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Page 6 of 17 <br />Table 3: Commercial Linkage Fee, Maximum Amounts <br />Land Use Category Current Fee Amount Maximum Justifiable fee <br />(per Square Foot) <br />Commercial/Retail $5.38 $578.73 <br />Office $8.98 $142.42 <br />Lodging $3.71 $72.86 <br />Industrial $14.91 $143.39 <br /> <br />As shown, the fee amounts are considerable, and far exceed the feasible amounts that could <br />be paid by new commercial development – this imbalance is a common result in these types of <br />analyses. As such, and as discussed in more detail below, it will be necessary to set the fee at <br />a fraction of the maximum. <br /> <br />Affordable/Inclusionary Housing Fee <br />The Affordable Housing Fee is applied to small residential projects, below the size threshold to <br />require on-site inclusionary units, and to larger projects subject to the inclusionary requirement, <br />but for which the City may grant approval to pay fees in lieu of on-site construction. Chapter 7 <br />of the study provides the detailed analysis for calculation of the fee. <br /> <br />The maximum justifiable amount of this fee is established based on the cost otherwise incurred <br />to subsidize construction of affordable units on-site, in the proportion and at the affordability <br />levels specified in the City’s Inclusionary Zoning Ordinance, as proposed to be revised. <br />Following the Draft IZO update, the study uses an inclusionary rate of 15% for all housing <br />types, including ownership and rental projects. As suggested by City Council, the IZO <br />establishes target incomes at 50% and 60% AMI for rental projects, and 120% AMI for <br />ownership projects. <br /> <br />To calculate the maximum supportable fee, EPS developed prototype projects (single-family <br />detached, townhome and multifamily apartments) to model overall development costs, and <br />market-rate and affordable home values to understand the subsidy necessary for the <br />affordable units. Each maximum justifiable in-lieu fee is summarized in Table 4, below: <br /> <br />Table 4: Inclusionary Housing In-Lieu Fee, Maximum Amounts <br />Unit Type Current Fee <br />Amount (per unit) <br />Current Fee <br />Amount (per <br />square foot <br />equivalent)1 <br />Maximum Fee (per <br />square foot) <br />Single-Family <br />Detached <br />$52,203 $17.40 $84.24 <br />Townhome $51,077 $25.54 $42.10 <br />Multi-Family <br />(Condominiums) <br />$51,077 $63.84 $54.87 <br />Multi-Family <br />(Rental) <br />$51,077 $63.84 $69.19 <br />1. Assumes Single Family Detached unit is 3,000 sq.ft, townhome is 2,000 square feet, and multi-family <br />condos and rental units are 800 square feet <br /> <br />Water and Wastewater Connection Fees <br />Page 212 of 893