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Home My WebLink AboutAffordable Housing In-lieu Fee Study Session CITY OF HUNTINGTON BEACH Inter Office Communication Planning Department RECEIVE® TO: Honorable Mayor and City Council Members MAY - 1 2006 VIA: Penny Culbreth-Graft, City Administrator CITY OF HUNTINGMN BEACH ADMINISTRATION OFFICE FROM: Howard Zelefsky, Director of Planning DATE: May 1, 2006 SUBJECT: AFFORDABLE HOUSING IN-LIEU FEE STUDY CITY COUNCIL STUDY SESSION ON MAY 15, 2006 In early February 2006, the City distributed an Affordable Housing In-Lieu Fee Study to the local development community and interested organizations for review and comment. The Study, prepared for the City by Keyser Marston Associates, was also distributed to the City Council and City staff at that time. At the May 151b City Council Study Session, the City's consultant and staff will review the Study. Attached please find the powerpoint presentation for this item as well as a copy of the In- Lieu Fee Study. Should you have any questions on this item prior to May 15t", please contact me at ext. 5465 or Mary Beth Broeren, Prinicpal Planner, at ext. 5550. Thank you. N 0 Cm r� f C� un Attachments: Powerpoint Presentation . Affordable Housing In-Lieu Fee Study xc: Joan L.Flynn,City Clerk Jennifer McGrath,City Attorney Paul Emery,Deputy City Administrator Stanley Smalewitz, Director of Economic Development Mary Beth Broeren,Principal Planner dJ G AAdmLtr\2006\0506mbb 1-doc AFFORDABLE HOUSING IN - LIEU FEE STUDY May 15, 2006 BACKGROUND ■ November 2004 , City Council approved r affordable housing ordinance Applies to new residential projects with 3 or more units � Requires equivalent of 10% of units as affordable (on-site or off-site) Requires affordability at very low, low or median income levels Allows payment of an in-lieu fee for projects with 3-9 units BACKGROUND ■ City retained Keyser Marston Assoc. (KMA) to complete analysis of fee ■ KMA report completed January 2006 ■ Report circulated for 60-day review period � Chamber, HST, local developers & consultants, Assoc. of Realtors, CIA, interested parties ■ Public meeting held to discuss report ■ One Comment Letter received (Chamber) REPORT METHODOLOGY ■ Calculate Affordability Gap : Difference between market rate prices and income restricted (affordable) prices ■ Calculate Effective Cost to Developer: Affordability Gap per affordable unit x required number of affordable units ■ Establish Base In-Lieu Fee Amount: � Effective Cost / Total Sq . Ft. of Project ■ Create a Small Project In-Lieu Fee : � Adjust Base In-Lieu Fee for small projects AFFORDABILITY GAP ■ Ownership Projects : One Bdrm Two Bdi-M Three Bdrm Market Price $3431600 $5595700 $91000 Affordable Price (209,400) (241 ,900) (269,800) Gap Per Unit 1 $134,200 $317,800 $64800 Average Gap/ Affordable For Sale Unit = $437,400 ■ Rental Projects : One Bdrin Two Bdnn Value/Unit ( . Market Rent $ 1. ,443 $ 1 ,729 $200,000 Affordable Rent (877) (982) (95,500) Gap Per Unit $566 $747 $ 105,000 Average Gap/ Affordable Rental Unit = $ 1055000 BASE IN - LIEU FEE AMOUNT Per Per Per Affordable Market SF of Unit Rate Unit' Building Areal Ownership $437,400 $43 ,700 $24 Rental $ 1051000 $ 101500 $ 12 10% inclusionary requirement 213ased on survey data , avg . ownership unit is 1 ,800 sq. ft. ; average rental unit is 875 sq . ft. SMALL PROJECT IN - LIEU FEE ■ KIVIA's analysis shows developer profit is approx. 46% less for smaller project ■ To equalize impact of inclusionary requirement for smaller projects , the Base In-Lieu Fee is reduced 46% ■ The resulting fee for a 9 unit project is : Ownership $ 13 per Sq . Ft. Rental $ 7 per Sq . Ft, SMALL PROJECT IN - LIEU FEE SLIDING SCALE Project Size Ownership Rental Three Units $7 $4 Four Units $8 $4 Five Units $9 $5 Six Units $ 10 $6 Seven Units $ 12 $6 Eight Units $ 12 $7 Nine Units $ 13 $7 IN - LIEU FEE COMPARISON w Per Square Foot: City In Dieu Fee Amount Chino $2.72 Duarte $6.50 Pasadena $5 .00 - $41 .00 San Diego $ 1 .25 - $2.50 Santa Monica $22.33 - $26.08 West Hollywood $6.70 — $ 13 .40 ■ Per Unit: $4,541 - $7,047 ■As a % of Project/Construction Valuation : 1 .00% ■Most cities calculate fee on a case by case basis PUBLIC COMMENTS ■ Informational Meeting Verbal Comments : Fee should be option regardless of project size Fee should be based on cost of rental unit, not market rent ■Chamber of Commerce Letter: Fee should be option regardless of project size Fee should be based on rental housing, not ownership Allow moderate income affordability for ownership housing • Affordability period of 30 years, not 60 years • Expand mixed-use opportunities/additional sites for higher density NEXT STEPS ■ Receive comments at this Study Session ■ Determine if additional analysis is required ■ Schedule a public hearing to adopt in-lieu fee for small projects ■ KMA recommends some clarifying language/clean -up to existing ordinance ■ Prepare revised ordinance Evaluate Fee for larger projects/other public comments at that time ■ Schedule public hearing for revised ordinance END OF SLIDE SHOW ` r, 1•�I �J 9�0 KEYSER MARSTON ASSOCIATES a P ` ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT �t1014�� MEMORANDUM ADVISORS IN: REAL ESTATE To: Mary Beth Broeren, Principal Planner REDEVELOPMENT City of Huntington Beach AFFORDABLE HOUSING ECONOMIC DEVELOPMENT From: Kathleen Head SAN FRANCISCO A JERRY KEYSER Julie Romey TIMOTHY C.KELLY KATE EARLE FUNK DEBBIE M.KERN Date: January 23, 2006 ROBERT J.WETMORE LOS ANGELES Subject: Inclusionary Housing Ordinance - In-Lieu Fee CALVIN E.HOLLIS.11 KATHLEEN H.HEAD JAMES A RABE PAUL C.ANDERSON At your request, Keyser Marston Associates, Inc. (KMA) prepared the following analysis GREGORY D.SOO-HOO pertaining to the City of Huntington Beach (City) Inclusionary Housing Ordinance SAN DIEGO (Ordinance). Specifically, KMA evaluated the Ordinance provision that allows GERALD M.TRIMBLE PAUL C.MARRA developers of projects with nine or fewer units to pay a fee in lieu of providing affordable housing units within their project. The purpose of the following memorandum is to assist the City in establishing an in-lieu fee payment schedule to be applied to small projects. INCLUSIONARY HOUSING ORDINANCE REQUIREMENTS The Ordinance requirements that must be considered in establishing an in-lieu fee schedule are: 1. All for-sale and rental new construction housing projects with three or more units must make at least 10% of the units available to the following households:' a. For-sale units must be made available to very-low, low or median income households.2 b. Rental units must be made available to very-low or low income households. ' New residential projects are defined as an entirely new project or new units added to an existing project. Only new units are used to calculate the required number of affordable housing units. 2 The median is defined as the Orange County median income (Median). 500 SOUTH GRAND AVENUE,SUITE 1480 > LOS ANGELES,CALIFORNIA 90071 > PHONE:213 622 8095 > FAx:213 622 5204 0507026.HB:KHH:JLR.gbd W W W.KEYS E RMARSTON.COM 14066.004.012 � S To: Mary Beth Broeren, City of Huntington Beach - January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 2 2. The income and affordability covenants must remain in place for at least 60 years. 3. The affordable units must be: a. Dispersed throughout the project; b. Proportional in number, bedroom size and location,to the market rate units; C. Comparable with the market rate units in terms of the base design, appearance, materials and finish quality; and d. Constructed and occupied concurrently with, or prior to, the construction and occupancy of market rate units. 4. For small projects, defined as projects including nine or fewer units, the inclusionary housing requirements may be satisfied by payment of an in-lieu fee established by resolution of the City Council and updated annually:3 a. The in-lieu fees will be deposited into a dedicated affordable housing account. b. The account will only be used to provide funding assistance for construction or retention of affordable housing, and for reasonable administration costs. 5. Developers may choose to provide the affordable units at an off-site location as long as these units are under the full control of the Developer or other approved party. The following outlines the other conditions: a. Off-site projects can be new construction or major physical rehabilitation of existing non-restricted units. At risk units and mobile homes may also be used to satisfy this requirement. b. Off-site units must be constructed or rehabilitated prior to, or concurrently with, the primary project. 3 The fees are to be based upon the total number and size of the new residential units. 0507026.H B:KH H:J L R:gbd 14066.004.012 1 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 3 C. The sales prices or rents must be affordable to very-low, low or median income households pursuant to the terms of an Affordable Housing Agreement. METHODOLOGY The vast majority of new residential projects within Huntington Beach are expected to be comprised of"for sale" projects. However, it is possible that rental development may also occur. Recognizing that the project economics vary between ownership and rental projects, and to avoid imposing onerous requirements on development, the KMA analysis evaluates both development types. The first step in establishing an in-lieu fee is to quantify the financial impact associated with fulfilling the affordable housing requirements within market rate projects. That financial impact is equal to the difference between the market rate prices and the affordable price for the required income restricted units. This difference is known as the "affordability gap", and it is quantified using the following methodology: 1. The projected market rate sales prices and rents are compiled for prospective new residential projects. 2. The maximum affordable prices and rents are calculated based on the standards imposed by California Health and Safety Code (Code) Sections 50052.5 and Section 50053. 3. The difference between the market rate price and the defined affordable price represents the affordability gap associated with each income restricted unit required to be included in a market rate residential project. 4. The affordability gap per income restricted unit is multiplied times the number of units that must be income restricted. This represents the effective cost to a developer of fulfilling the inclusionary housing requirements on-site. 5. Since a fee is going to be paid in-lieu of providing any affordable units on-site, the effective cost is divided by the total square footage of the project. This represents the Base In-Lieu Fee amount. 6. The Ordinance limits the in-lieu fee option to projects with nine or fewer units. The in-lieu fee analysis recognizes that the inclusionary requirement has a greater impact on smaller projects than it does for a typically sized project. 0507026.HB:KHH:JLR:gbd 14066.004.012 1 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 4 7. The Small Project in-lieu fee reflects the number of units in the project, which can range between three and nine units. To achieve this, it is necessary to create a Sliding Scale In-Lieu Fee amount that can be justified based on both the affordability gap and the feasibility analysis for the three-to nine-unit projects. Household Incomes The Ordinance specifically identifies the Code Section 50093 income definition for moderate income households. However, the Ordinance limits the moderate income category to 100% of the Median instead of the 120% of Median maximum that is allowed by Section 50093. The Ordinance also imposes very-low and low income restrictions. To account for these requirements, KMA assumed that Code Section 50105 would apply for very-low income households and that Code Section 50079.5 would apply for low income households. The income information is published by the State of California Housing and Community Development Department (HCD) annually. The income ranges for Orange County in 2005 are: Very-Low Low Median Household Income Income Income Size (Section 50105) (Section 50079.5) Section 50093 1 Person $0 - $26,900 $26,900 - $43,000 $43,000- $53,000 2 Person $0 - $30,700 $30,700 - $49,150 $49,150 - $60,550 3 Person $0 - $34,550 $34,550 - $55,300 $55,300 - $68,150 4 Person $0 - $38,400 $38,400 - $61,450 $61,450 - $75,700 5 Person $0 - $41,450 $41,450 - $66,350 $66,350 - $81,750 6 Person $0 - $44,550 $44,550 - $71,250 $71,250 - $87,800 7 Person $0 - $47,600 $47,600 - $76,200 $76,200- $93,850 8 Person $0 - $50,700 $50,700 - $81,100 $81,100-$99,900 Affordable Housing Cost Calculation Methodology The Ordinance does not identify a methodology for calculating affordable housing cost. However, historically the City has used the calculation methodologies imposed by the California Health and Safety Code. Section 50053 defines the calculation methodology for rental units and Section 50052.5 provides the methodology for ownership units. 0507026.HB:KHH:JLR:gbd 14066.004,012 To: Mary tseth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 5 AFFORDABILITY GAP ANALYSIS —OWNERSHIP PROJECTS (APPENDIX A) Market Rate Sales Prices Hanleywood Market Intelligence information indicates that the following single-family detached and attached residential projects are currently selling or recently sold out in Huntington Beach. Year Product Number Built Sold Out Type of Units Seabridge Villas 4 2003 2004 Condos 344 Bel Air 2004 --- Duplex 102 Peninsula Point 2004 --- Detached 13 Sea Cove 2004 --- Townhomes 106 Total Units 565 As shown in Appendix A—Table 1, the following summarizes the sales prices for each product type: Average Average Unit Size Sales Average (Sf) Prices $/Sf One-bedroom Units 811 $348,500 $430 Two-bedroom Units 1,418 $567,000 $400 Three-bedroom Units 2,484 $923,800 $367 Averages 1,841 $854,000 $464 Pricing Assumptions The market rate sales prices are based on the following assumptions: Unit Size Sales (Sf) $/Sf Prices One-bedroom Units 800 $430 $343,600 Two-bedroom Units 1,400 $400 $559,700 Three-bedroom Units 2,500 $367 $918,600 4 The project was built in the 1980's, and was converted from apartments to condominiums in 2003. 0507 026.H B:K H H:J L R:g b d 14066.004.012 To: Mary oeth Broeren, City of Huntington.Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 6 Affordable Housing Cost Calculation The affordable housing cost calculations included in the Code Section 50052.5 definition are: 1. The household incomes are based on a benchmark household size equal to one person more than the number of bedrooms. 2. The Ordinance sets the maximum household income for moderate income units at 100% of the Median as published by HCD.S 3. Thirty-five percent (35%) of the defined household income is allocated to housing related expenses. These expenses are defined as mortgage debt service payments, property taxes, maintenance costs, insurance costs, home owner's association (HOA) dues and utility costs. The Huntington Beach Redevelopment Agency (Agency) has historically calculated these costs for the City using the following assumptions: a. Typically, the Agency estimates HOA fees, inclusive of homeowner's insurance, based on the actual HOA fees for a project. Therefore, KMA estimated the HOA fees by calculating the weighted average of the project comparables in Appendix A—Table 1. b. The maintenance costs are estimated at $50 per month. C. The 2005 utility allowances are provided by the Orange County Housing Authority and include gas, electricity, trash and water expenses. These costs are as follows: One-bedroom Units $71 Two-bedroom Units $82 Three-bedroom Units $115 d. In accordance with the Agency's methodology, the property tax cost is estimated at 1.08% of the projected affordable price for the units. 4. The mortgage amount that can be supported by a Median income household is based on a 30-year fully amortizing mortgage at 6.5% interest rates 5 It is reasonable to assume that given a choice, a developer will provide Median income ownership units rather than very-low or low income ownership units. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary tseth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 7 Assuming the home buyer makes a down payment equal to 10% of the affordable purchase price, the affordable prices for the Median income units in 2005 are: One-Bedroom Two-Bedroom Three-Bedroom Units Units Units Supportable Mortgage $188,500 $217,800 $242,800 Home Buyer Down Payment 20,900 24,100 27,000 Affordable Purchase Price $209,400 $241,900 $269,800 Affordability Gap Calculations The results of the affordability gap analysis for Median income households are presented in Appendix A—Table 3. The analysis identifies the gaps between the maximum affordable prices and the projected market rate sales prices for one-, two- and three-bedroom units; the results are summarized below: One- Two- Three- Bedroom Bedroom Bedroom Units Units Units Market Sales Prices $343,600 $559,700 $918,600 (Less) Median Income Sales Prices (209,400) (241,900) 269,800 Affordability Gap $134,200 $317,800 $648,800 For the purposes of this analysis, KMA distributed the units as follows: 25% one bedrooms; 25% two bedrooms; and 50% three bedrooms. Based on these assumptions, the average affordability gap per Median income unit is estimated at $437,400. Inclusionary Housing Obligation Cost The Ordinance requires developers to impose income and affordability restrictions on at least 10% of the units in an ownership project. It is the KMA assumption that developers would typically minimize the financial gap by earmarking the units for Median income households, rather than for very-low or low income households. When the $437,400 gap per affordable unit is distributed across all units in a project, the cost is equal to $43,700 per unit ($437,400 x 10% _ $43,700). 6 The level annual debt service amount on a loan at 6.5% interest is equal to 7.58% multiplied times the original balance on the first trust deed mortgage. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 8 AFFORDABILITY GAP ANALYSIS—RENTAL PROJECTS (APPENDIX B) The methodology used in the KMA affordability gap analysis for rental developments can be described as follows: 1. KMA obtained rents for recently renovated market rate apartment complexes in Huntington Beach from www.rentnet.com. 2. KMA calculated the maximum affordable rents for low income households based on the household income statistics distributed by HCD and the affordability standards imposed by Code Section 50053.' 3. To maximize management efficiency, new apartment projects typically include at least 50 units.8 For the purposes of this analysis, KMA created a 50-unit prototype apartment project, and estimated the affordability gap associated with the imposition of low income rents on 10% of the units. The affordability gap was then translated into the value reduction generated by the income and affordability restrictions imposed by the Ordinance. 4. The Ordinance does not allow projects with more than nine units to pay the in- lieu fee. However, given the dearth of small new apartment projects, it is necessary to premise the affordability gap analysis on a larger project. The gap derived from this analysis is then adjusted to reflect the characteristics associated with a project that would qualify for the in-lieu fee payment option. The tables that detail the rental analysis are located in Appendix B, and are organized as follows: Table 1: Apartment Rental Rate Comparables Table 2: Affordable Rent for Low Income Households Table 3: Project Value— 100% Market Rate Units Table 4: Project Value— 100% Low Income Units Table 5: Affordability Gap Calculation— Rental Projects 7 KMA assumed that developers will choose to provide low income units rather than very-low income units. 8 Small investors will sometimes develop a smaller project to hold over the long-term. However, in the current market place it is far more financially advantageous to build a small condominium project rather than a small apartment project. 0507026.HB:KHH:JLR:gbd 14066.004 012 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 9 Market Rate Rents The vast majority of the recently constructed apartment projects in Huntington Beach have been subject to long-term income and affordability restrictions. Given the lack of new rental development, KMA gathered rent comparables for apartment buildings that have been renovated since 2000. The following illustrates the average asking rents for recently rehabilitated apartment units in Huntington Beach: Unit Size Monthly Unit Type (Sf) Rents $/Sf Studio Units 452 $1,000 $2.26 One-bedroom Units 723 $1,200 $1.67 Two-bedroom Units 988 $1,500 $1.50 Three-bedroom Units 1,364 $1,700 $1.27 Based on the current market and development trends, KMA assumed that a typical apartment project would be focused on one-and two-bedroom units. Assuming a 15% premium for new construction, the projected market rents for a new apartment project are as follows: Unit Size Monthly Unit Type (Sp $/Sf Rents One-bedroom Units 750 $1.92 $1,443 Two-bedroom Units 1,000 $1.73 $1,729 Affordable Housing Rent Calculations The Ordinance requires 10% of the units in a rental development to be subject to very- low or low income and affordability restrictions. Historically, the City has applied the Code Section 50053 affordable housing cost definition to the inclusionary housing rental units. The calculations are presented in Appendix B—Table 2, and the results can be summarized as follows: 1. The household incomes are based on benchmark household sizes of two persons for one-bedroom units and three persons for two-bedroom units. 2. The household income is set at 60% of the Median for low income units. 3. 30% of the defined household income is allocated to housing related expenses. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary neth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 10 4. The maximum allowable rent must be adjusted to reflect the fact that the tenants will be required to pay for interior utility costs. Based on the 2005 allowances provided by the County of Orange Housing Authority, the utilities are estimated at $32 per month for one-bedroom units and $40 per month for two-bedroom units.9 5. The income and affordability covenants must be imposed over at least a 60-year term. The maximum allowable 2005 low income rents under the defined income categories are as follows: Monthly Unit Type Rents One-bedroom Units $877 Two-bedroom Units $982 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 achieved by apartments that are not subject to income and affordability restrictions. As can be seen in the following table, the projected market rents exceed the maximum affordable rents by 39% to 43%. Thus, KMA has applied the defined affordable rents to our affordability gap analysis. Market Low Unit Type Rate Income Difference One-bedroom Units $1,443 $877 (39%) Two-bedroom Units $1,729 $982 43% Affordability Gap Calculations The affordability gap calculations are presented in Appendix B. Table 3 provides a pro forma analysis for a market rate project and Table 4 presents the findings for a low income project. The assumptions that were applied to each scenario are: 1. The market rate and income restricted rents are based on the assumptions discussed in the preceding section of this analysis. 2. The revenue analyses include $15 per unit per month in miscellaneous income and a 5% vacancy and collection allowance. 9 Rental utility allowances include gas and electricity expenses only. 0507026.H B:KHH:JLR:gbd 14066.004.012 To: Mary-deth Broeren; City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance- In-Lieu Fee Page 11 3. The general operating expenses are estimated at$3,800 per unit and a $250 per unit per year allowance is provided to fund an operating and capital reserve account. 4. The property tax expense estimates vary among the market rate and income restricted apartment projects. The expense cost is equal to the value supported by the project at a 1.1% property tax rate. 5. The net operating income (NOI)for both the market rate and income restricted units was capitalized at a 6.0% rate to estimate the relative values supported by market rate and low income units. Based on the preceding assumptions, the values per unit are estimated as follows: NOI / Unit Value/ Unit 100% Market Rate $12,000 $200,000 100% Low Income $5,700 $95,000 Appendix B—Table 5 illustrates the affordability gaps per affordable unit, which are summarized as follows: Market Rate Scenario Value/Unit $200,000 (Less) Low Income Value/Unit 95,500 Affordability Gap $105,000 Inclusionary Housing Obligation Cost The Ordinance requires developers to set-aside 10% of the units in a rental project for very-low or low income households. Based on the KMA analysis, the affordability gap is estimated at an average of$105,000 per income restricted unit included in the project. A developer that chooses to pay the in-lieu fee will not be providing any affordable units within their market rate project. To translate the weighted average affordability gap into an in-lieu fee payment per market rate unit, it is necessary to multiply $105,000 times the 10% inclusionary housing requirement. This equates to $10,500 per unit development in a market rate project. 0507026.H8:KHH:JLR:gbd 14066.004.012 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 12 2005 MAXIMUM ALLOWABLE IN-LIEU FEES The City's objective is to establish an in-lieu fee schedule that provides the City with adequate funds to produce the inclusionary units in similar locations and product types. However, the primary reason the Ordinance allows projects with nine or fewer units to pay an in-lieu fee is that the City recognizes that the imposition of income and affordability restrictions has a disproportionate impact on small projects. Therefore, it is necessary to establish an in-lieu fee schedule that does not render small projects economically infeasible. In order to demonstrate the effective cost of fulfilling the Ordinance's production requirements, the KMA financial analysis is based on the characteristics embodied by larger projects than would be allowed to pay the in-lieu fee. This in turn provides the foundation for creating an in-lieu fee schedule that does not render small development financially infeasible: 1. The Base In-Lieu fee is calculated at the 100% estimated affordability gap for a typically sized project. 2. Based on the survey data presented in this report, the average ownership unit is estimated at 1,800 square feet in size, and the average rental unit is estimated at 875 square feet in size. 3. The Base In-Lieu fees that correlate to the financial analyses presented in the financial analysis (Base In-Lieu Fees) are as follows: Per Per Per Sf of Affordable Market Rate Building Unit Unit Area Ownership Projects $437,400 $43,700 $24 Rental Projects $105,000 $10,500 $12 KMA prepared comparative pro forma analyses of 30-unit and nine-unit "for sale" projects to assist in understanding the financial characteristics of the different project sizes (Appendix C—Table 1). Based on current projections, the developer profit per unit is approximately 46% less for the nine-unit project than the projected profit for the 30- unit project. To equalize the impact of the Ordinance's production requirement for projects with 10 or more units, and the in-lieu fee option provided to projects with nine or fewer units, KMA reduced the Base In-Lieu Fee by 46%. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary tseth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 13 The resulting fees for nine-unit projects are: Per Sf of Building Area Ownership Projects $13 Rental Projects $7 It is important to recognize that the financial impacts grow at a disproportionate rate as the project size decreases. To reflect this, KMA created the following sliding scale for three-to nine-unit projects:10 Asa % of Small Project Project Size Base Fee Three Units 57% Four Units 64% Five Units 71% Six Units 79% Seven Units 92% Eight Units 93% Nine Units 100% The in-lieu fees that result from the sliding scale are: Project Size Ownership Rental Three Units $7 $4 Four Units $8 $4 Five Units $9 $5 Six Units $10 $6 Seven Units $12 $6 Eight Units $12 $7 Nine Units $13 $7 10 It is difficult to precisely project the financial impact generated at each project size. The recommended sliding scale percentages are based on the scales currently being applied in West Hollywood and Pasadena. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary Beth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 14 IN-LIEU FEE COMPARISON ANALYSIS To assist the City in setting the in-lieu fee payment amount, KMA compiled information from other Southern California jurisdictions that have inclusionary housing requirements, and that allow in-lieu fees to be paid. It is important to note, however, that the majority of the surveyed cities calculate the in-lieu fee on a case-by-case basis. In addition, many cities require the City Council to provide discretionary approval for a fee to be paid in-lieu of producing the affordable units. For the surveyed cities that have established fee schedules, the in-lieu fee is calculated on one of the following bases: 1. Per square foot of building area included in the project; 2. Per unit developed in a market rate project; or 3. As a percentage of project or construction valuation. The in-lieu fees charged in the surveyed cities are presented in the following tables: Per Square Foot of Building Area Jurisdiction In-Lieu Fee Amount Chino $2.72 Duarte $6.50 Pasadena " Rental Projects $12— $22 Ownership Projects $5 - $41 San Diego 13 $1.25- $2.50 Santa Monica 14 $22.33- $26.08 West Hollywood 15 $6.70- $13.40 " The in-lieu fee amount is only applicable to projects developed in the Preserve. 12 Projects with fewer than 10 units are exempt from the Program. 13 The lower fee is charged for projects with fewer than 10 units. 14 The lower fee is charged for apartment projects and the higher fee is charged for ownership projects. 15 An in-lieu fee can only be paid for projects with 20 or fewer units. The fee varies by number of units in the project. 0507026.HB:KHH:JLR:gbd 14066.004.012 To: Mary z)eth Broeren, City of Huntington Beach January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 15 Per Unit in a Market Rate Project Jurisdiction In-Lieu Fee Amount Agoura Hills $4,541 - $6,277 Laguna Beach 17 $7,047 Coronado $7,000 As a % of Project/Construction Valuation Jurisdiction In-Lieu Fee Amount San Clemente 1.00% San Juan Capistrano 1.00% The in-lieu fees being charged by the surveyed cities vary widely. Moreover, since many cities negotiate the in-lieu fee on a case-by-case basis, it is very difficult to identify the "typical" in-lieu fee being charged by cities that are implementing inclusionary housing programs. However, based on the available information, the maximum supportable fee in Huntington Beach is within the range of the fees currently being charged by other Southern California cities. IN-LIEU FEE RECOMMENDATIONS The establishment of an in-lieu fee amount requires several subjective judgments and decisions. To provide a framework for our recommendations, KMA considered the following factors: 1. The City's primary objective is to attract sufficient housing to fulfill the affordable housing production requirements imposed by Code Section 33413, and to eliminate the unmet need for affordable housing identified in the Regional Housing Needs Assessment (RHNA). 2. An inclusionary housing production requirement has a greater financial impact on small projects than it does on large projects. To mitigate this, the provision of an in-lieu fee option is an efficient method of enforcing the Ordinance without stopping the development of smaller projects. 16 The lower fee is charged for apartment projects and the higher fee is charged for ownership projects. 17 The fee is set at$46,978 per affordable lot or unit. 15%of the units are required to be affordable. 0507026.HB:KHHAR:gbd 14066.004.012 To: Mary Beth Broeren, City of Huntington Beach - January 23, 2006 Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 16 The preceding analysis indicates that the affordability gap is $24 per square foot for ownership units and $12 per square foot for rental projects. However, it is the KMA conclusion that fees of the this magnitude are likely to render small projects infeasible. To balance the City's objective to generate revenues to pursue affordable housing activities, against the need to ensure that the in-lieu fee does not result in a constraint to development, KMA recommends that the in-lieu fee schedule be set as follows: Project Size Ownership Rental Three Units $7 $4 Four Units $8 $4 Five Units $9 $5 Six Units $10 $6 Seven Units $12 $6 Eight Units $12 $7 Nine Units $13 $7 KMA also offers the following recommendations: 1. The City should create a mechanism for re-evaluating the in-lieu fee amount on a periodic basis. KMA suggests that the re-evaluation be performed at least every two years so that the in-lieu fee can keep pace with changes in the market place. 2. The Ordinance should be amended to provide the following clarifications: a. The Ordinance should make it clear that developers can fulfill the inclusionary requirements with Median income units for ownership projects and low income units for rental projects; b. The Ordinance should mandate that the affordable housing cost be calculated in accordance with the Code Section 50052.5 standards for ownership units and Code Section 50053 standards for rental units18; and C. The Ordinance should only allow new development and substantial rehabilitation, as defined by the Code Section 33413 affordable housing production requirements, to fulfill the off-site inclusionary housing option allowed by the Ordinance. t8 The City has set 100% of the Median as the maximum income for the moderate income"for sale" units. This standard should replace the 110%of the Median applied in the Code Section 50052.5 affordable housing cost calculation. 0507026.HB:KHHAR:gbd 14066.004.012 APPENDIX A OWNERSHIP ANALYSIS APPENDIX A-TABLE 1 NEW CONSTRUCTION SALES COMPARABLES IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Floorplans Year Built/ Type Unit #of Unit Base Project/Address Sold Out HOA Fee Type Units Size(Sf) Price $/Sf I. Seabridge Villas 2003 Condo One-bedroom 72 485 $230,000 $474 Beach Blvd&Adams 2004 $350 One-bedroom 19 760 310,000 408 One-bedroom 83 765 300,000 392 One-bedroom 46 885 360,000 407 Two-bedrooms 24 970 335,000 345 Two-bedrooms 59 1,095 405,000 370 Two-bedrooms 8 1,100 340,000 309 Two-bedrooms 4 1,240 415,000 335 Two-bedrooms 29 1,285 470,000 366 Totals/Averages 344 850 $330,974 $389 11. Bel Air 2004 Duplex Three-bedrooms 28 2,484 $910,000 $366 Gothard&Garfield $276 Three-bedrooms 25 2,497 898,820 360 Three-bedrooms 26 2,555 920,000 360 Three-bedrooms 23 2,636 907,855 344 Totals/Averages 102 2,539 $909,365 $358 111. Peninsula Point 2004 SFD Three-bedrooms 5 1,990 $869,900 $437 Main Street&Clay $95. Three-bedrooms 7 2,174 899,900 414 Three-bedrooms 1 2,260 919,900 407 Totals/Averages 13 2,110 $889,900 $422 IV. Sea Cove 2004 Townhomes One-bedroom 26 1,770 $838,990 $474 PCH&Goldenwest $405 Two-bedrooms 19 1,620 829,990 512 Two-bedrooms 21 1,845 917,990 498 Two-bedrooms 19 2,690 987,990 367 Three-bedrooms 21 2,450 1,014,990 414 Totals/Averages 106 2,058 $914,603 $445 V. lAttached Units/Large Projects 552 1,834 $853,140 $465 One-bedroom 246 811 $348,470 $430 Two-bedrooms 183 1,418 $567,019 $400 Three-bedrooms 123 2,524 $927,399 $367 VI. I Detached Units/Small Project 13 2,110 $889,900 $422 Three-bedroom Units 13 2,110 $889,900 $422 VII. JAII Units 665 1,841 $853,986 $464 One-bedroom 246 811 $348,470 $430 Two-bedrooms 183 1,418 $567,019 $400 Three-bedrooms 136 2,484 $923,814 $367 Source: Hanleywood Market Intelligence for the City of Huntington Beach. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.x1s;APPX A-T1; 1/23/2006 APPENDIX A-TABLE 2 AFFORDABLE HOUSING PRICES IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA One-bedroom Two-bedroom Three-bedroom Units Units Units 1. Household Income @ 100%of County Median ' $60,550 $68,150 $75,700 II. Income Available for Mortgage Debt Service Income Allotted for Housing @ 35%of Income 2 $21,200 $23,900 $26,500 (Less)Ongoing Expenses HOA, Insurance, Maintenance 3 (3,792) (3,792) (3,792) Utilities 4 (852) (984) (1,380) Property Taxes @ 1.08%of Affordable Price 3 (2,262) (2,603) (2,914) Income Available for Mortgage Debt Service $14,294 $16,521 $18,414 Ill. Maximum Mortgage @ 6.5%Interest Rate 5 $188,500 $217,800 $242,800 IV. Home Buyer Down Payment @ 10%Affordable Price 3 $20,900 $24,100 $27,000 V. IMaximum Affordable Home Price $209,400 $241,900 $269,800 1 Based on the 2005 Orange County median incomes provided by HCD. Per the requirements imposed by California Health and Safety Code Section 50052.5,the household size is set at three persons for two-bedroom units and four persons for three-bedroom units. The Ordinance limits the moderate income units to households earning 100%of the median. 2 Based on California Health and Safety Code Section 50052.5. 3 Based on the Redevelopment Agency's assumptions. The Agency calculates the affordable prices for the City. 4 Based on the current Orange County utility allowances. Includes gas, electricity,water and trash. 5 Based on the current 30-year fixed mortgage rate. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.x1s;APPX A-T2; 1/23/2006 APPENDIX A-TABLE 3 AFFORDABILITY GAP CALCULATION-OWNERSHIP PROJECTS IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA One-bedroom Two-bedroom Three-bedroom Units Units Units 1. Affordability Gap Calculation Market Sales Prices' $343,600 $559,700 $918,600 (Less) Maximum Affordable Sales Prices 2 (209,400) (241,900) (269,800) Affordability Gap/Affordable Unit $134,200 $317,800 $648,800 Affordability Unit Type 11. Average Affordability Gap Calculation Gap Distribution 3 One-bedroom Units $134,200 25% Two-bedroom Units $317,800 25% Three-bedroom Units $648,800 50% Average Affordability Gap/Affordable Unit $437,400 III. Affordability Gap/Total Unit Calculation Average Affordability Gap/Affordable Unit $437,400 Affordable Units as a%of Total Units 4 10% Affordability Gap/Total Unit $43,700 1 Market rate prices are based on the following:800 sf one-bedroom units @$430/sf; 1,400 sf two-bedroom units @$400/sf;and 2,500 sf three-bedroom units @$367/sf. 2 See APPENDIX A-TABLE 2. 3 KMA estimate. 4 Based on the City Ordinance. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.x1s;APPX A-T3; 1/23/2006 APPENDIX B RENTAL ANALYSIS APPENDIX B-TABLE 1 APARTMENT RENTAL RATE COMPARABLES IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Year Zip Built/ Total Unit Base Name&Address Code Renovated Units Type Rent SF/Unit $I SF 1 La Quinta Hermosa 92647 1971 94 1/1 $1,155 725 $1.59 16211 Parkside Lane 2000 2/1 1,405 940 $1.49 2/1 1,415 945 $1.50 2/1 1,530 1,110 $1.38 2 Las Brisas/Vida Del Mar Apartments 92649 1976 62 1/1 1,170 800 $1.46 16602 and 16552 Sell Circle 2000 2/2 1,450 1,200 $1.21 3 Archstone Huntington Beach 92647 1986 152 1/1 1,300 725 $1.79 8945 Riverbend Drive 2000 2/1 1,650 925 $1.78 4 Huntington Breakers 92648 1985 324 0/1 1,050 450 $2.33 21270 Beach Blvd 2000 1/1 1,305 635 $2.06 1/1 1,355 625 $2.17 2/2 1,615 925 $1.75 2/2 1,655 900 $1.84 2/2 1,655 900 $1.84 5 Los Patos Apartments 92649 1973 71 0/1 1,000 400 $2.50 17172 Bolsa Chica 2004 1/1 1,200 700 $1.71 2/1 1,500 1,000 $1.50 6 Maddox Apartments 92647 1971 56 1/1 1,045 750 $1.39 7051 Maddox Dr 2002 2/1 1,300 980 $1.33 2/2 1,400 1,050 $1.33 7 Ocean Breeze Villas 92647 1975 288 1/1 1,125 718 $1.57 6401 Warner Ave 2000 1/1 1,150 800 $1.44 2/1 1,225 850 $1.44 2/1 1,275 900 $1.42 2/2 1,450 1,100 $1.32 3/2 1,700 1,288 $1.32 3/2 1,750 1,440 $1.22 8 Avalon At Pacific Bay 92647 1970 304 1/1 1,195 750 $1.59 6700 Warner Ave 1999 2/1 1,540 1,000 $1.54 2/2 1,495 1,000 $1.50 9 Huntington Creek 92647 1978 194 0/1 990 505 $1.96 8211 San Angelo Dr 2001 1/1 1,190 729 $1.63 2/1.5 1,510 1,075 $1.40 Sample Average Min. Max. Avg. Avg. Size Unit Size Rent Rent Rent /Sf Studios 3 452 $1,000 $1,100 $1,000 $2.26 1-Bedroom Units 11 723 $1,000 $1,400 $1,200 $1.67 2-Bedroom Units 17 988 $1,200 $1,700 $1,500 $1.50 3-Bedroom Units 2 1,364 $1,700 $1,800 $1,700 $1.27 Source:RentNet.com,07/06/05. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.xls;APPX B-T1; 1/23/2006 APPENDIX B-TABLE 2 AFFORDABLE RENTS FOR LOW INCOME HOUSEHOLDS IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA One-Bedroom Two-Bedrooms Units' Units I. Low Income Income @ 60%County Median 2 $36,340 $40,880 %of Income Allotted to Housing 3 30.0% 30.0% Monthly Housing Expenses $909 $1,022 (Less)Utilities Expenses 4 (32) (40) Monthly Rent $877 $982 Based on the 2005 Orange County median incomes provided by HCD. Per the requirements imposed by California Health and Safety Code Section 50053,the household size is set at two persons for one-bedroom units and three persons for two-bedroom units. 2 Based on the 2005 Orange County median incomes provided by HCD and the requirements imposed by California Health and Safety Code Section 50053. 3 Based on the City Ordinance. 4 Based on the current Orange County utility allowances. Includes gas and electricity. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.xls;APPX B-T2; 1/23/2006 APPENDIX B-TABLE 3 PROJECT VALUE-100%MARKET RATE UNITS RENTAL PROTOTYPE IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA 1. Rental Income One-Bedroom' 25 Units $1,443 /Unit $433,000 Two-Bedrooms 2 25 Units $1,729 /Unit 518,800 Miscellaneous Income 50 Units $15.00 /Unit 9,000 Gross Income $960,800 (Less)Vacancy Allowance 5.0% of Gross Income (48,000) Effective Gross Income $912,800 II. Operating Expenses General Operating Expenses 50 Units $3,800 /Unit ($190,000) Property Taxes 3 50 Units $2,201 /Unit (110,000) Operating&Capital Reserves 50 Units $250 /Unit (12,500) Total Operating Expenses ($312,500) III. I Net Operating Income $600:300 Per Unit $12000 IV. JProjectValue 4 $10,005000 Per Unit $200:000 Assumes one-bedroom units at 750 square feet and rent at$1.92/sf. 2 Assumes two-bedroom units at 1,000 square feet and rent at$1.73/sf. 3 The value is projected based on a 6.0%capitalization rate. The property tax rate is set at 1.10%of value. 4 The value is projected based on a 6.0%capitalization rate. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.xis;APPX B-T3; 1/23/2006 APPENDIX B-TABLE 4 PROJECT VALUE-100%LOW INCOME UNITS RENTAL PROTOTYPE IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA I. Rental Income One-Bedroom 25 Units $877 /Unit $263,100 Two-Bedrooms' 25 Units $982 /Unit 294,600 Miscellaneous Income 50 Units $15.00 /Unit 9,000 Gross Income $566,700 (Less)Vacancy Allowance 5.0% of Gross Income (28,300) Effective Gross Income $538,400 11. Operating Expenses General Operating Expenses 50 Units $3,800 /Unit ($190,000) Property Taxes 2 50 Units $1,041 /Unit (52,000) Operatng&Capital Reserves 50 Units $250 /Unit (12,500) Total Operating Expenses ($254,500) III. Net Operating Income $283,900 Per Unit $5,700 IV. lProjectValue 3 $4,732,000 Per Unit $95,000 See APPENDIX B-TABLE 2. 2 The value is projected based on a 6.0%capitalization rate. The property tax rate is set at 1.10%of value. 3 The value is projected based on a 6.0%capitalization rate. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.xls;APPX B-T4; 1/23/2006 APPENDIX B-TABLE 5 AFFORDABILITY GAP CALCULATION-RENTAL PROJECTS IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Net Operating Project Affordability 1. Affordability Gap Income Value Gap Low Income Gap/Unit Market Rate Scenario' $12,000 $200,000 Low Income Scenario 2 $5,700 $95,000 Affordability Gap/Unit $105,000 II. Affordability Gap/Total Unit Calculation Affordability Gap/Affordable Unit $105,000 Affordable Units as a%of Total Units 10% Affordability Gap/Total Unit $10,500 See APPENDIX B-TABLE 3. 2 See APPENDIX B-TABLE 4. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.x1s;APPX B-T5; 1/23/2006 APPENDIX C IN-LIEU FEE CALCULATION ,d 4 APPENDIX C-TABLE 1 SMALL PROJECT ANALYSIS IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA Prototype Project 1. Proiected Sales Revenues' #of Units Sales Prices Total Revenue One-bedroom Units 5 $343,600 $1,718,000 Two-bedroom Units 5 559,700 2,799,000 Three-bedroom Units 20 918,600 18,372,000 Total Project Revenue 30 $762,967 $22,889,000 11. Land+Construction Costs $649,000 /Unit $19,456,000 III. Developer Profit Total 15% Sales Revenues $3,433,000 Per Unit $114,000 Small Project #of Units Sales Prices Total Revenue 1. Proiected Sales Revenues' One-bedroom Units 2 $343,600 $687,000 Two-bedroom Units 2 559,700 1,119,000 Three-bedroom Units 5 918,600 4,593,000 Total Project Revenue 9 $711,000 $6,399,000 11. Land+Construction Costs $649,000 /Unit $5,841,000 111. Developer Profit Total $558,000 Profit Per Unit $62,000 Profit Differential Per Unit $52,000 %Difference 46% ' See APPENDIX A-TABLE 3. 2 Based on stabilized return on total investment. Prepared by: Keyser Marston Associates,Inc. Filename: In lieu-01 23 06.x1s;APPX C-T1;1/23/2006 ct a APPENDIX C-TABLE 2 2005 IN-LIEU FEE SUMMARY IN-LIEU FEE ANALYSIS HUNTINGTON BEACH,CALIFORNIA I. Base In-lieu Fee /Total Unit /Sf GBA 2005 In-Lieu Fee-Ownership Projects $43,700 1 $24 2 2005 In-Lieu-Fee-Rental Projects $10,500 3 $12 4 Il. Base In-lieu Fee for Small Projects Ownership Rental Base In-lieu Fee $24 $12 Loss in Profit 5 46% 46% Base In-lieu Fee for Small Projects $13 $7 III. Slidinq Scale as a%of the Base In-lieu Fee Ownership Rental Three Unit Projects 57% 57% Four Unit Projects 64% 64% Five Unit Projects 71% 71% Six Unit Projects 79% 79% Seven Unit Projects 92% 92% Eight Unit Projects 93% 93% Nine Unit Projects 100% 100% IV. 2005 Slidinq Scale In-lieu Fee Ownership Rental Three Unit Projects $7 $4 Four Unit Projects $8 $4 Five Unit Projects $9 $5 Six Unit Projects $10 $6 Seven Unit Projects $12 $6 Eight Unit Projects $12 $7 Nine Unit Projects $13 $7 1 See APPENDIX A-TABLE 3. 2 Assumes that the units average 1,800 square feet in size. 3 See APPENDIX B-TABLE 5. 4 Assumes that the units average 875 square feet in size. See APPENDIX C-TABLE 1. Prepared by: Keyser Marston Associates, Inc. Filename: In lieu-01 23 06.x1s;APPX C-T2; 1/23/2006 _01 R 2006 MAY 12 PM 12: 41 HUNTINGTON BEACH V..'V CHAMBERO, May 11, 2006 I COMMERci 3 IT y 0 14 U_ I T 0i C H Mary Beth Broeren, Principal Planner City of Huntington Beach 2000 Main Streett Huntington Beach, Ca. 92648 Dear Mary Beth: - This is a follow up to your recent conservation with Dick Harlow concerning our letter on Affordable Housing. We recognize that our letter covered a broad range of issues which would normally be addressed at different times; therefore we offer the following sequence for addressing those issues. 1. Establish the method of determining the Affordable Housing fee based on the affordability gap in rental projects within the city and the rent low income families can afford to pay. (Currently estimated at $10,500 per market rate unit or$105,000 per affordable unit). 2. Adopt this fee for projects of nine or less units. 3. Revise the Affordable Housing ordinance to allow payment of a dollar in-lieu fee for all residential projects in the City. 4. Address our recommended changes to the existing Affordable Housing Ordinance (Section 230.26). 5. Address other recommended changes to the General Plan and Zoning codes. Thank you for the opportunity to clarify our recommendations. Sin erely, Is — J c iddell, CCE �� (� (� / ( /��;JP esident Cc: Mayor Dave Sullivan IZ7U-1j /V SIO 19891 Beach Blvd.,Suite 140 • Creating a strong local economy Huntington Beach,CA 92648 • Promoting the community (714)536-8888 • Providing networking opportunities (714)960-7654 Fax Representing the interests of businesses with government www.hbchamber.com • Political action 4V- l-i'--.-..."-�.--".-.,�,- lu f ;fi Mayor Pro-Tein Gil Coerper Councilmember Keith Bohr Councilmember Debbie Cook Councilmember Cathy Green Councilmember Don Hansen Councilmember Jill Hardy City Administrator Penny Culbreth-Graft Deputy City Administrator Paul Emery Planning Director Howard Zelefsky City Clerk, Joan Flynn