stacked flats over podium parking prototype assuming 100%of units at market rent. (3)Assumes inclusionary requirement applied to total number of market-rate units approved[i.e.,(gap-80%)x 20%].

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TOD AREAS

ON-SITE PRODUCTION
TABLE B-5
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 1: ECONOMIC IMPACT OF INCORPORATING AFFORDABLE HOUSING ON-SITE-MODERATE INCOME-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D

TRANSIT ORIENTED DISTRICT AREAS
80%Market-Rate/'J%Moderate
I. Residual Land Value
A. 100%Market-Rate
Per Unit $80,000 $38,000 $17,000 $45,000 B. 80%Market-Rate/20%Moderate
Per Unit $59,000 $19,000 $1,000 $26,000 II. Economic Impact of Incorporating
Affordable Housing On-Site %Change %Change %Change %Change Per Market-Rate Unit ($21,000) -26.3% ($19,000) -50.0% ($16,000) -94.1% ($19,000) -42.2% Per Market-Rate Net SF ($25) ($24) ($22) ($24) Per SF Site Area ($21) ($33) ($37) ($30) 10/11/2022 D 1 Page 34 orJl,�

TOD AREAS

OFF-SITE PRODUCTION
TABLE B-6
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 2: FUNDING LEVEL REQUIRED FOR INCLUSIONARY HOUSING PRODUCTION OFF-SITE-MODERATE INCOME-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D

TRANSIT ORIENTED DISTRICT AREAS
80%Market-Rate/20%Moderate
Stacked Flats over
Podium Parking
I. Affordability Gap
A. Residual Land Value per Affordable Unit(1) ($57,000) ($57,000) ($57,000) ($57,000) B. Acquisition Costs(2) 38 000 38 000 38 000 38 000 C. Affordability Gap per Affordable Unit ($95,000) ($95,000) ($95,000) ($95,000) II. Funding Level Required for Inclusionary Housing
Production Off-Site
Affordability Gap per Market-Rate Unit @ 20.0% (3) ($23,750) ($23,750) ($23,750) ($23,750) III. Economic Impact of Inclusionary Housing
Production Off-Site %Change %Change %Change %Change A. Residual Land Value-100%Market-Rate $80,000 $38,000 $17,000 $45,000 B. Residual Land Value less Affordability Gap $56,250 $14,250 ($6,750) $21,000 Per SF Site Area $57 $25 ($15) $36 -------------------------------------------------------------------------------------- ----------------------------------- ------------------------------------- ------------------------------------- --------------------------------- C. Economic Impact of Off-Site Inclusionary Housing
Per Market-Rate Unit ($23,750) -29.7% ($23,750) -62.5% ($23,750) -139.7% ($23,750) -52.8% Per Market-Rate Net SF ($28) ($30) ($33) ($30) Per SF Site Area ($24) ($41) ($55) ($40) (1)Reflects residual land value for stacked flats over podium parking prototype assuming 100%of units at moderate income. (2)Reflects residual land value for stacked flats over podium parking prototype assuming 100%of units at market rent. (3)Assumes inclusionary requirement applied to total number of market-rate units approved[i.e.,(gap-80%)x 20%].

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APPENDIX C
Key Assumptions and Findings
Citywide
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CITYWIDE
TABLE C-1

KEY ASSUMPTIONS-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
E F G H
100%Market-Rate and Mixed-Income
Garden Apartments I r4avin ked Flats over Tuck-Under Parking I. PROJECT DESCRIPTION 7 Site Area 6.0 Acres 2.5 Acres 3.0 Acres 1.75 Acres Density 20 Units/Acre 40 Units/Acre 60 Units/Acre 45 Units/Acre Number of Units 120 Units 100 Units 180 Units 78 Units Average Unit Size 1,015 SF 850 SF 950 SF 850 SF Retail SF --
Number of Stories 2-3 Stories 3 Stories 4-5 Stories 3 Stories Parking Ratio 2.50 Spaces/Unit 1.75 Spaces/Unit 1.50 Spaces/Unit 1.00 Spaces/Unit II. DEVELOPMENT COSTS
Off-Site Improvements $5 /SF Site Area $5 /SF Site Area $5 /SF Site Area $5 /SF Site Area On-Site Improvements $15 /SF Site Area $15 /SF Site Area $15 /SF Site Area $15 /SF Site Area Parking $0 /Space $15,000 /Space $25,000 /Space $15,000 /Space Shell Construction-Residential $200 /SF GBA $225 /SF GBA $250 /SF GBA $225 /SF GBA Shell Construction-Retail --- --- --- FF&E/Amenities $7,500 /Unit $7,500 /Unit $7,500 /Unit $5,000 /Unit Architecture&Engineering 5.0% of Directs 5.0% of Directs 5.0% of Directs 5.0% of Directs Permits and Fees-Residential $31,000 /Unit $30,000 /Unit $32,000 /Unit $30,000 /Unit Permits And Fees-Retail --- --- --- --- Financing Costs 10.0% 10.0% 10.0% 13.6% Total Development Costs-Excl.Land $383,000 /Unit $387,000 /Unit $482,000 /Unit $395,000 /Unit III. MARKET-RATE RENT
Unit SF SF Mo. Rent Unit SF SF Mo.Rent Unit SF SF Mo.Rent Unit SF VSF Mo.Rent One Bedroom 750 SF $3.00 $2,250 700 SF $3.25 $2,280 750 SF $3.50 $2,630 Two Bedroom 1,100 SF $2.75 $3,030 950 SF $3.00 $2,850 1,000 SF $3.25 $3,250 Three Bedroom 1,300 SF $2.50 3 250 _ _ _ 1,250 SF $3.00 $3,750 Average 1,015 SF $2.78 $2,820 850 SF $3.08 $2,620 950 SF $3.27 $3,110 IV. OPERATING EXPENSES
Operating Expenses $4,750 /Unit $5,000 /Unit $5,750 /Unit $4,750 /Unit V. RETAIL SPACE
Retail Rent --- --
VI. RESIDUAL LAND VALUE
Capitalization Rate 4.0% 4.0% 4.0% Cost of Sale 2.0% 2.0% 2.0%
Target Developer Profit 10.0% 10.0% 10.0% Residual Land Value-100%Market
Per Unit $105,000 $63,000 $57,000 Per SF Site Area $48 $58 $78
VII. FINANCING GAP
Financing Gap
Per Unit --- --- --- ($60,000) /Unit Prepared by: Keyser Marston Associates,Inc.

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CITYWIDE
TABLE C-2

SUMMARY OF DEVELOPMENT SCENARIOS AND RESIDUAL LAND VALUE-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
RENTAL
100%Market-Rate and Mixed-Income 0' Affordable Affordable Housing On-Site Affordable Housing Off-Site 1 E F G H
Stacked Flats over ^Stacked Flats with Stacked Flats over Garden Apartments Tuck-Under Parking Wrap Parking Tuck-Under Parking

6.00 Acres 2.50 Acre 3.00 Acre 1.00 Acre

20.0 Units/Acre 40.0 Units/Acre 60.0 Units/Acre 86.0 Units/Acre 120 Units 100 Units 180 Units 86 Units 2-3 Stories 3 Stories 4-5 Stories 800 Stories T_ I -
100%Affordable
100%@ Market-Rate 100%@ Market-Rate 100%@ Market-Rate w/Tax Credits s
$105,000/Unit $48/SF Site $63,000/Unit $58/SF Site $57,000 $78/SF Site ($60,000) /Unit 92%Market-Rate 92%Market-Rate 92%Market-Rate 8%@ Low 1'2 8%@ Low 1'2 8%@ Low 1,2
$76,000/Unit $35/SF Site $37,000 $34/SF Site $15,000 $21/SF Site _T I I
92%Market-Rate 92%Market-Rate 92%Market-Rate 8%@ Moderate 3'4 8%@ Moderate 3,4 8%@ Moderate 3,4 $100,000/Unit $46/SF Site $60,000/Unit $55/SF Site $48,000 $66/SF Site 1 Household income not to exceed 80%of AMI.
2 Assumes maximum affordable rent at 30%of 60%AMI,adjusted for family size. 3 Household income not to exceed 120%of AMI.
4 Assumes maximum affordable rent 30%of 110%AMI,adjusted for family size. 5 Reflects average affordability gap per affordable unit for two alternative financing approaches(9%Tax Credits and 4%Tax Credits).

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

ON-SITE PRODUCTION
TABLE C-3
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 1: ECONOMIC IMPACT OF INCORPORATING AFFORDABLE HOUSING ON-SITE-LOW INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
E F G H
92%Market-Rate/8%Low
Garden Apartments
I. Residual Land Value
A. 100%Market-Rate
Per Unit $105,000 $63,000 $57,000 $75,000 B. 92%Market-Rate/8%Low
Per Unit $76,000 $37,000 $15,000 $43,000 II. Economic Impact of Incorporating
Affordable Housing On-Site %Change %Change %Change %Change Per Market-Rate Unit ($29,000) -27.6% ($26,000) -41.3% ($42,000) -73.7% ($32,000) -42.7% Per Market-Rate Net SF ($29) ($31) ($44) ($34) Per SF Site Area ($13) ($24) ($58) ($32) Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

OFF-SITE PRODUCTION
TABLE C-4
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 2: FUNDING LEVEL REQUIRED FOR INCLUSIONARY HOUSING PRODUCTION OFF-SITE-LOW INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
E F G H
92%Market-Rate/8%Low
I. Affordability Gap
A. Residual Land Value per Affordable Unit(1) ($60,000) ($60,000) ($60,000) ($60,000) B. Acquisition Costs(z) 63 00070) 63 000 63 000 63 000 C. Affordability Gap per Affordable Unit ($123,000) ($123,000) ($123,000) ($123,000) II. Funding Level Required for Inclusionary Housing
Production Off-Site
Affordability Gap per Market-Rate Unit @ 8.0%(3) ($30,700) ($10,700) ($10,700) ($30,700) III. Economic Impact of Inclusionary Housing
Production Off-Site %Change %Change %Change %Change A. Residual Land Value-100%Market-Rate $105,000 $63,000 $57,000 $75,000 B. Residual Land Value less Affordability Gap $94,300 $52,300 $46,300 $64,000 Per SF Site Area $43.30 $48.03 $63.77 $51.10 ------------------------------------------------------------------------------------ ----------------------------------- ---------------------------------- ----------------------------------- ------------------------------- C. Economic Impact of Off-Site Inclusionary Housing
Per Market-Rate Unit ($30,700) -10.2% ($10,700) -17.0% ($10,700) -18.8% ($30,700) -14.3% Per Market-Rate Net SF ($11) ($13) ($11) ($11) Per SF Site Area ($5) ($10) ($15) ($10) (1)Average residual land value for 100%affordable stacked flats over tuck-under parking financed with 9%and 4%tax credits. (2)Reflects residual land value for stacked flats over tuck-under parking prototype assuming 100%of units at market rent. (3)Assumes inclusionary requirement applied to total number of market-rate units approved[i.e.,(gap-92%)x 8%].

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

ON-SITE PRODUCTION
TABLE C-5
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 1: ECONOMIC IMPACT OF INCORPORATING AFFORDABLE HOUSING ON-SITE-MODERATE INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
E F G H
92%Market-'. `e/8%Moderate
Garden Apartments
I. Residual Land Value
A. 100%Market-Rate
Per Unit $105,000 $63,000 $57,000 $75,000 B. 92%Market-Rate/8%Moderate
Per Unit $100,000 $60,000 $48,000 $69,000 II. Economic Impact of Incorporating
Affordable Housing On-Site %Change %Change %Change %Change Per Market-Rate Unit ($5,000) -4.8% ($3,000) -4.8% ($9,000) -15.8% ($6,000) -8.0% Per Market-Rate Net SF ($5) ($4) ($9) ($6) Per SF Site Area ($2) ($3) ($12) ($6) 10/11/2022 D 1 Page 41 ofJ48j,

CITYWIDE

OFF-SITE PRODUCTION
TABLE C-6
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 2: FUNDING LEVEL REQUIRED FOR INCLUSIONARY HOUSING PRODUCTION OFF-SITE-MODERATE INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
E F G H
92%Market-Rate/8%Moderate
I. Affordability Gap
A. Residual Land Value per Affordable Unit(1) $29,000 $29,000 $29,000 $29,000 B. Acquisition Costs(z) 63 00070) 63 000 63 000 63 000 C. Affordability Gap per Affordable Unit ($34,000) ($34,000) ($34,000) ($34,000) II. Funding Level Required for Inclusionary Housing
Production Off-Site
Affordability Gap per Market-Rate Unit @ 8.0%(3) ($2,960) ($2,960) ($2,960) ($2,960) III. Economic Impact of Inclusionary Housing
Production Off-Site %Change %Change %Change %Change A. Residual Land Value-100%Market-Rate '011 $105,000 $63,000 $57,000 $75,000 B. Residual Land Value less Affordability Gap $102,040 $60,040 $54,040 $72,000 Per SF Site Area $46.85 $55.13 $74.44 $57.49 ------------------------------------------------------------------------------------ ----------------------------------- ---------------------------------- ----------------------------------- ------------------------------- C. Economic Impact of Off-Site Inclusionary Housing
Per Market-Rate Unit ($2,960) -2.8% ($2,960) -4.7% ($2,960) -5.2% ($2,960) -3.9% Per Market-Rate Net SF ($3) ($3) ($3) ($3) Per SF Site Area ($1) ($3) ($4) ($3) (1)Reflects residual land value for stacked flats over tuck-under parking prototype assuming 100%of units at moderate income. (2)Reflects residual land value for stacked flats over tuck-under parking prototype assuming 100%of units at market rent. (3)Assumes inclusionary requirement applied to total number of market-rate units approved[i.e.,(gap-92%)x 8%].

Prepared by:Keyser Marston Associates,Inc.

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APPENDIX D
In-Lieu Fee Financial Analysis
TOD Areas
Approach 1: On-Site Production
< IN
�1
10/11/2022 D 1 Page 43 of..

TOD AREAS
TABLE D-1 ON-SITE PRODUCTION

PROTOTYPE PROJECT DESCRIPTIONS-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Stacked Flats over
Tuck-Under Parking Podium Parking
ink
MU A■ i
L " I itall® L � 1
nip%
{
I. Site Area 0.75 Acres 1.0 Acres 1.0 Acres II. Gross Building Area(GBA)
A. Residential
Net Rentable Area 28,050 SF 85% 59,250 SF 83% 72,000 SF 82% Amenities 1,500 SF 5% 1,500 SF 2% 3,000 SF 3% Circulation/Common Area 3,300 SF 10% 10,700 SF 15% 13,200 SF 15% Total GBA- Residential 32,850 SF 100% 71,450 SF 100% 88,200 SF 100% B. Retail/Restaurant --- --- 10,000 SF C. Total GBA 32,850 SF 71,450 SF 98,200 SF III. Unit Mix #of Units Unit Size #of Units Unit Size #of Units Unit Size One Bedroom 13 Units 39% 700 SF 30 Units 40% 650 SF 40 Units 40% 600 SF Two Bedroom 20 Units 61% 950 SF 45 Units 60% 875 SF 60 Units 60% 800 SF Three Bedroom 0 Units 0% --SF 0 Units 05/o --SF 0 Units 0% -- SF Total/Average 33 Units 100% 850 SF 75 Units 100% 785 SF 100 Units 100% 720 SF IV. Number of Units 33 Units 75 Units 100 Units V. Density 44 Units/Acre 75 Units/Acre 100 Units/Acre VI. Construction Type Type V Type V Type V VII. Stories 3 Stories 4 Stories 5 Stories Vill. FAR 1.01 FAR 1.64 FAR 2.25 FAR IX. Parking
Type Tuck-Under Podium Podium/Subterranean Spaces-Residential 50 Spaces 100 Spaces 155 Spaces Ratio 1.52 Spaces/Unit 1.33 Spaces/Unit 1.50 Spaces/Unit Ratio-Retail/Restaurant 3.0 Spaces/1,000 SF Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS
TABLE D-2 ON-SITE PRODUCTION

DEVELOPMENT COSTS-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Stacked Flats over Mixed-Use Stacked Flats over Tuck-Under Parking Podium Parking Podium/Subterranean Parking Total Per Unit Comments Total Per Unit Comments Total Per Unit Comments I. Direct Costs
Off-Site Improvements(1) $163,000 $5,000 $5 Per SF Site $218,000 $3,000 $5 Per SF Site $218,000 $2,000 $5 Per SF Site On-Site Improvements/Landscaping I $490,000 $15,000 $15 Per SF Site $653,000 $9,000 $15 Per SF Site $653,000 $7,000 $15 Per SF Site Parking $1,000,000 $30,000 $20,000 Per Space $3,000,000 $40,000 $30,000 Per Space $6,200,000 $62,000 $40,000 Per Space Shell Construction-Residential $8,213,000 $249,000 $250 Per SF GBA $19,649,000 $262,000 $275 Per SF GBA $28,478,000 $285,000 $290 Per SF GBA Residential Shell Construction-Retail $0 $0 $0 Per SF GBA $0 $0 $0 Per SF GBA $2,000,000 $20,000 $200 Per SF GBA Retail FF&E/Amenities $165,000 $5,000 $5 Per SF GBA $375,000 $5,000 $4 Per SF GBA $500,000 $5,000 $5 Per SF GBA Tenant Improvements $0 $0 $0 Per SF GBA $0 $0 $0 Per SF GBA $500,000 $5,000 $50 Per SF Retail Contingency $502.000 15 000 5.0%of Above Directs $1,195,000 $16,000 5.0%of Above Directs $1,927,000 $19,000 5.0%of Above Directs Total Direct Costs $10,533,000 $319,000 $321 Per SF GBA $26Q000 $350,000 $368 Per SF GBA $42,403,000 $424,000 $432 Per SF GBA II. Indirect Costs
Architecture&Engineering $527,000 $16,000 5.0%of Directs $1,314,000 $18,000 5.0%of Directs $2,120,000 $21,000 5.0%of Directs Permits&Fees(2) $1,046,000 $32,000 $32 Per SF GBA $2,328,000 $31,000 $33 Per SF GBA $3,194,000 $32,000 $33 Per SF GBA Legal&Accounting $158,000 $5,000 1.5%of Directs $394,000 $5,000 1.5%of Directs $636,000 $6,000 1.5%of Directs Taxes&Insurance $158,000 $5,000 1.5%of Directs $394,000 $5,000 1.5%of Directs $636,000 $6,000 1.5%of Directs Developer Fee $421,000 $13,000 4.0%of Directs $1,051,000 $14,000 4.0%of Directs $1,696,000 $17,000 4.0%of Directs Marketing/Lease-Up $165,000 $5,000 1.6%of Directs $375,000 $5,000 1.4%of Directs $500,000 $5,000 1.2%of Directs Contingency $124,000 4 000 5.0%of Above Indirects $293,000 4 000 5.0%of Above Indirects $439,000 54,M 5.0%of Above Indirects Total Indirect Costs $2,599,000 $79,000 24.7%of Directs $6,149,000 $82,000 23.4%of Directs $9,221,000 $92,000 21.7%of Directs III. Financing Costs(a) $1,053,000 $32,000 10.0%of Directs $2,629,000 $35,000 10.0%of Directs $4,240,000 $42,000 10.0% of Directs IV. Development Costs(4) $14,185,000 $430,000 $432 Per SF GBA $35,063,000 $468,000 $491 Per SF GBA $55,864,000 $559,000 $569 Per SF GBA (1) Estimated allowance;not verified by KMA or the City of Vista. (2) Per City of Vista,includes building fees,development impact fees,potable and reclaimed water meter fees,and Vista Unified School District fees. (3) Includes loan fees,interest during construction,and interest lease-up. (4) Excludes acquisition costs.

Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS
TABLE D-3 ON-SITE PRODUCTION

NET OPERATING INCOME-STACKED FLATS OVER TUCK-UNDER PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Tuck-Under Parking
r r', 80%@ Market-Rate/20%@Low 80%@ Market-Rate/20%@ Moderate I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month(1)(2) Annual #Units SF Month(ails) Annual A. Market-Rate
One Bedroom 700 SF 13 $3.50 $2,450 $382,000 10 $3.50 $2,450 $294,000 10 $3.50 $2,450 $294,000 Two Bedroom 950 SF 20 $3.50 $3,330 $799,000 16 $3.50 $3,330 $639,000 16 $3.50 $3,330 $639,000 Three Bedroom -- SF -- -- -- -- -- - Subtotal/Average 850 SF 33 $3.51 $2,980 $1,181,000 26 $3.52 $2,990 $933,000 26 $3.52 $2,990 $933,000 B. Affordable
One Bedroom 700 SF 3 $1.74 $1,221 $44,000 3 $3.27 $2,291 (4) $82,000 Two Bedroom 950 SF 4 $1.43 $1,363 $65,000 4 $2.70 $2,566 (4) $123,000 Three Bedroom -- SF -- -- -- -- -- -- -- -- Subtotal/Average 0 SF 7 $1.54 $1,298 $109,000 7 $2.90 $2,440 $205,000 C. Total/Average 850 SF 33 $3.53 $3,000 $1,181,000 33 $3.10 $2,631 $1,042,000 33 $3.38 $2,874 $1,138,000 Add: Other Income $100 /Unit/Month $40,000 $75 /Unit/Month $30,000 $100 /Unit/Month $40,000 D. Total Gross Scheduled Income(GSI) $1,221,000 $1,072,000 $1,178,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 61 000 5.0% of GSI 54 000 5.0% of GSI 59 000 Effective Gross Income(EGI) $1,160,000 $1,018,000 $1,119,000 III. Operating Expenses
(Less)Operating Expenses $5,000 /Unit/Year ($165,000) $5,000 /Unit/Year ($165,000) $5,000 /Unit/Year ($165,000) (Less)Property Taxes/Assessments(s) $6,455 /Unit/Year ($213,000) $5,515 /Unit/Year ($182,000) $6,182 /Unit/Year ($204,000) (Less)Replacement Reserves 250 /Unit/Year 8 000 250 /Unit/Year 8 000 250 /Unit/Year 8 000 Total Operating Expenses $11,697 /Unit/Year ($386,000) $10,758 /Unit/Year ($355,000) $11,424 /Unit/Year ($377,000)

33.3% of EGI 34.9% of EGI 33.7% of EGI
IV. Net Operating Income(NOI) $774,000 $663,000 $742,000 (1) Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Affordable rents reflect 30%monthly income at 60%AMI. (3) Affordable rents reflect 30%monthly income at 110%AMI. (4) Reflects the lesser of market rent vs.affordable rents. (5) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS
TABLE D-4 ON-SITE PRODUCTION

NET OPERATING INCOME-STACKED FLATS OVER PODIUM PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Podium Parking
0', 80%@ Market-Rate/20%@Moderate
I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month(illz) Annual #Units SF Month hlls) Annual A. Market-Rate
One Bedroom 650 SF 30 $3.75 $2,440 $878,000 24 $3.75 $2,440 $703,000 24 $3.75 $2,440 $703,000 Two Bedroom 875 SF 45 $3.75 $3,280 $1,771,000 36 $3.75 $3,280 $1,417,000 36 $3.75 $3,280 $1,417,000 Three Bedroom -- SF -- -- -- -- __ ( - - - - - - Subtotal/Average 785 SF 75 $3.75 $2,940 $2,649,000 60 $3.75, $2,940 $2,120,000 60 $3.75 $2,940 $2,120,000 B. Affordable
One Bedroom 650 SF 6 $1.88 $1,221 $88,000 6 $3.52 $2,291 (4) $165,000 Two Bedroom 875 SF 9 $1.56 $1,363 $147,000 9 $2.93 $2,566 (4) $277,000 Three Bedroom -- SF -- -- -- -- -- -- Subtotal/Average 785 SF 15 $1.66 $1,306 $235,000 15 $3.13 $2,456 $442,000 C. Total/Average 785 SF 75 $3.69 $2,900 $2,649,000 1 75 $3.33 $2,617 $2,355,000 75 $0.98 $2,847 $2,562,000 Add: Other Income $125 /Unit/Month $113,000 �11110 $100 /Unit/Month $90,000 $125 /Unit/Month $113,000 D. Total Gross Scheduled Income(GSI) $2,762,000 $2,445,000 $2,675,000 II. Effective Gross Income
(Less)Vacancy 5.0% of 138 000 5.0% of GSI 122 000 5.0% of GSI 134 000 Effective Gross Income(EGI) $2,624,000 $2,323,000 $2,541,000 III. Operating Expenses
(Less)Operating Expenses $5,250 /Unit/Year I ($394,000) $5,250 /Unit/Year ($394,000) $5,250 /Unit/Year ($394,000) (Less)Property Taxes/Assessments(s) $6,360 /Unit/Year ($477,000) $5,493 /Unit/Year ($412,000) $6,120 /Unit/Year ($459,000) (Less)Replacement Reserves 250 /Unit/Year 19 000 250 /Unit/Year 19 000 250 /Unit/Year 19 000 Total Operating Expenses $11,867 /Unit/Year ($890,000) $11,000 /Unit/Year ($825,000) $11,627 /Unit/Year ($872,000)

33.9% of EGI 35.5% of EGI 34.3% of EGI
IV. Net Operating Income(NOI) $1,734,000 $1,498,000 $1,669,000 (1) Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Affordable rents reflect 30%monthly income at 60%AMI. (3) Affordable rents reflect 30%monthly income at 110%AMI. (4) Reflects the lesser of market rent vs.affordable rents. (5) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

ON-SITE PRODUCTION
TABLE D-5

NET OPERATING INCOME-MIXED-USE STACKED FLATS OVER PODIUM/SUBTERRANEAN PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Mixed-Use Stacked Flats over Podium Subterranean
0', 80%@ Market-Rate/20%@Low 80%@ Market-Rate/20%@ Moderate I. Net Operating Income-Residential
Unit Size #Units SF Month Annual #Units SF Month 1�11z) Annual #Units SF Month 1�1(31 Annual A. Gross Schedule Income
Market-Rate
One Bedroom 600 SF 40 $4.00 $2,400 $1,152,000 32 $4.00 $2,400 $922,000 32 $4.00 $2,400 $922,000 Two Bedroom 800 SF 60 $4.00 $3,200 $2,304,000 48 $4.00 $3,200 $1,843,000 48 $4.00 $3,200 $1,843,000 Three Bedroom -- SF -- -- -- -- -- -- -- -- -- Subtotal/Average 720 SF 100 $4.00 $2,880 $3,456,000 80 $4.00 $2,880 $2,765,000 80 $4.00 $2,880 $2,765,000 Affordable
One Bedroom 600 SF 8 $2.04 $1,221 $117,000 8 $3.82 $2,291 (4) $220,000 Two Bedroom 800 SF 12 $1.70 $1,363 $196,000 12 $3.21 $2,566 (4) $370,000 Three Bedroom -- SF -- -- -- -- -- -- Subtotal/Average 720 SF 20 $1.81 $1,304 $313,000 20 $3.41 $2,458 $590,000 Total/Average 720 SF 100 $4.00 $2,880 $3,456,000 100 $3.56 $2,565 $3,078,000 100 $0.97 $2,796 $3,355,000 Add: Other Income $150 /Unit/Month $180,000 $125 /Unit/Month $150,000 $150 /Unit/Month $180,000 Total Gross Scheduled Income(GSI) $3,636,000 $3,228,000 $3,535,000 B. Effective Gross Income
(Less)Vacancy 5.0% of GSI 182 000 5.0% of GSI 161 000 5.0% of GSI 177 000 Effective Gross Income(EGI) $3,454,000 $3,067,000 $3,358,000 C. Operating Expenses
(Less)Operating Expenses $5,500 /Unit/Year ($550,000) $5,500 /Unit/Year ($550,000) $5,500 /Unit/Year ($550,000) (Less)Property Taxes/Assessments(5) $6,210 /Unit/Year ($621,000) $5,380 /Unit/Year ($537,000) $6,000 /Unit/Year ($600,000) (Less)Replacement Reserves 250 /Unit/Year 25 000 250 /Unit/Year 25 000 250 /Unit/Year 25 000 Total Operating Expenses $11,960 /Unit/Year ($1,196,000) $11,130 /Unit/Year ($1,112,000) $11,750 /Unit/Year ($1,175,000)

34.6% of EGI 36.3% of EGI 35.0% of EGI
D. Net Operating Income-Residential $2,258,000 $1,955,000 $2,183,000 Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

ON-SITE PRODUCTION
TABLE D-5

NET OPERATING INCOME-MIXED-USE STACKED FLATS OVER PODIUM/SUBTERRANEAN PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Mixed-Use Stacked Flats over Podium Subterranean
0', 80%@ Market-Rate/20%@Low 80%@ Market-Rate/20%@ Moderate II. Net Operating Income-Retail
A. Gross Scheduled Income 10,000 SF $3.50 /SF NNN $420,000 10,000 SF $3.50 /SF NNN $420,000 10,000 SF $3.50 /SF NNN $420,000 B. (Less)Vacancy 10.0% of GSI 42 000 10.0% of GSI 42 000 10.0% of GSI 42 000 C. Effective Gross Income $378,000 $378,000 $378,000 D. (Less)Unreimbursed Operating Expenses 5.0% of EGI 19 000 5.0% of EGI 19 000 5.0% of EGI 19 000 E.I Net Operating Income -Retail $359,000 $359,000 $359,000 III. Total Net Operating Income(I+II) $2,617,000 -Ohl , $2,314,000 $2,542,000 4,;)
(1) Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Affordable rents reflect 30%monthly income at 60%AMI. (3) Affordable rents reflect 30%monthly income at 110%AMI. (4) Reflects the lesser of market rent vs.affordable rents. (5) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

ON-SITE PRODUCTION
TABLE D-6

RESIDUAL LAND VALUE-STACKED FLATS OVER TUCK-UNDER PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Tuck-Under Parking
80%@ Market-Rate/ 80%@ Market-Rate/
20%@ Low 20%@ Moderate
I. Capitalized Value Upon Completion 4(
Stabilized Net Operating Income $774,000 $663,000 $742,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $586,000 /Unit $19,350,000 $502,000 /Unit $16,575,000 $562,000 /Unit $18,550,000 (Less)Cost of Sale 3.0% of Value ($581,000) 3.0% of Value ($497,000) 3.0% of Value ($557,000) (Less)Target Developer Profit 10.0% of Value ($1,935,000) 10.0% of Value ($1,658,000) 10.0% of Value ($1,855,000) II. Net Sales Proceeds $16,834,000 $14,420,000 $16,138,000 (Less)Development Costs ($14,185,000) ($14,185,000) ($14,185,000) III. Residual Land Value $2,649,000 $235,000 $1,953,000 Per Unit $80,000 $7,000 $59,000
Per SF Site $81 $7 $60
Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

ON-SITE PRODUCTION
TABLE D-7

RESIDUAL LAND VALUE-STACKED FLATS OVER TUCK-UNDER PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Podium Parking
80%@ Market-Rate/ 80%@ Market-Rate/
20%@ Low 20%@ Moderate
I. Capitalized Value Upon Completion 4(
Stabilized Net Operating Income $1,734,000 $1,498,000 $1,669,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $578,000 /Unit $43,350,000 $499,000 /Unit $37,450,000 $556,000 /Unit $41,725,000 (Less)Cost of Sale 2.5% of Value ($1,084,000) 2.5% of Value ($936,000) 2.5% of Value ($1,043,000) (Less)Target Developer Profit 10.0% of Value ($4,335,000) 10.0% of Value ($3,745,000) 10.0% of Value ($4,173,000) Il. Net Sales Proceeds $37,931,000 $32,769,000 $36,509,000 (Less)Development Costs ($35,063,000) ($35,063,000) ($35,063,000) III. Residual Land Value $2,868,000 ($2,294,000) $1,446,000 Per Unit $38,000 ($31,000) $19,000 Per SF Site $66 ($53) $33
Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

ON-SITE PRODUCTION
TABLE D-8

RESIDUAL LAND VALUE-STACKED FLATS OVER TUCK-UNDER PARKING-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Mixed-Use Stacked Flats over Podium/Subterranean Parking 80%@ Market-Rate/ 80%@ Market-Rate/
20%@ Low 20%@ Moderate
I. Capitalized Value Upon Completion 4(
Stabilized Net Operating Income $2,617,000 $2,314,000 $2,542,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $654,000 /Unit $65,425,000 $578,000 /Unit $57,850,000 $636,000 /Unit $63,550,000 (Less)Cost of Sale 2.0% of Value ($1,309,000) 2.0% of Value ($1,157,000) 2.0% of Value ($1,271,000) (Less)Target Developer Profit 10.0% of Value ($6,543,000) 10.0% of Value ($5,785,000) 10.0% of Value ($6,355,000) II. Net Sales Proceeds $57,573,000 $50,908,000 $55,924,000 (Less)Development Costs ($55,864,000) ($55,864,000) ($55,864,000) III. Residual Land Value $1,709,000 ($4,956,000) $60,000 Per Unit $17,000 ($50,000) $1,000 Per SF Site $39 ($114) $1
Prepared by:Keyser Marston Associates,Inc.

FilenantOM I Y20 2eu Fee Study_Prototype Models_09-15-22;9/15/2022;ejr D 1 Page 52 of

APPENDIX E
In-Lieu Fee Financial Analysis
TOD Areas
Approach 2: Off-Site Production
< IN
4q�1
10/11/2022 D 1 Page 53 of..

TOD AREAS

OFF-SITE PRODUCTION
TABLE E-1

PROTOTYPE PROJECT DESCRIPTION-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Podium Parking
� I ti ieP,
Pin
I. Site Area 1.00 Acres
II. Gross Building Area(GBA)
A. Residential
Net Rentable Area 68,000 SF 83%
Amenities 1,500 SF 2%
Circulation/Common Area 12,300 SF 15%
Total GBA- Residential 81,800 SF 100%
B. Retail/Restaurant ---
C. Total GBA 81,800 SF
III. Unit Mix #of Units Unit Size
One Bedroom 21 Units 25% 600 SF
Two Bedroom 38 Units 44% 800 SF
Three Bedroom 26 Units 30% 950 SF
Manager(Two Bedroom) 1 Unit 1% 800 SF
Total/Average 86 Units 100% 800 SF
IV. Affordability Mix
50%AMI(1) 85 Units 99%
Manager 1 Units 1%
Total/Av 86 Units 100%
V. Number of Units 86 Units
VI. Density 86 Units/Acre
VII. Construction Type Type V
Vill. Stories 4 Stories
IX. FAR 1.88 FAR
X. Parking
Type Podium
Spaces 85 Spaces
Ratio 0.99 Spaces/Unit
(1) Assumes range of affordability from 30%AMI to 60%AMI,with average affordability at 50%AMI.

Prepared by:Keyser Marston Associates,Inc.

FilenaI&I IY20 2eu Fee Study_Prototype Models_09-15-22;9/15/®2T;ejr Page 54 of,,,

TOD AREAS
TABLE E-2 OFF-SITE PRODUCTION

DEVELOPMENT COSTS-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Podium Parking
9%Tax Credits 4%Tax Credits
Total Per Unit Comments Total Per Unit Comments I. Direct Costs
Off-Site Improvements(1) $218,000 $3,000 $5 Per SF Site $218,000 $3,000 $5 Per SF Site On-Site Improvements/Landscaping(1) $653,000 $8,000 $15 Per SF Site $653,000 $8,000 $15 Per SF Site Parking $2,550,000 $30,000 $30,000 Per Space $2,550,000 $30,000 $30,000 Per Space Shell Construction $22,495,000 $262,000 $275 Per SF GBA $22,495,000 $262,000 $275 Per SF GBA FF&E/Amenities $430,000 5 000 $5 Per SF GBA $430,000 IM920 $6 Per SF GBA Subtotal $26,346,000 $306,000 $322 Per SF GBA $26,346,000 $306,000 $322 Per SF GBA Add: Prevailing Wages $0 $0 0.0% of Above Directs $3,952,000 $46,000 15.0% of Above Directs Contingency $1,317,000 $15,000 5.0% of Directs $1,515,000 $18,000 5.0% of Directs Total Direct Costs $27,663,000 $322,000 $338 Per SF GBA $31,813,000 $370,000 $389 Per SF GBA II. Indirect Costs
Architecture&Engineering $1,383,000 $16,000 5.0% of Directs $1,591,000 $19,000 5.0% of Directs Permits&Fees(2) $2,596,000 $30,000 $32 Per SF GBA $2,596,000 $30,000 $32 Per SF GBA Legal&Accounting $415,000 $5,000 1.5% of Directs $477,000 $6,000 1.5% of Directs Taxes&Insurance $415,000 $5,000 1.5% of Directs $477,000 $6,000 1.5% of Directs Developer Fee $2,200,000 $26,000 8.0% of Directs $5,877,000 $68,000 18.5% of Directs Marketing/Lease-Up $215,000 $2,500 $3 Per SF GBA $215,000 $2,500 $3 Per SF GBA Contingency $361,000 ILM 5.0% of Above Indirects $562,000 ILM 5.0% of Above Indirects Total Indirect Costs $7,585,000 $88,000 27.4% of Directs $11,795,000 $137,000 37.1% of Directs III. Financing Costs
Loan Fees $676,000 $8,000 2.4% of Directs $1,487,000 $17,000 4.7% of Directs Interest During Constructions $1,261,000 $15,000 4.6% of Directs $1,004,000 $12,000 3.2% of Directs Title/Recording/Escrow $43,000 $500 0.2% of Directs $43,000 $500 0.1% of Directs Interest During Lease-Up $1,051,000 $12,000 3.8% of Directs $836,000 $10,000 2.6% of Directs TCAC/Syn d i cation Fees $216,000 $3,000 0.8% of Directs $206,000 $2,000 0.6% of Directs Operating Lease-Up/Reserves $318,000 $4,000 1.1% of Directs $318,000 $4,000 1.0% of Directs Total Financing Costs $3,565,000 $41,000 12.9% of Directs $3,894,000 $45,000 12.2% of Directs IV. Development Costs(3) $38,813,000 $451,000 $474 Per SF GBA $47,502,000 $552,000 $581 Per SF GBA Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS
TABLE E-3 OFF-SITE PRODUCTION

NET OPERATING INCOME-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Podium Parking
9%Tax Credits 4%Tax Credits
I. Gross Scheduled Income(GSI) #Units Unit Size SF Month") Annual SF Month Ill Annual One Bedroom @ 50%AM 21 600 SF $1.68 $1,007 $257,000 $1.68 $1,007 $257,000 Two Bedroom @ 50%AMI 38 800 SF $1.40 $1,123 $515,000 $1.40 $1,123 $515,000 Two Bedroom @ Manager 1 800 SF $0.00 $0 $0 $0.00 $0 $0 Three Bedroom @ 50%AMI 26 950 SF $1.30 $1,239 $379,000 0.00 $1,239 $379,000 Total/Average 86 800 SF $1.38 $1,100 $1,151,000 $1.38 $1,100 $1,151,000 Add: Other Income $50 /Unit/Month $52,000 $50 /Unit/Month $52,000 Total Gross Scheduled Income(GSI) $1,203,000 $1,203,000 II. Effective Gross Income I
(Less)Vacancy 5.0% of GSI 60 000 5.0% of GSI 60 000 Effective Gross Income(EGI) $1,143,000 $1,143,000 III. Operating Expenses
(Less)Operating Expenses $5,250 /Unit/Year ($452,000) $5,250 /Unit/Year ($452,000) (Less)Tenant Services $200 /Unit/Year ($17,000) $500 /Unit/Year ($43,000) (Less)Property Taxes/Assessments(�) $233 /Unit/Year ($20,000) $233 /Unit/Year ($20,000) (Less)Replacement Reserves $250 /Unit/Year ($22,000) $500 /Unit/Year ($43,000) (Less)Monitoring Fee 150 /Unit/Year 13 000 150 /Unit/Year 13 000 Total Operating Expenses $6,093 /Unit/Year ($524,000) $6,640 /Unit/Year ($571,000)

45.8% of EGI 50.0% of EGI
IV. Net Operating Income(NOI) $619,000 $572,000 V. (Less)Debt Service-Other State Funding Source(3) 0.00% of Loan LO 0.42% of Loan 27 000 VI. NOI after Debt Service for State Funding Source $619,000 $545,000 (1) Based on the lower of State of California Department of Housing and Community Development(HCD)2022 income limits or California Tax Credit Allocation Committee 2022 maximum income and rent levels for projects placed in service on or after April 18,2022. (2) Reflects special assessments only. Assumes project will qualify for tax-exempt status. (3) Reflects competitive State funding source,e.g.,AHSC,MIP,MHP,11G,etc.

Prepared by:Keyser Marston Associates,Inc.

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TOD AREAS

OFF-SITE PRODUCTION
TABLE E-4

RESIDUAL LAND VALUE-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
00%Affordable
Stacked Flats over Podium Parking
9%Tax Credits 4%Tax Credits
I. Sources of Funds Total Per Unit Total Per Unit Supportable Permanent Loan(1) $8,349,000 $97,000 $8,345,000 $97,000 Tax Credit Equity Investment(2) $22,826,000 $265,000 $20,499,000 $238,000 Other State Funding Source (3) $0 $0 $6,450,000 $75,000 Deferred Developer Fee (4) $0 $0 $3,377,000 $39,000 General Partner Equity Contribution (4) $0 LO Total Sources of Funds $31,175,000 $363,000 $38,671,000 $450,000 II. (Less) Development Costs excluding Land ($38,813,000) 451 000 ($47,502,000) 552 000 III. lResidual Land Value ($7,638,000) ($89,000) ($8,831,000) ($103,000) Prepared by: Keyser Marston Associates, Inc.

Filena ��i � t�In-Lieu Fee Study_Prototype Models_09-15-22;9/15/2022;et)1 Page 57 oM48

TOD AREAS

OFF-SITE PRODUCTION
TABLE E-4(CONT-D.)

RESIDUAL LAND VALUE-TOD AREAS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
00Affordable
Stacked Flats over Podium Parking
9%Tax Credits 4%Tax Credits
(1) Supportable Permanent Loan
NOI $619,000 $545,000
Interest Rate 5.50% 4.50%
Term (years) 35 35
Debt Coverage Ratio 1.15 1.15
Annual Debt Service $538,000 $473,913
Supportable Permanent Loan $8,349,000 $8,345,000 (2) Low Income Housing Tax Credits(Federal)
Estimate of Eligible Basis:

Total Development Costs $38,813,000 $47,502,000 (Less) Ineligible Costs 4% ($1,643,000) 5% ($2,444,000) Eligible Basis $37,170,000 $45,058,000 Tax Credit Proceeds:

Maximum Eligible Basis $37,170,000 $45,058,000 (Less)Voluntary Credit Adjustment 40.0% ($14,868,000) 0.0% _�O_ Total Requested Unadjusted Basis $22,302,000 $45,058,000 Impacted Bonus Factor 130% $28,993,000 130% $58,575,400 Tax Credit Qualified Units/Applicable Factor 100% $28,993,000 100% $58,575,400 Tax Credit Rate 9.00% $2,609,000 4.00% $2,343,000 Total Tax Credits @ 10 $26,090,000 10 $23,430,000 Limited Partner Share 99.99% $26,087,000 99.99% $23,427,657 Tax Credit Equity Investment @ 87.5% $22,826,000 87.5% $20,499,000 (3) Other State Funding Source
Total Loan $0 $6,450,000
Annual Debt Service 0.00% $0 0.42% $27,000 (4) Estimate of Deferred Developer Fee
Eligible Basis $37,170,000 $45,058,000 (Less) Developer Fee ($2,200,000) ($5,877,000) Unadjusted Eligible Basis $34,970,000 $39,181,000 Total Developer Fee 6.3% $2,200,000 15.0% $5,877,000 Developer Overhead Fee $2,200,000 $5,877,000 (Less) Deferred Developer Fee 0.00% _�O_ 57.5% ($3,377,000) Upfront Developer Fee $2,200,000 $2,500,000
Prepared by: Keyser Marston Associates, Inc.

FilenaJ()fJyr/21J2_V-Lieu Fee Study_Prototype Models_09-15-01/15/2022;ejr Page 58 oM4,54

APPENDIX F
In-Lieu Fee Financial Analysis
Citywide
Approach 1: On-Site Production
A*S
4q�1
10/11/2022 D 1 Page 59 0'f§8

CITYWIDE
TABLE F-1 ON-SITE PRODUCTION

PROTOTYPE PROJECT DESCRIPTIONS-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Garden Apartments Stacked Flats over Tuck-Under Parking Stacked Flats with Wrap Parking - Im
� r
I. Site Area 6.0 Acres 2.5 Acres 3.0 Acres II. Gross Building Area(GBA)
A. Residential
Net Rentable Area 121,800 SF 94% 85,000 SF 88% 171,000 SF 84% Amenities 1,500 SF 1% 1,500 SF 2% 3,000 1% Circulation/Common Area 66,500 SF 5% 9 600 SF 10% 30,700 SF 15% Total GBA- Residential 129,800 SF 100% 96,100 SF 100% 204,700 SF 100% B. Retail/Restaurant --- --- ---
C. Total GBA 129,800 SF 96,100 SF 204,700 SF III. Unit Mix #of Units Unit Size #of Units Unit Size #of Units Unit Size One Bedroom 36 Units 30% 750 SF 40 Units 40% 700 SF 54 Units 30% 750 SF Two Bedroom 72 Units 60% 1,100 SF 60 Units 60% 950 SF 108 Units 60% 1,000 SF Three Bedroom 12 Units 10% 1,300 SF 0 Units % 0 SF 18 Units 10% 1,250 SF Total/Average 120 Units 100% 1,015 SF 100 Units 100% 850 SF 180 Units 100% 950 SF IV. Number of Units 120 Units 100 Units 180 Units V. Density 20 Units/Acre 40 Units/Acre 60 Units/Acre VI. Construction Type Type V Type V Type V VII. Stories 2-3 Stories 3 Stories 4-5 Stories Vill. FAR 0.50 FAR 0.88 FAR 1.57 FAR IX. Parking
Type Surface Tuck-Under Wrap
Spaces 300 Spaces 175 Spaces 270 Spaces Ratio 2.50 Spaces/Unit 1.75 Spaces/Unit 1.50 Spaces/Unit Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

ON-SITE PRODUCTION
TABLE F-2

DEVELOPMENT COSTS-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Garden Apartmenti��� Stacked Flats over Tuck-Under Parking Stacked Flats with Wrap Parking Total Per Unit Comments Total Per Unit Comments Total Per Unit Comments I. Direct Costs
Off-Site Improvements(1) $1,307,000 $11,000 $5 Per SF Site $545,000 $5,000 $5 Per SF Site $653,000 $4,000 $5 Per SF Site On-Site Improvements/Landscaping(1) $3,920,000 $33,000 $15 Per SF Site $1,634,000 $16,000 $15 Per SF Site $1,960,000 $11,000 $15 Per SF Site Parking $0 $0 $0 Per Space $2,625,000 $26,000 $15,000 Per Space $6,750,000 $38,000 $25,000 Per Space Shell Construction $25,960,000 $216,000 $200 Per SF GBA $21,623,000 $216,000 $225 Per SF GBA $51,175,000 $284,000 $250 Per SF GBA FF&E/Amenities $900,000 $7,500 $7 Per SF GBA $750,000 $7,500 $8 Per SF GBA $1,350,000 $7,500 $7 Per SF GBA Contingency $1,604,000 $13,000 5.0% of Above Directs $1,359,000 $14,000 5.0% of Above Directs $3,094,000 $17,000 5.0% of Above Directs Total Direct Costs $33,691,000 $281,000 $260 Per SF GBA $28,536,000 $285,000 $297 Per SF GBA $64,982,000 $361,000 $317 Per SF GBA II. Indirect Costs
Architecture&Engineering $1,685,000 $14,000 5.0% of Directs $1,427,000 $14,000 5.0% of Directs $3,249,000 $18,000 5.0% of Directs Permits&Fees(2) $3,776,000 $31,000 $29 Per SF GBA $3,034,000 $30,000 $32 Per SF GBA $5,803,000 $32,000 $28 Per SF GBA Legal&Accounting $505,000 $4,000 1.5% of Directs $428,000 $4,000 1.5% of Directs $975,000 $5,000 1.5% of Directs Taxes&Insurance $505,000 $4,000 1.5% of Directs $428,000 $4,000 1.5% of Directs $975,000 $5,000 1.5% of Directs Developer Fee $1,348,000 $11,000 4.0% of Directs $1,141,000 $11,000 4.0% of Directs $2,599,000 $14,000 4.0% of Directs Marketing/Lease-Up $600,000 $5,000 1.8% of Directs $500,000 $5,000 1.8% of Directs $900,000 $5,000 1.4% of Directs Contingency $421,000 $4,000 5.0% of Above Indirects $348,000 $3,000 5.0% of Above Indirects $725,000 $4,000 5.0916 of Above Indirects Total Indirect Costs $8,840,000 $74,000 26.2% of Directs $7,306,000 $73,000 25.6% of Directs $15,226,000 $85,000 23.4% of Directs III. Financing Costs(3) $3,369,000 $% ',000 10.0% of Directs $2,854,000 $29,000 10.0% of Directs $6,498,000 $36,000 10.0% of Directs IV. Development Costs(4) $45,900,000 $383,000 $35,' Per SF GBA $38,696,000 $387,000 $403 Per SF GBA $86,706,000 $482,000 $424 Per SF GBA (1) Estimated allowance;not verified by KMA or the City of Vista. (2) Per City of Vista,includes building fees,development impact fees,potable and reclaimed water meter fees,and Vista Unified School District fees. (3) Includes loan fees,interest during construction,and interest lease-up. (4) Excludes acquisition costs.

Prepared by: Keyser Marston Associates,Inc.

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CITYWIDE
TABLE F-3 ON-SITE PRODUCTION

NET OPERATING INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Garden Apartments
0'. 92%@ Market-Rate/8%@Low 92%@ Market-Rate/8%@Moderate I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month(1)(2 ( Annual #Units SF Month(1f(3( Annual A. Market-Rate
One Bedroom 750 SF 36 $3.00 $2,250 $972,000 33 $3.00 $2,250 $891,000 33 $3.00 $2,250 $891,000 Two Bedroom 1,100 SF 72 $2.75 $3,030 $2,618,000 66 $2.75 $3,030 $2,400,000 66 $2.75 $3,030 $2,400,000 Three Bedroom 1,300 SF 12 $2.50 jLZ5Q $468,000 11 $2.50 $3,250 $429,000 11 $2.50 3 250 $429,000 Subtotal/Average 1,015 SF 120 $2.78 $2,820 $4,058,000 110 $2.78 $2,820 $3,720,000 110 $2.78 $2,820 $3,720,000 B. Affordable
One Bedroom 750 SF 3 $ $1,221 $44,000 3 $3.00 $2,250 (4) $81,000 Two Bedroom 1,100 SF 6 $1.24 $1,363 $98,000 6 $2.33 $2,566 (4) $185,000 Three Bedroom 1 300 SF - - _ _ � 1.16 1 507 $18,000 1 $2.19 $2,843 (4) $34,000 Subtotal/Average 1,015 SF 10 $1.31 $1,333 $160,000 10 $2.46 $2,500 $300,000 C. Total/Average 1,015 SF 120 $2.76 $2,800 $4,058,000 120 $2.65 $2,694 $3,880,000 120 $1.00 $2,792 $4,020,000 Add: Other Income $100 /Unit/Month $144,000 $75 /Unit/Month $108,000 $100 /Unit/Month $144,000 D. Total Gross Scheduled Income(GSI) $4,202,000 $3,988,000 $4,164,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 210 000 5.0% of GSI 199 000 5.0% of GSI 208 000 Effective Gross Income(EGI) $3,992,000 $3,789,000 $3,956,000 III. Operating Expenses
(Less)Operating Expenses $4,750 /Unit/Year ($570,000) $4,750 /Unit/Year ($570,000) $4,750 /Unit/Year ($570,000) (Less)Property Taxes/Assessments(z) $6,100 /Unit/Year ($732,000) $5,733 /Unit/Year ($688,000) $6,033 /Unit/Year ($724,000) (Less)Replacement Reserves 250 /Unit/Year 30 000 250 /Unit/Year 30 000 250 /Unit/Year 30 000 Total Operating Expenses $11,100 /Unit/Year ($1,332,000) $10,733 /Unit/Year ($1,288,000) $11,033 /Unit/Year ($1,324,000)

33.4% of EGI 34.0% of EGI 33.5% of EGI
IV. Net Operating Income(NOI) $2,660,000 $2,501,000 $2,632,000 (1)Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2)Affordable rents reflect 30%monthly income at 60%AMI. (3)Affordable rents reflect 30%monthly income at 110%AMI. (4) Reflects the lesser of market rent vs.affordable rents. (5) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE
TABLE F-4 ON-SITE PRODUCTION

NET OPERATING INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Tuck-Under Parking
0', 92%@ Market-Rate/8%@Low 92%@ Market-Rate/8%@ Moderate I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month 11)I2) Annual #Units SF Month hllsl Annual A. Market-Rate
One Bedroom 700 SF 40 $3.25 $2,280 $1,094,000 37 $3.25 $2,280 $1,012,000 37 $3.25 $2,280 $1,012,000 Two Bedroom 950 SF 60 $3.00 $2,850 $2,052,000 55 $3.00 $2,850 $1,881,000 55 $3.00 $2,850 $1,881,000 Three Bedroom 0 SF 0 $0.00 LO LO 0 0.00 LO LO 0 0.00 LO LO Subtotal/Average 850 SF 100 $3.08 $2,620 $3,146,000 92 $3.08 $2,620 $2,893,000 92 $3.08 $2,620 $2,893,000 B. Affordable
One Bedroom 700 SF 3 $1.74 $1,221 $44,000 3 $3.26 $2,280 (4) $82,000 Two Bedroom 950 SF 5 $1.43 $1,363 $82,000 5 $2.70 $2,566 (4) $154,000 Three Bedroom 0 SF - - - - 0 $0.00 $1,507 LO 0 $0.00 $2,843 (4) LO Subtotal/Average 856 SF 8 $1.53 $1,313 $126,000 8 $2.87 $2,458 $236,000 C. Total/Average 850 SF 100 $3.06 $2,600 $3,146,000 100 $2.96 $2,516 $3,019,000 100 $3.07 $2,608 $3,129,000 Add: Other Income $125 /Unit/Montt $150,000 $100 /Unit/Month $120,000 $125 /Unit/Month $150,000 D. Total Gross Scheduled Income(GSI) $3,296,000 $3,139,000 $3,279,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 165 000 5.0% of GSI 157 000 5.0% of GSI 164 000 Effective Gross Income(EGI) $3,131,000 $2,982,000 $3,115,000 III. Operating Expenses
(Less)Operating Expenses $5,000 /Unit/Year ($500,000) $5,000 /Unit/Year ($500,000) $5,000 /Unit/Year ($500,000) (Less)Property Taxes/Assessments(z) $5,620 /Unit/Year ($562,000) $5,300 /Unit/Year ($530,000) $5,590 /Unit/Year ($559,000) (Less)Replacement Reserves 250 /Unit/Year 25 000 250 /Unit/Year 25 000 250 /Unit/Year 25 000 Total Operating Expenses $10,870 /Unit/Year ($1,087,000) $10,550 /Unit/Year ($1,055,000) $10,840 /Unit/Year ($1,084,000)

34.7% of EGI 35.4% of EGI 34.8% of EGI
IV. Net Operating Income(NOI) $2,044,000 $1,927,000 $2,031,000 (1) Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Affordable rents reflect 30%monthly income at 60%AMI. (3) Affordable rents reflect 30%monthly income at 110%AMI. (4) Reflects the lesser of market rent vs.affordable rents. (5) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE
TABLE F-5 ON-SITE PRODUCTION

NET OPERATING INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
0' I 92%@ Market-Rate/8%@ Low I 9291 @ Market-Rate/8%@ Moderate I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month h)RI Annual #Units SF Month(il(sl Annual A. Market-Rate
One Bedroom 750 SF 54 $3.50 $2,630 $1,704,000 50 $3.50 $2,630 $1,578,000 50 $3.50 $2,630 $1,578,000 Two Bedroom 1,000 SF 108 $3.25 $3,250 $4,212,000 99 $3.25 $3,250 $3,861,000 99 $3.25 $3,250 $3,861,000 Three Bedroom 1 250 SF 18 $3.00 JLZLO $810,000 17 $3.00 $3,750 $765,000 17 $3.00 3 750 $765,000 Subtotal/Average 950 SF 180 $3.27 $3,110 $6,726,000 166 $3.27 $3,110 $6,204,000 166 $3.27 $3,110 $6,204,000 B. Affordable
One Bedroom 750 SF 4 $1.6 $1,221 $59,000 4 $3.05 $2,291 (4) $110,000 Two Bedroom 1,000 SF 9 $1.3 $1,363 $147,000 9 $2.57 $2,566 (4) $277,000 Three Bedroom 1 250 SF $1.21 $1,507 $18,000 1 $2.27 $2,843 (4) $34,000 Subtotal/Average 946 SF 14 $1.41 $1,333 $224,000 14 $2.65 $2,506 $421,000 C. Total/Average 950 SF 180 $3.27 $3,110 $6,726,000 180 $3.13 $2,976 $6,428,000 180 $3.23 $3,067 $6,625,000 Add: Other Income $150 /Unit/Month $324,000 $75 /Unit/Month $162,000 $150 /Unit/Month $324,000 D. Total Gross Scheduled Income(GSI) $7,050,000 $6,590,000 $6,949,000 II. Effective Gross Income
(Less)Vacancy 5.0% of G 353 000 5.0% of GSI 330 000 5.0% of GSI 347 000 Effective Gross Income(EGI) il $6,697,000 $6,260,000 $6,602,000 III. Operating Expenses
(Less)Operating Expenses $5,750 /Unit/Year ($1,035,000) $5,750 /Unit/Year ($1,035,000) $5,750 /Unit/Year ($1,035,000) (Less)Property Taxes/Assessments(s) $6,728 /Unit/Year ($1,212,000) $6,206 /Unit/Year ($1,117,000) $6,617 /Unit/Year ($1,191,000) (Less)Replacement Reserves 250 /Unit/Year 45 000 250 /Unit/Year 45 000 250 /Unit/Year 45 000 Total Operating Expenses $12,728 /Unit/Year ($2,292,000) $12,206 /Unit/Year ($2,197,000) $12,617 /Unit/Year ($2,271,000)

34.2% of EGI 35.1% of EGI 34.4% of EGI
IV. Net Operating Income(NOI) $4,405,000 $4,063,000 $4,331,000 (1)Affordable rents based on State of California Department of Housing and Community Development(HCD)2022 income limits. (2)Affordable rents reflect 30%monthly income at 60%AMI. (3)Affordable rents reflect 30%monthly income at 110%AMI. (4) Based on capitalized income approach;assumes a 4.00%capitalization rate and a 1.10%tax rate.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

ON-SITE PRODUCTION
TABLE F-6

RESIDUAL LAND VALUE-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Garden Apartments
92%@ Market-Rate/ 92%@ Market-Rate/
8%@ Low 8%@ Moderate
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $2,660,000 $2,501,000 $2,632,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $554,000 /Unit $66,500,000 $521,000 /Unit $62,525,000 $548,000 /Unit $65,800,000 (Less)Cost of Sale 2.0% of Value ($1,330,000) 2.0% of Value ($1,251,000) 2.0% of Value ($1,316,000) (Less)Target Developer Profit 10.0% of Value ($6,650,000) 10.0% of Value ($6,253,000) 10.0% of Value ($6,580,000) II. Net Sales Proceeds $58,520,000 $55,021,000 $57,904,000 (Less) Development Costs ($45,900,000) ($45,900,000) ($45,900,000) III. Residual Land Value $12,620,000 $9,121,000 $12,004,000 Per Unit $105,000 $76,000 $100,000 Per SF Site $48 $35 $46
Prepared by:Keyser Marston Associates,Inc.

Filename:Citt ffM, a 2022ee Study_Prototype Models_09-15-22;9/15/2022;ejr D 1 Page 65 P h(�

CITYWIDE

ON-SITE PRODUCTION
TABLE F-7

RESIDUAL LAND VALUE-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stack Flats over Tuck-Under Parking
92%@ Market-Rate/ 92%@ Market-Rate/
8%@ Low 8%@ Moderate
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $2,044,000 $1,927,000 $2,031,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $511,000 /Unit $51,100,000 $482,000 /Unit $48,175,000 $508,000 /Unit $50,775,000 (Less)Cost of Sale 2.0% of Value ($1,022,000) 2.0% of Value ($964,000) 2.0% of Value ($1,016,000) (Less)Target Developer Profit 10.0% of Value ($5,110,000) 10.0% of Value ($4,818,000) 10.0% of Value ($5,078,000) II. Net Sales Proceeds $44,968,000 $42,393,000 $44,681,000 (Less) Development Costs ($38,696,000) ($38,696,000) ($38,696,000) III. Residual Land Value $6,272,000 $3,697,000 $5,985,000 Per Unit $63,000 $37,000 $60,000
Per SF Site $58 $34 $55 Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE

ON-SITE PRODUCTION
TABLE F-8

RESIDUAL LAND VALUE-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats with Wrap Parking
92%@ Market-Rate/ 92%@ Market-Rate/
8%@ Low 8%@ Moderate
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $4,405,000 $4,063,000 $4,331,000 Capitalization Rate @ 4.00% 4.00% 4.00% Capitalized Value Upon Completion $612,000 /Unit $110,125,000 $564,000 /Unit $101,575,000 $602,000 /Unit $108,275,000 (Less)Cost of Sale 2.0% of Value ($2,203,000) 2.0% of Value ($2,032,000) 2.0% of Value ($2,166,000) (Less)Target Developer Profit 10.0% of Value ($11,013,000) 10.0% of Value ($10,158,000) 10.0% of Value ($10,828,000) II. Net Sales Proceeds $96,909,000 $89,385,000 $95,281,000 (Less) Development Costs ($86,706,000) ($86,706,000) ($86,706,000) III. Residual Land Value $10,203,000 $2,679,000 $8,575,000 Per Unit $57,000 $15,000 $48,000
Per SF Site $78 $21 $66
Prepared by:Keyser Marston Associates,Inc.

Filename:Cj oyjiJJ2022ee Study_Prototype Mode ls_09-15-22;9/15/2022;ejr D 1 Page 67 P h(�

APPENDIX G
In-Lieu Fee Financial Analysis
Citywide
Approach 2: Off-Site Production
< IN
4q�1
10/11/2022 D 1 Page 68 ofJ`

CITYWIDE
TABLE G-1 OFF-SITE PRODUCTION

PROTOTYPE PROJECT DESCRIPTION-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Tuck-Under Parking
I. Site Area 1.75 Acres
II. Gross Building Area(GBA)
A. Residential
Net Rentable Area 66,300 SF / 88%
Amenities 1,500 SF 2%
Circulation/Common Area 7,500 SF 10%
Total GBA- Residential 75,300 SF 100%
B. Retail/Restaurant ---
C. Total GBA 75,300 SF
III. Unit Mix #of Units Unit Size
One Bedroom 20 Units 25% 650 SF
Two Bedroom 35 Units 45% 850 SF
Three Bedroom 23 Units 30% 1,000 SF
Total/Average 78 Units 100% 850 SF
IV. Affordability Mix
50%AMI (1) 77 Units 99%
Manager 1 Units 1%
Total/Av 78 Units 100%
V. Number of Units 78 Units
VI. Density 45 Units/Acre
VII. Construction Type Type V
Vill. Stories 3 Stories
IX. FAR 0.99 FAR
X. Parking
Type Tuck-Under
Spaces 78 Spaces
Ratio 1.00 Spaces/Unit
(1) Assumes range of affordability from 30%AMI to 60%AMI,with average affordability at 50%AMI.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE
TABLE G-2 OFF-SITE PRODUCTION

PROTOTYPE PROJECT DESCRIPTIONS-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Tuck-Under Parking
9%Tax Credits 4%Tax Credits
Total Per Unit Comments Total Per Unit Comments I. Direct Costs
Off-Site Improvements(1) $381,000 $5,000 $5 Per SF Site $381,000 $5,000 $5 Per SF Site On-Site Improvements/Landscaping(1) $1,143,000 $15,000 $15 Per SF Site $1,143,000 $15,000 $15 Per SF Site Parking $1,170,000 $15,000 $15,000 Per Space $1,170,000 $15,000 $15,000 Per Space Shell Construction $16,942,500 $217,000 $225 Per SF GBA $16,942,500 $217,000 $225 Per SF GBA FF&E/Amenities $390,000 5 000 $5 Per SF GBA $390,000 5 000 $5 Per SF GBA Subtotal $20,026,500 $257,000 $266 Per SF GBA $20,026,500 $257,000 $266 Per SF GBA Add: Prevailing Wages $0 $0 0.0% of Above Directs $3,004,000 $39,000 15.0% of Above Directs Contingency $1,001,000 $13,000 5.0% of Directs $1,152,000 $15,000 5.0% of Directs Total Direct Costs $21,027,500 $270,000 $279 Per SF GBA $24,182,500 $310,000 $321 Per SF GBA II. Indirect Costs
Architecture&Engineering $1,051,000 $13,000 5.0% of Directs $1,209,000 $16,000 5.0% of Directs Permits&Fees(2) $2,306,000 $30,000 $31 Per SF GBA $2,306,000 $30,000 $31 Per SF GBA Legal&Accounting $315,000 $4,000 1.5% of Directs $363,000 $5,000 1.5% of Directs Taxes&Insurance $315,000 $4,000 1.5% of Directs $363,000 $5,000 1.5% of Directs Developer Fee $2,200,000 $28,000 10.5% of Directs $4,490,000 $58,000 18.6% of Directs Marketing/Lease-Up $195,000 $2,500 0.9% of Directs $195,000 $2,500 0.8% of Directs Contingency $319,000 $4,000 5.0% of Above Indirects $446,000 6 000 5.0% of Above Indirects Total Indirect Costs $6,701,000 $86,000 31.9% of Directs $9,372,000 $120,000 38.8% of Directs III. Financing Costs
Loan Fees $596,000 $8,000 2.8% of Directs $1,136,000 $15,000 4.7% of Directs Interest During Constructions $1,069,000 $14,000 5.1% of Directs $767,000 $10,000 3.2% of Directs Title/Recording/Escrow $39,000 $500 0.2% of Directs $39,000 $500 0.2% of Directs Interest During Lease-Up $891,000 $11,000 4.2% of Directs $639,000 $8,000 2.6% of Directs TCAC/Syndication Fees $191,000 $2,000 0.9% of Directs $181,000 $2,000 0.7% of Directs Operating Lease-Up/Reserves $287,000 4 000 1.4% of Directs $293,000 $4,000 1.2% of Directs Total Financing Costs $3,073,000 $39,000 14.6% of Directs $3,055,000 $39,000 12.6% of Directs IV. Development Costs(3) $30,801,500 $395,000 $409 Per SF GBA $36,609,500 $469,000 $486 Per SF GBA (1) Estimated allowance;not verified by KMA or the City of Vista. (2) Per City of Vista,includes building fees,development impact fees,potable and reclaimed water meter fees,and Vista Unified School District fees. (3) Excludes acquisition costs.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE
TABLE G-3 OFF-SITE PRODUCTION

NET OPERATING INCOME-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Tuck-Under Parking
9%Tax Credits 4%Tax Credits
I. Gross Scheduled Income(GSI) #Units Unit Size SF Month") Annual SF Month Ill Annual One Bedroom @ 50%AMI 20 650 SF $1.55 $1,007 $236,000 $1.55 $1,007 $236,000 Two Bedroom @ 50%AMI 35 850 SF $1.32 $1,123 $473,000 $1.32 $1,123 $473,000 Two Bedroom @ Manager 1 850 SF $0.00 $0 $0 $0.00 $0 $0 Three Bedroom @ 50%AMI 23 1,000 SF $1.24 $1,239 $348,000 0.00 $1,239 $348,000 Total/Average 79 850 SF $1.29 $1,100 $1,057,000 $1.29 $1,100 $1,057,000 Add: Other Income $50 /Unit/Month $47,000 $50 /Unit/Month $47,000 Total Gross Scheduled Income(GSI) 1$1,104,000 $1,104,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 55 000 5.0% of GSI 55 000 Effective Gross Income(EGI) $1,049,000 $1,049,000 III. Operating Expenses
(Less)Operating Expenses $4,750 /Unit/Year ($375,000) $4,750 /Unit/Year ($375,000) (Less)Tenant Services $200 /Unit/Year ($16,000) $500 /Unit/Year ($40,000) (Less)Property Taxes/Assessments(�) $253 /Unit/Year ($20,000) $253 /Unit/Year ($20,000) (Less)Replacement Reserves $250 /Unit/Year ($20,000) $500 /Unit/Year ($40,000) (Less)Monitoring Fee 150 /Unit/Year 12 000 150 /Unit/Year 12 000 Total Operating Expenses $5,608 /Unit/Year ($443,000) $6,165 /Unit/Year ($487,000)

42.2% of EGI 46.4% of EGI
IV. Net Operating Income(NOI) $606,000 $562,000 V. (Less)Debt Service-Other State Funding Source(3) 0.00% of Loan LO 0.42% of Loan 25 000 VI. NOI after Debt Service for State Funding Source $606,000 $537,000 (1) Based on the lower of State of California Department of Housing and Community Development(HCD)2022 income limits or California Tax Credit Allocation Committee 2022 maximum income and rent levels for projects placed in service on or after April 18,2022. (2) Reflects special assessments only. Assumes project will qualify for tax-exempt status. (3) Reflects competitive State funding source,e.g.,AHSC,MIP,MHP,IIG,etc.

Prepared by:Keyser Marston Associates,Inc.

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CITYWIDE
TABLE G-4 OFF-SITE PRODUCTION

RESIDUAL LAND VALUE-CITYWIDE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
00Affordable
Stacked Flats over Tuck-Under Parking
9%Tax Credits 4%Tax Credits
I. Sources of Funds Total Per Unit Total Per Unit Supportable Permanent Loan(1) $8,177,000 $105,000 $8,605,000 $110,000 Tax Credit Equity Investment(2) $17,901,000 $230,000 $15,661,000 $201,000 Other State Funding Source (3) $0 $0 $5,850,000 $75,000 Deferred Developer Fee (4) $0 $0 $1,990,000 $26,000 General Partner Equity Contribution (4) LO $0 LO LO Total Sources of Funds $26,078,000 $334,000 $32,106,000 $412,000 II. (Less) Development Costs ($30,801,500) 395 000 ($36,609,500) 469 000 III. Residual Land Value ($4,723,500) ($61,000) ($4,503,500) ($58,000) Prepared by: Keyser Marston Associates, Inc.

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CITYWIDE
TABLE G-4(CONT-D.) OFF-SITE PRODUCTION

RESIDUAL LAND VALUE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Tuck-Under Parking
9%Tax Credits 4%Tax Credits
(1) Supportable Permanent Loan
NOI $606,000 $562,000
Interest Rate 5.50% 4.50%
Term(years) 35 35
Debt Coverage Ratio 1.15 1.15
Annual Debt Service $526,957 $488,696
Supportable Permanent Loan $8,177,000 $8,605,000 (2) Low Income Housing Tax Credits(Federal)
Estimate of Eligible Basis:

Total Development Costs $30,801,500 $36,609,500 (Less) Ineligible Costs 5% ($1,650,000) 6% ($2,186,000) Eligible Basis $29,151,500 $34,423,500
Tax Credit Proceeds:

Maximum Eligible Basis $29,151,500 $34,423,500 (Less)Voluntary Credit Adjustment 40.0% ($11,661,000) 0.0% Total Requested Unadjusted Basis $17,490,500 $34,423,500 Impacted Bonus Factor 130% $22,738,000 130% $44,750,550 Tax Credit Qualified Units/Applicable Factor 100% $22,738,000 100% $44,750,550 Tax Credit Rate 9.00% $2,046,000 4.00% $1,790,000 Total Tax Credits @ 10 $20,460,000 10 $17,900,000 Limited Partner Share 99.99% $20,458,000 99.99% $17,898,210 Tax Credit Equity Investment @ 87.5% $17,901,000 87.5% $15,661,000 (3) Other State Funding Source
Total Loan $0 $5,850,000
Annual Debt Service 0.00% $0 0.42% $34,000 (4) Estimate of Deferred Developer Fee
Eligible Basis $29,151,500 $34,423,500
(Less) Developer Fee ($2,200,000) ($4,490,000) Unadjusted Eligible Basis $26,951,500 $29,933,500 Total Developer Fee 8.2% $2,200,000 15.0% $4,490,000 Developer Overhead Fee $2,200,000 $4,490,000 (Less) Deferred Developer Fee 0.00% �_o 44.3% ($1,990,000) Upfront Developer Fee $2,200,000 $2,500,000 Prepared by:Keyser Marston Associates,Inc.

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APPENDIX H
Estimate of Affordable Rents
A( <
A04OW
10/11/2022 D 1 Page 74 O'Mt

TABLE H-1
ESTIMATE OF AFFORDABLE RENTS-50%AMI,2022

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Number of Bedrooms 1 2 3
A. City of Vista
Percent of AMI 50% 50% 50%
Assumed Family Size 2.0 3.0 4.0
Household Income (1) $42,775 $48,100 $53,450 Income Allocation to Housing 30% 30% 30%
Monthly Housing Cost $1,069 $1,203 $1,336 (Less) Utility Allowance(2) 62 80 97
Maximum Monthly Rent $1,007 $1,123 $1,239
B. Low Income Housing Tax Credit(LIHTC) Program
1111111111-
Percent of AMI 1 50% 50% 50%
Assumed Family Size 1.5 3.0 4.5
Household Income (3) $48,800 $58,550 $67,675 Income Allocation to Housing 30% 30% 30%
Monthly Housing Cost(4) $1,220 $1,463 $1,691 (Less) Utility Allowance(2) 62 80 97
Maximum Monthly Rent $1,158 $1,383 $1,594
C. Maximum Monthly Rent $1,007 $1,123 $1,239 (1) State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Reflects County of San Diego utility allowances,as of December 1,2021.

Monthly Utility One Two Three
Electric Heating $9 $12 $14
Electric Cooking $5 $7 $8
Other Electric $29 $37 $45
Electric Water Heating 19 24 30
Total $62 $80 $97
(3) California Tax Credit Allocation Committee 2022 maximum income levels for projects placed in service on or after April 18,2022. (4) California Tax Credit Allocation Committee 2022 maximum rents for projects placed in service on or after April 18,2022.

Prepared by:Keyser Marston Associates,Inc.

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TABLE H-2
ESTIMATE OF AFFORDABLE RENTS-60%AMI,2022

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Number of Bedrooms 1 2 3
A. City of Vista
Percent of AMI 60% 60% 60%
Assumed Family Size 2.0 3.0 4.0
Household Income (1) $51,330 $57,720 $64,140 Income Allocation to Housing 30% 30% 30%
Monthly Housing Cost $1,283 $1,443 $1,604 (Less) Utility Allowance(2) 62 80 97
B. Maximum Monthly Rent $1,221 $1,363 $1,507 (1) State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Reflects County of San Diego utility allowances,as of December 1,2021.

Monthly Utility One Two Three
Electric Heating $9 $12 $14
Electric Cooking $5 $7 $8
Other Electric $29 $37 $45
Electric Water Heating 19 24 30
Total $62 $80 $97
Prepared by:Keyser Marston Associates,Inc.

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TABLE H-3
ESTIMATE OF AFFORDABLE RENTS- 110%AMI,2022

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Number of Bedrooms 1 2 3
A. City of Vista
Percent of AMI 110% 110% 110%
Assumed Family Size 2.0 3.0 4.0
Household Income (1) $94,105 $105,820 $117,590 Income Allocation to Housing 30% 30% 30%
Monthly Housing Cost $2,353 $2,646 $2,940 (Less) Utility Allowance(2) 62 80 97
B. Maximum Monthly Rent $2,291 $2,566 $2,843 (1) State of California Department of Housing and Community Development(HCD)2022 income limits. (2) Reflects County of San Diego utility allowances,as of December 1,2021.

Monthly Utility One Two Three
Electric Heating $9 $12 $14
Electric Cooking $5 $7 $8
Other Electric $29 $37 $45
Electric Water Heating 19 24 30
Total $62 $80 $97
Prepared by:Keyser Marston Associates,Inc.

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STATE OF CALIFORNIA-BUSINESS,CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM,Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500 ° °,.,n Sacramento,CA 95833
(916)263-2911 /FAX(916)263-7453
www.hcd.ca.gov
October 21, 2019
MEMORANDUM FOR: Planning Directors and Interested Parties FROM: Zachary Olmstead, Deputy Director
Division of Housing Policy Development
3'oft "Zoe-�
SUBJECT: Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill 1505)
This memorandum provides guidance regarding Assembly Bill (AB) 1505 (Chapter 486, Statutes of 2017), effective January 1, 2018.

AB 1505 authorizes the legislative body of any city or county to adopt an inclusionary housing ordinance that includes residential rental units affordable to lower- and moderate-income households (Government Code, § 65850, subd. (g).) Among other things, this bill specifies:
• requirements for alternative means of compliance for inclusionary ordinances, • parameters for the California Department of Housing and Community Development (HCD) review of inclusionary housing ordinances, under limited circumstances, by requesting the submittal of an economic feasibility study to ensure the ordinance does not unduly constrain the production of housing, and • criteria for HCD to review economic feasibility studies.

Copies of bills and other materials from the 2017-2018 session can be obtained at http://leginfo.legislature.ca.gov/ or the legislative Bill Room at 916-445-2323. For additional information or questions, please contact the Division of Housing Policy Development at (916) 263-2911.

Pagel
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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill 1505)

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BACKGROUND AND INTENT OF AB 1505
Article XI, section 7 of the California Constitution grants each city and county the power "to make and enforce within its limits all local, police, sanitary and other ordinances and regulations not in conflict with general laws." This is generally referred to as the police power of local governments. The Planning and Zoning Law (Gov. Code, §§ 65000 to 66035) sets forth minimum standards for cities and counties to follow in land use regulation, but the law also establishes the Legislature's intent to "provide only a minimum of limitation in order that counties and cities may exercise the maximum degree of control over local zoning matters." (Government Code § 65800).

Many jurisdictions, pursuant to their police power, Legislative Findings on AB 1505 adopted inclusionary housing requirements that
require developers to ensure that a certain "Inclusionary housing ordinances percentage of housing units in a new development have provided quality affordable be affordable to moderate- and lower-income housing to over 80,000 households. Most, if not all, of such requirements Californians, including the applied to both rental and ownership housing. production of an estimated 30,000 Despite the many local inclusionary requirements, units of affordable housing in thelast decade alone. Since the court decisions changed the environment regarding 1970s, over 170 jurisdictions have rental inclusionary requirements. In 2009, in enacted inclusionary housing Palmer/Sixth Street Properties, L.P. v. City of Los ordinances inclusionary meet their
Angeles (2009) 175 Cal.AppAth 1396, the Second affordable housing needs." District California Court of Appeal opined that the
city's inclusionary housing requirements associated
with a specific plan, as applied to rental housing, conflicted with, and were preempted by, a state law known as the Costa-Hawkins Rental Housing Act. (Civil Code, §§ 1954.50 to 1954.535.)
The Costa-Hawkins Act, adopted in 1995, allows landlords to set the initial rent for a new unit and to increase the rent to market levels whenever a unit is vacated. The Court of Appeal concluded that the city's inclusionary requirement clearly conflicted with Palmer's right to set the rental rate for his units because the City would limit the rent that he could charge for the affordable units. After the Palmer decision, most jurisdictions with inclusionary housing ordinances that included rental housing stopped applying the inclusionary requirements on rental housing development.

In response to the court cases, AB 1505 supersedes the holding and dicta in the Palmer/Sixth Street Properties case to the extent that the decision conflicts with a local jurisdiction's authority to adopt inclusionary housing ordinances on residential rental unit developments. The enactment of AB 1505 reaffirms the authority of local governments to include rental units within inclusionary ordinance requirements and adds a limited HCD review, under certain circumstances, of economic feasibility studies to demonstrate the ordinance does not unduly constrain the production of housing.

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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill 1505)

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LOCAL AUTHORITY
While local governments have long held the authority to adopt ordinances and regulate land use, recent court cases made that authority relative to rental inclusionary housing less clear. In response, AB 1505
provides clear authority that all California Building Assn. V. of San Jose cities and counties, including (2015) 61 CalAt" 435 charter cities and counties, may
adopt ordinances that require, In 2010, the City of San Jose adopted an as a condition of development, a inclusionary housing ordinance that applied a certain percentage of rental 15 percent inclusionary requirement for lower- units affordable to lower- or and moderate-income households. The moderate-income households, California Building Industry Association including very low and (CBIA) filed a lawsuit alleging that extremely low- income inclusionary requirements were an "exaction" households, and to reaffirm that needed to be justified by the impact of the adoption of the same be project, like traffic fees. The California conducted openly, consistent Supreme Court ruled that inclusionary with the Ralph M. Brown Act. requirements are not "exactions." Rather, the In clarifying this authority, ruling stated that enforcing affordable housing AB 1505 also recognizes the requirements to address a growing housing importance of flexibility and problem is "constitutionally legitimate" so long mitigating development costs in as it "bears a real and substantial relationship meeting inclusionary to the public interest , and cited the need to requirements. The law states increase the number of affordable units given that inclusionary ordinances the severe scarcity of affordable housing in with rental housing must provide California, and the desirability of having alternative means for economically diverse communities. compliance. Local governments
may seek alternative means of compliance such as in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units. This list of alternative means is not exhaustive, and a local government could include additional means. A local government may also wish to consider other factors when allowing alternative means such as land dedication, off-site construction, and acquisition and rehabilitation.

Examples include strategic locations that minimize displacement, improve access to jobs and transportation, or improve a community's inclusiveness.

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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill
1505) Page 4

HCD REVIEW AUTHORITY
Since 1969, California has required that all jurisdictions (cities and counties) adequately plan to meet the housing needs of everyone in the community. California's local governments meet this requirement by adopting Housing Elements as part of their general plan pursuant to Gov. Code section 65580. Housing Elements are adopted every five to eight years and are subject to HCD review.

Pursuant to Government Code section 65583(a)(5), a jurisdiction's Housing Element must include an analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including, but not limited to, land use controls, fees and other exactions required of developers, local processing and permit procedures, and any locally adopted ordinances that directly impact the cost and supply of residential development. The element must also address and, where appropriate and legally possible, remove governmental constraints to the maintenance, improvement, and development of housing. As an inclusionary ordinance falls under this requirement, the Housing Element must include a description and analysis of the inclusionary housing ordinance framework, which would then be subject to HCD review. For more guidance on this analysis, please see the HCD's Building Blocks Webpage.

AB 1505 provides HCD authority to review economic feasibility studies related to rental inclusionary housing ordinances. However, HCD is not required to review these economic feasibility studies and local governments are only required to submit the studies upon HCD request after meeting several other conditions (see below). Further, HCD will not review the actual inclusionary ordinance pursuant to AB 1505. HCD's review is limited to a review of an economic feasibility study that provides evidence that the ordinance does not unduly constrain the production of housing. AB 1505 did not alter HCD's review authority of inclusionary ordinances, rental and owner, as part of its obligation to review Housing Elements of the general plan.

CONDITIONS TRIGGERING SUBMITTAL TO HCD
Local governments are only required to submit economic feasibility studies if specified conditions exist:
• Rental Inclusionary: AB 1505 only applies to ordinances with rental inclusionary requirements. Ordinances with only ownership housing do not trigger requirements under AB 1505.
• Adopted orAmended Post September 15, 2017: Local governments who do not adopt or amend ordinances after September 15, 2017, do not trigger AB 1505 and are not required to prepare or submit economic feasibility studies to HCD.

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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill
1505) Page 5
Jurisdictions adopting or amending ordinances after September 15, 2017, may consider conducting an economic feasibility study prior to the adoption or amendment of an inclusionary housing ordinance, but are not required to do so. • Level of Affordability: Only inclusionary ordinances that require more than 15 percent of the total number of units to be rented by households at 80 percent or less of area median income (AMI) are subject to AB 1505. Inclusionary ordinances that require less than 15 percent for 80 percent or less AMI household, or solely target household above 80 percent of AMI, do not trigger a submittal or review by HCD under AB 1505.
• HCD Findings: HCD may review any inclusionary rental-housing ordinance if it finds either of the following apply:

Annual Progress Reports
(1) The jurisdiction failed to meet at least 75
percent of its share of its above-moderate Local governments are required to income Regional Housing Need Allocation submit Annual Progress Reports (RHNA) (prorated based on the length of on implementation of the general time within the planning period) over at plan pursuant to Gov. Code least a five-year period, based on the section 65400. The report includes jurisdiction's annual Housing Element progress toward the RHNA by report; or income group. HCD makes that
data available through interactive
(2) The jurisdiction failed to submit the annual maps at Interactive RHNA Maps.

Housing Element report for at least two For assistance on annual reports, consecutive years. contact APR ,hcd.ca.gov.
• HCD Request and Time Limits: Local
governments are only required to submit an economic feasibility study upon HCD request. HCD cannot request to review an economic feasibility study for an ordinance if more than 10 years have passed since the adoption or amendment of that ordinance, whichever is later.

Examples of when the review provisions of AB 1505 apply:
• Jurisdiction adopted an inclusionary housing ordinance for both ownership and rental units in 2003. Due to the results of the Palmer/Sixth Street Properties case, the jurisdiction deleted the reference to rental units in the inclusionary housing ordinance. In 2019, the jurisdiction amends the inclusionary housing ordinance to reinstate its application to rental units.
• Jurisdiction adopted an inclusionary housing ordinance for both ownership and rental units in 2003. The ordinance requires on-site construction of the affordable rental units and does not provide for alternative means of compliance to the on-site requirement for rental units. In 2019, the jurisdiction amends the inclusionary

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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill
1505) Page 6
housing ordinance to include alternative means of compliance to the on-site requirement for rental units.
• Jurisdiction adopts a new inclusionary housing ordinance for rental units in 2018.

Examples of when the review provisions of AB 1505 do not apply:
• Enforcement of a preexisting ordinance: A jurisdiction with an inclusionary housing ordinance adopted in 2003 for both ownership and rental units did not enforce the inclusionary requirement for rental units due to the results of the Palmer/Sixth Street Properties case. Now, the jurisdiction is enforcing the inclusionary requirement for rental units without adopting or amending the ordinance. • Reinstatement of a previously suspended ordinance: A jurisdiction with an inclusionary housing ordinance adopted in 2008 for both ownership and rental units suspended the inclusionary requirement for rental units due to the results of the Palmer/Sixth Street Properties case. Now, the jurisdiction is reinstating the suspended inclusionary requirement for rental units without adopting an, or amending the, inclusionary housing ordinance.

HCD REVIEW PROCESS, CRITERIA AND TIMING
Review Process
Step 1: Evaluate applicability of AB 1505 review to subject inclusionary ordinance.

Third parties can request HCD's evaluation of a jurisdiction's rental inclusionary housing ordinance by submitting a request to the HCD's accountability and enforcement email address, ComplianceReview(a-_)hcd.ca.gov. HCD may also initiate an evaluation of an inclusionary housing ordinance based on information contained within a Housing Element, Annual Progress Report, stakeholder comment letter, phone call, news article, or additional source.

Step 2: If HCD requests evidence that the ordinance does not unduly constrain the production of housing, the jurisdiction must submit an economic feasibility study to HCD within 180 days from its receipt of HCD's request. When complying with the HCD request, the jurisdiction should submit sufficient information to demonstrate how the study meets the specified criteria below.

Step 3: Upon submission of an economic feasibility study, HCD has 90 days to issue a finding as to whether or not the study meets all specified criteria. During its review, HCD may consult with any local government, agency, group, or person prior to issuance of its findings.

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Rental Inclusionary Housing
Chapter 486, Statutes of 2017 (Assembly Bill
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Specified Criteria
• A qualified entity with demonstrated expertise in the preparation of economic feasibility studies prepared the economic feasibility study. • The study methodology followed best professional practices and was sufficiently rigorous to allow an assessment of whether the rental inclusionary requirement, in combination with other factors that influence feasibility, is economically feasible. • If the economic feasibility study was prepared after September 15, 2017, the jurisdiction must have made it available on its website for at least 30 days. After the 30-day period expired, the study must have been placed on the agenda of a regularly scheduled meeting of the jurisdiction's legislative body for consideration and approval.

The economic feasibility study should not be confused with a "nexus study" required when a jurisdiction seeks to justify impact mitigation fees, such as commercial linkage fees, prepared pursuant to Government Code section 66000. Inclusionary requirements may be based on the existing and projected housing needs of the region and other factors reasonably related to the regional welfare. They need not be based on a demonstration of the additional need for affordable housing generated by new residential development.

If a jurisdiction fails to submit an economic feasibility study to HCD within 180 days of receiving HCD's request, or if HCD makes a final decision that the economic feasibility study does not meet the statutory requirements, the jurisdiction's rental inclusionary requirement cannot require more than 15 percent of the total number of units in a development be affordable to households at 80 percent of the area median income. The jurisdiction may continue implementing a requirement at more than 15 percent once it has submitted an economic feasibility study to HCD providing evidence that the inclusionary housing ordinance does not unduly constrain housing production, and HCD makes a finding that the study meets the statutory requirements.

APPEALS
A jurisdiction can appeal HCD's finding that the economic feasibility study does not meet the statutory requirements by submitting an appeal to the Director of HCD. Once HCD receives the appeal, it has 90 days to issue a final decision, unless the timeline is extended by a mutual agreement between the jurisdiction and HCD.

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Attachment A
AB 1505 Revisions to Sections 65850, 65850.01, and Section 3 SECTION 1. Section 65850 of the Government Code is amended to read:
65850. The legislative body of any county or city may, pursuant to this chapter, adopt ordinances that do any of the following:
(a) Regulate the use of buildings, structures, and land as between industry, business, residences, open space, including agriculture, recreation, enjoyment of scenic beauty, use of natural resources, and other purposes.
(b) Regulate signs and billboards.
(c) Regulate all of the following:
(1) The location, height, bulk, number of stories, and size of buildings and structures. (2) The size and use of lots, yards, courts, and other open spaces. (3) The percentage of a lot which may be occupied by a building or structure. (4) The intensity of land use.
(d) Establish requirements for off street parking and loading. (e) Establish and maintain building setback lines.
(f) Create civic districts around civic centers, public parks, public buildings, or public grounds, and establish regulations for
those civic districts.
(g) Require, as a condition of the development of residential rental units, that the development include a certain percentage of residential rental units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate income, lower income, very low income, or extremely low income households specified in Sections 50079.5, 50093, 50105, and 50106 of the Health and Safety Code. The ordinance shall provide alternative means of compliance that may include, but are not limited to, in-lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units.

SECTION. 2.

Section 65850.01 is added to the Government Code, to read:
65850.01. L) The Department of Housing and Community Development, hereafter referred to as "the department"in this section, shall have the authority to review an ordinance adopted or amended by a county or city after September 15, 2017, that requires as a condition of the development of residential rental units that more than 15 percent of the total number of units rented in a development be affordable to, and occupied by, households at 80 percent or less of the area median income if either of the following apply:
(1) The county or city has failed to meet at least 75 percent of its share of the regional housing need allocated pursuant to Sections 65584.04, 65584.05, and 65584.06, as applicable for the above- moderate income category specified in Section 50093 of the Health and Safety Code, prorated based on the length of time within the planning period pursuant to paragraph (1) of subdivision (f) of Section 65588, over at least a five-year period. This determination shall be made based on the annual housing element report submitted to the department pursuant to paragraph (2) of subdivision (a) of Section 65400.
(2) The department finds that the jurisdiction has not submitted the annual housing element report as required by paragraph (2) of subdivision (a) of Section 65400 for at least two consecutive years. 10/11/2022 D 1 Page 85 of 95

(b) Based on a finding pursuant to subdivision (a), the department may request, and the county or city shall provide, evidence that the ordinance does not unduly constrain the production of housing by submitting an economic feasibility study. The county or city shall submit the study within 180 days from receipt of the department's request. The department's review of the feasibility study shall be limited to determining whether or not the study meets the following standards:
(1) A qualified entity with demonstrated expertise preparing economic feasibility studies prepared the study.
(2) If the economic feasibility study is prepared after September 15, 2017, the county or city has made the economic feasibility study available for at least 30 days on its Internet Web site. After 30 days, the county or city shall include consideration of the economic feasibility study on the agenda for a regularly scheduled meetinq of the legislative body of the county or city prior to consideration and approval. This paragraph applies when an economic feasibility study is completed at the request of the department or prepared in connection with the ordinance. (3) The study methodology followed best professional practices and was sufficiently rigorous to allow an assessment of whether the rental inclusionary requirement, in combination with other factors that influence feasibility, is economically feasible.
(c) If the economic feasibility study requested pursuant to subdivision (b) has not been submitted to the department within 180 days, the iurisdiction shall limit any requirement to provide rental units in a development affordable to households at 80 percent of the area median income to no more than 15 percent of the total number of units in a development until an economic feasibility study has been submitted to the department and the department makes a finding that the study meets the standards specified in paragraphs (1), (3), and, if applicable, (2), of subdivision (b). (d) (1) Within 90 days of submission, the department shall make a finding as to whether or not the economic feasibility study meets the standards specified in Para-graphs (1), (3), and, if applicable, (2), of subdivision (b).
(2) If the department finds that the jurisdiction's economic feasibility study does not meet the standards in paragraphs (1), (3), and, if applicable, (2), of subdivision (b), the jurisdiction shall have the right to appeal the decision to the Director of Housing and Community Development or his or her designee. The director or his or her designee shall issue a final decision within 90 days of the department's receipt of the appeal unless extended by mutual agreement of the jurisdiction and the department.
(3) If in its final decision the department finds that jurisdiction's economic feasibility study does not meet the standards in paragraphs (1), (3), and, if applicable, (2), of subdivision (b), the iurisdiction shall limit any requirement to provide rental units in a development affordable to households at 80 percent of the area median income to no more than 15 percent of the total number of units in a development until such time as the iurisdiction submits an economic feasibility study that supports the ordinance under review and the department issues a finding that the study meets the standards in paragraphs (1), Q, and, if applicable, (2), of subdivision (b). (e) The department shall not request to review an economic feasibility study for an ordinance more than 10 years from the date of adoption or amendment of the ordinance, whichever is later. (f) The department shall annually report any findings made pursuant to this section to the Legislature.

The report required by this subdivision shall be submitted in compliance with Section 9795. (.q) The Legislature finds and declares that ensuring access to affordable housing is a matter of statewide concern and not a municipal affair, as that term is used in Section 5 of Article A of the California Constitution. Therefore, this section shall apply to an ordinance proposed or adopted by any city, including a charter city.

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SEC. 3. The Legislature finds and declares all of the following:
(a) Inclusionary housinq ordinances have provided quality affordable housing to over 80,000 Californians, including the production of an estimated 30,000 units of affordable housing in the last decade alone.
(b) Since the 1970s, over 170 jurisdictions have enacted inclusionary housing ordinances to meet their affordable housing needs.
(c) While many of these local programs have been in place for decades, a 2009 appellate court decision has created uncertainty and confusion for local governments regarding the use of this tool to ensure the inclusion of affordable rental units in residential developments. (d) It is the intent of the Legislature to reaffirm the authority of local iurisdictions to include within these inclusionaa housing ordinances requirements related to the provision of rental units. (e) The Legislature declares its intent in adding subdivision (q) to Section 65850 of the Government Code, pursuant to Section 1 of this act, to supersede the holding and dicta in the court decision of Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (2009) 175 Cal.App.4th 1396 to the extent that the decision conflicts with a local iurisdiction's authority to impose inclusionaa housing ordinances pursuant to subdivision (q) of Section 65850 of the Government Code, as added pursuant to Section 1 of this act.
(f) In no case is it the intent of the Legislature in adding subdivision (g) to Section 65850 of the Government Code, pursuant to Section 1 of this act, to enlarge, diminish, or modify in any way the existinq authority of local iurisdictions to establish, as a condition of development, inclusionary housing requirements, beyond reaffirming their applicability to rental units. (q) This act does not modify or in any way change or affect the authority of local iurisdictions to require, as a condition of the development of residential units, that the development include a certain percentage of residential for-sale units affordable to, and occupied by, households with incomes that do not exceed the limits for moderate-income, lower income, very low income, or extremely low income households.
(h) It is the intent of the Legislature to reaffirm that existing law requires that the action of any legislative body of any city, county, or city and county to adopt a new inclusionary housinq ordinance be taken openly and that their deliberations be conducted openly consistent with the requirements of the Ralph M. Brown Act (Chapter 9 (commencinq with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code).
(i) Except as provided in subdivision (e), in no case is it the intent of the Legislature in adding subdivision (g) to Section 65850 of the Government Code, pursuant to Section 1 of this act, to enlarge, diminish, or modify in any way the existing rights of an owner of residential real property under Sections 1954.50 to 1954.535, inclusive, of the Civil Code and Sections 7060 to 7060.7, inclusive, of the Government Code.

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Transit Oriented Development Areas A Miles
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Low Density Residential(LD)
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High Density Residential(HD) b J
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CITY OF VISTA
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EXHIBIT 4
Active Planning Projects for Inclusionary Policy Eligibility ProjectPlanning Project Location .

Case # Name Description Units
1304 N. Santa Fe
1304 N. Avenue (NW corner of N. SDP for 36
P22-0181 Santa Fe Santa Fe Ave and W. apartment units None proposed Apartments Indian Rock) on 0.9 acre
Park Avenue 165 Eucalyptus Ave SDP for 176 10% (18 units) P22-0266 Apartments (former Community apartment units proposed at low Church of Vista) on 2.9 acres income
EXHIBIT 4
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PRIOR CITY COUNCIL ACTIONS
On April 28, 2015, adopted the following: 1) City Council Ordinance No. 2015- 6, amending Vista Development Code Chapters 18.34, R-M Multi-Residential Zone, and 18.35, M-U Mixed-Use Zone, to repeal inclusionary housing requirements; 2) City Council Ordinance no. 2015-7, amending Vista Development Code Chapter 18.31, Second Unit Requirements, to repeal affordable housing covenants for second units; and 3) City Council Resolution No. 2015-66, repealing City Council Policy 300-13, Inclusionary Housing (Vote: 4-1, Campbell opposed).

On February 3, 2015, conducted a workshop to discuss inclusionary housing policies and directed staff to evaluate the impacts of eliminating the City's inclusionary housing policies Vote: 4-1, Campbell abstained).

On February 4, 2014, held a workshop to discuss inclusionary housing policies and directed staff to further evaluate an in-lieu fee study for inclusionary housing and the allowance of offsite inclusionary housing units (Vote: 4-1, Campbell abstained).

On April 23, 2013, adopted City Council Resolution No. 2013- 57, adopting the 2013-2020 Housing Element of the General Plan (Vote: 5-0).

On April 23, 2013, adopted City Council Resolution No. 2013-53, amending City Council Policy 300-13 related to the deferral of in-lieu housing fees, among other actions (Vote: 3-2, Cowles and Campbell opposed).

On December 8, 2009, adopted City Council Resolution No. 2009-197, amending several City Council policies, including Policy 300-13 related to inclusionary housing (Vote: 5-0). The amendment provides clarification that Redevelopment Agency is involved in the development of any new inclusionary housing units within the Redevelopment Area.

On December 12, 2006, adopted City Council Ordinance No. 2006-22, amending Chapter 18.31 of the Development Code relating to second units (Vote: 5-0). The adopted second unit development standards require that second units be restricted as low-income households for a ten-year period.

On March 28, 2006, adopted City Council Policy No. 300-13, clarifying and restating the City's inclusionary housing implementation procedures and providing an option for developers to pay an in-lieu fee on partial units; and adopted City Council Resolution No. 2006- 73, approving an amendment to the inclusionary housing in- lieu fee (Vote: 3- 2, Gronke and Vance opposed).

On November 16, 2004, the City Council held a workshop on affordable housing policy and discussed inclusionary housing requirements (No action was taken).

On March 4, 2003, the City Council held a workshop on affordable housing policy and discussed inclusionary housing requirements (No action was taken).

On June 2, 1992, the City Council held a workshop on inclusionary housing requirements.

Direction was provided to exempt single-family units from the inclusionary requirements, accept a fee in-lieu of lower income units for projects of four or fewer units, and either accept a fee or require the lower income units be provided on-site for projects of five or more units (Vote: 5-0).

EXHIBIT 5
10/11/2022 D 1 Page 94 of 95

On August 13, 1985, adopted City Council Resolution No. 85-192, amending Resolution 82-55 setting fees (Vote: 5-0). This action modified the formula for calculating in-lieu fees for low- income housing units.

On May 28, 1985, adopted City Council Ordinance No. 85-25, amending the zoning ordinance regarding provision of low-income housing (Vote: 4- 1, Flick opposed).

On June 16, 1983, adopted City Council Resolution No. 83-80, amending Resolution 82-55, setting forth fees in lieu of dedication for low- or moderate-income families (Vote: 5- 0).

On April 12, 1982, adopted City Council Resolution No. 82-55, adopting certain fees pursuant to Ordinance 82-2 (Vote: 4- 0, McClellan absent).
10/11/2022 D 1 Page 95 of 95

ADD TO PACKET
From: Helene Bell
To: Public Comments
Subject: D1
Date: Sunday,October 9,2022 1:07:40 AM
My name is Helene and I'm a member of the St. Francis Social Justice Ministry.

Four facts: 1) In Vista there is a need for affordable housing. 2) The Regional Housing Needs Assessment or RHNA has set specific goals for more housing by 2029. 3) Having a safe, functional house or apartment is essential for all Vista residents. 4) Market rate development is mostly favorable to the developer.

Three Questions: 1) Can the Inclusionary Housing Policy state a 9% affordable unit rate across the board that will not invoke the density bonus? 2) Can the policy be made a fluid document that will revisit the success rate in 3 —5 years to evaluate and make adjustments? 3) Is the Council willing to consider including or allowing other types of development in addition to market rate to achieve the RHNA goals?
Thank you
D1

From: Helene Bell
To: Public Comments
Subject: D1
Date: Sunday,October 9,2022 1:10:19 AM
My name is Elena and I'm a member of the St. Francis Social Justice Ministry.

I respect the work compiled by your consultants in calculating the `in lieu' fees. It seems logical that the fees should be higher for three reasons. 1) It would encourage the developer to build the affordable units instead of paying the fees. 2) If higher fees are collected, Vista would have a larger funding source to build affordable housing in another location or, 3) have a funding source to subsidize rents in the non-affordable units for low-income residents.

Thank you

From: John Conley
To: Kathy Valdez
Subject: FW:October 11 City Council Discussion
Date: Monday,October 10,2022 10:56:43 AM
Attachments: Angeles Orozco Speech 10.9.2022 at 8-30 PM.docx Hi Kathy—here is a letter on D1 for tomorrow's meeting.

Thanks,
John
From: Susan Bentley
Sent: Monday, October 10, 2022 9:38 AM
To:John Conley
Subject: Re: October 11 City Council Discussion
Thank you for sending your October 11th meeting.

We reviewed it and want to advocate for a reasonable inclusionary housing policy: For example 15 to alleviate undue economic impact studies, 1/2 mile radius for transit centers, stacked housing with parking below apartments, and reasonable ways for builders to appropriate in lieu fees.

Our community leader's testimony at the Candidate Interviews on Wednesday, October 12 will address the challenges our families face and advocate for general but clear guidelines from the City...

Here are two versions of her testimony....one explicitly referring to inclusionary housing and one that speaks in general terms which we will present at the Candidate Interviews.

Would the one referring to inclusionary housing be something that someone would send to your attention for public input. Please let us know.

Gratefully,
Sue Bentley
On Oct 6, 2022, at 6:47 AM,John Conley wrote:

Hi Susan,
Attached is the staff report for this item. If the file is too large, you can access it here: D1 Inclusionary Housing Policy- Laserfiche WebLink (cityofvista.com) Let me know if you would like anything else.

Thank you,
John

From: Susan Bentley
Sent:Thursday, October 6, 2022 4:58 AM
To:John Conley ;John Conley >
Subject: October 11 City Council Discussion
Good Morning John:

Hope your plans and projects are going well.

Thank you for alerting us to the upcoming city council discussion on October 11 related to the inclusionary poly. We will have a few Social Justice Ministry team members at this meeting. Do you have any resources in writing that you could share with our team that you think might be helpful as we seek update our interest community following this issue?
We are looking forward to seeing how this process will unfold..

Gratefully,
Susan Bentley
On Sep 21, 2022, at 8:07 AM,John Conley
wrote:

Hi Susan,
I'm scheduling a discussion item with the city council on Oct 11 to get some final direction from them on a few issues related to the inclusionary policy. It will be an opportunity to speak to the council on it in a regular meeting so you're welcome to come. I'll likely take it to the planning commission in late Oct or early Nov and to council in Nov for approval.

Thanks,
John
On Wed, Sep 21, 2022 at 7:37 AM Susan Bentley
wrote:

Good Morning John:

We hope that your major project is being completed!

How are you coming along with proposed dates for the Planning Commission review of your Inclusionary Housing Ordinance.....? Please keep us updated when you can.

Gratefully,
Susan Bentley

Good Evening
I am Angeles Orozco de Lepe. I have been a Vista resident for 14 years. I am currently a noon duty supervisor in the Vista public schools, a faith formation leader in a local faith community, and, serve as an advocate for families in our North County Outreach Initiative. From these perspectives, I truly know and understand how important it is for every family to have a safe, nurturing, and affordable space to call home.

I have two daughters, ages 23 and 25, who have persevered through our public school system and are following a college/career path with a hope-filled vision. My husband received his citizenship in 2020 and is grateful to have a steady job that he commutes to every day out of this area. We are blessed, but we still struggle with the reality of continuously increasing rental costs that might come with a month's notice for the same living space.

We have persevered through many challenges through the years. We are fully committed to advocating for other families to flourish in life in our local community. Today I am speaking on behalf of the families we serve who fervently seek to provide a safe nurturing home for their families.

We know that our Vista City Council is in the process of developing housing policies and guidelines in the coming weeks. We firmly believe that it would be in EVERYONE's best interest for the City of Vista to have fair and reasonable legal guidelines for future building rather than no formal guidelines at all.

We would like you, the incumbent and potential city council and mayoral candidates to hear about the challenges our families endure as you are forming guidelines. We hope that you will

look after the pressing needs of the people you serve and to seek implementation solutions that would be best for ALL
Here are some of the challenges and needs that our families have expressed:

1. CHILDREN AND FAMILY ROLE MODELS KEEP LEAVING VISTA. Several single Moms with 2-3 children , with humble incomes, have difficulty finding even affordable one-room housing for their families in Vista and have needed to move out of the area. Our outreach invests in providing substantial tutoring and mentoring for the children in greatest need, as well as in developing and empowering the strongest family group leaders. We count on these leaders to help develop other families in supporting the education as well as faith formation of their children. We lose valuable community resources when these role models have to move out of the area for affordable housing.

2. SUPPORT FOR FIRST AND LAST MONTH'S RENT. As an example a family with 3 children, with one more on the way, has made progress in their income status, and would like to move into an apartment where children have a quiet, safe space for learning, growing, and resting. They are finding that they CAN afford slightly higher monthly rentals but cannot ALSO come up with the first and last month's rent to make that move. They feel stuck and don't know how to find options.

3. HOME OWNERSHIP. Families, whose living status is improving where both parents are working, are becoming leaders and role models for other families academically, economically, social emotionally and spiritually. They want to own a home and can't seem to find anything affordable in Vista. They need help knowing what resources are available or will become available in the future and how to access them.

4. PARKING. Parking in lower cost housing is a major issue. It isn't usually addressed as a component in housing policies. For example we have Moms who work at night and have to walk several blocks alone, in the middle of the night when they come home because all the parking spaces are filled outside their apartment complex. This is a dangerous safety issue.

REASONABLE HOUSING POLICIES. We realize that there might be community members or civic leaders who are against housing guidelines for reasons that wouldn't hold if a reasonable housing policy were adopted by the City Council. A fair policy would allow builders to contribute a reasonable percentage of housing with reasonable percentage goals around transit centers to help families with lower income without undue stress on city resources for economic impact studies.

ON-GOiNG COLLABORATION: INFORMING PUBLIC and CONNECTING RESOURCES We believe that if city officials and community leaders unite and work toward creative solutions like affordable stacked apartments with parking below the apartments on the premises, our families can look forward to safe, nurturing home environments.

Once reasonable legal guidelines are in place, we look forward to partnering with you in implementing information campaigns to enhance the overall understanding of the REAL impact of housing policies that address the common good.

Most of all, we advocate for a united approach to connecting our families in greatest need to the amazing resources that could be provided now and in the future through fair and reasonable housing guidelines.

Thank you for actively listening as we have shared from the heart on behalf of the families we love and serve.

CITY OF VISTA C A L I F 0 R N I
DI : Inclusionary Housing Policy
Vista City Council
October 11, 2022

CITY OF VISTA
D I : Inclusionary Housing
At the April 19, 2022, City Council meeting, the City Council directed staff to develop an
inclusionary housing program with 8 percent
affordable units for residential developments of
20 units or more citywide and 20 percent
affordable units for residential developments of
20 units or more within transit-oriented areas

CITY OF VISTA
D I : Inclusionary Housing
• Staff contracted with KMA to prepare an in-lieu fee study based on the City Council's direction
• The study was drafted in September 2022 and raised some additional questions requiring
clarification from the City Council

CITY OF VISTA
D I : Inclusionary Housing

1. AB 1505 requires an economic feasibility study of any inclusionary housing requirement that exceeds
15% to determine if policy "unduly constrains the production of housing" — the recommended 20%
requirement in TOD areas would be subject to
HCD's review

Cln Of
D I : Inclusionary Housing
DENSITY BONUS CHART*
nMORD+BLE UNIT VERY IOW IMCRME E4M lHC4ME M40ER+TE IHGP�E I/MP ODHATION -11-1 COLLEGE PERCEWACE•• DCNSITTOONU5 DEH$ITT news D€HSRT SON1/5"• DEHS.TT DCRIIlS SEHIpIF•••• DI5.46LEO YET51 $TUCKrliS

HOMELESS
5% 20% 20%
6% 22.5% 20%
796 25% 20%
8% 27.5% 20%
9% 300A - - 20% -
10% 32.5%6 20% 5%h 1 15% 20% 20%
11% 35%6 22.5% 6%b 16% 20% 20%
12% 38,75% 23% 7% 17% 20% 20%
13 42.5% 24-5% 8% 18% 2OW6 20%
14W6 46.250A 26% 9% 190A 20% 20%
15% 500A 275% 16% 20% 20% 200A
16% 50% 29% 11% 21% 20% 20%
17% 50% 3Q5% 12% 22% 20% 20%
18% 50% 32% 13% 23% 20% 20%
19% 50% 315% 14% 24% 20% 20%
20% 50% 35% 15% 25% 20% 20% 35%
21% 50% 3875% 16% 26% 20% 20% 35%
22% 500A 42-5% 17% 27% 20% 200A 35%
2396 5046 d&25% 18W6 2896 20% 200A 35%
24% 500A 50% lg% 29% 20% 20% 35%
25% 50% 50% 20% 30% 2096 20% 35%

CITY OF

CITY OF VISTA
D I : Inclusionary Housing

2. The City Council directed staff to develop a policy requiring low income units
• The Draft KMA study evaluated low (60-80% of AMI) and moderate income (80-120% of AMI) requirements
• Staff requesting the City Council's input regarding the inclusion of moderate income units

CITY OF VISTA
D I : Inclusionary •
3 . The prior inclusionary housing policy required the provision of affordable units onsite and allowed an in- lieu fee for partial units only
• The Draft KMA study identifies a higher cost to develop units onsite than the allowance of an offsite in-lieu fee • Staff recommends allowing an in-lieu fee for offsite affordable housing production
• In-lieu fees would be managed by the Housing Division, could be used for any affordable housing purpose

CITY OF
D I : Inclusionary Housing

4. The transit-oriented development (TOD) areas were defined as a 3/-mile radius from transit centers • Traditional TOD areas are within %2 mile of transit • Staff requesting the City Council's input regarding the preferred TOD radius if a higher inclusionary housing requirement is applied to TOD areas

CIn Of
D I : Inclusionary Housing
a
r°� li•
Melrose Dr Station
Ps,lr�.

I ' ~Vista Transit Center
a"
Civic Gent r Vlsta Statione (, �
Q 112 Mile Radiius Area
Q 314 Mile Radius Area
Transit Station ©�
�r Raoroaa Buena Creek Station
ciry Limits
Open Space Residenfial(OSR)
Rural Res d—1(RR) '
Lew lleesity Residerrtial(Lo) CITY

CITY OF VISTA
D I : Inclusionary Housing

5. There are two active development applications that would be affected by the proposed policy
• 1304 N Santa Fe (P22-0181)
• 165 Eucalyptus Ave ( P22-0266)
• Staff recommends that the inclusionary policy apply to projects submitted following its adoption

CITY OF VISTA C A L I F 0 R N I
DI : Inclusionary Housing Policy
Vista City Council
October 11, 2022

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