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Judson Brown, City of Santa Ana June 28, 2021 <br />Housing Opportunity Ordinance: Updated In-Lieu Fee Analysis Page 14 <br /> <br /> 2106011.SA:KHH <br /> 19090.017.021 <br /> <br />Estimating the achievable Affordable Sales Prices for moderate income households is <br />complicated by the fact that KMA believes that the Affordable Sales Prices are too close <br />to the projected market rate sales prices to be marketable when irrevocable resale <br />controls are imposed: <br />1. It is reasonable to assume that a home buyer will not purchase a home that is <br />subject to long-term covenants unless there they receive a substantial discount <br />from the unrestricted market rate sales price. <br />2. In KMA’s experience the required discount falls within the range of 30%. <br />3. When a 30% discount is applied to the projected market rate sales prices, the <br />achievable prices for moderate income units are estimated as follows: <br />a. The achievable price for three-bedroom units is estimated at $483,000. <br />b. The achievable price for four-bedroom units is estimated at $542,500. <br />The resulting Affordability Gaps are estimated as follows: <br />Estimated Affordability Gaps – Ownership Housing Development <br /> <br />Sales Prices <br /> Three-Bedroom <br />Units <br /> Four-Bedroom <br />Units <br /> Market Rate Sales Price $690,000 $775,000 <br />Affordable Sales Price $483,000 $542,500 <br /> Affordability Gap Per Unit $207,000 $232,500 <br /> <br />Supportable In-Lieu Fees <br />As shown in Attachment 2 – Appendix B – Exhibit II, KMA estimates the supportable in- <br />lieu fees at the following amounts: <br />