HomeMy WebLinkAboutCity Council - 2004-91 RESOLUTION NO. 2004-91
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH
ESTABLISHING THE AFFORDABLE HOUSING IN-LIEU FEE AUTHORIZED BY ZONING
AND SUBDIVISION ORDINANCE CHAPTER 235 RELATING TO RESIDENTIAL
CONDOMINIUM CONVERSIONS
Whereas, Section 235.08 B of Chapter 235 of the City of Huntington Beach Zoning and
Subdivision Ordinance (ZSO) requires all condominium conversion projects to comply with parking
requirements of ZSO Chapter 231 and landscape improvements of ZSO Chapter 232. A reduction
in these development standards is available to apartments and stock cooperatives with two to four
units on a parcel that were sold prior to June 1, 2004, as condominium units without approval of a
conditional use permit and tentative parcel map upon the payment of an affordable housing in-lieu
fee in accordance with Chapter 235 (hereafter, "Affordable Housing In-Lieu Fee"); and
The City Council desires to use the Affordable Housing In-Lieu Fee revenues to provide
assistance to residential developers that agree to construct or substantially rehabilitate rental
housing and to impose long-term income and affordability covenants on the units in order to off-set
the loss of affordable rental housing stock resulting from the conversion of apartment units to
condominiums that occurred prior to June 1, 2004; and
The City Council has reviewed a report dated October 14, 2004, entitled "Affordable
Housing In-Lieu Fee Study" prepared by Keyser Marston Associates Incorporated (hereafter, "In-
Lieu Fee Study") that evaluates the costs of imposing affordable housing requirements on
conversions of apartment units to condominiums that have occurred without the City's approval
prior to June 1, 2004. The In-Lieu Fee Study includes an analysis of the estimated cost of meeting
the development standards requirements and is attached hereto as Exhibit A and incorporated
herein by this reference; and
The In-Lieu Fee Study has been available for public inspection and review prior to
consideration of this resolution by the City Council after a public hearing,
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HUNTINGTON
BEACH DOES HEREBY FIND, RESOLVE AND DETERMINE AS FOLLOWS:
1. The report dated October 14, 2004, entitled "Affordable Housing In-Lieu Fee Study"
prepared by Keyser Marston Associates Incorporated attached hereto as Exhibit A is hereby
adopted and approved.
2. That the purpose of the Affordable Housing In-Lieu Fee authorized by ZSO Chapter
235 is to off-set the loss of affordable rental housing stock resulting from the conversion of
apartment units to condominiums that occurred prior to June 1, 2004, without City approval.
3. The Affordable Housing In-Lieu Fee shall be $15.00 per square foot of living area of
an apartment or stock cooperative of two to four units that was sold as a condominium units without
approval of a conditional use permit and tentative parcel map prior to June 1, 2004.
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Res. No. 2004-91
4_ The Affordable Housing In-Lieu Fee established by this Resolution is consistent with
the findings and conclusions of the Affordable Housing In-Lieu Fee Study and this amount is
reasonable, and necessary to offset the loss of affordable housing rental stock on apartment or stock
cooperative units converted to condominiums without City approval prior to June 1, 2004, that are
subject to the Affordable Housing In-Lieu Fee.
5. The Affordable Housing In-Lieu Fee as authorized by this Resolution is reasonably
related to impacts to the affordable rental housing stock resulting from the conversion of apartment
units to condominiums that occurred prior to June 1, 2004, without City approval.
6. The revenues from the Affordable Housing In-Lieu Fee shall be used to provide
assistance to residential developers that agree to construct or substantially rehabilitate rental
housing and to impose long-term income and affordability covenants on the units.
7. The adoption of this Resolution is exempt from the California Environmental Quality
Act ("CEQA") under Section 15061(b)(3) of the California Code of Regulations, commonly known
as the CEQA Guidelines. The City Council finds that this exemption applies because there is no
reasonable possibility that the Affordable Housing In-Lieu Fee could negatively affect the physical
environment. To the contrary, the Affordable Housing In-Lieu Fee will be collected to mitigate the
environmental impacts on the City's affordable housing stock as a result of conversions of
apartments and stock cooperatives to condominiums that occurred without City approval of a
conditional use permit and tentative parcel map prior to June 1, 2004. Any environmental impacts
associated with specific projects that may be undertaken with fee proceeds will be assessed as each
project is formulated. The City Council also hereby finds that the adoption of this Resolution is
exempt from CEQA pursuant to the Supplemental Environmental Categorical Exemptions adopted
the City Council pursuant to Resolution No. 4501, which provides that minor amendments to
zoning ordinances that do not change the development standards intensity or density are exempt as a
Class XX exemption.
8. This Resolution shall take effect sixty (60) days following its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular
meeting thereof held on the 2 9 th day of November 200 4 .
M or
REVIEWED AND APPROVED: APPROVED AS TO FORM:
ity Ad 'nistrator �{ ty Attorhey
INIT TED AND APPROVED:
t ctor of Pla'nni"Rf
G:aESOLUTNl2004%CondolnLieuFee.doo 2
' -Pf05 2e0 J-91
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KEYSER MARSTON AsSociArEs INC . /�j'�' ao$,
j Huntington
� 7fli"w {� ,4DVISpRS N:
500 SOUTH GRAND AVENUE, SUITE 1480 city of Huntington Beat'
Los ANGELES.CALIFORNIA 50071 REAL ESTATE
PHONE: 213/622-9095 P1 �". 15 r](l1'1A REDEVELOPMENT
FAx:213/622-5204 OCT L•004 AFFORDABLE HOOStNO
WWW.KEYSERMARSTON.COM ECONOMIC DEVELOPMENT
L OS ANGELES
Catvin E.HoIlis,II
Kathleen H.Head
MEMORANDUM James A.Rabe
Paul C.Anderson
Gregory D.Soo-Hoo
SAN DIEGO
Gerald M.Trimble
Paul C.Marra
To: Jane James, Senior Planner
SAN CISCO
City of Huntington Beach A,Jerr Keyser
A,terry Keyser
Timothy C.Kelly
From: Kathleen Head Kate Earle Funk
pebble M.Kern
Julie Romey Robert J. Wetmore
Date: October 14, 2004
Subject: Affordable Housing In-Lieu Fee Study
The City of Huntington Beach (City) adopted modifications to the Condominium Conversions
section of the City of Huntington Beach Zoning and Subdivision Ordinance (Conversion
Ordinance) on August 2, 2004. The purpose of the following Keyser Marston Associates, Inc.
(KMA) nexus analysis is to assist the City in setting an affordable housing in-lieu fee to be used
in conjunction with the Conversion Ordinance.
EXECUTIVE SUMMARY
In recent years, several existing apartment projects have been converted to condominium
projects without City approval. These conversions did not meet the City's development
standards, and they have reduced the supply of affordable rental housing within the community.
To mitigate this problem, the Conversion Ordinance provides two options for owners of
condominium units converted without the City's approval prior to June 1, 2004. These options
can be described as follows:
1. Retrofit the project to comply with the City's development standards on-site; or
2. Pay an affordable housing in-lieu fee, which will be used by the City to provide affordable
housing in an off-site location.
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Subject: Affordable Housing In-Lieu Fee Study Page 2
The following KMA analysis indicates that the assistance cost associated with providing
affordable housing units at the Conversion Ordinance standards is $70,500 per affordable unit.
When this cost is applied across the 122 units that were converted to condominiums with the
City's approval, the cost per unit equates to $17,900 per unit, or$15 per square foot of living
area. In contrast, the analysis concludes the cost to meet the current development standard
requirements on-site equals $31,570 per unit, or $30 per square foot of living area.
The levy of any City fee is subject to the nexus requirements imposed by Sections 66000-66008
of the Government Code. Based on these requirements, and the KMA financial analysis, the
maximum supportable in-lieu fee is estimated at $17,900 per unit, or$15 per square foot of
living area. As long as the City sets the in-lieu fee at or below this amount, the in-lieu fee will
comply with the nexus requirements.
BACKGROUND STATEMENT
It is our understanding that recently, several property owners have converted existing small
apartment projects into individually owned condominium units without applying for the
appropriate City permits. At least 122 apartment units in 26 buildings throughout Huntington
Beach were converted and sold as condominium units without the approval of the City. Most of
these projects include between two and four units, and the units have already been sold to
individual owners. Many of these projects do not meet the City's zoning and development
standards, and the conversions have decreased the stock of affordable rental housing in the
City.
The City wishes to devise an equitable solution to this problem that protects the individual
condominium owners' interests and that allows the City to attract affordable housing units to
replace the lost rental units. The methodology that has been adopted by the City is to require
the condominium owners to retrofit their projects to meet the development standards, or to
waive the current development standard requirements if the condominium owners agree to pay
an affordable housing in-lieu fee to the City. The City will then use the fee revenues to provide
assistance to residential developers that agree to construct or substantially rehabilitate rental
housing and to impose long-term income and affordability covenants on the units. It should be
noted that the revised Conversion Ordinance dues not provide an in-lieu fee option to future
condominium conversions.
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Conversion Ordinance
The recently adopted Conversion Ordinance requires future condominium conversions to
allocate 25% of the units in a project with three or more units as follows:
1. Eighty percent (80%) of the affordable units are to be allocated to moderate income
households earning up to 100% of the Orange County median income (Median); and
2. Twenty percent (20%) of the affordable units are to be allocated to low income
households earning up to 80% of the Median.
The program guidelines allow the owners of condominiums that converted without the proper
approvals prior to June 1, 2004, to be relieved of the affordable housing obligation and
development standard requirements if they pay an established in-lieu fee to the City. As
currently envisioned, the City will set the fee at an amount that will be sufficient to fund the
financial gap associated with developing units that are subject to long-term income and
affordability covenants (Affordability Gap Analysis).
The purpose of the KMA nexus analysis is to quantify the affordability gap associated with
providing low and moderate income rental units in the City. The results of the Affordability Gap
Analysis will then be used to assist the City in establishing the in-lieu fee that will be imposed on
conversion projects that have the option of receiving development standards relief.
NEXUS ANALYSIS
The ability of California cities to charge new development for its relative share of the costs of
public facilities and services is regulated by the Mitigation Fee Act (Sections 66000-66008 of the
Government Code), also known as AB 1600. In order to impose such fees on new
development, the legislative body must make certain findings to establish the connections or
"nexus" between the development and the public facilities or services that will be funded by the
fee, and also to establish the connection between the development and the amount of the fee
that is being imposed on the development.
The fees imposed on a development cannot be more than the cost of the relative burden on city
facilities or services attributed to that development.' In order to support the required nexus
findings, public agencies usually prepare nexus studies that establish the connection between
different types of new development and the need for expanded or new city services or facilities.
' Development fees cannot be used to cure existing deficiencies in services or facilities.
CELEBRATING 30 YEARS OFSERME To OUR CLIENTS
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Subject: Affordable Housing In-Lieu Fee Study Page 4
AFFORDABILITY GAP ANALYSIS (APPENDIX A)
Methodology
The methodology used in the KMA Affordability Gap Analysis can be described as follows:
1. KMA compiled rent data for two- and three-bedroom apartment units in the City.
2. KMA calculated the maximum affordable rents for moderate and low income households
based on household income statistics distributed by the California Department of
Housing and Community Development Department, and the affordability standards
imposed by California Health and Safety Code Section 50053 (Section 50053).
3. KMA compared the value supported by 122 apartment units at market rents, to the value
of 122 apartment units assuming 25% of the units are restricted at the affordability limits
required by the Conversion Ordinance. This exercise identifies the financial gap that
would be incurred by the City if they chose to purchase affordability covenants.
The tables that detail the analysis are located in Appendix A, and are organized as follows:
Appendix A
Affordability Gap Analysis
Table 1 Market Rent Comparables
Table 2 Monthly Rent Assumptions
Table 3 Scenario Assumptions
Table 4A Cash Flow Analysis— 100% Market Rate Scenario
Table 48 Cash Flow Analysis —25% Affordable Scenario
Table 5 Affordability Gap Calculation
Affordability Gap Calculation
The following sections of the analysis summarize the KMA affordability gap calculations.
Market Rate Rents
As detailed in Table 1, rental comparables within Huntington Beach indicate that the current
market rents are as follows:
CnE8umu.30 YEARS oFSEItYICE To OUR CL mns
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To: ,lane James, City of Huntington Beach October 14, 2004
Subject: Affordable Housing In-Lieu Fee Study Page 5
Median Median Weighted
Monthly Unit Size Average
Rent (Sf) $ISF
Two-Bedroom Units $1,410 974 $1.34
Three-Bedroom Units $1,700 1,400 $1.32
KMA assumed that the size of the two- and three-bedroom units used in the Affordability Gap
Analysis are the same as the median unit size of the units identified in the market survey.
Maximum Affordable Rents
The assumptions used to estimate the maximum affordable rents are summarized as follows:
1. In accordance with the Section 50063 requirements, the household incomes are based
on three-person households for two-bedroom units and four-person households for
three-bedroom units.
2. 30% of the defined household income is allocated to housing related expenses.
3. The maximum allowable rent must be adjusted to reflect the fact that the tenants will be
required to pay for interior utilities costs. Based on the allowances provided by the
Orange County Housing Authority, the utilities costs are estimated at $29 per month for
two-bedroom units and $44 per month for three-bedroom units.
As shown in Table 2, the maximum allowable rents under the income categories are:
Moderate Low
Income Income
Two-Bedroom Units $1,672 $992
Three-Bedroom Units $1,846 $1,090
As a practical matter, tenants will not be willing to pay rent that exceeds the prevailing rate in
the market area. As such, it is important to estimate the rents that could be generated by the
units being evaluated if they were rented on the open market. The market survey performed by
KMA indicates that the maximum affordable rents for moderate income restricted units exceeds
the current market rents. Thus, the market rents would prevail for the moderate income
restricted units.
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Affordability Gap Calculations
To determine the affordability gap, KMA created two cash flow analyses that assume 61 two-
bedroom units and 61 three-bedroom units. The scenarios are described in detail in Table 3,
and summarized below:
1. 100% Market Rate Scenario — Estimates the value of 122 rental units that are not
subject to any income or affordability requirements.
2. 25%Affordable Scenario — Estimates the value of 92 unrestricted units and 31
affordable units, of which;
a. 25 units are restricted to moderate income households; and
b. Six units are restricted to low income households.
The cash flow analyses assume the following:
1. The market rate rents increase at 3% per year and the affordable rents increase at 2.5%
per year.
2. Miscellaneous income is estimated at $10 per unit per year, increasing at 3% per year.
3. A 5% vacancy and collection allowance is provided.
4. The general operating expenses are estimated at $4,000 per year, increasing at 3.5%
per year.
5. The property taxes are estimated based on a value estimated at an 8% capitalization
rate, and 1.25% tax rate.
6. A $300 per unit per year contribution is provided for a reserve fund. The contributions
increase by 3.5% per year.
7. The affordability restrictions terminate in Year 61. Thereafter, there is no difference in
value between a market rate project and a project subject to income and affordability
restrictions. Therefore, the reversionary value will not effect the affordability gap
calculation, and is not included in either scenario being tested in this analysis.
CELEER4T&c 30 YEARS OFSERmH r0 OUR CaENn
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The only differences between the annual net operating income(NOl) for each scenario are the
achievable rental revenues and the annual property tax expenses. The NOI for the two
scenarios is projected forward for 60 years, and then discounted to present value at a 7% rate.
The following summarizes the estimated present value for each scenario:
Project
Value
100% Market Rate Scenario $35,280,000
25% Affordable Scenario 33 095,000
Affordability Gap $2,185,000
Per Affordable Unit (31 Units) $70,500
Per Total Unit 122 Units $17,900
The impact associated with imposing income and affordability restrictions on 25% of the units is
estimated at $2.19 million. This means that the cost associated with acquiring long-term
affordability covenants on 31 units is estimated at$70,500 per unit. When this cost is allocated
across the 122 units being evaluated in this analysis, the supportable in-lieu fee amount equals
$17,900 per unit. At an average unit size of 1,200 square feet, the in-lieu fee amount equates to
$15 per square foot of living area.
COST OF DEVELOPMENT REQUIREMENTS (APPENDIX B)
The owners of the converted units have been given the option to pay an affordable housing in-
lieu fee or to meet the City's current development standard requirements for parking and
landscaping. A prototype project was utilized to estimate the on-site requirement costs, as
follows:
1. Unit mix:
# of Unit Size
Units (m 2
Two-bedroom Units 2 900
Three-bedroom Units 2 1,200
Total Units 4 1,050
2 These estimates are based on the average unit size of a small sample of condominium conversion
projects, as provided by the City.
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2. Parking spaces:
# of
Spaces
On-site Parking 9
Street Parking 2
Total Spaces 11
Appendix B presents the KMA analysis of the prototype project. The purpose of the analysis is
to provide an order-of-magnitude estimate of the cost associated with complying with the City's
development standards.
Parking Requirement
According to the City, most of the apartments that were recently converted to condominiums
were built when the City's parking code for apartment development was as follows:
1, The code required one parking space per bedroom plus guest parking equal to 0.5
spaces per unit.
2. Each project was allowed to meet the parking requirement by providing two of the
parking spaces on the street.
The current parking standard for condominium development requires that all of the required
parking spaces be provided on-site. Therefore, most of the converted projects are two parking
spaces short of meeting the current parking standard. Given the size and configuration of most
of the projects, it is not physically possible to provide two additional surface parking spaces on-
site. To meet the current parking requirements, two bedrooms would have to be eliminated
from the existing units within the project.
The City estimates that most of the converted units are within four-plex buildings that have a mix
of two- and three-bedroom units. If it is assumed that one bedroom is removed from two of the
units, without changing the units'total square footage, the project could meet the City's parking
code standards on-site. However, based on available sales data, KMA estimates that the
elimination of a bedroom would diminish the units' value by +1-20%.
KMA compiled sales price information from Dataquick for one-, two- and three-bedroom
condominium units sold in the City from July 2003 through August 2004. This information is
summarized in the following table:
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Subject: Affordable Housing In-Lieu Fee Study Page 9
Median Weighted
Sales Average
Prices $1SF
One-Bedroom Units $295,000 $417
Two-Bedroom Units $369,000 $348
Three-Bedroom Units $408,000 $310
Assuming that the average two-bedroom unit in the converted condominiums is 900 square feet,
the market sales price is estimated to be $313,200. If the market price is decreased by 20%,
the estimated market price for a 900 square foot one-bedroom unit is $250,600. The resulting
reduction in value for each unit that loses a bedroom is estimated at $62,600.
Given that a bedroom must be eliminated in two units in a four-plex, the total value loss is
estimated at $125,280. When this is allocated across the four units, the impact to the individual
condominium owner is approximately $31,320 per unit.
Landscaping Requirement
The City staff indicated that the conversion projects have not met the City's tree requirement.
This requirement can be described as follows:
1. Multi-family residential lots shall have one 36 inch box tree for every 45 lineal feet of
street frontage planted within the setback areas adjacent to a street; and
2. One 36 inch box tree planted within the common open space areas for.each ground or
first level unit.
The City anticipates that the typical condominium conversion project will need to plant two trees
to meet the current landscaping requirements. According to Marshall and Swift, the average
cost of a 36 inch box tree, including soil preparation and planting, is approximately $500 per
tree. Therefore, to meet the landscaping requirement, installing two trees on a typical site will
cost a total of $1,000. This equates to $250 per unit in a four-plex project.
CEL&'BR4MVG30 YSARSOFS&RMEro OUR CLIENTS
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Estimated Cost to Meet Development Requirements On Site
The following summarizes the estimated cost to meet the City's development standards on-site:
$/Sf
Total Living
Costs $/Unit Area
Parking Requirement $125,280 $31,320 $29.83
Landscaping Requirement 1,000 250 .24
Total Cost of R uirements $126,280 $31,570 $30.07
As shown in the preceding table, the cost associated with meeting the City's development
standards is estimated at $31,570 per unit, or approximately $30 per square foot of living area,
As long as the in-lieu fee amount charged by the City is less than the cost of meeting the
development standards requirements on-site, it is likely that the home owners will choose the
.fee option rather than the on-site option.
CONCLUSIONS
The Affordability Gap Analysis concluded that the supportable in-lieu fee amount totals $17,900
per unit, or $15 per square foot of living area. Comparatively, the cost to comply with the City's
development standards on-site is estimated at$31,570 per unit, or $30 per square cost of living
area. To meet the nexus tests imposed by AB1600, it is the KMA conclusion that the fee should
not exceed $17,900 per unit, or$15 per square foot of living area.
If the owners of all 122 converted units elect to pay the recommended in-lieu fee, the revenues
will total approximately $2.19 million. KMA estimates that, at an average assistance cost of
$70,500 per unit, these in-lieu fee revenues will allow the City to create 31 units subject to long-
term income and affordability restrictions. These units will fulfill the affordability goals that have
been established for the 122 apartment units that were converted to condominiums without City
approval.
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APPENDIX A
TABLE 1 Res. No. 2004-91
i
MARKET RATE RENT COMPARABLES-CITY OF HUNTINGTON BEACH'
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Units in Year Unit Size Monthly
Name Address Zip Project Built (Sq Ft) Rent $/Sf
I. 2-bedrooms I 1 Bathroom Units
Avalon at Padfic Bay 6700 Warner Ave. 92547 304 1970 1,000 $1,410 $1.41
Huntington Highlander 16162 Sher Lane#13 92647 178 1959 960 $1,245 $1.30
Huntington Highlander 16162 Sher Lane#13 92647 178 1969 1,146 $1,395 $1.22
Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 800 $1,100 $1.38
Ocean Breeze Villas 6401 Wamer Ave. 92647 288 1975 900 $1,250 $1.39
The Californian 6242 Warner Ave. 92647 232 1970 1,050 $1,400 $1.33
Windjammer 7701 Warner Ave. 92647 NA NA 950 $1,399 $1.47
Weighted Averages-2-Bedrooms I 1-Sathroom Units 960 $1,395 $1.35
It. 2-bedrooms 11.5-Bathrooms Units
Huntington Lakes 7562 Ellis Ave. 92648 NA NA 983 $1,485 $1.51
Huntington Villas 16761 Viewpoint Ln 92647 400 1972 1,056 $1,475 $1.40
Regency Palms 6762 Warner Ave. 92647 310 1969 820 $1,192 $1.45
Regency Palms 6762 Warner Ave. 92647 310 1969 1,020 $1,496 $1,47
Surfslde Villas 7795 Neptune Chive 92648 NA NA 975 $1,500 $1.54
Weighted Averages-2-Bedrooms 11.5-Bathrooms Units 979 $1,485 $1.24
III. 2-Bedr2oms 12-Bathrooms Units
Avalon at Pacific Bay 6700 Warner Ave. 92647 304 1970 1,000 $1,460 $1.46
Casa del Sol 21661 Brookhurst St. 92648 NA NA 1,112 $1,430 $1.29
Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,550 $1.63
Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,585 $1,67
Huntington Breakers 21270 Beach Blvd. 92648 342 1985 950 $1,585 $1.67
Huntington Continental 17101 Springdale 92649 NA NA 1,025 $1,455 $1.42
Huntington Lakes 7562 Ellis Ave. 92648 NA NA 1,190 $1,575 $1.32
Huntington Villas 16761 Viewpoint Ln 92647 400 1972 020 $1,265 $1.54
Huntington Villas 16761 Viewpoint Ln 92647 400 1972 926 $1,355 $1.46
Huntington Vista 21551 Brookhurst St 92646 NA NA 1,025 $1,300 $1.27
Huntington Vista 21551 Brookhurst St 92648 NA NA 1,135 $1,530 $1.35
Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,100 $1,350 $1.23
San Miguel 16040 Springdale 92649 NA NA 850 $1,335 $1.57
San Miguel 16040 Springdale 92649 NA NA 930 $1,375 $1.48
The Californian 6242 Warner Ave. 92647 232 1970 1,050 $1,450 $1.38
Windjammer 7701 Warner Ave, 92647 NA NA 950 $1,495 $1.57
Yorktown Apartments 8082 Yorktown Ave. 92648 NA NA 1,025 $1,295 $1.26
Weighted Averages-2-Bedrooms/2-Bathrooms Units 975 $1,450 $1.36
IV. lWelghted Averages-All 2-Bedrooms Units 975 $1,410 $1.34
V. 3-bedrooms 11-Bathroom Units
Huntington Highlander 16162 Sher Lane#13 92647 178 1969 1.466 $1,630 $1.11
VI. 3-bedrooms 11,5 Sathrooms Units
Surfside Villas 7795 Neptune Drive 92648 NA NA 1,132 $1,800 $1.59
VIL 3-bedrooms 12 Bathrooms Units
Huntington Villas 16761 Viewpoint Ln 92647 400 1972 1,028 $1,650 $1.61
Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,288 $1,650 $1.28
Ocean Breeze Villas 6401 Warner Ave. 92647 288 1975 1,440 $1,700 $1.18
Weighted Averages-3-Bedrooms 12-Bathrooms Units 4,288 $1,650 $1.33
Vill. 3-bedrooms/2.5 Bathroom
Huntington Lakes 7562 Ellis Ave. 92648 NA NA 1,464 $1,875 $1.28
Huntington Vista 21551 Brookhurst St 92646 NA NA 1,400 $1,900 $1.36
Weighted Averages-3-Bedrooms 12."attwoom Units 1,432 $1,888 $1.32
IX. Weighted Averages-All 3-Bedroom Units 1,400 $1,700
Sources include RentNst and RenLcom.
Remodeled in 1999,
a Remodeled in 2000.
Prepared by: Keyser Marston Associates,Inc.
Filename: In-ileu fee 1014 04.xis;Mkt Rents;10/1412004.jIr
TABLE 2
MONTHLY RENT ASSUMPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year Year 7 Year B Year 9 Year 10 Year 11 Year 12 Year 13
1. 100%Market Rate Scenario
Two-Bedroom Units $1,300 $1,339 $1,379 $1,420 $1.463 $1,507 $1,552 $1,599 $1,647 $1,696 $1,147 $1.799 $1,853
Three-Bedroom Units $1,900 $1,957 $2.016 $2.076 $2,138 $2.202 $2,268 $2,336 $2,406 $2,478 $2,552 $2,629 $2,708
11. Moderate Income Rents
A. Maximum Allowable Rents
Two-Bedroom Units' $1,672 $1,714 $1,757 $1,801 $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2.140 $2,194 $2,249
Three-Bedroom Units $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2.140 $2,194 $2,249 $2,305 $2,363 $2,422 $2.483
B. Maximum Achievable Rents`
Two-Bedroom Units $1,300 $1,339 $1.379 $1.420 $1,463 $1,507 $1,552 $1,599 $1,647 $1,696 $1.747 $1,799 $1,853
Three-Bedroom Units $1,846 $1,892 $1,939 $1,987 $2,037 $2,088 $2,140 $2,194 $2.249 $2.305 $2,363 $2,422 $2,483
III. Low Income Rents'
Two-Bedroom Units' $992 $1,017 $1.042 $1,068 $1,095 $1,122 $1,150 $1,179 $1,208 $1,238 $1,269 $1,301 $1,334
Three-Bedroom Units' $1,090 $1,117 $1,145 $1,174 $1,203 $1,233 $1,264 $1.296 $1.328 $1,361 $1,395 $1.430 $1,466
' Year 1 rents are based on TABLE 1. Assumes annual increases
of 103.0%.
2 Based on 100%of the OC median,and Section 50053 of the
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5%per year.
9 Assumes monthly utility allowances of$29ltwo-bedroom unit and
$441three-bedroom unit.
4 Assumes that the maximum acheivable rent is the lesser of the
maximum allowable rent and the market rate rent.
e Based on 60%of the OC median,and Sections 50053 of the
California Health and Safety Code,per the Ordinance. Rents Z
increase at 102.5%per year. O
N
O
Prepared by: Keyser Marston Associates,Inc.
Filename: In4teu fee 10 14 04.x4s;Rent Assumptions;jlr,I0114)2004
TABLE 2
MONTHLY RENT ASSUMPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 14 Year15 Year 16 Year 17 Year 18 Year 19 Yeiar2Q Year 21 Year 22 Year23 Year 24 Year 25 Year 6
I. 100%Market Rate Scenario'
Two-Bedroom Units $1,909 $1,966 $2,025 $2,086 $2,149 $2,213 $2,279 $2,347 $2,417 $2,490 $2,565 $2,642 $2,721
Three-Bedroom Units $2,789 $2,873 $2,959 $3,048 $3,139 $3,233 $3,330 $3,430 $3,533 $3,639 $3,748 $3,860 $3,976
11, Moderate I come Rents
A. Maximum Allowable Rents
Two-Bedroom Units' $2,305 $2,363 $2,422 $2.483 $2,545 $2,609 $2,674 $2,741 $2,810 $2,880 $2,952 $3,026 $3,102
Three-Bedroom Units $2,545 $2.609 $2,674 $2.741 $2,810 $2,880 $2,952 $3,026 $3,102 $3,180 $3.260 $3,342 $3,426
B. Maximum Achievable Rents'
Two-Bedroom Units $1,909 $1,966 $2,025 $2,086 $2,149 $2,213 $2,279 $2,347 $2.417 $2,490 $2,565 $2,642 $2,721
Three-Bedroom Units $2,545 $2,609 $2,674 $2,741 $2.810 $2,880 $2,952 $3.026 $3,102 $3,180 $3,260 $3,342 $3A26
Ill. _Low Income Rents'
Two-Bedroorn Units' $1,367 $1,401 $1,436 $1,472 $1,509 $1,547 $1,586 $1,626 $1,667 $1,709 $1.752 $1,796 $1,841
Three-Bedroom Units' $1,503 $1.541 $1,580 $1.620 $1,661 $1,703 $1,746 $1,790 $1,835 $1,881 $1,928 $1,976 $2.025
Year 1 rents are based on TABLE 1. Assumes annual increases
of 103.0%.
2 Based on 100%of the OC median,and Section 50053 of the
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5%per year.
a Assumes monthly utility allowances of$29/two- edroom unit and
$441three-bedroom unit.
Assumes that the maximum achelvable rent is the lesser of the
maximum allowable rent and the market rate rent
Based on 60%of the OC median,and Sections 50053 of the ur0i
Callfomia Health and Safety Code,per the Ordinance. Rents Z
increase at 102.5%per year. o
PJ
O
O
Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.x1s;Rent Assumptions;1Ir;1 011 412 004
TABLE 2
MONTHLY RENT ASSUMPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39
i. 1 DO%Market Rate Scenario 1
Two-Bedroom Units $2.803 $2,887 $2,974 $3,063 $3,155 $3,250 $3,348 $3,448 $3,551 $3,658 $3,768 $3,861 $3,997
Three-Bedroom Units $4,095 $4,218 $4,345 $4,475 $4,609 $4,747 $4,889 $5,036 $5,187 $5,343 $5,503 $5.668 $5,838
It. Moderate Income Rents
A. Maximum Allowable Rents'
Two-Bedroom Units'' $3,180 $3,260 $3,342 $3,426 $3,512 $3,600 $3,690 $3,782 $3.877 $3,974 $4,073 $4,175 $4,279
Three-Bedroom Units $3.512 $3,600 $3,690 $3.782 $3,877 $3,974 $4.073 $4,175 $4.279 $4.386 $4.496 $4,608 $4.723
B. Maximum Achievable Rents`
Two-Bedroom Units $2,803 $2,887 $2,974 $3,063 $3,155 $3,250 $3.348 $3,448 $3,551 $3,658 $3,768 $3,881 $3,997
Three-Bedroom Units $3,512 $3,600 $3,690 $3,782 $3,877 $3,974 $4,073 $4,175 $4,279 $4,386 $4,496 $4,608 $4,723
Ill. Low Income Rents'
Two-Bedroom Units $1,887 $1,934 $1,982 $2,032 $2,083 $2,135 $2,188 $2.243 $2,299 $2,356 $2,415 $2,475 $2,537
Three-Bedroom Units' $2,076 $2,128 $2,181 $2,236 $2,292 $2,349 $2,408 $2,468 $2.530 $2,593 $2,658 $2,724 $2,792
Year 1 rents are based an TABLE 1. Assumes annual increases
of 103.0%.
z Based on 100%of the OC median,and Section 50053 of the
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5°�per year.
3 Assumes monthly utility allowances of$29ftwo-bedroom unit and
$44/three-bedroom unit.
4 Assumes that the maximum acheivable rent is the lesser of the
maximum allowable rent and the market rate rent
a Based on 60%of the OC median,and Sections 50053 of the ran
California Health and Safety Code,per the Ordinance. Rents z
increase at 102.5%per year. p
N
O
O
4P
i
Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.As;Rent Assumptions;jlr; 10/14/2004
TABLE 2
MONTHLY RENT ASSUMPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
1Yearg0 Year 41 Year 42 Year 43 Year Year44 Year 45 Year Year 47 Year 48 Year4q Year5Q Year 51 Year 52
t. 100%Market Rate Scenario'
Two-Bedroom Units $4,117 $4,241 $4.368 $4,499 $4,634 $4.773 $4,916 $5,063 $5,215 $5,371 $5,532 $5,698 $5.869
Three-Bedroom Units $6.013 $6,193 $6,379 $6,570 $6.767 $6,970 $7.179 $7.394 $7.616 $7.844 $8,079 $8,321 $8.671
It. Moderate Income teats
A. Maximum Allowable Rents
Two-Bedroom Units' $4.386 $4,496 $4,608 $4,723 $4,841 $4,962 $5,086 $5,213 $5,343 $5,477 $5,614 $5.754 $5,898
Three-Bedroom Units' $4,841 $4,962 $5,086 $5,213 $5,343 $5,477 $5,614 $5,754 $5,898 $6,045 $6,196 $6,351 $6,510
B. Maximum Achievable Rents'
Two-Bedroom Units $4,117 $4,241 $4,368 $4,499 $4,634 $4,773 $4,916 $5,063 $5,215 $5,3T1 $5,532 $5,5N $5,869
Three-Bedroom Units $4,841 $4,962 $5,066 $5,213 $5,343 $5,477 $5,614 $5,754 $5,898 $6,045 $6,196 $6,351 $6,510
III. Low Income Rents
Two-Bedroom Units' $2,600 $2,665 $2,732 $2,800 $2,870 $2.942 $3,016 $3,091 $3,168 $3,247 $3,328 $3,411 $3,496
Three-Bedroom Units' $2,862 $2,934 $3,007 $3,082 $3,159 $3,238 $3,319 $3,402 $3,487 $3,574 $3,663 $3,755 $3,849
1 Year 1 rents are based on TABLE 1. Assumes annual increases
of 103.0%.
2 Based on 100%of the OC median,and Section 50053 of the
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5%per year_
3 Assumes monthly utility allowances of$29ftwo-bedroom unit and
$4411hree-bedroom unit
° Assumes that the maximum acheevable rent is the lesser of the
maximum allowable rent and the market rate rent.
s Based on 60%of the OC median,and Sections 50053 of the
California Health and Safety Code,per the Ordinance. Rents Z
Increase at 102.5%per year. O
N
O
O
r
Prepared by: Keyser Marston Associates,Inc.
Fllename: in4leu fee 10 14 04.x1s;Rent Assumptions:jfr: I W1412004
TABLE 2
MONTHLY RENT ASSUMPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 53 Year 54 Year 55 Year 56 Year 57 Year 58 Year 59 Year 60
1. 100%Market Rate Scenario
Two-Bedroom Units $6,045 $6,226 $6,413 $6,605 $6,803 $7,007 $7,217 $7,434
Three-Bedroom Units $8,828 $9,093 $9,366 $9.647 $9,936 $10.234 $10,541 $10,857
It. Moderate Income Rents
A. Maximum Allowable Rents
Two-Bedroom Units' $6,045 $6.196 $6,351 $6,510 $6,673 $6,840 $7,011 $7,186
Three-Bedroom units'3 $6,673 $6,840 $7,011 $7,186 $7,366 $7,550 $7,739 $7,932
B. Maximum Achievable Rents;
Two-Bedroom Units $6,045 $6,196 $6,351 $6,510 $6,673 $6,840 $7,011 $7,186
Three-Bedroom Units $6,673 $6,840 $7,011 $7,186 $7,366 $7,550 $7,739 $7,932
III. Low Income Rents'
Two-Bedroom Units'' $3,583 $3,673 $3,765 $3,859 $3,955 $4,054 $4,155 $4,259
Three-Bedroom Units $3,945 $4.044 $4,145 $4,249 $4,355 $4,464 $4.576 $4.690
' Year 1 rents are based on TABLE 1. Assumes annual Increases
of 103.0%.
2 Based on 100%of the OC median,and Section 50053 of the
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5%per year.
s Assumes monthly utility allowances of$29/two-bedroom unit and
$44/three-bedroom unit.
` Assumes that the maximum acheivable rent is the lesser of the
maximum allowable rent and the market rate rent.
s Based on 60%of the OC median,and Sections 50053 of the C
m
California Health and Safety Code,per the Ordinance. Rents
increase at 102.5%per year. p
O
0
.p
Prepared by, Keyser Marston Associates,Inc.
Filename: In-lieu tee 10 14 04.x1s;Rent Assumptions;jlr, 1011412004
Res. No. 2004-91
TABLE 3
SCENARIO DESCRIPTIONS
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
1. Unit Mix Assumptions
Two-Bedroom Units 50% Total Units 61
Three-Bedroom Units 50% Total Units 61
Total Units 122
tl. 100°/s_ Market Rate Scenario 2
A. Affordability Assumptions
Market Rate Units 100% Total Units 122
Affordable Units 0% Total Units 0
Moderate Income Units 20% Affordable Units 0
Low Income Units 80% Affordable Units 0
Market Moderate Low
Rate Income Income Total
B. 100%Market Rate Scenario S Units Units Units Units
Two-Bedroom Units 61 0 0 61
Three-Bedroom Units 61 0 0 61
'total Units 122 0 0 122
III. 25%Affordable Scenario
A. Affordability Assumptions
Market Rate Units 75% Total Units 91
Affordable Units 25% Total Units 31
Moderate Income Units 80% Affordable Units 25
Low Income Units 20% Affordable Units 6
Market Moderate Low
Rate Income Income Total
B. Affordability Mix Units Units Units Units
Two-Bedroom Units 46 13 3 62
Three-Bedroom Units 45 12 3 60
Total Units 91 25 6 122
I Based on the City's estimate of the number of condominums converted without City approval. KMA based the unit
mix assumption on a small sample of projects provided by the City.
2 Assumes that all of the units are rented on the open market.
3 Assumptions based on the adopted Condominium Conversion Ordinance.
Prepared by: Keyser Marston Associates, Inc.
Filename: In-lieu fee 10 14 04.x1s;Scenarios;jr; 1 0/1 412 0 04
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
I, income
Rental Revenue'
Market Rate Units $2,342,400 $2,412,700 $2,485,100 $2,559,700 $2,636,500 $2,715,600 $2,797,100 $2,881,000 $2,967,400
Moderate Income Units - - - - - - - - -
Low Income Units - - -
Gross Rental Income $2,342,400 $2,412,700 $2,485,100 $2,559,700 $2,636,500 $2,715,600 $2,797,100 $2,881,000 $2,967,400
Miscellanous Income" 14,600 15.000 15,500 16.000 16.500 17.000 17,500 18.000 18,500
Gross Income $2,357,000 $2,427,700 $2,500,600 $2,575.700 $2.653,000 $2,732,600 $2,814,600 $2,899,000 $2,985,900
(Less)Vacancy Allowance 11 900 (121ADO) (125,000) (128,800) (132 700) (136,600) (140,700) (145,000) (149,3001
Effective Gross Income $2,239,100 $2,306,300 $2,375,600 $2,446.900 $2,520,300 $2,596,000 $2,673,900 $2,754,000 $2,836,600
il. Operating Expenses
General Operating Expenses 4 $488,000 $505,100 $522,800 $541,100 $560,000 $579,600 $599,900 $620,900 $642.600
Property Taxes 231,700 236.300 241,000 246,800 250.700 255,700 260,800 266,000 271,300
Reserves" 36.600 37,900 39,200 40,600 42,000 43.500 45,000 46.60D 48.200
Total Operating Expenses $756,300 $779,300 $803,000 $827,500 $852,700 $878,800 $905,700 $933,500 $962,100
III. Net Operating income $1,482,800 $1,527,000 $1,572,600 $1,619,400 $1,667,600 $1,717.200 $1,768,200 $1,820,500 $1,874,500
IV. Present Value @ 7% $35,280,000
Per Unit $289,200
1 Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$1 Dlunit/month,increasing at 103.0%tyear.
3 Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,000/unit,increasing
at 103.5%/year.
8 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate), Increasing at 102.0°/o/year.
6 Assumes$300Junitlyear,Increasing at 103.5%lyear.
Z
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N
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4,
Prepared by: Keyser Marston Associates, Inc.
Filename: to-lieu fee 1014 04.4s;Market Rate CF;jlr; 10/14/2004
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year10 Year11 Year 2 Year13 Year14 Year15 Year16 Year17 Year18
1. Income
Rental Revenue'
Market Rate Units $3,056,400 $3,148.100 $3,242,500 $3,339,000 $3,440,000 $3,543,200 $3,649,500 $3,759,000 $3,871,800
Moderate Income Units - - - - - - - -
Low income Units - - - -
Gross Rental Income $3,056,400 $3,148,100 $3,242,500 $3,339,800 $3,440,000 $3,543,200 $3,649,500 $3,759,000 $3,871,800
Miscelianous Income' 19100 19,700 _ 20.300 20.900 21,500 22,100 22,800 23.500 24,200
Gross Income $3,075,500 $3,167,800 $3,262,800 $3,360,700 $3,461,500 $3.565,300 $3,672,300 $3,782,500 $3,896,000
(L.ess)Vacancy Allowance 15 Q� _ (158,400) 1 633,10 (168,000) (173,100) (178,300) (183,600) - (189.100) (194,800)
Effective Gross Income $2,921,700 $3,009.400 $3,099,700 $3,192,700 $3,288,400 $3.387,000 $3,488,700 $3,593.400 $3,701,200
11. Operating Expenses
General Operating Expenses' $665,100 $688,400 $712.500 $737,400 $763,200 $789,900 $817,500 $846.100 $875,700
Property Taxes' 276,700 282,200 287,800 293,600 299.500 305,500 311,600 317,800 324,200
Reserves' 49.900 51,600 53.400 55.300 57200 59.2 61.30 63.400 _ 65,600
Total Operating Expenses $991,700 $1,022,200 $1,053,700 $1,086,300 $1,119,900 $1,154,600 $1,190,400 $1.227,300 $1,265,500
III. Net Operating Income $1,930,000 $1,987,200 $2,046,000 $2,106,400 $2,168,500 $2.232,400 $2,298,300 $2,366,100 $2,435,700
IV. Present Value @ 7%
Per Unit
Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10/unit/month,increasing at 103.01/a!year.
3 Assumes a 5.0%vacancy and collection allowance.
4 Assumes annual operating expenses at$4,0001unit,increasing
at 103.5%/year_
B Assumes property taxes at 1.25%of the value(8.0%
capitalization rate), increasing at 102.0%/year. C
e Assumes$300/unitlyear,increasing at 103.5%/year.
z
0
N
Prepared by-. Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.x1s;Market Rate CF;jlr; 10/14/2004
TABLE 4A
CASH FLOW ANALYSIS-IGO%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27
I. income
Rental Revenue'
Market Rate Units $3,988,000 $4,107,600 $4,230,800 $4,357,700 $4,488,400 $4,623,100 $4,761,800 $4,904,700 $5,051,800
Moderate Income Units
Low Income Units
Gross Rental Income $3,988.000 $4,107,600 $4,230,800 $4.357,700 $4,488,400 $4,623,100 $4,761,800 $4,904,700 $5,061,800
Miscellanous Income` 24,900 25,600 26.400 27,200 28.000 28.800 29,700 30AW 31 0
Gross Income $4.012,900 $4,133,200 $4,257,200 $4,384,900 $4,516,400 $4.651,900 $4,791,500 $4,935,300 $5,083,300
(Less)Vacancy Allowance' f200.6001 (206.70❑) (212.900) (219,200) f�2.5.800} 1232.6001 (239.600} (246,800} (254,�00)
Effective Gross Income $3,812,300 $3,926.500 $4.044,300 $4,165,700 $4,290,600 $4,419,300 $4,551,900 $4.688,500 $4,829,100
11. Operating Expenses
General Operating Expenses $906,300 $938,000 $970,800 $1,004,800 $1,040,000 $1,076,400 $1,114,100 $1,153,100 $1,193,500
Property Taxes° 330,700 337,300 344,000 350,900 357,900 365,100 372,400 379,800 387,400
Reserves" 67,900 70,300 _72,800 75,300 77,900 _ 80.600 83.400 86.300 89, 00
Total Operating Expenses $1,304,900 $1,345,600 $1,387.600 $1,431,000 $1,475,8W $1,522,100 $1,569,900 $1,619,200 $1,670,200
III. Net Operating Income $2,507,400 $2,580,900 $2,655,700 $2,734,700 $2,814,800 $2,897,200 $2,982,000 $3,069,300 $3,158,900
IV. Present Value @ 7%
Per Unit
' Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$101unitlmanth,increasing at 103.0'Adyear.
8 Assumes a 5,0%vacancy and collection allowance.
° Assumes annual operating expenses at$4,0001unit,increasing
at 103.5%!year.
5 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0°hfyear. 7d
5 Assumes$3001unitlyear,increasing at 103.5%/year.
z
a
0
Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04_xls;Market Rate CF;jlr; 1011412004
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36
1. Income
Rental Revenue'
Market Rate Units $5,203,400 $5,359,500 $5,520,300 $6,685,900 $5,856,500 $6,032,200 $6,213,200 $6,399,600 $6,591,600
Moderate Income Units - - - - -
Low Income Units - - - - -
Gross Rental Income $5,203,400 $5,359,500 $5,520,300 $5,605,900 $5.856,500 $6,032,200 $6.213,200 $6,399,600 $6,591,600
MiscellanousIncome` 32,400 33,400 34.40 35.400 36.500 37,600 38,700 39,900 _ 41,100
Gross Income $5,235,800 $5,392,900 $5,554,700 $5,721,300 $5.893.000 $6,069,800 $6,251,900 $6,439,500 $6,632,700
(Less)Vacancy Allowance (261.800) (269,600) (277,700) (286,100) (294,700) (303,500) (312,600) (322,000) (331,600)
Effective Gross Income $4,974,000 $5,123,300 $5,277,000 $5,435,200 $5,598,300 $5,766,300 $6,939,300 $6,117,600 $6,301,100
It. OMratinra Expenses
General Operating Expenses $1,235,300 $1,278,500 $1,323,200 $1,369,500 $1,417,400 $1,467,000 $1,518,300 $1,571,400 $1,626,400
Property Taxes 395,100 403,000 411.100 419,300 427,700 436,300 445,000 453,900 463.000
Reserves b 92,400 95.500 ,. 98,900 102 4�0[ 106.IZ0 109.70t3 _ 113,500 117,500 121,600
Total Operating Expenses $1,722,800 $1,777,100 $1,833,200 $1,891,200 $1,951,100 $2,013,000 $2,075,800 $2,142,800 $2,211,M)o
111. Net Operating Income $3,251,200 $3,346,200 $3,443,800 $3,544,000 $3,647,200 $3,753,300 $3,862,500 $3,974,700 $4,090,100
IV. Present Value @ 7%
Per Unit
Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10lunittmonth,increasing at 103.0%lyear.
3 Assumes a 5.0%vacancy and collection allowance.
a Assumes annual operating expenses at$4,000/unit,increasing
at 103.5%lyear.
5- Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0%/year_
co
e Assumes$3001unitfyear,increasing at 103.5%lyear.
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Prepared by: Keyser Marston Associates, Inc.
Filename: in-lieu fee 10 14 04.x1s;Market Rate CF;jlr; 10/14/2004
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Lear 37 Year 38 Year 39 Year4Q Y ar 41 Year 42 Year 43 Year 44 Year 45
I. Income
Rental Revenue'
Market Rate Units $6,789,300 $6,993.000 $7,202,800 $7,418,900 $7,641,500 $7,870,700 $8,106,800 $8,350,000 $8,600.500
Moderate Income Units - - - - - - - - -
Low Income Units
Gross Rental Income $6,789,300 $6,993,000 $7,202,800 $7,418,900 $7,641,500 $7,870,700 $8,106,800 $8,350,000 $8.600,500
Miscellanous Income` 42,300 43,600 44.900 46,200 47,eQ0 49,000 50.500 52.000 63.600
Gross Income $6.831,600 $7,036,600 $7.247,700 $7,465,100 $7,689,100 $7,919,700 $8,157,300 $8,402,000 $8,654,100
(Less)Vacancy Allowance' 1 0 (351,800) (362,400? (373,300) (384.5001 (396 D0O) 4Q7.900] (420.10D), (432.700)
Effective Gross Income $6,490,000 $6,684,800 $6,885,300 $7,091,800 $7,304,600 $7,523,700 $7,749,400 $7,981,900 $8,221,400
11. Operating Expo_s
General Operating Expenses' $1,683,300 $1,742,200 $1,803,200 $1,866,300 $1,931,600 $1,999.200 $2,069,200 $2,141,600 $2,216,000
Property Taxes° 472,300 481.700 491,300 501,100 611,100 521,300 531,700 542,300 553,100
Reserves n 125,900 130,300 134.900 139,600 144,,500 149,600 154,800 160.200 165,800
Total Operating Expenses $2,281,500 $2,354,200 $2,429,400 $2,507,000 $2.587,200 $2,670,100 $2,755,700 $2,844,100 $2,935,500
Ill. Net Operating Income $4,208,500 $4,330,600 $4,455.900 $4,584,800 $4,717,400 $4,853,600 $4,993,700 $5,137,8()0 $5,285,9()0
IV. Present Value @ 7%
Per Unit
Based an assumption in TABLE 3 and TABLE 2.
2 Assumes$10lunitlmonth,increasing at 103.0%lyear.
3 Assumes a 5.0%vacancy and collection allowance.
4 Assumes annual operating expenses at$4,000/unit,increasing
at 103.5°Alyear_
' Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0%!year.
6 Assumes$3001unitlyear,increasing at 103.5%lyear. cCDir
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.xis;Market Rate CF;jlr;10/1412004
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 46 Year 47 Year 48 Year 49 Year 60 Year 51 Year 52 Year 53 Year 54
I. Income
Rental Revenue'
Market Rate Units $8,858,500 $9,124,300 $9,398,000 $9,679,900 $9,970,300 $10,269,400 $10,577,500 $10.894,800 $11,221,600
Moderate income Units - - - - - - - -
Low Income Units - - - - - - - -
Gross Rental Income $8.858,500 $9,124,300 $9,398.000 $9,679,900 $9,970,300 $10,269,400 $10,577,500 $10,894,800 $11,221,600
Misceilanous Income` 55.200 56.900 58.600 60.400 62.200 64.100 66,000 68.000 70 000
Gross Income $8,913,700 $9,181,200 $9,456,600 $9,740,300 $10,032,500 $10.333,500 $10,643,500 $10.962,800 $11,291.600
(Less)Vacancy Allowances (445,7001 (459100 (479,800) L487,090 (501,600) (516,70) _ (532,200) 046,1001 (564.600)
Effective Grow Income $8,468,000 $8,722,100 $8,983,800 $9,253,300 $9,530,900 $9,816,800 $10,111,300 $10,414,700 $10,727,000
It. Operating Expenses
General Operating Expenses 4 $2,294,200 $2,374,500 $2,457,600 $2,543,600 $2,632,600 $2,724,700 $2,820,100 $2,918,800 $3,021,000
Property Taxes° 564,200 576,500 587,000 598,700 610,700 622,900 635,400 648,100 661,100
Reserves° 171,600 177,600 183.800 190,200 _ 196.900 203,800 210,900 218.300 2-25 900
Total Operating Expenses $3,030,000 $3,127,600 $3,228,400 $3,332,500 $3,440,200 $3,561,400 $3,666,400 $3,785,200 $3,908,000
III. Net Operating Income $5,438,000 $5,594,500 $5,755,400 $5,920,800 $6,090,700 $6,265,400 $6,444,900 $6,629,500 $6.819,000
IV. Present Value @ 7%
Per Unit
1 Based on assumption in TABLE 3 and TABU:2.
x Assumes$101unit/month,increasing at 103.09/alyear.
3 Assumes a 5.0%vacancy and collection allowance.
i Assumes annual operating expenses at$4,0001unit,increasing
at 103.5%lyear.
a Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0%tyear.
e Assumes$3001unitlyear, increasing at 103.5%!year_
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04.xls;Market Rate CF;jlr, 10/14/2004
TABLE 4A
CASH FLOW ANALYSIS-100%MARKET RATE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 55 Year 56 Year 57 Year 58 Year 59 Year 60
I. Income
Rental Revenue'
Market Rate Emits $11.558.200 $`11,904,900 $12,262,000 $12,629,900 $13,008,800 $13,399,100
Moderate Income Units - - - - -
Low Income Units
Gross Rental Income $11,558,200 $11,904,900 $12,262,000 $12,629.900 $13,008,800 $13,399,100
Miscellanous Income` 72,100 74.300 76,500 78.800 81.200 83.600
Gross Income $11.630,300 $11,979,200 $12,338,500 $12,708,700 $13,090,000 $13,482,700
(Less)Vacancy Allowance ' (581.500) (599,000) (616,900) (635 4001 (B54.5001 (674.100)
Effective Gross Income $11,048,800 $11,380,200 $11,721.600 $12.073,300 $12,435.500 $12,808,600
It. Oi)eratina Expenses
General Operating Expenses" $3.126,700 $3,236,100 $3,349,400 $3,466,600 $3,587.900 $3,713,500
Property Taxes' 674,300 687,800 701.600 716,600 729,900 744,500
Reserves' 233,800 242,000 250,500 259.300 268,400 277.800
Total Operating Expenses $4,034,800 $4,165,900 $4,301,500 $4,441,500 $4,586,200 $4,735,800
III. Net Operating Income $7,014,000 $7,214,300 $7,420,100 $7,631,800 $7,849,300 $8,072,800
IV. Present Value @ 7%
Per Unit
1 Based on assumption in.TABLE 3 and TABLE 2.
2 Assumes$10/unitlmonth,increasing at 103.00/a/year.
3 Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,000/unit,increasing
at 103.5%fyear.
5 Assumes property taxes at 1.25%of the value(8.096
capitalization rate),increasing at 102.0%/year.
CD
6 Assumes$300/unit/year,increasing at 103.5%!year.
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04.xis;Market Rate CF;jlr; 10/14/2004
TABLE 46
CASH FLOW ANALYSIS-25%.AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
1. Inc m
Rental Revenue'
Market Rate Units $1,743,500 $1,795,900 $1,849,800 $1,905,300 $1,962,500 $2,021,400 $2,082,000 $2,144,500 $2,208,800
Moderate Income Units 468,600 480,300 492,300 504,600 51-1,200 530,100 543,400 557,000 570,900
Low income Units 75,000 76,900 78.800 80.800 82.80 84.900 87,000 89,200 91AW
Gross Rental Income $2,287,200 $2,353,100 $2,420,900 $2,490,700 $2,562,500 $2.636,400 $2,712,400 $2,790,700 $2,871,100
tlAisceltanous Income` _ 14,600 15,D00 15.500 16.000 16.500 17.000 17.500 18.000 18.500
Gross Income $2,301,800 $2,368,100 $2,436,400 $2,506,700 $2,579,000 $2,653,400 $2,729,900 $2,808,700 $2,889,600
(Less)Vacancy Allowance ' (115,100) (118,400) 021.800 (125,3001 (129,000) (132,700) (136.500) 040,4DQ (144,500)
Effective Grosslncoma $2,186,700 $2,249,700 $2,314,600 $2,381,400 $2,460,000 $2,520,700 $2,593,400 $2,668,300 $2,745,100
II. Operatina Expenses
General Operating Expenses" $488,000 $505,100 $522,800 $541,100 $560,000 $579,600 $599,900 $620,900 $642,6W
Property Taxes 224,600 229.100 233,700 238,400 243,200 248,100 253.100 258,200 263,400
Reserves" 36,600 37.90D 39.20D 40,600 42,000 43,500 45,000 46,600 48,200
Total Operating Expenses $749,200 $772,100 $795,700 $820,100 $845,200 $871,200 $898,000 $925,700 $954,200
III. Net Operating Income $1,437,500 $1,477,600 $1,518,900 $1,561,300 $1,604,800 $1,649,500 $1,695,400 $1.742,600 $1,790,900
IV. Present Value @ 7% $33,095,000
Per Unit $271,300
' Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$101uniUmonth,increasing at 103.0%!year.
3 Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,0001unit,
increasing at 103.5%/year.
s Assumes property taxes at 1.25%of the value(8.0%
capitall¢ation rate), increasing at 102.0%/year. CD
rnd
e Assumes$300/unWyear,increasing at 103.5%/year.
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04.xls;25%Aff CF;jlr; 1011412004
TABLE 4B
CASH FLOW ANALYSIS-26%AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 1 Year11 Year 2 Year13 Year14 Year IS Year16 Xearl Year18
1. Income
Rental Revenue'
Market Rate Units $2,275,100 $2,343,400 $2,413,700 $2,486,100 $2,560,700 $2,637,500 $2,716,600 $2,798,100 $2,882,000
Moderate Income Units 585,200 599,800 614,800 630,200 646,000 662.200 678,800 695,800 713,200
Law Income Units 93,700 96.000 98,400 100.900 103,400 106.000 108 70D 111.400 114.200
Gross Rental Income $2,954,000 $3.039,200 $3,126,900 $3,217,200 $3.310,100 $3,405,700 $3,504,100 $3,605,300 $3,709,400
Miscellanous Income` 19,100 19,700 20,300 20,900 21,500 22,100 22,600 23.500 24.200
Gross Income $2,973,100 $3,058,900 $3,147,200 $3,238,100 $3,331.600 $3.427,800 $3,526,900 $3,628.800 $3,733,600
(Less)Vacancy Allowance' (148,7001 (152,900) (167,4001 (161,9001 (16Cs.600) _071.400) J176,300) 081.400) 0116.700)
Effective Gross Income $2,824,400 $2,906.000 $2,989,800 $3,076,200 $3,165,000 $3,256,400 $3,350,600 $3,447,400 $3,546,900
II. Operating Expenses
General Operating Expenses° $666,100 $688,400 $712,500 $737,400 $763,200 $789,900 $817.500 $846,100 $875,700
Property Taxes' 268,700 274,100 279,600 285,200 290,900 296,700 302,600 308,700 314,900
Reserves' 49,900 51.600 53,400 55,300 57.200 _59.200 61,300 63,400 65.600
Total Operating Expenses $983,700 $1,014,100 $1.045,500 $1,077,900 $1,111,300 $1,145,800 $1,181,400 $1,218,200 $1,256,200
III. Net Operating Income $1,840,700 $1.891,900 $1.044,300 $1,998,300 $2,053,700 $2,110.600 $2,169,200 $2,229,200 $2,290,700
IV. Present Value @ 7%
Per Unit
Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10/unitlmonth,increasing at 103.0%lyear.
3 Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,0001un1t,
increasing at 103.5%lyear.
5 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0%lyear.
s Assumes$3001unitlyear,increasing at 103.5°/!year_
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Prepared by: Keyser Marston Associates,Inc.
Filename; In-lieu fee 10 14 04.x1s;25%Aff CF;jlr, 10/1412004
€ABLE 4B
CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 ygar 25 Year 26 Year 27
I. Income
Rental Revenue'
Market Rate Units $2,968,600 $3,057,6W $3.149,300 $3,243.800 $3,341,100 $3,441,300 $3,544,500 $3,650,800 $3,760,300
Moderate Income Units 731,000 749,300 768,000 787,200 806,900 827,100 847,800 869,000 890,700
Low Income Units 117100 120,QQQO 123.000 Q15,100 129,300 132.50 _ _135,800 139,200 _ 142,700
Gross Rental Income $3,816,600 $3,926,900 $4,040,300 $4,157,100 $4,277,300 $4,400,900 $4,528,100 $4.659,000 $4,793,700
Miscellanous Income` 24,900 25,600 26,400 27,200 28.Q00 28.80Q 29,700 30,60D 31,500
Gross Income $3,841,500 $3,952,500 $4,056,700 $4,184,300 $4,305,300 $4,429.700 $4,557,800 $4,689,600 $4,825,200
(Less)Vacancy Allowance,' (192,100) _ (197,600) (203,300) (209,200) (215,300) 221500 (227,9001 (234,500) (241,300)
Effective Gross Income $3,649,400 $3,754,900 $3,863,400 $3,975,100 $4,090,000 $4,208,200 $4,329,900 $4,455,100 $4,583,900
11. Operating Expenses
General Operating Expenses $906,300 $938,000 $970,800 $1,004,800 $1,040,000 $1.076,400 $1,114,100 $1,153,100 $1,193,500
Property Taxes' 321,200 327,600 334,200 340,900 347,700 354.700 361,800 369,000 376,400
Reserves' _ 67,900 70,300 72,800 75.300 77 9Q0 - 80.600 83,400 86,300 89.300
Total Operating Expenses $1,295,400 $1,335,900 $1,377,800 $1,421,000 $1,465,600 $1,611.700 $1,559,300 $1,608,400 $1,659,200
III. Not Operating Income $2,354,000 $2,419,000 $2,485,600 $2,564,100 $2,624,400 $2,696,500 $2,770,600 $2,846,700 $2,924,700
IV. Present Value @ 7%
Per Unit
1 Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10luniftonth,increasing at 103.0%lyeaL
8 Assumes a 5.0%vacancy and collection allowance.
4 Assumes annual operating expenses at$4,000/unit,
increasing at 103.5%lyaor.
5 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate), increasing at 102.0%/year. C
s Assumes$300lunitlyear,increasing at 103.5%tyear,
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04.x1s;25%Aff CF;jlr, 1 011 4/20 0 4
TABLE 4B
CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 Year 36 Year 37
I. Income
Rental Revenue'
Market Rate Units $3,873,100 $3.989,300 $4.109.000 $4.232,300 $4,359,300 $4,490,100 $4,624,800 $4,763.500 $4,906,400 $5,053,600
Moderate Income Units 913,000 935,800 959.200 983,200 1.007,800 1.033.000 1,058,800 1,085,300 1,112,400 1,140,200
Low Income Units 146,300 150.000 153.800 157,600 161.500 165,500 16U.00 173.800 178,100 182.600
Grass Rental Income $4,932,400 $5,076,100 $5,222,000 $5,373,100 $5,528.600 $5,688,600 $5.853,200 $6,022,600 $6,196,900 $6,376,400
Miscellanous Income` 32`400 33.40D 34,400 35,400 36.500 _37,600 38.700 39,900 41,100 42.30D
Gross Income $4,964,800 $5,108,500 $5,256,400 $5,408,500 $5,565,100 $5,726,200 $5,891,900 $6,062,50(} $6,238,000 $6,418,700
(Less)Vacancy Allowance (248,200} (255.400) (262,800} (270,400) (278,300} (286,300) (294,600) (303,100) (311,900) (320,900)
Effective Gross Income $4,716,600 $4,853,100 $4,993,600 $5.138,100 $5,286,800 $5,439,900 $5,597,300 $5,759,400 $5,926,100 $6,097,800
Il. Operating Expenses
General Operating Expenses $1,235.300 $1,278,600 $1,323,200 $1,369,500 $1,417,400 $1.467,000 $1,518,300 $1,571,400 $1,626,400 $1,683,300
Property Taxes' 383,900 391,600 399,400 407,400 415,500 423,800 432,300 440,900 449,700 458,700
Reserves' 92,400 95.600 98.900 102,400 106.000 109,700 113,500 117.500 121,600 125,900
Total Operating Expenses $1.711.600 $1,765,700 $1.821,500 $1,879,300 $1,938,900 $2,000,500 $2,064,100 $2,129,800 $2,197,700 $2,267,900
111, Net Operating Income $3,005,000 $3,087,400 $3,172,100 $3,258,B00 $3,347,900 $3,439,400 $3,533,200 $3,629,600 $3,728,400 $3,829,900
IV. Present Value @ 7%
Per Unit
1 Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10/unit/month,increasing at 103.OWyear.
3 Assumes a 5,0%vacancy and collection allowance.
4 Assumes annual operating expenses at$4,000/unit,
increasing at 103.5%/year.
6 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.01/o/year.
6 Assumes$300/unit/year,increasing at 103.5%lyear. ran
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.xis,25%Aff CF,,jlr 10/14/2004
r
TABLE 4B
CASH FLOW ANALYSIS-25°/a AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 38 Year 39 Year 40 Year 41 Year 42 Year 43 Year 44 Year 46 Year 46 Year 47
I. Income
Rental Revenue'
Market Rate Units $5,205,200 $5,361,400 $5,522,200 $5,687,900 $5,858,500 $6,034,300 $5,215,300 $6,401,800 $6,593,900 $6,791,700
Moderate Income Units 1,168,700 1,197,900 1,227,800 1,258,500 1,290,000 1,322,300 1,355,400 1,389,300 1,424,000 1,459,600
Low Income Units 107 00 191.900 196,700 201,600 206-,600 211,800 217100 _ 222,500 T 228.100 233,800
Gross Rental Income $6,561,100 $6,751.200 $6,946,700 $7,148,000 $7,355.100 $7,568,400 $7,787,800 $8,013,600 $8,246.000 $8,485,100
Miscellanous Inoome` 43,600 44,900 46,200 47.600 49.000 50.500 52,000 53,600 55.200 56.900
Gross Income $6,604.700 $6,796,100 $6,992,900 $7,195,600 $7,404,100 $7,618,900 $7,839,800 $8.067,200 $8,301,200 $8,542,000
(Less)Vacancy Allowance (330,200) (339,800) (349,600) (359,800) (370,200) (380,900) (392,000) (403,400) (415,100) (427.100)
Effective Gross Income $6,274,500 $6,456,300 $6,643,300 $6,835,800 $7,033,900 $7,238,000 $7,447,800 $7,663,800 $7,886,100 $8.114,900
II. Operatina Expenses
General Operating Expenses $1,742,200 $1,803,200 $1,866,300 $1,931,600 $1,999.200 $2,069,200 $2,141,600 $2,216,600 $2,294,200 $2,374,500
Property Taxes' 467,900 477,300 486,800 496,500 506,400 516,500 526,800 537,300 548,000 559,000
Reserves° 130,300 134,900 139,600 144,500 149.600 154,800 160,200 165.800 171.600 177,600
Total Operating Expenses $2,340,400 $2,415.400 $2,492,700 $2,572,600 $2,655,200 $2,740,500 $2,828,600 $2,919,700 $3.013,800 $3,111,106
Ill. Net Operating Income $3,934,100 $4,040,900 $4,150,600 $4,263,200 $4.378,700 $4,497,500 $4,619,200 $4,744,100 $4,872,300 $5,003,800
IV. Present Value @ 7%
Per Unit
1 Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$10/unit/month,increasing at 103.0%/year.
Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,000/unit,
increasing at 103.5%lyear.
5 Assumes property taxes at 1.25%of the value(8.0%
capitalization rate),increasing at 102.0%lyear.
e Assumes$3001unit/year,increasing at 103.5°An/year.
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Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 10 14 04.x1s;25%Aff CF;jlr; 1 011 4/2 0 04
TABLE 4B
CASH FLOW ANALYSIS-25%AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 48 Year 49 Year 50 Year 51 Year 52 Year 53 Year 54 Year 55 Year 56
I. Income
Rental Revenue'
Market Rate Units $6,995,500 $7,205,400 $7,421,600 $7,644,200 $7,873,500 $8,109,700 $8,353,000 $8,603.600 $8,861,700
Moderate Income Units 1,496,100 1,533,600 1,571,800 1,611IJ00 1,661,400 1,692,700 1,735,000 1,778,400 1,822,900
Low Income Unds 239,600 245,600 251.700 258.000 264,500 271,100 277.900 284.800 291.900
Gross Rental Income $8.731,200 $8,984,500 $9,245,100 $9,513,300 $9,789,400 $10,073,500 $10,365.900 $10,666,800 $10,976,500
Miscellanous Income` 58,600 60.400 62,200 64,100 66.000 68.000 70,000 72,100 74,300
Gross Income $8,789,800 $9,044,900 $9,307.300 $9,577,400 $9,855,400 $10,141,500 $10,435,900 $1.0,738,900 $11,050,800
(Less)Vacancy Allowance ' (439.500,) (452,200) (465,4001 (478,900) (492,800) (507,100} (521,800) 1536 9001 (552,500)
Effective Gross income $8,350,300 $8,592,700 $8,841,900 $9.098,500 $9,362,600 $9,634,400 $9,914,100 $10,202,000 $10,498,300
ll. Operatina Expenses
General Operating Expenses" $2,457,600 $2,543,600 $2,632,600 $2.724,700 $2,820,100 $2,9118,800 $3,021.000 $3.126.700 $3,236,100
Property Taxes 570,200 581,600 593,200 605,100 617,200 629,500 642,100 654,900 668,0W
Reserves" 183.800 190,200 196,900 203,800 210.900 218.300 225,900 233,800 242,000
Total Operating Expenses $3,211,600 $3,315,400 $3,422,700 $3,533,600 $3,648,200 $3.766.600 $3,889,000 $4,015,400 $4,146,100
III. Net Operating Income $5,138,700 $5,277,300 $5,419,200 $5,564,900 $5,714,400 $5,867,800 $6,025,100 $6,186.600 $6,352,200
IV. Present Value @ 7%
Per Unit
3 Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$101unitlmonth,increasing at 103.0%/year.
3 Assumes a 6.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,000/unit,
increasing at 103.5°Jalyear.
$ Assumes property taxes at 1.25%of the value(8.0%
capitalization rate), Increasing at 102.0%lyear.
e Assumes$300/unitlyear,increasing at 103.5%lyear.
z
0
Prepared by: Keyser Marston Associates,Inc.
Filename: In-lieu fee 1014 04.xls;25%Aff CF;jlr; 10/1412004
TABLE 413
CASH FLOW ANALYSIS-26°Ao AFFORDABLE SCENARIO
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year 57 Year fill Year 69 Year 6
1. Income
Rental Revenue'
Market Rate Units $9.127,600 $9,401,400 $9,683,400 $0,973,900
Moderate Income Units 1,868,600 1,916,200 1,963,100 2.012.200
Low Income Units 299,200 306.700 314.400 322.300
Gross Rental Income $11,295,300 $11.623,300 $11,960,900 $12,308,400
Miscellanous Income' 76,500 78.800 81,200 83,600
Gross Income $11,371,800 $11,702,100 $12,042,100 $12,392,000
(Less)Vacancy Allowance (568,600} (565.100) (602,100} _ (619,600)
Effective Grass Income $10,803,200 $11,117.000 $11,440,000 $11,772,400
11. Operating Expenses
General Operating Expenses 4 $3,349,400 $3,466,600 $3,687,900 $3.713.500
Property Taxes' 681,400 695,000 708,900 723,100
Reserves" 250.500 259.300 268,400 277,800
Total Operating Expenses $4,281,300 $4,420.900 $4,565,200 $4,714,400
Ill. Net Operating Income $6,521.900 $6,696,100 $6,874,800 $7,058,000
IV. Present Value @ M
Per Unit
Based on assumption in TABLE 3 and TABLE 2.
2 Assumes$101unit/manth,increasing at 103.0%/year.
3 Assumes a 5.0%vacancy and collection allowance.
Assumes annual operating expenses at$4,0061unit,
increasing at 103.5'Ao/year.
5 Assumes property taxes at 1.25%of the value(8.0%
capitalizafion rate),increasing at 102.0%/year.
6 Assumes$300/unitlyear,increasing at 103.5%lyear.
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40
Prepared by: Keyser Marston Associates,Inc,
Fitename: In-lieu fee 1014 04.xis;25%Aff CF;jlr 10114/2004
Res. No. 2004-91
TABLE 5
AFFORDABILITY GAP CALCULATION
AFFORDABILITY GAP ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
I. Value of 122 Rental Units Total Value
100% Market Rate Scenario $35,280,000
25%Affordable Scenario $33,095,000
IL Affordability Gap $2,185,000
Per Affordable Units $70,500
Per Total Units $17,900
Per Sf GSA of Converted Units $15
' Assumes the weighted average unit size is 1,188 square feet.
Prepared by: Keyser Marston Associates, Inc.
Filename: In4eu fee 10 14 04.x1s;Aff Gap;jlr, 10114/2004
Res. No. 2004-91
APPENDIX B
Res. No. 2004-91
TABLE 1
ESTIMATED COST TO MEET DEVELOPMENT REQUIREMENTS ON-SITE
DEVELOPMENT REQUIREMENT ANALYSIS
CONDOMINIUM CONVERSION IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
I. Parkina Requirements
A. Parking Code Deficit
Required On-site Parking Spaces 11
(Less)Existing On-site Parking Spaces (9)
Parking Deficit 2
Required Required
9 of Unit Size Parking On-Site
B. Revised Unit Mix Units (Sf) Ratios Parking
One-Bedroom Units 2 900 1.60 3
Two-Bedroom Units - 900 2.50 -
Three-Bedroom Units 2 1,200 3.00 6
Totals 4 1,050 2.25 9
C. Reduction in Value I Converted Unit
Two-Bedroom Unit Market Price $348 ISf $313,200
Estimated% Reduction in Value 20%
One-Bedroom Unit Market Price $278 ISf $250,560
Reduction in Value 1 Converted Unit $62,640
D. Cost of Parking Requirement
Number of Units Converted to One-Bedroom Units 2
Reduction in Value 1 Converted Unit $02,640
Total Cost of Parking Requirement $125,280
Per Unit(Total Project) $31,320
Per Sf GBA 1 Unit $29.83
IL Lan_dsca ina Requirement
Additional Trees 2
Cost of Planting Trees $500
Total Cost of Landscaping Requirment $1,000
Per Unit(Total Project) $250
Per Sf GBA/Unit $0.24
III. Cost to Most Development Reauirements`On-qb
Total Cost of Parking Requirement $125,280
Total Cost of Landscaping Requirment 1,000
IV. Total Cost to Most Development Requirements On-Site $126,280
Per Unit(Total Project) $31,570
Per Sf GBA f Unit $30.07
Prepared by: Keyser Marston Associates, Inc.
Filename: In-lieu fee 1014 04.xis;Dev Standards;11r; 10/14/2004
Res. No. 2004-91
STATE OF CALIFORNIA
COUNTY OF ORANGE } ss:
CITY OF HUNTINGTON BEACH }
I, JOAN L.FLYNN, the duly appointed, qualified City Clerk of the
City of Huntington Beach, and ex-officio Clerk of the City Council of said City,
do hereby certify that the whole number of members of the City Council of the
City of Huntington Beach is seven; that the foregoing resolution was passed
and adopted by the affirmative vote of at least a majority of all the members of
said City Council at an adjourned regular meeting thereof held on the 29th
day of November 2004 by the following vote:
AYES: Sullivan, Coerper Hardy, Cook, Winchell
NOES: None
ABSENT: Green, Boardman
ABSTAIN: None
6?(- JAt2�162
Ci Clerk and ex-officio lerk of the
City Council of the City of
Huntington Beach, California