1. PLANNING ACADEMY ECONOMIC IMPACTS OF AFFORDABLE HOUSING AND EXTENDED PERMIT DURATION TO A RESIDENTIAL DEVELOPMENT OCTOBER 22, 2013 JAY HIGGINS, AICP

2. PERMITTING VARIABLES CAN IMPACT A PROJECT’S FINANCES DESIGN – VARIOUS BOARDS OF ARCHITECTURAL REVIEW WILL ASK YOU TO … ‘GET YOUR CLIENT’S WALLET OUT’ DENSITY – QUANTITY DRIVES REVENUE + TRAFFIC, ETC. IMPACTS IMPACT FEES CAN BE IN THE +$$$100K PER UNIT PERMIT DURATION CAN BE DECADES = +$$$ AFFORDABLE HOUSING – +$$$...BUILD ON SITE OR PAY FEES?

3. AFFORDABLE HOUSING RELATIVELY UNIFORM REQUIREMENT ON THE SOUTH COAST BUILD THEM ON SITE – OR PAY OUT? IT DEPENDS … ON THE AMOUNT OF THE FEES PER UNIT OR THE PERCENTAGE REQUIRED TO BE BUILT ON SITE IN LIEU FEES CAN RANGE FROM SEVERAL $100K PER UNIT ON THE SOUTH COAST TO JUST UNDER $100K IN THE SANTA MARIA MARKET PERCENTAGES OF HOMES THAT NEED TO BE PRICE RESTRICTED – IF THEY ARE GOING TO BE BUILT ON SITE AS A PART OF A DEVELOPMENT PROJECT CAN RANGE FROM 10% - 30% DEPENDING ON LOCATION

8. SUMMARY BUILDING THE AFFORDABLE UNITS ON SITE REALLY IMPACTS REVENUE – EVEN ON THE MARKET RATE UNITS DEVELOPERS WILL USUALLY BE OK WITH PAYING THE IN LIEU FEES UP TO THE PER UNIT LOSSES – BUT THAT’S A LEVEL OF FINANCIAL INTIMACY THAT IS UNUSUAL WITH PUBLIC AGENCIES. IN ORDER TO MAKE PROJECTS PENCIL THAT HAVE AFFORDABLE UNITS, OTHER FUNDAMENTALS OF THE P&L NEED TO CHANGE – TYPICALLY THESE ARE IN THE FORM OF REDUCED CONSTRUCTION COSTS (AND PROJECT QUALITY) OR DRASTICALLY REDUCED LAND COSTS PERMIT DURATIONS THAT MERELY DOUBLE WILL REALLY HURT YOUR ECONOMICS… AND IT DOESN’T TAKE TOO MUCH OF A DELAY (THINK – DECADES) FOR DEVELOPERS TO GO BELLY UP