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Pleasanton Comprehensive Fee Update and Nexus Study November 2024
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<br />Table 19 Affordability Gap Analysis
<br />
<br />
<br />Item
<br />Very Low
<br />Income
<br />Low
<br />Income
<br />Low
<br />Income
<br />Median
<br />Income
<br />Moderate
<br />Income
<br />50% AMI 60% AMI 80% AMI 100% AMI 120% AMI
<br />Multifamily Rental
<br />Project Development Cost Assumptions (per unit) $595,227 $595,227 $595,227 $595,227 $595,227
<br />Maximum Supported Home Value
<br />Household Income1 $62,300 $74,730 $96,650 $124,550 $149,500
<br />Income Available for Housing Costs/Year2 $15,528 $19,257 $25,833 $34,203 $41,688
<br />(less) Operating Expenses per Unit/Year3 ($7,500) ($7,500) ($7,500) ($10,000) ($10,000)
<br />Net Operating Income $8,028 $11,757 $18,333 $24,203 $31,688
<br />Capitalization Rate4 5.0% 5.0% 5.0% 5.0% 5.0%
<br />Total Supportable Unit Value5 $160,560 $235,140 $366,660 $484,060 $633,760
<br />Affordability Gap $434,667 $360,087 $228,567 $111,167 -$38,533
<br />Townhomes
<br />Project Development Cost Assumptions (per unit) $1,069,670 $1,069,670 $1,069,670 $1,069,670 $1,069,670
<br />Maximum Supported Home Price
<br />Household Income6 $77,850 $93,420 $108,990 $140,130 $171,270
<br />Income Available for Housing Costs/Year7 $27,248 $32,697 $38,147 $49,046 $59,945
<br />Less Annual Housing Expenses 8 $13,167 $14,204 $16,277 $18,350 $21,025
<br />Income Availably for Mortgage Payments $14,080 $18,493 $21,869 $30,695 $38,920
<br />Interest Rate 7.0% 7.0% 7.0% 7.0% 7.0%
<br />Total Supportable Mortgage Amount 9 $174,719 $229,478 $271,376 $380,897 $482,955
<br />Down Payment % 5% 5% 5% 5% 5%
<br />Total Supportable Unit Value $183,915 $241,556 $285,659 $400,944 $508,374
<br />Affordability Gap $885,754 $828,113 $784,011 $668,726 $561,295
<br />Average Affordability Gap $660,211 $594,100 $506,289 $389,946 $261,381
<br />(2) Assumes 30% of income available for housing related expenses.
<br />(7) Assumes 35% of household income is spent on housing related expenses.
<br />(8) Includes property tax, mortgage insurance, and utility payments.
<br />(9) Assumes 30-year mortage term.
<br />Sources: City of Pleasanton; Alameda County Housing Authority; California Housing and Community Development (HCD); CoStar; Economic &
<br />Planning Systems, Inc.
<br />(5) The total supportable unit value is determined by dividing the net operating income by the capitalization rate.
<br />(1) Incomes are based on 2024 HCD Income Limits for two-person households in Alameda County for rental.
<br />(6) Incomes are based on 2024 HCD Income Limits for four-person households in Alameda County. Per California Health and Safety Code Section
<br />50052.5, incomes for households above 70% AMI are set at a lower percent of AMI than the cutoff, (ex. Moderate Income is 110% of AMI rather than
<br />120%).
<br />(3) Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; lower-income units (at or below
<br />80% of AMI) are assumed to be built as non-profit and are, therefore, exempt from property taxes. Property taxes are assumed to comprise a share of
<br />the operating expenses for the moderate-income category.
<br />(4) The capitalization rate is used to determine the current value of a property based on estimated future operating income, and is typically a measure of
<br />estimated operating risk.
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