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cc 2023 AR 01/10 inclusionary housing program

Vista City Council
January 10, 2023

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ACTION:
____________________________
Clerk/Secretary
Department: Community Development Item No: PH1
Prepared by: John Conley, Director Meeting Date: January 10, 2023 Approved by: Amanda Lee, Acting City Manager Agenda Location: Public Hearing SUBJECT: INCLUSIONARY HOUSING PROGRAM
RECOMMENDATION:

1.Open, conduct, and close a public hearing to receive testimony regarding the proposed Inclusionary Housing Program (P22-0377).

2. Adopt Ordinance No. 2023- , amending chapters 18.34 and 18.35 of the Vista Development Code and the Downtown Vista Specific Plan related to inclusionary housing requirements.

3.Adopt Resolution No. 2023- , adopting City Council Policy 300-15 and establishing an in-lieu fee for an Inclusionary Housing Program.

CORRELATION TO CITY COUNCIL GOALS: Homelessness and Housing.

PRIOR ACTION: On October 11, 2022, discussed the formation of an inclusionary housing policy and directed staff to return with an Inclusionary Housing Program for the City Council’s consideration that sets aside nine percent of the units within any multi-family housing project of 20 units or more with a mix of low- income and moderate-income units, to allow an in-lieu fee for the inclusionary units to be set by the City Council, and to apply the inclusionary requirements to development applications submitted after the effective date (Vote: Consensus).

A complete list of prior actions is included as Exhibit 6.

PRIOR PLANNING COMMISSION ACTION: On December 6, 2022, the Planning Commission adopted Resolution No. 2022-22, recommending City Council approval of an ordinance amending chapters 18.34 and 18.35 of the Vista Development Code and the Downtown Vista Specific Plan related to inclusionary housing requirements (Vote: 5-2, Aguilera and Looney opposed).

STATEMENT ON THE SUBJECT: Inclusionary housing is a city’s mandatory requirement or voluntary program to reserve a certain percentage of housing units within new developments for affordable housing.

The City of Vista established a mandatory inclusionary housing program in 1985 to reserve six percent of all units within the Multi-Residential (R-M) Zone as low-income units (defined as 50-80 percent of the annual median income (AMI) within the County). The City later added inclusionary housing requirements to the Mixed Use (M-U) Zone when it was adopted in 2012. In 2015, the City rescinded the affordable housing requirements in the Development Code and deleted City Council Policy (300-13), which established the requirements for implementation of the inclusionary housing program.

AGENDA
REPORT

CITY COUNCIL

COMMUNITY DEVELOPMENT COMMISSION

SUCCESSOR AGENCY

BUENA SANITATION DISTRICT

JOINT POWERS FINANCING AUTHORITY
01/10/2023 PH1 Page 1 of 66
Approved above recommendation, introduced and adopted City Council Ordinance No. 2023-1; and adopt City Council Resolution No. 2023-3, revising Section 2C of Resolution to read $16/ square foot. Vote: 4-1 (Franklin opposed)

MEETING DATE: January 10, 2023 PAGE 2
SUBJECT: INCLUSIONARY HOUSING PROGRAM
In April 2022, the City Council discussed inclusionary housing and directed staff to provide recommendations on a new policy to re-establish an inclusionary housing program in Vista. Later that year, in October, the City Council again discussed inclusionary housing and provided staff final direction for a new inclusionary housing program, whereby nine percent of the units within a multi-family project of 20 units or more would be required as either low income (50-80 percent AMI) or moderate income (80-120 percent AMI) units. The City Council directed staff to return with the appropriate code amendments and the new policy outlining the associated requirements, which are addressed herein.

The current (2022) AMI for San Diego County for a family of four is $106,900. Moderate income, or 120 percent of AMI within the County, is currently $128,300 for a family of four. Low income, or 80 percent of AMI, is currently $104,100 for a family of four. The 2022 San Diego County AMI affordable categories based on family size are provided in Exhibit 3.

Project Description. The proposed project amends Chapter 18.34, the Multi-Residential (R-M) Zone, and Chapter 18.35, the Mixed Use (M-U) Zone, of the Development Code, as well as amends the Downtown Specific Plan to establish requirements for an Inclusionary Housing Program. The proposal would require the reservation of nine percent of the residential units within a multi-family project of 20 units or more as a mix of low- and moderate-income units. The proposed ordinance amending the Development Code and the Downtown Vista Specific Plan (DVSP) is attached as Exhibit 1 and is summarized below.

Chapter 18.34, R-M Zone. The proposed project would amend Chapter 18.34 of the Development Code to establish inclusionary housing requirements for multi-family projects, either for sale or rent, of 20 units or more. The amendment would add Section 18.34.130, as follows:
• Any application for a Site Development Plan for 20 or more multiple dwelling residential units, for sale or rent, shall include reservation of nine percent of the units being built to be made eligible to the City of Vista as affordable housing units. Affordable housing shall include, at a minimum, four percent of the units as moderate-income units or lower and five percent of the units as low-income units or lower, with "moderate income" and "low income" as defined by the California Department of Housing and Community Development. The City may adopt a fee in lieu of the reservation of the affordable housing units. Such a fee shall be used exclusively for programs providing affordable housing opportunities within the City. The fee shall be based on a formula set by resolution of the City Council as a fair share contribution to the City's Inclusionary Housing Fund as applied to the subject housing project.

When affordable units are provided on-site, the property owner shall execute and cause the recordation of a regulatory agreement, in a form approved by the City Attorney, to assure compliance with this paragraph. The City may adopt policies, rules and regulations by Resolution or administrative action to implement these affordable housing provisions, and such requirements shall apply to qualifying projects.

Chapter 18.35, M-U Zone. The proposed project would amend Chapter 18.35 of the Development Code to add Section 18.35.110, as follows:
• Any application for a Site Development Plan for 20 or more multiple dwelling residential units, either for sale or rent, shall satisfy the City's affordable housing requirements found in Section 18.34.130 of the Vista Development Code.

Downtown Vista Specific Plan Amendment. The proposed project would amend the DVSP to add a new Section 3.7 (within the Development Standards section of the Specific Plan) with language identical to that included in the M-U Zone, as follows:
01/10/2023 PH 1 Page 2 of 66

MEETING DATE: January 10, 2023 PAGE 3
SUBJECT: INCLUSIONARY HOUSING PROGRAM
• Any application for a Site Development Plan for 20 or more multiple dwelling residential units, either for sale or rent, shall satisfy the City's affordable housing requirements found in Section 18.34.130 of the Vista Development Code.

City Council Policy 300-15, Inclusionary Housing. Implementation of the proposed Inclusionary Housing Program would be supported by a new City Council Policy, number 300-15. The draft Policy is included as Exhibit 2A and details the implementation procedures. The Policy allows inclusionary units to be provided onsite within a new multi-family development of 20 units or more, or the payment of an in-lieu fee per market rate residential unit.

The proposed in-lieu fee is based on a study prepared by the City's financial consultant, Keyser Marston Associates (KMA), which is included as Exhibit 4. The KMA study evaluated two scenarios to determine an appropriate in-lieu fee: (1) the funding gap created by developing affordable units onsite; and (2) the funding gap created by developing affordable units offsite. The funding gap is determined by calculating the residual land value of a 100 percent market rate project and deducting the residual land value of a project with 9 percent affordable units (consisting of 5 percent low and 4 percent moderate units). With onsite affordable housing development, the funding gap is estimated at $23,500 per market rate unit. With offsite affordable housing development, the funding gap is estimated at $12,310 per market rate unit.

Based on the KMA study, staff recommends using the offsite methodology, which equates to an in-lieu fee of$12,310 per market rate unit. If the City Council chooses to adopt a different in-lieu fee, staff recommends that it be based on the findings of the KMA study, which establishes a range from $10,000 to $15,000 per market rate unit, or $12 to $17 per square foot of market rate residential living area, using the offsite production model. Staff further recommends adjusting this fee on an annual basis using the Construction Cost Index (CCI) for the region, as applied to the majority of the City's construction-related fees. This annual adjustment is included in the Resolution (Exhibit 2A) for the City Council's consideration.

Per the recommended policy, in-lieu fees may be paid at the time of building permit, or at the time of final occupancy at the developer's discretion. Any in-lieu fees collected under this program would go into the City's Inclusionary Housing Fund for the sole purpose of providing affordable housing. The proposed Resolution adopting the new inclusionary housing policy and the proposed in-lieu fee is attached as Exhibit 2.

Staff Review. The proposed Inclusionary Housing Program is being presented at the direction of the City Council. The inclusionary housing requirements would increase the cost of new multi-family projects that exceed 20 units; however, these requirements are consistent with several other jurisdictions in the County.

For reference, a table reflecting the inclusionary housing programs within the region is included as Exhibit

5. The proposed Inclusionary Housing Program would improve the City's ability to provide affordable housing consistent with policies in the Housing Element and the Land Use and Community Identity Element of the General Plan.

Planning Commission Recommendation. The Planning Commission reviewed the proposed project on December 6, 2022, and recommended approval of the Inclusionary Housing Program with a 5-2 vote. The dissenting members of the Planning Commission stated that the proposed inclusionary requirements would increase the cost of housing projects and could negatively impact housing production within the City. The majority of the Planning Commission supported the staff recommendation based on a desire to provide more affordable housing opportunities.

FISCAL IMPACT: The proposed Inclusionary Housing Program would generate additional affordable housing units and/or additional revenue for affordable housing. Over the past 5 years, the City has approved an average of approximately 230 multi-family units per year that would qualify for the Inclusionary Housing Program (i.e., projects of 20 units or more within the multi-family zones). Based on 01/10/2023 PH 1 Page 3 of 66

MEETING DATE: January 10, 2023 PAGE 4
SUBJECT: INCLUSIONARY HOUSING PROGRAM
this, it is estimated that the City would generate approximately 20 new affordable housing units per year, or in-lieu fees of approximately $2.5 million per year assuming the same level of housing production and the staff recommended in-lieu fee of$12,310 per market rate unit.

EXHIBITS:

1. Ordinance No. 2023- , amending chapters 18.34 and 18.35 of the Vista Development Code and the Downtown Vista Specific Plan related to inclusionary housing

2. Resolution No. 2023- , adopting City Council Policy 300-15 and establishing an in-lieu fee for an Inclusionary Housing Program, with Exhibit A
A. City Council Policy 300-15, Inclusionary Housing

3. San Diego County Area Median Income, 2022

4. Inclusionary Housing In-Lieu Fee Study, KMA

5. Affordable Housing Program Comparison for the San Diego Region

6. List of Prior Actions
01/10/2023 PH 1 Page 4 of 66

ORDINANCE NO. 2023-

AN ORDINANCE OF THE CITY COUNCIL OF THE CHARTERED CITY OF VISTA, CALIFORNIA, AMENDING CHAPTERS 18.34 AND 18.35 OF THE

VISTA DEVELOPMENT CODE AND THE DOWNTOWN VISTA SPECIFIC

PLAN RELATED TO INCLUSIONARY HOUSING
The City Council of the City of Vista does resolve as follows:

1. Findings. The City Council hereby finds and declares the following:

A. This ordinance is enacted by the City Council pursuant to its authority under the Charter of the City of Vista and Article 11, Section 7 of the California Constitution.

B. The City intends to amend Chapter 18.34, the Multi-Residential (R-M) Zone, and Chapter 18.35, the Mixed-Use (M-U) Zone, of the Development Code, and the Downtown Vista Specific Plan (DVSP) to establish an inclusionary housing program within the City of Vista.

C. The proposed Development Code and DVSP amendments would be consistent with the General Plan Land Use and Community Identity Element, Policy 9.2, as well as the Housing Element, policies 1.2, 2.1 and 2.3.

D. The proposed amendments to chapters 18.34 and 18.35 of the Development Code and the amendment to the DVSP would implement a policy requiring a certain percentage of affordable housing units in specified development projects and, therefore, are exempt pursuant to CEQA Guidelines Section 15061(b)(3), the "Common Sense" exemption, because there is no possiblity that the proposed amendments may have a significant effect on the environment.

2. Code Amendment.

A. Chapter 18.34, R-M Multi-Residential Zone, is amended to add Section

18.34.130, as follows:
"Section 18.34.130 Affordable Housing
Any application for a Site Development Plan for 20 or more multiple dwelling residential units, for sale or rent, shall include reservation of nine percent (9%) of the units being built to be made eligible to the City of Vista as affordable housing units. The affordable housing units shall include, at a minimum, four percent (4%) of the units as moderate income units or lower and five percent (5%) of the units as low income units or lower, with "moderate income" and "low income" as defined by the California Department of Housing and Community Development. The City may adopt a fee in lieu of the reservation of the affordable housing units. Such a fee shall be used exclusively for programs providing affordable housing opportunities within the City. The fee shall be based on a formula set by resolution of the City Council as a fair share contribution to the City's Inclusionary Housing Fund as applied to the subject housing project. When affordable units are provided on-site, the property owner shall execute and cause the recordation of a regulatory agreement, in a form approved by the City Attorney, to assure compliance with this paragraph. The City may adopt policies, rules and regulations by EXHIBIT 1
01/10/2023 PH 1 Page 5 of 66

ORDINANCE NO. 2023-

CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
Resolution or administrative action to implement these affordable housing provisions, and such requirements shall apply to qualifying projects."
B. Chapter 18.35, M-U Mixed Use Zone, is amended to add Section 18.35.110, as follows:
"Section 18.35.110 Affordable Housing
Any application for a Site Development Plan for 20 or more multiple dwelling residential units, for sale or rent, shall satisfy the City's affordable housing requirements found in Section

18.34.130 of the Vista Development Code."
C. The provisions of these amendments shall apply to any qualifying project unless the City has deemed the project's Site Development Plan application complete, or the project has otherwise legally vested, prior to the effective date of this ordinance.

3. Specific Plan Amendment.

A. The Downtown Vista Specific Plan is amended to add Section 3.7, as follows:
"3.7 Affordable Housing
Any application for a Site Development Plan for 20 or more multiple dwelling residential units, for sale or rent, shall satisfy the City's affordable housing requirements found in Section

18.34.130 of the Vista Development Code,."
B. The provisions of these amendments shall apply to any qualifying project unless the City has deemed the project's Site Development Plan application complete, or the project has otherwise legally vested, prior to the effective date of this ordinance.

4. Effective Date. This Ordinance shall be effective on the thirty-first day following the date of its adoption.
[Continued on next page]
01/10/2023 PH 1 Page 6 of 66

ORDINANCE NO. 2023-

CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 3

5. Adoption. INTRODUCED AND ADOPTED at a meeting of the City Council held on January 10, 2023 by the following vote:

AYES:

NOES:

ABSTAIN:

JOHN FRANKLIN, MAYOR
APPROVED AS TO FORM: ATTEST:

WALTER CHUNG, CITY ATTORNEY KATHY VALDEZ, CITY CLERK By: By:

APPROVED
Amanda L.Guy
20221219154405
01/10/2023 PH 1 Page 7 of 66

CITY COUNCIL RESOLUTION NO. 2023-

A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY OF VISTA, CALIFORNIA, ADOPTING CITY COUNCIL POLICY 300-15 AND ESTABLISHING AN IN-

LIEU FEE FOR AN INCLUSIONARY HOUSING PROGRAM
The City Council of the City of Vista does resolve as follows:

1. Findings. The City Council hereby finds and declares the following:

A. The City of Vista has developed a new City Council Policy, number 300-15, to clarify the procedures for implementation of its Inclusionary Housing Program.

B. The City of Vista has commissioned an Inclusionary Housing In-Lieu Fee Study by Keyser Marston Associates, Inc., attached as Exhibit 4 to the accompanying Agenda Report, and desires to establish an Inclusionary Housing In-Lieu Fee to implement its Inclusionary Housing Program.

C. These proposed actions are not within the definition of a "project" under the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the State CEQA Guidelines because these actions consist of the establishment of a policy and associated fee which are administrative and will not result in direct or indirect physical changes to the environment.

D. On January 10, 2023, the Vista City Council held a duly noticed public hearing on the draft policy and in-lieu fee for the City's proposed Inclusionary Housing Program. At the public hearing staff reports both written and oral were received in evidence, and all persons desiring to speak on the project were heard. At the conclusion of said hearing, after consideration of all evidence presented, the City Council reached a decision on the matter as set forth.

2. Action.

A. Each of the above recitals is true and correct and is incorporated herein by reference.

B. City Council Policy 300-15, "Inclusionary Housing," attached hereto as Exhibit 'A" is hereby adopted by the City Council.

C. The City's Inclusionary Housing In-Lieu Fee is hereby established as $12,310 per market rate residential unit. This fee shall be published in the City's Fee Schedule and shall be adjusted annually on July 1 of each year, starting on July 1, 2024, by an amount equal to the Engineering News Report ("ENR") Construction Cost Index for Los Angeles during the previous year. The adjustment shall be determined by comparing the change in the ENR published at least sixty (60) days prior to the adjustment date to the comparable ENR published for the preceding year.

EXHIBIT 2
01/10/2023 PH 1 Page 8 of 66

RESOLUTION NO. 2023-

CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE NO. 2

3. Adoption. PASSED AND ADOPTED at a meeting of the City Council held on January 10, 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

JOHN FRANKLIN, MAYOR
APPROVED AS TO FORM: ATTEST:

WALTER CHUNG, CITY ATTORNEY KATHY VALDEZ, CITY CLERK By: By
Exhibits:

A. City Council Policy 300-15, Inclusionary Housing

APPROVED
Amanda L.Guy
20221219153901
01/10/2023 PH 1 Page 9 of 66

CITY COUNCIL RESOLUTION NO. 2023-

EXHIBIT A
300-15 INCLUSIONARY HOUSING

PURPOSE
To clarify the City's processes and procedures for the implementation of its Inclusionary Housing Program.

POLICY
Pursuant to Section 18.34.130 of the Vista Development Code ("Affordable Housing"), any application for a Site Development Plan for the development of 20 or more multiple dwelling residential units, for sale or rent, within the Multi-Residential (R-M) Zone, the Mixed Use (M-U) Zone, the Downtown Vista Specific Plan, or any other specific plan area that allows multi-family residential development and is subject to the affordable housing requirements, shall include reservation of nine percent (9%) of the units being built to be made eligible for and available to the City of Vista for eligible households.

The Inclusionary Housing Program shall be implemented by recording a regulatory agreement against the real property when affordable housing units are provided, in a form approved by the City Attorney, consistent with terms set forth below, and prior to the issuance of a building permit for development of the project.

1. The developer shall have the option of providing the affordable units on-site or paying any in-lieu fee duly adopted by the City Council to satisfy the Inclusionary Housing Program requirements. If affordable units are provided on-site, the location of the inclusionary units shall be determined by the Planning Division of the City of Vista in consultation with the developer. The units shall be dispersed evenly throughout the project and shall be representative of the overall units within the project.

2. If affordable units are provided on-site, nine percent of the total units shall be reserved for sale/rental to the qualified affordable households (the "inclusionary" units). The nine percent shall be split into five percent of low-income or lower units (51-80% of annual median income (AMI)) and four percent of moderate-income or lower units (81-120% of AMI). If an in-lieu fee is paid, it shall be as established by resolution of the City Council.

3. Any partial affordable units shall be subject to the payment of an in-lieu fee in proportion to the amount of the partial affordable unit.

4. The in-lieu fees required under this policy shall be paid prior to issuance of a building permit, or, at the request of the developer, deferred until all work required for final inspection has been completed and all department approvals required for occupancy have been obtained by the developer. If the developer chooses to defer the payment of the in-lieu fees to the time of final inspection, the amount of the fees shall be based on the in-lieu fees in effect at the time of final inspection. If the City fails to collect the in-lieu fees prior to final inspection, such fees shall remain the obligation of the developer and/or property owner.
01/10/2023 PH 1 Page 10 of 66

5. The amount of the in-lieu fee shall be as adopted by resolution of the City Council, with any prescribed adjustment clause.

6. Consistent with the requirements and standards of the California Department of Housing and Community Development relating to State Density Bonus Law, any affordable units provided on-site shall: (a) be restricted by the terms of the regulatory agreement for a period of not less than 55 years, or as prescribed in the regulatory agreement; and (b) shall only be sold or rented to qualified households, as determined by the City's Housing Division.
01/10/2023 PH 1 Page 11 of 66

Exhibit 3: San Diego County Area Median Income, 2022
# of Persons in Household 1 2 3 4 5 6 7 8 Acutely Low (0-15%) $11,250 $12,850 $14,450 $16,050 $17,350 $18,600 $19,900 $21,200 Extremely Low (15-30%) $27,350 $31,250 $35,150 $39,050 $42,200 $45,300 $48,450 $51,550 Very Low (30-50%) $45,550 $52,050 $58,550 $65,050 $70,300 $75,500 $80,700 $85,900 Low (50-80%) $72,900 $83,300 $93,700 $104,100 $112,450 $120,800 $129,100 $137,450 Median Income $74,850 $85,550 $96,200 $106,900 $115,450 $124,000 $132,550 $141,100 Moderate Income (80-120%) $89,800 $102,650 $115,450 $128,300 $138,550 $148,850 $159,100 $169,350 EXHIBIT 3
01/10/2023 PH 1 Page 12 of 66

INCLUSIONARY HOUSING IN-LIEU FEE STUDY
A*S
Prepared for:

City of Vista
4q
Prepared by:

Keyser Marston Associates, Inc.

November 2022
EXHIBIT 4
01/10/2023 PH 1 Page 13 of 66

TABLE OF CONTENTS
EXECUTIVESUMMARY................................................................................................................................. 1 INCLUSIONARY HOUSING IN-LIEU FEE STUDY.............................................................................................3 I. Introduction.......................................................................................................................................3 II. In-Lieu Fee Financial Analysis............................................................................................................S III. Potential Fee Level Adjustments.....................................................................................................13 IV. Survey of San Diego County Jurisdictions........................................................................................15 V. Limiting Conditions............................................................It..................... ...................................17 L

APPENDICES
Appendix A Summary of Potential In-Lieu Fees
Appendix B Estimate of Affordable Rents
Appendix C In-Lieu Fee Financial Analysis
Approach 1: On-Site Production
Appendix D In-Lieu Fee Financial Analysis
Approach 2: Off-Site Production
Appendix E Comparison of Affordable Housing Fees, San Diego County 01/10/2023 PH 1 Page 14 of 66

EXECUTIVE SUMMARY

OVERVIEW
The City of Vista (City) is currently considering the reinstatement of the City's inclusionary housing policy previously repealed in 2015. As part of this effort, the City seeks to review current in-lieu fee and impact fee levels charged in other local jurisdictions and establish an appropriate methodology to determine an updated inclusionary housing in-lieu fee for the City. The City engaged Keyser Marston Associates, Inc. (KMA)to prepare an Inclusionary Housing In-Lieu Fee Study (Study)to evaluate the potential of establishing an inclusionary housing in-lieu fee for the City. The Study reviews a range of approaches to determine appropriate housing in-lieu fee levels for the City.

RESIDENTIAL DEVELOPMENT PROTOTYPES
The Study identified four(4) residential prototypes reflective of the type of development projects occurring or anticipated to occur in the City including:
• Garden-style rental apartments
• Stacked-flat rental apartments developed over tuck-under parking • Stacked flat rental apartments developed over podium parking • Mixed-use apartment development over podium and subterranean parking For each residential prototype, KMA prepared base case financial pro forma models assuming: (i) 100%of all units are rented at market rents; and (ii) a potential inclusionary housing set-aside at 5% Low Income and 4% Moderate Income.

APPROACH TO IN-LIEU FEE FINANCIAL ANALYSIS
KMA used two approaches to determine possible fee levels: (1)the economic impact on the developer to provide affordable housing on-site; and (2)the funding level required for the City to develop affordable housing in an off-site location.
• Approach 1 —Economic Impact of Including Units On-Site—This approach uses a financial analysis to estimate fee levels that are approximately equivalent to the economic impact to market-rate developments of incorporating inclusionary units on-site. • Approach#2—Off-Site Affordability Gap—This approach determines how much the City would need to receive from a market-rate residential developer in order to produce affordable rental housing in an off-site location.

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POTENTIAL FEE LEVELS
As presented in Table 1, based on the findings from the two approaches noted above, the City may wish to consider an in-lieu fee of up between $10,000 to $15,000 per market-rate unit, or between $12.00 and $17.00 per square foot (SF) of market-rate residential living area.

Table 1: Potential Fee Levels
Per Market-Rate Unit $10,000 to $15,000
Per Market-Rate Net SF $12.00 to $17.00
The potential 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 and avoids overly burdening the production of small units.

In order to mitigate affordable housing impacts--and fund affordable housing--over a long term and respond to economic cycles, the City should consider a potential annual escalator that could be used to adjust fee levels over time, such as the Construction Cost Index (CCI) published by the Engineering News- Record (ENR).

POTENTIAL FEE LEVELS IN COMPARISON TO OTHER SAN DIEGO COUNTY JURISDICTIONS KMA surveyed inclusionary in-lieu fees and affordable housing impact fees in other San County jurisdictions. The survey is summarized in Table 2 in comparison with the potential fee levels for the City.

Table 2: Comparison of Affordable Housing Fees,Vista vs. San Diego County Jurisdictions City of Vista San Diego County Jurisdictions
(range of findings)
Inclusionary Housing Required
20 Units 1 unit - 50 units
Threshold
of Affordable Units Required 9% 10% - 20% Potential Fee Levels:

In-Lieu Fee Amount $10,000 to $15,000/Unit $500 to $9,300/Unit $12/SF to $17/SF $15.00/SF to $31.91/SF
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INCLUSIONARY HOUSING IN-LIEU FEE STUDY
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.

B. City of Vista Prior 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 reinstatement 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. Under the current proposal,the inclusionary requirement would be set at 5% Low Income [61%-80%Area Median Income (AMI)] and 4% Moderate Income (81%to 120%AMI)for residential complexes with 20 or more units.

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.

3. Formulated multi-family residential development prototypes in coordination with City staff.

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4. Prepared pro forma financial models to estimate the residual land value generated by each residential prototype under two scenarios: (a) at 100% market-rate; and (b) an inclusionary requirement of 5% at Low Income and 4% at Moderate Income.

D. Organization of Report
This report is organized into the following key sections:
• Following this Introduction, Section II presents the financial analysis for an affordable housing inclusionary in-lieu fee.
• Section III reviews potential indices that could be used to adjust the fee in the future. • Section IV presents a survey of affordable housing in-lieu fees in other San Diego jurisdictions. • Section V presents limiting conditions pertaining to this report.

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II. IN-LIEU FEE FINANCIAL ANALYSIS
A. Residential Development Prototypes
Table II-1 provides a summary of the residential development prototypes identified for the in-lieu fee financial analysis. The prototypes are illustrative of the types of development projects occurring and anticipated to occur in the City. Four 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 II-1: Project Descriptions for Development
RENTAL
Garden Stacked Flats over Stacked Flats over Mixed-Use Flats over Apartments Tuck-Under Parking Podium Parking Podium/Subterraneani Site Area 6.0 Acres 1.5 Acres 1.0 Acres 1.0 Acres Density
(Units/Acre) 20.0 45.0 75.0 100.0 Number of Units 120 Units 67 Units 75 Units 100 Units 1,2,and 3 1 and 2 1 and 2 1 and 2
Unit Mix Bedrooms Bedrooms Bedrooms Bedrooms Stories 2-3 Stories 3 Stories 4 Stories 5 Stories Average Unit Size 1,015 SF 850 SF 785 SF 720 SF Retail SF --- --- --- 10,000 SF
B. Projected Market Rents
KMA surveyed new rental developments in the 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 City. The base case market-rate monthly rent estimates that are used in the financial feasibility analyses are presented in Table II-2.

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Table II-2: Projected Market Rents
RENTAL
Him
Average$/SF $2.78/SF $3.50/SF $3.75/SF $4.00/SF Average Unit Size 1,015 SF 850 SF 785 SF 720 SF Average Market $2 820 $2,980 $2,940 $2,880 Monthly Rent
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 B;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 for Low Income units is calculated as equal to 1/12 x 30%x 60%AMI (adjusted for household size), less adjustments for certain tenant-paid utilities. • Maximum monthly rental housing payment for Moderate Income units is calculated as equal to 1/12 x 30%x 110%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 affordable rents for each of the residential prototypes are presented in Table II-3.

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Table II-3: Affordable Rents(1)
RENTAL
PodiumGarden Stacked Flats over Stacked Flats over Mixed-Use Flats :Apartments Tuck-Under Parking
Average Affordable Monthly
$1,333 $1,333 $1,292 $1,300
Rent @ Low Income
Average Affordable Monthly $2,450(2) $2,472 $2,472 $2,438 Rent @ Moderate Income
(1) Reflects average rent(weighted)for one-,two-,and three-bedroom units at Low and Moderate Income. (2) Reflects the lesser of market rent vs.affordable rent.

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 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 C provides the detailed pro forma analyses prepared by KMA for each TOD Areas residential development prototype. Appendix C is organized as follows:

Table 1 Project Description
Table 2 Estimate of Development Costs
Tables 3, 4, 5, and 6 Estimate of Net Operating Income Tables 7, 8, 9 and 10 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., 5% at Low Income and 4%at Moderate Income. The base case residual land value outcome can then be measured against the residual land value that is generated when the 5% Low/4% Moderate Income requirement is imposed. The economic impact of incorporating the City's proposed inclusionary requirement on-site is summarized in Table II-4.

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Table II-4: Economic Impact of Incorporating Affordable Housing On-Site ENTAL
Residual Land Value *WW-
Stacked Flats over '"' Mixed-Use Flats Average Per Unit Podium Parking DISubterranean
100%Market-Rate $105,000 $88,000 $38,000 $17,000 $62,000 91%Market-Rate/9% $84,000 $63,000 $13,000 ($6,000) $38,500 Affordable
Economic Impact of Incorporating Affordable Housing On-Site Per Market-Rate Unit ($21,000) ($25,000) ($25,000) ($23,000) ($23,500) Per Market-Rate Net SF ($21) ($29) ($32) ($32) ($28) As shown in Table II-4,the economic impact of including 5% Low Income and 4% Moderate Income units on-site are estimated to range from $21,000 to $25,000 per market-rate unit, or$21 to $32 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.

Low Income
As detailed in Appendix D,the analysis assumed the off-site affordable housing project affordable to Low Income households 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.

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:

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• Total development costs, excluding acquisition, estimated to average $504,000 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 II-5 (allow for rounding).

Table II-5: Off-Site Affordable Units—Net Operating Income 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 $6,337
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 II-6.

Table II-6: Off-Site Affordable Units—Sources of Funds per Unit 9%Tax Credits 4%Tax Credits
Supportable Permanent Loan $97,000 $97,000 Tax Credit Equity Investment $265,000 $240,000 Other State Funding Sources $0 $75,000
Deferred Developer Fee/General Partner Equity $0 $40,000 Income During Lease-Up $0 $0
Total Sources of Funds $363,000 $452,000
As shown in Table II-7,the affordability gap for a Low Income affordable unit is estimated to average $134,000 per affordable unit. These figures are calculated as the difference between total development costs and total funding sources.

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Table II-7: Off-Site Affordable Units—Affordability Gap per Unit 9%Tax Credits 4%Tax Credits
Total Sources of Funds $363,000 $452,000 $408,000 (Less)Total Development Costs ($451,000) ($556,000) ($504,000) (Less)Acquisition Costs ($38,000) ($38,000) ($38,000) Affordability Gap per Affordable Unit ($126,000) ($142,000) ($134,000) As shown above, KMA estimates that an affordable rental unit has an estimated average financing gap of $134,000. In other words,for the market-rate developer or City to facilitate creation of off-site Low Income unit, it would need to contribute $134,000 per affordable rental unit. As shown in Table II-8, assuming a 5% Low Income 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 $7,050 per market-rate unit developed (i.e., $134,000-95%x 5%).

Table II-8: Estimate of Funding Gap for Off-Site Units- Low Income Affordability Gap per Off-Site Affordable Unit ($134,000) Per Market-Rate Unit
@ 5% Low Income Inclusionary Set-Aside ($7,050) Moderate Income
KMA also prepared an estimate of the affordability gap associated with developing Moderate Income affordable housing in an off-site location. KMA assumed the off-site Moderate Income housing to be developed in a stacked flat configuration over podium parking, similar to the 75-unit stacked flats over podium parking residential prototype modeled in Section II of this report. Using the same framework and assumptions described in Section II, KMA estimates the financing gap required to develop a Moderate Income unit in an off-site location is$100,000 per affordable rental unit. As shown in Table II-9, this figure is calculated as the residual land value outcome assuming 100%of units at Moderate Income plus an acquisition cost estimate of$38,000 per unit.

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Table II-9: Off-Site Affordable Units—Affordability Gap per Unit- Moderate Income Residual Land Value per Affordable Unit ($62,000)
(Less) Acquisition Costs ($38,000)
Affordability Gap per Affordable Unit ($100,000) Assuming a 4% Moderate Income inclusionary requirement,the required number of off-site Moderate Income units is calculated against the total number of market-rate units approved plus the inclusionary units produced off-site. As shown in Table II-10,this equates to $5,260 per market-rate unit developed (i.e., $100,000-96%x 4%).

Table II-10: Estimate of Funding Gap for Off-Site Units- Moderate Income Affordability Gap per Off-Site Affordable Unit ($100,000) Per Market-Rate Unit
@ 4% Moderate Income Inclusionary Set-Aside ($5,260) Funding Gap for Affordable Housing Off-Site t�*
The funding gap outcome for off-site inclusionary housing 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$12,310 per market-rate unit, or a per-SF fee ranging between $12 and $17, depending on the market-rate prototype, or an average of$15 per SF living area, as shown in Table II-11.

Table II-11: Funding Level Required to Create Affordable Housing Off-Site RENTAL
• Stacked Flats over over Podium/ Average
•. Podium Parking Subterranean
Per Market-Rate Unit
Low Income $7,050 $7,050 $7,050 $7,050 $7,050 Moderate Income $5,260 $5,260 $5,260 $5,260 $5,260 Total Market Rate Unit $12,310 $12,310 $12,310 $12,310 $12,310 Per Market-Rate Net SF $12 $14 $16 $17 $15 Keyser Marston Associates,Inc. Page 11
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F. Potential In-Lieu Fees
As summarized in Table II-12, in view of Approaches 1 and 2 above,the City may wish to consider an in- lieu fee of$10,000 to $15,0000 per market-rate unit, or between $12 and $17 per SF of market-rate residential living area.

Table II-12: Potential Fee Levels—5%Low Income/4% Moderate Income Approach to Setting Fee Levels
Potential
Approach 1: Approach 2: Fee Levels
On-Site Production Off-Site Production
Per Market-Rate Unit Average: $23,500 $12,310 $10,000 to$15,000 Per Market-Rate Net SF Average: $28 Average: $15 $12 to$17 This potential 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 present a feasibility challenge for some market-rate projects. It should be noted that using the off- site production approach as the benchmark results in a per-unit in-lieu fee that is higher than existing per- unit fees found in other areas of the County. On a per-SF basis, the potential fee range falls toward the lower end of the range of, or below, comparable per-SF fees found in other areas of the County, see Section IV and Appendix D for further detail.
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III. 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 III-1.

Table III-1: 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)
As shown in Table III-2, 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. These outcomes exceed the potential fee range of$10,000 to$15,000 per market-rate unit identified in this Study.

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Table III-2: Average Annual Growth Rate Applied to 2006 In-Lieu Fee Levels Em
Consumer Price
• 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
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IV. 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 Exhibits IV-1 and IV-2, in comparison with potential fee levels for the City of Vista on a per-unit and per-SF basis, respectively. Further information on each jurisdiction's inclusionary program and fee levels is presented in Appendix D.

Exhibit IV-1: Vista Potential Fee Levels vs. San Diego County Jurisdictions—Per Unit In-Lieu Fee - Per Unit
$14,000 $12,500
$12,000
v
$10,000 $9,300 L
v
$8,000 $7,000 - o
$6,000
$4,000 3
$2,000 $500
15%V ry Low X,,
$0 -
Coronado Poway San Marcos Vista
(mid-point of range)
Exhibit IV-2: Vista Potential Fee Levels vs.San Diego Countv Jurisdictions- Per SF In-Lieu Fee - Per SF
$35.00 $31.91
$30.00 $25.91
$25.00
$25.00
$20.00 17$14.50
$20.00
$15.00 $15.00
$15.00
$10.00$5.00
Ln
$0.00
Carlsbad Del Mar Encinitas Oceanside(1) San Diego Solana Beach Vista (mid-point of
range)
(1) Reflects in-lieu fee amount to be considered by the Oceanside City Council on December 7,2022, an increase from the City's current fee of$8.82/SF.

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As shown in the above exhibits,the recommended per-unit fee for the City($10,000 to $15,000, or a midpoint of$12,500)would exceed other per-unit fees in the County. However,the recommended per-SF fee for the City ($12 to$17, or a midpoint of$14.50) falls below all other surveyed jurisdictions that charge fees on a per-SF basis.

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.

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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 Summary of Potential In-Lieu Fees
Appendix B Estimate of Affordable Rents
Appendix C In-Lieu Fee Financial Analysis-
Approach 1: On-Site Production
Appendix D In-Lieu Fee Financial Analysis
Approach 2: Off-Site Production
Appendix E Comparison of Affordable Housing Fees, San Diego County 01/10/2023 PH 1 Page 33 6f966

APPENDIX A
Summary of Potential In-Lieu Fees
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ON-SITE PRODUCTION
TABLE A-1
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 1: ECONOMIC IMPACT OF INCORPORATING AFFORDABLE HOUSING ON-SITE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D E
Stacked Flats over
Podium Parking
I. Residual Land Value-Per unit
100%Market-Rate $105,000 $88,000 $38,000 $17,000 $62,000 5%LOW INCOME/4%MODERATE INCOME
II. Residual Land Value-Per Unit
91%Market-Rate/9%Affordable $84,000 $63,000 $13,000 ($6,000) $38,500 III. Economic Impact of Affordable Housing On-Site
Per Market-Rate Unit ($21,000) ($25,000) ($25,000) ($23,000) ($23,500) Change -20.0% "28.4% -65.8% -135.3% -37.9% Per Market-Rate Net SF ($21) ($29) ($32) ($32) ($28) Per SF Site Area ($10) ($26) ($43) ($53) ($33) A,
Prepared by:nKepvser Marston Associates Inc.

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OFF-SITE PRODUCTION
TABLE A-2
ESTIMATE OF POTENTIAL IN-LIEU FEE-APPROACH 2: FUNDING LEVEL REQUIRED FOR INCLUSIONARY HOUSING PRODUCTION OFF-SITE

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
A B C D E
Stacked Flats over
777E. Podium Parking
5%LOW
I. Affordability Gap
A. Residual Land Value per Affordable Unit(1) ($96,000) ($96,000) ($96,000) ($96,000) ($96,000) B. Acquisition Costs(2) 38 000 38 000 38 000 38 000 38 000 C. Affordability Gap per Affordable Unit ($134,000) ($134,000) ($134,000) ($134,000) ($134,000) II. Funding Required for Inclusionary Housing Production Off-Site Affordability Gap per Market-Rate Unit @ 5.0% (3) ($7,050) ($7,050) ($7,050) ($7,050) ($7,050) 4%MODERATE
III. Affordability Gap
A. Residual Land Value per Affordable Unit(4) ($62,000) ($62,000) ($62,000) ($62,000) ($62,000) B. Acquisition Costs(2) 38 000 38 000 38 000 38 000 38 000 C. Affordability Gap per Affordable Unit ($100,000) ($100,000) ($100,000) ($100,000) ($100,000) IV. Funding Required for Inclusionary Housing Production Off-Site Affordability Gap per Market-Rate Unit @ 4.0% (5) ($5,260) ($5,260) ($5,260) ($5,260) ($5,260) V. Economic Impact of Off-Site Inclusionary Housing
Per Market-Rate Unit(II+IV) ($12,310) ($12,310) ($12,310) ($12,310) ($12,310) %Change -11.7% -14.0% -32.4% -72.4% -19.9% Per Market-Rate Net SF ($12) ($14) ($16) ($17) ($15) Per SF Site Area ($6) ($13) ($21) ($28) ($17) (1)Average residual land land value for 100%affordable stacked flat usts 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-95%)x 5%]. (4)Reflects residual land value for stacked flats over podium parking prototype assuming 100%of units at moderate income. (5)Assumes inclusionary requirement applied to total number of market-rate units approved[i.e.,(gap-96%)x 4%].

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APPENDIX B
Estimate of Affordable Rents
Aoqvaw
A( <
01/10/2023 PH 1 Page 37 6f96B

TABLE B-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 B-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.Fi1enaQ1AtQi l3i-Lieu Fee Study_Prototype Models_9%set-Is H_12;11/28/2022;ejr Page 39 6f96�g 7

TABLE B-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. ��g Fi1enaQ1AtQi l3i-Lieu Fee Study_Prototype Models_9%set-Ps H_12;11/28/2022;ejr Page 40 6f966

APPENDIX B
In-Lieu Fee Financial Analysis
Approach 1: On-Site Production
< IN
01/10/2023 PH 1 Page 41 6f96B

ON-SITE PRODUCTION
TABLE C-1

PROTOTYPE PROJECT DESCRIPTIONS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Stacked Flats over Mixed-Use Stacked Flats oveilliiiiiii­� Tuck-Under Parking Podium Parking Podium/Subterranean Parking Lam'-l � 1AN
,.

I. Site Area 6.0 Acres 1.50 Acres 1.0 Acres 1.0 Acres II. Gross Building Area(GBA)
A. Residential
Net Rentable Area 121,800 SF 94% 56,950 SF 88% 59,250 SF 83% 72,000 SF 82% Amenities 1,500 SF 1% 1,500 SF 2% 1,500 SF 2% 3,000 SF 3% Circulation/Common Area 6 500 SF 59/o 6 500 SF 10910 10,700 SF 1556 13,200 SF 15% Total GBA- Residential 129,800 SF 100% 64,950 SF 100% 71,450 SF 100% 88,200 SF 100% B. Retail/Restaurant --- --- --- 10,000 SF C. Total GBA 129,800 SF 64,950 SF 71,450 SF 98,200 SF III. Unit Mix #of Units Unit Size #of Units Unit Size #of Units Unit Size #of Units Unit Size One Bedroom 36 Units 30% 750 SF 27 Units 40% 700 SF 30 Units 40% 650 SF 40 Units 40% 600 SF Two Bedroom 72 Units 60% 1,100 SF 40 Units 60% 950 SF 45 Units 60% 875 SF 60 Units 60% 800 SF Three Bedroom 12 Units 10% 1,300 SF 0 Units 0% --SF 0 Units 0% -- SF 0 Units 0% --SF Total/Average 120 Units 100% 1,015 SF 67 Units 100% 850 SF 75 Units 100% 785 SF 100 Units 100% 720 SF IV. Number of Units 120 Units 67 Units 75 Units 100 Units V. Density 20 Units/Acre 45 Units/Acre 75 Units/Acre 100 Units/Acre VI. Construction Type Type V Type V Type V Type V VII. Stories 2-3 Stories 3 Stories 4 Stories 5 Stories Vill. FAR 0.50 FAR 0.99 FAR 1.64 FAR 2.25 FAR IX. Parking
Type Surface Tuck-Under Podium Podium/Subterranean Spaces-Residential 300 Spaces 101 Spaces 100 Spaces 155 Spaces Ratio 2.50 Spaces/Unit 1.51 Spaces/Unit 1.33 Spaces/Unit 1.55 Spaces/Unit Ratio-Retail/Restaurant 3.0 Spaces/1,000 SF Prepare
m C�� 1 sociates,Inc.

Filena Ike Study_Pro totype Models_9%set-aside_v2;11/28/2022;ejr PH 1 Page 42 U fgV7 6

ON-SITE PRODUCTION
TABLE C-2

DEVELOPMENT COSTS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
ve
Garden Apartments Stacked Flats over Stacked Flats over Mixed-Use Stacked Flats o,� I� Tuck-Under Parking Podium Parking Podium/Subterranean Pa rk ng Total Per Unit Comments 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 $327,000 $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(1) $3,920,000 $33,000 $15 Per SF Site $980,000 $15,000 $15 Per SF Site $653,000 $9,000 $15 Per SF Site $653,000 $7,000 $15 Per SF Site Parking $0 $0 $0 Per Space $2,020,000 $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 $25,960,000 $216,000 $200 Per SF GBA $16,238,000 $242,000 $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 $900,000 $7,500 $7 Per SF GBA $335,000 $5,000 $5 Per SF GBA $375,000 $5,000 $5 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 $1,604,000 $13,000 5.0%of Above Directs $995,000 $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 $33,691,000 $281,000 $260 Per SF GBA $20,895,000 $312,000 $322 Per SF GBA $26,285,000 $350,000 $368 Per SF GBA $42,403,000 $424,000 $432 Per SF GBA II. Indirect Costs
Architecture&Engineering $1,685,000 $14,000 5.0%of Directs $1,045,000 $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) $3,776,000 $31,000 $29 Per SF GBA $2,093,000 $31,000 $32 Per SF GBA $2,328,000 $31,000 $33 Per SF GBA $3,194,000 $32,000 $33 Per SF GBA Legal&Accounting $505,000 $4,000 1.5%of Directs $313,000 $5,000 1.5%of Directs $394,000 $5,000 1.5%of Directs $636,000 $6,000 1.5%of Directs Taxes&Insurance $505,000 $4,000 1.5%of Directs $313,000 $5,000 1.5%of Directs $394,000 $5,000 1.5%of Directs $636,000 $6,000 1.5%of Directs Developer Fee $1,348,000 $11,000 4.0%of Directs $836,000 $12,000 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 $600,000 $5,000 1.8%of Directs $335,000 $5,000 1.6%of Directs $375,000 $5,000 1.4%of Directs $500,000 $5,000 1.2%of Directs Contingency $421,000 $4,000 5.0%of Above Indirects $247,000 4 000 5.0%of Above Indirects $293,000 J4&L0q 5.0%of Above Indirects $439,000 jjgg0 5.0%of Above Indirects Total Indirect Costs $8,840,000 $74,000 26.2%of Directs $5,182,000 $77,000 24.8%of Directs $6,149,000 $82,000 23.4%of Directs $9,221,000 $92,000 21.7%of Directs III. Financing Costs(3) $3,369,000 $28,000 10.0%of Directs $2,090,000 $31,000 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) $45,900,000 $383,000 $354 Per SF GBA $28,167,000 $420,000 $434 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.

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ON-SITE PRODUCTION
TABLE C-3

NET OPERATING INCOME

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
i', 91%@ Market-Rate/9%@Affordable
I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month(1) Annual A. Market-Rate
One Bedroom 750 SF 36 $3.00 $2,250 $972,000 32 $3.00 $2,250 $864,000 Two Bedroom 1,100 SF 72 $2.75 $3,030 $2,618,000 66 $2.75 $3,030 $2,400,000 Three Bedroom 1,300 SF 12 $2.50 $468,000 11 $2.50 3 250 $429,000 Subtotal/Average 1,015 SF 120 $2.78 $2,820 $4,058,000 109 $2.78 $2,820 $3,693,000 B. Low Income(2)
One Bedroom 750 SF 2 $1.63 $1,221 $29,000 Two Bedroom 1,100 SF 3 $1.24 $1,363 $49,000 Three Bedroom 1,300 SF - - - - 4 1 $1.16 $18,000 Subtotal/Average 1,017 SF 6 $1.31 $1,333 $96,000 C. Moderate Income(3)
One Bedroom 750 SF , 2 $3.00 $2,250 (4) $54,000 Two Bedroom 1,100 SF 3 $2.33 $2,566 (4) $92,000 Three Bedroom 1 300 SF - - - _ 0 2.19 La 43 (4) LO
Subtotal/Average 960 SF 5 $2.53 $2,433 $146,000 D. Total/Average 1,017 SF 120 $2.75 $2,800 $4,058,000 120 $2.69 $2,733 $3,935,000 Add: Other Income $100 /Unit/Month $144,000 $75 /Unit/Month $108,000 E. Total Gross Scheduled Income(GSI) $4,202,000 $4,043,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 210 000 5.0% of GSI 202 000 Effective Gross Income(EGI) $3,992,000 $3,841,000 III. Operating Expenses
(Less)Operating Expenses $4,750 /Unit/Year ($570,000) $4,750 /Unit/Year ($570,000) (Less)Property Taxes/Assessments(2) $6,100 /Unit/Year ($732,000) $5,825 /Unit/Year ($699,000) (Less)Replacement Reserves 250 /Unit/Year 30 000 250 /Unit/Year 30 000 Total Operating Expenses $11,100 /Unit/Year ($1,332,000) $10,825 /Unit/Year ($1,299,000)

33.4% of EGI 33.8% of EGI
IV. Net Operating Income(NOI) $2,660,000 $2,542,000 (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.

Filename:CitG s1a012D23tudy_Prototype Models_9%set-aside_v2;11/28/aHj1 Page 44 6f966

ON-SITE PRODUCTION
TABLE C-4

NET OPERATING INCOME-STACKED FLATS OVER TUCK-UNDER PARKING

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Tuck-Under Parkin
0'• ML 91%@ Market-Rate/9%@ Affordable
I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month(1) Annual A. Market-Rate
One Bedroom 700 SF 27 $3.50 $2,450 $794,000 25 $3.50 $2,450 $735,000 Two Bedroom 950 SF 40 $3.50 $3,330 $1,598,000 36 $3.50 $3,330 $1,439,000 Three Bedroom -- SF -- -- -- -- Subtotal/Average 850 SF 67 $3.51 $2,980 $2,392,000 61 $3.49 $2,970 $2,174,000 a
B. Low Income(2)
One Bedroom 700 SF 1 $1.74 $1,221 $15,000 Two Bedroom 950 SF 2 $1.43 $1,363 $33,000 Three Bedroom -- SF
Subtotal/Average 0 SF 3 $1.54 $1,333 $48,000 C. Moderate Income(3)
One Bedroom 700 SF 1 $3.27 $2,291 (4) $27,000 Two Bedroom 950 SF 2 $2.70 $2,566 (4) $62,000 Three Bedroom -- SF --
Subtotal/Average 0 SF 3 $2.85 $2,472 $89,000 D. Total/Average 850 SF 67 $3.53 $3,000 $2,392,000 67 $3.38 $2,874 $2,311,000 Add: Other Income $100 /Unit/Month $80,000 $75 /Unit/Month $60,000 E. Total Gross Scheduled Income(GSI) $2,472,000 $2,371,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI ($124,0001 5.0% of GSI 119 000 Effective Gross Income(EGI) $2,348,000 $2,252,000 III. Operating Expenses
(Less)Operating Expenses $5,000 /Unit/Year ($335,000) $5,000 /Unit/Year ($335,000) (Less)Property Taxes/Assessments(s) $6,418 /Unit/Year ($431,000) $6,119 /Unit/Year ($410,000) (Less)Replacement Reserves 250 /Unit/Year 17 000 250 /Unit/Year 17 000 Total Operating Expenses $11,672 /Unit/Year ($783,000) $11,373 /Unit/Year ($762,000)

33.3% of EGI 33.8% of EGI
IV. Net Operating Income(NOI) $1,565,000 $1,490,000 (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.

Filename:CitG s1a012D23tudy_Prototype Models_9%set-aside_v2;11/28/aHj1 Page 45 6f966

ON-SITE PRODUCTION
TABLE C-5

NET OPERATING INCOME-STACKED FLATS OVER PODIUM PARKING

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Podium Parking
0'. 91%@ Market-Rate/9%@ Affordable
I. Gross Scheduled Income(GSI)
Unit Size #Units SF Month Annual #Units SF Month Ill Annual A. Market-Rate
One Bedroom 650 SF 30 $3.75 $2,440 $878,000 27 $3.75 $2,440 $791,000 Two Bedroom 875 SF 45 $3.75 $3,280 $1,771,000 41 $3.75 $3,280 $1,614,000 Three Bedroom -- SF -- -- --
Subtotal/Average 785 SF 75 $3.75 $2,940 $2,649,000 68 $3.76 $2,950 $2,405,000 B. Low Income(2)
One Bedroom 650 SF 2 $1.88 $1,221 $29,000 Two Bedroom 875 SF 2 $1.56 $1,363 $33,000 Three Bedroom -SF - - - - <
Subtotal/Average 763 SF 4 $1.69 $1,292 $62,000 C. Moderate Income(3)
One Bedroom 650 SF 1 $3.52 $2,291 (4) $27,000 Two Bedroom 875 SF 2 $2.93 $2,566 (4) $62,000 Three Bedroom -- SF -- -- --
Subtotal/Average 800 SF 3 $3.09 $2,472 $89,000 D. Total/Average 763 SF 75 $3.80 $2,900 $2,649,000 75 $3.72 $2,840 $2,556,000 Add: Other Income $125 /Unit/Month $113,000 $100 /Unit/Month $90,000 E. Total Gross Scheduled Income(GSI) $2,762,000 $2,646,000 II. Effective Gross Income
(Less)Vacancy 5.0% of GSI 138 000 5.0% of GSI 132 000 Effective Gross Income(EGI) $2,624,000 $2,514,000 III. Operating Expenses
(Less)Operating Expenses $5,250 /Unit/Year ($394,000) $5,250 /Unit/Year ($394,000) (Less)Property Taxes/Assessments(sl $6,360 /Unit/Year ($477,000) $6,040 /Unit/Year ($453,000) (Less)Replacement Reserves 250 /Unit/Year 19 000 250 /Unit/Year 19 000 Total Operating Expenses $11,867 /Unit/Year ($890,000) $11,547 /Unit/Year ($866,000)

33.9% of EGI 34.4% of EGI
IV. Net Operating Income(NOI) $1,734,000 $1,648,000 (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.

Filename:CitG s1a012D23tudy_Prototype Models_9%set-aside_v2;11/28/aHj1 Page 46 &96B

ON-SITE PRODUCTION
TABLE C-6

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

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Mixed-Use Stacked Flats over Podium/Subterranean
0', 91%@ Market-Rate/9%@ Affordable
I. Net Operating Income-Residential
Unit Size #Units SF Month Annual #Units SF Month(1i12i Annual Gross Schedule Income
A. Market-Rate
One Bedroom 600 SF 40 $4.00 $2,400 $1,152,000 36 $4.00 $2,400 $1,037,000 Two Bedroom 800 SF 60 $4.00 $3,200 $2,304,000 55 $4.00 $3,200 $2,112,000 Three Bedroom --SF -- -- -- -- -- -- Subtotal/Average 720 SF 100 $4.00 $2,880 $3,456,000 91 $4.00 $2,880 $3,149,000 B. Low Income(2)
One Bedroom 600 SF 2 $2.04 $1,221 $29,000 Two Bedroom 800 SF 3 $1.70 $1,363 $49,000 Three Bedroom --SF -- -- -- -- Subtotal/Average 720 SF 5 $1.81 $1,300 $78,000 C. Moderate Income(3)
One Bedroom 600 SF 2 $3.82 $2,291 (4) $55,000 Two Bedroom 800 SF 2 $3.21 $2,566 (4) $62,000 Three Bedroom --SF -- -- -- -- Subtotal/Average 700 SF - - - 4 $3.48 $2,438 $117,000 Total/Average 720 SF 100 $4.00 $2,880 $3,456,000 100 $3.87 $2,787 $3,344,000 Add: Other Income $150 /Unit/Month $180,000 $125 /Unit/Month $150,000 Total Gross Scheduled Income(GSI) 6 $3,636,000 $3,494,000 D. Effective Gross Income
(Less)Vacancy 5.0% of GSI 182 000 5.0% of GSI 175 000 Effective Gross Income(EGI) $3,454,000 $3,319,000 E. Operating Expenses
(Less)Operating Expenses $5,500 /Unit/Year ($550,000) $5,500 /Unit/Year ($550,000) (Less)Property Taxes/Assessments(5) $6,210 /Unit/Year ($621,000) $5,920 /Unit/Year ($592,000) (Less)Replacement Reserves 250 /Unit/Year 25 000 250 /Unit/Year 25 000 Total Operating Expenses $11,960 /Unit/Year ($1,196,000) $11,670 /Unit/Year ($1,167,000)

34.6% of EGI 35.2% of EGI
F.1 Net Operating Income-Residential $2,258,000 $2,152,000 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 B. (Less)Vacancy 10.0% of GSI 42 000 10.0% of GSI 42 000 C. Effective Gross Income $378,000 $378,000 D. (Less)Unreimbursed Operating Expenses 5.0% of EGI 19 000 5.0% of EGI 19 000 E.I Net Operating Income -Retail $359,000 $359,000 III.Total Net Operating Income(I+II) $2,617,000 $2,511,000 (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:K s rJVla t�e jd 4 ,Inc. PH Page 47 8 g�� Filename:City a y_Prototype Models_9%set-aside_v2;11/28/2022;ej

ON-SITE PRODUCTION
TABLE C-7

RESIDUAL LAND VALUE-GARDEN APARTMENTS

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Garden A
91%@ Market Rate/
9%@ Affordable
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $2,660,000 $2,542,000 Capitalization Rate @ 4.00% 4.00% Capitalized Value Upon Completion $554,000 /Unit $66,500,000 $530,000 /Unit $63,550,000 (Less)Cost of Sale 2.0% of Value ($1,330,000) 2.0% of Value ($1,271,000) (Less)Target Developer Profit 10.0% of Value ($6,650,000) 10.0% of Value ($6,355,000) II. Net Sales Proceeds $58,520,000 $55,924,000 (Less) Development Costs ($45,900,000) ($45,900,000) III. Residual Land Value $12,620,000 $10,024,000 Per Unit $105,000 $84,000
Per SF Site $48 $38
Prepared by: Keyser Marston Associates, Inc.

Filename:CQ/1AQA20U'j3Fee Study_Prototype Models_9%set-aside_v2;11/28/2022;ejr PH 1 Page 48 &96B

ON-SITE PRODUCTION
TABLE C-8

RESIDUAL LAND VALUE-STACKED FLATS OVER TUCK-UNDER PARKING

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Stacked Flats over Tuck-Under Parking
91%@ Market-Rate/
9%@ Affordable
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $1,565,000 $1,490,000 Capitalization Rate @ 4.00% 4.00% Capitalized Value Upon Completion $584,000 /Unit $39,125,000 $556,000 /Unit $37,250,000 (Less)Cost of Sale 3.0% of Value ($1,174,000) 3.0% of Value ($1,118,000) (Less)Target Developer Profit 10.0% of Value ($3,913,000) 10.0% of Value ($3,725,000) II. Net Sales Proceeds $34,038,000 $32,407,000 (Less) Development Costs ($28,167,000) ($28,167,000) III. Residual Land Value $5,871,000 $4,240,000 Per Unit $88,000 $63,000
Per SF Site $90 $65
Prepared by: Keyser Marston Associates, Inc.

Filena@ej ti� Q2_3-Lieu Fee Study_Prototype Models_9%set-aside_v2;11/28/2022;4?H 1 Page 49 6f96B

ON-SITE PRODUCTION
TABLE C-9

RESIDUAL LAND VALUE-STACKED FLATS OVER PODIUM PARKING

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
91%@ Market-Rate/
9%@ Affordable
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $1,734,000 $1,648,000 Capitalization Rate @ 4.00% 4.00% Capitalized Value Upon Completion $578,000 /Unit $43,350,000 $549,000 /Unit $41,200,000 (Less)Cost of Sale 2.5% of Value ($1,084,000) 2.5% of Value ($1,030,000) (Less)Target Developer Profit 10.0% of Value ($4,335,000) 10.0% of Value ($4,120,000) II. Net Sales Proceeds $37,931,000 $36,050,000 (Less) Development Costs ($35,063,000) ($35,063,000) III. Residual Land Value $2,868,000 $987,000 Per Unit $38,000 $13,000
Per SF Site $66 $23
Prepared by: Keyser Marston Associates, Inc.

Filena®ej ti� Q2_3-Lieu Fee Study_Prototype Models_9%set-aside_v2;11/28/2022;4?H 1 Page 50 &96-B

ON-SITE PRODUCTION
TABLE C-10

RESIDUAL LAND VALUE-MIXED-USE STACKED FLATS OVER PODIUM/SUBTERRANEAN PARKING

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
Mixed-Use Stacked Flats over Podium/Subterranean Parking 91%@ Market-Rate/
9%@ Affordable
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $2,617,000 $2,511,000 Capitalization Rate @ 4.00% 4.00%
Capitalized Value Upon Completion $654,000 /Unit $65,425,000 $628,000 /Unit $62,775,000 (Less)Cost of Sale 2.0% of Value ($1,309,000) 2.0% of Value ($1,256,000) (Less)Target Developer Profit 10.0% of Value ($6,543,000) 10.0% of Value ($6,278,000) II. Net Sales Proceeds $57,573,000 $55,241,000 (Less) Development Costs ($55,864,000) ($55,864,000) III. Residual Land Value $1,709,000 ($623,000) Per Unit $17,000 ($6,000)
Per SF Site $39 ($14)
Prepared by: Keyser Marston Associates, Inc.

Filena@e1 ti� Q2_3-Lieu Fee Study_Prototype Models_9%set-aside_v2;11/28/2022;4?H 1 Page 51 &96B

APPENDIX D
In-Lieu Fee Financial Analysis
Approach 2: Off-Site Production
< IN
y
01/10/2023 PH 1 Page 52 6f966

OFF-SITE PRODUCTION
TABLE D-1

PROTOTYPE PROJECT DESCRIPTION

INCLUSIONARY HOUSING IN-LIEU FEE STUDY

CITY OF VISTA
100%Affordable
Stacked Flats over Podium Parking
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:Kwe!r�Ma!rsst!oon Associates,Inc. p
Filenargp:L/t��1)120 -3eu Fee Study—Prototype Models_9%set-aside_Pt;H/18/2022;ejr Page 53 &96-B

OFF-SITE PRODUCTION
TABLE D-2

DEVELOPMENT COSTS

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 $5 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) $2,597,000 $30,000 $32 Per SF GBA $2,597,000 $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 $5,913,000 $69,000 18.6% 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 $564,000 ILM 5.0% of Above Indirects Total Indirect Costs $7,586,000 $88,000 27.4% of Directs $11,834,000 $138,000 37.2% of Directs III. Financing Costs
Loan Fees $676,000 $8,000 2.4% of Directs $1,496,000 $17,000 4.7% of Directs Interest During Constructions $1,261,000 $15,000 4.6% of Directs $1,234,000 $14,000 3.9% 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 $841,000 $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 $4,138,000 $48,000 13.0% of Directs IV. Development Costs(3) $38,814,000 $4S1,000 $474 Per SF GBA $47,785,000 $S56,000 $584 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 bb� Ke ser Marston Associates,Inc.

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OFF-SITE PRODUCTION
TABLE D-3

NET OPERATING INCOME

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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OFF-SITE PRODUCTION
TABLE D-4

RESIDUAL LAND VALUE

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 $20,622,000 $240,000 Other State Funding Source (3) $0 $0 $6,450,000 $75,000 Deferred Developer Fee (4) $0 $0 $3,413,000 $40,000 General Partner Equity Contribution (4) $0 LO Total Sources of Funds $31,175,000 $363,000 $38,830,000 $452,000 II. (Less) Development Costs excluding Land ($38,814,000) 451 000 ($47,785,000) 556 000 III. lResidual Land Value ($7,639,000) ($89,000) ($8,955,000) ($104,000) Prepared by: Keyser Marston Associates, Inc.

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

RESIDUAL LAND VALUE

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 $38,814,000 $47,785,000 (Less) Ineligible Costs 4% ($1,643,000) 5% ($2,453,000) Eligible Basis $37,171,000 $45,332,000 Tax Credit Proceeds:

Maximum Eligible Basis $37,171,000 $45,332,000 (Less)Voluntary Credit Adjustment 40.0% ($14,868,000) 0.0% _�O_ Total Requested Unadjusted Basis $22,303,000 $45,332,000 Impacted Bonus Factor 130% $28,994,000 130% $58,931,600 Tax Credit Qualified Units/Applicable Factor 100% $28,994,000 100% $58,931,600 Tax Credit Rate 9.00% $2,609,000 4.00% $2,357,000 Total Tax Credits @ 10 $26,090,000 10 $23,570,000 Limited Partner Share 99.99% $26,087,000 99.99% $23,567,643 Tax Credit Equity Investment @ 87.5% $22,826,000 87.5% $20,622,000 (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 $37,171,000 $45,332,000 (Less) Developer Fee ($2,200,000) ($5,913,000) Unadjusted Eligible Basis $34,971,000 $39,419,000 Total Developer Fee 6.3% $2,200,000 15.0% $5,913,000 Developer Overhead Fee $2,200,000 $5,913,000 (Less) Deferred Developer Fee 0.00% _�O_ 57.7% ($3,413,000) Upfront Developer Fee $2,200,000 $2,500,000
Prepared by: Keyser Marston Associates, Inc.

Filena®el ti� Q2_3-Lieu Fee Study_Prototype Models_9%se _v2;11/28/2022;ejr Page 57 8fgb'6

APPENDIX E
Comparison of Affordable Housing Fees
San Diego County
A04OW
01/10/2023 PH 1 Page 58 8fg6q8

TABLE E-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 E-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 $15/SF(2) 10%@ Low Income projects of all sizes
----------------------------------- ------------------- --------------------------------------- ----------------- ------------------------ For-Sale Yes Available to In-Lieu Fee $15/SF(2) 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(4) 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:Ke a nc M _ PH 1 Page 60 6fgu6Filename is\Cit O P _

TABLE E-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 of Chula Vista west of 1-805 identified as"Area of Low/Moderate Income Concentration". (2) Reflects in-lieu fee amount to be considered by the City of Oceanside City Council on December 7,2022,an increase from the City's current fee of$8.82/SF. (3) 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. (4) City of Poway base fee varies by zoning,with a maximum total of$500 per unit for all projects.

Prepared by:KerYS'er MM/aart of�at�)s nc.

Filename i:\Cit1ay10 _
totype Models_9%set-aside_v2;11/28/2022;lag PH1 Page 61 &903

EXHIBIT 5

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
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)
Prepared by:Ke er MM/aart o�{ate�s1Znc EXHIBIT 5 Filename i:\CitV1 a 1=idCu Prototype Models_09-15-22;9/15/2022;1ag PH1 Page 62 of 66

EXHIBIT 5

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%AMI
San Diego
Inside FUA Yes Yes 2 units 20%@ 65%AMI or less None None None None Prepared by:K Filename iACt:M7aJlt�oEja s n_Pr ototype Models_09-15-22;9/15/2022;lag PH1 Page 63 of 66

EXHIBIT 5

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
4,;)
(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.

Prepared b
Filename \Cty 7.1,typd=S Prototype Models_09-15-22;9/15/2022;lag PH1 Page 64 of 66

PRIOR CITY COUNCIL ACTIONS
EXHIBIT 6
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).

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).

EXHIBIT 6
01/10/2023 PH 1 Page 65 of 66

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).

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).
01/10/2023 PH 1 Page 66 of 66

From:Clark
To:Public Comments
Subject:(PH1 Inclusionary Housing Program)
Date:Monday, January 9, 2023 5:10:39 PM
Dear City Council,
I'm a member of the SDOP and urge you to vote Yes on the PH1 Inclusionary Housing Policy.

Please consider supporting the construction of low income, affordable housing to be built in Vista. There are so many hard working individuals and families that work in the community who are in need of this resource. Access to affordable housing in San Diego County is becoming increasingly difficult and your Yes vote will make a difference to many deserving people who live at or below the poverty line.

Sincerely,
Susan Clark

From:Judah Coker
To:Public Comments
Subject:PH1 Inclusionary Housing Program Public Comment Date:Tuesday, January 10, 2023 10:15:07 AM
Hello Vista City Council,
My name is Judah Coker, and I am a member of the San Diego Organizing Project. I am writing in to express my support for item PH1, that will create an inclusionary housing ordinance in the City of Visa.

We are in desperate need of policies that would increase the supply of affordable housing in our cities as San Diego County is in the midst of an affordable housing crisis, and this is one step forward that Vista could take to help address it. For this reason I ask that you please vote YES tonight for PH1.

Regards,
Judah Coker

From:

To:Public Comments
Subject:re: inclusionary housing
Date:Tuesday, January 10, 2023 10:00:43 AM

1/10/23
My name is Marianne Grisez
As a member of SDOP
San Diego Organizing Project , I urge
the Vista City Council to vote yes
on - PH1 - Inclusionary housing program.

A basic human right is a safe place to call home. This will make that possible for many in our county.

Thank you,
Marianne Grisez
Sent from my iPhone

From:Selma Hassane
To:Public Comments
Subject:PH1 Inclusionary Housing Program
Date:Tuesday, January 10, 2023 10:07:18 AM
Hello my name is Selma Hassane. I am a member of the San Diego Organizing Project (SDOP).

I am urging the city council to vote YES in the item PH1 Inclusionary Housing Program. We need inclusionary housing and affordable housing for all! --
Best,
Selma Hassane

From:

To:Public Comments
Subject:PH1 - Comments
Date:Monday, January 9, 2023 7:40:04 PM
In one of Aesop’s fables, he teaches a lesson that persuasion is better than force. We face this issue here today with Inclusionary Housing. When it comes to local government, local control is paramount to effective governing. Imposition of inclusionary requirements, as you should be aware, will allow state rules to come into play for which the city will not be able to have discretionary authority to disapprove, effectively taking some measure of control out of our hands.

We all want to increase our city’s tax base and give people a place to live, but not at the price of density bonuses which would lead to insufficient parking, increasing traffic beyond the capacity of our road system to handle, testing the capacity of public utilities, and breaching our current skyline.

A recent Terner Institute study demonstrated that imposing Inclusionary Housing policies resulted in some reduction of market-rate home construction and slightly above average increases in housing costs in several cities, such as Boston, MA. In the city of San Francisco, the collection of in lieu fees in support of Inclusionary Housing projects has resulted in exactly zero units being built under that program.

Why is the city looking to move away from the great example of cooperation shown with the construction and opening of affordable projects such as Paseo Artist Village or Los Robles de Cortez and instead towards compelling affordability requirements upon developers? Building in CA is expensive, with some thanks to Sacramento, you can’t get around it. Implementing Inclusionary policies without regard to the consequences is governing within a stovepipe; the governing body either has not studied or does not care or plan for the long-term impact of this decision.

I urge the City Council to instead study and implement a program to establish a framework for cooperative development efforts between the city and housing developers to incentivize and facilitate the construction of affordable housing. The City of Vista is not designed for the magnitude of high density construction which would be the fallout of adopting an Inclusionary Housing policy of this nature.

- Very Respectfully, Armen Kurdian, Vista Resident
“Underlying most arguments against the free market is a lack of belief in freedom itself.” ― Milton Friedman

From:D. Megginson
To:Public Comments
Subject:PH1 Inclusionary Housing Program
Date:Tuesday, January 10, 2023 10:42:39 AM
Hello, my name is Danyrea Megginson.

I am a member of the San Diego Organizing Project (SDOP). I am urging the city council to vote YES on the item PH1 Inclusionary Housing Program.

It is the right thing to do for your citizens in need of affordable housing and assistance.
-
In His Service,
Danyrea Megginson "Cookie"
"Faith is not about everything turning out okay; Faith is about being okay no matter how things turn out"

From:Sarah Spinks
To:Public Comments
Subject:P1: Inclusionary Housing Program
Date:Monday, January 9, 2023 4:56:23 PM
To the Vista City Council,
Please vote YES on item PH1 in support of the Inclusionary Housing Program.

Thank you,
Sarah Spinks

Voice message received 1/10/2023

Barbara Avalos, member of the San Diego Organizing Project (SDOP), urging the City Council to vote yes on item PH1, Inclusionary Housing Program.

Voice message received 1/10/2023

Jennifer Moff, , with the San Diego Organizing Project (SDOP), calling to urge the City Council to approve PH1, Inclusionary Housing Program.

From:Helene Bell
To:Public Comments
Subject:PH1
Date:Sunday, January 8, 2023 10:54:14 AM
TO: Vista City Council
Thank you for adopting the ordinances related to inclusionary housing and the in-lieu fees for inclusionary housing.

H Bell

From:Shirley Giese
To:Public Comments
Subject:PH1 Inclusionary Housing Program
Date:Saturday, January 7, 2023 1:03:58 PM
Dear City Council Members,
As a member of San Diego Organizing Project (SDOP), I urge you to support PH1, the Inclusionary Housing Program, and vote YES. This program will provide more affordable housing. As local rents have sky-rocketed, affordable housing is greatly needed for our citizens working minimum-wage jobs, seniors, and others with limited or fixed incomes.

Thank you for your careful consideration of PH1 - Inclusionary Housing Program.

Sincerely,
Shirley Giese

From:Caroline Theiss-Aird
To:Public Comments
Subject:PH1 Inclusionary Housing
Date:Friday, January 6, 2023 11:47:56 AM
Esteemed Vista City Council Members,
My husband and I are writing to express our support for an inclusionary housing plan that doesn’t leave out our many working residents who have been left out of home ownership, along with the elderly and disabled on fixed incomes, the mentally ill who have difficulty maintaining employment and other who remain houseless. Rents have risen astronomically in the last few years leaving many residents doubling up families, living in substandard housing, or in their cars. It’s past time we address this in our own city and take into account all residents of Vista.

Sincerely,
Caroline and Michael Theiss-Aird
Sent from my iPhone

CITY- OF VISTA ,C A L I F 0 P F I A PH1 : Indusionary Housing Program
Planning Case No. P22-0377 — City of Vista
City Council Public Hearing
January 10, 2023

PHI : Inclusionary • • oe

CITY OF VISTA
• Inclusionary housing is a program established by the local jurisdiction to reserve a certain percentage of residential units within a new development as affordable housing units • The City Council provided direction to staff on April 19 and October 11, 2022, to develop an inclusionary housing program • Implementation requires amendments to the Development Code, chapters 18.34 and 18.35, and the Downtown Specific Plan, as well as new City Council Policy

PHI : Inclusionary • • Oe

CITY OF VISTA
• Council direction is to provide nine percent (9%) inclusionary units within any new multi-family development of 20 units or more
• The nine percent of inclusionary units would be split between low-income (50-80% AMI ) and moderate-income (80-120% AMI). Staffs recommendation is five percent (5%) low-income and four percent (4%) moderate income
• Inclusionary units could be provided onsite or handled through an in-lieu fee payment

PHI : Inclusionary • • Oe

CITY OF VISTA
Development Code amendments:
• Chapter 18.34, Multi-Residential ( R-M ) Zone, would be amended to add section 18.34. 130 addressing Inclusionary Housing — requires any multi-family project of 20 units or more reserve 9% of the units as affordable, with 5% low- income and 4% moderate income, with option for in-lieu fee and requirement for a regulatory agreement if units are provided onsite

PHI : Inclusionary • • Oe

CITY OF VISTA
Development Code amendments:
• Chapter 18.35, Mixed-Use ( M-U ) Zone, would be amended to add section 18.35. 110 addressing Inclusionary Housing — refers back to R-M Zone inclusionary requirements
• Downtown Vista Specific Plan would be amended to add section 3.7 addressing Inclusionary Housing — refers back to R-M Zone inclusionary requirements

PHI : Inclusionary • • Oe

CITY OF VISTA
City Council Policy 300-15 :
• Establishes procedures for implementation of the
Inclusionary Housing Program
• Specifies the split of low-income and moderate-income units onsite, and provides the option for an in-lieu fee for offsite affordable housing
• City Council must establish the in-lieu fee by resolution

PHI : Inclusionary • • Oe

CITY OF VISTA
• In-lieu fee was determined through a study prepared by the City's financial consultant, KMA
o KMA study evaluated funding gap using two
methodologies: onsite production and offsite production o Funding gap determined by establishing the cost of a 100% market rate development and subtracting cost of a comparable development with 9% affordable units

PHI : Inclusionary • • Oe

CITY OF VISTA
o Onsite production, or the construction of affordable units within the project, would equate to an average funding gap of $23,500 per market rate unit, or $28 per square foot of market rate residential living area
o Offsite production would equate to an average funding gap of $12,310 per market rate unit, or $15 per square foot of market rate residential living area
o Staff recommends the offsite production methodology with an in-lieu fee of $12,310 per market rate unit

Oe
PHI : Inclusionary Housing

CITY OF VISTA
• The City Council may adjust the inclusionary requirements or the proposed in-lieu fee as part of any motion to approve • KMA study provides some fee options (using offsite production) :
o Range of $10,.000 to $15,000 per market rate unit o Range of $12 to $17 per square foot of market rate residential living area
o Fee per square foot benefits projects with smaller unit sizes

PHI : Inclusionary • • Oe

CITY OF VISTA
• Development Code and specific plan amendments are subject to formal recommendation from the Planning Commission prior to consideration by the City Council per Government Code section 65855
• The Planning Commission reviewed the proposal on December 611 2022, and voted 5-2 in favor of the staff recommendation

PHI : Inclusionary • • oe

CITY OF VISTA
Staff Recommendation :
• Adopt Ordinance No. 2023- , amending chapters 18.34 and

18.35 of the Vista Development Code and the Downtown Vista Specific Plan related to inclusionary housing requirements • Adopt Resolution No. 2023- , adopting City Council Policy 300-15 and establishing an in-lieu fee for an Inclusionary Housing Program

CITY- OF VISTA ,C A L I F 0 P F I A PH1 : Indusionary Housing Program
Planning Case No. P22-0377 — City of Vista
City Council Public Hearing
January 10, 2023

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