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Judson Brown, City of Santa Ana <br />1126-46 E. Washington Ave: Preliminary Financial Gap Analysis <br />EXHIBIT 2 <br />May 22, 2019 <br />Page 9 <br />The Developer will request 43 PBVs from the County for the Project. The PBV payments <br />are equal to the difference between the tenants' rent payments and the fair market <br />rents (FMRs) approved by the County. The 2019 FMRs for the Project are estimated as <br />follows: <br />Studio Units $1,362 <br />One -Bedroom Units $1,470 <br />Two -Bedroom Units $1,807 <br />Estimated Effective Gross Income <br />KMA estimates the Project's effective gross income at approximately $1.05 million <br />based on the following assumptions: <br />1. The base rental income is estimated at $705,900. <br />2. The PBV income is estimated at $432,100. <br />3. Laundry and miscellaneous income is estimated to average $6 per unit per <br />month for a total of $6,200 per year. <br />4. A vacancy and collection allowance equal to 7.5% of gross affordable income is <br />provided. This equates to $53,400. <br />A vacancy and collection allowance for Section 8 Subsidy equal to 10% of gross <br />subsidy income is provided. This equates to $43,200 <br />Estimated Operating Expenses <br />The operating expenses are estimated at $705,900 based on the following assumptions: <br />1. The general operating expenses are estimated at $5,880 per unit per year. <br />2. KMA assumes the Developer will apply for the property tax abatement that is <br />accorded to non-profit housing organizations that own and operate apartment <br />units that are restricted to households earning less than 80% of the Median. The <br />1905019:SA:TRB <br />19090.017.019 <br />FO <br />