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Cost of Producing New Rental Housing <br /> <br />In estimating the cost of producing new rental housing in Pleasanton, the following <br />assumptions were made: <br /> <br /> · Development of a rental apartment complex of 100 units with a density of <br /> 20 units per acre, and an average of 900 square feet per unit. <br /> <br /> · Land cost is $300,000 per acre ($15,000 per unit), and assumes minimal <br /> on- and off-site infrastructure improvement costs. <br /> <br /> · Construction cost is $72 per square foot of building floor area for a total <br /> of $64,800 per unit. <br /> <br /> · Fee payment is $15,000 per unit. <br /> <br /> · Soft costs including financing and design are 15 percent of total cost for <br /> a total of $14,200 per unit. <br /> <br /> · Construction standards and design quality are assumed to be somewhat <br /> higher than for the existing units due to more restrictive State and local <br /> building regulations that have been enacted in recent years. <br /> <br />Based upon the above assumptions, the estimated cost of producing new rental housing <br />in Pleasanton in 1996 is $109,000 per unit. Assuming a five-percent-per-year inflation <br />rate and replacement in the year 2000 (end of the first State-mandated five-year interval), <br />the total replacement cost of the 413 assisted units would be approximately $54,000,000. <br /> <br />Cost of Preserving Existing Assisted Rental Housing <br /> <br />Without the benefit of having appraisal estimates for the at-risk projects, exact <br />preservation costs are difficult to determine. Instead of obtaining appraisals, a variety <br />of other relevant factors were analyzed in considering preservation costs: <br /> <br /> 1. In some cases, the units were designed and constructed to somewhat lower <br /> standards and on less expensive land in 1975 and 1988 than the buildings <br /> of today, and as such, would be of slightly lower value. <br /> <br /> 2. The original physical condition of these units will deteriorate, and the <br /> value should decrease with the passing of time. However, it is important <br /> to recognize that all three projects have been and continue to be very well <br /> maintained. <br /> <br /> 3. The units will be 10 to 30 years old upon the restriction termination dates <br /> and probably in need some rehabilitation in order to bring them up to the <br /> standard of comparable new housing. <br /> <br /> <br />