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Draft Memorandum July 25, 2013
<br /> EPSP Infrastructure Feasibility Analysis Page 8
<br /> as with the inclusionary housing requirements. As shown in Table 5, these policies have
<br /> substantial implications for the land values in the Project ranging as much as $1 million per acre.
<br /> Particularly notable is the impact on the lower density housing that has higher development cost
<br /> and is more costly to accommodate inclusionary requirements in. However, some of the land
<br /> value reductions could be remedied with tax credits and other tools.
<br /> Table 5 — Comparison of Land Values Under Various Inclusionary Housing
<br /> Requirements
<br /> Resulting Land Value
<br /> Assumed Price per unit or
<br /> Item per unit sq.ft. Per Acre Notes
<br /> Residential (with inclusionary fees)
<br /> 4 du/acre $1,400,000 $308,000 $1,232,000
<br /> 8 du/acre $975,000 $287,000 $2,298,000
<br /> 11 du/acre $800,000 $191,000 $2,097,000
<br /> 23 du/acre $450,000 $100,000 $2,290,000
<br /> 30 du/acre $372,000 $15,000 $450,000 surface
<br /> I nclusionary
<br /> Residential (blended) Requirement
<br /> 4 du/acre 20% $1,177,639 $102,200 $409,400
<br /> 8 du/acre 20% $837,639 $165,200 $1,320,000
<br /> 11 du/acre 20% $697,639 $102,600 $1,129,600
<br /> 23 du/acre 20% $417,639 $63,200 $1,452,600
<br /> 30 du/acre 15% $346,050 ($7,808) ($233,350) surface
<br /> Cost Allocation and Fee Credits
<br /> As described above, there are significant differences in the financial performance of various land
<br /> use types, with lower to medium density single family units performing the best and industrial
<br /> uses performing the worst. This suggests, among other things, that an effective development
<br /> program will require a strategic allocation of project-wide costs across land uses. In addition,
<br /> cost sharing tools would need to be developed to ensure that revenue and cost allocation
<br /> between property owners is equitable.
<br /> Another key cost allocation issue has to do with the availability of outside funding. As noted, the
<br /> current analysis assumes that all EPSP developers and/or builders pay applicable development
<br /> impact fees and connection charges. These fees are designed to cover a variety of off-site and
<br /> on-site infrastructure costs. To the extent that credits or contributions towards transportation or
<br /> other infrastructure improvements in EPSP would be provided to the Project, such as traffic fee
<br /> credits, overall feasibility would improve. The fees allocated to regional serving transportation
<br /> 4 The current affordable housing fee is currently being updated.
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