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HomeMy WebLinkAboutReso 52-24 Item 6.1 Adopting a Non-Residential Development Affordable Housing Impact Fee within theDocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E RESOLUTION NO. 52 — 24 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ADOPTING A NON-RESIDENTIAL DEVELOPMENT AFFORDABLE HOUSING IMPACT FEE WITHIN THE CITY OF DUBLIN WHEREAS, the Dublin City Council adopted Dublin Municipal Code Chapter 7.86 creating and establishing the authority for imposing and charging a Non -Residential Development Affordable Housing Impact Fee ("Fee") to mitigate the impacts of non-residential development on the affordability of housing within the City; and WHEREAS, the Inclusionary Zoning Regulations establish the authority to impose and charge a fee to mitigate the impacts of non-residential development on the affordability of housing in the City of Dublin; and WHEREAS, on May 3, 2005, the City Council adopted Resolution 70-05 establishing a Non -Residential Development Affordable Housing Impact Fee; and WHEREAS, the City of Dublin Strategic Plan for Fiscal Years 22-23 includes Objective 2.b to ensure the City's Inclusionary Zoning Regulations incentivize targeted housing production and Objective 2.c to evaluate the affordable housing in -lieu fee for ownership and rental housing; and WHEREAS, the City selected the consulting firm Economic and Planning Systems (EPS) through a competitive process to assist with preparing a nexus study to evaluate the Non - Residential Development Affordable Housing Impact Fee, also known as the "Commercial Linkage Fee"; and WHEREAS, EPS prepared the Commercial Linkage Fee Nexus Study, attached as Exhibit A, to evaluate the nexus for collecting Non -Residential Affordable Housing Impact Fees; and WHEREAS, on August 15, 2023, and September 19, 2023, the City Council received a report on the City's Inclusionary Zoning Regulations, Affordable Housing In -Lieu Fee, and Non - Residential Development Affordable Housing Impact Fee and directed Staff to prepare amendments to these programs; and WHEREAS, pursuant to California Environmental Quality Act (CEQA) and CEQA Guidelines Section 15061(b)(3) and Section 15378 (b)(4), revising Affordable Housing In -Lieu Fees is not a project and, therefore, is exempt from the requirements of CEQA; and WHEREAS, on January 9, 2024, the City Council held a public hearing, at which time the City Council directed Staff to bring back additional information and analysis; and WHEREAS, on March 19, 2024, the City Council held a Study Session to consider additional information and analysis, at which time Staff was given direction to prepare updates and amendments to these programs; and WHEREAS, a Staff Report, dated June 4, 2024, described and analyzed the proposed changes to the Non -Residential Development Affordable Housing Impact Fee; and Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 1 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E WHEREAS, on June 4, 2024, the City Council held a properly noticed public hearing to consider the Non -Residential Development Affordable Housing Impact Fee, at which time all interested parties had the opportunity to be heard; and WHEREAS, on June 4, 2024, the City Council did hear and use independent judgment and considered all said reports, recommendations and testimony; and NOW, THEREFORE, BE IT RESOLVED that in accordance with DMC Section 7.86.020.B, the Dublin City Council hereby sets forth the following: 1. The purpose of the Fee is to implement the goals and objectives of the General Plan Housing Element and the Dublin Municipal Code Inclusionary Zoning Regulations Chapter 8.68; and 2. The Fee collected pursuant to this resolution shall be used to increase and maintain the supply of housing affordable to households of very low-, low-, and moderate -income; and 3. There is a reasonable relationship between the need for affordable housing and the impacts of the types of development for which the corresponding fee is charged in that new non-residential development in the City of Dublin will result in additional persons who work in Dublin and generate or contribute to the need for affordable housing; and 4. There is a reasonable relationship between the use of the Fee and the impacts of non- residential development as such development encourages new residents to move to the City who are not able to afford market rate housing; and 5. There is a reasonable relationship between the amount of the Fee and the cost of the affordable housing or portion thereof attributable to non-residential development in the City of Dublin in that the Fee is calculated based on the number of employees generated by specific land uses, the total amount it will cost to construct the affordable housing and the percentage by which non-residential development within the City of Dublin contributes to the need for the affordable housing; and 6. The cost estimates set forth in the Report are reasonable cost estimates for constructing the affordable housing, and the Fees expected to be generated by future non-residential development will not exceed the projected costs of construction the affordable housing; and 7. The method of allocating the Fee to non-residential development bears a fair and reasonable relationship to, and is roughly proportional to, each development's burden on, and benefit from, the affordable housing to be funded by the Fee, in that the Fee is calculated based on the number of employees each particular non-residential development will generate. BE IT FURTHER RESOLVED the Dublin City Council adopts the following: 1. Definitions Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 2 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E i. "Affordable Housing" shall mean housing affordable to households of very low- , low-, and moderate -income as defined in Chapter 8.68 of the City of Dublin's Zoning Ordinance. ii. "Commercial" shall mean a business selling or providing merchandise, entertainment, and personal services to the general public. Examples include grocery stores, drug stores, clothing stores, general merchandise stores, beauty salons, and gas stations. Food and drinking places are also included in this category. iii. "Development" shall mean the construction, alteration or addition of any building or structure within the City of Dublin. iv. "Industrial" shall mean employers engaged in business activity with limited direct access from the general public; businesses focused on assembling, distributing, or repairing products; businesses focused on the testing and invention of new materials, products, or processes; and businesses engaged in the transformation of raw materials into consumable products. Examples include auto repair, self -storage facilities, and food/beverage products manufacturing. Additionally, Industrial includes warehousing, and the storage and distribution of goods. v. "Lodging" shall mean lodging or short-term accommodations for travelers, vacationers, and others in facilities known as hotels, motor hotels, resort hotels, and motels. vi. "Research & Development/Office" shall mean any facilities devoted almost exclusively to research and development activities. Research & Development land uses include but are not limited to: biotechnology, technology and other products and services research facilities. 2. Non -Residential Development Affordable Housina Impact Fee Imposed i. A Non -Residential Development Affordable Housing Impact Fee ("Fee") shall be charged and paid for non-residential buildings or structures within the City of Dublin when the building permit is issued for construction of such building or structure. ii. A Fee shall be charged and paid for non-residential development for any alteration or addition to an existing building or structure if the alteration or addition is greater than 500 square feet and results in the building or structure's combined floor area after the alteration or addition being greater than 20,000 square feet. The Fee shall be charged only against that area of the alteration or addition that is over 20,000 square feet. Square footage shall be calculated as gross floor area, as defined in the Dublin Municipal Code, Chapter 8.08. iii. Any non-residential use of land which is substantially similar to, but not included in the definitions of "Commercial", "Industrial", "Lodging", "Research & Development/Office" or "Retail" shall be allocated by the Community Development Director to one of the four categories, maintaining as much consistency as possible with the definitions of such terms. Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 3 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E i v . In the event that a non-residential use of land is not substantially similar to the definitions of, "Commercial", "Industrial", "Lodging", "Research & Development/Office" or "Retail" the Community Development Director may establish a new category and calculate the appropriate fee for such category based upon the assumptions as used in the Report. 3. Amount of Fee i. The Non -Residential Development Affordable Housing Impact Fee authorized by Municipal Code section 7.86.020 is hereby set as follows: Land Use Fee per square foot Commercial $1.35 Industrial $0.65 Lodging $0.57 Research & Development/Office $1.39 4. Exemptions from Fee i. Any non-residential building or structure that is 20,000 square feet or less. Square footage shall be calculated as gross floor area, as defined in the Dublin Municipal Code, Chapter 8.08. ii. Any alteration or addition to a non-residential building or structure, except when the alteration or addition results in an increase of greater than 500 square feet and the building or structure's combined floor area after the alteration or addition is greater than 20,000 square feet. The Fee shall be charged only against that area of the alteration or addition that is over 20,000 square feet. Square footage shall be calculated as gross floor area, as defined in the Dublin Municipal Code, Chapter 8.08. iii. Any replacement or reconstruction of an existing non-residential building or structure that has been destroyed or demolished, provided that the building permit for new reconstruction is obtained within three (3) years after the building was destroyed or demolished and there is no change in the land use category (i.e., Commercial, Lodging, Research & Development/Office, or Industrial). iv. Any non-residential building or structure constructed on property on which a building or structure was demolished for which the Fee has been paid within the prior 20-year period, provided the exemption shall be in the amount of the previously -paid Fee only, and the applicant shall pay any additional amount based on the then -current Fee. The new development shall not accrue any unused credit or reimbursement rights, in the event that the replacement project results in a lower Fee. Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 4 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E 5. Use of Revenue i. The revenue raised by payment of the Fee shall be placed in the Affordable Housing Fund. Separate and special accounts within the Affordable Housing Fund shall be used to account for such revenues, along with any interest earnings on each account. The revenues (and interest) shall be used for the following purposes: 1. To increase the supply of housing affordable to households of very low-, low- and moderate -income; and 2. To pay for design, engineering, land acquisition and building, and to subsidize and rehabilitate affordable housing and reasonable costs of outside consultant studies related thereto; and 3. To reimburse the City for affordable housing constructed by the City with funds from other sources including funds from other public entities, unless the City funds were obtained from grants or gifts intended by the grantor to be used for affordable housing; and 4. To pay for and/or reimburse costs of program development and ongoing administration of the Fee program. ii. Fees in these accounts shall be expended only for affordable housing and only for the purpose for which the Fee was collected. 6. Periodic Review i. During each fiscal year, the City Manager shall prepare a report for the City Council, pursuant to Government Code section 66001(b), determining how there is a reasonable relationship between the amount of the Fee and the cost of affordable housing, or portion of the affordable housing attributable to the development on which the Fee is imposed. ii. During the fifth fiscal year following the first Fee deposit into the Affordable Housing Fund, and every five years thereafter, the City Manager shall prepare a report for the City Council, pursuant to Government Code section 66001(d), regarding the disposition of any unexpended portion of the Fund, whether committed or uncommitted. iii. During each fiscal year, the City Manager shall prepare a report for the City Council, pursuant to Government Code section 66006, identifying the balance of Fees in each account. 7. Automatic Fee Adiustments i. The Fee shall be adjusted annually on the greater of the percentage change in either: a) the February ENR Building Cost Index for the San Francisco Bay Area; b) the February Bay Area Consumer Price Index for All Urban Consumers (CPI-U) ; or c) the United States Department of Housing and Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 5 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E 70-05. Urban Development (HUD) Fair Market Rent limits for the Oakland Primary Metropolitan Statistical Area that are in effect in February of each year. 8. Administrative Guidelines The City Council may, by resolution, adopt administrative guidelines to provide procedures for calculation and other administrative aspects of the Fee. 9. Effective Date This resolution shall become effective 60 days after City Council adoption and applied to applicable building permits issued on or after that date. 10. Severabilitv The Fee and all portions of this resolution are severable. Should the Fee or other provision of this resolution be adjudged to be invalid and unenforceable, the remaining provisions shall be and continue to be fully effective, and the Fee shall be fully effective except as to that judged to be invalid. BE IT FURTHER RESOLVED that this Resolution shall supersede and replace Resolution PASSED, APPROVED AND ADOPTED this 4th day of June 2024, by the following vote: AYES: Councilmembers Josey, McCorriston, Qaadri and Mayor Pro Tempore Hu NOES: ABSENT: ABSTAIN: ATTEST: DocuSigned by: Movia,,m5i-12-- City dier`rcLr4VH.. 5564422.2 DocuSigned by: Mayor Reso. No. 52-24, Item 6.1, Adopted 06/04/2024 Page 6 of 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Hie Lronoiirice o/ Lanul (sr Economic & Planning Systems, Inc. 1330 Broadway Suite 450 Oakland, CA 94612 510 841 9190 tel Oakland Sacramento Denver Los Angeles Report Commercial Linkage Fee Nexus Study Prepared for: City of Dublin Prepared by: Economic & Planning Systems, Inc. October 27, 2023 EPS #231009 www.epsys.com DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table of Contents 1. INTRODUCTION AND EXECUTIVE SUMMARY 1 Background 1 Regional Context 1 Summary of Maximum Nexus -Based Fees 2 Primary Sources 2 Organization of Report 4 2. REQUIRED NEXUS FINDINGS FOR FEE PROGRAM 5 Background 5 Authority 5 Required Nexus Findings 5 Assembly Bill 602 Provisions 6 3. METHODOLOGY AND FEE CALCULATION 9 Land Use Categories 9 Estimates of New Worker Households 11 Housing Development Costs and Affordability Gap 16 Fee Calculation 19 Appendices: Appendix A: Survey of Commercial Linkage Fees in Other Jurisdictions Appendix B: Occupation Distribution by Employment Category Appendix C: Assumptions and Sources DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A List of Tables Table 1 Summary of Maximum Allowable Linkage Fees 2 Table 2 Alameda County Income Category Definitions (2023) 3 Table 3 Land Use Category Descriptions 10 Table 4 Illustration of Employees' Household Income Calculation 12 Table 5 Income Distribution of Worker Households by Employment Category 14 Table 6 Household Generation Rates by Employment Category 15 Table 7 Affordability Gap Analysis - Rental Product Type 18 Table 8 Fee Calculation - Commercial 20 Table 9 Fee Calculation - Lodging 21 Table 10 Fee Calculation - Office/R&D 22 Table 11 Fee Calculation - Industrial 23 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A 1, INTRODUCTION AND EXECUTIVE SUMMARY Background The City of Dublin is exploring various tools to advance the City's affordable housing objectives, including a review of the City's commercial linkage fee program. The City's commercial linkage fee program was adopted in 2001 and last updated in 2005. Fees are adjusted each year according to the Consumer Price Index (CPI) for the San Francisco area. Other than these annual adjustments, the commercial linkage fee program has not been reevaluated since 2005. A commercial linkage fee, also known as a jobs -housing linkage fee, is a type of development impact fee charged to developers of new, nonresidential properties to help support affordable housing for lower -wage workers. The conceptual underpinning of the fee is that new nonresidential development creates new jobs, and some of these jobs will pay wages below what is required for a worker to afford a market -rate housing unit in the City. If the cost to construct new housing units is higher than can be supported by the rents or home prices that workers can afford to pay, the difference is considered an "affordability gap." The nexus (or reasonable relationship) established between the projected number of lower -wage jobs created by new development, and the subsidy needed to fund this "affordability gap" and support the creation and maintenance of units that are affordable to workers in these jobs is the basis for the fee. Economic & Planning Systems (EPS) was retained to update the nexus analysis based on current economic and market factors. EPS has completed the required nexus analysis that quantifies the relationship between the growth in several nonresidential land uses (Commercial, Office/R&D, Lodging, and Industrial) and the demand for and cost of affordable housing for the local workforce. Assessing an impact fee, such as a linkage fee, based on an established nexus is allowed pursuant to the State of California's Mitigation Fee Act (California Government Code sections 66000 et seq.). As a development impact fee, this linkage fee can only be charged to new development and must be based on the impact of new development on the need for resources to subsidize the development of new affordable housing. Fee revenue may be collected by the City and used to subsidize the production or preservation of affordable units for lower -income households. Expenditures may include, but are not limited to, direct contributions to affordable housing developers, land acquisition, and funding local match requirements to leverage other funding opportunities. This is consistent with how the City has been using fee revenue collected since the fee's adoption. Regional Context Commercial linkage fees are common across the state but most common in high -demand, high - value jurisdictions with strong nonresidential development trends. Fees are often set well below the nexus -based maximums and typically range from $1 to $10 (or as high as $40 per square foot of office development in some Bay Area Peninsula jurisdictions). Appendix A exhibits examples of commercial linkage fees in other cities by land use category. Economic & Planning Systems, Inc. 1 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Summary of Maximum Nexus -Based Fees Table 1 summarizes the maximum justifiable linkage fee by commercial land use category. The methodology used to establish the maximum justifiable fees is described in the subsequent chapters of this report. Please note that these maximum fees are supported by the nexus analysis but likely exceed levels that could feasibly be borne by new commercial developments. The City has the opportunity to adopt fees up to these maximum levels but will want to consider other economic development and fiscal revenue factors. The "adjusted maximum" fees identified on Table 1 reflect one rationale for adjusting the maximum fees downward, by discounting the maximum fees to reflect that 9.4 percent of people who work in Dublin also reside in Dublin, but still likely exceed feasible fee levels.1 Table 1 Summary of Maximum Allowable Linkage Fees Employment Category Maximum Fee per sq. ft. Adjusted Maximum [1] per sq. ft. Commercial $380 $344 Lodging $62 $57 Office/R&D $202 $183 Industrial $127 $115 [1] Adjusted to avoid potential double -counting of the 9.4% of people who work in Dublin and also live in Dublin (as of 2020 LEHD data). Source: Economic & Planning Systems, Inc. Primary Sources To estimate the fee, EPS relied on numerous sources of data, including the following: • JobsEQ, which is a software tool that compiles industry and wage occupation data for 2022 from a variety of sources, including U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, National Center of Education Statistics, and others. • State Department of Housing and Community Development (HCD) annual income limits for Alameda County, 2023 (see Table 2) • U.S. Census Bureau American Community Survey (ACS) 5-Year Estimates (2017-2021) 1 As a separate deliverable to support City Council consideration of appropriate commercial linkage fee levels, EPS is providing fee level recommendations. Economic & Planning Systems, Inc. 2 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table 2 Income Group Acutely Low Extremely Low Very Low Low Median Moderate Alameda County Income Category Definitions (2023) Standard Definition Number of Persons in Household <_15% AMI >15% to <_30% AMI >30% to <_50% AMI >50% to <_80% AMI 100% AMI >80% AMI to <_120% AMI 1 2 3 4 5 $15,550 $17,750 $31,050 $35,500 $51,800 $59,200 $78,550 $89,750 $103,550 $118,300 $124,250 $142,000 Source: California Department of Housing and Community Development, 2023 $20,000 $39,950 $66,600 $100,950 $133,100 $159,750 6 7 8 $22,200 $24,000 $25,750 $27,500 $29,300 $44,350 $47,900 $51,450 $55,000 $58,550 $73,950 $79,900 $85,800 $91,700 $97,650 $113,150 $121,150 $130,100 $139,100 $148,050 $147,900 $159,750 $171,550 $183,400 $195,250 $177,500 $191,700 $205,900 $220,100 $234,300 Economic & Planning Systems, Inc. 3 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A In addition, EPS sought input from City of Dublin staff regarding affordability levels and recently developed affordable housing projects. Data from recent Dublin developments and land transactions were combined with information collected from various market -rate and affordable housing developers to estimate appropriate development cost assumptions for use in Dublin. These and other data sources are identified on the tables provided throughout this report. Organization of Report Following this Introduction and Executive Summary, this study includes the following chapters: • Chapter 2 summarizes the required nexus findings of the Study. • Chapter 3 describes the methodology used to calculate the fee. Economic & Planning Systems, Inc. 4 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A 2, REQUIRED NEXUS FINDINGS FOR FEE PROGRAM The following section confirms that this Nexus Study contains the findings required under the Mitigation Fee Act for the establishment of a development impact fee. Background The City of Dublin (City) first adopted a commercial linkage fee for affordable housing in 2001, and it was last updated in 2005. The City is in the process of addressing a number of changes in local housing supply, regional housing needs, and broader economic and housing trends. The Two -Year Strategic Plan established an objective to prepare a Nexus Study to review the commercial linkage fee program. Therefore, the City retained EPS to explore the feasibility of an affordable housing impact fee for new commercial (i.e., nonresidential) development. Authority This study serves as the basis for requiring development impact fees under AB 1600 legislation, as codified by the Mitigation Fee Act (California Government Code sections 66000 et seq.). This section of the Mitigation Fee Act sets forth the procedural requirements for establishing and collecting development impact fees. These procedures require that a reasonable relationship, or nexus, must exist between a governmental exaction and the purpose of the condition. In 1991, the Ninth Circuit U.S. Court of Appeals upheld the City of Sacramento's nonresidential linkage fee.2 In that case, the court found that the City of Sacramento's fee program "substantially advanced a legitimate interest." EPS is using a similar methodology to the nexus study reviewed in that case to develop the City of Dublin's fee program. Required Nexus Findings The Mitigation Fee Act clearly identifies the required nexus findings. Required Nexus Findings • Identify the purpose of the fee. • Identify how the fee is to be used. • Determine how a reasonable relationship exists between the fee's use and the type of development project on which the fee is imposed. • Determine how a reasonable relationship exists between the demand for the affordable housing and the type of development project on which the fee is imposed. • Demonstrate a reasonable relationship between the amount of the fee and the cost of the public benefit attributable to the development on which the fee is imposed. 2 Commercial Builders of Northern California v. City of Sacramento, 941 F2d 872 (1991). Economic & Planning Systems, Inc. 5 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Purpose of Fee The fee program established through this Nexus Study will fund the development and preservation of affordable housing in the City to serve lower -wage workers employed by new nonresidential development. Use of Fee The fee will be collected by the City. The funds are used to assist with the production and/or rehabilitation and preservation of affordable housing units and/or the acquisition of land in the City. The fee may also fund the studies and administration to support the fee program. Relationship between Use of Fee and Type of Development New commercial development in the City will generate new jobs. Some portion of the workers in those jobs will not earn wages high enough to afford rent prices necessary to support new residential development without subsidy. The linkage fee will be used to help fund this subsidy, resulting in the development of residential units affordable to the local workforce. Relationship between Demand for Affordable Housing and Type of Project The City and EPS have identified four non-residential land use categories for which a separate fee has been calculated. The proportion of lower wage workers and the number of square feet per employee for each employment category has been assessed to ensure a proper nexus is established. Relationship between Amount of Fee and Cost of Public Benefit Attributed to New Development EPS estimated the difference between the cost of developing new rental housing and the value of the new rental units based on rents affordable to workers at wages typical of businesses in different commercial land uses. The affordable rents yielded unit values below the cost of construction, indicating an "affordability gap." To estimate the fee for each non-residential land use, this gap was multiplied by the anticipated number of lower wage workers generated by the new development projects and the number of households of various income categories those workers are likely to form. Assembly Bill 602 Provisions AB 602 passed in the California Assembly in 2021 and was signed by the Governor. The legislation adds some new requirements for impact fees in addition to those required under AB 1600. While much of the intent of AB 602 was to clarify and limit impact fees applied to residential development, certain aspects of AB 602 may also apply to nonresidential development. Existing Level of Service Under Government Code 66016.5, AB 602 requires that an impact fee nexus study "identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate." Economic & Planning Systems, Inc. 6 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 The City of Dublin currently has 1,443 affordable housing units for an employment base of 37,116 workers.3 This represents a ratio of 0.039 assisted affordable units per worker. The "adjusted maximum" linkage fee levels identified herein would allow the City to subsidize a similar or greater number of affordable units per worker - 0.5 per Commercial worker, 0.5 per Office/R&D worker, 0.2 per Lodging worker, and 0.4 per Industrial worker.4 These higher proportions, except in the case of Lodging, may be appropriate given the shortfall of such affordable units in the City, region, and state, and the demonstrated impacts of new commercial development on the City's need for affordable housing. As an example of public policy reflecting that shortfall, the State's Regional Housing Needs Allocation (RHNA) process has indicated that Dublin should aim to produce 3,719 total housing units between 2023 and 2031, including 2,270 units priced at moderate or lower incomes, and this target would represent a significant increase in the pace of both targeted and actual affordable housing production in recent years. Collection of Fees at Previous Levels Under Government Code 66016.5, AB 602 requires that "if a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee." The City of Dublin wishes to use the commercial linkage fee program to generate revenue to increase the amount of deed -restricted affordable housing in the City as new workers are added to the local employment base. According to the 2022 Annual Progress Report staff report, from 2015 to 2022, the City has collected $724,111 in commercial linkage fees: • 2015: $45,830 • 2016: $3,462 • 2017: $359,928 • 2018: $11,879 • 2019: $191,697 • 2020: $0 • 2021: $71,568 • 2022: $39,847 3 Assisted rental unit count is from the City of Dublin Community Development department as of December 2022. The employment base is from the US Census Bureau, ACS, Five -Year Estimates, 2021. 4 Proportions are calculated as the number of affordable units that could be subsidized by the maximum fee on a 100,000 square foot space, discounted by 9.4 percent of that figure given commute patterns to reflect the "adjusted maximum" (as shown on Tables 8-11) and then divided by the total number of employees that would work in a given building type (as shown on Table 6). Economic & Planning Systems, Inc. 7 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Capital Improvement Plan Under Government Code 66016.5, AB 602 requires that "large jurisdictions shall adopt a capital improvement plan as a part of the nexus study." Under Government Code 66002, "any local agency which levies a fee subject to Section 66001 may adopt a capital improvement plan, which shall indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees." Capital improvement plans typically include specific infrastructure projects and public facilities rather than affordable housing developments, and affordable housing is not listed in the statute as the type of "facility" or "improvement" for which a capital improvement plan must be adopted. However, the City has expressed its intent to support the permitting and construction of affordable housing units as specified in the State's RHNA process, including 2,270 moderate and lower income units. These units may be located in various areas within the City's boundaries, may range from single units to larger complexes of 100 or more units, and are intended to be permitted and/or developed by 2031. This nexus study estimates the costs to develop such units, less their value as income - restricted units, which represents the housing production subsidies to be financed with the collected linkage fees. Economic & Planning Systems, Inc. 8 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A 3. METHODOLOGY AND FEE CALCULATION Land Use Categories The current fee program has five land use categories: Retail, Services & Accommodation (Lodging), Office, Research & Development (R&D), and Industrial. The City decided that the land use categories should more closely match the categories of the City's other non-residential impact fees. These changes are intended to make the fee structure more transparent and to ease administration. For this update, the City asked EPS to evaluate four distinct land use categories. Office and R&D land use categories were combined to reflect recent R&D developments that have similar land use patterns and employment densities to office development and to acknowledge that wages of R&D workers are more like the wages of office/professional workers than typical industrial workers. While EPS explored combining Lodging with other Commercial land uses, Lodging was ultimately maintained as a separate category due to distinct employment densities observed in proposed hotel projects in Dublin (detailed in Appendix Table C-1). While most land use categories are discretely associated with a particular type of building, others may be interchangeable as tenants may shift between building types (e.g., businesses located in industrial space moving to Office/R&D space). The commercial land uses analyzed in this study are presented in Table 3, along with a description of the types of businesses that often locate in each category. In general, each land use category is intended to be associated with a particular type of building or land use, to which the fees can be applied. This analysis bases its employment projections on NAICS codes associated with the most typical tenants for each land use category. Economic & Planning Systems, Inc. 9 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table 3 Land Use Category Descriptions Land Use Category Commercial Lodging Office/R&D Industrial Description and Examples Businesses selling or providing merchandise, entertainment, and personal services to the general public. Examples include grocery stores, drug stores, clothing stores, general merchandise stores, beauty salons, and gas stations. Food and drinking places are also included in this category. Lodging or short-term accommodations for travelers, vacationers, and others in facilities known as hotels, motor hotels, resort hotels, and motels. Does not include short-term Employers engaged in business activity with limited direct access from the general public; businesses focused on professional, financial, scientific, and technical services. Examples include finance, insurance, real estate, law, engineering, medical offices, and science and technology. Employers engaged in business activity with limited direct access from the general public; businesses focused on assembling, distributing, or repairing products; businesses focused on the testing and invention of new materials, products, or processes; and businesses engaged in the transformation of raw materials into consumable products. Examples include auto repair, self -storage facilities, and food/beverage products manufacturing. Additionally includes warehousing, and the storage and distribution of goods. Sources: City of Dublin; Economic & Planning Systems, Inc. NAICS Sectors 44 and 45 - Retail Trade 532 - Rental and Leasing Services 722 - Food Services and Drinking Places 812 - Personal and Laundry Services 721000 - Accommodation. 51 - Information 52 - Finance and Insurance 53 - Real Estate and Rental and Leasing (excluding 532000 -Rental and Leasing Services) 54 - Professional, Scientific, and Technical Services 5417 - Scientific R&D Services 55 - Management of Companies and Enterprises 561 - Admin. and Support Services 6211 - Offices of Physicians 6212 - Offices of Dentists 6213 - Offices of Other Health Practitioners 6214 - Outpatient Care Centers 6215 - Medical and Diagonostic Laboratories 22 - Utilities 23 - Construction 31 - Manufacturing 42 - Wholesale Trade 484 - Truck Transportation 493 - Warehousing & Storage 811 - Repair and Maintenance Economic & Planning Systems, Inc. 10 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Estimates of New Worker Households The following section details the methodology for estimating the distribution of household income levels for new worker households in the City, and the number of these households that will be generated by new development in each commercial land use category. Occupational Category and Wage Distribution The first step in determining the number of new worker households requiring affordable residential units is to associate each land use type with occupational categories and the wage distribution within those categories. This estimate included the following analytical steps: • EPS used JobsEQ to calculate the proportion of occupations likely to be represented under each land use category in the San Francisco -Oakland -Berkeley Core -Based Statistical Area (CBSA), which includes Dublin.5 For example, EPS evaluated the occupation categories within the lodging industry to determine the proportional distribution of occupations for the land use category "Lodging." Using JobsEQ, the North American Industry Classification System (NAICS) sector 721000 ("Accommodation") for San Francisco -Oakland -Berkeley MSA shows that 9.36 percent of the jobs in the Lodging industry nationwide are filled by managers, while 32.80 percent are in the category of buildings and grounds cleaning and maintenance (see Table B-3). The occupational distribution for all designated employment categories is provided in Appendix B. In addition to the distribution by occupation, JobsEQ provided the average wage for each occupation in each land use category. • The wages for each occupation were multiplied by 1.70, the average number of workers per working household in the City.6 While certainly there will be some variation in wages per employee within a household, in the absence of more specific data, this analysis assumes comparable levels of education and training and thus hourly earnings among all workers in a household.? • Each occupation is placed into its income category and the distribution is calculated based on JobsEQ's reported percent of each industry's jobs that is in the income category. This sorting uses HCD's income classifications for a 3-person household because there are 3.29 people per working household in the City of Dublin. For consistency, the affordability gap calculation uses a 2-bedroom multi -family unit, which assumes three occupants. Table 4 presents an example of how household income is calculated for each occupational category and the corresponding income category for that household. 5 The San Francisco -Oakland -Berkeley Core -Based Statistical Area (CBSA) includes Alameda County, Contra Costa County, Marin County, San Francisco County, and San Mateo County. 6 From the Census Bureau's American Community Survey. 7 This assumption is consistent with "Assortative Mating" theory. See National Bureau of Economic Research. "Marry Your Like: Assortative Matins and Income Ineaualitv." Economic & Planning Systems, Inc. 11 23100,0.1,comrneroal Linkage Fee_Oraft_20230[123 door DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhipeport Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Table 4 Illustration of Employees' Household Income Calculation Item Source Example Employment Category City of Dublin and EPS Lodging Industry JobsEQ Accommodation (NAICS Code 721000) Occupation Category JobsEQ Buildings and Grounds Cleaning and Maintenance Median Wage for the San Francisco -Oakland -Berkeley MSA for Occupation within Industry Workers per Household Median Income per Household Income Category for 3-person Household JobsEQ $46,100 American Community Survey 5-Year Estimates 2021 1.70 Workers per HH Multiplied by Med. Annual Wage $78,370 California Housing and Community Development (HCD) Low Sources: City of Dublin; California Housing and Community Development (HCD); JobsEQ, 2022; U.S. Census American Community Survey 5-Year Estimates 2021; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 12 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibituraft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Distribution of Workers by Land Use Type After identifying income ranges for each occupation category, EPS summed the percentages of the households in each income bracket across all occupations represented in the land use categories. These estimates of the proportion of worker households in each income brackets by land use category are presented in Table 5. As illustrated, only Lodging is expected to generate a very small number of households at the very low-income levels. Commercial, Lodging, and Industrial are expected to generate significant numbers of households at the low-income level, while jobs in the Office/R&D uses are expected to yield more households with incomes at or above moderate -income levels. See Appendix B for details regarding the distribution of occupations and wages within each land use type. Employment Densities Different land use categories operate with varying levels of employment densities. A 100,000 square foot industrial development, for example, typically has fewer employees than an office building of the same size. The number of building square feet anticipated for an employee is termed the "employment density" of each land use category. Based on input from City staff, independent research, and experience with other comparable cities, EPS estimated the employment density for each of the land use categories (detailed in Appendix Table C-1). Using these employment density assumptions, EPS estimated the number of employees that would occupy a prototype 100,000-square foot building for each land use category, as shown in Table 6. Household Formation After calculating the estimated number of new employees generated for each land use category, EPS estimated the number of households represented by these new employees, detailed in Table 6. To calculate new households, EPS first adjusted the number of workers expected to form new households, accounting for those workers who are typically too young (aged 16 to 19) to form their own households.8 The resulting adjusted estimate of new workers was divided by 1.70, which represents the average number of workers per households in Dublin.9 8 Data from the Bureau of Labor Statistics indicate this age cohort represents about 2.0 percent of the overall workforce. This proportion was applied to all industries except Commercial, which represents retail and food service industries, where the younger worker cohort represent 7.7 percent of the overall industry employment. 9 Based on the Census Bureau's American Community Survey 2017-2021 data regarding the number of Dublin residents who are defined as"workers" in households that have workers. Economic & Planning Systems, Inc. 13 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit4aft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Table 5 Income Distribution of Worker Households by Employment Category Employment Income Level Category Very Low Low Moderate Above Moderate 50% AMI 80% AMI 120% AMI >120% AMI Commercial 0.0% 90.5% 3.5% 6.0% Lodging 0.5% 87.1% 3.0% 9.4% Office/R&D 0.0% 26.3% 14.0% 59.7% Industrial 0.0% 43.4% 36.2% 20.4% [1] Designation of household income assumes a 3-person household and 1.7 workers per household, based on American Community Survey data. Sources: JobsEQ, 2022; California Housing and Community Development (HCD); Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 14 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Ex hil?Actit eport Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Table 6 Household Generation Rates by Employment Category %of Workers Total Households by Income Levels Total Employment Sq.Ft. per Total Workers Forming Households per Very Low Low Moderate Above Moderate Households per Category Worker per 100k Sq.Ft. Households2 100k Sq. Ft.3• ° 50% AMI 80% AMI 120% AMI >120% AMI 100k Sq. Ft.3' a Commercial 472 212 92.3% 115 0 104 4 7 115 Lodging 3,000 33 98.0% 19 0 17 1 2 20 Office/R&D 307 326 98.0% 188 0 49 26 112 187 Industrial 862 116 98.0% 67 0 29 24 14 67 [1] See Appendix Table A-1 for sources on employment densities in different land uses. [2] U.S. Bureau of Labor Statistics data indicates that 7.7% of retail/restaurant workers are aged 16-19, but an average of only 2% of workers in other industries fall into that age cohort. EPS has assumed that workers aged 16-19 do not form their own households. [3] Assumes 1.70 workers per household based on Census data; rounded. [4] This maximum nexus -based fee calculation assumes that Dublin fees account for all worker households generated by new employers in City of Dublin, though some workers and their households may choose to reside outside of Dublin. Total number of households may not match sum of households by income level due to rounding. [5] Figures are rounded to nearest whole number. Sources: U.S. Census American Community Survey 5-Year Estimates 2021; JobsEQ, 2022; California Housing and Community Development (HCD); Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 15 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibituraft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Housing Development Costs and Affordability Gap To calculate the maximum justifiable fee for each land use category, EPS estimated the "affordability gap" related to developing residential units affordable to very -low, low, and moderate -income households. The average household size in Dublin is 3.03 people per household according to 2021 Five -Year Estimates from the American Community Survey (ACS), but the average number of people, per working household (households with earnings - not including retired households, etc.) is 3.29. Thus, this analysis estimates the costs of providing affordable housing for a three -person household, to represent the average size of working households (rounded). California State law (California Health and Safety Code Section 50052.5) assumes that a three -person household would occupy a two -bedroom unit, and this assumption is used in this analysis. The assumed prototype reflects multifamily construction at 85 dwelling units to the acre with podium parking, reflecting the highest allowable residential density in the Dublin Downtown Specific Plan Area, and consistent with City staff representations of the general type of multifamily projects being built in Dublin. This building prototype is relatively cost-effective to construct, as it makes efficient use of land and does not involve overly expensive construction materials or techniques. Based on comparable recent projects in the vicinity of Dublin, EPS assumes that the typical gross square footage of a two -bedroom rental unit in Dublin will be approximately 1,000 square feet. Development Cost Assumptions Affordable housing development costs include land costs, direct costs (e.g., labor and materials), and indirect or "soft" costs (e.g., architecture, entitlement, marketing, etc.). Data from recent land transactions in and around Dublin have been combined with EPS's information from various market -rate and affordable housing developers in the surrounding region to estimate appropriate development cost assumptions for use in Dublin. A developer fee is also estimated and represents the compensation to the developer for their efforts, investment, and risk. These assumptions are shown on Table 7 and indicate that the total cost per unit for rental apartments is about $692,000. By necessity, this figure represents a "prototypical" project; the actual costs for a given project will vary by location and project design characteristics. Revenue Assumptions Assumptions must be made regarding the applicable income level (very -low, low, and moderate) and the percentage of household income spent on housing costs to calculate the values of the affordable units. In addition, translating these assumptions into unit prices and values requires estimates of operating expenses and capitalization rates. The following assumptions were used in these calculations: • Income Levels —This analysis estimates the subsidy required to produce units for households falling into the very low, low, and moderate -income categories for a three -person household. While these categories are generally defined as a percentage of area median income (AMI) by HCD. In Alameda County, the dollar amount thresholds for each category are in line with Economic & Planning Systems, Inc. 16 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibituraft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 the percentage thresholds.10 EPS has assumed the maximum income level allowable for the Very Low category but has defined Low as "Lower" at 60 percent AMI and Moderate at 110 percent AMI, consistent with State Density Bonus guidelines. This assumption is conservative in that it does not assume households earn at the very top of the income range. • Percentage of Gross Household Income Available for Housing Costs— HCD standards on overpaying for rent indicate that households should pay no more than 30 percent of their gross income on housing cost.11 For this analysis, EPS has assumed that all households shall spend 30 percent of their gross income on housing costs, including the cost of utilities stated by the Alameda County utility allowance schedule. • Operating Costs for Rental Units —This analysis assumes that apartment operators incur annual operating costs of $7,500 per unit for below market rate housing for units affordable for those falling into the very low and low-income categories. EPS has assumed the units for moderate -income households would have similar operating costs but would be built by for - profit builders and thus also subject to property taxes, increasing their annual operating cost to $10,000 per unit. Affordability Gap Results Table 7 shows the costs and values for developing rental apartments in the City for households at various income levels. Across all categories, the cost of constructing the unit is higher than the supportable value of the unit. This is considered the "affordability gap," and serves as the basis for calculating the subsidies required to provide housing for the lower -wage worker households generated by new nonresidential development. The results of the analysis illustrate that rents affordable to households earning moderate incomes and below cannot support the costs of new construction without subsidy. 10 See HCD State Income Limits 2023 for Alameda County, https://www. hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2023.pdf 11 See HCD standards for Overpayment and Overcrowding, Building Blocks: Housing Needs - Overpayment and Overcrowding (ca.aov) Economic & Planning Systems, Inc. 17 23100,0.1,comrneroal Linkage Fee_Oraft_20230[123 door DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit Dlaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Table 7 Affordability Gap Analysis - Rental Product Type Item Multifamily Rental Apartments with Podium -style, Above -grade, Structured Parking Very Low Lower Low Moderate Income Income [1] Income Income [2] 50% AMI 60% AMI 80% AM 110% AMI Development Program Assumptions Density/Acre [3] 85 85 85 85 Gross Unit Size 1,000 1,000 1,000 1,000 Number of Bedrooms 2 2 2 2 Occupants per 2-bedroom Unit [4] 3 3 3 3 Parking Spaces/Unit [5] 0.75 0.75 0.75 0.75 Project Development Cost Assumptions (per acre) Land Acquisition and Site Improvement [6] $9,350,000 $9,350,000 $9,350,000 $9,350,000 Direct Development Costs [7] $33,787,500 $33,787,500 $33,787,500 $33,787,500 Indirect Development Costs [8] $8,446,875 $8,446,875 $8,446,875 $8,446,875 Developer Fee $7.221.813 $7.221.813 $7.221.813 $7.221.813 Total Development Costs $58,806,188 $58,806,188 $58,806,188 $58,806,188 per Unit Development Costs $691,838 $691,838 $691,838 $691,838 Maximum Supported Home Price Household Income [9] $66,600 $79,860 $93,170 $146,410 Income Available for Housing Costs/Year [10] $16,014 $19,992 $23,985 $39,957 (less) Operating Expenses per Unit/Year [11] ($7,500) ($7,500) ($7,500) ($10,000) Net Operating Income $8,514 $12,492 $16,485 $29,957 Capitalization Rate [12] 5.0% 5.0% 5.0% 5.0% Total Supportable Unit Value [13] $170,280 $249,840 $329,700 $599,140 Affordability Gap $521,558 $441,998 $362,138 $92,698 [1] Assuming the State Density Bonus is used, the rents for Lower -income households will need to be affordable to households with earnings of not greater than 60% AMI. [2] Astand-alone Moderate -income rental project would not qualifyfor the State Density Bonus, but as part of a 100% affordable project that includes Lower -income units, moderate -income rental units are allowed. The rents for Moderate -income households are assumed to be affordable to households with earnings of not greater than 110%. [3] Reflects highest allowable densities in Dublin's Downtown Specific Plan area (85 dwelling units per acre) [4] Consistent with guidance in State law (Health and Safety Code Section 50052.5), a 2-bedroom unit should be assumed to be occupied bya 3- person household. [5] Typical parking requirement in high -density residential zone is 1.5 spaces per unit plus guest parking. This analysis assumes state density bonus parking concession is used to improve development economics. [6] Includes land acquisition, site preparation costs, entitlement consultants, and fees/permits. Land acquisition value reflects a weighted average, based on vacant, residentially -zoned land transactions in Tri-Valley during the past four years, as reported byCoStar. Estimate aligns with figures provided by local developers but can varywidely. [7] Includes on -site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects wood - frame construction. Assumes workers are paid prevailing wage. [8] Includes costs for architecture and engineering; project management; appraisal and market study marketing, commissions, and general administration; financing and charges; insurance; and contingency. [9] Incomes are based on 2023 HCD Income Limits for three -person households in Alameda Countyand revised to reflect State Density Bonus Law affordability requirements. [10] Assumes that no more than 30% of a household's income should be spent on housing -related costs for housing to be considered affordable, subtracting cost of utilities for3-person household based on the Alameda County Housing Authority. [11] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; lower -income units (at or below 80% ofAMl) are assumed to be built as non-profit and are, therefore, exempt from propertytaxes. Property taxes are assumed to comprise a share of the operating expenses for the moderate -income category. [12] The capitalization rate is used to determine the current value ofa property based on estimated future operating income, and is typically measure of estimated operating risk. [13] The total supportable unit value is determined by dividing the net operating income bythe capitalization rate. Sources: Cityof Dublin; Alameda County Housing Authority, California Housing and Community Development (HCD); Costar; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 18 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibituraft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Fee Calculation Table 8 through Table 11 provide the maximum nonresidential housing fee calculations for each of the three land use categories. The fee is calculated by the following steps: 1. Estimate the number of new households by income category generated by a prototype 100,000-square foot building in the land use category. 2. Multiply the number of households generated by the per -unit affordability gap (as calculated in Table 7) to determine the level of subsidy required to provide housing in Dublin for all new worker households. 3. Divide the total affordability gap by 100,000 square feet (the size of the prototype building) to determine a maximum fee per building square foot. The "Maximum Fee per Square Foot" calculated in the following tables represents the maximum justifiable linkage fee that the City can charge for each land use category based on the required nexus findings. The City may, however, decide to adopt fees below the maximum justifiable levels based on economic or policy considerations. For example, EPS has calculated an "Adjusted Maximum" fee reflecting the idea that not every employee of newly developed workplaces will in fact reside in Dublin. According to the most recently available data from the US Census Bureau's Longitudinal Employer -Household Dynamics program, only 9.4 percent of people who work in Dublin also live in Dublin. EPS has applied that proportion to the "Maximum Fee" to calculate an "Adjusted Maximum" for each land use category. To be clear, however, this type of adjustment is not legally required, but does yield a lower fee. Economic & Planning Systems, Inc. 19 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Table 8 Fee Calculation — Commercial Item Table References: Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Worker Households Affordability Gap Total Gap per 100k sq. ft. per household Table 6 Table 7 Aggregate Financing Gap per 100K Sq. Ft Affordability Level Very Low Income 0 $521,558 $0 Low Income 104 $362,138 $37,662,300 Moderate 4 $92,698 $370.790 Total 108 $38,033,090 Fee Calculation formula Total Financing Gap a $38,033,090 Total Building Sq. Ft. b 100,000 Maximum Fee per Sq. Ft. c=a/b $380.33 Adjustment for % of Workers Living in Dublin [1] 9.4% Adjusted Fee per Sq. Ft. $344.44 [1] The US Census Bureau indicates that 9.4% of people working in Dublin also lived in Dublin in 2020 (most recent data available). Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 20 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Table 9 Fee Calculation — Lodging Item Table References: Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Worker Households Affordability Gap Total Gap per 100k sq. ft. per household Aggregate Financing Gap per 100K Sq. Ft Table 6 Table 7 Affordability Level Very Low Income 0 $521,558 $0 Low Income 17 $362,138 $6,156,338 Moderate 1 $92,698 $92,698 Total 18 $6,249,035 Fee Calculation formula Total Financing Gap a $6,249,035 Total Building Sq. Ft.1 b 100,000 Maximum Fee per Sq. Ft. c =a/b $62.49 Adjustment for % of Workers Living in Dublin [1] 9.4% Adjusted Fee per Sq. Ft. $56.59 [1] The US Census Bureau indicates that 9.4% of people working in Dublin also lived in Dublin in 2020 (most recent data available). Sources: US Census Bureau "On The Map'; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 21 23100,0,lin_comrnersal Linkage Fee_Oraft_20230a23 door DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Table 10 Fee Calculation — Office/R&D Ite m Table References: Exhibitb4aft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Worker Households Affordability Gap Total Gap per 100k sq. ft. per household Table 6 Table 7 Aggregate Financing Gap per 100K Sq. Ft Affordability Level Very Low Income 0 $521,558 $0 Low Income 49 $362,138 $17,744,738 Moderate 26 $92,698 $2.410.135 Total 75 $20,154,873 Fee Calculation formula Total Financing Gap a $20,154,873 Total Building Sq. Ft. b 100,000 Maximum Fee per Sq. Ft. c = a /b $201.55 Adjustment for % of Workers Living in Dublin [1] 9.4% Adjusted Fee per Sq. Ft. $182.53 [1] The US Census Bureau indicates that 9.4% of people working in Dublin also lived in Dublin in 2020 (most recent data available). Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 22 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Table 11 Fee Calculation - Industrial Item Table References: Exhibitaft Report Dublin Commercial Linkage Fee Nexus Study 10/27/2023 Worker Households Affordability Gap Total Gap per 100k sq. ft. per household Aggregate Financing Gap per 100K Sq. Ft Table 6 Table 7 Affordability Level Very Low Income 0 $521,558 $0 Low Income 29 $362,138 $10,501,988 Moderate 24 $92,698 $2,224,740 Total 53 $12,726,728 Fee Calculation formula Total Financing Gap a $12,726,728 Total Building Sq. Ft.1 b 100,000 Maximum Fee perSq. Ft. c=a/b $127.27 Adjustment for % of Workers Living in Dublin [1] 9.4% Adjusted Fee perSq. Ft. $115.26 [1] The US Census Bureau indicates that 9.4% of people working in Dublin also lived in Dublin in 2020 (most recent data available). Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 23 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A 0 APPENDICES: Appendix A: Survey of Commercial Linkage Fees in Other Jurisdictions Appendix B: Occupation Distribution by Employment Category Appendix C: Assumptions and Sources DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A APPENDIX A: Survey of Commercial Linkage Fees in Other Jurisdictions DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table A-1 Survey of Commercial Linkage Fees as of August 2023 City of Dublin Commercial Linkage Fee Study; EPS #231009 Commercial Linkage Fee per Sq. Ft. Commercial (Retail) Lodging Office/R&D Industrial Dublin $1.35 $0.57 $1.09-1.68 $0.65 San Ramon $4.32 $4.32 $4.32 $3.24 Danville no commercial linkage fee program Pleasanton $5.21 $3.59 $8.68 $14.42 Livermore $2.38 $3.34 $1.53 $0.21-1.52 Fremont $11.33 $11.33 $11.33 $5.67 Hayward no commercial linkage fee program Walnut Creek $5.00 $5.00 $5.00 $5.00 Concord no commercial linkage fee program DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A 0 APPENDIX B: Occupation Distribution by Employment Category DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table B-1 Occupation and Wage Distribution - Commercial (without Lodging) City of Dublin Commercial Linkage Fee Study; EPS #231009 Occupation Category [1] Commercial San Francisco -Oakland - Berkeley, CA MSA %of Industry Jobs in Average Wage Occupation Category HH Income at 1.70 workers/HH Income Category Management Occupations $101,153.66 4.05% $171,961.22 Above Moderate Business and Financial Operations Occupations $79,403.97 1.26% $134,986.75 Moderate Computer and Mathematical Occupations $107,491.80 0.33% $182,736.05 Above Moderate Architecture and Engineering Occupations $107,765.50 0.02% $183,201.36 Above Moderate Life, Physical, and Social Science Occupations $84,624.70 0.01% $143,861.99 Moderate Community and Social Service Occupations $51,467.04 0.04% $87,493.97 Low Legal Occupations $108,695.65 0.02% $184,782.61 Above Moderate Educational Instruction and Library Occupations $56,927.36 0.03% $96,776.52 Low Arts, Design, Entertainment, Sports, and Media Occupations $55,439.53 0.65% $94,247.19 Low Healthcare Practitioners and Technical Occupations $96,029.88 1.62% $163,250.79 Above Moderate Healthcare Support Occupations $56,312.85 0.53% $95,731.85 Low Protective Service Occupations $48,022.99 0.29% $81,639.08 Low Food Preparation and Serving Related Occupations $39,487.58 38.88% $67,128.89 Low Building and Grounds Cleaning and Maintenance Occupations $44,801.74 0.76% $76,162.96 Low Personal Care and Service Occupations $41,373.20 5.12% $70,334.45 Low Sales and Related Occupations $43,598.88 27.03% $74,118.09 Low Office and Administrative Support Occupations $49,440.79 4.89% $84,049.33 Low Farming, Fishing, and Forestry Occupations $42,092.71 0.14% $71,557.61 Low Construction and Extraction Occupations $66,877.97 0.19% $113,692.54 Moderate Installation, Maintenance, and Repair Occupations $59,658.15 2.05% $101,418.85 Moderate Production Occupations $44,744.93 2.20% $76,066.38 Low Transportation and Material Moving Occupations $42,359.83 9.88% $72,011.71 Low Total or Weighted Average $46,493.40 100.00% $79,038.78 [1] Includes NAICS Sectors: 44 and 45 - Retail Trade; 532000 - Rental and Leasing Services; 812000 - Personal and Laundry Services; and 722000 - Food Services and Drinking Places. Sources: JobsEQ, 2021; U.S. Census American Community Survey 5-Year Estimates 2021; Economic & Planning Systems, Inc. DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table B-2 Occupation and Wage Distribution - Lodging City of Dublin Commercial Linkage Fee Study; EPS #231009 Occupation Category [1] Lodging San Francisco -Oakland - Berkeley, CA MSA %of Industry Jobs in Average Wage Occupation Category HH Income at 1.70 workers/HH Income Category Management Occupations $108,000.00 9.36% $183,600.00 Above Moderate Business and Financial Operations Occupations $64,800.00 2.42% $110,160.00 Moderate Computer and Mathematical Occupations $78,700.00 0.18% $133,790.00 Moderate Architecture and Engineering Occupations $119,800.00 0.07% $203,660.00 Above Moderate Life, Physical, and Social Science Occupations $70,700.00 0.01% $120,190.00 Moderate Community and Social Service Occupations $65,300.00 0.02% $111,010.00 Moderate Legal Occupations $164,600.00 0.01% 279,820.00 Above Moderate Educational Instruction and Library Occupations $57,700.00 0.08% $98,090.00 Low Arts, Design, Entertainment, Sports, and Media Occupations $71,700.00 0.21% $121,890.00 Moderate Healthcare Practitioners and Technical Occupations $95,100.00 0.01% $161,670.00 Above Moderate Healthcare Support Occupations $35,500.00 0.46% $60,350.00 Very Low Protective Service Occupations $42,800.00 1.87% $72,760.00 Low Food Preparation and Serving Related Occupations $42,000.00 17.00% $71,400.00 Low Building and Grounds Cleaning and Maintenance Occupations $46,100.00 32.80% $78,370.00 Low Personal Care and Service Occupations $41,000.00 3.41% $69,700.00 Low Sales and Related Occupations $49,800.00 2.39% $84,660.00 Low Office and Administrative Support Occupations $42,900.00 20.45% $72,930.00 Low Farming, Fishing, and Forestry Occupations $48,000.00 0.08% $81,600.00 Low Construction and Extraction Occupations $68,500.00 0.21% $116,450.00 Moderate Installation, Maintenance, and Repair Occupations $56,400.00 6.33% $95,880.00 Low Production Occupations $43,200.00 1.94% $73,440.00 Low Transportation and Material Moving Occupations $39,400.00 0.70% $66,980.00 Low Total or Weighted Average $51,586.65 100.00% $87,697.31 [1] Includes NAICS Sector: 721 -Accommodation. Sources: JobsEQ, 2022; U.S. Census American Community Survey 5-Year Estimates 2021; Economic & Planning Systems, Inc. DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table B-3 Occupation and Wage Distribution - Office/R&D City of Dublin Commercial Linkage Fee Study; EPS #231009 Occupation Category [1] Office/R&D San Francisco -Oakland - Berkeley, CA MSA % of Industry Jobs in Average Wage Occupation Category HH Income at 1.70 workers/HH Income Category Management Occupations $186,928.04 12.43% $317,777.67 Above Moderate Business and Financial Operations Occupations $112,199.26 14.53% $190,738.75 Above Moderate Computer and Mathematical Occupations $137,383.52 15.98% $233,551.99 Above Moderate Architecture and Engineering Occupations $124,474.22 4.33% $211,606.18 Above Moderate Life, Physical, and Social Science Occupations $113,363.11 4.45% $192,717.29 Above Moderate Community and Social Service Occupations $71,506.82 0.79% $121,561.59 Moderate Legal Occupations $152,823.83 2.25% $259,800.50 Above Moderate Educational Instruction and Library Occupations $73,603.93 0.25% $125,126.68 Moderate Arts, Design, Entertainment, Sports, and Media Occupations $93,142.15 3.84% $158,341.65 Moderate Healthcare Practitioners and Technical Occupations $145,114.86 5.75% $246,695.26 Above Moderate Healthcare Support Occupations $54,417.72 2.49% $92,510.13 Low Protective Service Occupations $48,276.53 2.26% $82,070.10 Low Food Preparation and Serving Related Occupations $40,479.47 0.22% $68,815.10 Low Building and Grounds Cleaning and Maintenance Occupations $46,638.02 3.79% $79,284.63 Low Personal Care and Service Occupations $45,934.07 0.34% $78,087.93 Low Sales and Related Occupations $92,511.49 6.74% $157,269.53 Moderate Office and Administrative Support Occupations $57,904.91 13.84% $98,438.35 Low Farming, Fishing, and Forestry Occupations $51,397.31 0.12% $87,375.43 Low Construction and Extraction Occupations $80,538.98 0.52% $136,916.27 Moderate Installation, Maintenance, and Repair Occupations $69,607.82 1.84% $118,333.29 Moderate Production Occupations $48,922.47 1.30% $83,168.21 Low Transportation and Material Moving Occupations $44,803.83 1.95% $76,166.51 Low Total or Weighted Average $110,011.04 100.00% $187,018.77 [1] Includes NAICS Sectors: 51 - Information; 52 - Finance and Insurance; 53 - Real Estate and Rental and Leasing (excluding 532000 -Rental and Leasing Services); 54 - Professional, Scientific, and Technical Services; 55 - Management of Companies and Enterprises; 561 - Admin. and Support Services; 6211 - Offices of Physicians; 6212 - Offices of Dentists; 6213 - Offices of Other Health Practitioners; 6214 - Outpatient Care Centers; and 621500 - Medical and Diagonostic Laboratories. Sources: JobsEQ, 2021; U.S. Census American Community Survey 5-Year Estimates 2021; Economic & Planning Systems, Inc. DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table B-4 Occupation and Wage Distribution - Industrial City of Dublin Commercial Linkage Fee Study; EPS #231009 Occupation Category [1] Industrial San Francisco -Oakland - Berkeley, CA MSA % of Industry Jobs in Average Wage Occupation Category HH Income at 1.70 workers/HH Income Category Management Occupations $158,147.54 8.23% $268,850.81 Above Moderate Business and Financial Operations Occupations $103,392.89 6.03% $175,767.91 Above Moderate Computer and Mathematical Occupations $139,076.43 2.41% $236,429.93 Above Moderate Architecture and Engineering Occupations $112,828.89 3.54% $191,809.12 Above Moderate Life, Physical, and Social Science Occupations $92,162.61 1.05% $156,676.44 Moderate Community and Social Service Occupations $78,359.68 0.00% $133,211.45 Moderate Legal Occupations $199,705.44 0.08% $339,499.25 Above Moderate Educational Instruction and Library Occupations $69,094.23 0.01% $117,460.18 Moderate Arts, Design, Entertainment, Sports, and Media Occupations $72,251.41 0.78% $122,827.40 Moderate Healthcare Practitioners and Technical Occupations $112,353.32 0.15% $191,000.64 Above Moderate Healthcare Support Occupations $59,860.28 0.02% $101,762.47 Moderate Protective Service Occupations $59,228.02 0.11% $100,687.63 Low Food Preparation and Sensing Related Occupations $41,556.54 0.42% $70,646.12 Low Building and Grounds Cleaning and Maintenance Occupations $49,462.99 0.57% $84,087.08 Low Personal Care and Service Occupations $47,499.67 0.01% $80,749.44 Low Sales and Related Occupations $84,554.44 6.22% $143,742.54 Moderate Office and Administrative Support Occupations $57,812.72 9.52% $98,281.63 Low Farming, Fishing, and Forestry Occupations $46,613.34 0.27% $79,242.67 Low Construction and Extraction Occupations $78,336.07 20.78% $133,171.31 Moderate Installation, Maintenance, and Repair Occupations $71,292.15 7.31% $121,196.66 Moderate Production Occupations $54,838.13 19.41% $93,224.82 Low Transportation and Material Moving Occupations $51,202.17 13.10% $87,043.69 Low Total or Weighted Average $78,713.23 100.00% $133,812.48 [1] Includes NNCS Sectors: 22 - Utilities; 23 - Construction; 42 - Wholesale Trade; 484 - Truck Transportation; 493 - Warehousing & Storage; and 811 - Repair and Maintenance DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A APPENDIX C: Assumptions and Sources 0 DocuSign Envelope ID: 18F374E7-BB2F-42F5-82C6-28ABC1B2890E Exhibit A Table C-1 Assumptions and Sources City of Dublin Commercial Linkage Fee Study; EPS #231009 Item Demographic Assumptions Total Population Total Employed Households Households with Eamings Workers per Household with Workers Persons per Working Household Dublin Workers Living in Dublin Employment Density Assumptions Commercial Office/R&D Lodging Industrial Total Unit 71,680 persons 37,116 persons 23,688 households 21,819 households 1.70 persons 3.29 persons 9.4% of workers 472 sq. ft. per employee 307 sq. ft. per employee 3,000 sq. it. per employee 862 sq. ft. per employee Source American Community Survey 5-Year Estimates 2021 American Community Survey 5-Year Estimates 2021 American Community Survey 5-Year Estimates 2021 American Community Survey 5-Year Estimates 2021 American Community Survey 5-Year Estimates 2021 American Community Survey 5-Year Estimates 2021 US Census Bureau "On The Map" 2020 data Draft Public Facilities Fee study, City of Dublin, 2023 Draft Public Facilities Fee study, City of Dublin, 2023 Draft Public Facilities Fee study, City of Dublin, 2023 Draft Public Facilities Fee study, City of Dublin, 2023 Sources: U.S. Census American CommunitySurvey 5-Year Estimates 2021;US Census Bureau "On The Map"; Cityof Dublin