HomeMy WebLinkAboutCC_2022_05_24_AgendaPacket CITY OF ATASCADERO CITY COUNCIL AGENDA
HYBRID MEETING INFORMATION:
In accordance with City Council Resolution No. 2022-010 and the requirements of
AB 361, the City Council Meeting will be available via teleconference for those who
wish to participate remotely. The City Council meeting will also be held in the City
Council Chambers and in-person attendance will be available at that location.
HOW TO OBSERVE THE MEETING REMOTELY:
To participate remotely, residents can livestream the meeting on Zoom, SLO-SPAN.org,
on Spectrum cable Channel 20 in Atascadero, and listen live on KPRL Radio 1230AM
and 99.3FM. The video recording of the meeting will repeat daily on Channel 20 at 1:00
am, 9:00 am, and 6:00 pm and will be available through the City’s website and on the
City’s YouTube Channel. To participate remotely using the Zoom platform please visit
https://us02web.zoom.us/webinar/register/WN_ZwJ7a031S3KXauEym9ehaA.
HOW TO SUBMIT PUBLIC COMMENT:
Individuals who wish to provide public comment in-person may attend the meeting in
the City Council Chambers. Individuals who wish to participate remotely may call
(669) 900-6833 (Meeting ID: 889 2347 9018) to listen and provide public comment via
phone or via the Zoom platform using the link above.
If you wish to comment but not via a live platform, please email public comments to
cityclerk@atascadero.org. Such email comments must identify the Agenda Item Number
in the subject line of the email. The comments will be forwarded to the City Council and
made a part of the administrative record. To ensure distribution to the City Council prior
to consideration of the agenda, the public is encouraged to submit comments no later
than 12:00 p.m. the day of the meeting. Those comments, as well as any comments
received after that time, but before the close of the item, will be distributed to the City Council,
posted on the City’s website, and will be made part of the official public record of the meeting.
Please note, email comments will not be read into the record.
AMERICAN DISABILITY ACT ACCOMMODATIONS:
Any member of the public who needs accommodations should contact the City
Clerk’s Office at cityclerk@atascadero.org or by calling 805-470-3400 at least 48
hours prior to the meeting or time when services are needed. The City will use their
best efforts to provide reasonable accommodations to afford as much accessibility
as possible while also maintaining public safety in accordance with the City procedure
for resolving reasonable accommodation requests.
City Council agendas and minutes may be viewed on the City's website:
www.atascadero.org.
Copies of the staff reports or other documentation relating to each item of business referred to on
the Agenda are on file in the office of the City Clerk and are available for public inspection on our
website, www.atascadero.org. Contracts, Resolutions and Ordinances will be allocated a number
once they are approved by the City Council. The Minutes of this meeting will reflect these numbers.
All documents submitted by the public during Council meetings that are made a part of the record or
referred to in their statement will be noted in the Minutes and available for review by contacting the
City Clerk's office. All documents will be available for public inspection by appointment during City
Hall business hours.
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CITY OF ATASCADERO
CITY COUNCIL
AGENDA
Tuesday, May 24, 2022
City Hall Council Chambers, 4th floor
6500 Palma Avenue, Atascadero, California
REGULAR SESSION – CALL TO ORDER: 6:00 P.M.
PLEDGE OF ALLEGIANCE: Mayor Moreno
ROLL CALL: Mayor Moreno
Mayor Pro Tem Newsom
Council Member Bourbeau
Council Member Dariz
Council Member Funk
APPROVAL OF AGENDA: Roll Call
Recommendation: Council:
1. Approve this agenda; and
2. Waive the reading in full of all ordinances appearing on this agenda, and the titles
of the ordinances will be read aloud by the City Clerk at the first reading, after the
motion and before the City Council votes.
CLOSED SESSION – REPORT (IF ANY)
1. May 10, 2022
City Council Regular Session: 6:00 P.M.
City Council Closed Session: Immediately
following conclusion of
the City Council Regular
Session
City Council Regular Session: 6:00 P.M.
City Council Closed Session: Immediately following
the conclusion of the City
Council Regular Session
A. CONSENT CALENDAR: (All items on the consent calendar are considered to be routine
and non-controversial by City staff and will be approved by one motion if no member of
the Council or public wishes to comment or ask questions. If comment or discussion is
desired by anyone, the item will be removed from the Consent Calendar and will be
considered in the listed sequence with an opportunity for any member of the public to
address the Council concerning the item before action is taken.)
1. City Council Draft Action Minutes – May 10, 2022
▪ Recommendation: Council approve the May 10, 2022 Draft City Council Regular
Meeting Minutes. [City Clerk]
2. April 2022 Accounts Payable and Payroll
▪ Fiscal Impact: $2,797,945.95
▪ Recommendation: Council approve certified City accounts payable, payroll and payroll
vendor checks for April 2022. [Administrative Services]
3. Downtown Parking Business Improvement Area (DPBIA) Annual
Assessment
▪ Fiscal Impact: None.
▪ Recommendation: Council adopt Draft Resolution, declaring intent to levy the annual
Downtown Parking and Business Improvement Area assessment, and set a public
hearing for June 14, 2022. [City Manager]
4. Atascadero Tourism Business Improvement District (ATBID) Annual
Assessment
▪ Fiscal Impact: None.
▪ Recommendation: Council:
1. Approve the ATBID Annual Report.
2. Adopt Draft Resolution declaring intent to levy an annual Business Improvement
District assessment on lodging businesses within the Atascadero Tourism
Business Improvement District, and set a public hearing for June 14, 2022. [City
Manager]
5. Atascadero Tourism Business Improvement District (ATBID) Board
Appointment of Three Board Members for New Term
▪ Fiscal Impact: None.
▪ Recommendation: Council appoint Patricia Harden, Deana Alexander and
Amar Sohi to the ATBID Advisory Board for the term expiring June 30, 2024.
[City Manager]
6. Adopting a List of Projects for Fiscal Year 2022-2023 Funded by SB 1: The
Road Repair and Accountability Act of 2017
▪ Fiscal Impact: Approval of the Draft Resolution adopting the list of projects for
SB 1 Funding will allow the City to receive an estimated $675,246 in 2022-
2023 SB1 funding.
▪ Recommendation: Council adopt Draft Resolution adopting a list of projects to
be funded with Road Maintenance and Rehabilitation Account revenues from
SB 1 (The Road Repair and Accountability Act of 2017) for Fiscal Year (FY)
2022-2023. [Public Works]
7. Traffic Way and Ardilla Avenue Pavement Rehabilitation
▪ Fiscal Impact: $385,791
▪ Recommendation: Council award a construction contract for $385,791 to Souza
Construction for the Traffic Way and Ardilla Avenue Pavement Rehabilitation
Project – Project No. C2020R01 (which includes the Traffic Way/US 101
Alleyway Rehabilitation Project).
8. Diablo Canyon Power Plant – REACH Letter of Support
▪ Fiscal Impact: None.
▪ Recommendation: Council authorize the Mayor to sign a letter on behalf of the City,
drafted by REACH and the Diablo Canyon Power Plant (DCPP) MOU stakeholder
group, in support of responsible and economically beneficial reuse opportunities at
DCPP if and when DCPP is closed. [City Manager]
9. Virtual Meetings – AB 361 Requirements
▪ Fiscal Impact: None.
▪ Recommendation: Council adopt the Draft Resolution making findings consistent with
the requirements of AB 361 to continue to allow for the conduct of virtual meetings.
[City Manager]
UPDATES FROM THE CITY MANAGER: (The City Manager will give an oral report on any
current issues of concern to the City Council.)
COMMUNITY FORUM: (This portion of the meeting is reserved for persons wanting to
address the Council on any matter not on this agenda and over which the Council has
jurisdiction. Speakers are limited to three minutes. Please state your name for the record
before making your presentation. Comments made during Community Forum will not be a
subject of discussion. A maximum of 30 minutes will be allowed for Community Forum,
unless changed by the Council. Comments will be allowed for the entire 30-minute period
so if the final speaker has finished before the 30 minute period has ended and a member of
the public wishes to make a comment after the Council has commenced another item, the
member should alert the Clerk within the 30 minute period of their desire to make a comment
and the Council will take up that comment upon completion of the item which was
commenced. Any members of the public who have questions or need information may
contact the City Clerk’s Office, between the hours of 8:30 a.m. and 5:00 p.m. at
(805) 470-3400, or cityclerk@atascadero.org.)
B. MANAGEMENT REPORTS:
1. Affordable/Inclusionary Housing Impact Fee Nexus Studies
▪ Fiscal Impact: None.
▪ Recommendations: Council review and provide direction on potential
strategies for an affordable housing program in an effort to implement City
Housing Element Policy. [Community Development]
C. COUNCIL ANNOUNCEMENTS AND COMMITTEE REPORTS: (On their own
initiative, Council Members may make a brief announcement or a brief report on their own
activities. The following represent standing committees. Informative status reports will
be given, as felt necessary):
Mayor Moreno
1. City Selection Committee
2. County Mayors Round Table
3. Regional Economic Action Coalition (REACH)
4. SLO Council of Governments (SLOCOG)
5. SLO Regional Transit Authority (RTA)
Mayor Pro Tem Newsom
1. City / Schools Committee
2. Design Review Committee
3. League of California Cities – Council Liaison
4. Visit SLO CAL Advisory Committee
Council Member Bourbeau
1. City of Atascadero Finance Committee
2. City / Schools Committee
3. Integrated Waste Management Authority (IWMA)
4. SLO County Water Resources Advisory Committee (WRAC)
Council Member Dariz
1. Air Pollution Control District
2. California Joint Powers Insurance Authority (CJPIA) Board
3. City of Atascadero Finance Committee
4. Community Action Partnership of San Luis Obispo (CAPSLO)
Council Member Funk
1. Atascadero Basin Ground Water Sustainability Agency (GSA)
2. Design Review Committee
3. Homeless Services Oversight Council
D. INDIVIDUAL DETERMINATION AND / OR ACTION: (Council Members may ask a
question for clarification, make a referral to staff or take action to have staff place a matter of
business on a future agenda. The Council may take action on items listed on the Agenda.)
1. City Council
2. City Clerk
3. City Treasurer
4. City Attorney
5. City Manager
E. RECESS TO CLOSED SESSION FOLLOWING CONCLUSION OF CITY COUNCIL
REGULAR SESSION
COUNCIL CLOSED SESSION:
1. CLOSED SESSION -- PUBLIC COMMENT
2. COUNCIL LEAVES TO BEGIN CLOSED SESSION
3. CLOSED SESSION -- CALL TO ORDER
a. Conference with Real Property Negotiators
(Govt. Code 54956.8)
Real Property: 5970 El Camino Real (APN 030181031)
Agency Negotiator: Rachelle Rickard, City Manager
Negotiating Parties: Fred C. Pflum Revocable Trust
Subject of Negotiations: Purchase price and/or terms of payment
4. CLOSED SESSION – ADJOURNMENT
Announcement(s) of any reportable action(s) taken in Closed Session that occur(s) after the adjournment of Regular Session
will be made at the beginning of the next Regular City Council meeting as Closed Session is not recorded or videotaped.
Please note: Should anyone challenge any proposed development entitlement listed on this Agenda in court, that person
may be limited to raising those issues addressed at the public hearing described in this notice, or in written correspondence
delivered to the City Council at or prior to this public hearing. Correspondence submitted at this public hearing will be
distributed to the Council and available for review in the City Clerk's office.
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ITEM NUMBER: A-1
DATE: 05/24/22
CITY OF ATASCADERO
CITY COUNCIL
DRAFT MINUTES
Tuesday, May 10, 2022
City Hall Council Chambers, 4th floor
6500 Palma Avenue, Atascadero, California
REGULAR SESSION – CALL TO ORDER: 6:00 P.M.
Mayor Moreno called the meeting to order at 6:01 p.m. and Council Member Funk led the
Pledge of Allegiance.
ROLL CALL:
Present: Council Members Bourbeau, Dariz and Funk, Mayor Pro Tem Newsom,
and Mayor Moreno
Absent: None
Others Present: None
Staff Present: City Manager Rachelle Rickard, Administrative Services Director Jeri
Rangel, Community Development Director Phil Dunsmore, Fire Chief
Casey Bryson, Police Chief Bob Masterson, Public Works Director Nick
DeBar, City Attorney Brian Pierik, Deputy City Manager/City Clerk Lara
Christensen, Public Works Analyst Ryan Betz, IT Manger Luke Knight,
and IT Support Specialist Charles Alexander
APPROVAL OF AGENDA:
MOTION: By Council Member Bourbeau and seconded by Mayor Pro Tem Newsom
to:
1. Approve this agenda; and,
City Council Regular Session: 6:00 P.M.
City Council Closed Session: Immediately
following conclusion of
the City Council Regular
Session
City Council Regular Session: 6:00 P.M.
City Council Closed Session: Immediately following
the conclusion of the City
Council Regular Session
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2. Waive the reading in full of all ordinances appearing on this
agenda, and the titles of the ordinances will be read aloud by
the City Clerk at the first reading, after the motion and before
the City Council votes.
Motion passed 5:0 by a roll-call vote.
PRESENTATIONS:
1. Proclamation declaring May as National Foster Care Awareness Month
The City Council presented a Proclamation to Mikayla Anderson and Rosario Depew, SLO
County Social Services, proclaiming May as National Foster Care Awareness Month.
A. CONSENT CALENDAR:
1. City Council Draft Action Minutes – April 26, 2022
▪ Recommendation: Council approve the April 26, 2022 Draft City Council Regular
Meeting Minutes. [City Clerk]
2. Department of Defense Firefighter Property (FFP) Program
▪ Fiscal Impact: There is no cost to participate in the program. There will be costs to ship,
deliver or pick up property received. Any costs associated with acquiring property will be
budgeted.
▪ Recommendation: Council adopt Draft Resolution authorizing the City Manager to enter
into a cooperative agreement between the State of California Department of Forestry
and Fire Protection (CAL FIRE) in order to allow the City to take custody and use excess
Department of Defense (DOD) property for use in providing fire and emergency medical
services, including disaster relief activities. [Fire & Emergency Services]
3. Apple Valley Assessment Districts
▪ Fiscal Impact: Annual assessments for 2022/2023 will total $38,500 for
road/drainage system maintenance and $63,000 for landscape and lighting
maintenance. These amounts will be assessed to the owners of parcels in Apple
Valley. Contributions of $11,000 for half the cost of the park will be made from the
City’s General Fund, and an equal revenue source will be recognized from
contributions made by the developer.
▪ Recommendation: Council:
1. Adopt Draft Resolution A initiating proceedings for the levy and collection of
annual assessments for Atascadero Street and Storm Drain Maintenance District
No. 01 (Apple Valley) for fiscal year 2022/2023.
2. Adopt Draft Resolution B accepting and preliminarily approving the Engineer’s
Annual Levy Report regarding the Atascadero Street and Storm Drain
Maintenance District No. 01 (Apple Valley).
3. Adopt Draft Resolution C declaring the City’s intention to levy and collect annual
assessments within Atascadero Street and Storm Drain Maintenance District No.
01 (Apple Valley) in fiscal year 2022/2023, and to appoint a time and place for
the public hearing on these matters.
4. Adopt Draft Resolution D initiating proceedings for annual levy of assessments
for the Atascadero Landscaping and Lighting Maintenance District No. 01 (Apple
Page 10 of 186
Valley) for fiscal year 2022/2023 pursuant to the provisions of Part 2 of Division
15 of the California Streets and Highways Code.
5. Adopt Draft Resolution E for preliminary approval of the Annual Engineer’s Levy
Report for the Atascadero Landscaping and Lighting Maintenance District No. 01
(Apple Valley) for fiscal year 2022/2023.
6. Adopt Draft Resolution F declaring the City’s intention to levy and collect
assessments for the Atascadero Landscaping and Lighting Maintenance District
No. 01 (Apple Valley) for fiscal year 2022/2023. [Administrative Services]
4. De Anza Estates Assessment Districts
▪ Fiscal Impact: Annual assessments for 2022/2023 will total $30,562 for
road/drainage system maintenance and $15,875 for landscape and lighting
maintenance. These amounts will be assessed to the owners of parcels in De Anza
Estates. The City General Fund will contribute $1,400 for the fiscal year 2022/2023
for half of the maintenance costs of the trails and open space.
▪ Recommendation: Council:
1. Adopt Draft Resolution A initiating proceedings for the levy and collection of
annual assessments for Atascadero Street and Storm Drain Maintenance District
No. 03 (De Anza Estates) for fiscal year 2022/2023.
2. Adopt Draft Resolution B accepting and preliminarily approving the Engineer’s
Annual Levy Report regarding the Atascadero Street and Storm Drain
Maintenance District No. 03 (De Anza Estates).
3. Adopt Draft Resolution C declaring the City’s intention to levy and collect annual
assessments within Atascadero Street and Storm Drain Maintenance District No.
03 (De Anza Estates) in fiscal year 2022/2023, and to appoint a time and place
for the public hearing on these matters.
4. Adopt Draft Resolution D initiating proceedings for annual levy of assessments
for the Atascadero Landscaping and Lighting Maintenance District No. 03 (De
Anza Estates) for fiscal year 2022/2023 pursuant to the provisions of Part 2 of
Division 15 of the California Streets and Highways Code.
5. Adopt Draft Resolution E for preliminary approval of the Annual Engineer’s Levy
Report for the Atascadero Landscaping and Lighting Maintenance District No. 03
(De Anza Estates) for fiscal year 2022/2023.
6. Adopt Draft Resolution F declaring the City’s intention to levy and collect
assessments for the Atascadero Landscaping and Lighting Maintenance District
No. 03 (De Anza Estates) for fiscal year 2022/2023. [Administrative Services]
5. Las Lomas (Woodridge) Assessment Districts
▪ Fiscal Impact: Annual assessments for 2022/2023 will total $99,189 for
road/drainage system maintenance and $70,452 for landscape and lighting
maintenance. These amounts will be assessed to the owners of parcels in Las
Lomas (Woodridge). The City General Fund will contribute $2,600 for the
fiscal year 2022/2023 for 25% of the maintenance costs of the trails and open
space.
▪ Recommendation: Council:
1. Adopt Draft Resolution A initiating proceedings for the levy and collection
of annual assessments for Atascadero Street and Storm Drain
Maintenance District No. 02 (Woodridge) for fiscal year 2022/2023.
2. Adopt Draft Resolution B accepting and preliminarily approving the
Engineer’s Annual Levy Report regarding the Atascadero Street and Storm
Drain Maintenance District No. 02 (Woodridge).
Page 11 of 186
3. Adopt Draft Resolution C declaring the City’s intention to levy and collect
annual assessments within Atascadero Street and Storm Drain
Maintenance District No. 02 (Woodridge) in fiscal year 2022/2023, and to
appoint a time and place for the public hearing on these matters.
4. Adopt Draft Resolution D initiating proceedings for annual levy of
assessments for the Atascadero Landscaping and Lighting Maintenance
District No. 02 (Woodridge) for fiscal year 2022/2023 pursuant to the
provisions of Part 2 of Division 15 of the California Streets and Highways
Code.
5. Adopt Draft Resolution E for preliminary approval of the Annual Engineer’s
Levy Report for the Atascadero Landscaping and Lighting Maintenance
District No. 02 (Woodridge) for fiscal year 2022/2023.
6. Adopt Draft Resolution F declaring the City’s intention to levy and collect
assessments for the Atascadero Landscaping and Lighting Maintenance
District No. 02 (Woodridge) for fiscal year 2022/2023. [Administrative Services]
6. Adoption of Atascadero Transit’s Updated Title VI Plan 2022-2025
▪ Fiscal Impact: None. However, the City benefits from FTA capital and
operating assistance funding and this funding could be withheld should the
City fail to submit a Title VI Plan.
▪ Recommendation: Council adopt Atascadero Transit’s updated Title VI Plan
for 2022-2025. [Public Works]
7. Centennial Plaza Planned Development (ZCH) 22-0022
▪ Fiscal Impact: None
▪ Recommendation: Council adopt on second reading, by title only, Draft Ordinance
approving a Zoning Map Amendment adding a Planned Development overlay zone,
based on findings. [Community Development]
8. Virtual Meetings – AB 361 Requirements
▪ Fiscal Impact: None
▪ Recommendation: Council adopt the Draft Resolution making findings consistent with
the requirements of AB 361 to continue to allow for the conduct of virtual meetings.
[City Manager]
MOTION: By Council Member Bourbeau and seconded by Council Member
Dariz to approve the Consent Calendar. (#A-2: Resolution No. 2022-
012) (#A-3: Resolution Nos. 2022-013 through 2021-018)
(#A-4: Resolution Nos. 2021-019 through 2021-024)
(#A-5: Resolution Nos. 2021-025 through 2021-030)
(#A-6: Resolution No. 2021-031) (#A-7: Ordinance No. 655)
(#A-8: Resolution No. 2022-032.
Motion passed 5:0 by a roll-call vote.
UPDATES FROM THE CITY MANAGER:
City Manager Rachelle Rickard gave an update on projects and issues within the City.
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COMMUNITY FORUM:
The following persons spoke during Community Forum: Geoff Auslen and Maggie Payne
Mayor Moreno closed the COMMUNITY FORUM period.
B. PUBLIC HEARINGS:
1. Weed Abatement – Hearing of Objections
▪ Fiscal Impact: None.
▪ Recommendation: Council:
1. Hear all objections to the proposed removal of vegetative growth and/or
refuse and allow or overrule any objections, and,
2. Authorize the Fire Chief to proceed and perform the work of abatement.
[Fire & Emergency Services]
Ex Parte Communications
No Council Members had anything to report.
Fire Chief Bryson gave the report and answered questions from the Council.
PUBLIC COMMENT:
The following persons spoke on this item: Geoff Auslen
Mayor Moreno closed the Public Comment period.
MOTION: By Council Member Funk and seconded by Mayor Pro Tem Newsom
to authorize the Fire Chief to proceed and perform the work of
abatement.
Motion passed 5:0 by a roll-call vote.
2. Proposition 218 Majority Protest Process Relative to Proposed Increase to
Wastewater (Sewer) Rates
▪ Fiscal Impact: Approving staff recommendations will generate an estimated
$650,000 in additional revenue from sewer service charges collected in
FY22/23.
▪ Recommendation: Council:
1. Conduct a public hearing to receive all written and verbal testimony
regarding the proposed wastewater (sewer) rates and consider the results
of protest proceedings in accordance with Proposition 218.
2. Adopt one of the following resolutions certifying the protest results:
A. For a non-majority protest – Draft Resolution A certifying that the
number of valid written protests were not received from property owners
representing a majority of the parcels subject to the proposed rate
increase.
OR
B. For a majority protest – Draft Resolution B certifying that the number of
valid written protests were received from property owners representing
a majority of the parcels subject to the proposed rate increase.
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3. If no majority protest exists, adopt Draft Resolution C approving proposed
wastewater rates effective July 1, 2022. [Public Works]
Ex Parte Communications
No Council Members had anything to report.
Public Works Analyst Betz gave the report and answered questions from the Council.
PUBLIC COMMENT:
The following persons spoke on this item: None
Mayor Moreno closed the Public Comment period.
MOTION: By Council Member Bourbeau and seconded by Council Member
Funk to adopt Resolution No. 2022-033 certifying that the number
of valid written protests were not received from property owners
representing a majority of the parcels subject to the proposed rate
increase and adopt Resolution No. 2022-034 approving proposed
wastewater rates effective July 1, 2022.
Motion passed 5:0 by a roll-call vote.
C. MANAGEMENT REPORTS:
1. AB 481 – Military Equipment Policy
▪ Fiscal Impact: None.
▪ Recommendations: Council introduce for first reading, by title only, a Draft
Ordinance adopting a Military Equipment Policy in accordance with Assembly
Bill 481. [Police Department]
Police Chief Masterson gave the report and answered questions from the Council.
PUBLIC COMMENT:
The following persons spoke on this item: None
Mayor Moreno closed the Public Comment period.
MOTION: By Council Member Dariz and seconded by Mayor Pro Tem Newsom
to introduce for first reading, by title only, a Draft Ordinance
adopting a Military Equipment Policy in accordance with Assembly
Bill 481.
Deputy City Manager/City Clerk Christensen read the title of the Ordinance:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, ADOPTING A MILITARY EQUIPMENT USE POLICY IN
ACCORDANCE WITH AB 481
Motion passed 5:0 by a roll-call vote.
Page 14 of 186
D. COUNCIL ANNOUNCEMENTS AND COMMITTEE REPORTS:
The following Council Members made brief announcements and gave brief update reports
on their committees since their last Council meeting:
Mayor Moreno
1. City Selection Committee
2. County Mayors Round Table
3. SLO Council of Governments (SLOCOG)
Council Member Bourbeau
1. Integrated Waste Management Authority (IWMA)
Council Member Funk
1. Homeless Services Oversight Council
E. INDIVIDUAL DETERMINATION AND / OR ACTION: None
F. RECESS REGULAR MEETING TO CLOSED SESSION
Mayor Moreno recessed the Regular Meeting at 6:53 p.m. and called the Closed Session
Meeting to order.
COUNCIL CLOSED SESSION:
1. CLOSED SESSION -- PUBLIC COMMENT
2. COUNCIL LEAVES TO BEGIN CLOSED SESSION
3. CLOSED SESSION -- CALL TO ORDER
a. Conference with Real Property Negotiators
(Govt. Code 54956.8)
Real Property: 5970 El Camino Real (APN 030181031)
Agency Negotiator: Rachelle Rickard, City Manager
Negotiating Parties: Fred C. Pflum Revocable Trust
Subject of Negotiations: Purchase price and/or terms of payment
b. Conference with Legal Counsel – Anticipated Litigation
Significant exposure to litigation pursuant to Government Code
Section 54956.9(d)(2): 1 potential case – California Voting Rights Act
4. CLOSED SESSION – ADJOURNMENT
G. ADJOURN
Following Closed Session, the meeting was adjourned at 7:28 pm; no reportable action.
Page 15 of 186
MINUTES PREPARED BY:
______________________________________
Lara K. Christensen
City Clerk
APPROVED:
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Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
4358 04/01/2022 STATE DISBURSEMENT UNIT 467.07Payroll Vendor Payment
4359 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 21,932.50Payroll Vendor Payment
4360 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 32,901.61Payroll Vendor Payment
4361 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,145.94Payroll Vendor Payment
4362 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,624.83Payroll Vendor Payment
4363 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 6,709.33Payroll Vendor Payment
4364 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 8,422.92Payroll Vendor Payment
4365 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 9,976.85Payroll Vendor Payment
4366 04/04/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 16,633.29Payroll Vendor Payment
4367 04/05/2022 RABOBANK, N.A. 57,551.60Payroll Vendor Payment
4368 04/05/2022 EMPLOYMENT DEV DEPARTMENT 17,803.26Payroll Vendor Payment
4369 04/05/2022 EMPLOYMENT DEV. DEPARTMENT 2,867.56Payroll Vendor Payment
170633 04/05/2022 ANTHEM BLUE CROSS HEALTH 217,241.43Payroll Vendor Payment
170634 04/05/2022 BENEFIT COORDINATORS CORP 9,253.40Payroll Vendor Payment
170635 04/05/2022 LINCOLN NATIONAL LIFE INS CO 2,049.65Payroll Vendor Payment
170636 04/05/2022 MEDICAL EYE SERVICES 1,828.73Payroll Vendor Payment
170637 04/08/2022 13 STARS MEDIA 774.20Accounts Payable Check
170638 04/08/2022 2 MEXICANS, LLC 6,495.00Accounts Payable Check
170639 04/08/2022 ACCESS PUBLISHING 200.00Accounts Payable Check
170640 04/08/2022 AIRFLOW FILTER SERVICE, INC. 163.52Accounts Payable Check
170641 04/08/2022 AIR-RITE HEATING & COOLING 3,458.44Accounts Payable Check
170642 04/08/2022 ALL SIGNS AND GRAPHICS, INC. 97.88Accounts Payable Check
170643 04/08/2022 ALLAN HANCOCK COLLEGE 3,063.60Accounts Payable Check
170644 04/08/2022 ALLAN HANCOCK COLLEGE 1,360.00Accounts Payable Check
170645 04/08/2022 ALLIANT INSURANCE SERVICES INC 182.00Accounts Payable Check
170646 04/08/2022 AMERICAN WEST TIRE & AUTO INC 1,498.94Accounts Payable Check
170647 04/08/2022 AT&T 290.28Accounts Payable Check
170648 04/08/2022 ATASCADERO CHAMBER OF COMMERCE 2,000.00Accounts Payable Check
170649 04/08/2022 ATASCADERO GLASS, INC. 1,355.00Accounts Payable Check
170650 04/08/2022 ATASCADERO HAY & FEED 1,367.32Accounts Payable Check
170652 04/08/2022 ATASCADERO MUTUAL WATER CO. 11,603.00Accounts Payable Check
170653 04/08/2022 AURORA WORLD, INC. 2,292.45Accounts Payable Check
170654 04/08/2022 AVILA TRAFFIC SAFETY 744.94Accounts Payable Check
170655 04/08/2022 BASSETT'S CRICKET RANCH,INC. 209.83Accounts Payable Check
170656 04/08/2022 BATTERY SYSTEMS, INC. 133.45Accounts Payable Check
170657 04/08/2022 BAY AREA DRIVING SCHOOL, INC. 115.50Accounts Payable Check
170658 04/08/2022 KEITH R. BERGHER 1,181.25Accounts Payable Check
170659 04/08/2022 BERRY MAN, INC. 1,082.75Accounts Payable Check
170660 04/08/2022 BOUND TREE MEDICAL, LLC 904.76Accounts Payable Check
170661 04/08/2022 BREZDEN PEST CONTROL, INC. 65.00Accounts Payable Check
170662 04/08/2022 BUBBLE FUN 500.00Accounts Payable Check
170663 04/08/2022 BURKE,WILLIAMS, & SORENSON LLP 21,001.31Accounts Payable Check
170664 04/08/2022 CALPORTLAND COMPANY 680.91Accounts Payable Check
Page 18 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170665 04/08/2022 CARQUEST OF ATASCADERO 109.90Accounts Payable Check
170666 04/08/2022 CASH 100.00Accounts Payable Check
170667 04/08/2022 CHARTER COMMUNICATIONS 90.00Accounts Payable Check
170668 04/08/2022 CITY OF MORRO BAY 754.40Accounts Payable Check
170669 04/08/2022 CLEVER CONCEPTS, INC. 82.95Accounts Payable Check
170670 04/08/2022 COPWARE, INC. 840.00Accounts Payable Check
170671 04/08/2022 CRYSTAL SPRINGS WATER 20.00Accounts Payable Check
170672 04/08/2022 CUESTA POLYGRAPH & INVEST. LLC 3,577.74Accounts Payable Check
170673 04/08/2022 DAVE BANG ASSC., INC. 890.07Accounts Payable Check
170674 04/08/2022 SHARON J. DAVIS 364.00Accounts Payable Check
170675 04/08/2022 NICHOLAS DEBAR 300.00Accounts Payable Check
170676 04/08/2022 HYRUM C. DEL CASTILLO 300.00Accounts Payable Check
170677 04/08/2022 BRISTA DEL RIO 1,721.00Accounts Payable Check
170678 04/08/2022 DESTINATION TRAVEL NETWORK 75.00Accounts Payable Check
170679 04/08/2022 DIVISION OF STATE ARCHITECT 470.40Accounts Payable Check
170680 04/08/2022 DOOMSDAY SKATE, LLC 252.00Accounts Payable Check
170681 04/08/2022 PHILIP DUNSMORE 300.00Accounts Payable Check
170682 04/08/2022 EARTH SYSTEMS PACIFIC 17,477.50Accounts Payable Check
170683 04/08/2022 EARTHSHINE 81.00Accounts Payable Check
170684 04/08/2022 EL CAMINO VETERINARY HOSP 729.98Accounts Payable Check
170685 04/08/2022 EPIC IT SUPPORT 14,014.25Accounts Payable Check
170686 04/08/2022 FARM SUPPLY COMPANY 413.67Accounts Payable Check
170687 04/08/2022 FGL ENVIRONMENTAL 1,454.00Accounts Payable Check
170688 04/08/2022 FIESTA MAHAR MANUFACTURNG CORP 141.60Accounts Payable Check
170689 04/08/2022 FILIPPIN ENGINEERING, INC. 38,383.25Accounts Payable Check
170690 04/08/2022 FURNITURE INSTALLATION TEAM 1,974.24Accounts Payable Check
170691 04/08/2022 GAS COMPANY 1,146.01Accounts Payable Check
170692 04/08/2022 CHRISTOPHER HALL 219.00Accounts Payable Check
170693 04/08/2022 HANSEN BRO'S CUSTOM FARMING 13,090.00Accounts Payable Check
170694 04/08/2022 HIGH COUNTRY OUTDOOR, INC. 450.00Accounts Payable Check
170696 04/08/2022 HOME DEPOT CREDIT SERVICES 4,924.97Accounts Payable Check
170697 04/08/2022 STEVEN KAHN 196.23Accounts Payable Check
170698 04/08/2022 LAUTZENHISER'S STATIONARY 677.63Accounts Payable Check
170699 04/08/2022 LEHIGH HANSON 968.42Accounts Payable Check
170700 04/08/2022 LENOVO (UNITED STATES) INC. 1,795.11Accounts Payable Check
170701 04/08/2022 LIFE ASSIST, INC. 900.99Accounts Payable Check
170702 04/08/2022 MADRONE LANDSCAPES, INC. 421.00Accounts Payable Check
170703 04/08/2022 MAILSTREAM, INC. 1,875.00Accounts Payable Check
170704 04/08/2022 MARK'S TIRE SERVICE 241.98Accounts Payable Check
170705 04/08/2022 SAMUEL HENRY MCMILLAN, JR. 125.00Accounts Payable Check
170706 04/08/2022 ADAM MEDINA 115.68Accounts Payable Check
170707 04/08/2022 MICHAEL K. NUNLEY & ASSC, INC. 14,576.56Accounts Payable Check
170708 04/08/2022 MID-COAST FIRE PROTECTION, INC 2,720.64Accounts Payable Check
Page 19 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170709 04/08/2022 MID-COAST MOWER & SAW, INC. 477.72Accounts Payable Check
170710 04/08/2022 MIG 9,543.75Accounts Payable Check
170711 04/08/2022 MINER'S ACE HARDWARE 200.08Accounts Payable Check
170712 04/08/2022 MISSION UNIFORM SERVICE 355.27Accounts Payable Check
170713 04/08/2022 MORRO BAY BUG COMPANY 343.67Accounts Payable Check
170714 04/08/2022 MV TRANSPORTATION, INC. 11,420.16Accounts Payable Check
170715 04/08/2022 NBS 7,171.39Accounts Payable Check
170716 04/08/2022 NORTH COAST ENGINEERING INC. 463.00Accounts Payable Check
170717 04/08/2022 OFFICE DEPOT INC. 743.38Accounts Payable Check
170718 04/08/2022 O'REILLY AUTOMOTIVE, INC. 105.94Accounts Payable Check
170719 04/08/2022 PACIFIC CNTRL COAST HLTH CTRS 2,230.00Accounts Payable Check
170722 04/08/2022 PACIFIC GAS AND ELECTRIC 36,353.30Accounts Payable Check
170723 04/08/2022 PAHLER HOME BUILDERS, LLC 142.96Accounts Payable Check
170724 04/08/2022 PEAKWIFI, LLC 650.00Accounts Payable Check
170725 04/08/2022 PROCARE JANITORIAL SUPPLY,INC. 777.25Accounts Payable Check
170726 04/08/2022 QUINCY ENGINEERING, INC. 17,834.04Accounts Payable Check
170727 04/08/2022 RAINSCAPE, A LANDSCAPE SVC CO. 11,855.57Accounts Payable Check
170728 04/08/2022 RAMINHA CONSTRUCTION, INC. 43,510.00Accounts Payable Check
170729 04/08/2022 JERI RANGEL 300.00Accounts Payable Check
170730 04/08/2022 READYREFRESH BY NESTLE 82.63Accounts Payable Check
170731 04/08/2022 RACHELLE RICKARD 300.00Accounts Payable Check
170732 04/08/2022 BRIAN S. RICKS 75.00Accounts Payable Check
170733 04/08/2022 SITEONE LANDSCAPE SUPPLY, LLC 199.35Accounts Payable Check
170734 04/08/2022 SLO CO AIR POLLUTION CTRL DIST 1,651.87Accounts Payable Check
170735 04/08/2022 SOFTWAREONE, INC. 2,758.45Accounts Payable Check
170736 04/08/2022 SOUTH COAST EMERGENCY VEH SVC 1,836.00Accounts Payable Check
170737 04/08/2022 SP MAINTENANCE SERVICES, INC. 728.00Accounts Payable Check
170738 04/08/2022 SPEAKWRITE, LLC. 142.39Accounts Payable Check
170739 04/08/2022 SPECIALIZED EQUIPMENT REPAIR 2,003.71Accounts Payable Check
170740 04/08/2022 JENNIFER L. SPOTTEN 326.40Accounts Payable Check
170741 04/08/2022 STANLEY CONVERGENT SECURITY 1,125.02Accounts Payable Check
170742 04/08/2022 STAPLES CREDIT PLAN 52.18Accounts Payable Check
170743 04/08/2022 SUNLIGHT JANITORIAL, INC. 4,850.00Accounts Payable Check
170744 04/08/2022 SUPERIOR PLUS PROPANE 751.98Accounts Payable Check
170745 04/08/2022 TESCO CONTROLS, INC. 290.00Accounts Payable Check
170746 04/08/2022 CHRISTOPHER DANIEL THOMAS 125.00Accounts Payable Check
170747 04/08/2022 U.S. POSTMASTER 2,656.88Accounts Payable Check
170748 04/08/2022 U.S. POSTMASTER 800.00Accounts Payable Check
170749 04/08/2022 ULTREX LEASING 263.18Accounts Payable Check
170750 04/08/2022 UNIVAR SOLUTIONS USA, INC. 6,433.92Accounts Payable Check
170751 04/08/2022 UNIVERSITY OF FLORIDA 390.00Accounts Payable Check
170752 04/08/2022 VERIZON WIRELESS 1,795.75Accounts Payable Check
170753 04/08/2022 VILLAGE ORIGINALS, INC. 920.42Accounts Payable Check
Page 20 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170754 04/08/2022 VINO VICE, INC. 388.50Accounts Payable Check
170755 04/08/2022 VISIT SLO CAL 6,280.00Accounts Payable Check
170756 04/08/2022 WALLACE GROUP 18,601.54Accounts Payable Check
170757 04/08/2022 WARM FUZZY TOYS 872.64Accounts Payable Check
170758 04/08/2022 TED E. WATERHOUSE 375.00Accounts Payable Check
170759 04/08/2022 WCJ PROPERTY SERVICES 1,913.50Accounts Payable Check
170760 04/08/2022 WEST COAST AUTO & TOWING, INC. 90.00Accounts Payable Check
170761 04/08/2022 WEX BANK - 76 UNIVERSL 14,259.17Accounts Payable Check
170762 04/08/2022 WEX BANK - WEX FLEET UNIVERSAL 11,662.30Accounts Payable Check
170763 04/08/2022 WHITLOCK & WEINBERGER TRANS. 588.47Accounts Payable Check
170764 04/08/2022 MICHAEL J. WILLMON 12.50Accounts Payable Check
170765 04/08/2022 WISHPETS CO. 84.96Accounts Payable Check
170766 04/08/2022 WORKBENCH 2,535.00Accounts Payable Check
170767 04/08/2022 KAREN B. WYKE 699.90Accounts Payable Check
170768 04/08/2022 ZOOM IMAGING SOLUTIONS, INC. 986.91Accounts Payable Check
4370 04/14/2022 ANTHEM BLUE CROSS HSA 13,812.92Payroll Vendor Payment
170769 04/14/2022 ATASCADERO MID MGRS ORG UNION 60.00Payroll Vendor Payment
170770 04/14/2022 ATASCADERO POLICE OFFICERS 1,904.00Payroll Vendor Payment
170771 04/14/2022 ATASCADERO PROF. FIREFIGHTERS 1,096.80Payroll Vendor Payment
170772 04/14/2022 MASS MUTUAL WORKPLACE SOLUTION 7,136.96Payroll Vendor Payment
170773 04/14/2022 NATIONWIDE RETIREMENT SOLUTION 600.99Payroll Vendor Payment
170774 04/14/2022 NAVIA BENEFIT SOLUTIONS 1,674.10Payroll Vendor Payment
170775 04/14/2022 SEIU LOCAL 620 813.73Payroll Vendor Payment
170776 04/14/2022 VANTAGEPOINT TRNSFR AGT 106099 416.88Payroll Vendor Payment
170777 04/14/2022 VANTAGEPOINT TRNSFR AGT 304633 7,691.83Payroll Vendor Payment
170778 04/14/2022 VANTAGEPOINT TRNSFR AGT 706276 285.00Payroll Vendor Payment
4371 04/15/2022 STATE DISBURSEMENT UNIT 467.07Payroll Vendor Payment
4372 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 21,932.50Payroll Vendor Payment
4373 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 33,730.86Payroll Vendor Payment
4374 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,166.45Payroll Vendor Payment
4375 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,650.48Payroll Vendor Payment
4376 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 6,709.33Payroll Vendor Payment
4377 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 8,634.62Payroll Vendor Payment
4378 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 10,447.37Payroll Vendor Payment
4379 04/15/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 16,705.75Payroll Vendor Payment
4380 04/19/2022 RABOBANK, N.A. 59,650.54Payroll Vendor Payment
4381 04/19/2022 EMPLOYMENT DEV DEPARTMENT 19,054.34Payroll Vendor Payment
4382 04/19/2022 EMPLOYMENT DEV. DEPARTMENT 2,860.22Payroll Vendor Payment
170779 04/22/2022 13 STARS MEDIA 723.19Accounts Payable Check
170780 04/22/2022 2 MEXICANS, LLC 2,125.00Accounts Payable Check
170781 04/22/2022 A & T ARBORISTS & VEGETATION 10,000.00Accounts Payable Check
170782 04/22/2022 AGM CALIFORNIA, INC. 628.00Accounts Payable Check
170783 04/22/2022 ALL SIGNS AND GRAPHICS, INC. 261.00Accounts Payable Check
Page 21 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170784 04/22/2022 ALLIANT INSURANCE SERVICES INC 661.00Accounts Payable Check
170785 04/22/2022 ALLTECH SERVICES, INC. 28,867.22Accounts Payable Check
170786 04/22/2022 ALTHOUSE & MEADE, INC. 475.00Accounts Payable Check
170787 04/22/2022 AMERICAN WEST TIRE & AUTO INC 3,787.65Accounts Payable Check
170788 04/22/2022 KELLY AREBALO 858.47Accounts Payable Check
170790 04/22/2022 AT&T 1,052.71Accounts Payable Check
170791 04/22/2022 ATASCADERO HAY & FEED 2,061.64Accounts Payable Check
170792 04/22/2022 AVILA TRAFFIC SAFETY 163.00Accounts Payable Check
170793 04/22/2022 TERRIE BANISH 75.00Accounts Payable Check
170794 04/22/2022 BASSETT'S CRICKET RANCH,INC. 487.05Accounts Payable Check
170795 04/22/2022 BERRY MAN, INC. 994.00Accounts Payable Check
170796 04/22/2022 BOUND TREE MEDICAL, LLC 1,119.04Accounts Payable Check
170797 04/22/2022 BRANCH SMITH PROPERTIES 374.00Accounts Payable Check
170798 04/22/2022 BUBBLE FUN 370.00Accounts Payable Check
170799 04/22/2022 BUSINESS ORIENTED SOFTWARE SOL 3,358.80Accounts Payable Check
170800 04/22/2022 CA BUILDING STANDARDS COMM. 268.20Accounts Payable Check
170801 04/22/2022 CA DEPT OF TAX AND FEE ADMIN. 3,796.00Accounts Payable Check
170802 04/22/2022 CALPORTLAND COMPANY 137.07Accounts Payable Check
170803 04/22/2022 CARQUEST OF ATASCADERO 57.91Accounts Payable Check
170804 04/22/2022 CHARTER COMMUNICATIONS 7,599.60Accounts Payable Check
170805 04/22/2022 COASTAL COPY, INC. 303.60Accounts Payable Check
170806 04/22/2022 COBAN TECHNOLOGIES, INC. 31.32Accounts Payable Check
170807 04/22/2022 COUNTY OF SAN LUIS OBISPO 268.00Accounts Payable Check
170808 04/22/2022 CRYSTAL CRIMBCHIN 118.91Accounts Payable Check
170809 04/22/2022 CULLIGAN/CENTRAL COAST WTR TRT 35.00Accounts Payable Check
170810 04/22/2022 DEPARTMENT OF CONSERVATION 827.61Accounts Payable Check
170811 04/22/2022 DEPARTMENT OF WATER RESOURCES 4,303.00Accounts Payable Check
170812 04/22/2022 ECONOMIC & PLANNING SYSTEM INC 1,930.00Accounts Payable Check
170813 04/22/2022 ALI ELMASRI 50.00Accounts Payable Check
170814 04/22/2022 ENGEL AND GRAY, INC. 35,369.22Accounts Payable Check
170815 04/22/2022 EPIC IT SUPPORT 950.00Accounts Payable Check
170816 04/22/2022 ESCUELA DEL RIO 780.00Accounts Payable Check
170817 04/22/2022 FAILSAFE TESTING, LLC 1,100.00Accounts Payable Check
170818 04/22/2022 FARM SUPPLY COMPANY 199.35Accounts Payable Check
170819 04/22/2022 FGL ENVIRONMENTAL 324.00Accounts Payable Check
170820 04/22/2022 FILIPPIN ENGINEERING, INC. 53,803.25Accounts Payable Check
170821 04/22/2022 FURNITURE INSTALLATION TEAM 202.28Accounts Payable Check
170822 04/22/2022 ANNE E. GALLAGHER 481.25Accounts Payable Check
170823 04/22/2022 GARRY BRILL PRODUCTIONS 150.00Accounts Payable Check
170824 04/22/2022 GAS COMPANY 403.06Accounts Payable Check
170825 04/22/2022 GSOLUTIONZ, INC. 1,700.00Accounts Payable Check
170826 04/22/2022 HART IMPRESSIONS PRINTING 435.72Accounts Payable Check
170827 04/22/2022 HERC RENTALS, INC. 480.75Accounts Payable Check
Page 22 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170828 04/22/2022 DEXTER HOWARD E ETUX 258.52Accounts Payable Check
170829 04/22/2022 IRON MOUNTAIN RECORDS MGMNT 36.91Accounts Payable Check
170830 04/22/2022 J. CARROLL CORPORATION 220.46Accounts Payable Check
170831 04/22/2022 JK'S UNLIMITED, INC. 195.00Accounts Payable Check
170832 04/22/2022 JOE A. GONSALVES & SON 3,000.00Accounts Payable Check
170833 04/22/2022 DAREN KENNETT 190.20Accounts Payable Check
170834 04/22/2022 KPRL 1230 AM 920.00Accounts Payable Check
170835 04/22/2022 L.N. CURTIS & SONS 226.20Accounts Payable Check
170836 04/22/2022 LAKE TECH, INC. 6,473.52Accounts Payable Check
170837 04/22/2022 CAROL LANGLEY-BERG 38.94Accounts Payable Check
170838 04/22/2022 CRAIG C. LOWRIE 325.00Accounts Payable Check
170839 04/22/2022 RUSSELL C. LOWRIE 125.00Accounts Payable Check
170840 04/22/2022 MARK43, INC. 132,694.00Accounts Payable Check
170841 04/22/2022 MCMASTER-CARR SUPPLY CO. 206.98Accounts Payable Check
170842 04/22/2022 SAMUEL HENRY MCMILLAN, JR. 100.00Accounts Payable Check
170843 04/22/2022 MID-COAST MOWER & SAW, INC. 95.60Accounts Payable Check
170844 04/22/2022 MINER'S ACE HARDWARE 470.89Accounts Payable Check
170845 04/22/2022 MATTHEW J. MIRANDA 389.99Accounts Payable Check
170846 04/22/2022 MISSION UNIFORM SERVICE 253.98Accounts Payable Check
170847 04/22/2022 MORRO BAY BUG COMPANY 334.77Accounts Payable Check
170848 04/22/2022 MOSS, LEVY, & HARTZHEIM LLP 2,000.00Accounts Payable Check
170849 04/22/2022 MWI ANIMAL HEALTH 104.02Accounts Payable Check
170850 04/22/2022 NEW TIMES 1,200.00Accounts Payable Check
170851 04/22/2022 NIELSEN,MERKSAMER,PARRINELLO, 3,772.50Accounts Payable Check
170852 04/22/2022 NUTRIEN AG SOLUTIONS, INC. 307.76Accounts Payable Check
170853 04/22/2022 OFFICE DEPOT INC. 65.51Accounts Payable Check
170854 04/22/2022 PACIFIC GAS AND ELECTRIC 24,610.56Accounts Payable Check
170855 04/22/2022 PERRY'S PARCEL & GIFT 45.64Accounts Payable Check
170856 04/22/2022 PERRY'S PARCEL & GIFT 350.00Accounts Payable Check
170857 04/22/2022 PRO TOW 334.00Accounts Payable Check
170858 04/22/2022 PROCARE JANITORIAL SUPPLY,INC. 111.98Accounts Payable Check
170859 04/22/2022 READYREFRESH BY NESTLE 199.18Accounts Payable Check
170860 04/22/2022 RECOGNITION WORKS 13.26Accounts Payable Check
170861 04/22/2022 REVENUE & COST SPECIALISTS LLC 7,000.00Accounts Payable Check
170862 04/22/2022 BRIAN S. RICKS 250.00Accounts Payable Check
170863 04/22/2022 GREG ROACH 157.68Accounts Payable Check
170864 04/22/2022 RODMAN REPAIR & FABRICATION 750.00Accounts Payable Check
170865 04/22/2022 SAN LUIS POWERHOUSE, INC. 542.09Accounts Payable Check
170866 04/22/2022 SCOTT O'BRIEN FIRE & SAFETY CO 198.00Accounts Payable Check
170867 04/22/2022 SERVICE SYSTEMS ASSC, INC. 2,500.00Accounts Payable Check
170868 04/22/2022 SITEIMPROVE, INC. 4,273.76Accounts Payable Check
170869 04/22/2022 SLO COUNTY SHERIFF'S OFFICE 181.00Accounts Payable Check
170870 04/22/2022 SP MAINTENANCE SERVICES, INC. 1,200.00Accounts Payable Check
Page 23 of 186
Check
Number
Check
Date Vendor Description Amount
City of Atascadero
Disbursement Listing
For the Month of April 2022
170871 04/22/2022 SPECIALTY CONSTRUCTION, INC. 506,514.35Accounts Payable Check
170872 04/22/2022 STANLEY CONVERGENT SECURITY 662.98Accounts Payable Check
170873 04/22/2022 STEAM PRO CARPET CARE,LLC 373.20Accounts Payable Check
170874 04/22/2022 TARGET SOLUTIONS LEARNING, LLC 93.36Accounts Payable Check
170875 04/22/2022 TEMPLETON UNIFORMS, LLC 84.50Accounts Payable Check
170876 04/22/2022 CHRISTOPHER DANIEL THOMAS 100.00Accounts Payable Check
170877 04/22/2022 THOMSON REUTERS - WEST 180.35Accounts Payable Check
170878 04/22/2022 RODOLFO B. TORRES 350.00Accounts Payable Check
170879 04/22/2022 TRI-COUNTY OFFICE FURNITURE 267.77Accounts Payable Check
170883 04/22/2022 U.S. BANK 26,018.11Accounts Payable Check
170884 04/22/2022 ULTREX BUSINESS PRODUCTS 64.76Accounts Payable Check
170885 04/22/2022 THOMAS F. VELASQUEZ 100.00Accounts Payable Check
170886 04/22/2022 VERDIN 17,960.76Accounts Payable Check
170887 04/22/2022 VERIZON WIRELESS 1,156.81Accounts Payable Check
170888 04/22/2022 VINO VICE, INC. 777.00Accounts Payable Check
170889 04/22/2022 VITAL RECORDS CONTROL 184.09Accounts Payable Check
170890 04/22/2022 WELL SEEN SIGNS 992.06Accounts Payable Check
4383 04/25/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 99.81Payroll Vendor Payment
4384 04/28/2022 ANTHEM BLUE CROSS HSA 14,112.92Payroll Vendor Payment
170891 04/28/2022 ATASCADERO MID MGRS ORG UNION 60.00Payroll Vendor Payment
170892 04/28/2022 ATASCADERO POLICE OFFICERS 1,904.00Payroll Vendor Payment
170893 04/28/2022 ATASCADERO PROF. FIREFIGHTERS 1,151.80Payroll Vendor Payment
170894 04/28/2022 MASS MUTUAL WORKPLACE SOLUTION 7,140.16Payroll Vendor Payment
170895 04/28/2022 NATIONWIDE RETIREMENT SOLUTION 609.62Payroll Vendor Payment
170896 04/28/2022 NAVIA BENEFIT SOLUTIONS 1,674.10Payroll Vendor Payment
170897 04/28/2022 SEIU LOCAL 620 809.57Payroll Vendor Payment
170898 04/28/2022 VANTAGEPOINT TRNSFR AGT 106099 416.88Payroll Vendor Payment
170899 04/28/2022 VANTAGEPOINT TRNSFR AGT 304633 7,338.25Payroll Vendor Payment
170900 04/28/2022 VANTAGEPOINT TRNSFR AGT 706276 285.00Payroll Vendor Payment
170901 04/28/2022 CASH 200.00Accounts Payable Check
4385 04/29/2022 STATE DISBURSEMENT UNIT 467.07Payroll Vendor Payment
4386 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 21,932.50Payroll Vendor Payment
4387 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 32,868.98Payroll Vendor Payment
4388 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,145.94Payroll Vendor Payment
4389 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 2,650.48Payroll Vendor Payment
4390 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 6,709.33Payroll Vendor Payment
4391 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 8,460.37Payroll Vendor Payment
4392 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 10,353.83Payroll Vendor Payment
4393 04/29/2022 CALIF PUBLIC EMPLOYEES RETIREMENT SYSTEM 17,219.36Payroll Vendor Payment
170902 04/29/2022 MEREDITH BOWLES 720.00Accounts Payable Check
$2,123,961.05
Page 24 of 186
ITEM NUMBER: A-3
DATE: 05/24/22
Atascadero City Council
Staff Report – City Manager’s Office
Downtown Parking & Business Improvement Area (DPBIA)
Assessment
RECOMMENDATION:
Council adopt Draft Resolution, declaring intent to levy the annual Downtown Parking and
Business Improvement Area assessment and set a public hearing for June 14, 2022.
DISCUSSION:
The City of Atascadero established a Downtown Parking and Business Improvement Area
in 1986 (Chapter 11 of the Atascadero Municipal Code) for the purpose of acquisition,
construction or maintenance of parking facilities, decoration of public places, promotion
of public events, and general promotion of business activities in the downtown area. The
formation and operation of a Parking and Business Improvement Area is governed by the
California Streets & Highways Code (Section 36500 et. Seq.). The assessment was
reduced to $0.00 in 2010 at the behest of downtown landlords and as part of a program
to encourage downtown businesses.
In January 2018, staff was approached by an informal committee of downtown business
owners, who expressed interest in reinstituting the full levy of the assessment for the
Downtown Parking and Business Improvement Area (DPBIA). This committee spent
months conducting outreach regarding the DPBIA including holding town hall meetings,
sending letters and emails, and personally meeting with businesses subject to the DPBIA
in order to garner support to request the Council reinstitute the full assessment. The
Council reinstituted the assessment in June 2018 following a show of support from
downtown business owners.
The Streets & Highways Code requires that the “advisory board” provide a report to the
City Council annually for the expenditure of funds derived from the assessment paid by
businesses in the downtown area. In order to ensure adoption of the assessment prior
to the beginning of the Fiscal Year, the report and Resolution of Intention are submitted
as a part of this agenda item. A hearing would then be conducted at the next regular City
Council meeting scheduled for June 14, 2022.
Page 25 of 186
ITEM NUMBER: A-3
DATE: 05/24/22
The Chamber of Commerce serves as the advisory body and the
sub-contractor to the City regarding the DPBIA. The informal committee of downtown
business owners advises the Chamber of Commerce on expenditures and assists in the
creation of the annual budget. The Chamber of Commerce has submitted a report
identifying the proposed improvements and activities for the area, based upon the
National Main Street Program's four-point approach. The report does not propose any
changes to the boundaries of the DPBIA or of the assessment.
The Chamber of Commerce is proposing expenditures for 2022-2023 with the Downtown
Parking and Business Improvement Area funds as follows:
The proposed expenditures will focus to a combination of events and beautification ideas
to help promote the downtown and strengthen the businesses in the area. In 2021/2022
the downtown business owners organized Trick-Or-Treat on Entrada, Santa Photo Stop,
#ATownWithHeart, and At Her Table events. In 2022/2023 the Chamber will be working
with downtown business owners to use beautification funds to install string lighting over
Entrada Avenue.
An annual Draft Resolution of Intention, declaring the City’s intent to levy an annual
Downtown Parking and Business Improvement Area assessment, and holding a public
hearing is required by the California Streets & Highways Code for the City to levy and
collect the assessments. Consistent with State law, the City Council is required to adopt
a Draft Resolution of Intention and set a public hearing to receive public comment prior
to the assessment being collected.
Staff is proposing that the hearing be conducted at the next regular City Council meeting
scheduled for June 14, 2022.
2021-2022 2022-2023
ESTIMATED REQUESTED
REVENUES
BIA Assessments-Received from City 14,480$ 12,820$
Revenue From Events - 1,000
Total Revenues 14,480 13,820
EXPENSES
Events (5,341) (8,000)
Beautification/Miscellaneous - (22,870)
Marketing - (2,057)
Administration (1,448) (1,450)
Total Expenses (6,789) (34,377)
Net Income 7,691 (20,557)
BEGINNING AVAILABLE BALANCE 12,866 20,557
ENDING AVAILABLE BALANCE 20,557$ -$
Page 26 of 186
ITEM NUMBER: A-3
DATE: 05/24/22
FISCAL IMPACT:
None.
ALTERNATIVES:
1. The City Council may set an alternative date for the public hearing, but no later than
June 28, 2022.
2. The City Council may discontinue the current program and assess a $0 fee to
businesses in the District.
3. The City Council may choose not to adopt the Resolution of Intention to levy
assessment, thereby discontinuing the collection of Downtown Parking and Business
Improvement Area assessments.
ATTACHMENTS:
1. Draft Resolution
2. Downtown Parking and Business Improvement Area Report and Proposed
Expenditures for 2022-2023
Page 27 of 186
ITEM NUMBER: A-3
DATE:
ATTACHMENT:
05/24/22
1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, DECLARING THE CITY’S INTENT TO
LEVY AN ANNUAL ASSESSMENT PURSUANT TO STREETS &
HIGHWAYS CODE SECTION 36500 ET. SEQ.
WHEREAS, the City of Atascadero has formed a Parking and Business Improvement
Area, pursuant to Section 36500 of the Streets and Highways Code of the State of California; and
WHEREAS, the City Council has received a report pursuant to Section 36533 of said
Code; and
WHEREAS, the City Council has approved such report and is required to adopt a
resolution of intention pursuant to Section 36534; and
WHEREAS, the report proposes no changes to the boundaries or assessment amounts that
currently apply in said area; and
WHEREAS, the report identifies the proposed improvements and activities for the area
based upon the National Main Street Program Four Points approach, on file in the City Clerk’s
Office and incorporated herein by this reference.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. The City Council herby declares its intent to levy and collect assessments
within the Parking and Business Improvement Area for Fiscal Year 2022-2023.
SECTION 2. The area is known as the Downtown Parking and Business Improvement
Area. The area is generally located in the downtown core including the area between Highway 41
on the south, Rosario Avenue on the north, Highway 101 on the west, and an irregular boundary
generally along Santa Ysabel Avenue on the east.
SECTION 3. Consistent with Section 36527 of the Streets and Highways Code, Ordinance
No. 116 proposes the following uses of Downtown Parking and Business Improvement Area
revenue:
a. The acquisition, construction, or maintenance of parking facilities for the benefit of
the area.
b. Decoration of public place in the area.
c. Promotion of public events that are to take place on or in public places in the area.
d. The general promotion of business activities in the area.
Page 28 of 186
ITEM NUMBER: A-3
DATE:
ATTACHMENT:
05/24/22
1
SECTION 4. A report, which includes a full and detailed description of the improvements
and activities to be provided in the 2022-2023 fiscal year, the boundaries of the area, and the
proposed assessments to be levied upon the businesses within the area, are on file in the City
Clerk’s Office and incorporated herein by this reference.
SECTION 5. The City Council will hold a public hearing on the levy of the proposed
assessment for Fiscal Year 2022-2023 on June 14, 2022 at 6:00 p.m., or sometime shortly
thereafter, in the City Council Chambers, 6500 Palma Avenue, Atascadero, California.
SECTION 6. Written or oral protests may be made at the hearing. The form of the protests
shall comply with Sections 36524 and 36524 of the Streets and Highways Code.
SECTION 7. The City Clerk is hereby directed to give notice of the public hearing by
causing this Resolution to be published once in a newspaper of general circulation in the City not
less than seven days before said hearing.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ___ day of
_____, 2022.
On motion by Council Member _______________________, and seconded by Council
Member _______________________, the foregoing Resolution is hereby adopted in its entirety
on the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAINED:
CITY OF ATASCADERO
Heather Moreno, Mayor
ATTEST:
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
Brian A. Pierik, City Attorney
Page 29 of 186
ITEM NUMBER: A-3
DATE: 05/24/22
ATTACHMENT: 1
Exhibit A
Atascadero Chamber of Commerce
Downtown Parking and Business Improvement Area
Annual Report for Fiscal Year 2022-2023
The California Streets and Highways Code Section 36533 requires the preparation of a
report for each fiscal year for which assessments are to be levied and collected to pay
the costs of improvements and activities of the Improvement Area. The report may
propose changes, including, but not limited to the boundaries of the parking and business
improvement area or any benefit zones within the area, the basis and method of levying
the assessments, and any changes in the classification of businesses.
No boundary changes are proposed for Fiscal Year 2022-2023. The boundaries are more
specifically described as follows:
From the south corner of Morro Road at the Highway 101 over-crossing
then in the generally northwest direction immediately adjacent to
Highway 101, to a point at the intersection of El Camino Real and Rosario
Avenue, then easterly along Rosario Avenue, to a point at the intersection
of Rosario and Palma Avenue, then easterly along Palma Avenue to the
rear lot line of parcels on the east side of Traffic Way, then north along
said rear lot lines to include Lot 24 of Block LA, of Atascadero, then
northerly along the center line of Traffic Way, to a point, then easterly to
include the presently existing National Guard Armory Property. Then to a
point easterly to the intersection of West Mall and Santa Ysabel Avenue
at the West Mall bridge, then southerly along Santa Ysabel Avenue to a
point at the intersection of the southerly leg of Hospital Drive and Santa
Ysabel Avenue, then easterly from that point to the extension of proposed
Highway 41, then southwesterly to the Morro Road/Highway 101
over-crossing, point of beginning.
Since 2000, the City, Community Redevelopment Agency, Chamber of Commerce, other
organizations and the community have worked to strengthen the downtown business
community, and implement the downtown revitalization strategy. In 2009, as the
economic downturn was affecting businesses, the City Council made the decision to levy
a $0 assessment on the businesses in the District. The State of California dissolved all
redevelopment agencies in 2011, and the City, Chamber of Commerce, and other
organizations have worked in collaboration to continue the efforts of the Community
Redevelopment Agency to provide better services to and strengthen the businesses in
the downtown.
In 2017, an informal committee of downtown business owners formed to promote
economic vitality and encourage business growth in the downtown. This committee will
advise the Chamber of Commerce on expenditures and will assist in the creation of the
annual budget for the Downtown Parking and Business Improvement Area (DPBIA). The
Atascadero Chamber of Commerce will serve as the advisory body and the
Page 30 of 186
ITEM NUMBER: A-3
DATE: 05/24/22
ATTACHMENT: 1
sub-contractor to the City regarding the Downtown Parking and Business Improvement
Area. The Chamber of Commerce is requesting that the City levy an assessment of 100%
of the business license fee for businesses in the DPBIA. Each licensed business in the
Improvement Area shall contribute to the assessment. Activities and improvements in
the DPBIA are funded by the assessment.
The proposed work plan and budget for Fiscal Year 2022/2023 is as follows:
This report shall be filed with the City Clerk on behalf of the DPBIA for Fiscal Year 2022-2023.
2021-2022 2022-2023
ESTIMATED REQUESTED
REVENUES
BIA Assessments-Received from City 14,480$ 12,820$
Revenue From Events - 1,000
Total Revenues 14,480 13,820
EXPENSES
Events (5,341) (8,000)
Beautification/Miscellaneous - (22,870)
Marketing - (2,057)
Administration (1,448) (1,450)
Total Expenses (6,789) (34,377)
Net Income 7,691 (20,557)
BEGINNING AVAILABLE BALANCE 12,866 20,557
ENDING AVAILABLE BALANCE 20,557$ -$
Page 31 of 186
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Page 32 of 186
ITEM NUMBER: A-4
DATE: 05/24/22
Atascadero City Council
Staff Report – City Manager’s Office
Atascadero Tourism Business Improvement District (ATBID)
Annual Assessment
RECOMMENDATIONS:
Council:
1. Approve the ATBID Annual Report.
2. Adopt Draft Resolution declaring intent to levy an annual Business Improvement
District assessment on lodging businesses within the Atascadero Tourism
Business Improvement District, and set a public hearing for June 14, 2022.
DISCUSSION:
The City of Atascadero established the Atascadero Tourism Business Improvement
District (ATBID) to levy annual assessments under the Parking and Business
Improvement Area Law of 1989, by adopting Title 3, Chapter 16 of the Atascadero
Municipal Code in April 2013. The activities to be funded by the assessments, on lodging
businesses within the ATBID, are tourism promotions and marketing programs to promote
the City as a tourism destination. The formation and operation of a Tourism Business
Improvement District is governed by the California Streets & Highways Code
(Section 36500 et. Seq.). The budget for the ATBID is submitted in conjunction with the
City’s annual budget.
The City Council appointed ATBID Advisory Board Members to serve at the pleasure of
the Council. The Advisory Board is made up of lodging business owners or employees,
or other representatives holding the written consent of a lodging business owner within
the ATBID area.
The Streets & Highways Code requires that the Advisory Board provide a specific report
to the City Council annually for the expenditure of funds derived from the assessment
paid by lodging businesses within the City. The annual report must identify: (1) proposed
activities, programs and projects for the fiscal year; (2) the approximate cost of such
activities, programs and projects for the fiscal year; (3) the amount of surplus or deficit
revenues carried over from a previous fiscal year; and (4) contributions received other
than assessments. The annual report must meet the requirements of the California
Page 33 of 186
ITEM NUMBER: A-4
DATE: 05/24/22
Streets and Highway Code §36533. The City Council may approve the report as filed or
may modify any particular contained in the report and approve it as modified.
During the 2021-23 budget cycle, staff estimated that ATBID revenues for fiscal year
2020-21 would increase by 11% from fiscal year 2019-20. Actual ATBID revenues
exceeded estimate for fiscal year 2020-21 and saw an increase of 23% over the previous
fiscal year. ATBID revenue is expected to exceed revenue projections in fiscal year 2022.
As of the writing of this report, staff projects that assessment revenue for fiscal year 2021-
22 will be $356,000, up 22% from the budgeted revenue and up 28% from 2020-21 actual
assessment revenue. The current budget projects that assessment revenue for fiscal
year 2022-23 will be $298,170, however, with recent upward revenue trends, there is a
good possibility that revenues will exceed that projection. Expenditures for fiscal year
2021-22 are expected to come in under budget by about $18,540, or about 6%.
The ATBID fund balance is now projected to be $473,720 at June 30, 2022, and $464,910
at June 30, 2023.
The Annual Report includes the above assumptions. Staff recommends the Council
approve the Annual Report, adopt the Resolution of Intention, and set a date and time for
a public hearing. The purpose of the public hearing is to receive public comment prior to
the assessment being collected. Staff is proposing that the hearing be conducted at the
next regular City Council meeting scheduled for June 14, 2022.
FISCAL IMPACT:
None.
ALTERNATIVE:
The City Council may modify the Annual Report before approval.
ATTACHMENTS:
1. Draft Resolution
2. ATBID Annual Report
Page 34 of 186
ITEM NUMBER: A-4
DATE: 05/24/22
ATTACHMENT: 1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, DECLARING ITS INTENTION TO LEVY
AN ANNUAL ASSESSMENT ON LODGING BUSINESSES WITHIN THE
ATASCADERO TOURISM BUSINESS IMPROVEMENT DISTRICT,
PURSUANT TO STREETS & HIGHWAYS CODE SECTION 36500 ET.SEQ.
WHEREAS, the City Atascadero (“City”) has formed the Atascadero Tourism Business
Improvement District, pursuant to Section 26500 of the Streets & Highways Code of the State of
California; and
WHEREAS, the City Council has received an annual report pursuant to Section 36533 of
said Code; and
WHEREAS, the City Council has approved said report and is required to adopt a
resolution of intention pursuant to Section 36534.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. The City Council hereby declares its intent to levy and collect assessments
within the Atascadero Tourism Business Improvement District for Fiscal Year 2022-2023.
SECTION 2. The ATBID includes all of the lodging businesses, including hotels, motels,
bed and breakfasts, and each business defined as a “hotel” in Section 3-3.02 of Chapter 3
(Transient Occupancy Tax) of the Atascadero Municipal Code (“Lodging Businesses”) within the
corporate boundaries of the City.
SECTION 3. The activities to be funded by the levy of assessments against Lodging
Businesses within the ATBID are tourism promotions and marketing programs to promote the City
as a tourism destination and projects, programs, and activities that benefit Lodging Businesses
located and operating within the boundaries of the ATBID. The proposed activities will primarily
be targeted at increasing transient stays at Lodging Businesses.
SECTION 4. The City Council sets June 14, 2022, as the date of the public hearing on the
levy of assessments. The public hearing will be held at 6:00 p.m. or as soon thereafter as practicable,
in the City of Atascadero Council Chambers, 6500 Palma Ave., Atascadero, California 93422.
SECTION 5. A protest may be made orally or in writing by any owner of a Lodging
Business that is within the ATBID boundaries and subject to the ATBID assessment. Written
protests must be received by the City Clerk, City of Atascadero, before the close of the public
hearing and may be delivered or mailed to the City Clerk, Atascadero, 6500 Palma Ave.,
Atascadero, California 93422. A written protest may be withdrawn in writing at any time before
the conclusion of the public hearing.
Page 35 of 186
ITEM NUMBER: A-4
DATE: 05/24/22
ATTACHMENT: 1
SECTION 6. Further information regarding the proposed ATBID may be obtained from
the City Manager’s Office, City of Atascadero, 6500 Palma Ave., Atascadero, CA 93422.
SECTION 7. The City Clerk is directed to provide notice of the public hearing on the
proposed ATBID by causing this resolution to be published once in a newspaper of general
circulation in the City not less than seven days before said hearing.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ___th day
of _____, 2022.
On motion by Council Member _________ and seconded by Council Member _______,
the foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ADOPTED:
CITY OF ATASCADERO
___________________________________
Heather Moreno, Mayor
ATTEST:
___________________________________
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
___________________________________
Brian A. Pierik, City Attorney
Page 36 of 186
ITEM NUMBER: A-4
DATE: 05/24/22
ATTACHMENT: 2
ATBID Annual Report
Fiscal Year 2022-2023
(Pursuant to Streets & Highways Code Section 36533)
1. Proposed activities, programs and projects for the fiscal year:
• Contract Services
o Marketing Firm
o Administration Services
• Marketing Plan
• Maintenance of Visual Assets
o Photography & Content
o Creative Services
• Digital Marketing
o Website Content & Updates (i.e., Visit Atascadero; VisitSLOCAL)
o Social Media
• Advertising
o Print & Promotional Items
o Digital
o Reactive Opportunities
• Public Relations
o Group FAM (familiarization tours for journalists, tour operators and
meeting & event coordinators)
o Individual Journalist Hosted Itineraries
o Press Releases
• Tour & Travel
o Collaboration with CCTC FAMs
o Collaboration with Visit CA FAMs
o Collaboration with Visit SLOCAL FAMs
• Consumer Outreach
o Event Sponsorships Opportunities
o Event Marketing
o Email Marketing
• Administration of TBID fund
2. Approximate cost of such activities, programs and projects for the fiscal year is
projected to be $313,620.
3. Amount of fund balance as of June 30, 2022 is projected to be $473,720.
4. Estimated fund balance for June 30, 2023 is budgeted at $464,910.
5. Contributions received other than assessments:
• Estimated interest income of $6,950 for fiscal year 2021/22
• Estimated interest income for fiscal year 2022/23 is budgeted at $6,640.
Page 37 of 186
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Page 38 of 186
ITEM NUMBER: A-5
DATE: 05/24/22
Atascadero City Council
Staff Report – City Manager’s Office
Atascadero Tourism Business Improvement District (ATBID) Board
Appointment of Three Board Members for New Term
RECOMMENDATION:
Council appoint Patricia Harden, Deana Alexander and Amar Sohi to the ATBID Advisory
Board for the term expiring June 30, 2024.
DISCUSSION:
In 2013, the lodging businesses in Atascadero requested the Council establish a Tourism
Business Improvement District in order to levy annual assessments that would fund
tourism promotions and marketing programs to promote the City as a tourism destination.
The City Council established the ATBID, appointed Board Members, and levied
assessments beginning June 1, 2013.
When the initial Advisory Board was appointed, it was comprised of three members
serving three-year terms, and two members serving two-year terms. In 2015, the
Municipal Code was changed to clarify that after the initial formation, all subsequent
Board Members will serve two year staggered terms. The terms of the Board Member
positions currently held by Patricia Harden, Deana Alexander and Amar Sohi are set to
expire on June 30, 2022.
Once Board Member terms are close to expiring, the ATBID’s Rules and Procedures lay
out the nomination process that must be followed. Before the expiration of terms, a letter
is mailed out to each Lodging Business notifying them of a meeting for the purpose of
making nominations for the Board seats that are scheduled to be vacant in July. At this
meeting, lodging business owners are nominated and a written ballot election determines
the nominees to be recommended to the City Council. The results of the nomination
meeting are then forwarded to the City Clerk to be placed on the Council’s agenda as a
recommendation for filling the Board vacancies.
The Atascadero Municipal Code § 3-16.07 (b) states that membership on the ATBID
Board is limited to Lodging Business owners or employees or other representatives
holding the written consent of a Lodging Business owner within the ATBID area who has
Page 39 of 186
ITEM NUMBER: A-5
DATE: 05/24/22
fully paid its assessment at the time of the appointment, and remain fully paid during the
term of the membership on the Board.
This year, letters were mailed out to each of the Lodging Businesses on March 14, 2022
and the Lodging Business nomination meeting was held April 19, 2022. Patricia Harden,
Deana Alexander and Amar Sohi were selected by the lodging owners present at the
nomination meeting to be recommended to the City Council for appointment to the ATBID
Board. Once appointed, following would be the new ATBID Board going forward:
TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID)
(2-Year Terms)
BOARD MEMBER LODGING FACILITY TERM EXPIRES
6/30/2023
TERM EXPIRES
6/30/2024
Patricia Harden Springhill Suites
Marriott
X
Amar Sohi Holiday Inn Express X
Deana Alexander The Carlton X
Tom O’Malley The Portola Inn X
Corina Ketchum Hilton Home 2 Suites X
FISCAL IMPACT:
None.
ALTERNATIVE:
Council may reject the recommendation of the lodging business owners and request a
new recommendation from the lodging business owners.
ATTACHMENTS:
None.
Page 40 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
Atascadero City Council
Staff Report - Public Works Department
Adopting a List of Projects for Fiscal Year 2022-2023
Funded by SB 1: The Road Repair and Accountability Act of 2017
RECOMMENDATION:
Council adopt Draft Resolution adopting a list of projects to be funded with Road
Maintenance and Rehabilitation Account revenues from SB 1 (The Road Repair and
Accountability Act of 2017) for Fiscal Year (FY) 2022-2023.
DISCUSSION:
Background
The Road Repair and Accountability Act of 2017 (SB 1) provides
funding for local and state jurisdictions to address roadway
maintenance and rehabilitation needs, as well as other transportation
related projects. This act became law in April 2017 and annual
reporting guidelines for local agencies (cities and counties) were
finalized in August 2017. These guidelines describe annual reporting
requirements and processes for local agencies receiving SB 1
revenues, which primarily involves having local agencies identify a list of projects to be
funded with SB 1 revenues each fiscal year and reporting expenditures for those projects.
Analysis
SB 1 was designed intentionally to provide the most flexibility to local agencies as to how
to use these funds, but with a “fix it first” approach to roadway improvements. Annual
funds can be used on multiple projects or a single project can be funded with multiple
annual revenue allocations. “Betterment” improvement projects can be funded with SB 1
funds but require local agencies’ roadway systems to have a comprehensive Pavement
Condition Index (PCI) of 80 or higher – Atascadero’s last comprehensive PCI was 50
(2019).
In general, staff recommends directing SB 1 revenues to fund roadway repairs,
maintenance, and rehabilitation on arterial and collector functional classification
roadways. These roadways receive the heaviest use in town and are driven by most of
the public compared to residential functional classification roadways. Furthermore,
Measure F14 funds have been used exclusively on collectors and residential (local)
roadways. Arterials and collectors are typically more expensive to repair, support
Page 41 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
commerce and business activities, have enhanced improvements (sidewalks, bike lanes,
etc.), and have higher risk for liability if in disrepair. Staff believes committing additional
funding to arterials and collectors will allow the City to continue to improve the busiest
and most visible roads in Atascadero.
SB 1 guidelines require local agencies to pass a resolution each year that identifies a list
of projects for SB 1 funding. The following table summarizes the SB 1 budgeted and
estimated revenues FY 17/18 through FY 22/23.
Fiscal Year
2017-2018 178,071$ 181,060$ 2,989$
2018-2019 530,440 571,180 40,740
2019-2020 511,890 526,611 14,721
2020-2021 568,200 557,213 (10,987)
2021-2022 577,400 613,566 *36,166
2022-2023 594,140 675,246 *81,106
2,960,141$ 3,124,876$ 164,735$
Budgeted
Actual/
Estimated*Difference
The City Council used the combined partial first year (FY 17/18) and most of the second
year (FY 18/19) revenues toward the El Camino Real (North) Pavement Rehabilitation
project from San Anselmo Road (East) to San Benito Road. That project was completed
in fall of 2018. The remaining amounts from FY 18/19, FY 19/20, FY 20/21 and FY 21/22
have been allocated to the El Camino Real (South) Pavement Resurfacing project.
In accordance with the adopted budget, staff recommends allocating the FY 22/23 SB 1
funds as follows:
• El Camino Real (South) Pavement Resurfacing Project. This project involves
pavement maintenance and repairs for 1.90 miles of El Camino Real between the
south City limits and El Bordo Avenue. This project was primarily constructed in
fiscal year 2021-2022, however it is anticipated that the project will finish up during
the early part of FY 2022-2023. Staff recommends that FY 2022-2023 SB1 Funds
be used for any remaining construction costs for this project.
• Traffic Way Rehabilitation North Project. This Project includes heavy pavement
rehabilitation, drainage improvements, pavement markings, traffic signage, and
other miscellaneous and related work for 1.09 miles of Traffic Way between Chico
Road and Santa Cruz Road. Any remaining SB1 Funds not needed for the El
Camino Real (South) Pavement Resurfacing Project will be allocated to this
project.
Conclusion
The attached Draft Resolution (Attachment 1) will provide the necessary documentation
required to be included with the submitted project list to the California Transportation
Commission (CTC), which is due on July 1, 2022. This deadline was extended due to the
COVID-19 pandemic.
Page 42 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
FISCAL IMPACT:
Approval of the Draft Resolution adopting the list of projects for SB 1 Funding will allow
the City to receive an estimated $675,246 in 2022-2023 SB1 funding.
ATTACHMENT:
Draft Resolution
Page 43 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
ATTACHMENT: 1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, ADOPTING A LIST OF PROJECTS FOR
FISCAL YEAR 2022-2023 FUNDED BY SB 1: THE ROAD REPAIR AND
ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017
(Chapter 5, Statutes of 2017) was passed by the Legislature and signed into law by the Governor
in April 2017 in order to address the significant multimodal transportation funding shortfalls
statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the
residents of the City are aware of the projects proposed for funding in the community and which
projects have been completed each fiscal year; and
WHEREAS, the City must include a list of all projects proposed to receive funding from
the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, in the City budget,
which must include a description and the location of each proposed project, a proposed schedule
for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City will receive an estimated $675,246 of RMRA funding in Fiscal Year
2022-2023 from SB 1; and
WHEREAS, the City has undergone a public process to ensure public input into the
community’s transportation priorities and capital improvement plans; and
WHEREAS, the City used a Pavement Management System to assist in the development
of the SB 1 project list to ensure revenues are being used on the most high-priority and cost-
effective projects that also meet the community’s priorities for transportation investment; and
WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate 139
centerline miles of roads, 20 bridges, and add active transportation infrastructure throughout the
City this year and hundreds of similar projects in the future; and
WHEREAS, the 2019 Pavement Management Program found that the City’s streets and
roads are in a “fair” condition and the revenue will help increase the overall quality of the road
system over the next decade, with the anticipation of bringing the streets and roads into a “good”
condition; and
WHEREAS, without revenue from SB 1, the City’s streets and roads may continue to
degrade into a condition that would require higher costs and expenses to maintain and repair; and
WHEREAS, if the Legislature and Governor failed to act, city streets and county roads
would have continued to deteriorate, resulting in many and varied negative impacts on the
community; and
Page 44 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
ATTACHMENT: 1
WHEREAS, cities and counties own and operate more than 81 percent of streets and roads
in California, and from the moment an individual opens the front door to drive to work, bike to
school, or walk to the bus station, they are dependent upon a safe, reliable local transportation
network; and
WHEREAS, modernizing the local street and road system provides well-paying
construction jobs and boosts local economies; and
WHEREAS, the local street and road system is also critical for farm to market needs,
interconnectivity, multimodal needs, and commerce; and
WHEREAS, police, fire, and emergency medical services all need safe reliable roads to
react quickly to emergency calls and a few minutes of delay can be a matter of life and death; and
WHEREAS, maintaining and preserving local streets and the road system will reduce
drive times and traffic congestion, improve bicycle safety, and make the pedestrian experience
safer and more appealing, which leads to reduced vehicle emissions helping the State achieve its
air quality and greenhouse gas emissions reductions goals; and
WHEREAS, restoring roads before they fail reduces construction time, which results in
less air pollution from heavy equipment and less water pollution from site run-off; and
WHEREAS, the overall investment in the local streets, roads, and complete streets
infrastructure, with a focus on basic maintenance and safety, using cutting-edge technology,
materials and practices, will have significant positive co-benefits statewide.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. That the recitals set forth hereinabove are true, correct and valid.
SECTION 2. The list of projects planned to be funded with SB 1 RMRA revenues for
Fiscal Year 2022-2023 include:
Project: El Camino Real Resurfacing – South
Description: Pavement maintenance and rehabilitation of approximately 1.90 miles of
arterial roadway to improve deteriorated pavement conditions and better define
roadway configuration for all roadway users, including motorists, bicyclists, and
pedestrians.
Location: South City Limits to El Bordo Avenue
Estimated Useful Life: 10 to 20 years
Schedule for Completion: Summer 2022
AND
Project: Traffic Way Rehabilitation North Project
Page 45 of 186
ITEM NUMBER: A-6
DATE: 5/24/22
ATTACHMENT: 1
Description: Heavy pavement rehabilitation, drainage improvements, pavement markings,
traffic signage, and other miscellaneous and related work for 1.09 miles of Traffic Way.
Location: Chico Road to Santa Cruz Road
Estimated Useful Life: 10 to 20 years
Schedule for Completion: Summer 2024
PASSED AND ADOPTED at a regular meeting of the City Council held on the 24th day of
May, 2022.
On motion by Council Member _______________and seconded by Council Member
__________________, the foregoing resolution is hereby adopted in its entirety by the following
vote:
AYES:
NOES:
ABSENT:
ADOPTED:
CITY OF ATASCADERO
________
Heather Moreno, Mayor
ATTEST:
________
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
________
Brian A. Pierik, City Attorney
Page 46 of 186
ITEM NUMBER: A-7
DATE: 05/24/22
Atascadero City Council
Staff Report – Public Works Department
Traffic Way and Ardilla Avenue Pavement Rehabilitation Project
Construction Award
RECOMMENDATION:
Council award a construction contract for $385,791 to Souza Construction for the
Traffic Way and Ardilla Avenue Pavement Rehabilitation Project – Project No.
C2020R01 (which includes the Traffic Way/US 101 Alleyway Rehabilitation Project).
DISCUSSION:
Background
Traffic Way (from El Camino Real to Ardilla Avenue) and Ardilla Avenue (from Traffic
Way to Atascadero Avenue) are classified as minor arterial roadways, serving as the
primary conduit (along with the Hwy 41 undercrossing) for traffic crossing from the
downtown core to the west side of Hwy 101. Rehabilitation of these segments of Traffic
Way and Ardilla Avenue was included on the Five-Year Capital Improvement Plan (CIP)
beginning with the 2017-2019 Budget. As part of the 2021-2023 Budget process, the
Traffic Way/US 101 Alleyway Rehabilitation Project was added to the CIP to address
the failed pavement in the public alleyway behind the businesses on the west side of El
Camino Real against US 101 and north of Traffic Way. While the CIP and adopted
Budget show two separate projects, it was intended that these projects be designed, bid
and constructed as a single project for efficiency, as the location proximity and
pavement conditions require similar construction techniques and treatments.
Design Analysis
The previously noted segments of Traffic Way, Ardilla Avenue and the US 101 Alleyway
are in poor condition (PCI’s of 30, 49 and 35 respectively) and require significant
maintenance work by City staff. In particular, the pavement conditions below the US 101
overcrossing has badly deteriorated and needs repair. While the area below the
overcrossing is within Caltrans’ right-of-way, pursuant to the Maintenance Agreement
between the City (previously SLO County) and Caltrans, the City is responsible for the
maintenance of the pavement on all surface streets crossing above (to edge of bridge) or
below US 101.
Roadway conditions vary across the three segments included in this project. The
outside lanes on Traffic Way between El Camino Real and the US 101 NB Offramp are
new pavement, completed as part of the Traffic Way CDBG Sidewalk Infill Project in
Page 47 of 186
ITEM NUMBER: A-7
DATE: 05/24/22
2021. The majority of Ardilla Avenue and Traffic Way have sufficient pavement
thickness such that the most efficient and cost-effective treatment is to mill the road
surface to a depth of 3-inches and overlay with new asphalt. Localized failed pavement
sections will be replaced with full depth (10-inch thick) asphalt.
As part of the project design, existing drainage issues on the US 101 Alleyway were taken into
consideration, with final design modifying grades to improve drainage. Additionally, pavement
rehabilitation projects trigger a requirement that the City complete an assessment and
upgrade curb ramps where not in compliance with existing ADA regulations. For the Traffic
Way/Ardilla Avenue project, the existing non-compliant curb ramp at the southwest corner of
the Ardilla Avenue/Santa Lucia Road intersection will be replaced to meet ADA requirements.
City staff contracted with Earth Systems Pacific to provide Geotechnical Recommendations
for Roadway Rehabilitation, and with MBS Surveys to provide topographic surveys, but
completed project engineering design in-house.
Bid Analysis
The project was publicly bid for a minimum of 30 days, starting April 1, 2022, in accordance
with State Contracting Laws and Atascadero Purchasing Policy, with the bid opening
occurring on May 5, 2022. A total of three bids were received ranging from $385,791 to
$568,293. The bids were reviewed for accuracy and compliance with the City of Atascadero
bidding requirements, and the City Engineer has determined that Souza Construction of San
Luis Obispo is the lowest responsive bidder at $385,791.
The adopted budget includes $362,500 in Urban State Highway Account Grant monies, and
$200,000 in Local Transportation Funds (LTF) for project funding. To date, there has been
approximately $20,000 spent for the design and bid phases of the project. Other non-
construction costs remaining include: material testing, coordination, and inspection fees that are
estimated to be around $57,870, or about 15% of construction costs. Staff is recommending
contracting with a qualified material testing firm for Quality Assurance (QA) testing.
During construction, some inconvenience is expected to vehicular and pedestrian traffic along
the roadway segments. Specifically, full depth asphalt repair is expected to result in lane
closures for short durations of time. However, it is anticipated that this work is likely to be
done at night to minimize traffic control impacts. The contractor will be required to prepare a
traffic control plan, and City staff will work with the contractor to minimize travel delays and
impediments to driveways. Property owners on each roadway segment will be notified of the
construction schedule prior to work beginning. City staff deliberately bid this project at this
time and has written into the project requirements that the work be done between June 15th
and August 15th in order to coincide with the Atascadero Unified School District summer
break.
ENVIRONMENTAL REVIEW:
The proposed project is Categorically Exempt (Class 1) from the provisions of the California
Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”)
and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.) pursuant
to CEQA Guidelines Section 15301, because it is limited to repair and maintenance of
existing facilities. A finding of exemption is on file in the project records.
Page 48 of 186
ITEM NUMBER: A-7
DATE: 05/24/22
FISCAL IMPACT:
The following tables summarize the proposed expenditures and funding for the project.
Traffic Way and Ardilla Avenue rehabilitation work is funded with Urban State Highway
Account Grant Funds (USHA), while the Traffic Way/US 101 Alleyway rehabilitation
work is funded with Local Transportation Funds (LTF). All funding is included in the
FY2021-2023 Budget.
ESTIMATED EXPENDITURES
Traffic Way and Ardilla Avenue Rehabilitation:
Design and Bid Phase $10,000
Construction Contract 259,500
Construction Inspection / Testing / Administration @ 15% 38,925
Construction Contingency @ 20% 51,900
Subtotal: 360,325
Traffic Way/US 101 Alleyway Rehabilitation:
Design and Bid Phase $ 10,000
Construction Contract 126,291
Construction Inspection / Testing / Administration @ 15% 18,944
Construction Contingency @ 20% 25,260
Subtotal: 180,495
Total Estimated Expenditures: $ 540,820
BUDGETED FUNDING SOURCES
USHA Funds (Traffic Way/Ardilla Ave. Project) $362,500
LTF Fund (Traffic Way/US 101 Alleyway) $200,000
Total Budgeted Funding Sources: $562,500
ALTERNATIVES:
Council can direct staff to cancel or re-bid the project. This is not recommended as the
roadways are in poor condition and it is anticipated that re-bidding the project would
result in higher bids.
ATTACHMENT:
Bid Summary
Page 49 of 186
Page 50 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
Atascadero City Council
Staff Report - City Manager
Diablo Canyon Power Plant - REACH Letter of Support
RECOMMENDATION:
Council authorize the Mayor to sign a letter on behalf of the City, drafted by REACH and
the Diablo Canyon Power Plant (DCPP) MOU stakeholder group, in support of
responsible and economically beneficial reuse opportunities at DCPP if and when
DCPP is closed.
DISCUSSION:
The Diablo Canyon Decommissioning Engagement Panel (DCDEP) formed in May
2018 to facilitate local public input on the closure of Diablo Canyon Power Plant
(DCPP). The DCDEP provided a forum for public input regarding reuse of facilities and
lands related to the operations of the DCPP. The power plant itself is located on a
portion of the property that is commonly referred to as Parcel P.
In March 2021, a Memorandum of Understanding (MOU) was approved with various
public and private stakeholders committing to furthering the work of the DCDEP to
provide a more focused and detailed reuse plan for Parcel P (Attachment 2). The MOU
states that the “participants share the common objective of aligning and guiding the
diverse range of public and private sector officials around a shared vision for the DCPP
decommissioning process and future use of Parcel P, thereby championing social,
cultural, environmental and economic interests of Central Coast residents.” The shared
vision embraces job creation and clean energy innovation at the 600-acre industrial
Parcel P site while honoring the complementary efforts to preserve the unique natural
resources and cultural heritage of the surrounding 12,000 acres of Diablo Lands.
REACH serves as the MOU stakeholder group coordinator and facilitator.
In 2021, REACH engaged consultants to conduct a series of 40 stakeholder interviews,
host a workshop to facilitate consensus on potential reuse opportunities for Parcel P,
develop a potential reuse “bubble map”, and devised a conceptual site plan for a
mixed-use innovation park supporting research, education and commercial enterprise.
As a result of this process, the consultants recommended that the scenario with the
likelihood of success was to support Cal Poly as the lead entity to acquire Parcel P and
promote the productive reuse of the site, aligned with the broader vision of the reuse
opportunities.
Page 51 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
REACH met monthly from January – April 2022 to further discuss and formalize
consensus for Cal Poly taking on the role of lead entity for reuse of Parcel P. The result
of this consensus is the letter titled, “Cal Poly Should Lead Diablo Canyon’s Next
Chapter: An open letter advancing our vision for a world-class clean tech innovation
park” provided as Attachment 1. The letter explains the vision to have the DCPP site
“accelerate global clean-energy innovation — all while creating jobs and economic
benefit for Central Coast residents and retaining the vast surrounding lands for
conservation and tribal stewardship.” Other MOU partners have signed the letter and
have invited other entities to join. The goal of the letter is to gain community support and
publicity for the vision of reuse opportunities at the DCPP site, if and when closure of
DCPP occurs in the future.
During the week of April 25, 2022, the Governor’s office confirmed that they are
exploring options for keeping the DCPP open. Ultimately, the decision involves other
regulatory bodies in addition to PG&E and is not entirely within the hands of the
Governor. On May 3, 2022, the San Luis Obispo County Board of Supervisors
unanimously approved the letter provided as Attachment 1, which removes the phrase
“soon-retiring” from the first sentence in light of the Governor’s recent comments. Any
renewed conversations regarding the potential for the plant to remain open do not
diminish the need to prepare for a future without the plant nor preclude the ability to
support the stakeholder group’s planning efforts. The concept described in the letter is a
plan for what will happen if and when the DCPP closes and represents broad
consensus achieved through a year-long process of extensive community stakeholder
engagement and consulting expertise.
Authorizing the execution of the letter provided in Attachment 1 will support the ongoing
efforts of the stakeholder group to identify and pursue responsible and economically
beneficial reuse of Parcel P.
ALTERNATIVES:
1. Do not authorize the Mayor to sign the letter on behalf of the City.
2. Provide other direction to staff.
FISCAL IMPACT:
None related to the signing of the proposed letter.
ATTACHMENT:
1. Proposed Letter
2. Memorandum of Understanding, March 2021
Page 52 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
ATTACHMENT: 1
May 3, 2022
Cal Poly should lead Diablo
Canyon’s next chapter
An open letter advancing our vision for a world-class clean tech innovation park
To California Central Coast residents, clean energy champions and innovators, and anyone interested
in advancing an abundant, sustainable energy future:
Where the Diablo Canyon Power Plant sits on California’s Central Coast, we see a new future as a hub of
clean energy innovation. We see a research and development campus where industry and academia can
hatch and collaborate on emerging renewable technologies. We see an expansion of existing
desalination capabilities, a harbor for blue economy activity, a community center for Chumash heritage
education and celebration, and a critical platform for enabling California to harness the wind energy
right off our coast.
This is no idle daydream. One year ago, stakeholders spanning government, higher education, business,
labor, tribal and conservation organizations came together to pursue a shared vision for the future of
Page 53 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
ATTACHMENT: 1
May 3, 2022
Diablo Canyon’s 585-acre industrial area. We’ve spent the last 12 months expanding the coalition and
crystallizing the vision.
We’ve convened top experts in large-scale redevelopment and nuclear decommissioning, consulted
national renewable energy researchers and industry leaders, explored suitable possibilities, weighed
challenges and devised a conceptual site plan for a mixed-use innovation park supporting research,
education and commercial enterprise. We’ve built strong consensus around what all the experts agree is
a generational opportunity.
Put simply, this unique industrial site offers unrivaled energy assets for pioneering the next chapter of
our state and nation’s energy independence and resilience. With high-power transmission lines (500 kV
and 230 kV) connecting to the state’s electricity grid, extensive existing facilities, and proximity to the
offshore wind development coming to the waters off our coast, this site can accelerate global clean-
energy innovation — all while creating jobs and economic benefit for Central Coast residents and
retaining the vast surrounding lands for conservation and tribal stewardship.
From our collective due diligence through the last year, we firmly believe that Cal Poly San Luis
Obispo, with support from public-private partnerships and investments, can be the catalyst for this
vision.
Cal Poly is a trusted community partner that contributes significantly to the region’s economy,
community and social fabric. It’s also a widely regarded applied research powerhouse, with access to
the extensive resources of the 23-campus California State University system and an established national
network of donors, supporters and industry partners. Complemented by a combination of commercial
enterprise and state- and federally funded research labs, the university’s lauded Learn by Doing ethos
can enhance and propel the vision of a hands-on center of innovation and collaboration. With an
extensive history of capital project execution, stewardship and partnerships with Pacific Gas and
Electric, Cal Poly is ideally poised as the logical successor entity to usher in an extraordinary new era for
Diablo Canyon and the Central Coast.
The Central Coast is already a leading nexus of renewable energy, with massive utility-scale solar farms,
the world’s largest battery storage plant under development in Morro Bay and the West Coast’s largest
o shore wind energy area slated for lease auction this fall, among other projects. Add in a
substantial skilled energy workforce and energy-exporting legacy, and the Central Coast is positioned as
a primary player in the nation’s clean-energy future.
Details big and small need to be hashed out. Among them: synchronizing development of future-use
activities with the plant decommissioning; ensuring local businesses and workers are employed in the
multi-billion dollar decommissioning process to the maximum extent possible; and remaining flexible to
evolution as industry partners, regulatory processes, and investment come together.
Page 54 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
ATTACHMENT: 1
May 3, 2022
But the clock is ticking. With strong community alignment behind Cal Poly, we are proactively seeking
the long-term partnerships and investments needed to realize the vision of a climate-change innovation
hub that supports good-paying, future-oriented jobs for our skilled workforce.
The Central Coast is already playing a pivotal role in driving our state’s sustainable economy forward,
and we invite you to join us in unlocking the potential of this bold vision.
Sincerely,
U.S. Representative Salud Carbajal
24th District, U.S. House of
Representatives
Senator John Laird
17th District, CA State Senate
Assemblyman Jordan Cunningham
35th District, CA State Assembly
Jeffrey D. Armstrong
President, Cal Poly
Bruce Gibson
Board Chair, County of San Luis Obispo
Melissa James
President/CEO, REACH
Kaila Dettman
Executive Director, The Land
Conservancy of San Luis Obispo County
Joshua Medrano
Executive Secretary & Treasurer,
Tri-Counties Building and Construction Trades Council
Vice Mayor Carlyn Christianson
City of San Luis Obispo
Mayor Jeff Lee
City of Grover Beach
Mayor John Headding
City of Morro Bay
Mayor Ed Waage
City of Pismo Beach
Page 55 of 186
ITEM NUMBER: A-8
DATE: 05/24/22
ATTACHMENT: 1
May 3, 2022
Glenn Morris
CEO, Santa Maria Valley Chamber of Commerce
Chuck Davison
CEO, Visit SLO CAL
Mayor Caryn Ray Russom
As an individual Arroyo Grande City Council Member
Jane Swanson
President, Mothers for Peace
Nicole Moore
Interim CEO, South County Chambers of Commerce
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Page 66 of 186
ITEM NUMBER: A-9
DATE: 05/24/22
Atascadero City Council
Staff Report - City Manager
Virtual Meetings – AB 361 Requirements
RECOMMENDATION:
Council adopt Draft Resolution making findings consistent with the requirements of
AB 361 to continue to allow for the conduct of virtual meetings.
DISCUSSION:
On March 4, 2020, Governor Newsom declared a state of emergency due to the novel
coronavirus COVID-19. That declaration is still in effect. Since March 12, 2020,
Executive Orders from the Governor relaxed various Brown Act meeting requirements
relating to teleconferencing rules, temporarily suspending the Brown Act provisions
requiring the physical presence of council, board and commission members at public
meetings. The most recent extension of those Orders expired on September 30, 2021.
On Friday, September 17, 2021, the Governor signed AB 361. AB 361 amends
Government Code section 54953 to provide more clarity on the Brown Act’s rules and
restrictions surrounding the use of teleconferencing to conduct meetings. The newly
enacted Government Code Section 54953(e) creates alternate measures to protect the
ability of the public to appear before local legislative bodies.
With the passage of AB 361, local agencies are allowed to continue to conduct virtual
meetings during a declared state of emergency, provided local agencies comply with
specified requirements. The City Council previously adopted Resolution No. 2021-066
on September 28, 2021, finding that the requisite conditions exist for the legislative
bodies of the City of Atascadero to conduct remote teleconference meetings in
compliance with AB 361. (Government Code Section 54953(e).) AB 361 requires the
City Council to reconsider the circumstances of the state of emergency not later than 30
days after teleconferencing for the first time pursuant to AB 361 and every 30 days
thereafter in order to continue to conduct remote teleconference meetings. The City
Council previously adopted Resolution No. 2021-069 on October 26, 2021, Resolution
No. 2021-073 on November 23, 2021, Resolution No. 2021-074 on December 14, 2021,
Resolution No. 2022-001 on January 11, 2022, Resolution No. 2022-003 on February 8,
2022, Resolution No. 2022-010 on March 8, 2022, Resolution No. 2022-010 on April 12,
2022, and Resolution No. 2022-032 on May 10, 2022, making the requisite findings to
continue remote teleconferencing. Circumstances have not changed since the
Council’s adoption of Resolution No. 2022-006, Resolution No. 2022-010, and
Resolution No. 2022-032.
Page 67 of 186
ITEM NUMBER: A-9
DATE: 05/24/22
In order to continue remote teleconferencing, the City Council must make the following
findings (Gov. Code § 52953(e)(3)):
• The City Council has reconsidered the circumstances of the state of emergency.
• Any of the following circumstances exist:
o The state of emergency continues to directly impact the ability of the
members to meet safely in person.
o State or local officials continue to impose or recommend measures to
promote social distancing.
Social distancing is the term used for measures that reduce physical contact between
infectious and susceptible people during a disease outbreak. While local and state
mask mandates have been lifted, and the San Luis Obispo County local health
emergency has been terminated, there are still some remaining social distancing
measures in place to reduce the spread of COVID.
• The California Department of Public Health continues to strongly recommend
masks for all persons, regardless of vaccine status, in indoor public settings and
businesses.
• The City remains subject to the State Occupational Safety and Health
Administration (CalOSHA) regulations which, among other requirements,
continues to obligate an employer to provide training to employees on COVID-19
transmission and risk reduction, including “The fact that particles containing the
virus can travel more than six feet, especially indoors, so physical distancing,
face coverings, increased ventilation indoors, and respiratory protection decrease
the spread of COVID-19, but are most effective when used in combination.”
(CCR Section 3205(c)5(D).)
• CDC continues to have quarantine and isolation recommendations for those that
have tested positive for COVID, those that have symptoms of COVID and for
those that have been exposed to COVID. These isolation and quarantine
requirements continue to often prevent employees and community members
from attending meetings in person.
Should the Draft Resolution not be adopted, and the City Council (or an individual
Council Member) elects to attend virtually, the City must comply with the provisions of
Government Code Section 54953(3)(b):
• Agendas shall be posted at all teleconferencing locations
• Each teleconference location shall be identified on the agenda
• Each teleconference location shall be accessible to the public
• At least a quorum of the Council shall participate from locations with the
boundaries of the City
• The public shall be provided an opportunity to address the Council directly at
each teleconference location
Adoption of the Draft Resolution does not prohibit the conduct of a traditional or hybrid
meeting in accordance with state and local regulations. At Council’s direction on March
8, 2022, and because CDC measures are still in place that could prevent a member of
the public from participating in the meeting in person, if the Draft Resolution were not
adopted staff will continue to conduct hybrid City Council meetings that allow public
Page 68 of 186
ITEM NUMBER: A-9
DATE: 05/24/22
participation both virtually and in-person. At this time, there is not staff available to
conduct all advisory body meetings (such as Planning Commission, Design Review
Committee, ATBID, CSTOC) in a hybrid fashion and adoption of the Draft Resolution
allows these meetings to continue to be conducted virtually. If the Draft Resolution was
not adopted, these advisory bodies would need to return to the traditional in-person
meeting model, effective immediately.
FISCAL IMPACT:
None.
ATTACHMENT:
Draft Resolution
Page 69 of 186
ITEM NUMBER: A-9
DATE:
ATTACHMENT:
05/24/22
1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF ATASCADERO, CALIFORNIA,
PROCLAIMING THE CONTINUING NEED TO MEET BY
TELECONFERENCE PURSUANT TO
GOVERNMENT CODE SECTION 54953(e)
WHEREAS, all meetings of the City of Atascadero legislative bodies are open and public
as required by the Ralph M. Brown Act (Cal. Gov. Code 54950 – 54963); and
WHEREAS, the Brown Act, Government Code section 54953(e), makes provisions for
remote teleconferencing participation in meetings by members of a legislative body, without
compliance with the requirements of Government Code section 54953(b)(3), subject to the
existence of certain conditions; and
WHEREAS, Government Code section 54953(e) was added by AB 361, signed by
Governor Newsom on September 17, 2021; and
WHEREAS, on March 4, 2020, Governor Newsom declared a State of Emergency as a
result of the COVID-19 pandemic; and
WHEREAS, on March 17, 2020, the City of Atascadero declared a State of Emergency as
a result of the COVID-19 pandemic; and
WHEREAS, such State of Emergency remains in effect; and
WHEREAS, COVID-19 continues to threaten the health and lives of City of Atascadero
residents; and
WHEREAS, the Delta and Omicron variants are highly transmissible in indoor settings
and breakthrough cases are more common; and
WHEREAS, state officials have imposed or recommended measures to promote social
distancing to include the wearing of masks indoors, regardless of vaccination status; and
WHEREAS, the City Council previously adopted Resolution No. 2021-066 on
September 28, 2021, Resolution No. 2021-069 on October 26, 2021, Resolution No. 2021-073 on
November 23, 2021, Resolution No. 2021-074 on December 14, 2021, Resolution No. 2022-001
on January 11, 2022, Resolution No. 2022-003 on February 8, 2022, Resolution No. 2022-006 on
March 8, 2022, Resolution No. 2022-010 on April 12, 2022, and Resolution No. 2022-032 on May
10, 2022, finding that the requisite conditions exist and continue to exist for the legislative bodies
of the City of Atascadero to conduct remote teleconference meetings in compliance with
Government Code Section 54953(e); and
WHEREAS, Government Code Section 54953(e) requires that the City Council must
reconsider the circumstances of the state of emergency every 30 days in order to continue to
conduct remote teleconference meetings in compliance with AB 361.
Page 70 of 186
ITEM NUMBER: A-9
DATE:
ATTACHMENT:
05/24/22
1
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. Recitals. The above recitals are true and correct and are incorporated into
this Resolution by this reference.
SECTION 2. Findings. The City Council does hereby find that:
1. The City Council has reconsidered the circumstances of the state of emergency
declared as a result of the COVID-19 pandemic.
2. The state of emergency continues to directly impact the ability of the members to meet
safely in person.
3. State or local officials continue to impose or recommend measures to promote social
distancing.
SECTION 3. Compliance with Government Code Section 54953(e). The City Council and
other legislative bodies will continue to meet by teleconference in accordance with Government
Code section 54953(e).
SECTION 4. Effective Date of Resolution. This Resolution shall take effect immediately
upon its adoption and shall be effective until the earlier of (i) 30 days from the date of adoption of
this Resolution, or (ii) such time the City Council adopts a subsequent resolution in accordance
with Government Code section 54953(e)(3) to extend the time during which the legislative bodies
of the City of Atascadero may continue to teleconference without compliance with paragraph (3)
of subdivision (b) of section 54953.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ____th
day of ______, 2022.
On motion by Council Member _______ and seconded by Council Member ____________,
the foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ADOPTED:
CITY OF ATASCADERO
______________________________
Heather Moreno, Mayor
ATTEST:
______________________________________
Lara K. Christensen, City Clerk
APPROVED AS TO FORM:
______________________________________
Brian A. Pierik, City Attorney
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ITEM NUMBER: C-1
DATE: 05/24/22
Atascadero City Council
Staff Report – Community Development Department
Affordable/Inclusionary Housing Impact Fee Nexus Studies
RECOMMENDATION:
Council review and provide direction on potential strategies for an affordable housing
program in an effort to implement City Housing Element Policy.
REPORT IN BRIEF
The adopted 2021-2028 Housing Element states:
Program 2.B: Inclusionary Housing Ordinance
Evaluate the City’s inclusionary housing policy and consider replacing the current
inclusionary policy with an inclusionary housing ordinance. An inclusionary ordinance
must be consistent with State Density Bonus regulations and address changing economic
and regulatory considerations. The City will continue to monitor the impact of its
inclusionary housing policy/ordinance on production of market rate housing in response
to market conditions. If the City’s inclusionary housing approach presents an obstacle to
the development of the City's fair share of regional housing needs, the City will revise the
policy/ordinance accordingly
In March 2021, following adoption of the Housing Element, Council was asked to review
options for the implementation of an affordable housing program. The discussion led to
direction to:
• Develop a program to encourage the development of housing that is affordable by
design to meet moderate-income unit needs
• Prepare a nexus fee study to explore fees that can be utilized to support the
development of future low- and very low-income affordable housing
• Explore policies and/or incentives that meet Housing Element objectives
In 2021, the City hired EPS to assist in developing a nexus study to help the City
determine the true cost of subsidizing an affordable housing program to inform housing
strategies. On October 26, 2021, the City Council reviewed a preliminary report from
EPS and provided initial feedback. Since that time, EPS and City staff have completed
further work toward the nexus study and affordable housing program options and would
like additional feedback prior to finalizing an implementation strategy.
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A new housing implementation strategy is needed because of changes to State housing
laws over the past several years. Due to State law changes, most housing projects do not
require discretionary City review such as use permit, rezoning or other actions, therefore,
the City is limited in our ability to implement our current inclusionary housing policy which
only applies to discretionary legislative actions. Changes to the density bonus laws have
also diluted our existing affordable housing policies resulting in more moderate-income
units and fewer low- or very low-income opportunities. While moderate-income units are
very close to the market rate for most smaller residential units in Atascadero, it is
recognized that low- and very low-income projects generally require a significant level of
subsidy through State grants and local funding contributions. Without a policy change,
Atascadero will likely not reach Regional Housing Needs Assessment (RHNA) needs for
low- and very low-income units in the future without an updated affordable housing
strategy.
In order to achieve RHNA goals without placing an unfair burden on any one sector of
development, the City should consider a multifaceted approach that combines multiple
programs and policies.
Suggested potential strategies include:
• Adoption of an inclusionary program similar to the City’s existing policy to require
affordable units within projects requiring legislative or discretionary approval (Use
permit, Zone Change or General Plan Amendment).
• Zoning and development policies that require or incentivize affordable by design
units to maintain and expand moderate-income housing stock. (Implemented
through the adoption of Objective Design Standards)
• Development impact fee subsidies (or deferments) for affordable housing projects.
• Impact fees for new market rate housing development, with exceptions to
incentivize affordable-by-design units.
• Adoption of a State Density Bonus program consistent with State law
• Utilization of ADUs and JADUs to meet a portion of the low-income housing
allocation.
Each of these strategies may produce varying results in the amount of affordable housing
produced and the level of affordability attained. Staff is seeking additional direction on
strategies to be included in the design of an affordable housing program
DISCUSSION:
Affordable Housing Overview
Inclusionary housing programs are local policies that tap the economic gains from rising
real estate values to create affordable housing. These programs support local residents
who are considered moderate-, low-, and very low-income in securing stable housing.
The following table classifies San Luis Obispo County’s income categories per the State
Housing and Community Development Department (HCD).
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The Housing Element anticipates that the City will consider adopting an affordable
housing strategy by the end of 2022. The City’s current RHNA cycle (2020-2029) sets a
goal of achieving 207 completed very low-income units, 131 completed low-income units,
and 151 moderate-income units in addition to 354 above moderate-income units for a
total of 843 units.
Historically, the City meets and exceeds housing production in the market rate and
moderate-income categories but falls short in the low- and very low-income categories.
The City Council has directed staff to focus on affordable-by-design strategies to
encourage construction of moderate-income units. These strategies will be included in
the upcoming Objective Design Standards currently under development.
Current Interim Inclusionary Housing Policy
In 2003, the Atascadero City Council adopted an interim Inclusionary Housing Policy that
requires all housing projects subject to a legislative action (rezoning or general plan
amendment) to provide affordable units or pay an in-lieu fee into the City’s affordable
housing fund.
The current Interim Inclusionary Housing Policy is as follows:
• Residential developments of 11+ units requiring legislative action must include at
least 20% affordable units, as follows:
• Single family land use area: 100% Moderate
• Multifamily and mixed-use land areas: 20% Very Low, 37% Low, and 43%
Moderate
• Projects of 1-10 units pay fee or build units
• Fractional units up to 0.49 pay fee; fractional units 0.5 and greater counted as 1.0
unit
• In-lieu fee is calculated as 5% of construction value of the market rate units
(valuation set by building code)
• Projects that participate in the State Density Bonus program are exempt
The City has been operating under this policy since adoption. While this has helped our
community make progress toward achieving our RHNA targets, the City has fallen short
on meeting low- and very low-income housing numbers by approximately half the RHNA
goal in the previous cycle, as demonstrated in the table below.
Maximum
Percentage of 2021 Max Income [1]
Affordability Category County Median 3-person household
Extremely Low Income (ELI)0% - 30%$26,450
Very Low Income (VLI)50%$44,050
Low Income (LI)80%$70,450
Median Income 100%$88,000
Moderate Income (Mod)120%$105,600
Sources: CA Department of Housing and Community Development; Economic & Planning Systems, Inc.
[1] 2021 HCD maximum income thresholds are used to translate employment, wages and total worker household
incomes to affordable housing categories and to compute supportable housing costs based on household income
levels.
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Construction
Objectives/Progress
Extremely Low
and Very Low-
Income Units
Low-Income
Units
Moderate-
Income Units
Above
Moderate-
Income Units Total Units
2014-2019 RHNA Objectives
Goal 98 62 69 164 393
Units Constructed (2014-
2019) 48 33 178 344 562
Progress (%) 49% 53% 258% 210%
Current challenges with the Interim Inclusionary Housing Policy include:
• It only applies to projects requiring legislative approval and projects that use the
State Density Bonus are exempt. Since 2003, State laws have substantially
changed and many housing projects have now become “by right”, not allowing the
City to perform discretionary review and thus limiting application of our current
policy
• Residential developers are rarely required or encouraged to incorporate units that
meet needs of all affordable housing income levels, focusing on moderate-income
units for for-sale projects
• Incentives such as the granting of bonus units to help offset costs and balance
developer subsidy often cannot be achieved based on site development
constraints such as stormwater requirements, access standards, and topography.
• The in-lieu fee is not related to the affordability gaps or the subsidy required to
build affordable housing nor does it consider feasibility for developers based on
current market and construction cost conditions
An inclusionary (or affordable) housing ordinance could update and formalize the policy,
recognizing recent State updates and implementing the City’s General Plan Housing
Element program.
2021-2028 Housing Element
The evaluation of the City’s inclusionary housing policy is an activity listed in the adopted
2021-2028 Housing Element but the City may consider other tools in concert with
adoption of an ordinance to achieve a balance of affordable housing types that meet the
City’s projected needs. The Housing Element identifies this activity to be completed by
the end of 2022.
At the November 12, 2019 Council meeting, the City Council authorized a contract with
MIG to provide planning consultant services for the preparation of the 6th cycle General
Plan Housing Element update and development of an Inclusionary Housing Ordinance.
MIG has worked with City staff and the community to assist the City with drafting an
Affordable Housing Strategy, utilizing a variety of tools to target housing needs and City
goals. At the March 11, 2021 joint Planning Commission/City Council study session, MIG
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presented an overview memo detailing the current State regulatory framework, a
summary of Atascadero’s inclusionary policy, various affordable housing tools (and the
benefits and constraints of each), case studies of surrounding jurisdiction’s affordable
housing requirements, and implementation ideas for Atascadero. The memo has been
attached to this report for reference (Attachment 3). It is important to note that there have
been some local changes since this memo was written.
To address strategies for low- and very low-income units, the City hired EPS to conduct
a nexus study analyzing the impact that development of market rate housing has on the
demand for below market rate housing, and based on the results, to determine the
defensible nexus-based fee that could be charged to market rate development. The
nexus study is a tool to help the City formulate a comprehensive affordable housing
strategy that balances the need for affordable housing without placing an undue burden
on new market rate housing.
The City’s ultimate strategy should acknowledge the need to meet housing goals across
all income levels. Based on past construction history, higher density development can
achieve moderate-income units without placing cost burdens on developers. In general,
higher density development can take advantage of economies of scale and are able to
spread land, infrastructure, and site amenity costs over multiple units. Units on multi-
family sites also tend toward smaller units and shared amenities, often providing for rents
or sales at the moderate-income rate.
Recent changes to State Density Bonus law also increased opportunities for lower-
income units to be included in private development through the granting of concessions
and waivers of development standards. While these projects usually only provide low
numbers of units, implementation of the program allows for these units to be distributed
throughout the City and provides for variety in unit type. Because of the allowance for
concessions and waivers, staff expects more multi-family projects to take advantage of
the program in coming years.
While the State Bonus can be an effective tool in the construction of lower-income units,
the number of units achieved is expected to remain below the City’s 6th cycle RHNA goals.
Many of the City’s recent low- and very low-income units are constructed by local non-
profit organizations through grant funding opportunities. These housing projects utilize
tax credit programs that rely upon contributions from local jurisdictions in order to achieve
grant scoring and be awarded funds. Grant scoring can be supported through a
combination of Impact Fee waivers and affordable housing funds obtained through an
affordable housing impact fee. Impact fees can also be utilized to help supplement
development impact fees and support City administration of an affordable housing
program.
Affordable Housing Impact Fee Analysis
The City analyzed the basis for an impact fee through multiple lenses:
• Legal defensibility,
• Developer feasibility, and
• Estimated need.
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EPS, in conjunction with City staff, performed an analysis of these three facets to provide
options for an impact fee as a potential part of the City’s comprehensive strategy for the
provision and facilitation of affordable housing to meet the City’s housing goals.
Nexus Study:
In general, new market rate housing generates a need for increased services and thus
added service sector employees.
The nexus analysis:
• Looks at what type of housing is built and how much those households earn and
spend in the local economy;
• That leads to understanding how many jobs may be generated from that spending
and how much those employees earn;
• This in turn informs how many housing units are needed for those added
employees and what the gap is between housing development costs and
employee household purchasing power.
In determining the impact, a number of assumptions are built into the analysis. In
September and October of 2021, EPS met with regional housing and lending experts from
the non-profit and private sector to better understand the development process, local
housing market dynamics and issues, and to vet assumptions used in the analysis. The
analysis considers local density allowances and typical sizes of housing units developed
for lower-income households. The below chart shows the total development costs
including a reasonable profit margin and assuming prevailing wage construction, as
compared to what households in each income category could afford. The analysis was
completed assuming a prototypical lower-income housing development based on data
from recent projects as well as information gathered from local non-profit organizations.
The prototype assumed a 2-3 story multi-family development with 900 sq. ft. 2-bedroom
units. Typical development costs were estimated to be approximately $613,000 per unit
and were vetted and confirmed through interviews with local housing developers.
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The analysis concluded that the maximum justifiable fee ranges from:
• $47 to $75 per sq. ft. of new market-rate rental housing (varies by the size of the
unit) and;
• $38 to $42 per sq. ft. of new market rate ownership housing.
As was anticipated, even the lowest of the maximum justifiable fees far exceed the
feasible amount that can be absorbed by new development but provides the necessary
data to justify an impact fee.
This analysis also informs the implied inclusionary requirement for projects based on the
affordability gap. As with the fee, the percentage of inclusionary units supported by the
need are not a realistic alternative for developers, however, the study provides a starting
point for discussion. Based on the analysis, inclusionary needs range between 14% and
22% for rental projects and 18% and 27% for for-sale projects.
Feasibility Analysis:
The feasibility analysis performed by EPS looks at the maximum fee that would be legally
defensible based on affordable housing need generated by market-rate development.
EPS tested the feasibility of a range of inclusionary requirements and affordable housing
fee levels by preparing financial proformas reflecting the expected costs of new
development, based on the nexus study, supplemental market research, and developer
interviews, and comparing those costs to the revenues that could be generated given
various mixes of market-rate and affordable housing and/or fee levels. The analytical
metric for evaluating feasibility varies for the development of ownership units and rental
units.
• For ownership units, the threshold for feasibility is defined as a 15% profit margin
(profit divided by gross revenue).
• For rental units, the threshold for feasibility is defined as a 5% yield-on-cost (annual
net operating income divided by development costs).
Using these threshold feasibility assumptions, the model can be used to solve for the
highest fee that achieves feasibility:
• For ownership projects, the maximum fee that still allows a developer to achieve a
15% return is calculated to be $15.50 per sq. ft.
• For rental projects, the maximum fee that still allows a developer to achieve a 5%
yield-on-cost is calculated to be $10.12 per sq. ft.
While these calculations are based on market research and current costs and values, it
is important to note that every applicant and every development will present unique
economic considerations, and some developments may not be able to absorb these fees,
while others may be able to absorb fees higher than indicated here.
Estimated Need:
A majority of low- and very low-income units are achieved by local housing organizations
through grant funded development projects. These projects help the City meet RHNA
goals for the lower affordability categories. To be eligible and competitive for grants, these
organization usually need to show a local contribution toward the project. Based on a
number of recent and past grant applications, it is estimated that a local match of 6% of
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total project costs to ensure that local affordable housing developers remain competitive
through the grant process.
EPS’s analysis identifies a per unit development cost of $613,000. This is in line with
current grant applications and represents complete development costs including land
acquisition and prevailing wage requirements. A majority of grant funded affordable
housing requirements will fall into the prevailing wage project category so it is important
to understand this full cost when determining anticipated City contribution expectations.
Staff has identified two ways that the City can support these grant funded development
projects: Subsidy or long-term deferment of development impact fees and by direct
contributions from funds collected from market-rate development.
Current Infrastructure Development Impact Fee Options
The City has two options for supporting affordable housing projects through modifications
of impact fees. The City can provide a full subsidy of fees or a long-term deferral and low-
interest loan. The current development impact fee for a high-density unit is $11,684, and
is set at higher amounts for units built at a lower density. These impact fees are used to
pay for necessary road expansions, police facility expansions and additional fire and park
facilities needed to serve future residents as the City grows. A full subsidy of the fees
would result in a loss of this revenue. It is important to note that the current development
impact fees are adopted at a rate of 60% of full facility costs (currently using 2006 cost
analysis) and there is a large backlog of needed expansion projects for which there is not
adequate funding.
As an alternative, the Council could consider a long-term loan and deferral of payments
for a designated period of time. The City of Paso Robles has a similar program and defers
payment for until the loan is due at a 17- to 20-year timeframe with simple interest 2% to
3% providing an extended period of time to generate cash flow for repayment and to
eliminate up front project costs. This type of program can count as a City fund contribution
for grant applications and can allow impact fees to be collected over time rather than a
full reduction of revenue; however, there are costs associated with program
administration.
Affordable Housing Impact Fee
As shown in the nexus report produced by EPS, the City could charge an affordable
housing impact fee on each sq. ft. of new residential development. The nexus report
supports a maximum fee of $47 to $75 per sq. ft. of new market-rate rental housing and
$38 to $42 per sq. ft. of new ownership housing. For context, if the City charged the
maximum allowed fee based on the nexus study, a home owner would pay $63,090 in
affordable housing impact fees to build their 1,500sq. ft. dream house. This amount would
be in addition to the estimated $25,000 in City fees and impact fees, plus school developer
fees (estimated at $6,120), water meter fees (estimated at $19,600) and other charges
(construction, non-City utility connections, etc.) for building a home. As stated, a fee
burden of this magnitude is a significant barrier to building any housing. The higher the
fee burden per unit, in theory, the fewer units that will be built due to cost, which not only
increases the statewide housing shortage, but also means fewer units assessed the fee
and a shortfall in the target affordable housing fee revenue number.
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There is no single answer to what is the correct fee burden for new housing, but instead
it is a policy decision that must balance the whole. The City’s ultimate strategy should
acknowledge the need to balance housing and community goals across all income levels.
More costly housing provides tax revenue that pays for City services such as police and
fire, while low-income housing or non-profit housing provides little to no tax revenue to
support the services required to serve these new residents. More very low- and low-
income housing units are needed in this community to provide critical housing for our low-
income residents, but these units are not able to be built without some funding assistance
from government. City funding is inadequate and the City has many existing funding
deficiencies and financial needs that are not being met with current funding levels. In
general, the City’s impact fees are woefully inadequate to reasonably construct the
infrastructure expansions identified in the General Plan and to continue to serve the
community. A study is in process to potentially increase these fees to address this
shortfall. As we add affordable housing fees to each unit, this will affect our ability to
adjust impact fees based on overall feasible project costs. All of these competing needs
must be balanced when considering what is the correct level of affordable housing fees.
Setting the Fee
One way to look at a potential fee is to look at what is necessary to produce the needed
units in the current RHNA cycle. Based on the current RHNA cycle, 43 low- and very low-
income units would need to be constructed annually to achieve RHNA targets. As 50% of
ADUs and most State Density Bonus units count toward lower-income categories, these
anticipated units were deducted from the total, resulting in the need for 195 Very Low-
Income Units and 59 Low-Income Units to be built over the 8-year RHNA Cycle (an
average of 31.75 units per year).
Based on a $613,000-unit cost, the City’s expected grant contribution would be $36,780
per unit (6% of $613,000). The City’s current development impact fee for a high-density
residential unit is $11,684 which could be waived, deferred, or set at $0 as part of the
City’s affordable housing program, leaving a remaining gap of $25,086 per unit or
$796,481 annually as shown below.
Need Based Analysis
Cost to develop a unit of affordable housing 613,000$
Estimated Needed Local Match 6%
Estimated City Subsidy Needed per Unit 36,780$
Less: Waiver of City Impact Fee (high density)(11,694)$
Estimated Remaining City Sbsidy Needed
per Unit 25,086$
Times # of Annual Units Needed 31.75
Estimated Annual Local Subsidy Needed 796,481$
In order to examine what level of fee would need to be assessed to collect an average
$796,481 annually, EPS, in coordination with staff, reviewed past permit data from 2014
through 2019 to determine annual housing construction averages. Ignoring deed restricted
affordable housing projects and eliminating some housing units that were either conversions
of existing structures, or would require further staff research, staff then looked at 518 units or
813,109 sq. ft. of housing produced over the 6 years in the last RHNA cycle.
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In examining these units, there was a lot of variety in the size and types of housing units
that were built from 2014-2019. In the data set, there were 238 single-family homes, 96
attached single-family homes (duplex, triplex, etc.) and 184 apartment units. The sizes
of the units varied and included very large apartments (2,800 sq. ft.) and very small single-
family homes (432 sq. ft.). While we know that what will be built in the current RHNA
cycle will not be exactly what was built from 2014-2019, staff used this data set as an
estimate for examining what different fee structures and rates could look like and how
they would affect housing units of different types and sizes.
As long as the fee is under the maximum amount set forth in the nexus study, the fee
does not have to be set at a flat per sq. ft. charge. Staff looked at exempting certain types
of housing, assuming that certain units were affordable, such as ADUs or apartments, but
the data suggests that the type of housing does not always correlate with affordability. In
other words, very large and expensive apartments are being built while some single-
family units on individual sites fall into affordable categories due to size and amenities.
As such, staff looked at various fee options based primarily on unit size instead of unit
type.
Based on this data, EPS and staff analyzed a number of options that could be used to formulate
an impact fee strategy considering possible waivers and/or graduated fees based on square-
footage. These options are solely concepts and could be combined or modified as appropriate.
Potential Options to Consider for Impact Fees
Option 1: Charge a flat “per sq. ft.” fee on housing units, excluding only ADUs less than
750 sq. ft. per State Law or other exclusions such as affordable deed restricted units.
• Pros: as this would be spread amongst every sq. ft. built, this would
produce the lowest per sq. ft. cost. Simple to administer.
• Cons: would add cost to units that might otherwise meet affordability
targets for price or rent. Does not incentivize very small/affordable units
unless they are an ADU or deed restricted unit.
Option 2: Charge a flat “per sq. ft.” fee on housing units above a certain size, with similar
exclusion consideration as Option 1. Fees would kick in above a certain size threshold.
• Pros: This would produce a low per sq. ft. cost. Incentivizes smaller, more
affordable-by-design units. Simple to administer.
• Cons: Would incentivize housing to be built just under the minimum (i.e.
999sq. ft.) Would place a larger fee burden on relatively small homes than
Option #3. (i.e. a 1,001sq. ft. home might have to pay $6,400, where a
999sq. ft. home pays $0)
Option 3: Exclude the first portion of area (sq. ft.) of a housing unit from the affordable
housing fee. i.e. the fee for the first 1,000sq. ft. is $0, and anything above that is charged
a flat per sq. ft. fee, with similar exclusion consideration as Option 1.
• Pros: Incentivizes smaller units. Places the highest burden on very large
houses. Allows fee to graduate up based on size. Simple to administer.
• Cons: Requires the highest sq. ft. cost to produce targeted funding.
Places the highest fee burden on very large houses.
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Option 4: Adopt a tiered fee structure whereby some housing units are fee exempt, houses a
little larger than that are charged a certain fee per sq. ft., and houses even larger than that are
charged a higher $ per sq. ft. with similar exclusion consideration as Option 1.
• Pros: Incentivizes smaller units. Places more burden on larger houses.
Slightly more difficult to administer, but still simple to administer.
• Cons: Would incentivize housing to be built just under the minimum (i.e.
999sq. ft., 1999sq. ft., etc.) Requires a fairly high sq. ft. cost for larger
homes to produce targeted funding.
Example Scenarios
Assuming the City wants to collect the $796,481 annual local subsidy necessary to
produce the needed 31.75 low- and very low-income units each year to meet the City’s
RHNA and assuming a similar construction level experienced during 2014-2019, the fees
would need to be set as follows:
• Option #1- $5.88 per sq. ft.
• Option #2- $6.40 per sq. ft. ($0 for housing units less than 1,000 sq. ft.)
• Option #3- $14.81 per sq. ft. (over the first 1,000 sq. ft.)
• Option #4- $4 per sq. ft. for units between 1,000 and 2,000sq. ft.; $10 per sq. ft. for
housing units over 2,000sq. ft.; $0 for housing units 1,000sq. ft. or less.
Below is a comparison showing total fees under each fee option for housing units of
various sizes:
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Annual Subsidy Needed 796,481$
Minimum Unit Size 1,000
Exempted SF 1,000
Tier Size Break 2,000
Lower Tier Fee per SF 4.00$
Option #1 Option #2 Option #3 Option #4
Fee per SF 5.8773$ 6.4013$ 14.8158$ 4 / 10
Size
All Units /
All SF
All Units
Above
Minimum
Size
All SF above
Exempted
SF Tiered
500 2,939$ -$ -$ -$
1,050 6,171$ 6,721$ 741$ 4,200$
1,350 7,934$ 8,642$ 5,186$ 5,400$
1,760 10,344$ 11,266$ 11,260$ 7,040$
3,500 20,571$ 22,405$ 37,040$ 35,000$
5,000 29,387$ 32,007$ 59,263$ 50,000$
SCENARIO A
Assuming construction rates similar to 2014-2019, all of the fee options shown provide
the same amount of projected annual revenue, but as you can see produce very different
fees for each size of housing unit shown.
• Options 3 and 4 require substantially higher fees than Options 1 and 2 for the very
large houses, and lower fees for the small and more modest houses.
• A 1,760 sq. ft. house would experience similar fees under options 1-3.
Where would the fees need to be set if the size thresholds for exemption were set to 750
sq. ft. and the lower tier fee was $3 per sq. ft. for the tiered scenario?
• Option #1- $5.88 per sq. ft. (same)
• Option #2- $6.28 per sq. ft. ($0 for housing units less than 750 sq.ft.)
• Option #3- $11.03 per sq. ft. (over the first 750 sq.ft.)
• Option #4- $3 per sq. ft. for units between 750 sq.ft and 2,000 sq.ft and $7.55 per
sq. ft. for housing units over 2,000 sq. ft.; $0 for housing units 750 sq.ft. or less.
Below is a comparison showing total fees under each fee option for housing units of
various sizes:
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Annual Subsidy Needed 796,481$
Minimum Unit Size 750
Exempted SF 750
Tier Size Break 1,500
Lower Tier Fee per SF 3.00$
Option #1 Option #2 Option #3 Option #4
Fee per SF 5.8773$ 6.1718$ 11.0352$ 3 / 7.55
Size
All Units /
All SF
All Units
Above
Minimum
Size
All SF above
Exempted
SF Tiered
500 2,939$ -$ -$ -$
1,050 6,171$ 6,480$ 3,311$ 3,150$
1,350 7,934$ 8,332$ 6,621$ 4,050$
1,760 10,344$ 10,862$ 11,146$ 13,288$
3,500 20,571$ 21,601$ 30,347$ 26,425$
5,000 29,387$ 30,859$ 46,900$ 37,750$
SCENARIO B
This results in the same expected average annual revenue of $796,481, but produces
very different fee levels across each option and when compared to the fees using a 1,000
sq.ft. threshold size. This results in lower fees for those larger houses than we saw with
the thresholds in Scenario A, but higher fees for the more modest housing units.
What would happen if we changed the expected average annual revenue that we want to
produce?
In this assumption, staff assumed that the targeted revenue amount was only about 60%
of the annual local need subsidy and that the City plans to produce the other 40% of low-
and very low-income housing units through other local matches, grants, an inclusionary
program or other methods. Using the thresholds in Scenario #1, the fees would need to
be set as follows under each of the options:
• Option #1- $3.50 per sq. ft.
• Option #2- $3.81 per sq. ft. ($0 for housing units less than 1,000 sq. ft.)
• Option #3- $8.84 per sq. ft. (over the first 1,000 sq. ft.)
• Option #4- $2.00 per sq. ft. for units between 1,000 and 2,000sq. ft.; $6.54 per sq.
ft. for housing units over 2,000sq. ft.; $0 for housing units 1,000sq. ft. or less.
Below is a comparison showing total fees under each fee option for housing units of
various sizes:
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Annual Subsidy Needed 475,000$
Minimum Unit Size 1,000
Exempted SF 1,000
Tier Size Break 2,000
Lower Tier Fee per SF 2.00$
Option #1 Option #2 Option #3 Option #4
Fee per SF 3.5051$ 3.8175$ 8.8358$ 2 / 6.54
Size
All Units /
All SF
All Units
Above
Minimum
Size
All SF above
Exempted
SF Tiered
500 1,753$ -$ -$ -$
1,050 3,680$ 4,008$ 442$ 2,100$
1,350 4,732$ 5,154$ 3,093$ 2,700$
1,760 6,169$ 6,719$ 6,715$ 3,520$
3,500 12,268$ 13,361$ 22,090$ 22,890$
5,000 17,526$ 19,088$ 35,343$ 32,700$
SCENARIO C
Changing the targeted revenue obviously produces much lower fees across the board
than the options shown in Scenario A or B, but the City must weigh how likely it is to
secure an adequate number of low- or very low-income housing units at this lower
projected revenue number.
As long as any impact fee set is under the maximum amounts calculated under the nexus
studies, the City has substantial discretion in determining which option, threshold, and fee
level works best for Atascadero. Staff will be prepared to calculate other fee options as
directed by Council at the Council meeting.
Impact Fee Applicability to ADUs
ADUs currently can be counted as either low- or moderate-income units based on a
completed regional study. Per the study, the City can count 50% of ADUs at the low-
income rate and 50% at the moderate-income rate. Currently ADUs within the City can
be a maximum of 1200 sq. ft., however the City is considering adopting standards that
limit the maximum size to 1,000 sq. ft. on smaller residential and multi-family properties.
Many of the larger ADUs will continue to be constructed on lots greater than one acre and
are anticipated to generate a need for service sector jobs similar to standard market rate
units of similar size. Based on this, the Council may want to consider including ADUs in
the impact fee program. It is important to note that per State law, no impact fee can be
charged for an ADU that is less than 750 sq. ft.
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ITEM NUMBER: C-1
DATE: 05/24/22
Inclusionary Housing
The City’s existing inclusionary housing policy along with State Density Bonus incentives
works well to produce units in the moderate-income range. Current policy focuses on
moderate-income restrictions for ownership units, which comprise a majority of units
constructed in Atascadero. In addition, the City’s policy allows developments to be
exempt from further affordability requirements if they utilize the State Density Bonus
program. The State Density Bonus Program requires a small percentage of development
be made affordable and usually at the moderate-income level for ownership units.
If the Council formalizes the existing “interim” housing policy which has a legislative
trigger to impose inclusionary requirements, the requirements will need to be updated to
require low- and very low-income units while eliminating an exemption for State Density
Bonus projects. Projects enacting the State Density Bonus outside of the City’s
inclusionary requirements will still qualify for concessions and bonus units, but the City
can ensure that low- and very low-income units are provided for projects that fall under
inclusionary requirements.
While the nexus study demonstrated defensibility of a 22% inclusionary requirement for
rental projects and an up to 27% inclusionary requirement for for-sale units, these
percentages likely exceed feasibility. Staff recommends modifying the policy to require a
lower percentage of units and focusing on low- and very low-income units rather than
moderate-income units. Based on how the existing interim policy is written, this would
apply just to projects that require discretionary approvals and would be an alternative to
an impact fee program. For reference, surrounding jurisdictions have inclusionary
requirements ranging from 5% to 15%.
State Density Bonus Ordinance
The City is required to adopt a State Density Bonus Ordinance consistent with State law.
An enacting ordinance is currently included in AMC Chapter 3, Article 30, however the
ordinance is out of date and not consistent with current State law (adopted in 2013). As
part of a comprehensive housing strategy, an updated ordinance should be adopted. An
ordinance update will also allow the City to provide some local considerations that are
important in clarifying the intent of State law.
CONCLUSION:
With State requirements mandating specific housing goals for our community, the
adoption of a current affordable housing program will ensure that the City can be
successful in meeting the identified RHNA goals and complying with HCD mandates. An
affordable housing program can help to ensure the physical construction of housing for
all income categories while helping to finance the City’s ability to administer deed
restricted units generated through the State Density Bonus and the affordable housing
program. Meeting our required RHNA typically comes along with the ability to receive
State grants and other incentives from the State too. A program that includes
development incentives, City fee subsidies or deferments and collection of some impact
fees distributes the financial burden of affordable unit construction, allowing the City to be
a partner with the development community.
Page 87 of 186
ITEM NUMBER: C-1
DATE: 05/24/22
As stated previously, there is no easy or right answer on how to best help provide a
balance of housing units for all income levels in the City. When looking at policies and
fees it is important to look at the consequences to the entire community. It is likely that
the City will not meet its RHNA goals, and more importantly will not provide adequate low-
and very low-income housing for its residents without some dedicated funding source.
Setting the fees too high, however, may discourage all new housing, or disincentivize
larger housing units that are critical in providing the funding needed to maintain City
services through reassessed property taxes.
Staff is looking for Council direction on potential programs and policies in order to
implement a comprehensive Affordable Housing Program. In order to achieve success,
it is likely that a City adopted affordable housing policy will need multiple programs, tools
and requirements in order to achieve the balance that the community is looking for.
As part of a comprehensive Affordable Housing Program that provides a toolbox
approach, Staff is looking for Council direction on the following:
1. Inclusionary Housing Ordinance: Should staff bring back/modify for formal
adoption the existing inclusionary Housing Policy for legislative approvals?
Items for consideration:
a. Require 10% affordability (low- and very low-income) in each development
project with 10 or more units.
b. Establish complementary affordability standards for projects that utilize
State Density Bonus program instead of exempting such projects.
c. Allow impact fee payment for projects 9 units or less, set at the same rate
as a Citywide impact fee.
Page 88 of 186
ITEM NUMBER: C-1
DATE: 05/24/22
2. Development Impact Fee: Should some level of subsidy to the current Citywide
Development Impact Fee be provided for low-, very low-income, and deed
restricted housing units?
Items for consideration:
a. Should it be a deferral, a waiver, or a reduction of fees to incentivize
affordability and help with grant scoring?
3. Affordable Housing Impact Fee: Should the City adopt some level of affordable
housing impact fees in order to provide necessary local match funding for low- and
very low-income housing projects?
Items for consideration:
a. What fee structure should be used?
• Option 1- Every sq. ft.?
• Option 2- Every sq. ft. on all units above a minimum size?
• Option 3- Every sq. ft. above a certain size?
• Option 4- A tiered fee structure?
• Other combinations?
b. Based on the option chosen, what parameters would Council like to see
brought back for consideration? (minimum size, etc.)
c. Should the affordable housing fees be set at $0 for all deed restricted
affordable housing units? Only low- and very low-income?
d. Should affordable fees not be applied to mobile home replacements in a
mobile home park?
e. Should affordable fees not be applied to replacement units for residences
that are involuntarily destroyed by a disaster such as fire, earthquake,
landslide or other natural disaster?
4. Objective Design Standards: Should staff continue with the development of
Objective Design Standards that encourage units that are affordable-by-design?
NEXT STEPS:
▪ Return with a draft ordinance that incorporates State Density Bonus law
requirements, inclusionary requirements, and/or fees as directed by Council.
▪ Continue to develop Objective Design Standards and Small-Lot Subdivision
Standards for multi-family and mixed-use properties.
FISCAL IMPACT:
None. There is no fiscal impact of the Council providing staff direction. Depending on
the staff direction provided by the Council, implementation of the direction will result in
the use of SB2 grant funds for some portion of staff time and consultant costs. Additional
budgeted staff time may also be spent on the activities directed by Council. Long term
revenue and costs will be described once program details are established.
ATTACHMENTS
1. EPS Nexus Study: Rental Units
2. EPS Nexus Study: For-sale Units
3. MIG Affordable Housing Tools memo
Page 89 of 186
DRAFT Report
Affordable Housing Fee Nexus
Study for Rental Housing
Prepared for:
City of Atascadero
Prepared by:
Economic & Planning Systems, Inc.
April 15, 2022
EPS #211050
Page 90 of 186
Table of Contents
EXECUTIVE SUMMARY .................................................................................................... 1
1. AFFORDABILITY GAP ANALYSIS .................................................................................. 7
Product Type .......................................................................................................... 7
Development Cost Assumptions .............................................................................. 10
Revenue Assumptions ............................................................................................ 10
Affordability Gap Results ........................................................................................ 12
2. DEMAND-BASED NEXUS FEE CALCULATION ................................................................. 13
Market-Rate Household Income Levels ..................................................................... 13
Household Expenditures and Job Creation by Income Level ......................................... 13
Combined Demand for Income-Qualified Workers ...................................................... 17
Fee Calculation ..................................................................................................... 19
APPENDIX A: Household Expenditures and Employment Generation
APPENDIX B: Income Levels for Worker Households
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List of Figures and Tables
Figure 1 Illustration of Nexus-Based Housing Fee Methodology ........................................... 2
Table 1 Summary of Maximum Supportable Nexus-Based Housing Fees
or Unit Requirements In-Lieu of Fees ................................................................. 6
Table 2 Affordability Gap Analysis ................................................................................. 9
Table 3 Income Limits for Affordable Housing ............................................................... 11
Table 4 Required Income by Unit Type - Market-Rate Rental Apartments .......................... 14
Table 5 Summary of Worker and Household Generation per 100 Market-Rate Units ............ 18
Table 6 Nexus-Based Housing Fee Calculations (For-Rent Studio Apartment) .................... 20
Table 7 Nexus-Based Housing Fee Calculations (For-Rent 1-Bedroom Apartment) .............. 21
Table 8 Nexus-Based Housing Fee Calculations (For-Rent 2-Bedroom Apartment) .............. 22
Table 9 Nexus-Based Housing Fee Calculations (For-Rent 3-Bedroom Apartment) .............. 23
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EXECUTIVE SUMMARY
Economic & Planning Systems, Inc. (EPS) was retained by the City of Atascadero to conduct a
nexus study analyzing the impact that development of market-rate rental housing has on the
demand for below-market-rate housing and, based on the results, to determine the defensible
nexus-based fee that could be charged to market-rate rental development.
The technical approach used herein quantifies the impacts that the introduction of market-rate
rental apartments have on the local economy and the demand for additional affordable housing.
As new households are added to the community, local employment also will grow to provide the
goods and services required by the new households. To the extent that these new jobs do not
pay adequate wages for the employees to afford market-rate housing in the community, the new
households’ spending is creating a need for affordable housing. A nexus-based affordable
housing fee is therefore based on the impact of the new market-rate homes on the demand for
affordable housing. The fee calculated in this study represents the maximum fee that may be
charged to new market-rate rental housing units to mitigate their impacts on the affordable
housing supply. Such fees may be used by the City to subsidize the production of new affordable
units for lower-income households not accommodated by market-rate projects.
Calculating the impact of market-rate rental development in the City on affordable housing
needs, and the fees needed to mitigate those impacts, involves three main analytical steps:
Step #1. Estimate the typical subsidy required to construct units affordable at various
income levels (the “affordability gap”).
Step #2. Determine the market-rate households’ demand for goods and services, the jobs
created by that demand, and the affordable housing needs of workers in those jobs.
Step #3. Combine the affordability gap with the affordable housing demand projections to
compute the maximum, legally-defensible, nexus-based affordable housing fees per market-
rate rental unit.
These technical steps are illustrated in Figure 1 and detailed in the body of this Report and the
attached Technical Appendices. The findings regarding each of these steps are presented below.
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Figure 1 Illustration of Nexus-Based Housing Fee Methodology
1. The cost to construct housing units affordable to many households exceed those
units’ values based on what the households can afford to pay. The estimated
subsidy required to construct affordable housing units in Atascadero ranges from
roughly $459,000 for Very Low-Income households earning up to 50 percent of AMI
to $152,000 for Moderate Income households earning up to 120 percent of AMI.
An “affordability gap analysis” evaluates whether or not the costs to construct affordable
units exceed the values of units that are affordable to lower- and moderate-income
households. For each affordable housing income level—households with incomes at 50, 80,
and 120 percent of Area Median Income (AMI)—this analysis estimates the subsidy required
to construct affordable housing units.
The affordability gap analysis assumes that the average affordable unit for all income levels
will be a 2-bedroom unit in a multifamily development in a three-story building (with an
average density of 24 dwelling units per acre). This prototype assumes that affordable
housing developers will maximize the City’s current allowable density (24 units per acre),
plus utilize the State Density Bonus (up to 50 percent of allowable density). However, due to
the topography of many sites in Atascadero, it was assumed a developer would not be able
to build more than 24 units per acre and that the State density Bonus would be utilized to
depart from development standards to assist in achieving maximum base density. The
estimated costs to construct the prototypical affordable unit are based on conversations with
local market rate and affordable housing developers, as well as other development cost data
sources. The cost of land acquisition is also included in the development cost calculations.
A household’s ability to pay is estimated based on standard percentages of income available
for housing costs at each household income level. Income available for housing costs is then
converted into a monthly affordable rent and a capitalized unit value or an affordable
mortgage payment and supportable home price. This unit value is then compared to the
costs of development to determine the subsidy required to make the unit affordable to each
income level.
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2. The demand for affordable housing generated by the expenditures of new
households in Atascadero increases along with the market-rate rent price (and
related renter income). For example, a studio unit that rents for $1,750 per month
is estimated to create demand for 0.142 affordable housing units, while a
3-bedroom unit that rents for $3,000 per month creates demand for 0.218
affordable units.
Any justified nexus-based fee is based on the total demand for affordable housing units
generated by the construction of market-rate units. The link (or nexus) between market-rate
housing and increased demand for affordable housing is that residents of market-rate units
demand goods and services that rely on wage earners (for example, retail sales clerks) some
of whom typically cannot afford market-rate housing and thus require affordable housing.
Because more expensive housing units require renters to have higher incomes, and higher
income households create more jobs through their spending, the nexus impacts and thus the
justified fees for rental units vary according to the rental price range of the market-rate
units. Typically, larger apartments (i.e., more bedrooms) command higher rents, so their
occupants are required to have higher household incomes than renters of smaller units.
Thus, larger units create more jobs as a result of their occupants’ spending. Consequently,
nexus impacts and the justified fees for market-rate rental apartments vary by unit size.
This analysis evaluates the demand for affordable housing generated by a range of for-rent
unit sizes. For each unit size, the demand-based nexus fee calculation involves the following
steps:
A. Market-Rate Household Income Levels. The expected rental price of the unit is
based on market data regarding the actual asking rents of apartments of various sizes.
The required income levels of households occupying new market-rate, rental housing are
derived based on the rental rate, assuming standard housing cost expenses as a
proportion of overall household income. For example, a typical household renting a
market-rate one-bedroom unit for around $2,200 per month would have an income of
roughly $98,800, if it spends 30 percent1 of its income on housing costs (rent and
utilities).
B. Household Expenditures. Based on the household income computed in Step A,
Consumer Expenditure Survey data is used to evaluate the typical spending patterns of
the household. This analysis provides an estimate of how much the household spends on
specific categories of expenditures, such as “Food at Home.” The survey consists of two
components — the Interview Survey and the Diary Survey — each with its own sample.
The surveys collect data on expenditures, income, and consumer unit characteristics. As
the households’ income increases along with the price and size of the market-rate units,
the total spending on goods and services also increases. The Consumer Expenditure
Survey also indicates that these relationships are not linear (e.g., a household with twice
the income does not necessarily spend twice as much on food). While expenditures do
1 California Health and Safety Code Section 50053 specifies that affordable housing cost for rental
units is 30 percent of gross income for all income categories. Note that this differs from the State’s
defined affordable housing cost for for-sale units, which is up to 35 percent of gross income.
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increase with income, the relationship is not linear (i.e., household expenditures do not
increase at the same proportion that incomes go up).
C. Job Creation and Worker Households. Having estimated the households’ spending on
various items, that spending is then converted into an estimate of jobs created. For each
expenditure category, data regarding average worker wages and the ratio between gross
business receipts and wages are used to translate these household expenditures into the
total number of private-sector workers. Because each new worker does not represent an
independent household (Atascadero has an average of 1.71 workers per working
household), the total number of new households created is somewhat less than the
number of new jobs created. This analysis assumes that workers form households with
others with similar wages. EPS has further adjusted the household formation rates to
reflect the fact that a certain proportion of workers will not form their own households,
particularly those of younger ages.2
D. Worker Households by Income Category. Each worker household generated is
assigned to an income category—represented as a proportion of AMI ranging from 50 to
120 percent—based on its estimated gross wages. This provides the total number of
households generated at each income level by construction of market-rate units at
various sizes and price points. The results indicate that residents of smaller, lower-priced
units generate fewer worker households requiring affordable housing than do residents of
larger, higher-priced units.
These steps of the nexus-based fee calculation provide the total number of income-qualified
workers required to meet the needs for goods and services generated by market-rate rental
housing. The number of workers providing goods and services to occupants of market-rate
housing (at each apartment unit size) is then converted to total income-qualified households
and each such household is assumed to require one housing unit.
3. This analysis calculates the fees that could be charged to fully mitigate the impact
that new market-rate housing has on Atascadero’s affordable housing demand at
various representative unit sizes. These fees could range from $37,677 for studio
apartments to $56,685 for 3-bedroom apartments, or could be justified at
approximately $47.24 per square foot.
The nexus fee is calculated by applying the number of affordable units needed by income
qualified households to the affordability gap for each housing income category. This
calculation is made for several different apartment sizes based on bedroom counts. Table 1
summarizes the maximum nexus-based fees calculated for representative rental unit sizes.
Should the City prefer to adopt a flat fee per square foot rather than adjusting the fee based
on the number of bedrooms, this analysis suggests that the maximum justifiable fee could be
$47.24 per square foot, as that is the lowest maximum fee level calculated. In many cases,
this fee will need to be adjusted down to a reasonable and feasible fee for new development.
2 BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only
1.9% of workers overall (this factor is applied to other industries). EPS has assumed that such young
workers do not form their own households and has not included them in the household formation
calculations.
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The City may also consider whether to allow developers to provide affordable apartment units
within their projects, rather than paying the nexus-based fee. Table 1 illustrates the
proportions of affordable units that correspond to the fee calculation and demands created by
the market-rate units. For instance, a project offering two-bedroom units would effectively
mitigate the demand being created by the market-rate units if it provided 0.190 affordable
units for each market-rate unit.
Table 1 Summary of Maximum Supportable Nexus-Based Housing Fees or Unit
Requirements In-Lieu of Fees
4. While a nexus-based relationship is not typically required for cities to adopt
inclusionary housing standards, Table 1 shows that the City of Atascadero could
justify an inclusionary requirement of at least 14 percent from a nexus perspective.
Inclusionary ordinances in California vary widely but commonly require 10 to 15 percent
affordable units. California jurisdictions commonly adopt inclusionary standards based on
policy preferences rather than nexus analysis such as this report, but this analysis indicates
that the impact of new rental housing could justify an inclusionary requirement of at least
14.2 percent as that is the lowest impact-based figure calculated. Table 1 also suggests that
very low-income units represent a large portion of the units demanded based on the
spending of new rental housing occupants, but again jurisdictions commonly adopt
inclusionary housing income standards based on considerations other than the nexus-based
impact.
Fee per Unit Per Sq.Ft.VLI Low Moderate Total
(<50% of AMI) (<80% of AMI) (<120% of AMI)
Studio 500 $1,750 $37,677 $75.35 7.1% 4.3% 2.8% 14.2%
1-Bedroom 750 $2,200 $45,295 $60.39 8.7% 5.3% 3.2% 17.2%
2-Bedroom 900 $2,600 $49,730 $55.26 9.6% 6.1% 3.3% 19.0%
3-Bedroom 1,200 $3,000 $56,685 $47.24 11.1% 7.0% 3.7% 21.8%
Unit Requirements by Income LevelNexus-Based Fees
Sources: City of Atascadero; HCD Income Limits 2021; RedFin.com; 2017 U.S Economic Census; Consumer Expenditure Survey, U.S. Bureau of Labor Statistics, September, 2020;
Economic & Planning Systems, Inc.
Rental Unit Size Monthly RentSquare Footage
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1. AFFORDABILITY GAP ANALYSIS
For any nexus-based affordable housing fee calculation, it is necessary to estimate the subsidy
required to construct affordable housing units. Table 2 shows the subsidy needed to produce
housing that is affordable to very low-, low-, and moderate-income households (50 through 120
percent of AMI).
Product Type
While the nexus fees calculated herein are based on demands created by market-rate rental
housing, the analysis assumes that new lower-income worker households would actually be
housed in developments that are 100 percent affordable units (in order to determine the cost of
construction for such units). The affordable units are assumed as apartments at 24 units per acre
with surface parking, reflecting the assumption that affordable apartment builders would
maximize the City’s current allowable density (24 units per acre), plus utilize the State density
bonus program to implement development standard concessions in addition to granting a 50
percent increase in base density.
In order to determine the average household size of future affordable housing units, EPS used
two estimates from the US Census 2015-2019 American Community Survey (ACS)—the average
household size for working households in Atascadero being 2.56, and average family size being
3.04. Rounding these averages, EPS compared the estimated household wage with the income
thresholds for a 3-person household to identify the income category into which each occupation
would fall for new units.
California State law (California Health and Safety Code Section 50052.5) assumes that a
2-bedroom unit is occupied by a 3-person household, and this assumption is used in this
analysis. Commonly, a 2-bedroom rental unit in the Central Coast of California has a gross size
of about 1,000 square feet (accounting for shared lobbies, hallways, etc.) and a net size of 900
square feet. This analysis estimates the subsidy required to build rental housing for the lower-
income worker households.
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Table 2 Affordability Gap Analysis
Item
Very Low
Income
(50% AMI)
Low
Income
(80% AMI)
Moderate
Income
(120% AMI)
Development Program Assumptions
Density/Acre [1] 242424
Gross Unit Size 1,000 1,000 1,000
Net Unit Size 900 900 900
Number of Bedrooms 2 2 2
Number of Persons per 2-bedroom Unit [2] 3 3 3
Parking Spaces/Unit 2.00 2.00 2.00
Cost Assumptions
Land/Acre [3] $650,000 $650,000 $650,000
Land/Unit $27,083 $27,083 $27,083
Direct Costs
Site Preparation Cost per Land Square Foot $10 $10 $10
Site Preparation Cost per Unit $18,200 $18,200 $18,200
Direct Construction Costs/Gross SF [4] $350 $350 $350
Direct Construction Costs/Unit $350,000 $350,000 $350,000
Parking Construction Costs/Space $5,000 $5,000 $5,000
Parking Construction Costs/Unit $10,000 $10,000 $10,000Subtotal, Direct Costs/Unit $378,200 $378,200 $378,200
Indirect Costs as a % of Direct Costs [5] 35% 35% 35%
Indirect Costs/Unit [6] $132,370 $132,370 $132,370
Developer Return (% of all costs) 14% 14% 14%Return Amount $75,271 $75,271 $75,271
Total Cost/Unit (rounded) $613,000 $613,000 $613,000
Maximum Supported Home Price
Household Income [7] $44,050 $70,450 $105,600
Income Available for Housing Costs/Year [8] $13,215 $21,135 $31,680
(less) Operating Expenses per Unit/Year [9] ($6,000) ($6,000) ($10,000)
Net Operating Income $7,215 $15,135 $21,680
Capitalization Rate [10] 4.7% 4.7% 4.7%
Total Supportable Unit Value [11] $154,000 $322,000 $461,000
Affordability Gap $459,000 $291,000 $152,000
Sources: City of Atascadero; HCD; CoStar; and Economic & Planning Systems, Inc.
[1] Based on City Staff input. Density assumes state density bonus is utilized but also reflects topographical limitations in the City
[6] Includes costs for architecture and engineering; entitlement and fees; project management; appraisal and market study; marketing,
[7] Based on 2021 income limits for a three person household in San Luis Obispo County.
3-Story Multifamily Building with Surface Parking
[9] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; units at or below 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 the operating expenses for the moderate income category.
[2] An average of 3 persons is used for this analysis based on Census data indicating the average family size in Atascadero and State law
(Health and Safety Code Section 50052.5) indicates that a 2-bedroom unit should be assumed to be occupied by a 3-person household.
Thus, EPS has assumed an average unit for income-qualified worker households would be 2-bedrooms.
[3] Based on CoStar data on land transactions in the Atascadero area since 2016.
[8] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; units at or below 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 the operating expenses for the moderate income category.
[11] The total supportable unit value is determined by dividing the net operating income by the capitalization rate.
[10] 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 estimated operating risk. Obtained from CoStar for Atascadero multifamily developments.
[4] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects
wood-frame construction above podium parking. Assumes workers are paid prevailing wage.
[5] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects
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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.). Operating costs,
including property maintenance, common utilities, advertising, leasing, and property taxes
(where applicable) also must be incorporated into the analysis. Data from recent Atascadero
developments and recent Atascadero land transactions have been combined with EPS’s
information from various market-rate and affordable housing developers to estimate appropriate
development cost assumptions for use in Atascadero. These assumptions are shown on Table 2.
Revenue Assumptions
To calculate the values of the affordable units, assumptions must be made regarding the
applicable income level (moderate, low, and very low) and the percentage of income spent on
housing costs. In addition, translating these assumptions into unit prices and values requires
estimates of operating expenses, capital reserves, and capitalization rates. The following
assumptions were used in these calculations:
Income Levels—This analysis estimates the subsidy required to produce units for three-
person households earning up to 50, 80, and 120 percent of AMI. In 2021, AMI in San Luis
Obispo County for these households was $88,000, as shown in the California Department of
Housing and Community Development’s (HCD’s) income limits chart (see Table 3).
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 rental housing costs. For this analysis, EPS has assumed that households
spend 30 percent of their gross income on rental housing costs.
Operating Costs for Rental Units— Based on conversations with developers and property
managers, the analysis assumes that apartment operators incur annual operating costs of
$6,000 per unit, which include the cost of utilities, for units affordable at 80 percent of AMI
or below. 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.
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Table 3 Income Limits for Affordable Housing
Maximum
Percentage of 2021 Max Income [1]
Affordability Category County Median 3-person household
Extremely Low Income (ELI) 0% - 30% $26,450
Very Low Income (VLI) 50% $44,050
Low Income (LI) 80% $70,450
Median Income 100% $88,000
Moderate Income (Mod) 120% $105,600
Sources: CA Department of Housing and Community Development; Economic & Planning Systems, Inc.
[1] 2021 HCD maximum income thresholds are used to translate employment, wages and total worker household
incomes to affordable housing categories and to compute supportable housing costs based on household income
levels.
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Affordability Gap Results
Table 2 shows the estimated subsidies for construction of affordable rental units for very low,
low, and moderate-income households. As shown, the cost to construct a unit of affordable
housing is approximately $613,000 per unit.
A household earning 50 percent of AMI can afford rents that translate to unit valuation of
$154,000, resulting in a required subsidy of $459,000.
A household earning 80 percent of AMI can afford rents that translate to unit valuation of
$322,000, resulting in a required subsidy of $291,000.
A household earning 120 percent of AMI can afford rents that translate to unit valuation
of $461,000, resulting in a required subsidy of $152,000.
These housing affordability gaps then were used to calculate the justifiable nexus-based fees by
multiplying this required subsidy by the number of units required to house workers providing
goods and services to new market-rate housing development. This methodology is discussed in
more detail in the following chapter.
It is worth noting that the affordability gaps estimated in this analysis are not as large as they
might be using other also-valid assumptions. For example, the funding gaps for low-income
units assume that prices are set at 80 percent of median income, while State law suggest low-
income unit prices may be set at 70 percent of median income, or even 60 percent of AMI. This
methodology used by EPS yields higher unit values and thus results in lower maximum fees than
the City’s current practices would yield, and has been used by EPS to preempt objections that
the assumptions and calculations overstate the actual funding gap for affordable units.
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2. DEMAND-BASED NEXUS FEE CALCULATION
The maximum supportable nexus-based fees are based on both the affordability gap and the
estimated impact that new market-rate rental units have on the need for affordable units, as
reflected in the number of income-qualified local workers required to support the residents of
market-rate apartments and the total subsidy required to construct housing for those workers.
This approach is based on the following logic: (a) residents of market-rate housing have
disposable incomes and require a variety of goods and services, (b) the provision of those goods
and services will require some workers who make moderate or lower incomes and cannot afford
market-rate housing, and (c) fees charged to market-rate projects can mitigate the impact of
those projects on the increased need for affordable housing.
Market-Rate Household Income Levels
The link (or nexus) between market-rate housing and increased demand for affordable housing is
that residents of market-rate units demand goods and services that rely on wage earners (for
example, retail sales clerks) some of whom may not be able to afford market-rate housing.
Because more expensive market-rate rental housing units require tenants to have higher
incomes, and higher income households create more jobs through their spending, the nexus
impacts and thus the justified fees for units vary in relation to the rents of the market-rate units.
The rent associated with a particular unit is often a function of its size. To assess the impact that
market-rate rental units have on the need for affordable housing, EPS estimated the typical
income required to rent a market-rate apartment at various bedroom sizes in Atascadero, as
shown in Table 4.
Average rents for various apartment sizes (studio, and 1-, 2-, and 3-bedrooms) are based on a
survey of rental rates for three market-rate multifamily projects recently developed in
Atascadero. New apartment rents are significantly higher, on average, than rental rates for
existing rental housing stock, both because the newer units are of better-than-average quality
and because the higher rents are required to cover the costs of construction. The rents for the
most recent apartment projects were used, rather than average rents for all apartments,
because these newer apartments best represent the rents that can be expected with new
market-rate apartment development.
Assuming utility costs for each unit size based on the Housing Authority Utility Allowance for San
Luis Obispo County, the minimum household income needed to rent each unit is then computed,
predicated on the assumption that a household will spend 30 percent of their income on housing
costs (rent and utility payments). As shown, required household incomes range from
approximately $80,000 for a studio apartment to roughly $135,300 for a 3-bedroom apartment.
Changes in housing market and financing conditions can have a significant effect on the
calculations in this study.
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Household Expenditures and Job Creation by Income
Level
Having established the income requirements for renting apartments of various sizes, the fee
calculation then requires an analysis of the household spending patterns at those required
income levels.
Table 4 Required Income by Unit Type - Market-Rate Rental Apartments
Unit Size
Average
Monthly Rent
[1]
Monthly Utility
Cost [2]
Subtotal
Rent and
Utilities
Annual Rent
and Utility
Expenditures
Annual
Household
Income
Required [3]
Studio $1,750 $251 $2,001 $24,012 $80,000
1-Bedroom $2,200 $269 $2,469 $29,628 $98,800
2-Bedroom $2,600 $325 $2,925 $35,100 $117,000
3-Bedroom $3,000 $382 $3,382 $40,584 $135,300
[2] Based on the San Luis Obispo County Housing Authority Utility Allowance (assumes natural gas).
Source: City of Atascadero; HCD; Economic & Planning Systems, Inc.
[1] Based on Apartments.com data for multifamily rentals in the Greater San Luis Obispo Region.
Required Income by Unit Type
[3] Assumes renting households spend 30% of gross income on housing expenses.
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The Consumer Expenditure Survey from the United States Bureau of Labor Statistics provides
data for households at a variety of income levels, detailing the amounts that typical households
spend on things like Food at Home, Apparel and Services, and Vehicle Maintenance and Repairs.
Interestingly, household expenditures by category are not uniformly proportional to household
income levels. For example, households earning around $80,000 (adequate to rent a studio
apartment) spend roughly 12.8 percent of their income on food and drink (at home and eating
out), while households earning $135,000 who can afford to rent a three-bedroom apartment
spend only about 10.6 percent of their income on food and drink. Because of these and other
differences in proportionate spending, the expenditure profile varies at different income levels.
Higher earning households do generate higher numbers of jobs than lower earning households,
but it is not a linear relationship (i.e., a household earning $160,000 per year does not generate
more than twice the number of jobs as a household earning $80,000 per year).
The renter household’s typical expenditures were converted to the number of jobs created by
their spending. The first step in this process is to determine how much of an industry’s gross
receipts are used to pay wages and employee compensation. EPS relied on data from the
Economic Census,3 which provides employment, gross sales, and payroll data by industry for San
Luis Obispo County. In certain instances, where local data was not available for every Economic
Census industry, EPS relied on statewide Economic Census data for that industry.
To link the Economic Census data and the Consumer Expenditure Survey data, EPS made
determinations as to the industries involved with expenditures in various categories. For
example, purchases in the Consumer Expenditure Survey’s “Food at Home” category would likely
involve the Economic Census’s “Food & Beverage Stores” industry, where gross receipts were
more than nine times the employees’ wages. By contrast, purchases in the Consumer
Expenditure Survey’s “Entertainment Fees and Admissions” category were attributed to the
Economic Census’ “Arts, Entertainment, and Recreation” industry, where gross receipts are only
about four times the employees’ wages. Where more than one Economic Census category was
attributable to a Consumer Expenditure Survey category, EPS estimated the proportion of
expenditures associated with each Economic Census category.
After determining the amount of the household’s expenditures that were used for employee
wages, EPS estimated the number of employees those aggregate wages represent. EPS
calculated the number of workers supported by that spending using the average wage per
worker (also from the 2017 Economic Census). These wages ranged from a low of roughly
$19,500 per year for workers in the clothing and clothing accessories industry to a high of more
than $100,000 for legal services.
3 Note that the Consumer Expenditure Survey data is based on information current as of 2019. The
latest data available for the Economic Census was published in 2017. EPS converted all numbers to
2021 dollars using the Consumer Price Index (CPI) for the San Francisco Metropolitan Statistical Area
(MSA) from the Bureau of Labor Statistics.
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A range of occupations and incomes exist in a given industry sector. For instance, the
methodology used to generate Tables B-1 to B-4 in Appendix B distinguishes between the
typical incomes of workers in different types of retail stores (e.g., “food and beverage stores”
versus “general merchandise stores”), rather than assuming all retail sector workers earn the
same income. However, the average wage is used for each sub-category of industry
employment and represents a reasonable proxy for the range of incomes in that group. Using
the average approximates the total housing subsidy needed by workers in that industry.
To calculate the number of households supported by the expenditures of market-rate housing
units, EPS estimated the employees’ household formation rates. Employees generated from the
increase in housing units do not all form households; some employees, in the retail and food
services industries in particular, are young workers and do not form households. Data from the
Bureau of Labor Statistics indicates that 12.5 percent of retail/restaurant workers are age 16 to
19, but an average of only 1.9 percent of workers in the workforce overall. EPS applied these
discounts to household formation by type of business to get a more accurate calculation of
households formed by the employees and the average total incomes of those households.
To get the overall households’ income rather than the individual workers’, the wages of workers
forming households were multiplied by the average of approximately 1.69 workers per working
household in Atascadero.4 This assumption implies the workers in a given household will have
roughly equivalent pay per hour. While certainly there will often be some variation in wages per
employee within a household, on average this assumption is reasonable because it implies
comparable levels of education and training among all workers in a household. The average
household incomes then are allocated to various income categories to estimate the number of
affordable housing units demanded in each income category (50 through 120 percent of AMI).
A simplified example of these calculations follows:
A. Number of Households (prototype project) 1,000
B. Average Household Income $125,000
C. Aggregate Household Income (A x B) $125 million
D. Average Income Spent on Retail (Consumer Expenditure Survey) $40,000
E. Aggregate Retail Spending (A x D) $40 million
F. Retail Gross Receipts: Payroll Ratio (Economic Census) 9:1
G. Estimated Retail Payroll (E F) $4.44 million
H. Average Retail Wage (Economic Census) $28,500
I. Estimated Total Retail Jobs (G H) 156
J. Percent Age 20+ (Bureau of Labor Statistics) 87.5%
K. Total Retail Workers Forming Households 136
J. Average Workers/Household (Census Data) 1.71
K. Estimated Households Created (K J) 80
L. Average Household Income (H x J) $45,000
M. Income Category Low-Income (up to 80% of AMI)
4 Workers per working household based on American Community Survey (ACS) Census data as of
2019. Although ACS data reported is based on historical figures, these figures can vary somewhat
based on ongoing revisions to the ACS data.
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In this simplified example, 1,000 new market-rate apartments rented to households earning
$125,000 per year would create demand for 80 housing units for retail workers with household
incomes typically between 50 and 80 percent of AMI. Actual calculations and impact distinctions
by type of household expenditure for various rental unit sizes are shown in the series of tables
presented in Appendix B.
Demand for Income-Qualified Workers
The total number of income-qualified households required to support the expenditure needs of
new market-rate units were determined based on the affordable housing income limits from HCD
for a 3-person household. Table 3 summarizes the HCD income limits used to compute the total
number of income-qualified households generated by construction of market-rate units.5 The
number of income-qualified households required to provide goods and services to new housing
units is detailed in Appendix B.
The nexus methodology used herein computes the total number of income-qualified households
generated by market-rate units (as shown in Table 5) and calculates the impact fee based on
the estimated cost to subsidize the production of units to meet that affordable housing demand.
This analysis assumes that the fees on residential development will fund required affordable
housing for all new workers generated.
Table 5 Summary of Worker and Household Generation per 100 Market-Rate
Units
5 To correspond to the available data regarding employee wages, the 2021 San Luis Obispo County
affordable housing income limits from HCD were used to determine the number of income-qualified
households based on household expenditures.
Unit Type
Total
Workers
Generated
Total
Worker
Households
Total Income
Qualified
Households VLI Households LI Households
Moderate Income
Households
[1] [2] [3]
Rental Units
Studio $80,000 30 16.1 14.2 7.1 4.3 2.8
1-Bedroom $98,800 36 19.3 17.2 8.7 5.3 3.2
2-Bedroom $117,000 40 21.2 19.0 9.6 6.1 3.3
3-Bedroom $135,300 45 24.1 21.8 11.1 7.0 3.7
[1] Total workers generated detailed by unit price point and rental apartment size in Tables B-1 through B-4.
Source: Economic & Planning Systems, Inc.
Minimum
Household
Income
Requirement
[3] Total income qualified households reflects those households eligible for affordable housing based on total household income. Income
qualified households therefore exclude households earning above moderate income. See Tables B-1 through B-4 for detail. Total may not
sum due to rounding.
Income Qualified Households by Income Category
[2] Total worker households derived assuming 1.71 workers per household. Includes a 12.5% discount for retail and 1.9%
discount for other industries to account for workers under age 20.
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Fee Calculation
The affordability gap analysis quantifies the subsidy required to construct affordable housing at
various income levels. Analysis of consumer expenditures that rely on lower wage workers
provides an estimate of the total number of income-qualified households generated by new for-
rent units. Then for each category of market-rate rental units, the nexus-based fee is calculated
by applying the total number of income-qualified households generated to the affordability gap
computed for each affordable household income level. The analysis provides the maximum
supportable nexus-based fees for new rental housing development in Atascadero.
Tables 6 through 9 show the impact fee calculation by number of bedrooms for rental units.
The total impact fees required for a representative project of 100 units is calculated by
multiplying the number of affordable units required per income level by the cost of subsidizing
such housing. All income-qualified households are assumed to be housed in multifamily units
and the subsidies needed are calculated as the affordability gaps shown in Table 2. The
resulting maximum impact fee for market-rate rental units ranges from $37,677 for a studio
apartment to $56,685 for a 3-bedroom apartment.
These fee estimates result in the maximum fee range of between $47 and $75 per square foot.
While the City has the option of adopting fees up to the maximum levels calculated, there may
be a variety of reasons to adopt the fee level below the maximum, including concerns about
affecting the feasibility of new housing construction. The goal is to balance the competing
objectives of generating revenue to support affordable housing in the community while not
overburdening new development. EPS is evaluating the level of fees that may be feasible in
current market conditions and will document these findings in a separate deliverable.
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Economic & Planning Systems, Inc. 17Z:\Shared\Projects\Oakland\211000s\211050_Atascadero Housing Fees\Deliverables\EPS 211050_Draft Report_Rental_2022Apr15.docx Table 6 Nexus-Based Housing Fee Calculations (For-Rent Studio Apartment) Table 7 Nexus-Based Housing Fee Calculations (For-Rent 1-Bedroom Apartment) ItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 7.1 $153,511 $1,082,262Affordable Units - Low Income 4.3 $322,021 $1,389,876Affordable Units - Moderate Income 2.8$461,277 $1,295,612Total 14.2 $3,767,749$37,677 $75.35[1] See Table 5.Source: Economic & Planning Systems, Inc.Total Nexus-Based Fee Supported[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]ItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 8.7 $153,511 $1,336,593Affordable Units - Low Income 5.3 $322,021 $1,716,496Affordable Units - Moderate Income 3.2$461,277 $1,476,389Total 17.2 $4,529,478$45,295 $60.39[1] See Table 5.Source: Economic & Planning Systems, Inc.Total Nexus-Based Fee Supported[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]Page 109 of 186
Nexus-Based Affordable Housing Fee Analysis for Rental Housing DRAFT Report 04/15/22 Economic & Planning Systems, Inc. 18Z:\Shared\Projects\Oakland\211000s\211050_Atascadero Housing Fees\Deliverables\EPS 211050_Draft Report_Rental_2022Apr15.docx Table 8 Nexus-Based Housing Fee Calculations (For-Rent 2-Bedroom Apartment) Table 9 Nexus-Based Housing Fee Calculations (For-Rent 3-Bedroom Apartment) ItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 9.6 $153,511 $1,473,463Affordable Units - Low Income 6.1 $322,021 $1,958,615Affordable Units - Moderate Income 3.3$461,277 $1,540,939Total 19.0 $4,973,017$49,730 $55.26[1] See Table 5.Source: Economic & Planning Systems, Inc.Total Nexus-Based Fee Supported[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]ItemPer 100 Market-Rate UnitsPer Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 11.1 $153,511 $1,703,928Affordable Units - Low Income 7.0 $322,021 $2,264,963Affordable Units - Moderate Income 3.7$461,277 $1,699,631Total 21.8 $5,668,522$56,685 $47.24[1] See Table 5.Source: Economic & Planning Systems, Inc.Total Nexus-Based Fee Supported[2] See Tables 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]Page 110 of 186
APPENDICES:
Appendix A: Household Expenditures and
Employment Generation
Appendix B: Income Levels for Worker Households
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APPENDIX A:
Household Expenditures and
Employment Generation
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Table A-1 Household Expenditures and Employment Generation - For Rent Studio Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income$80,000Food at Home7.2% 100% $5,738Food & Beverage Stores100% $5,738 $5,737,588 9.40 $610,703 $30,692 19.9 87.5% 1.71 10.2 $52,599 LI HouseholdsFood Away From Home5.6% 100% $4,481Food Services and Drinking Places100% $4,481 $4,481,398 3.20 $1,400,124 $19,920 70.3 87.5% 1.71 35.9 $34,137 VLI Households Alcoholic Beverages0.9% 100% $759Food & Beverage Stores50% $380 $379,717 9.40 $40,417 $30,692 1.3 87.5% 1.71 0.7 $52,599 LI HouseholdsFood Services and Drinking Places50% $380 $379,717 3.20 $118,635 $19,920 6.0 87.5% 1.71 3.0 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $1,424Personal and Household Goods Repair and Maintenance 45% $641 $640,593 3.30 $194,177 $25,686 7.6 98.1% 1.71 4.3 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $641 $640,593 9.23 $69,393 $36,992 1.9 87.5% 1.71 1.0 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $142 $142,354 5.23 $27,199 $43,536 0.6 98.1% 1.71 0.4 $74,608 ModerateFuel oil and Other fuels [7]5.6% 100% $4,478Nonstore Retailers100% $4,478 $4,478,221 7.83 $572,209 $42,161 13.6 87.5% 1.71 6.9 $72,252 ModerateWater and Other Public Services [7]1.2% 100% $925Waste Management and Remediation Services 100% $925 $924,666 4.11 $224,888 $59,559 3.8 98.1% 1.71 2.2 $102,068 ModerateHousehold Operations Personal Services0.8% 100% $638Nursing and Residential Care Facilities40% $255 $255,051 2.20 $116,065 $33,109 3.5 98.1% 1.71 2.0 $56,740 LI HouseholdsSocial Assistance [8]60% $383 $382,576 2.98 $128,231 $27,179 4.7 98.1% 1.71 2.7 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.3% 100% $1,058Services to Buildings and Dwellings100% $1,058 $1,057,931 2.91 $363,690 $75,555 4.8 98.1% 1.71 2.8 $129,482 Above ModHousekeeping Supplies1.0% 100% $800Building Materials and Garden Equipment and Supplies Dealers 10% $80 $79,968 9.23 $8,663 $36,992 0.2 87.5% 1.71 0.1 $63,394 LI HouseholdsFood & Beverage Stores35% $280 $279,889 9.40 $29,791 $30,692 1.0 87.5% 1.71 0.5 $52,599 LI HouseholdsGeneral Merchandise35% $280 $279,889 11.23 $24,930 $30,374 0.8 87.5% 1.71 0.4 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $160 $159,936 6.97 $22,953 $23,032 1.0 87.5% 1.71 0.5 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a Studio Unit requires a household income of $90,000 per year.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.Page 113 of 186
Table A-1 Household Expenditures and Employment Generation - For Rent Studio Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment3.1% 100% $2,484Furniture and Home Furnishings Stores40% $994 $993,513 6.99 $142,034 $33,865 4.2 87.5% 1.71 2.1 $58,035 LI HouseholdsElectronics and Appliance Stores40% $994 $993,513 6.84 $145,293 $33,179 4.4 87.5% 1.71 2.2 $56,860 LI HouseholdsGeneral Merchandise Stores10% $248 $248,378 11.23 $22,123 $30,374 0.7 87.5% 1.71 0.4 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $248 $248,378 6.97 $35,646 $23,032 1.5 87.5% 1.71 0.8 $39,471 VLI HouseholdsApparel and Services2.9% 100% $2,290Clothing and Clothing Accessories Stores40% $916 $915,980 8.08 $113,433 $18,852 6.0 87.5% 1.71 3.1 $32,307 VLI HouseholdsGeneral Merchandise40% $916 $915,980 11.23 $81,587 $30,374 2.7 87.5% 1.71 1.4 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $229 $228,995 6.97 $32,864 $23,032 1.4 87.5% 1.71 0.7 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $114 $114,498 3.30 $34,706 $25,686 1.4 87.5% 1.71 0.7 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $114 $114,498 3.30 $34,706 $25,686 1.4 87.5% 1.71 0.7 $44,019 VLI Households Vehicle Purchases (net outlay)5.2% 100% $4,185Motor Vehicle and Parts Dealers100% $4,185 $4,184,827 10.73 $389,884 $50,376 7.7 87.5% 1.71 4.0 $86,331 ModerateGasoline and motor oil3.6% 100% $2,849Gasoline Stations100% $2,849 $2,849,199 30.62 $93,038 $25,561 3.6 87.5% 1.71 1.9 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.4% 100% $1,131Repair and Maintenance100% $1,131 $1,131,206 3.37 $335,357 $28,937 11.6 98.1% 1.71 6.6 $49,591 LI Households Medical Services1.5% 100% $1,233Ambulatory Health Care Services 40% $493 $493,155 2.60 $189,427 $62,611 3.0 98.1% 1.71 1.7 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $370 $369,866 4.40 $84,050 $27,115 3.1 98.1% 1.71 1.8 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $370 $369,866 2.20 $168,314 $33,109 5.1 98.1% 1.71 2.9 $56,740 LI HouseholdsDrugs0.7% 100% $540Health and Personal Care Stores100% $540 $540,183 9.35 $57,779 $36,944 1.6 87.5% 1.71 0.8 $63,313 LI HouseholdsMedical Supplies0.3% 100% $211Health and Personal Care Stores100% $211 $210,777 9.35 $22,545 $36,944 0.6 87.5% 1.71 0.3 $63,313 LI HouseholdsEntertainment Fees and Admissions1.2% 100% $935Arts, Entertainment, & Recreation 100% $935 $935,258 2.93 $318,996 $20,339 15.7 87.5% 1.71 8.0 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a Studio Unit requires a household income of $90,000 per year.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.Page 114 of 186
Table A-1 Household Expenditures and Employment Generation - For Rent Studio Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.2% 100% $935Electronics and Appliance Stores100% $935 $935,258 6.84 $136,774 $33,179 4.1 87.5% 1.71 2.1 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.1.3% 100% $1,045Sporting Goods, Hobby, and Musical Instrument Stores 40% $418 $418,165 7.31 $57,204 $20,692 2.8 87.5% 1.71 1.4 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $418 $418,165 6.97 $60,013 $23,032 2.6 87.5% 1.71 1.3 $39,471 VLI HouseholdsVeterinary Services20% $209 $209,082 2.69 $77,687 $49,793 1.6 98.1% 1.71 0.9 $85,332 ModerateOther Entertainment Supplies, Equipment, and Services 0.5% 100% $390Sporting Goods, Hobby, and Musical Instrument Stores 85% $331 $331,312 7.31 $45,323 $20,692 2.2 87.5% 1.71 1.1 $35,461 VLI HouseholdsPhotographic Services15% $58 $58,467 3.41 $17,162 $43,227 0.4 98.1% 1.71 0.2 $74,079 ModeratePersonal Care Products and Services1.2% 100% $944Unspecified Retail50% $472 $471,865 6.97 $67,720 $23,032 2.9 87.5% 1.71 1.5 $39,471 VLI HouseholdsPersonal Care Services50% $472 $471,865 3.46 $136,270 $20,231 6.7 98.1% 1.71 3.9 $34,671 VLI HouseholdsReading0.1% 100% $109Sporting Goods, Hobby, and Musical Instrument Stores 100% $109 $109,096 7.31 $14,924 $20,692 0.7 87.5% 1.71 0.4 $35,461 VLI HouseholdsEducation1.0% 100% $823Educational Services100% $823 $822,984 3.45 $238,559 $27,444 8.7 98.1% 1.71 5.0 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.4% 100% $287Unspecified Retail 100% $287 $287,038 6.97 $41,194 $23,032 1.8 87.5% 1.71 0.9 $39,471 VLI HouseholdsMiscellaneous1.3% 100% $1,007Accounting20% $201 $201,456 3.37 $59,809 $50,490 1.2 98.1% 1.71 0.7 $86,527 ModerateArchitectural, Engineering, and Related 20% $201 $201,456 0.83 $243,795 $97,022 2.5 98.1% 1.71 1.4 $166,269 Above ModSpecialized Design Services20% $201 $201,456 3.50 $57,504 $56,159 1.0 98.1% 1.71 0.6 $96,242 ModerateDeath Care Services 20% $201 $201,456 2.99 $67,348 $43,227 1.6 98.1% 1.71 0.9 $74,079 ModerateLegal Services20% $201 $201,456 2.87 $70,239 $100,406 0.7 98.1% 1.71 0.4 $172,068 Above ModTotal per 1,000 Market Rate Households258.1 136.3[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a Studio Unit requires a household income of $90,000 per year.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 115 of 186
Table A-2 Household Expenditures and Employment Generation - For Rent 1-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income$98,800Food at Home7.2% 100% $7,086Food & Beverage Stores100% $7,086 $7,085,921 9.40 $754,219 $30,692 24.6 87.5% 1.71 12.5 $52,599 LI HouseholdsFood Away From Home5.6% 100% $5,535Food Services and Drinking Places100% $5,535 $5,534,527 3.20 $1,729,154 $19,920 86.8 87.5% 1.71 44.3 $34,137 VLI Households Alcoholic Beverages0.9% 100% $938Food & Beverage Stores50% $469 $468,950 9.40 $49,915 $30,692 1.6 87.5% 1.71 0.8 $52,599 LI HouseholdsFood Services and Drinking Places50% $469 $468,950 3.20 $146,514 $19,920 7.4 87.5% 1.71 3.8 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $1,758Personal and Household Goods Repair and Maintenance 45% $791 $791,133 3.30 $239,808 $25,686 9.3 98.1% 1.71 5.3 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $791 $791,133 9.23 $85,700 $36,992 2.3 87.5% 1.71 1.2 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $176 $175,807 5.23 $33,591 $43,536 0.8 98.1% 1.71 0.4 $74,608 ModerateFuel oil and Other fuels [7]5.6% 100% $5,531Nonstore Retailers100% $5,531 $5,530,602 7.83 $706,678 $42,161 16.8 87.5% 1.71 8.6 $72,252 ModerateWater and Other Public Services [7]1.2% 100% $1,142Waste Management and Remediation Services 100% $1,142 $1,141,962 4.11 $277,737 $59,559 4.7 98.1% 1.71 2.7 $102,068 ModerateHousehold Operations Personal Services0.8% 100% $787Nursing and Residential Care Facilities40% $315 $314,988 2.20 $143,340 $33,109 4.3 98.1% 1.71 2.5 $56,740 LI HouseholdsSocial Assistance [8]60% $472 $472,482 2.98 $158,366 $27,179 5.8 98.1% 1.71 3.3 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.3% 100% $1,307Services to Buildings and Dwellings100% $1,307 $1,306,545 2.91 $449,157 $75,555 5.9 98.1% 1.71 3.4 $129,482 Above ModHousekeeping Supplies1.0% 100% $988Building Materials and Garden Equipment and Supplies Dealers 10% $99 $98,761 9.23 $10,698 $36,992 0.3 87.5% 1.71 0.1 $63,394 LI HouseholdsFood & Beverage Stores35% $346 $345,663 9.40 $36,792 $30,692 1.2 87.5% 1.71 0.6 $52,599 LI HouseholdsGeneral Merchandise35% $346 $345,663 11.23 $30,788 $30,374 1.0 87.5% 1.71 0.5 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $198 $197,522 6.97 $28,347 $23,032 1.2 87.5% 1.71 0.6 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 1-Bedroom Unit requires a household income of $138,800 per year.Page 116 of 186
Table A-2 Household Expenditures and Employment Generation - For Rent 1-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment3.1% 100% $3,067Furniture and Home Furnishings Stores40% $1,227 $1,226,988 6.99 $175,412 $33,865 5.2 87.5% 1.71 2.6 $58,035 LI HouseholdsElectronics and Appliance Stores40% $1,227 $1,226,988 6.84 $179,437 $33,179 5.4 87.5% 1.71 2.8 $56,860 LI HouseholdsGeneral Merchandise Stores10% $307 $306,747 11.23 $27,322 $30,374 0.9 87.5% 1.71 0.5 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $307 $306,747 6.97 $44,023 $23,032 1.9 87.5% 1.71 1.0 $39,471 VLI HouseholdsApparel and Services2.9% 100% $2,828Clothing and Clothing Accessories Stores40% $1,131 $1,131,236 8.08 $140,090 $18,852 7.4 87.5% 1.71 3.8 $32,307 VLI HouseholdsGeneral Merchandise40% $1,131 $1,131,236 11.23 $100,760 $30,374 3.3 87.5% 1.71 1.7 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $283 $282,809 6.97 $40,587 $23,032 1.8 87.5% 1.71 0.9 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $141 $141,404 3.30 $42,863 $25,686 1.7 87.5% 1.71 0.9 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $141 $141,404 3.30 $42,863 $25,686 1.7 87.5% 1.71 0.9 $44,019 VLI Households Vehicle Purchases (net outlay)5.2% 100% $5,168Motor Vehicle and Parts Dealers100% $5,168 $5,168,262 10.73 $481,506 $50,376 9.6 87.5% 1.71 4.9 $86,331 ModerateGasoline and motor oil3.6% 100% $3,519Gasoline Stations100% $3,519 $3,518,761 30.62 $114,903 $25,561 4.5 87.5% 1.71 2.3 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.4% 100% $1,397Repair and Maintenance100% $1,397 $1,397,040 3.37 $414,166 $28,937 14.3 98.1% 1.71 8.2 $49,591 LI Households Medical Services1.5% 100% $1,523Ambulatory Health Care Services 40% $609 $609,046 2.60 $233,942 $62,611 3.7 98.1% 1.71 2.1 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $457 $456,785 4.40 $103,802 $27,115 3.8 98.1% 1.71 2.2 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $457 $456,785 2.20 $207,867 $33,109 6.3 98.1% 1.71 3.6 $56,740 LI HouseholdsDrugs0.7% 100% $667Health and Personal Care Stores100% $667 $667,126 9.35 $71,358 $36,944 1.9 87.5% 1.71 1.0 $63,313 LI HouseholdsMedical Supplies0.3% 100% $260Health and Personal Care Stores100% $260 $260,310 9.35 $27,843 $36,944 0.8 87.5% 1.71 0.4 $63,313 LI HouseholdsEntertainment Fees and Admissions1.2% 100% $1,155Arts, Entertainment, & Recreation 100% $1,155 $1,155,043 2.93 $393,960 $20,339 19.4 87.5% 1.71 9.9 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 1-Bedroom Unit requires a household income of $138,800 per year.Page 117 of 186
Table A-2 Household Expenditures and Employment Generation - For Rent 1-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item #REF! #REF!Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.2% 100% $1,155Electronics and Appliance Stores100% $1,155 $1,155,043 6.84 $168,915 $33,179 5.1 87.5% 1.71 2.6 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.1.3% 100% $1,291Sporting Goods, Hobby, and Musical Instrument Stores 40% $516 $516,434 7.31 $70,647 $20,692 3.4 87.5% 1.71 1.7 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $516 $516,434 6.97 $74,116 $23,032 3.2 87.5% 1.71 1.6 $39,471 VLI HouseholdsVeterinary Services20% $258 $258,217 2.69 $95,944 $49,793 1.9 98.1% 1.71 1.1 $85,332 ModerateOther Entertainment Supplies, Equipment, and Services 0.5% 100% $481Sporting Goods, Hobby, and Musical Instrument Stores 85% $409 $409,170 7.31 $55,974 $20,692 2.7 87.5% 1.71 1.4 $35,461 VLI HouseholdsPhotographic Services15% $72 $72,207 3.41 $21,195 $43,227 0.5 98.1% 1.71 0.3 $74,079 ModeratePersonal Care Products and Services1.2% 100% $1,166Unspecified Retail50% $583 $582,754 6.97 $83,634 $23,032 3.6 87.5% 1.71 1.9 $39,471 VLI HouseholdsPersonal Care Services50% $583 $582,754 3.46 $168,294 $20,231 8.3 98.1% 1.71 4.8 $34,671 VLI HouseholdsReading0.1% 100% $135Sporting Goods, Hobby, and Musical Instrument Stores 100% $135 $134,733 7.31 $18,431 $20,692 0.9 87.5% 1.71 0.5 $35,461 VLI HouseholdsEducation1.0% 100% $1,016Educational Services100% $1,016 $1,016,386 3.45 $294,621 $27,444 10.7 98.1% 1.71 6.1 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.4% 100% $354Unspecified Retail 100% $354 $354,492 6.97 $50,875 $23,032 2.2 87.5% 1.71 1.1 $39,471 VLI HouseholdsMiscellaneous1.3% 100% $1,244Accounting20% $249 $248,799 3.37 $73,864 $50,490 1.5 98.1% 1.71 0.8 $86,527 ModerateArchitectural, Engineering, and Related 20% $249 $248,799 0.83 $301,087 $97,022 3.1 98.1% 1.71 1.8 $166,269 Above ModSpecialized Design Services20% $249 $248,799 3.50 $71,017 $56,159 1.3 98.1% 1.71 0.7 $96,242 ModerateDeath Care Services 20% $249 $248,799 2.99 $83,175 $43,227 1.9 98.1% 1.71 1.1 $74,079 ModerateLegal Services20% $249 $248,799 2.87 $86,745 $100,406 0.9 98.1% 1.71 0.5 $172,068 Above ModTotal per 1,000 Market Rate Households318.8 168.3[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 1-Bedroom Unit requires a household income of $138,800 per year.Page 118 of 186
Table A-3 Household Expenditures and Employment Generation - For Rent 2-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income$117,000Food at Home5.7% 100% $6,726Food & Beverage Stores100% $6,726 $6,726,005 9.40 $715,909 $30,692 23.3 87.5% 1.71 11.9 $52,599 LI HouseholdsFood Away From Home5.1% 100% $5,935Food Services and Drinking Places100% $5,935 $5,934,711 3.20 $1,854,183 $19,920 93.1 87.5% 1.71 47.5 $34,137 VLI Households Alcoholic Beverages0.7% 100% $865Food & Beverage Stores50% $433 $432,670 9.40 $46,053 $30,692 1.5 87.5% 1.71 0.8 $52,599 LI HouseholdsFood Services and Drinking Places50% $433 $432,670 3.20 $135,179 $19,920 6.8 87.5% 1.71 3.5 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $2,099Personal and Household Goods Repair and Maintenance 45% $944 $944,415 3.30 $286,271 $25,686 11.1 98.1% 1.71 6.4 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $944 $944,415 9.23 $102,304 $36,992 2.8 87.5% 1.71 1.4 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $210 $209,870 5.23 $40,099 $43,536 0.9 98.1% 1.71 0.5 $74,608 ModerateFuel oil and Other fuels [7]4.5% 100% $5,309Nonstore Retailers100% $5,309 $5,309,190 7.83 $678,387 $42,161 16.1 87.5% 1.71 8.2 $72,252 ModerateWater and Other Public Services [7]1.0% 100% $1,136Waste Management and Remediation Services 100% $1,136 $1,136,105 4.11 $276,312 $59,559 4.6 98.1% 1.71 2.7 $102,068 ModerateHousehold Operations Personal Services0.6% 100% $705Nursing and Residential Care Facilities40% $282 $282,037 2.20 $128,346 $33,109 3.9 98.1% 1.71 2.2 $56,740 LI HouseholdsSocial Assistance [8]60% $423 $423,055 2.98 $141,799 $27,179 5.2 98.1% 1.71 3.0 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.3% 100% $1,547Services to Buildings and Dwellings100% $1,547 $1,547,224 2.91 $531,897 $75,555 7.0 98.1% 1.71 4.0 $129,482 Above ModHousekeeping Supplies0.9% 100% $1,050Building Materials and Garden Equipment and Supplies Dealers 10% $105 $104,990 9.23 $11,373 $36,992 0.3 87.5% 1.71 0.2 $63,394 LI HouseholdsFood & Beverage Stores35% $367 $367,466 9.40 $39,113 $30,692 1.3 87.5% 1.71 0.7 $52,599 LI HouseholdsGeneral Merchandise35% $367 $367,466 11.23 $32,730 $30,374 1.1 87.5% 1.71 0.6 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $210 $209,980 6.97 $30,135 $23,032 1.3 87.5% 1.71 0.7 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 2-Bedroom Unit requires a household income of $167,000 per year.Page 119 of 186
Table A-3 Household Expenditures and Employment Generation - For Rent 2-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment2.8% 100% $3,283Furniture and Home Furnishings Stores40% $1,313 $1,313,372 6.99 $187,762 $33,865 5.5 87.5% 1.71 2.8 $58,035 LI HouseholdsElectronics and Appliance Stores40% $1,313 $1,313,372 6.84 $192,070 $33,179 5.8 87.5% 1.71 3.0 $56,860 LI HouseholdsGeneral Merchandise Stores10% $328 $328,343 11.23 $29,246 $30,374 1.0 87.5% 1.71 0.5 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $328 $328,343 6.97 $47,122 $23,032 2.0 87.5% 1.71 1.0 $39,471 VLI HouseholdsApparel and Services2.4% 100% $2,778Clothing and Clothing Accessories Stores 40% $1,111 $1,111,349 8.08 $137,627 $18,852 7.3 87.5% 1.71 3.7 $32,307 VLI HouseholdsGeneral Merchandise40% $1,111 $1,111,349 11.23 $98,989 $30,374 3.3 87.5% 1.71 1.7 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $278 $277,837 6.97 $39,874 $23,032 1.7 87.5% 1.71 0.9 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $139 $138,919 3.30 $42,109 $25,686 1.6 87.5% 1.71 0.8 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $139 $138,919 3.30 $42,109 $25,686 1.6 87.5% 1.71 0.8 $44,019 VLI Households Vehicle Purchases (net outlay)5.3% 100% $6,173Motor Vehicle and Parts Dealers100% $6,173 $6,173,425 10.73 $575,153 $50,376 11.4 87.5% 1.71 5.8 $86,331 ModerateGasoline and motor oil3.1% 100% $3,665Gasoline Stations100% $3,665 $3,664,711 30.62 $119,668 $25,561 4.7 87.5% 1.71 2.4 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.2% 100% $1,347Repair and Maintenance100% $1,347 $1,347,190 3.37 $399,388 $28,937 13.8 98.1% 1.71 7.9 $49,591 LI Households Medical Services1.4% 100% $1,664Ambulatory Health Care Services 40% $666 $665,749 2.60 $255,722 $62,611 4.1 98.1% 1.71 2.3 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $499 $499,311 4.40 $113,466 $27,115 4.2 98.1% 1.71 2.4 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $499 $499,311 2.20 $227,220 $33,109 6.9 98.1% 1.71 3.9 $56,740 LI HouseholdsDrugs0.6% 100% $673Health and Personal Care Stores100% $673 $673,043 9.35 $71,990 $36,944 1.9 87.5% 1.71 1.0 $63,313 LI HouseholdsMedical Supplies0.2% 100% $251Health and Personal Care Stores100% $251 $250,871 9.35 $26,834 $36,944 0.7 87.5% 1.71 0.4 $63,313 LI HouseholdsEntertainment Fees and Admissions1.1% 100% $1,331Arts, Entertainment, & Recreation 100% $1,331 $1,330,613 2.93 $453,843 $20,339 22.3 87.5% 1.71 11.4 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 2-Bedroom Unit requires a household income of $167,000 per year.Page 120 of 186
Table A-3 Household Expenditures and Employment Generation - For Rent Studio Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.1% 100% $1,331Electronics and Appliance Stores100% $1,331 $1,330,613 6.84 $194,591 $33,179 5.9 87.5% 1.71 3.0 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.1.2% 100% $1,460Sporting Goods, Hobby, and Musical Instrument Stores 40% $584 $583,967 7.31 $79,886 $20,692 3.9 87.5% 1.71 2.0 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $584 $583,967 6.97 $83,808 $23,032 3.6 87.5% 1.71 1.9 $39,471 VLI HouseholdsVeterinary Services20% $292 $291,983 2.69 $108,490 $49,793 2.2 98.1% 1.71 1.2 $85,332 ModerateOther Entertainment Supplies, Equipment, and Services 1.1% 100% $1,311Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,114 $1,114,112 7.31 $152,408 $20,692 7.4 87.5% 1.71 3.8 $35,461 VLI HouseholdsPhotographic Services15% $197 $196,608 3.41 $57,712 $43,227 1.3 98.1% 1.71 0.8 $74,079 ModeratePersonal Care Products and Services1.1% 100% $1,272Unspecified Retail50% $636 $636,020 6.97 $91,278 $23,032 4.0 87.5% 1.71 2.0 $39,471 VLI HouseholdsPersonal Care Services50% $636 $636,020 3.46 $183,676 $20,231 9.1 98.1% 1.71 5.2 $34,671 VLI HouseholdsReading0.1% 100% $155Sporting Goods, Hobby, and Musical Instrument Stores 100% $155 $154,722 7.31 $21,166 $20,692 1.0 87.5% 1.71 0.5 $35,461 VLI HouseholdsEducation1.9% 100% $2,257Educational Services100% $2,257 $2,256,737 3.45 $654,163 $27,444 23.8 98.1% 1.71 13.6 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.3% 100% $311Unspecified Retail 100% $311 $310,550 6.97 $44,569 $23,032 1.9 87.5% 1.71 1.0 $39,471 VLI HouseholdsMiscellaneous1.1% 100% $1,288Accounting20% $258 $257,502 3.37 $76,448 $50,490 1.5 98.1% 1.71 0.9 $86,527 ModerateArchitectural, Engineering, and Related 20% $258 $257,502 0.83 $311,620 $97,022 3.2 98.1% 1.71 1.8 $166,269 Above ModSpecialized Design Services20% $258 $257,502 3.50 $73,502 $56,159 1.3 98.1% 1.71 0.7 $96,242 ModerateDeath Care Services 20% $258 $257,502 2.99 $86,085 $43,227 2.0 98.1% 1.71 1.1 $74,079 ModerateLegal Services20% $258 $257,502 2.87 $89,780 $100,406 0.9 98.1% 1.71 0.5 $172,068 Above ModTotal per 1,000 Market Rate Households353.3 187.0[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2014 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2013 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 2-Bedroom Unit requires a household income of $167,000 per year.Page 121 of 186
Table A-4 Household Expenditures and Employment Generation - For Rent 3-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income$135,300Food at Home5.7% 100% $7,778Food & Beverage Stores100% $7,778 $7,778,021 9.40 $827,885 $30,692 27.0 87.5% 1.71 13.8 $52,599 Above ModFood Away From Home5.1% 100% $6,863Food Services and Drinking Places100% $6,863 $6,862,960 3.20 $2,144,196 $19,920 107.6 87.5% 1.71 55.0 $34,137 Above Mod Alcoholic Beverages0.7% 100% $1,001Food & Beverage Stores50% $500 $500,344 9.40 $53,256 $30,692 1.7 87.5% 1.71 0.9 $52,599 Above ModFood Services and Drinking Places50% $500 $500,344 3.20 $156,323 $19,920 7.8 87.5% 1.71 4.0 $34,137 Above ModHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $2,427Personal and Household Goods Repair and Maintenance 45% $1,092 $1,092,131 3.30 $331,047 $25,686 12.9 98.1% 1.71 7.4 $44,019 Above ModBuilding Material and Garden Equipment and Supplies Dealer 45% $1,092 $1,092,131 9.23 $118,306 $36,992 3.2 87.5% 1.71 1.6 $63,394 Above ModReal Estate and Rental and Leasing10% $243 $242,696 5.23 $46,371 $43,536 1.1 98.1% 1.71 0.6 $74,608 Above ModFuel oil and Other fuels [7]4.5% 100% $6,140Nonstore Retailers100% $6,140 $6,139,602 7.83 $784,494 $42,161 18.6 87.5% 1.71 9.5 $72,252 Above ModWater and Other Public Services [7]1.0% 100% $1,314Waste Management and Remediation Services 100% $1,314 $1,313,803 4.11 $319,531 $59,559 5.4 98.1% 1.71 3.1 $102,068 Above ModHousehold Operations Personal Services0.6% 100% $815Nursing and Residential Care Facilities40% $326 $326,150 2.20 $148,420 $33,109 4.5 98.1% 1.71 2.6 $56,740 Above ModSocial Assistance [8]60% $489 $489,226 2.98 $163,978 $27,179 6.0 98.1% 1.71 3.5 $46,578 Above ModHousehold Operations Other Household Expenses1.3% 100% $1,789Services to Buildings and Dwellings100% $1,789 $1,789,226 2.91 $615,091 $75,555 8.1 98.1% 1.71 4.7 $129,482 Above ModHousekeeping Supplies0.9% 100% $1,214Building Materials and Garden Equipment and Supplies Dealers 10% $121 $121,412 9.23 $13,152 $36,992 0.4 87.5% 1.71 0.2 $63,394 Above ModFood & Beverage Stores35% $425 $424,941 9.40 $45,230 $30,692 1.5 87.5% 1.71 0.8 $52,599 Above ModGeneral Merchandise35% $425 $424,941 11.23 $37,850 $30,374 1.2 87.5% 1.71 0.6 $52,053 Above ModMiscellaneous Store Retailers20% $243 $242,824 6.97 $34,849 $23,032 1.5 87.5% 1.71 0.8 $39,471 Above Mod[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 4-Bedroom Unit requires a household income of $195,300 per year.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 122 of 186
Table A-4 Household Expenditures and Employment Generation - For Rent 3-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment2.8% 100% $3,797Furniture and Home Furnishings Stores40% $1,519 $1,518,797 6.99 $217,129 $33,865 6.4 87.5% 1.71 3.3 $58,035 Above ModElectronics and Appliance Stores40% $1,519 $1,518,797 6.84 $222,112 $33,179 6.7 87.5% 1.71 3.4 $56,860 Above ModGeneral Merchandise Stores10% $380 $379,699 11.23 $33,820 $30,374 1.1 87.5% 1.71 0.6 $52,053 Above ModMiscellaneous Store Retailers 10% $380 $379,699 6.97 $54,493 $23,032 2.4 87.5% 1.71 1.2 $39,471 Above ModApparel and Services2.4% 100% $3,213Clothing and Clothing Accessories Stores 40% $1,285 $1,285,176 8.08 $159,153 $18,852 8.4 87.5% 1.71 4.3 $32,307 Above ModGeneral Merchandise40% $1,285 $1,285,176 11.23 $114,472 $30,374 3.8 87.5% 1.71 1.9 $52,053 Above ModMiscellaneous Store Retailers 10% $321 $321,294 6.97 $46,110 $23,032 2.0 87.5% 1.71 1.0 $39,471 Above ModPersonal and Household Goods Repair and Maintenance 5% $161 $160,647 3.30 $48,695 $25,686 1.9 87.5% 1.71 1.0 $44,019 Above ModDry cleaning and Laundry Services 5% $161 $160,647 3.30 $48,695 $25,686 1.9 87.5% 1.71 1.0 $44,019 Above Mod Vehicle Purchases (net outlay)5.3% 100% $7,139Motor Vehicle and Parts Dealers100% $7,139 $7,139,012 10.73 $665,113 $50,376 13.2 87.5% 1.71 6.7 $86,331 Above ModGasoline and motor oil3.1% 100% $4,238Gasoline Stations100% $4,238 $4,237,910 30.62 $138,386 $25,561 5.4 87.5% 1.71 2.8 $43,804 Above ModVehicle Maintenance and Repairs1.2% 100% $1,558Repair and Maintenance100% $1,558 $1,557,905 3.37 $461,856 $28,937 16.0 98.1% 1.71 9.1 $49,591 Above Mod Medical Services1.4% 100% $1,925Ambulatory Health Care Services 40% $770 $769,878 2.60 $295,719 $62,611 4.7 98.1% 1.71 2.7 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $577 $577,409 4.40 $131,213 $27,115 4.8 98.1% 1.71 2.8 $46,469 Above ModNursing and Residential Care Facilities 30% $577 $577,409 2.20 $262,759 $33,109 7.9 98.1% 1.71 4.5 $56,740 Above ModDrugs0.6% 100% $778Health and Personal Care Stores100% $778 $778,313 9.35 $83,250 $36,944 2.3 87.5% 1.71 1.2 $63,313 Above ModMedical Supplies0.2% 100% $290Health and Personal Care Stores100% $290 $290,110 9.35 $31,031 $36,944 0.8 87.5% 1.71 0.4 $63,313 Above ModEntertainment Fees and Admissions1.1% 100% $1,539Arts, Entertainment, & Recreation 100% $1,539 $1,538,734 2.93 $524,829 $20,339 25.8 87.5% 1.71 13.2 $34,856 Above Mod[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 4-Bedroom Unit requires a household income of $195,300 per year.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 123 of 186
Table A-4 Household Expenditures and Employment Generation - For Rent 3-Bedroom Apartment City of Atascadero Rental Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.1% 100% $1,539Electronics and Appliance Stores100% $1,539 $1,538,734 6.84 $225,027 $33,179 6.8 87.5% 1.71 3.5 $56,860 Above ModEntertainment Pets, Toys, Hobbies, and Playground Equip.1.2% 100% $1,688Sporting Goods, Hobby, and Musical Instrument Stores 40% $675 $675,305 7.31 $92,380 $20,692 4.5 87.5% 1.71 2.3 $35,461 Above ModMiscellaneous Store Retailers 40% $675 $675,305 6.97 $96,916 $23,032 4.2 87.5% 1.71 2.1 $39,471 Above ModVeterinary Services20% $338 $337,653 2.69 $125,459 $49,793 2.5 98.1% 1.71 1.4 $85,332 Above ModOther Entertainment Supplies, Equipment, and Services 1.1% 100% $1,516Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,288 $1,288,371 7.31 $176,247 $20,692 8.5 87.5% 1.71 4.3 $35,461 Above ModPhotographic Services15% $227 $227,360 3.41 $66,739 $43,227 1.5 98.1% 1.71 0.9 $74,079 Above ModPersonal Care Products and Services1.1% 100% $1,471Unspecified Retail50% $735 $735,500 6.97 $105,555 $23,032 4.6 87.5% 1.71 2.3 $39,471 Above ModPersonal Care Services50% $735 $735,500 3.46 $212,405 $20,231 10.5 98.1% 1.71 6.0 $34,671 Above ModReading0.1% 100% $179Sporting Goods, Hobby, and Musical Instrument Stores 100% $179 $178,923 7.31 $24,476 $20,692 1.2 87.5% 1.71 0.6 $35,461 Above ModEducation1.9% 100% $2,610Educational Services100% $2,610 $2,609,714 3.45 $756,481 $27,444 27.6 98.1% 1.71 15.8 $47,032 Above ModTobacco Products and Smoking Supplies0.3% 100% $359Unspecified Retail 100% $359 $359,123 6.97 $51,540 $23,032 2.2 87.5% 1.71 1.1 $39,471 Above ModMiscellaneous1.1% 100% $1,489Accounting20% $298 $297,778 3.37 $88,405 $50,490 1.8 98.1% 1.71 1.0 $86,527 Above ModArchitectural, Engineering, and Related 20% $298 $297,778 0.83 $360,361 $97,022 3.7 98.1% 1.71 2.1 $166,269 Above ModSpecialized Design Services20% $298 $297,778 3.50 $84,998 $56,159 1.5 98.1% 1.71 0.9 $96,242 Above ModDeath Care Services 20% $298 $297,778 2.99 $99,550 $43,227 2.3 98.1% 1.71 1.3 $74,079 Above ModLegal Services20% $298 $297,778 2.87 $103,822 $100,406 1.0 98.1% 1.71 0.6 $172,068 Above ModTotal per 1,000 Market Rate Households408.5 216.3[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Luis Obispo County.[6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2017 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, renting a 4-Bedroom Unit requires a household income of $195,300 per year.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 124 of 186
APPENDIX B:
Income Levels for Worker Households
Page 125 of 186
Table B-1 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Rent Studio Apartment
City of Atascadero Rental Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
ELI
Households
VLI
Households LI Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 4.7 2.4 0.0 2.4 0.0 0.0 0.0
Food & Beverage Stores 22.2 11.3 0.0 0.0 11.3 0.0 0.0
Food Services and Drinking Places 76.2 38.9 0.0 38.9 0.0 0.0 0.0
Health and Personal Care Stores 2.2 1.1 0.0 0.0 1.1 0.0 0.0
General Merchandise 4.2 2.2 0.0 0.0 2.2 0.0 0.0
Furniture and Home Furnishings Stores 4.2 2.1 0.0 0.0 2.1 0.0 0.0Building Material and Garden Equipment and Supplies Dealer 2.1 1.1 0.0 0.0 1.1 0.0 0.0
Electronics and Appliance Stores 8.5 4.3 0.0 0.0 4.3 0.0 0.0Clothing and Clothing Accessories Stores 6.0 3.1 0.0 3.1 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 7.7 4.0 0.0 0.0 0.0 4.0 0.0
Gasoline Stations 3.6 1.9 0.0 1.9 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 5.7 2.9 0.0 2.9 0.0 0.0 0.0
Miscellaneous Store Retailers 6.6 3.4 0.0 3.4 0.0 0.0 0.0
Nonstore Retailers 13.6 6.9 0.0 0.0 0.0 6.9 0.0
Arts, Entertainment, & Recreation 15.7 8.0 0.0 8.0 0.0 0.0 0.0
Medical/HealthAmbulatory Health Care Services 3.0 1.7 0.0 0.0 0.0 0.0 1.7
General Medical and Surgical Hospitals 3.1 1.8 0.0 0.0 1.8 0.0 0.0
Nursing and Residential Care Facilities 8.6 4.9 0.0 0.0 4.9 0.0 0.0
Social Assistance 4.7 2.7 0.0 0.0 2.7 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 8.9 5.0 0.0 5.0 0.0 0.0 0.0
Services to Buildings and Dwellings 4.8 2.8 0.0 0.0 0.0 0.0 2.8
Waste Management and Remediation Services 3.8 2.2 0.0 0.0 0.0 2.2 0.0
Real Estate and Rental and Leasing 0.6 0.4 0.0 0.0 0.0 0.4 0.0
Personal Care Services 6.7 3.9 0.0 3.9 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.4 0.7 0.0 0.7 0.0 0.0 0.0Auto Repair and Maintenance 11.6 6.6 0.0 0.0 6.6 0.0 0.0
Veterinary Services 1.6 0.9 0.0 0.0 0.0 0.9 0.0Photographic Services 0.4 0.2 0.0 0.0 0.0 0.2 0.0
Educational Services 8.7 5.0 0.0 0.0 5.0 0.0 0.0
Accounting 1.2 0.7 0.0 0.0 0.0 0.7 0.0
Architectural, Engineering, and Related 2.5 1.4 0.0 0.0 0.0 0.0 1.4
Specialized Design Services 1.0 0.6 0.0 0.0 0.0 0.6 0.0
Death Care Services 1.6 0.9 0.0 0.0 0.0 0.9 0.0
Legal Services 0.7 0.4 0.0 0.4 0.0 0.0 0.0
Government 43.4 24.9 0.0 0.0 0.0 11.4 14.8
Total Workers and Households 301.6 161.1 0.0 70.5 43.2 28.1 20.7
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]141.7 0.0 70.5 43.2 28.1 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]14.2 0.0 7.1 4.3 2.8 0.0
[2] Excludes above moderate-income households because these incomes are adequate to acquire market-rate housing.
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and 1.9% discount for
other industries to account for workers under age 20.
Page 126 of 186
Table B-2 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Rent 1-Bedroom Apartment
City of Atascadero Rental Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 5.8 3.0 3.0 0.0 0.0 0.0
Food & Beverage Stores 27.4 14.0 0.0 14.0 0.0 0.0
Food Services and Drinking Places 94.2 48.1 48.1 0.0 0.0 0.0
Health and Personal Care Stores 2.7 1.4 0.0 1.4 0.0 0.0
General Merchandise 5.2 2.7 0.0 2.7 0.0 0.0
Furniture and Home Furnishings Stores 5.2 2.6 0.0 2.6 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 2.6 1.3 0.0 1.3 0.0 0.0
Electronics and Appliance Stores 10.5 5.4 0.0 5.4 0.0 0.0
Clothing and Clothing Accessories Stores 7.4 3.8 3.8 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 9.6 4.9 0.0 0.0 4.9 0.0
Gasoline Stations 4.5 2.3 2.3 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 7.0 3.6 3.6 0.0 0.0 0.0
Miscellaneous Store Retailers 8.1 4.1 4.1 0.0 0.0 0.0
Nonstore Retailers 16.8 8.6 0.0 0.0 8.6 0.0
Arts, Entertainment, & Recreation 19.4 9.9 9.9 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 3.7 2.1 0.0 0.0 0.0 2.1
General Medical and Surgical Hospitals 3.8 2.2 0.0 2.2 0.0 0.0
Nursing and Residential Care Facilities 10.6 6.1 0.0 6.1 0.0 0.0
Social Assistance 5.8 3.3 0.0 3.3 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 11.0 6.2 6.2 0.0 0.0 0.0
Services to Buildings and Dwellings 5.9 3.4 0.0 0.0 0.0 3.4
Waste Management and Remediation Services 4.7 2.7 0.0 0.0 2.7 0.0
Real Estate and Rental and Leasing 0.8 0.4 0.0 0.0 0.4 0.0
Personal Care Services 8.3 4.8 4.8 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.7 0.9 0.9 0.0 0.0 0.0
Auto Repair and Maintenance 14.3 8.2 0.0 8.2 0.0 0.0
Veterinary Services 1.9 1.1 0.0 0.0 1.1 0.0
Photographic Services 0.5 0.3 0.0 0.0 0.3 0.0
Educational Services 10.7 6.1 0.0 6.1 0.0 0.0
Accounting 1.5 0.8 0.0 0.0 0.8 0.0
Architectural, Engineering, and Related 3.1 1.8 0.0 0.0 0.0 1.8
Specialized Design Services 1.3 0.7 0.0 0.0 0.7 0.0
Death Care Services 1.9 1.1 0.0 0.0 1.1 0.0
Legal Services 0.9 0.5 0.5 0.0 0.0 0.0
Government 43.4 24.9 0.0 0.0 11.4 14.8
Total Workers and Households 362.2 193.1 87.1 53.3 32.0 22.1
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]172.4 87.1 53.3 32.0 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]17.2 8.7 5.3 3.2 0.0
[2] Excludes above moderate-income households because these incomes are adequate to acquire market-rate housing.
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and
1.9% discount for other industries to account for workers under age 20.
Page 127 of 186
Table B-3 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Rent 2-Bedroom Apartment
City of Atascadero Rental Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 5.9 3.0 3.0 0.0 0.0 0.0
Food & Beverage Stores 26.1 13.3 0.0 13.3 0.0 0.0
Food Services and Drinking Places 99.9 51.0 51.0 0.0 0.0 0.0
Health and Personal Care Stores 2.7 1.4 0.0 1.4 0.0 0.0
General Merchandise 5.3 2.7 0.0 2.7 0.0 0.0
Furniture and Home Furnishings Stores 5.5 2.8 0.0 2.8 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 3.1 1.6 0.0 1.6 0.0 0.0
Electronics and Appliance Stores 11.7 6.0 0.0 6.0 0.0 0.0
Clothing and Clothing Accessories Stores 7.3 3.7 3.7 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 11.4 5.8 0.0 0.0 5.8 0.0
Gasoline Stations 4.7 2.4 2.4 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 12.2 6.3 6.3 0.0 0.0 0.0
Miscellaneous Store Retailers 8.7 4.5 4.5 0.0 0.0 0.0
Nonstore Retailers 16.1 8.2 0.0 0.0 8.2 0.0
Arts, Entertainment, & Recreation 22.3 11.4 11.4 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 4.1 2.3 0.0 0.0 0.0 2.3
General Medical and Surgical Hospitals 4.2 2.4 0.0 2.4 0.0 0.0
Nursing and Residential Care Facilities 10.7 6.1 0.0 6.1 0.0 0.0
Social Assistance 5.2 3.0 0.0 3.0 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 12.8 7.2 7.2 0.0 0.0 0.0
Services to Buildings and Dwellings 7.0 4.0 0.0 0.0 0.0 4.0
Waste Management and Remediation Services 4.6 2.7 0.0 0.0 2.7 0.0
Real Estate and Rental and Leasing 0.9 0.5 0.0 0.0 0.5 0.0
Personal Care Services 9.1 5.2 5.2 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.6 0.8 0.8 0.0 0.0 0.0
Auto Repair and Maintenance 13.8 7.9 0.0 7.9 0.0 0.0
Veterinary Services 2.2 1.2 0.0 0.0 1.2 0.0
Photographic Services 1.3 0.8 0.0 0.0 0.8 0.0
Educational Services 23.8 13.6 0.0 13.6 0.0 0.0
Accounting 1.5 0.9 0.0 0.0 0.9 0.0
Architectural, Engineering, and Related 3.2 1.8 0.0 0.0 0.0 1.8
Specialized Design Services 1.3 0.7 0.0 0.0 0.7 0.0
Death Care Services 2.0 1.1 0.0 0.0 1.1 0.0
Legal Services 0.9 0.5 0.5 0.0 0.0 0.0
Government 43.4 24.9 0.0 0.0 11.4 14.8
Total Workers and Households 396.7 211.9 96.0 60.8 33.4 23.0
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]190.2 96.0 60.8 33.4 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]19.0 9.6 6.1 3.3 0.0
[2] Excludes above moderate-income households because these incomes are adequate to acquire market-rate housing.
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and
1.9% discount for other industries to account for workers under age 20.
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Table B-4 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Rent 3-Bedroom Apartment
City of Atascadero Rental Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 6.8 3.5 3.5 0.0 0.0 0.0
Food & Beverage Stores 30.2 15.4 0.0 15.4 0.0 0.0
Food Services and Drinking Places 115.5 59.0 59.0 0.0 0.0 0.0
Health and Personal Care Stores 3.1 1.6 0.0 1.6 0.0 0.0
General Merchandise 6.1 3.1 0.0 3.1 0.0 0.0
Furniture and Home Furnishings Stores 6.4 3.3 0.0 3.3 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 3.6 1.8 0.0 1.8 0.0 0.0
Electronics and Appliance Stores 13.5 6.9 0.0 6.9 0.0 0.0
Clothing and Clothing Accessories Stores 8.4 4.3 4.3 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 13.2 6.7 0.0 0.0 6.7 0.0
Gasoline Stations 5.4 2.8 2.8 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 14.2 7.2 7.2 0.0 0.0 0.0
Miscellaneous Store Retailers 10.1 5.2 5.2 0.0 0.0 0.0
Nonstore Retailers 18.6 9.5 0.0 0.0 9.5 0.0
Arts, Entertainment, & Recreation 25.8 13.2 13.2 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 4.7 2.7 0.0 0.0 0.0 2.7
General Medical and Surgical Hospitals 4.8 2.8 0.0 2.8 0.0 0.0
Nursing and Residential Care Facilities 12.4 7.1 0.0 7.1 0.0 0.0
Social Assistance 6.0 3.5 0.0 3.5 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 14.8 8.3 8.3 0.0 0.0 0.0
Services to Buildings and Dwellings 8.1 4.7 0.0 0.0 0.0 4.7
Waste Management and Remediation Services 5.4 3.1 0.0 0.0 3.1 0.0
Real Estate and Rental and Leasing 1.1 0.6 0.0 0.0 0.6 0.0
Personal Care Services 10.5 6.0 6.0 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.9 1.0 1.0 0.0 0.0 0.0
Auto Repair and Maintenance 16.0 9.1 0.0 9.1 0.0 0.0
Veterinary Services 2.5 1.4 0.0 0.0 1.4 0.0
Photographic Services 1.5 0.9 0.0 0.0 0.9 0.0
Educational Services 27.6 15.8 0.0 15.8 0.0 0.0
Accounting 1.8 1.0 0.0 0.0 1.0 0.0
Architectural, Engineering, and Related 3.7 2.1 0.0 0.0 0.0 2.1
Specialized Design Services 1.5 0.9 0.0 0.0 0.9 0.0
Death Care Services 2.3 1.3 0.0 0.0 1.3 0.0
Legal Services 1.0 0.6 0.6 0.0 0.0 0.0
Government 43.4 24.9 0.0 0.0 11.4 14.8
Total Workers and Households 452.0 241.1 111.0 70.3 36.8 24.3
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]218.2 111.0 70.3 36.8 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]21.8 11.1 7.0 3.7 0.0
[2] Excludes above moderate-income households because these incomes are adequate to acquire market-rate housing.
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and
1.9% discount for other industries to account for workers under age 20.
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DRAFT Report
Affordable Housing Fee Nexus
Study for For-Sale Housing
Prepared for:
City of Atascadero
Prepared by:
Economic & Planning Systems, Inc.
April 15, 2022
EPS #211050
Page 130 of 186
Table of Contents
EXECUTIVE SUMMARY .................................................................................................... 1
1. AFFORDABILITY GAP ANALYSIS .................................................................................. 7
Product Type .......................................................................................................... 7
Development Cost Assumptions .............................................................................. 10
Revenue Assumptions ............................................................................................ 10
Affordability Gap Results ........................................................................................ 11
2. DEMAND-BASED NEXUS FEE CALCULATION ................................................................. 12
Market-Rate Household Income Levels ..................................................................... 12
Combined Demand for Income-Qualified Workers ...................................................... 16
Fee Calculation ..................................................................................................... 19
APPENDIX A: Household Expenditures and Employment Generation
Appendix B: Income Levels for Worker Households
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List of Figures and Tables
Figure 1 Illustration of Nexus-Based Housing Fee Methodology ........................................... 2
Table 1 Summary of Maximum Supportable Nexus-Based Housing Fees
or Unit Requirements ....................................................................................... 6
Table 2 Affordability Gap Analysis ................................................................................. 9
Table 3 Required Income by Unit Price - Market-Rate For-Sale Units ................................ 13
Table 4 Income Limits for Affordable Housing ............................................................... 17
Table 5 Summary of Worker and Household Generation per 100 Market-Rate Units ............ 18
Table 6 Nexus-Based Housing Fee Calculations (1,500 Square Feet) ................................ 20
Table 7 Nexus-Based Housing Fee Calculations (2,000 Square Feet) ................................ 21
Table 8 Nexus-Based Housing Fee Calculations (2,500 Square Feet) ................................ 22
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EXECUTIVE SUMMARY
Economic & Planning Systems, Inc. (EPS) was retained by the City of Atascadero (City) to
conduct a nexus study analyzing the impact that the development of market-rate housing has on
the demand for below-market-rate housing and, based on the results, to determine the
defensible nexus-based fee that could be charged to market-rate housing development.
The technical approach used herein quantifies the impacts that the introduction of market-rate
units have on the local economy and the demand for additional affordable housing. As new
households are added to the community, local employment also will grow to provide the goods
and services required by the new households. To the extent that these new jobs do not pay
adequate wages for the employees to afford market-rate housing in the community, the new
households’ spending is creating a need for affordable housing. A nexus-based affordable
housing fee is therefore based on the impact of the new market-rate homes on the demand for
affordable housing. The fee calculated in this study represents the maximum fee that may be
charged to new market-rate housing units to mitigate their impacts on the affordable housing
supply. Such fees may be used by the City to subsidize the production of new affordable units for
lower-income households not accommodated by market-rate projects.
Calculating the impact of market-rate development in the City on affordable housing needs, and
the fees needed to mitigate those impacts, involves three main analytical steps:
Step #1. Estimate the typical subsidy required to construct units affordable at various
income levels (the “affordability gap”).
Step #2. Determine the market-rate households’ demand for goods and services, the jobs
created by that demand, and the affordable housing needs of workers in those jobs.
Step #3. Combine the affordability gap with the affordable housing demand projections to
compute the maximum, legally-defensible nexus-based affordable housing fees per market-
rate unit.
These technical steps are illustrated in Figure 1 and detailed in the body of this Report and the
attached Technical Appendices. The findings regarding each of these steps are presented below.
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Figure 1 Illustration of Nexus-Based Housing Fee Methodology
1. The cost to construct housing units affordable to many households exceed those
units’ values based on what the households can afford to pay. The estimated
subsidy required to construct affordable housing units in Atascadero ranges from
roughly $459,000 for Very Low-Income households earning up to 50 percent of AMI
to $152,000 for Moderate Income households earning up to 120 percent of AMI.
An “affordability gap analysis” evaluates whether or not the costs to construct affordable
units exceed the values of units that are affordable to lower- and moderate-income
households. For each affordable housing income level—households with incomes at 50, 80,
and 120 percent of Area Median Income (AMI)—this analysis estimates the subsidy required
to construct affordable housing units.
The affordability gap analysis assumes that the average affordable unit for all income levels
will be a 2-bedroom unit in a multifamily development in a three-story building (with an
average density of 24 dwelling units per acre). This prototype assumes that affordable
housing developers will maximize the City’s current allowable density (24 units per acre),
plus utilize the State Density Bonus (up to 50 percent of allowable density). However, due to
the topography of many sites in Atascadero, it was assumed a developer would not be able
to build more than 24 units per acre and that the State density Bonus would be utilized to
depart from development standards to assist in achieving maximum base density. The
estimated costs to construct the prototypical affordable unit are based on conversations with
local market rate and affordable housing developers, as well as other development cost data
sources. The cost of land acquisition is also included in the development cost calculations.
A household’s ability to pay is estimated based on standard percentages of income available
for housing costs at each household income level. Income available for housing costs is then
converted into a monthly affordable rent and a capitalized unit value or an affordable
mortgage payment and supportable home price. This unit value is then compared to the
costs of development to determine the subsidy required to make the unit affordable to each
income level.
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2. The demand for affordable housing generated by the expenditures of new
households in the City of Atascadero increases along with the market-rate unit
value (and related owner income). For example, a 1,500 square foot unit selling for
$555,000 is estimated to create demand for 0.176 affordable housing units, while a
2,500 square foot home selling for $925,000 creates demand for 0.268 affordable
units.
Any justified nexus-based fee is based on the total demand for affordable housing units
generated by the construction of market-rate homes. The link (or nexus) between market-
rate housing and increased demand for affordable housing is that residents of market-rate
units demand goods and services that rely on wage earners (for example, retail sales clerks)
some of whom typically cannot afford market-rate housing and thus require affordable
housing.
Because more expensive housing units require owners to have higher incomes, and higher
income households create more jobs through their spending, the nexus impacts and thus the
justified fees for units vary in relation to the price of the market-rate units. The price of the
unit is typically a function of its size, and the fees calculated herein can be applied based on
the square footage of the market-rate units.
This analysis evaluates the demand for affordable housing generated by a range of sale
prices. For each price, the demand-based nexus fee calculation involves the following steps:
A. Market-Rate Household Income Levels. The required incomes of households
occupying new for-sale market-rate housing are derived based on the unit’s mortgage,
property taxes, HOA dues, insurance, and utilities, assuming standard housing cost
expenses as a proportion of overall household income. For example, a typical household
purchasing a for-sale market-rate home for $740,000 would have an income of roughly
$143,600, if it spends 35 percent1 of its income on housing costs.
B. Household Expenditures. Based on the household income computed in Step A,
Consumer Expenditure Survey data is used to evaluate the typical spending patterns of
the household. This analysis provides an estimate of how much the household spends on
specific categories of expenditures, such as “Food at Home.” The survey consists of two
components — the Interview Survey and the Diary Survey — each with its own sample
representative of the broader population, including distinctions by income level. The
surveys collect data on expenditures, income, and consumer unit characteristics. As the
households’ income increases with the value of the market-rate units, the total spending
on goods and services also increases. The Consumer Expenditure Survey also indicates
that these relationships are not linear (e.g., a household with twice the income does not
necessarily spend twice as much on food). While expenditures do increase with income,
the relationship is not linear (i.e., household expenditures do not increase at the same
proportion that incomes go up).
1 California Health and Safety Code Section 50052.5 states that affordable housing cost for for-sale
units should not exceed 35 percent of gross household income for all income levels. Please note that
this differs from the State’s defined affordable housing cost for rental units, which is 30 percent of
gross household income.
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C. Job Creation and Worker Households. Having estimated the households’ spending on
various items, that spending is then converted into an estimate of jobs created. For each
expenditure category, data regarding average worker wages and the ratio between gross
business receipts and wages are used to translate these household expenditures into the
total number of private-sector workers. Because each new worker does not represent an
independent household (Atascadero has an average of 1.71 workers per working
household), the total number of new households created is somewhat less than the
number of new jobs created. This analysis assumes that workers form households with
others with similar wages. EPS has further adjusted the household formation rates to
reflect the fact that a certain proportion of workers will not form their own households,
particularly those of younger ages.2
D. Worker Households by Income Category. Each worker household generated is
assigned to an income category—represented as a proportion of AMI ranging from 50 to
120 percent—based on its estimated gross wages. This provides the total number of
households generated at each income level by construction of market-rate units at
various price points. The results indicate that residents of smaller, lower-priced units
generate fewer worker households requiring affordable housing than do residents of
larger, higher-priced units.
These steps of the nexus-based fee calculation provide the total number of income-qualified
workers required to meet the needs for goods and services generated by market-rate
housing. The number of workers providing goods and services to occupants of market-rate
housing (at each unit price level) is then converted to total income-qualified households and
each such household is assumed to require one housing unit.
3. This analysis calculates the maximum fees that could fully mitigate the impact that
new market-rate housing has on Atascadero’s affordable housing demand at
various representative price points. These fees could range from about $63,096 for
units selling for $555,000 to $96,776 for units that sell for $925,000, or could be
justified at approximately $38.71 per square foot.
The nexus fee is calculated by applying the number of affordable units needed by income
qualified households to the affordability gap for each housing income category. This
calculation is made for several different home values, as shown in Table 1. Should the City
prefer to adopt a flat fee per square foot rather than adjusting the fee based on the actual
unit prices, this analysis suggests that the maximum justifiable fee could be $38.71 per
square foot, as that is the lowest maximum fee level calculated. In many cases, this fee will
need to be adjusted down to a reasonable and feasible fee for new development.
The City may also consider whether to allow developers to provide affordable units within
their projects, rather than paying a nexus-based fee. Table 1 illustrates the proportions of
affordable units that correspond to the fee calculation and demands created by the market-
2 BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only
1.9% of workers overall (this factor is applied to other industries). EPS has assumed that young
workers in this age cohort do not form their own households and has not included them in the
household formation calculations.
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rate units. For instance, a project offering $740,000 units would effectively mitigate the
demand being created by the market-rate units if it provided 0.23 affordable units for each
market-rate unit.
Table 1 Summary of Maximum Supportable Nexus-Based Housing Fees or Unit
Requirements
4. While a nexus-based relationship is not typically required for cities to adopt
inclusionary housing standards, Table 1 shows that the City of Atascadero could
justify an inclusionary requirement of at least 17.6 percent from a nexus
perspective.
Inclusionary ordinances in California vary widely but commonly require 10 to 15 percent
affordable units. California jurisdictions commonly adopt inclusionary standards based on
policy preferences rather than nexus analysis such as this report, but this analysis indicates
that the impact of new for-sale housing could justify an inclusionary requirement of at least
17.6 percent, as that is the lowest impact-based figure calculated. Table 1 also suggests
that very low-income units represent approximately one-half of the units demanded based on
the spending of new for-sale housing occupants, but again, jurisdictions commonly adopt
inclusionary housing income standards based on considerations other than the nexus-based
impact.
5. The findings of this analysis can apply equally to new construction of for-sale units
and expansions of existing homes.
According to City staff, there is significant residential permitting activity occurring in
Atascadero -- some of which is focused on expansions of existing homes rather than entirely
new construction. This analysis demonstrates that there is a relationship between the size of
homes, their market value, the incomes of households expected to occupy those homes, and
the impact on the City’s affordable housing demands. As homeowners or other investors
expand an existing home, its market value increases in a predictable way based on the
square footage added, and the required income of the future buyers of the home can be
expected to increase even if the current occupants’ income stays the same while they remain
in the home. For example, market data suggests that adding 500 square feet to a home can
be expected to add roughly $185,000 to the home’s value. A household that buys the
expanded home in the future would thus need to have more income than the current
For-Sale Unit
Size (Sq. Ft.)1 Unit Value Fee per Unit % of Value Per Sq.Ft. [1]VLI Low Moderate Total
(<50% of AMI) (<80% of AMI) (<120% of AMI)
1,500 $555,000 $63,096 11.4% $42.06 8.8% 6.6% 2.2% 17.6%
2,000 $740,000 $82,715 11.2% $41.36 11.7% 8.5% 2.8% 23.0%
2,500 $925,000 $96,776 10.5% $38.71 13.8% 9.8% 3.2% 26.8%
[1] Unit sizes based on 25th percentile, 50th percentile, and 75th percentile of single family units larger than 1,000 sq. ft.
Unit Requirements by Income LevelNexus-Based Fees
Sources: City of Atascadero; HCD Income Limits 2021; RedFin.com; 2017 U.S Economic Census; Consumer Expenditure Survey, U.S. Bureau of Labor Statistics,
September, 2020; Economic & Planning Systems, Inc.
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household needed to buy the smaller home. As such, home expansions have an impact on
the demand for affordable housing in Atascadero.
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1. AFFORDABILITY GAP ANALYSIS
For any nexus-based affordable housing fee calculation, it is necessary to estimate the subsidy
required to construct affordable housing units. Table 2 shows the subsidy needed to produce
housing that is affordable to very low-, low-, and moderate-income households (50 through 120
percent of AMI).
Product Type
While the nexus fees calculated herein are based on demands created by market-rate for-sale
housing, the analysis assumes that new lower-income worker households would actually be
housed in developments that are 100 percent affordable units (in order to determine the cost of
construction for such units). The affordable units are assumed as apartments at 24 units per acre
with surface parking, reflecting the maximum reasonable density given the City’s topography.
Such a density is permissible given that that affordable apartment builders would likely maximize
the City’s current allowable density (24 units per acre), plus utilize the State density bonus
program to implement development standard concessions in addition to granting up to a 50
percent increase in base density.
In order to determine the average household size of future affordable housing units, EPS used
two estimates from the US Census 2015-2019 American Community Survey (ACS)—the average
household size for working households in Atascadero being 2.56, and average family size being
3.04. Rounding these averages, EPS compared the estimated household wage with the income
thresholds for a 3-person household to identify the income category into which each occupation
would fall for new units.
California State law (California Health and Safety Code Section 50052.5) assumes that a
2-bedroom unit is occupied by a 3-person household, and this assumption is used in this
analysis. Commonly, a 2-bedroom rental unit in the Central Coast of California has a gross size
of about 1,000 square feet (accounting for shared lobbies, hallways, etc.) and a net size of 900
square feet. This analysis estimates the subsidy required to build for-rent housing for the lower-
income worker households.
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Table 2 Affordability Gap Analysis
Item
Very Low
Income
(50% AMI)
Low
Income
(80% AMI)
Moderate
Income
(120% AMI)
Development Program Assumptions
Density/Acre [1] 242424
Gross Unit Size 1,000 1,000 1,000
Net Unit Size 900 900 900
Number of Bedrooms 2 2 2
Number of Persons per 2-bedroom Unit [2] 3 3 3
Parking Spaces/Unit 2.00 2.00 2.00
Cost Assumptions
Land/Acre [3] $650,000 $650,000 $650,000
Land/Unit $27,083 $27,083 $27,083
Direct Costs
Site Preparation Cost per Land Square Foot $10 $10 $10
Site Preparation Cost per Unit $18,200 $18,200 $18,200
Direct Construction Costs/Gross SF [4] $350 $350 $350
Direct Construction Costs/Unit $350,000 $350,000 $350,000
Parking Construction Costs/Space $5,000 $5,000 $5,000
Parking Construction Costs/Unit $10,000 $10,000 $10,000Subtotal, Direct Costs/Unit $378,200 $378,200 $378,200
Indirect Costs as a % of Direct Costs [5] 35% 35% 35%
Indirect Costs/Unit [6] $132,370 $132,370 $132,370
Developer Return (% of all costs) 14% 14% 14%Return Amount $75,271 $75,271 $75,271
Total Cost/Unit (rounded) $613,000 $613,000 $613,000
Maximum Supported Home Price
Household Income [7] $44,050 $70,450 $105,600
Income Available for Housing Costs/Year [8] $13,215 $21,135 $31,680
(less) Operating Expenses per Unit/Year [9] ($6,000) ($6,000) ($10,000)
Net Operating Income $7,215 $15,135 $21,680
Capitalization Rate [10] 4.7% 4.7% 4.7%
Total Supportable Unit Value [11] $154,000 $322,000 $461,000
Affordability Gap $459,000 $291,000 $152,000
Sources: City of Atascadero; HCD; CoStar; and Economic & Planning Systems, Inc.
[1] Based on City Staff input. Density assumes state density bonus is utilized but also reflects topographical limitations in the City
[6] Includes costs for architecture and engineering; entitlement and fees; project management; appraisal and market study; marketing,
[7] Based on 2021 income limits for a three person household in San Luis Obispo County.
3-Story Multifamily Building with Surface Parking
[9] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; units at or below 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 the operating expenses for the moderate income category.
[2] An average of 3 persons is used for this analysis based on Census data indicating the average family size in Atascadero and State law
(Health and Safety Code Section 50052.5) indicates that a 2-bedroom unit should be assumed to be occupied by a 3-person household.
Thus, EPS has assumed an average unit for income-qualified worker households would be 2-bedrooms.
[3] Based on CoStar data on land transactions in the Atascadero area since 2016.
[8] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; units at or below 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 the operating expenses for the moderate income category.
[11] The total supportable unit value is determined by dividing the net operating income by the capitalization rate.
[10] 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 estimated operating risk. Obtained from CoStar for Atascadero multifamily developments.
[4] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects
wood-frame construction above podium parking. Assumes workers are paid prevailing wage.
[5] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects
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Development Cost Assumptions
Affordable housing development costs include land costs, direct costs (e.g., labor and materials),
indirect or “soft” costs (e.g., architecture, entitlement, marketing, etc.), and developer profit.
Operating costs, including property maintenance, common utilities, advertising, leasing, and
property taxes (where applicable) also must be incorporated into the analysis. Data from recent
Atascadero developments and land transactions have been combined with EPS’s information from
various market-rate and affordable housing developers to estimate appropriate development cost
assumptions. These assumptions are shown in Table 2.
Revenue Assumptions
To calculate the values of the affordable units, assumptions must be made regarding the
applicable income level and the percentage of income spent on housing costs. In addition,
translating these assumptions into unit prices and values requires estimates of operating
expenses, capital reserves, and capitalization rates. The following assumptions were used in
these calculations:
Income Levels—This analysis estimates the subsidy required to produce units for three-
person households earning 50, 80, and 120 percent of AMI. In 2021, AMI for these
households was $88,000 in San Luis Obispo County, as shown in the California Department
of Housing and Community Development’s (HCD’s) income limits chart (see Table 3).
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 rental housing costs. For this analysis, EPS has assumed that households
spend 30 percent of their gross income on rental housing costs.
Operating Costs for Rental Units—Based on conversations with developers and property
managers, the analysis assumes that apartment operators incur annual operating costs of
$6,000 per unit, which include the cost of utilities, for units affordable at 80 percent of AMI
or below. 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.
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Table 3 Income Limits for Affordable Housing
Maximum
Percentage of 2021 Max Income [1]
Affordability Category County Median 3-person household
Extremely Low Income (ELI) 0% - 30% $26,450
Very Low Income (VLI) 50% $44,050
Low Income (LI) 80% $70,450
Median Income 100% $88,000
Moderate Income (Mod) 120% $105,600
Sources: CA Department of Housing and Community Development; Economic & Planning Systems, Inc.
[1] 2021 HCD maximum income thresholds are used to translate employment, wages and total worker household
incomes to affordable housing categories and to compute supportable housing costs based on household income
levels.
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Affordability Gap Results
Table 2 shows the estimated subsidies for construction of affordable rental units for very low,
low, and moderate-income households. As shown, the cost to construct a unit of affordable
housing is approximately $613,000 per unit.
A household earning 50 percent of AMI can afford rents that translate to unit valuation of
$154,000, resulting in a required subsidy of $459,000.
A household earning 80 percent of AMI can afford rents that translate to unit valuation of
$322,000, resulting in a required subsidy of $291,000.
A household earning 120 percent of AMI can afford rents that translate to unit valuation
of $461,000, resulting in a required subsidy of $152,000.
These housing affordability gaps then were used to calculate the justifiable nexus-based fees by
multiplying this required subsidy by the number of units required to house workers providing
goods and services to new market-rate housing development. This methodology is discussed in
more detail in the following chapter.
It is worth noting that the affordability gaps estimated in this analysis are not as large as they
might be using other also-valid assumptions. For example, the funding gaps for low income units
assume that prices are set at 80 percent of median income, while State law suggest low-income
unit prices may be set at 70 percent of median income, or even 60 percent of AMI. This
methodology used by EPS yields higher unit values and thus results in lower maximum fees than
the City’s current practices would yield, and has been used by EPS to preempt objections that
the assumptions and calculations overstate the actual funding gap for affordable units.
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2. DEMAND-BASED NEXUS FEE CALCULATION
The maximum supportable nexus-based fees are based on both the affordability gap and the
estimated impact that new market-rate units have on the need for affordable units, as reflected
in the number of income-qualified local workers required to support the residents of market-rate
units and the total subsidy required to construct housing for those workers. This approach is
based on the following logic: (a) residents of market-rate housing have disposable incomes and
require a variety of goods and services, (b) the provision of those goods and services will require
some workers who make lower incomes and cannot afford market-rate housing, and (c) fees
charged to market-rate projects can mitigate the impact of those projects on the increased need
for affordable housing.
Market-Rate Household Income Levels
The link (or nexus) between market-rate housing and increased demand for affordable housing is
that residents of market-rate units demand goods and services that rely on wage earners (for
example, retail sales clerks) some of whom may not be able to afford market-rate housing.
Because more expensive market-rate housing units require owners to have higher incomes, and
higher income households create more jobs through their spending, the nexus impacts and thus
the justified fees for units vary in relation to the price of the market-rate units. The price of the
unit is often a function of its size. To assess the impact that market-rate units have on the need
for affordable housing, EPS has estimated the household income required to purchase a home at
various price levels, as shown in Table 4.
The income required to purchase a particular unit value is based on assumptions of the standard
down payment, financing terms, property taxes, and other costs related to owning a home.
These housing costs typically account for 35 percent of a household’s income, and therefore, by
knowing these costs, the required income to purchase each unit can be estimated. As shown,
required household incomes under recent market conditions range from approximately $108,200
for a $555,000 unit to roughly $181,400 for a $925,000 unit. Changes to housing market and
financing conditions can have a significant effect on the calculations in this study.
Household Expenditures and Job Creation by Income
Level
Having established the income requirements for purchasing units at various values, the fee
calculation then requires an analysis of the household spending patterns at those required
income levels.
The Consumer Expenditure Survey from the United States Bureau of Labor Statistics provides
data for households at a variety of income levels, detailing the amounts that typical households
spend on things like Food at Home, Apparel and Services, and Vehicle Maintenance and Repairs.
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Table 4 Required Income by Unit Price - Market-Rate For-Sale Units
Base Mortgage Minimum
Unit
Price
(Price less
20% Down)Mortgage
Payment
Property
Taxes HOA Dues
Home
Insurance Utilities
Required
Income
[1] [2] [3] [4] [5] [6]
$555,000 $444,000 $28,883 $6,334 $1,050 $389 $1,212 $108,200
$740,000 $592,000 $38,510 $8,446 $1,575 $518 $1,212 $143,600
$925,000 $740,000 $48,138 $10,557 $2,100 $648 $2,040 $181,400
[3] HOA dues are assumed to increase at $525 annually for every $250,000 of home value
[5] Based on the San Luis Obispo County Housing Authority Utility Allowance (assumes natural gas).
[6] Assumes 35% of gross household income spent on housing costs; rounded.
Sources: City of Atascadero; County of San Luis Obispo; Economic & Planning Systems, Inc.
[1] Based on mortgage terms of 20% down payment and 5% interest for 30 years.
[2] Assumes property tax rate of 1.1413%.
[4] Assumes homeowners insurance costs of 0.1% of the unit cost assumed at 70% of the value.
Annual Cost
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Interestingly, household expenditures by category are not uniformly proportional to household
income levels. For example, households earning around $108,200 (adequate to purchase a
$555,000 unit) spend roughly 10.8 percent of their income on food and drink (at home and
eating out), while households earning $181,800 who can afford to purchase a $925,000 unit will
spend on 9.5 percent of their income on food and drink. Because of these and other differences
in proportionate spending, the expenditure profile varies at different income levels.
The homebuyer household’s typical expenditures were converted to the number of jobs created
by their spending. The first step in this process is to determine how much of an industry’s gross
receipts are used to pay wages and employee compensation. EPS relied on data from the
Economic Census,3 which provides employment, gross sales, and payroll data by industry for San
Luis Obispo County. In certain instances, where local data was not available for every Economic
Census industry, EPS relied on statewide Economic Census data for that industry.
To link the Economic Census data and the Consumer Expenditure Survey data, EPS made
determinations as to the industries involved with expenditures in various categories. For
example, purchases in the Consumer Expenditure Survey’s “Food at Home” category would likely
involve the Economic Census’s “Food & Beverage Stores” industry, where gross receipts were
more than nine times the employees’ wages. By contrast, purchases in the Consumer
Expenditure Survey’s “Entertainment Fees and Admissions” category were attributed to the
Economic Census’ “Arts, Entertainment, and Recreation” industry, where gross receipts are only
about four times the employees’ wages. Where more than one Economic Census category was
attributable to a Consumer Expenditure Survey category, EPS estimated the proportion of
expenditures associated with each Economic Census category.
After determining the amount of the household’s expenditures that were used for employee
wages, EPS estimated the number of employees those aggregate wages represent. EPS
calculated the number of workers supported by that spending using the average wage per
worker (also from the 2017 Economic Census). These wages ranged from a low of roughly
$19,500 per year for workers in the clothing and clothing accessories industry to a high of more
than $100,000 for legal services.
A range of occupations and incomes exist in a given industry sector. For instance, the
methodology used to generate Tables B-1 to B-3 in Appendix B distinguishes between the
typical incomes of workers in different types of retail stores (e.g., “food and beverage stores”
versus “general merchandise stores”), rather than assuming all retail sector workers earn the
same income. However, the average wage is used for each sub-category of industry employment
and represents a reasonable proxy for the range of incomes in that group: while some
employees will have higher wages and require lower subsidies, others will have lower incomes
and require higher subsidies. Using the average approximates the total housing subsidy needed
by workers in that industry.
To calculate the number of households supported by the expenditures of market-rate housing
units, EPS estimated the employees’ household formation rates. Importantly, employees
3 Note that the Consumer Expenditure Survey data is based on information current as of 2019. The
latest data available for the Economic Census was published in 2017. EPS converted all numbers to
2021 dollars using the Consumer Price Index (CPI) from the Bureau of Labor Statistics.
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generated from the increase in housing units do not all form households; some employees, in the
retail and food services industries in particular, are young workers and do not form households.
Data from the Bureau of Labor Statistics indicates that 12.5 percent of retail/restaurant workers
are age 16 to 19, but an average of only 1.9 percent of workers in the workforce overall. EPS
applied these discounts to household formation by type of business to get a more accurate
calculation of households formed by the employees and the average total incomes of those
households.
To get the overall households’ income rather than the individual workers’, the wages of workers
forming households were multiplied by the average of approximately 1.71 workers per working
household in Atascadero.4 This assumption implies the workers in a given household will have
roughly equivalent compensation. While certainly there will often be some variation in wages per
employee within a household, on average this assumption is reasonable because it implies
comparable levels of education and training among all workers in a household. The average
household incomes then are allocated to various income categories to estimate the number of
affordable housing units demanded in each income category (50 through 120 percent of AMI).
A simplified example of these calculations follows:
A. Number of Households (prototype project) 1,000
B. Average Household Income $125,000
C. Aggregate Household Income (A x B) $125 million
D. Average Income Spent on Retail (Consumer Expenditure Survey) $40,000
E. Aggregate Retail Spending (A x D) $40 million
F. Retail Gross Receipts: Payroll Ratio (Economic Census) 9:1
G. Estimated Retail Payroll (E F) $4.44 million
H. Average Retail Wage (Economic Census) $28,500
I. Estimated Total Retail Jobs (G H) 156
J. Percent Age 20+ (Bureau of Labor Statistics) 87.5%
K. Total Retail Workers Forming Households 136
J. Average Workers/Household (Census Data) 1.71
K. Estimated Households Created (K J) 80
L. Average Household Income (H x J) $45,000
M. Income Category Low-Income (up to 80% of AMI)
In this simplified example, 1,000 new market-rate units sold to households earning $125,000 per
year would create demand for 80 housing units for retail workers with household incomes
typically between 50 and 80 percent of AMI. Actual calculations and impact distinctions by type
of household expenditure for various home values are shown in the series of tables presented in
Appendix C.
4 Workers per working household based on American Community Survey (ACS) Census data current
as of 2019. Although ACS data reported is based on historical figures, these figures can vary
somewhat based on ongoing revisions to the ACS data.
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Demand for Income-Qualified Workers
The total number of income-qualified households required to support the expenditures of new
market-rate units were determined based on the affordable housing income limits from HCD for
a 3-person household. Table 3 summarizes the HCD income limits used to compute the total
number of income-qualified households generated by construction of market-rate units.5 The
number of income-qualified households required to provide goods and services to new housing
units is detailed in Appendix B.
The nexus methodology used herein computes the total number of income-qualified households
generated by market-rate units (as shown in Table 5) and calculates the impact fee based on the
estimated cost to subsidize the production of units to meet that affordable housing demand. This
analysis assumes that the fees on residential development will fund required affordable housing
for all new workers generated.
Table 5 Summary of Worker and Household Generation per 100 Market-Rate
Units
5 To correspond to the available data regarding employee wages, the 2021 San Luis Obispo County
affordable housing income limits from HCD were used to determine the number of income-qualified
households based on household expenditures.
Unit Size (Sq.
Ft.)
Total
Workers
Generated
Total
Worker
Households
Total Income
Qualified
Households VLI Households LI Households
Moderate Income
Households
[1] [2] [3]
1,500 $108,200 33 19.9 17.6 8.8 6.6 2.2
2,000 $143,600 44 25.6 23.0 11.7 8.5 2.8
2,500 $181,400 51 29.5 26.8 13.8 9.8 3.2
[1] Total workers generated detailed by unit price point and rental apartment size in Tables B-1 through B-4.
Source: Economic & Planning Systems, Inc.
Minimum
Household
Income
Requirement
[3] Total income qualified households reflects those households eligible for affordable housing based on total household income. Income
qualified households therefore exclude households earning above moderate income. See Tables B-1 through B-4 for detail. Total may not
sum due to rounding.
Income Qualified Households by Income Category
[2] Total worker households derived assuming 1.71 workers per household. Includes a 12.5% discount for retail and 1.9%
discount for other industries to account for workers under age 20.
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Fee Calculation
The affordability gap analysis quantifies the subsidy required to construct affordable housing at
various income levels. Analysis of consumer expenditures that rely on lower wage workers
provides an estimate of the total number of income-qualified households generated by new for-
sale units. Then for each category of market-rate units, the nexus-based fee is calculated by
applying the total number of income-qualified households generated to the affordability gap
computed for each affordable household income level. The analysis provides the maximum
supportable nexus-based fees for new housing development in Atascadero.
Tables 6 through 8 show the impact fee calculation by home value ranging from $555,000 to
$925,000, which is based on the typical household sizes and value per square foot found in
Atascadero. The total impact fees required for a representative project of 100 units is calculated
by multiplying the number of affordable units required per income level by the cost of subsidizing
such housing. All income-qualified households are assumed to be housed in multifamily rental
units and the subsidies needed are calculated as the affordability gaps shown in Table 3. The
resulting maximum defensible impact fee for market-rate units ranges from $63,096 for a
$555,000 unit to $96,776 for a $925,000 unit.
These fee estimates result in the maximum defensible fee range between $38 and $42 per
square foot. The fee per square foot is based on the assumption that homes in Atascadero over
1,000 square feet typically sell for approximately $370 per square foot. This assumption is based
on RedFin data for new home sales from December 2020 through December 2021. While the City
has the option of adopting fees up to the maximum levels calculated, there may be a variety of
reasons to adopt the fee level below the maximum, including concerns about affecting the
feasibility of new housing construction. The goal is to balance the competing objectives of
generating revenue to support affordable housing in the community while not overburdening new
development. EPS is evaluating the level of fees that may be feasible in current market
conditions and will document these findings in a separate deliverable.
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Economic & Planning Systems, Inc. 18Z:\Shared\Projects\Oakland\211000s\211050_Atascadero Housing Fees\Deliverables\EPS 211050_Draft Report_For Sale_2022Apr15.docx Table 6 Nexus-Based Housing Fee Calculations (1,500 square foot unit) Table 7 Nexus-Based Housing Fee Calculations (2,000 square foot unit) ItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 8.8 $459,000 $4,052,591Affordable Units - Low Income 6.6 $291,000 $1,928,878Affordable Units - Moderate Income 2.2$152,000 $328,113Total 17.6 $6,309,583$63,096 $42.06[1] See Table 5Source: Economic & Planning Systems, Inc.[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]Total Nexus-Based Fee SupportedItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 11.7 $459,000 $5,378,485Affordable Units - Low Income 8.5 $291,000 $2,464,398Affordable Units - Moderate Income 2.8$152,000 $428,630Total 23.0 $8,271,512$82,715 $41.36[1] See Table 5Source: Economic & Planning Systems, Inc.[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]Total Nexus-Based Fee SupportedPage 150 of 186
Nexus-Based Affordable Housing Fee Analysis for For-Sale Housing DRAFT Report 04/15/22 Economic & Planning Systems, Inc. 19Z:\Shared\Projects\Oakland\211000s\211050_Atascadero Housing Fees\Deliverables\EPS 211050_Draft Report_For Sale_2022Apr15.docx Table 8 Nexus-Based Housing Fee Calculations (2,500 square foot units) ItemPer 100 Market-Rate Units Per Market-Rate Unit Per Sq.Ft.(A) (B) (C = A * B) (D = C / 100)Affordable Units - Very Low Income 13.8 $459,000 $6,329,829Affordable Units - Low Income 9.8 $291,000 $2,865,022Affordable Units - Moderate Income 3.2$152,000 $482,781Total 26.8 $9,677,632$96,776 $38.71[1] See Table 5Source: Economic & Planning Systems, Inc.[2] See Table 2. EPS has assumed all affordable units will be rental because the subsidy to construct rental units is lower than for-sale for every income-category. Affordable Units Required Per 100 Market-Rate Units [1]Affordability Gap per Affordable Unit [2]Total Nexus-Based Fee SupportedPage 151 of 186
APPENDICES:
Appendix A: Household Expenditures and
Employment Generation
Appendix B: Income Levels for Worker Households
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APPENDIX A:
Household Expenditures and
Employment Generation
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Table A-1 Household Expenditures and Employment Generation - For Sale 1,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income $108,200Food at Home5.7% 100% $6,220Food & Beverage Stores100% $6,220 $6,220,118 9.40 $662,063 $30,692 21.6 87.5% 1.71 11.0 $52,599 LI HouseholdsFood Away From Home5.1% 100% $5,488Food Services and Drinking Places100% $5,488 $5,488,339 3.20 $1,714,723 $19,920 86.1 87.5% 1.71 44.0 $34,137 VLI Households Alcoholic Beverages0.7% 100% $800Food & Beverage Stores50% $400 $400,128 9.40 $42,589 $30,692 1.4 87.5% 1.71 0.7 $52,599 LI HouseholdsFood Services and Drinking Places50% $400 $400,128 3.20 $125,012 $19,920 6.3 87.5% 1.71 3.2 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $1,941Personal and Household Goods Repair and Maintenance 45% $873 $873,382 3.30 $264,739 $25,686 10.3 98.1% 1.71 5.9 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $873 $873,382 9.23 $94,610 $36,992 2.6 87.5% 1.71 1.3 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $194 $194,085 5.23 $37,083 $43,536 0.9 98.1% 1.71 0.5 $74,608 Moderate Income Fuel oil and Other fuels [7]4.5% 100% $4,910Nonstore Retailers100% $4,910 $4,909,866 7.83 $627,363 $42,161 14.9 87.5% 1.71 7.6 $72,252 Moderate Income Water and Other Public Services [7]1.0% 100% $1,051Waste Management and Remediation Services 100% $1,051 $1,050,654 4.11 $255,530 $59,559 4.3 98.1% 1.71 2.5 $102,068 Moderate Income Household Operations Personal Services0.6% 100% $652Nursing and Residential Care Facilities40% $261 $260,824 2.20 $118,692 $33,109 3.6 98.1% 1.71 2.1 $56,740 LI HouseholdsSocial Assistance [8]60% $391 $391,236 2.98 $131,134 $27,179 4.8 98.1% 1.71 2.8 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.7% 100% $1,868Services to Buildings and Dwellings100% $1,868 $1,868,134 2.91 $642,217 $75,555 8.5 98.1% 1.71 4.9 $129,482 Above ModHousekeeping Supplies0.9% 100% $971Building Materials and Garden Equipment and Supplies Dealers 10% $97 $97,094 9.23 $10,518 $36,992 0.3 87.5% 1.71 0.1 $63,394 LI HouseholdsFood & Beverage Stores35% $340 $339,827 9.40 $36,171 $30,692 1.2 87.5% 1.71 0.6 $52,599 LI HouseholdsGeneral Merchandise35% $340 $339,827 11.23 $30,269 $30,374 1.0 87.5% 1.71 0.5 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $194 $194,187 6.97 $27,869 $23,032 1.2 87.5% 1.71 0.6 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $500,000 Unit requires a household income of $87,300.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.Page 154 of 186
Table A-1 Household Expenditures and Employment Generation - For Sale 1,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment2.8% 100% $3,036Furniture and Home Furnishings Stores40% $1,215 $1,214,589 6.99 $173,639 $33,865 5.1 87.5% 1.71 2.6 $58,035 LI HouseholdsElectronics and Appliance Stores40% $1,215 $1,214,589 6.84 $177,624 $33,179 5.4 87.5% 1.71 2.7 $56,860 LI HouseholdsGeneral Merchandise Stores10% $304 $303,647 11.23 $27,046 $30,374 0.9 87.5% 1.71 0.5 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $304 $303,647 6.97 $43,578 $23,032 1.9 87.5% 1.71 1.0 $39,471 VLI HouseholdsApparel and Services2.4% 100% $2,569Clothing and Clothing Accessories Stores40% $1,028 $1,027,760 8.08 $127,275 $18,852 6.8 87.5% 1.71 3.4 $32,307 VLI HouseholdsGeneral Merchandise40% $1,028 $1,027,760 11.23 $91,543 $30,374 3.0 87.5% 1.71 1.5 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $257 $256,940 6.97 $36,875 $23,032 1.6 87.5% 1.71 0.8 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $128 $128,470 3.30 $38,942 $25,686 1.5 87.5% 1.71 0.8 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $128 $128,470 3.30 $38,942 $25,686 1.5 87.5% 1.71 0.8 $44,019 VLI Households Vehicle Purchases (net outlay)5.3% 100% $5,709Motor Vehicle and Parts Dealers100% $5,709 $5,709,099 10.73 $531,894 $50,376 10.6 87.5% 1.71 5.4 $86,331 Moderate Income Gasoline and motor oil3.1% 100% $3,389Gasoline Stations100% $3,389 $3,389,075 30.62 $110,668 $25,561 4.3 87.5% 1.71 2.2 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.2% 100% $1,246Repair and Maintenance100% $1,246 $1,245,863 3.37 $369,348 $28,937 12.8 98.1% 1.71 7.3 $49,591 LI Households Medical Services1.4% 100% $1,539Ambulatory Health Care Services 40% $616 $615,675 2.60 $236,488 $62,611 3.8 98.1% 1.71 2.2 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $462 $461,756 4.40 $104,932 $27,115 3.9 98.1% 1.71 2.2 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $462 $461,756 2.20 $210,130 $33,109 6.3 98.1% 1.71 3.6 $56,740 LI HouseholdsDrugs0.6% 100% $622Health and Personal Care Stores100% $622 $622,421 9.35 $66,576 $36,944 1.8 87.5% 1.71 0.9 $63,313 LI HouseholdsMedical Supplies0.2% 100% $232Health and Personal Care Stores100% $232 $232,002 9.35 $24,816 $36,944 0.7 87.5% 1.71 0.3 $63,313 LI HouseholdsEntertainment Fees and Admissions1.1% 100% $1,231Arts, Entertainment, & Recreation 100% $1,231 $1,230,533 2.93 $419,708 $20,339 20.6 87.5% 1.71 10.5 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $500,000 Unit requires a household income of $87,300.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.Page 155 of 186
Table A-1 Household Expenditures and Employment Generation - For Sale 1,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.1% 100% $1,231Electronics and Appliance Stores100% $1,231 $1,230,533 6.84 $179,955 $33,179 5.4 87.5% 1.71 2.8 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.1.2% 100% $1,350Sporting Goods, Hobby, and Musical Instrument Stores 40% $540 $540,044 7.31 $73,877 $20,692 3.6 87.5% 1.71 1.8 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $540 $540,044 6.97 $77,504 $23,032 3.4 87.5% 1.71 1.7 $39,471 VLI HouseholdsVeterinary Services20% $270 $270,022 2.69 $100,330 $49,793 2.0 98.1% 1.71 1.2 $85,332 Moderate Income Other Entertainment Supplies, Equipment, and Services 1.1% 100% $1,212Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,030 $1,030,316 7.31 $140,945 $20,692 6.8 87.5% 1.71 3.5 $35,461 VLI HouseholdsPhotographic Services15% $182 $181,820 3.41 $53,371 $43,227 1.2 98.1% 1.71 0.7 $74,079 Moderate Income Personal Care Products and Services1.1% 100% $1,176Unspecified Retail50% $588 $588,182 6.97 $84,413 $23,032 3.7 87.5% 1.71 1.9 $39,471 VLI HouseholdsPersonal Care Services50% $588 $588,182 3.46 $169,861 $20,231 8.4 98.1% 1.71 4.8 $34,671 VLI HouseholdsReading0.1% 100% $143Sporting Goods, Hobby, and Musical Instrument Stores 100% $143 $143,085 7.31 $19,574 $20,692 0.9 87.5% 1.71 0.5 $35,461 VLI HouseholdsEducation1.9% 100% $2,087Educational Services100% $2,087 $2,087,000 3.45 $604,961 $27,444 22.0 98.1% 1.71 12.6 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.3% 100% $287Unspecified Retail 100% $287 $287,192 6.97 $41,216 $23,032 1.8 87.5% 1.71 0.9 $39,471 VLI HouseholdsMiscellaneous1.1% 100% $1,191Accounting20% $238 $238,135 3.37 $70,698 $50,490 1.4 98.1% 1.71 0.8 $86,527 Moderate Income Architectural, Engineering, and Related 20% $238 $238,135 0.83 $288,182 $97,022 3.0 98.1% 1.71 1.7 $166,269 Above ModSpecialized Design Services20% $238 $238,135 3.50 $67,974 $56,159 1.2 98.1% 1.71 0.7 $96,242 Moderate Income Death Care Services 20% $238 $238,135 3.41 $69,902 $43,227 1.6 98.1% 1.71 0.9 $74,079 Moderate Income Legal Services20% $238 $238,135 2.99 $79,610 $100,406 0.8 98.1% 1.71 0.5 $172,068 Above ModTotal per 1,000 Market Rate Households328.4 173.9[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $500,000 Unit requires a household income of $87,300.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 156 of 186
Table A-2 Household Expenditures and Employment Generation - For Sale 2,000 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income $143,600Food at Home5.7% 100% $8,255Food & Beverage Stores100% $8,255 $8,255,165 9.40 $878,672 $30,692 28.6 87.5% 1.71 14.6 $52,599 LI HouseholdsFood Away From Home5.1% 100% $7,284Food Services and Drinking Places100% $7,284 $7,283,970 3.20 $2,275,732 $19,920 114.2 87.5% 1.71 58.3 $34,137 VLI Households Alcoholic Beverages0.7% 100% $1,062Food & Beverage Stores50% $531 $531,038 9.40 $56,523 $30,692 1.8 87.5% 1.71 0.9 $52,599 LI HouseholdsFood Services and Drinking Places50% $531 $531,038 3.20 $165,912 $19,920 8.3 87.5% 1.71 4.3 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.8% 100% $2,576Personal and Household Goods Repair and Maintenance 45% $1,159 $1,159,128 3.30 $351,355 $25,686 13.7 98.1% 1.71 7.8 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $1,159 $1,159,128 9.23 $125,563 $36,992 3.4 87.5% 1.71 1.7 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $258 $257,584 5.23 $49,216 $43,536 1.1 98.1% 1.71 0.6 $74,608 Moderate Income Fuel oil and Other fuels [7]4.5% 100% $6,516Nonstore Retailers100% $6,516 $6,516,236 7.83 $832,619 $42,161 19.7 87.5% 1.71 10.1 $72,252 Moderate Income Water and Other Public Services [7]1.0% 100% $1,394Waste Management and Remediation Services 100% $1,394 $1,394,399 4.11 $339,132 $59,559 5.7 98.1% 1.71 3.3 $102,068 Moderate Income Household Operations Personal Services0.6% 100% $865Nursing and Residential Care Facilities40% $346 $346,158 2.20 $157,525 $33,109 4.8 98.1% 1.71 2.7 $56,740 LI HouseholdsSocial Assistance [8]60% $519 $519,237 2.98 $174,037 $27,179 6.4 98.1% 1.71 3.7 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.7% 100% $2,479Services to Buildings and Dwellings100% $2,479 $2,479,335 2.91 $852,333 $75,555 11.3 98.1% 1.71 6.5 $129,482 Above ModHousekeeping Supplies0.9% 100% $1,289Building Materials and Garden Equipment and Supplies Dealers 10% $129 $128,860 9.23 $13,959 $36,992 0.4 87.5% 1.71 0.2 $63,394 LI HouseholdsFood & Beverage Stores35% $451 $451,009 9.40 $48,005 $30,692 1.6 87.5% 1.71 0.8 $52,599 LI HouseholdsGeneral Merchandise35% $451 $451,009 11.23 $40,172 $30,374 1.3 87.5% 1.71 0.7 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $258 $257,720 6.97 $36,987 $23,032 1.6 87.5% 1.71 0.8 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $750,000 Unit requires a household income of $126,300.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 157 of 186
Table A-2 Household Expenditures and Employment Generation - For Sale 2,000 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment2.8% 100% $4,030Furniture and Home Furnishings Stores40% $1,612 $1,611,968 6.99 $230,449 $33,865 6.8 87.5% 1.71 3.5 $58,035 LI HouseholdsElectronics and Appliance Stores40% $1,612 $1,611,968 6.84 $235,737 $33,179 7.1 87.5% 1.71 3.6 $56,860 LI HouseholdsGeneral Merchandise Stores10% $403 $402,992 11.23 $35,895 $30,374 1.2 87.5% 1.71 0.6 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $403 $402,992 6.97 $57,835 $23,032 2.5 87.5% 1.71 1.3 $39,471 VLI HouseholdsApparel and Services2.4% 100% $3,410Clothing and Clothing Accessories Stores40% $1,364 $1,364,015 8.08 $168,916 $18,852 9.0 87.5% 1.71 4.6 $32,307 VLI HouseholdsGeneral Merchandise40% $1,364 $1,364,015 11.23 $121,494 $30,374 4.0 87.5% 1.71 2.0 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $341 $341,004 6.97 $48,939 $23,032 2.1 87.5% 1.71 1.1 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $171 $170,502 3.30 $51,683 $25,686 2.0 87.5% 1.71 1.0 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $171 $170,502 3.30 $51,683 $25,686 2.0 87.5% 1.71 1.0 $44,019 VLI Households Vehicle Purchases (net outlay)5.3% 100% $7,577Motor Vehicle and Parts Dealers100% $7,577 $7,576,956 10.73 $705,915 $50,376 14.0 87.5% 1.71 7.2 $86,331 Moderate Income Gasoline and motor oil3.1% 100% $4,498Gasoline Stations100% $4,498 $4,497,885 30.62 $146,875 $25,561 5.7 87.5% 1.71 2.9 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.2% 100% $1,653Repair and Maintenance100% $1,653 $1,653,475 3.37 $490,189 $28,937 16.9 98.1% 1.71 9.7 $49,591 LI Households Medical Services1.4% 100% $2,043Ambulatory Health Care Services 40% $817 $817,107 2.60 $313,860 $62,611 5.0 98.1% 1.71 2.9 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $613 $612,830 4.40 $139,263 $27,115 5.1 98.1% 1.71 2.9 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $613 $612,830 2.20 $278,878 $33,109 8.4 98.1% 1.71 4.8 $56,740 LI HouseholdsDrugs0.6% 100% $826Health and Personal Care Stores100% $826 $826,059 9.35 $88,357 $36,944 2.4 87.5% 1.71 1.2 $63,313 LI HouseholdsMedical Supplies0.2% 100% $308Health and Personal Care Stores100% $308 $307,907 9.35 $32,935 $36,944 0.9 87.5% 1.71 0.5 $63,313 LI HouseholdsEntertainment Fees and Admissions1.1% 100% $1,633Arts, Entertainment, & Recreation 100% $1,633 $1,633,128 2.93 $557,025 $20,339 27.4 87.5% 1.71 14.0 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $750,000 Unit requires a household income of $126,300.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.Page 158 of 186
Table A-2 Household Expenditures and Employment Generation - For Sale 2,000 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.1% 100% $1,633Electronics and Appliance Stores100% $1,633 $1,633,128 6.84 $238,832 $33,179 7.2 87.5% 1.71 3.7 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.1.2% 100% $1,792Sporting Goods, Hobby, and Musical Instrument Stores 40% $717 $716,732 7.31 $98,048 $20,692 4.7 87.5% 1.71 2.4 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $717 $716,732 6.97 $102,862 $23,032 4.5 87.5% 1.71 2.3 $39,471 VLI HouseholdsVeterinary Services20% $358 $358,366 2.69 $133,156 $49,793 2.7 98.1% 1.71 1.5 $85,332 Moderate Income Other Entertainment Supplies, Equipment, and Services 1.1% 100% $1,609Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,367 $1,367,406 7.31 $187,059 $20,692 9.0 87.5% 1.71 4.6 $35,461 VLI HouseholdsPhotographic Services15% $241 $241,307 3.41 $70,833 $43,227 1.6 98.1% 1.71 0.9 $74,079 Moderate Income Personal Care Products and Services1.1% 100% $1,561Unspecified Retail50% $781 $780,619 6.97 $112,030 $23,032 4.9 87.5% 1.71 2.5 $39,471 VLI HouseholdsPersonal Care Services50% $781 $780,619 3.46 $225,435 $20,231 11.1 98.1% 1.71 6.4 $34,671 VLI HouseholdsReading0.1% 100% $190Sporting Goods, Hobby, and Musical Instrument Stores 100% $190 $189,899 7.31 $25,978 $20,692 1.3 87.5% 1.71 0.6 $35,461 VLI HouseholdsEducation1.9% 100% $2,770Educational Services100% $2,770 $2,769,807 3.45 $802,887 $27,444 29.3 98.1% 1.71 16.7 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.3% 100% $381Unspecified Retail 100% $381 $381,154 6.97 $54,701 $23,032 2.4 87.5% 1.71 1.2 $39,471 VLI HouseholdsMiscellaneous1.1% 100% $1,580Accounting20% $316 $316,046 3.37 $93,828 $50,490 1.9 98.1% 1.71 1.1 $86,527 Moderate Income Architectural, Engineering, and Related 20% $316 $316,046 0.83 $382,467 $97,022 3.9 98.1% 1.71 2.3 $166,269 Above ModSpecialized Design Services20% $316 $316,046 3.50 $90,213 $56,159 1.6 98.1% 1.71 0.9 $96,242 Moderate Income Death Care Services 20% $316 $316,046 3.41 $92,772 $43,227 2.1 98.1% 1.71 1.2 $74,079 Moderate Income Legal Services20% $316 $316,046 2.99 $105,657 $100,406 1.1 98.1% 1.71 0.6 $172,068 Above ModTotal per 1,000 Market Rate Households435.9 230.8[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $750,000 Unit requires a household income of $126,300.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 159 of 186
Table A-3 Household Expenditures and Employment Generation - For Sale 2,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item% of Household Income Spent per Category [1]% of Category Expenditure per Type of Business [2]Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryCalculationa b c d = c * 1,000 e f = d / e g h = f / g ijk= h * i / j l = g * jRequired Income $181,400Food at Home4.7% 100% $8,616Food & Beverage Stores100% $8,616 $8,616,142 9.40 $917,094 $30,692 29.9 87.5% 1.71 15.3 $52,599 LI HouseholdsFood Away From Home4.8% 100% $8,697Food Services and Drinking Places100% $8,697 $8,697,200 3.20 $2,717,268 $19,920 136.4 87.5% 1.71 69.6 $34,137 VLI Households Alcoholic Beverages0.8% 100% $1,379Food & Beverage Stores50% $690 $689,621 9.40 $73,403 $30,692 2.4 87.5% 1.71 1.2 $52,599 LI HouseholdsFood Services and Drinking Places50% $690 $689,621 3.20 $215,458 $19,920 10.8 87.5% 1.71 5.5 $34,137 VLI HouseholdsHousing Maintenance, Repairs, Insurance, Other expenses 1.7% 100% $3,173Personal and Household Goods Repair and Maintenance 45% $1,428 $1,427,686 3.30 $432,760 $25,686 16.8 98.1% 1.71 9.6 $44,019 VLI HouseholdsBuilding Material and Garden Equipment and Supplies Dealer 45% $1,428 $1,427,686 9.23 $154,655 $36,992 4.2 87.5% 1.71 2.1 $63,394 LI HouseholdsReal Estate and Rental and Leasing10% $317 $317,264 5.23 $60,619 $43,536 1.4 98.1% 1.71 0.8 $74,608 Moderate Income Fuel oil and Other fuels [7]3.8% 100% $6,851Nonstore Retailers100% $6,851 $6,850,612 7.83 $875,344 $42,161 20.8 87.5% 1.71 10.6 $72,252 Moderate Income Water and Other Public Services [7]0.8% 100% $1,445Waste Management and Remediation Services100% $1,445 $1,445,100 4.11 $351,463 $59,559 5.9 98.1% 1.71 3.4 $102,068 Moderate Income Household Operations Personal Services0.5% 100% $993Nursing and Residential Care Facilities40% $397 $397,181 2.20 $180,744 $33,109 5.5 98.1% 1.71 3.1 $56,740 LI HouseholdsSocial Assistance [8]60% $596 $595,771 2.98 $199,690 $27,179 7.3 98.1% 1.71 4.2 $46,578 LI HouseholdsHousehold Operations Other Household Expenses1.4% 100% $2,577Services to Buildings and Dwellings100% $2,577 $2,577,288 2.91 $886,006 $75,555 11.7 98.1% 1.71 6.7 $129,482 Above ModHousekeeping Supplies0.8% 100% $1,483Building Materials and Garden Equipment and Supplies Dealers 10% $148 $148,310 9.23 $16,066 $36,992 0.4 87.5% 1.71 0.2 $63,394 LI HouseholdsFood & Beverage Stores35% $519 $519,084 9.40 $55,251 $30,692 1.8 87.5% 1.71 0.9 $52,599 LI HouseholdsGeneral Merchandise35% $519 $519,084 11.23 $46,235 $30,374 1.5 87.5% 1.71 0.8 $52,053 LI HouseholdsMiscellaneous Store Retailers20% $297 $296,619 6.97 $42,569 $23,032 1.8 87.5% 1.71 0.9 $39,471 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $1,000,000 Unit requires a household income of $167,200.Page 160 of 186
Table A-3 Household Expenditures and Employment Generation - For Sale 2,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryHousehold Furnishings and Equipment2.6% 100% $4,717Furniture and Home Furnishings Stores40% $1,887 $1,886,610 6.99 $269,712 $33,865 8.0 87.5% 1.71 4.1 $58,035 LI HouseholdsElectronics and Appliance Stores40% $1,887 $1,886,610 6.84 $275,901 $33,179 8.3 87.5% 1.71 4.2 $56,860 LI HouseholdsGeneral Merchandise Stores10% $472 $471,652 11.23 $42,010 $30,374 1.4 87.5% 1.71 0.7 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $472 $471,652 6.97 $67,689 $23,032 2.9 87.5% 1.71 1.5 $39,471 VLI HouseholdsApparel and Services2.4% 100% $4,405Clothing and Clothing Accessories Stores40% $1,762 $1,761,984 8.08 $218,200 $18,852 11.6 87.5% 1.71 5.9 $32,307 VLI HouseholdsGeneral Merchandise40% $1,762 $1,761,984 11.23 $156,941 $30,374 5.2 87.5% 1.71 2.6 $52,053 LI HouseholdsMiscellaneous Store Retailers 10% $440 $440,496 6.97 $63,218 $23,032 2.7 87.5% 1.71 1.4 $39,471 VLI HouseholdsPersonal and Household Goods Repair and Maintenance 5% $220 $220,248 3.30 $66,762 $25,686 2.6 87.5% 1.71 1.3 $44,019 VLI HouseholdsDry cleaning and Laundry Services 5% $220 $220,248 3.30 $66,762 $25,686 2.6 87.5% 1.71 1.3 $44,019 VLI Households Vehicle Purchases (net outlay)5.1% 100% $9,329Motor Vehicle and Parts Dealers100% $9,329 $9,329,194 10.73 $869,164 $50,376 17.3 87.5% 1.71 8.8 $86,331 Moderate Income Gasoline and motor oil2.4% 100% $4,269Gasoline Stations100% $4,269 $4,269,442 30.62 $139,415 $25,561 5.5 87.5% 1.71 2.8 $43,804 VLI HouseholdsVehicle Maintenance and Repairs1.1% 100% $2,086Repair and Maintenance100% $2,086 $2,085,960 3.37 $618,403 $28,937 21.4 98.1% 1.71 12.2 $49,591 LI Households Medical Services1.0% 100% $1,795Ambulatory Health Care Services 40% $718 $717,864 2.60 $275,740 $62,611 4.4 98.1% 1.71 2.5 $107,299 Above ModGeneral Medical and Surgical Hospitals 30% $538 $538,398 4.40 $122,348 $27,115 4.5 98.1% 1.71 2.6 $46,469 LI HouseholdsNursing and Residential Care Facilities 30% $538 $538,398 2.20 $245,007 $33,109 7.4 98.1% 1.71 4.2 $56,740 LI HouseholdsDrugs0.5% 100% $842Health and Personal Care Stores100% $842 $842,236 9.35 $90,088 $36,944 2.4 87.5% 1.71 1.2 $63,313 LI HouseholdsMedical Supplies0.2% 100% $351Health and Personal Care Stores100% $351 $350,826 9.35 $37,525 $36,944 1.0 87.5% 1.71 0.5 $63,313 LI HouseholdsEntertainment Fees and Admissions1.2% 100% $2,244Arts, Entertainment, & Recreation 100% $2,244 $2,244,275 2.93 $765,474 $20,339 37.6 87.5% 1.71 19.2 $34,856 VLI Households[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo County[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $1,000,000 Unit requires a household income of $167,200.Page 161 of 186
Table A-3 Household Expenditures and Employment Generation - For Sale 2,500 Square Foot Units City of Atascadero For Sale Housing Fee; EPS# 211050 Item $0 $0 Expenditures [3]Expenditures per 1,000 HHsGross Receipts to Wages [4]Total Wages per 1,000 Households2021 Avg. Wages [5]# of New Workers% Forming HH [6]Workers/ HH [7]Total Worker HHsAvg. Worker HH IncomeIncome CategoryEntertainment Audio and Visual Equipment and Services1.2% 100% $2,244Electronics and Appliance Stores100% $2,244 $2,244,275 6.84 $328,207 $33,179 9.9 87.5% 1.71 5.1 $56,860 LI HouseholdsEntertainment Pets, Toys, Hobbies, and Playground Equip.0.9% 100% $1,688Sporting Goods, Hobby, and Musical Instrument Stores 40% $675 $675,309 7.31 $92,381 $20,692 4.5 87.5% 1.71 2.3 $35,461 VLI HouseholdsMiscellaneous Store Retailers 40% $675 $675,309 6.97 $96,917 $23,032 4.2 87.5% 1.71 2.1 $39,471 VLI HouseholdsVeterinary Services20% $338 $337,654 2.69 $125,460 $49,793 2.5 98.1% 1.71 1.4 $85,332 Moderate Income Other Entertainment Supplies, Equipment, and Services 0.8% 100% $1,472Sporting Goods, Hobby, and Musical Instrument Stores 85% $1,251 $1,250,943 7.31 $171,127 $20,692 8.3 87.5% 1.71 4.2 $35,461 VLI HouseholdsPhotographic Services15% $221 $220,755 3.41 $64,800 $43,227 1.5 98.1% 1.71 0.9 $74,079 Moderate Income Personal Care Products and Services0.8% 100% $1,520Unspecified Retail50% $760 $759,913 6.97 $109,059 $23,032 4.7 87.5% 1.71 2.4 $39,471 VLI HouseholdsPersonal Care Services50% $760 $759,913 3.46 $219,455 $20,231 10.8 98.1% 1.71 6.2 $34,671 VLI HouseholdsReading0.1% 100% $163Sporting Goods, Hobby, and Musical Instrument Stores 100% $163 $163,381 7.31 $22,350 $20,692 1.1 87.5% 1.71 0.6 $35,461 VLI HouseholdsEducation2.1% 100% $3,810Educational Services100% $3,810 $3,809,695 3.45 $1,104,321 $27,444 40.2 98.1% 1.71 23.0 $47,032 LI HouseholdsTobacco Products and Smoking Supplies0.1% 100% $267Unspecified Retail 100% $267 $267,236 6.97 $38,352 $23,032 1.7 87.5% 1.71 0.9 $39,471 VLI HouseholdsMiscellaneous1.2% 100% $2,215Accounting20% $443 $443,029 3.37 $131,527 $50,490 2.6 98.1% 1.71 1.5 $86,527 Moderate Income Architectural, Engineering, and Related 20% $443 $443,029 0.83 $536,138 $97,022 5.5 98.1% 1.71 3.2 $166,269 Above ModSpecialized Design Services20% $443 $443,029 3.50 $126,459 $56,159 2.3 98.1% 1.71 1.3 $96,242 Moderate Income Death Care Services 20% $443 $443,029 3.41 $130,046 $43,227 3.0 98.1% 1.71 1.7 $74,079 Moderate Income Legal Services20% $443 $443,029 2.99 $148,108 $100,406 1.5 98.1% 1.71 0.8 $172,068 Above ModTotal per 1,000 Market Rate Households509.8 270.0[2] Where multiple business types are likely to provide goods and services in the expenditure category, EPS has estimated the proportion accruing to each business type.[5] Based on the 2017 average wage reported by the American Community Survey inflated to $2021 based on the Bureau of Labor Statistics data for the San Francisco MSA. [6] BLS data indicates that 12.5% of retail/restaurant workers are age 16-19, but an average of only 1.9% of workers in other industries. EPS has assumed that young workers do not form their own households. [7] Based on the American Community Survey data 2014-2019.Source: 2019 Consumer Expenditure Survey, U.S. Bureau of Labor Statistics; 2017 Economic Census, American Community Survey; and Economic & Planning Systems, Inc.[9] San Luis Obispo County data not available from 2017 Economic Census. Gross receipts to wages and average wage thus based on statewide data.[3] Expenditures are based on the percent of household income spent per the 2019 U.S. Consumer Expenditure Survey. Per Table 3, the purchase of a $1,000,000 Unit requires a household income of $167,200.[8] Part of the Utilities, Fuels, and Public Services category, which also includes natural gas, electricity, and telephone services. Natural gas, electricity, and telephone services not estimated because data was not available in the Economic Census.[1] Percent of income spent per category is based on the 2019 U.S. Consumer Expenditure Survey data for households at this income level. The sum of the categories included in this analysis is well below the total expenditures of households at this income level, and thus represent a conservative estimate of job creation and housing impacts. Expenditure categories not incorporated due to data constraints include taxes, housing and lodging, most utilities, tobacco, health insurance, personal/ life insurance, cash contributions, and financing charges.[4] Gross receipts to wages ratio obtained from the 2017 Economic Census data for San Luis Obispo CountyPage 162 of 186
APPENDIX B:
Income Levels for Worker Households
Page 163 of 186
Table B-1 Income Levels for Worker Households
Worker Household Generation per 1,000 Units – For Sale 1,500 Square Foot Units
City of Atascadero For Sale Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 5.5 2.8 2.8 0.0 0.0 0.0
Food & Beverage Stores 24.1 12.3 0.0 12.3 0.0 0.0
Food Services and Drinking Places 92.4 47.2 47.2 0.0 0.0 0.0
Health and Personal Care Stores 2.5 1.3 0.0 1.3 0.0 0.0
General Merchandise 4.9 2.5 0.0 2.5 0.0 0.0
Furniture and Home Furnishings Stores 5.1 2.6 0.0 2.6 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 2.8 1.5 0.0 1.5 0.0 0.0
Electronics and Appliance Stores 10.8 5.5 0.0 5.5 0.0 0.0
Clothing and Clothing Accessories Stores 6.8 3.4 3.4 0.0 0.0 0.0Motor Vehicle and Parts Dealers 10.6 5.4 0.0 0.0 5.4 0.0
Gasoline Stations 4.3 2.2 2.2 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 11.3 5.8 5.8 0.0 0.0 0.0
Miscellaneous Store Retailers 8.1 4.1 4.1 0.0 0.0 0.0
Nonstore Retailers 14.9 7.6 0.0 0.0 7.6 0.0
Arts, Entertainment, & Recreation 20.6 10.5 10.5 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 3.8 2.2 0.0 0.0 0.0 2.2General Medical and Surgical Hospitals 3.9 2.2 0.0 2.2 0.0 0.0
Nursing and Residential Care Facilities 9.9 5.7 0.0 5.7 0.0 0.0
Social Assistance 4.8 2.8 0.0 2.8 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 11.8 6.7 6.7 0.0 0.0 0.0
Services to Buildings and Dwellings 8.5 4.9 0.0 0.0 0.0 4.9
Waste Management and Remediation Services 4.3 2.5 0.0 0.0 2.5 0.0
Real Estate and Rental and Leasing 0.9 0.5 0.0 0.0 0.5 0.0
Personal Care Services 8.4 4.8 4.8 0.0 0.0 0.0
Dry Cleaning and Laundry Services 1.5 0.8 0.8 0.0 0.0 0.0
Auto Repair and Maintenance 12.8 7.3 0.0 7.3 0.0 0.0
Veterinary Services 2.0 1.2 0.0 0.0 1.2 0.0
Photographic Services 1.2 0.7 0.0 0.0 0.7 0.0
Educational Services 22.0 12.6 0.0 12.6 0.0 0.0
Accounting 1.4 0.8 0.0 0.0 0.8 0.0
Architectural, Engineering, and Related 3.0 1.7 0.0 0.0 0.0 1.7
Specialized Design Services 1.2 0.7 0.0 0.0 0.7 0.0
Death Care Services 1.6 0.9 0.0 0.0 0.9 0.0
Legal Services 0.8 0.5 0.0 0.0 0.0 0.5
Government 0.0 24.9 0.0 10.0 1.4 14.8
Total Workers and Households 328.4 198.8 88.3 66.3 21.6 24.0
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]176.2 88.3 66.3 21.6 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]17.6 8.8 6.6 2.2 0.0
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and 1.9%
discount for other industries to account for workers under age 20.
Page 164 of 186
Table B-2 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Sale 2,000 Square Foot Units
City of Atascadero For Sale Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 7.2 3.7 3.7 0.0 0.0 0.0
Food & Beverage Stores 32.0 16.4 0.0 16.4 0.0 0.0
Food Services and Drinking Places 122.6 62.6 62.6 0.0 0.0 0.0
Health and Personal Care Stores 3.3 1.7 0.0 1.7 0.0 0.0
General Merchandise 6.5 3.3 0.0 3.3 0.0 0.0
Furniture and Home Furnishings Stores 6.8 3.5 0.0 3.5 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 3.8 1.9 0.0 1.9 0.0 0.0
Electronics and Appliance Stores 14.3 7.3 0.0 7.3 0.0 0.0
Clothing and Clothing Accessories Stores 9.0 4.6 4.6 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 14.0 7.2 0.0 0.0 7.2 0.0
Gasoline Stations 5.7 2.9 2.9 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 15.0 7.7 7.7 0.0 0.0 0.0
Miscellaneous Store Retailers 10.7 5.5 5.5 0.0 0.0 0.0
Nonstore Retailers 19.7 10.1 0.0 0.0 10.1 0.0
Arts, Entertainment, & Recreation 27.4 14.0 14.0 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 5.0 2.9 0.0 0.0 0.0 2.9
General Medical and Surgical Hospitals 5.1 2.9 0.0 2.9 0.0 0.0
Nursing and Residential Care Facilities 13.2 7.5 0.0 7.5 0.0 0.0
Social Assistance 6.4 3.7 0.0 3.7 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 15.7 8.9 8.9 0.0 0.0 0.0
Services to Buildings and Dwellings 11.3 6.5 0.0 0.0 0.0 6.5
Waste Management and Remediation Services 5.7 3.3 0.0 0.0 3.3 0.0
Real Estate and Rental and Leasing 1.1 0.6 0.0 0.0 0.6 0.0
Personal Care Services 11.1 6.4 6.4 0.0 0.0 0.0
Dry Cleaning and Laundry Services 2.0 1.0 1.0 0.0 0.0 0.0
Auto Repair and Maintenance 16.9 9.7 0.0 9.7 0.0 0.0
Veterinary Services 2.7 1.5 0.0 0.0 1.5 0.0
Photographic Services 1.6 0.9 0.0 0.0 0.9 0.0
Educational Services 29.3 16.7 0.0 16.7 0.0 0.0
Accounting 1.9 1.1 0.0 0.0 1.1 0.0
Architectural, Engineering, and Related 3.9 2.3 0.0 0.0 0.0 2.3
Specialized Design Services 1.6 0.9 0.0 0.0 0.9 0.0
Death Care Services 2.1 1.2 0.0 0.0 1.2 0.0
Legal Services 1.1 0.6 0.0 0.0 0.0 0.6
Government 0.0 24.9 0.0 10.0 1.4 14.8
Total Workers and Households 435.9 255.7 117.2 84.7 28.2 27.0
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]230.1 117.2 84.7 28.2 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]23.0 11.7 8.5 2.8 0.0
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and
1.9% discount for other industries to account for workers under age 20.
Page 165 of 186
Table B-3 Income Levels for Worker Households
Worker Household Generation per 1,000 Units - For Sale 2,500 Square Foot Units
City of Atascadero For Sale Housing Fee; EPS# 211050
Industry
Total
Workers
Total Worker
Households [1]
VLI
Households
LI
Households
Moderate
Income
Households
Above
Moderate
Income
Households
Retail
Unspecified Retail 6.4 3.3 3.3 0.0 0.0 0.0
Food & Beverage Stores 34.1 17.4 0.0 17.4 0.0 0.0
Food Services and Drinking Places 147.2 75.2 75.2 0.0 0.0 0.0
Health and Personal Care Stores 3.5 1.8 0.0 1.8 0.0 0.0
General Merchandise 8.1 4.1 0.0 4.1 0.0 0.0
Furniture and Home Furnishings Stores 8.0 4.1 0.0 4.1 0.0 0.0
Building Material and Garden Equipment and Supplies Dealer 4.6 2.4 0.0 2.4 0.0 0.0
Electronics and Appliance Stores 18.2 9.3 0.0 9.3 0.0 0.0
Clothing and Clothing Accessories Stores 11.6 5.9 5.9 0.0 0.0 0.0
Motor Vehicle and Parts Dealers 17.3 8.8 0.0 0.0 8.8 0.0
Gasoline Stations 5.5 2.8 2.8 0.0 0.0 0.0
Sporting Goods, Hobby, and Musical Instrument Stores 13.8 7.1 7.1 0.0 0.0 0.0
Miscellaneous Store Retailers 11.7 6.0 6.0 0.0 0.0 0.0
Nonstore Retailers 20.8 10.6 0.0 0.0 10.6 0.0
Arts, Entertainment, & Recreation 37.6 19.2 19.2 0.0 0.0 0.0
Medical/Health
Ambulatory Health Care Services 4.4 2.5 0.0 0.0 0.0 2.5
General Medical and Surgical Hospitals 4.5 2.6 0.0 2.6 0.0 0.0
Nursing and Residential Care Facilities 12.9 7.4 0.0 7.4 0.0 0.0
Social Assistance 7.3 4.2 0.0 4.2 0.0 0.0
Services
Personal and Household Goods Repair and Maintenance 19.4 11.0 11.0 0.0 0.0 0.0
Services to Buildings and Dwellings 11.7 6.7 0.0 0.0 0.0 6.7
Waste Management and Remediation Services 5.9 3.4 0.0 0.0 3.4 0.0
Real Estate and Rental and Leasing 1.4 0.8 0.0 0.0 0.8 0.0
Personal Care Services 10.8 6.2 6.2 0.0 0.0 0.0
Dry Cleaning and Laundry Services 2.6 1.3 1.3 0.0 0.0 0.0
Auto Repair and Maintenance 21.4 12.2 0.0 12.2 0.0 0.0
Veterinary Services 2.5 1.4 0.0 0.0 1.4 0.0
Photographic Services 1.5 0.9 0.0 0.0 0.9 0.0
Educational Services 40.2 23.0 0.0 23.0 0.0 0.0
Accounting 2.6 1.5 0.0 0.0 1.5 0.0
Architectural, Engineering, and Related 5.5 3.2 0.0 0.0 0.0 3.2
Specialized Design Services 2.3 1.3 0.0 0.0 1.3 0.0
Death Care Services 3.0 1.7 0.0 0.0 1.7 0.0
Legal Services 1.5 0.8 0.0 0.0 0.0 0.8
Government 0.0 24.9 0.0 10.0 1.4 14.8
Total Workers and Households 509.8 294.8 137.9 98.5 31.8 28.1
Total Income-Qualified HH Generated Per 1,000 Market-Rate Units [2]268.1 137.9 98.5 31.8 0.0
Total Income-Qualified HH Generated Per 100 Market-Rate Units [2]26.8 13.8 9.8 3.2 0.0
Source: Economic & Planning Systems, Inc.
[1] Assumes 1.69 workers per worker household in the City of Atascadero based on 2015-2019 American Community Survey. Includes a 12.5% discount for retail and
1.9% discount for other industries to account for workers under age 20.
Page 166 of 186
ITEM NUMBER: C-1
DATE:
ATTACHMENT:
05/24/22
3
1
City of Atascadero Housing Element
Inclusionary Ordinance Options
I. Introduction and Background
Atascadero has long been committed to providing housing opportunities for all members of the
community. In 2003, the City adopted an inclusionary housing policy requiring all developments that were
subject to legislative approval (including zone changes, planned unit developments, and specific plans) to
provide 20 percent of the units as affordable/deed restricted to households of very low, low, and
moderate incomes or in specific circumstances, to provide in-lieu fees equal to 5% of building valuation.
Under the existing policy, 147 units have been created (plus 22 in the pipeline), and over $1.11 million in-
lieu fees have been collected.
However, over the past 15+ years, market conditions have changed significantly, State laws related to
affordable housing incentives have changed drastically, and much of the large developable areas in
Atascadero have been developed. In response, the 2021-2028 Housing Element includes a program to re-
evaluate the City’s inclusionary housing policy and consider replacing the policy with an inclusionary
housing ordinance.
Purpose of Inclusionary Ordinances
Beginning in the early 1970s, cities and counties throughout California adopted inclusionary policies and
ordinances as part of their overall affordable housing strategy. Similar policies are also prevalent in other
jurisdictions across the country. Inclusionary housing ordinances are designed to increase the supply of
affordable housing for lower-income households. They are also intended to reverse the harmful effects
of exclusionary zoning practices which in past decades had the effect of blocking low-cost housing from
many municipalities. Inclusionary housing ordinances achieve this purpose by requiring private housing
developers to include a certain percentage of affordable housing units in their projects, thereby helping
to logically integrate affordable units throughout each neighborhood.
Case Law and Legislative History
By 2007, more than 170 jurisdictions in California had adopted an inclusionary housing ordinance. In
2009, however, the authority of jurisdictions to enact such policies was challenged in two separate court
cases. To address the challenges, the State legislature passed a bill in 2017 to ensure that local
jurisdictions could adopt and implement inclusionary housing ordinances. This section summarizes the
relevant case law and legislation in chronological order.
Palmer Case (2009)
In the Palmer case (Palmer/Sixth Street Properties L.P. v. City of Los Angeles), the Second District California
Court of Appeal ruled that inclusionary housing requirements on rental units mandated by the City of Los
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Angeles conflicted with 1995 Costa Hawkins Act, which allows landlords to set the initial monthly rent for
a new unit and to increase the rent to market levels whenever a unit is vacated. After the Palmer decision
(until AB 1505 became effective in 2018), most jurisdictions stopped applying inclusionary housing
requirements on rental housing development.
Patterson Case (2009)
In another case before the California Court of Appeal during that same year (Building Industry Association
of Central California v. City of Patterson), the court ruled that an in-lieu fee associated with the City of
Patterson’s inclusionary ordinance was not “reasonably justified” as required by the development
agreement. This decision created some uncertainty as to what standard of review courts would use when
assessing the validity of an inclusionary ordinance. This court found an inclusionary in-lieu fee to be a type
of impact fee, rather than simply a land use control, and thus would require a nexus-type study to justify
it.
Between 2009 and 2015, jurisdictions had great uncertainty as to how to implement their inclusionary
housing ordinances; many were not enforced, particularly as related to new rental residential projects. In
response, many jurisdictions replaced affordable housing production models with a linkage or impact fee
methodology. However, in 2015 the Patterson decision was overturned by the California Supreme Court
decision in California Building Industry Association v. City of San Jose, and in 2017 new legislation was
adopted that clearly authorizes local jurisdictions’ authority to adopt and implement inclusionary housing
ordinances, including those for rental affordable housing.
CBIA v. City of San Jose (2015)
In 2015, the California Supreme Court ruled in California Building Industry Association v. City of San Jose
that inclusionary housing programs are use restrictions that are a valid exercise of a jurisdiction’s zoning
powers. Importantly, this means that inclusionary housing requirements are deemed to be a planning tool
and not an exaction—even if they include an in-lieu fee payment option—and are not subject to AB 1600
nexus requirements imposed by the “Mitigation Fee Act.” However, price controls imposed by
inclusionary housing programs must meet the following criteria:
1. The requirements cannot be “confiscatory”; and
2. The requirements cannot deprive a property owner of a fair and reasonable return on their
investment.
The San Jose ruling that inclusionary housing programs are not an exaction applies to both ownership and
rental residential development. However, the San Jose case did not overturn the limitations that the
Palmer case imposed on inclusionary housing programs for rental residential projects, which rendered
inclusionary housing ordinances for rental units invalid because rental property owners could not set
initial rents as required by the Costa Hawkins law. Former Governor Brown publicly stated that he would
not sign legislation that would undo the Costa Hawkins/inclusionary housing conflict, also known as a
“Palmer Fix” bill, unless and until the California Supreme Court ruled in favor of the City of San Jose. When
the Supreme Court found in favor of the City of San Jose, this ruling allowed for the subsequent passage
and adoption of Assembly Bill (AB) 1505 in September 2017, known as the “Palmer Fix”.
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AB 1505 (The Palmer Fix – Effective January 1, 2018)
In a direct response to Palmer, AB 1505 authorizes jurisdictions to adopt inclusionary housing ordinances
that requires a certain percentage of residential rental units be affordable to lower- and moderate-income
households (Government Code Section 65850.01).
AB 1505 does not place a cap on the percentage of units that can be required to be affordable as part of
an inclusionary housing policy. However, if the ordinance requires that more than 15 percent of the units
be restricted to households earning less than 80 percent of the area median income (AMI), the California
Department of Housing and Community Development (HCD) can require the jurisdiction to prepare an
economic feasibility study. If HCD reviews and finds that feasibility analysis was not conducted by a
“qualified entity with demonstrated expertise,” that the analysis was not sufficiently rigorous and
followed “best professional practices,” and if the study was not made public for 30 days, the ordinance is
still valid but cannot require more than 15 percent of units at 80 percent of median or below.
AB 1505 requires that inclusionary housing programs offer developers a range of options for fulfilling the
affordable housing requirements. More flexible inclusionary housing policies improve the feasibility of
these projects by offering developers various ways to meet affordability obligations. Beyond the on-site
construction of a specified number of affordable housing units, these alternatives may include the
following:
• Allow developers to pay fees in lieu of building inclusionary units on-site. These in-lieu fees can
be leveraged by local jurisdictions and non-profit developers to build affordable housing. This
option allows the affordable housing requirement to be transferred to a developer with more
experience in the construction and operation of affordable housing projects. But it is critical that
the in-lieu fee be set at a level sufficient to actually fund new construction. The dollars collected
should be high enough to enable the city to finance construction of an equivalent number of
affordable housing units elsewhere; otherwise, the number of units produced may end up being
less than the number that would have been produced had the developer simply built the units
themselves.
• Another option is the off-site construction of a defined percentage of income restricted units at a
different project location. Typically, the developer is still responsible for actual development but
will partner with another developer, again someone with more experience with affordable
housing projects. With both in-lieu fees and off-site construction, a fully dedicated affordable
housing project will have access to public funding sources that a private development will not. By
leveraging the expertise of non-profit developers and accessing funding sources not available to
private projects, these two options can provide a more cost-efficient way to build affordable
housing. Ideally, the off-site construction should not be in an isolated location which would
restrict the extent to which the new development could promote residential, social, and economic
integration of its residents with the surrounding community. If this is not possible, the alternative
site could be justified by requiring the production of a larger number of affordable units than
would have been built at the original site.
• Some inclusionary housing ordinances allow developers to dedicate land that can accommodate
the same number of affordable housing units that would have be required at the original project
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site. With this option the responsibility for construction of the affordable housing will fall on the
local jurisdiction, which typically will deed the property to a community-based non-profit
developer. The property should be equal to or greater in value than the in-lieu fee and large
enough to ensure production of an equivalent number of affordable housing units. Again, isolated
plots of land should be avoided. The capacity of local non-profit developers to undertake the
development is a critical consideration, as is the existence of adequate sewer and water capacity
and other infrastructure, the availability of financing to improve the land and build and operate
the housing, and the level of public acceptance by the surrounding community.
• A transfer of credits allows developers to build more than the required number of affordable units
in one project to compensate for building fewer such units in another project.
• Instead of constructing new affordable units on-site, developers may have the option of acquiring
and rehabilitating existing off-site units. This option could also include the adaptive re-use of an
existing non-residential building for new affordable housing.
By providing off-site and in-lieu fee options, the affordable housing requirements can be transferred to
developers that have experience in constructing affordable housing projects. This is beneficial for multiple
reasons, including: (1) affordable housing developers have expertise in developing and operating
affordable housing projects, which may be difficult for other developers (especially long-term project
holders), and (2) affordable housing developers use a variety of public funding sources to layer funding
and achieve affordable housing, which can support deeper affordability and additional units. However,
this can result in concentrating affordable housing units in a smaller number of developments, rather than
integrating units throughout the city.
Key Components of Inclusionary Housing Programs
Although characteristics of inclusionary programs vary widely among jurisdictions, most share the
following aspects and components:
• Most are mandatory and are required with every new housing development over a specific
threshold (e.g., 5 or more units); however, some programs (like the City of Atascadero’s) are only
incorporated into legislative level projects, such as those that are requesting a General Plan
modification, zone change, or other variances from requirements.
• Most ordinances apply to both rental and ownership housing.
• Most ordinances exclude very small projects; the threshold is typically between five and 10 or
fewer units, below which new projects are not subject to affordable housing requirements.
• There is significant variation in the affordability standards of Inclusionary Housing programs
throughout California. The majority of programs require between 10 and 20 percent of the units
in projects to be affordable, at varying levels of affordability.
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• There is variation in length of affordability requirements; however, the prior standard in California
Redevelopment Law of 45 years for ownership housing units and 55 years for rental units is
commonly used (though both shorter and longer covenant periods exist).
II. Summary of City of Atascadero’s Inclusionary Policy
Background
During the 2001 update to the Atascadero General Plan, the City Council recognized that rising housing
prices were not accommodating local working families, many of whom had lived in the community for
generations. As a result, an inclusionary housing ordinance was adopted in 2003, requiring a 20 percent
set-aside for all developments requiring legislative approval (including zone changes, planned unit
developments, and specific plans). Affordable units developed under the inclusionary policy must be deed
restricted to households of very low, low, and moderate incomes. The policy requires an in-lieu fee of five
percent of the construction valuation of the market rate units within a project that does not provide 20
percent of the units as affordable. All inclusionary units are required to be deed restricted for a period of
30 years. All residential projects under legislative approval are subject to the inclusionary requirement as
follows:
▪ Projects of 1 to 10 units can pay in-lieu fee or build units.
▪ Projects of 11 or more units must build units or receive a Council approval to pay in-lieu fees.
The Inclusionary Housing Policy requires that all affordable units in single-family land use areas be
designated for moderate-income households. The distribution of affordable units in multi-family and
mixed-use commercial land use areas are 20 percent very low income, 37 percent low income, and 43
percent moderate income. Affordable units must be constructed at the same time as the market-rate
units, and affordable units must be physically distributed throughout the project site, rather than
concentrated in one area. To ensure compliance with these requirements, a construction timeline
detailing the development of affordable units and a site map must be approved by the City Council. With
City Council approval, alternatives to on-site construction or payment of in-lieu fees for inclusionary units
may be allowed, including off-site construction, land dedication, combinations of construction, fees,
and/or land dedications. All inclusionary units are treated as density bonus units that are not counted as
part of the maximum density entitlement of a site.
For-sale inclusionary properties may participate in a “shared equity purchase program.” Under the
equity sharing program, the buyer of an affordable unit enters into an agreement with the City that
upon resale of the property eventually returns a share of the property’s accrued equity to the City
for use in other citywide affordable housing developments. The affordability of the ownership units
is maintained by a promissory note valued at the below-market benefit of the particular unit, which
is evidenced by a second trust deed recorded on the property at time of sale.
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Past Performance of City of Atascadero’s Inclusionary Ordinance
As shown in Table 1 below, the City of Atascadero’s inclusionary ordinance resulted in the construction of
147 affordable housing units between 2003 and 2020. Most of the construction—144 units—occurred
prior to 2007. There was a seven-year gap from 2008 through 2014 during which no affordable housing
units were built via the inclusionary policy. This period corresponds to the economic downturn in the
housing market.
Over half (55 percent) of the inclusionary units produced were moderate-income housing units, as a
majority of legislative projects are small lot single-family subdivisions. Very low-income housing units
account for 23 percent of the total and low-income the balance at 22 percent. Affordable units were
included in Apple Valley, the Colony Homes development, Las Lomas, and Dove Creek.
Table 1: Atascadero Inclusionary Housing Units Constructed
Year
Units Constructed
by Income Level
Total Very
Low Low Moderate
2003 2 2 2 6
2004 2 24 21 47
2005 2 0 25 27
2006 10 5 31 46
2007 18 0 0 18
Subtotal 2003 - 2007 34 31 79 144
2008-2014 0 0 0 0
2014 0 1 0 1
2015 0 0 0 0
2016 0 0 1 1
2017-2019 0 0 0 0
2020 0 0 1 1
Subtotal 2008 - 2020 0 1 2 3
Total 2003-2020 34 32 81 147
In addition, three projects are in the development stages that have committed to providing affordable
housing through the inclusionary policy, as outlined in Table 2, which will provide an additional 22 units
of affordable housing in Atascadero.
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Table 2: Atascadero Inclusionary Housing Units In Planning Process
Project Name
Units Constructed
by Income Level
Total Very
Low Low Moderate
Grand Oaks Micro Community 0 0 3 3
Hartberg Multi-Family Planned Development 3 6 6 15
The Principal Mixed-Use Project 0 3 1 4
Total 3 9 10 22
To note, this summary of inclusionary housing units in Table 1 and Table 2 is not inclusive of all affordable
housing in Atascadero. Additional affordable housing projects have been created through grant funding
and tax credit financing, including:
• The Knolls at the Avenida (59 affordable units for families)
• Atascadero Senior Apartments (19 affordable units for seniors)
Since 2003, over $1.11 million in lieu-fees have been collected by the City. These fees are used (often
along with other funding sources) to finance affordable housing developed off site. Projects that have
been funded with in-lieu fees include support for land acquisition for affordable housing, housing
rehabilitation and preservation as affordable housing, and to support affordable housing developers’
payment of impact fees, thereby reducing the overall cost of the project.
Changes Since Inclusionary Policy Adoption
The City’s 2001 General Plan and Housing Element updates initiated a period of both commercial and
residential growth. The City’s inclusionary housing policy was highly successful during the early years,
with projects such as Los Lomas/Woodridge, where inclusionary units were mixed in with the
development of 270 single-family homes, townhomes, and apartments, and Dove Creek, which had a
similar housing type mix.
However, as the remaining large developable areas have dwindled, market conditions have changed, and
State laws have been modified (and lawsuits have changed the landscape), inclusionary housing projects
have decreased. The ability for developers to provide affordable units based on economies of scale often
diminishes on smaller lots; larger tracts of land make the construction of affordable units more financially
feasible as the financial impacts of affordable units can be spread across more market-rate units.
Construction costs have also increased throughout California, in terms of both material and labor costs.
New State requirements, including solar installation for all new single-family homes, have also increased
construction costs. All of these factors have resulted in a narrowing of profit margins for new
development. At the same time, there has also been a shift towards building housing that is “affordable
by design” rather than being deed-restricted affordable housing, particularly in private, for profit
development projects where grant finding is not sought or applicable. In Atascadero, trends are shifting
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toward smaller units and higher density than has been in demand before. This may be due partly to the
economic factors sited here, as well as changing housing preferences in the market.
In addition, changes to State laws include (1) increasingly generous State Density Bonus provisions, (2)
strengthening of the Housing Accountability Act and related limitations on jurisdictions to deny projects
or reduce density (as well as more emphasis on requiring housing to be allowed “by-right” without a
public hearing or discretionary approval), and (3) the rescinding of redevelopment law, which eliminated
a structure for requiring affordable housing and a related funding source. State Density Bonus regulations
and the Housing Accountability Act are described in more detail below.
Los Lomas Village
Density Bonus
The State Density Bonus law (Government Code Section 65915) is often used in tandem with inclusionary
housing policies to lessen the financial impact of inclusionary housing policies on developers.1
Section 65915 requires the City to adopt an ordinance that specifies how it will comply with the State-
mandated density bonus requirements. The City’s density bonus ordinance (Zoning Code Article 30) was
last amended in 2013. Various new State laws have amended the density bonus requirements since 2013.
Until the City’s density bonus ordinance is updated (which is an implementation action of the Housing
Element and will be funded with SB 2 grant funds), the State law governs and supersedes City policies over
any inconsistencies.
Over the years, the State Density Bonus law has become increasingly more generous, allowing additional
incentives at lower thresholds for the development of affordable housing. The most recent law, AB 2345
1 In 2013, in Latinos Unidos del Valle de Napa y Solano v. County of Napa, the First District Court of Appeal ruled
that jurisdictions must allow developers to use the same affordable units to fulfill both inclusionary housing
ordinance and density bonus requirements (as long as the more stringent of the two programs’ requirements are
applied).
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(effective January 2021), decreases the percentage of units that must be affordable in a development
while simultaneously increasing the allowed bonuses and concessions. Specific changes associated with
AB 2345 include:
• Requires 17 percent of the total units be for lower-income households rather than 20 percent to
qualify for two incentives/concessions.
• Requires 24 percent of the total units be for lower-income households rather than 30 percent to
qualify for three incentives/concessions.
• Increases cap of bonus percentage from 35 percent to 50 percent.
Density bonus law allows for-sale units to be provided at the moderate level (not lower-income); most
inclusionary units produced in Atascadero have been for-sale units and thus moderate-income level. As a
result, the City has been limited in its ability to require low- or very low-income units. Furthermore, in
Atascadero, developers have used the density bonus process to access the allowed incentives/
concessions, even if additional density is not needed (or constructed). Prior to the changes to State Density
Bonus law, these projects may have instead endeavored to use the variance process to achieve the same
effect.
Given the generous approach to State Density Bonus law, it is difficult for the City to provide any additional
incentives for affordable housing provisions. In addition to increases in density, developers are often
interested in accessing the incentives and concessions available to address site planning issues, including
reductions in setbacks, parking, and open space, which are all accessible through State Density Bonus law.
The City’s inclusionary housing regulations require that housing remain affordable for 30 years; State
density bonus requires a 50-year term. As such, as project developers ask for concessions, the City is able
to increase the deed restriction requirement associated with the inclusionary housing ordinance from 30
to 55 years (consistent with State Density Bonus law provisions). However, once a moderate-income deed-
restricted unit sells for a moderate price in the free market, the affordability covenant is no longer
required, thus reducing the local deed-restricted moderate-income affordable housing, which is generally
what is considered “workforce housing”.
Given the current local market conditions, deed-restricted very low- and low-income units are the least
likely to be provided in the free market, and are the most highly needed.
Housing Accountability Act
The Housing Accountability Act (HAA) was enacted in 1982 to address the high cost of housing in
California. The act, strengthened in 2018 with a package of housing bills signed by former Governor Jerry
Brown, protects both of the following:
• Developments that comply with all "applicable, objective general plan, zoning, and subdivision
standards and criteria." Local governments may not disapprove – or reduce the density/size of
– multi-family residential and mixed-use projects unless they find that the project would have
an unavoidable impact on public health or safety that cannot be mitigated in any way other than
rejecting the project or reducing its size.
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• Developments that contain a minimum amount of affordable housing (either 20 percent of units
for lower-income households or 100 percent of units for moderate-income), even if the projects
do not comply with all objective standards. Local governments may not disapprove or reduce the
size of qualifying affordable housing projects except under specific circumstances defined in the
statute.
This modification to the Housing Accountability Act is consistent with a recent and consistent statewide
legislative push toward requiring jurisdictions to increase local by-right approvals (removing discretionary
actions, as well as some legislative action, thus no longer triggering the inclusionary policy).
In Atascadero, because the inclusionary housing policy is linked only to legislative actions (general plan
amendments, specific plans, zone changes), only certain housing developments are required to comply
with the inclusionary housing regulations. For example, a small lot subdivision of four homes that is part
of a planned development would be required to comply and provide affordable housing or pay an in-lieu
fee; however, a larger project that is fully consistent with zoning regulations (such as Emerald Ridge, with
208 units) would be reviewed by the Planning Commission through the Conditional Use Permit process,
but would not be subject to the inclusionary requirements. This has resulted in a feeling of unbalance in
the applicability of the inclusionary policy.
Atascadero Recent Policy Direction
In previous Housing Element updates, the City included an action item to consider adoption of an
inclusionary housing ordinance that expands the existing inclusionary policy to require more residential
developments to provide deed-restricted affordable units or pay an in-lieu fee. In 2008, the City approved
a new Affordable Housing Funds Policy that established affordable housing goals, policies, and
prioritization criteria for the allocation of affordable housing funds.
The 2021-2028 Housing Element includes this Implementation Action: “Evaluate the City’s inclusionary
housing policy and consider replacing the current inclusionary policy with an inclusionary housing
ordinance…consistent with State density bonus regulations and [that] address[es] changing economic and
regulatory considerations.
III. The Balancing Act
Inclusionary housing ordinances are promoted as a way to produce a wider range of housing choices, for
a variety of income levels—more than the free marketplace can do on its own. However, if affordable
housing requirements are set too high, developers may not be able to make a sufficient profit and may
choose not to build at all, ultimately reducing overall housing production. Over time, inclusionary housing
policies may also have an impact on land prices, as the market adjusts to reflect the inclusionary housing
restrictions in place. In addition, consistent with case law, inclusionary housing requirements cannot be
confiscatory or deprive an owner of a fair and reasonable return on his/her investment. Moreover,
California Housing Element law2 requires any jurisdiction with an inclusionary housing policy or ordinance
to analyze potential and actual constraints being placed on the development of housing by that ordinance.
2 Government Code Section 65583(a)
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For these reasons, any ordinance should be carefully designed to avoid placing an onerous financial
burden on developers which could then hinder market rate housing development.
Critically, an inclusionary housing ordinance by itself cannot produce all the affordable housing units that
may be in demand or that may be required by the State RHNA targets. While Atascadero was significantly
more successful than most jurisdictions in meeting the regional housing needs allocation targets set by
the State and San Luis Obispo Council of Governments, local production of very low- and low-income
housing during the past five years did not achieve construction goals (see Table 4). In addition, the State
of California has determined that household overcrowding and over payment issues effectively increase
the need for affordable housing above these RHNA targets.
Table 4: Atascadero 2014-2019 Regional Housing Needs and Progress
Objectives
Income Levels
Total
Extremely
Low-
Income
Units
Very Low-
Income Units
Low-Income
Units
Moderate-
Income Units
Above
Moderate-
Income Units
Construction Objectives
Goal 49 49 62 69 164 393
Progress 0 (0%) 48 (98%) 28 (45%) 178 (258%) 308 (188%) 562
Other complementary affordable housing strategies can also support provision of a variety of housing
choice, including encouraging (or requiring) projects to provide housing that is affordable by design, such
as limiting single-family housing types on multi-family properties and/or limiting average unit size for
multi-family developments.
IV. Options and Recommendations
A fundamental consideration should be that the inclusionary housing ordinance not place an onerous
financial burden on the developers of market-rate housing. As such, it must be carefully crafted to achieve
affordable housing goals and avoid unintended consequences.
Inclusionary Housing Ordinance Factors to Consider
In considering an inclusionary housing ordinance that requires on-site units (and allows for alternatives
consistent with AB 1505), it is recommended that the City conduct an economic study to best determine
the appropriate affordability thresholds and optional in-lieu fee.
The courts have held that affordable housing is a “public benefit” and that locally imposed inclusionary
housing ordinances are a legitimate means of providing this public benefit. However, the courts have also
ruled that inclusionary housing regulations cannot be confiscatory, and they cannot deprive a property
owner of a fair and reasonable return on an investment. However, no guidance is provided as to how
these requirements should be met. Many California inclusionary housing programs have assumed that a
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policy that results in a reduction in land costs of approximately 30 percent would be consistent with these
case law requirements.
To understand the appropriate parameters for an individual jurisdiction, an economic study estimates the
achievable market rate monthly rents and the defined affordable rents for a variety of unit sizes, the
difference between which is identified as the affordability gap. The affordability gap equates to the
recommended in-lieu fees per affordable unit. In the development of an inclusionary housing ordinance,
the key factors that must be considered are:
• Percent of units required to be affordable: Throughout the State, jurisdictions have varied in the
percentage of project units that are required to be affordable through an inclusionary housing
ordinance. The City of Long Beach and Keyser Marston Associates, Inc. conducted an exhaustive
search and summarized 68 inclusionary housing programs in California (see Attachment 1 for the
Long Beach report’s summary of programs).
• Threshold of applicability: Some jurisdictions exempt small projects from inclusionary housing
requirements. Common thresholds include one unit, five units, and 10 units (see Attachment 1).
• Affordability: There is variation in the level of affordability required. Some jurisdictions require
provision of very low-income units (50 percent of the area median income), some require low-
income units (80 percent of the area median income), some require moderate-income units (120
percent of area median income, and some with a proportion of each (like Atascadero’s existing
inclusionary policy). Jurisdictions also have established different thresholds for renter and
ownership products. In general, ownership units are reserved for moderate-income households
(not very low- or low-income households) since moderate-income households are more likely to
have the necessary disposable income to address the costs associated with homeownership.
However, in a jurisdiction where most of the new housing product is for sale rather than rent, this
can significantly limit amount of new lower-income housing units that come on line.
• In lieu fee: An economic study can assess the appropriate amount for the in-lieu fee and a
calculation methodology.
• Covenant period: The inclusionary ordinance should re-evaluate the existing affordable housing
covenant time period and consider adjustments based on best practices. While some jurisdictions
throughout California have limitations of 30 years like Atascadero, many have increased
restrictions to last 55 years (and some in perpetuity).
Pros and Cons of Inclusionary Housing Ordinances
The benefits of inclusionary housing ordinances are significant:
• Affordable units in market-rate developments can be constructed more quickly than non-profit
affordable units, which require more time for financing.
• Construction of affordable units throughout different neighborhoods can meet a wider array of
housing needs than concentrating a larger number of units in one development as a traditional
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100 percent affordable project. Due to the wider variety of types of housing constructed,
inclusionary housing can expand the housing choices available to lower-income families.
• The presence of affordable units within each residential project provides more opportunities for
residents to remain in the community.
The drawbacks relate to how an inclusionary requirement can increase the costs of development and
potentially reduce residential construction. The goal of an inclusionary requirement is to produce
additional affordable housing. This goal is unachievable if increased construction costs due to the
inclusionary requirement are too high and discourage residential development. In addition, inclusionary
ordinances can require significant administration to ensure that small numbers of affordable units across
multiple projects are rented or owned by qualified residents.
Other Affordable Housing Tools to Consider
In addition to, or instead of, an inclusionary housing ordinance, there are other affordable housing tools
that the City may want to consider, including (1) an affordable housing impact fee and (2) efforts to
encourage (or require) affordability by design.
Affordable Housing Impact Fee
Linkage fees and affordable housing impact fees are policy tools that generate revenue to support the
creation of affordable housing by charging a fee on new development, and are used by jurisdictions
throughout California. A nexus study must be prepared to demonstrate the connection between the fee
and the need for affordable housing. Affordable housing impact fees are assessed on market-rate
residential development on the assumption that an influx of new residents will generate increased
demand for services and, in turn, low-wage jobs to fulfill that demand. The revenue from affordable
housing impact fees can then be used to help provide housing affordable to these workers. Linkage fees
are assessed on nonresidential development (commercial and industrial), understanding that these
facilities stimulate the creation of jobs, and thus a need for housing. The need to meet the demand for
affordable housing created by new growth provides the legal justification for charging linkage fees, which
are used to preserve or create affordable housing near the jobs that are created.
When selecting a fee amount, communities strive to develop formulas that generate as much revenue as
possible to support local affordable housing goals while avoiding unintended negative impacts on new
development. Linkage and affordable housing fees that are too high could suppress economic growth in
the short run and lead to higher land prices in the long run. Many communities choose to engage a
consultant or other specialist when designing their formulas to help balance these competing priorities.
Linkage or impact fees are sometimes confused with in-lieu fees. When a developer is required to build
units on site but allowed to pay a fee as an alternative, the fee is called an “in-lieu fee.” When a program
is structured to require fees for all new residential and/or commercial projects across the board instead
of requiring onsite units within certain projects, the fee is called an ”impact fee” or “linkage fee.” Some
jurisdictions in California have opted to require affordable housing impact fees or commercial linkage fees
rather than require units to be provided through an inclusionary housing ordinance. Some jurisdictions
have a blended program, requiring payment of a linkage fee for new commercial development and
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inclusionary housing provisions for new residential development (with on-site units and an option for in-
lieu fee payment).
To institute an affordable housing impact fee or a linkage fee, the City would need to conduct a nexus
study to determine appropriate fees.
Pros and Cons of Affordable Housing/Linkage Fees
Affordable housing/linkage fees are an effective tool in the creation of affordable housing because they
create a dedicated funding source to support development. This option allows affordable housing to be
built by a developer with more experience in the construction and operation of affordable housing
projects. This options also allows the City to make a significant contribution to affordable housing projects,
which often require multiple sources to secure financing, by consolidating fees from multiple projects.
Furthermore, there can be economies of scale in the development of larger-scale projects, making these
projects less expensive on a per-unit basis. Single-site projects that can be financed through such fees are
also generally less costly, on a per-unit basis, to operate than units that are located throughout a
community through an inclusionary policy because of efficiencies in administrative, maintenance, and
other operating costs.
The drawbacks are similar to an inclusionary requirement in that such impact fees can increase the costs
of development and potentially reduce residential construction (for an affordable housing fee) and hinder
economic development and job creation (for a linkage fee). Another consideration is that impact fees
result in the investment of affordable housing fees within a few individual projects within a community,
rather than spreading that investment throughout the community and can result in a more narrow
housing type as these project tend to be larger scale for-rent projects.
Affordable by Design
In conjunction with an inclusionary housing ordinance, some jurisdictions have considered additional tools
to encourage or require housing to be more “affordable by design.” In locations where land costs are
slightly lower than surrounding more expensive areas, demand for new construction (and the related
profit margins) tend to be higher for single-family product type over multi-family attached housing such
as apartments and condominiums.
In Atascadero, the HDR zone requires a minimum density (as required by the State) to increase the
amount of lower-cost, smaller units which are affordable by design. Outside of the HDR zone, Grand Oaks
Micro Homes on El Camino Real is an example of affordability by design. This project, currently under
construction on 1.7 acres, will provide 26 cottage homes, four live/work units, and a community center.
Three units are deed-restricted as affordable to moderate-income households (as part of a density bonus
agreement). The remaining 27 units are expected to be affordable by design to moderate-income
households based on sales price. Housing sizes within this development range from 703 square-feet to
940 square-feet.
The Grand Oaks project provides an excellent prototype for a lower-cost housing option. The model tends
to be more difficult to execute, however, on smaller lots (where achieving required parking becomes
difficult), and on sloped lots where the topography interferes with simple building design (which often
occurs in Atascadero). Cost savings are most often achieved when the geometry and massing of buildings
can be very basic: a repetitive typology that is simple to draw, bid, build, and market.
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Some jurisdictions require a maximum unit size in multi-family zones to support affordable housing by
design. Maximum unit sizes may be applied across all units, or as a maximum average unit size for planned
developments and multi-family developments. In West Hollywood, the City limits the average size of all
dwelling units within a new residential project to 1,200 square feet in the high-density residential zone,
not including any required inclusionary units (which may be smaller). This approach limits the construction
of larger units, which would command higher rents and sales prices.
To further incentivize affordability by design, some jurisdictions have employed a fractional density
system, where smaller units count as 0.5 or 0.66 of a unit for the purposes of determining allowable
density. This allows developers to develop more units within the same underlying density as an incentive
for smaller affordable-by-design units. Some jurisdictions also allow additional design flexibility for
affordable housing and/or smaller unit sizes to encourage development, including alternative parking
strategies and setbacks. The County of San Luis Obispo discourages very large homes (larger than 2,200
square feet) by charging affordable housing fees only on units larger than that threshold, and at
increasingly higher rates for larger homes. Many jurisdictions also waive fees for affordable housing
developments and offer project streamlining, moving affordable housing projects to the front of the line.
Pros and Cons of Affordable by Design
In general, units that are affordable “by design” cost less to produce because they are small and efficiently
designed. This savings in cost can be passed onto the consumer. One of the benefits of this model is its
simplicity – these units can be produced by interested developers and require no additional tracking by
the City. However, in order to adequately encourage a substantial number of affordable by design units,
the City will need to actively encourage developers and likely provide incentives (or requirements) for
developers to provide this type of housing.
While units that are affordable by design contribute directly to a lower housing cost burden for the
families that reside within them, without a deed restriction or requirement, rents and sales prices may
eventually rise to levels that are considered unaffordable. Furthermore, affordable by design will not
produce any very low- or low-income units, which are of the highest need.
V. Case Studies/Examples
Attachment 1 provides an overview of 68 inclusionary ordinances in California, compiled by the City of
Long Beach and Keyser Marston Associates, Inc. in 2019. Additional detail on three local ordinances is
summarized below (County of San Luis Obispo, City of San Luis Obispo, and Pismo Beach).
County of San Luis Obispo
In 2008, the County of San Luis Obispo adopted an inclusionary housing ordinance. It was to be phased in
over a five-year period. In the first year, the ordinance stipulated that residential development projects
must reserve four percent of all new residential units for occupancy by workforce-moderate, low-, or very
low-income households. After five years, the requirements were to rise to a maximum of 20 percent of all
new residential units. As an alternative to constructing inclusionary housing units (on-site or off-site),
developers were also given the options of opting out by paying an in-lieu fee for each market rate unit or
by donating land. In the first of the five years, the in-lieu fee was a modest 75 cents per square foot but
after five years was to reach a maximum of $3.75 per square foot.
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As a result of the housing market crash that year, the phased approach was put on hold. Affordability
requirements and in-lieu fees remained unchanged until 2019 when the Board of Supervisors voted to
amend the policy by requiring multi-family developments to set aside eight percent of their units (instead
of four percent) for affordable housing, in effect only the second year of the original five-phase plan. This
modest increase is still far short of the originally conceived 20 percent at the end of the first five years. In
2016, the in-lieu fee was raised to $1.50 per square foot, or 40 percent of the original $3.75 maximum.
The move to amend the inclusionary housing ordinance was motivated by the increasing cost of housing
in a county where only five percent of households can afford the average priced home of $600,000 and
31 percent of renters pay more than 50 percent of their income on rent. San Luis Obispo County has
become the six least affordable place to buy a home in the United States.
During its first decade, only one project incorporated affordable housing units under the inclusionary
housing ordinance. In 2017, the Templeton Ranch project provided five on-site affordable housing units.
Now with the new in-lieu fee in place, yearly revenue from the fee is expected to increase from less than
$50,000 to more than $1 million.
Under the revised 2019 ordinance, residential development with one or more units is subject to the
inclusionary housing requirements (although rental housing, accessory dwelling units, and assisted living
facilities are exempt). In addition, commercial, industrial, and mixed-use development must pay an
affordable housing linkage impact fee.
Only new homes over 2,200 square feet in size are subject to in-lieu fees. The planning director calculates
the in-lieu fee according to the following rate schedule:
• The first 2,200 square feet of the unit is exempt from paying fees.
• The portion of the unit between 2,200 square feet and 2,500 square feet pays a fee of $8 per
square feet.
• The portion of the unit between 2,500 and 3,500 square feet pays a fee of $12 per square foot.
• The portion of the unit above 3,500 square feet pays a fee of $16 per square foot.
• The maximum fee for any single unit shall not exceed $7 per square foot as calculated using the
entire square footage of the residence.
• Units greater than 4,600 square footage are not subject to this rate schedule but simply pay a rate
of $7 per square foot.
San Luis Obispo County allows for alternative methods in addition to constructing inclusionary housing
units on site or paying an in-lieu fee (for units over 2,200 square feet). Existing housing units on the site
of a new development may be designated as inclusionary housing units if they meet required design
standards. This does not apply to existing housing units that are off site. However, constructing new
inclusionary housing units off site does qualify, provided the off-site location is in the same housing market
area. Finally, developers can donate land located on site or off site of the proposed development.
For inclusionary units built on site, a portion of the base density (eight percent) must be set aside for
affordable housing. Inclusionary housing units must be provided for each qualified income group per the
following structure:
• Workforce households (earning up to 160% of the area median income) – two percent
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• Moderate income households (earning 80-120% of the area median income) – two percent
• Low-income households (earning 50-80% of the area median income) – two percent
• Very low- income households (earning up to 50% of the area median income) – two percent
• Project total – eight percent
Within each residential development project, inclusionary housing units are also to be provided in a
required sequence. The first required inclusionary housing unit must be for workforce households, the
second for moderate-income households, the third for low-income households, and the fourth for very
low-income households. The sequence then repeats itself for every additional inclusionary housing unit.
Multiple incentives are in place to encourage the provision of inclusionary housing units. With any
approved residential development, one density bonus unit is granted for each required inclusionary
housing unit constructed on site or off site. In addition, when all of a project’s inclusionary housing
requirements are met by providing those units on site, the inclusionary requirements of setting aside eight
percent for affordable housing is reduced by 25 percent.
If the number of dwellings constructed on site will exceed the base density amount, then the developer
can request an additional incentive. In these instances, the County can grant at least one modification of
residential development standards for parking, height, private yard space, setback, or parcel size.
The County also encourages the development of affordable housing within incorporated city limits. If a
developer satisfies the inclusionary housing requirement through alternative methods such as providing
off-site inclusionary housing units of donation of land for affordable housing and this results in
development of affordable housing units within the urban limits of an incorporated city within the County,
then the inclusionary housing requirement is reduced by 25 percent.
The following development standards apply to the design of inclusionary housing units:
• They are to have compatible exterior designs and finishes to the development’s market-rate units.
• They may be smaller in size and have different interior finishes, features, and appliances, as long
as the interior components are durable, of good quality, and consistent with contemporary
standards for new housing.
• In 50 percent or more of the inclusionary housing units, the average number of bedrooms must
be equal to or greater than the average number of bedrooms in the development’s market rate
units.
• Up to 30 percent of the inclusionary housing units can be accessory dwelling units.
City of San Luis Obispo
As of 2020, the City of San Luis Obispo had a total of 1,306 affordable housing units. Twenty percent of
these (264 units) are included within the inclusionary housing program. Most of the inclusionary program
affordable housing units (71 percent) are rentals, 27 percent are ownership units, and two percent are
mixed ownership and rental. Additionally, the City has granted, loaned, or committed $10,450,954 of
affordable housing in-lieu funds to assist with the development of 464 new deed-restricted affordable
housing units. The City’s inclusionary housing ordinance was adopted in 1999. It targets very low-income,
low-income, and moderate-income populations.
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Inclusionary housing requirements are imposed on developments of five or more units. The percent of
required affordable housing units varies depending on whether the project is within city limits or its
“expansion area,” which is land area proposed for annexation or annexed after the adoption date of the
ordinance (see Table 5 below). These requirements can be adjusted based on project density and average
unit size.
Table 5: City of San Luis Obispo Inclusionary Housing Requirements
Inclusionary Housing Requirements
In City Limits • Build 3 percent low or 5 percent moderate income Affordable Housing
Units (AHUs) but not less than 1 AHU per project, or
• Pay in-lieu fee equal to 5 percent of building valuation
In Expansion Area • Build 5 percent low and 10 percent moderate income AHUs (15
percent total), but not less than 1 AHU per project, or
• Pay in-lieu fee equal to 15 percent of building valuation
These housing units must remain affordable for a specified length of time before they can be sold at
market rate prices. Older agreements have a 30-year deed restriction, but the most recent agreement
terms are 45 years for ownership housing and 55 years for rentals.
Alternatives to on-site construction include:
• in-lieu fees
• dedication of land for affordable housing
• rehabilitation of existing housing units that are vacant and in poor physical condition or otherwise
uninhabitable
• a combination of the above methods is also possible with approval of the Director of Community
Development
Developers are entitled to receive density bonuses and concessions when they agree to construct very
low-, low-, or moderate-income dedicated units, consistent with State Density Bonus law. The extent of
the bonus varies depending on the percentage of affordable income units in the project.
In 2020, the City of San Luis Obispo conducted an Affordable Housing Nexus Study to establish a rational
nexus between market-rate residential development and nonresidential development and the need for
affordable housing in the City. The 2021-2028 Housing Element states that the City will update the
Inclusionary Housing Ordinance based on findings and recommendations in the 2020 Affordable Housing
Nexus Study and conduct further feasibility analysis to evaluate the City’s ability to provide affordable
housing in the proportions shown in the Regional Housing Needs Allocation.
Pismo Beach
The City of Pismo Beach had an estimated population of 8,213 in 2018. It is a built-out beach community
with very high housing costs. To encourage affordable housing construction, the City adopted an
inclusionary housing ordinance in 2001. For residential projects of five or more units, a developer can
either: (1) pay an in-lieu fee equal to or greater than five percent of the building permit value or (2)
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dedicate land or build affordable units of equal value to the fee. Commercial projects greater than 5,000
square feet must either: (1) pay an in-lieu fee of at least two percent of the building permit value or (2)
build an affordable unit or dedicate land with value equivalent to the in-lieu fee. As of 2017, the
inclusionary housing fund has a balance of $3,360,000.
VI. Next Steps and Factors to Consider in Development of an
Inclusionary Housing Strategy
The City should consider many options when designing an inclusive housing strategy that targets local
needs and conditions. The State mandates, through our RHNA allocation, achievement of affordable
housing opportunities throughout the community, at all income levels. In response to this State goal, the
City should focus on an integrated inclusionary housing strategy that supports local community needs as
well as regional and statewide efforts for increased affordable housing opportunities. There are currently
three main approaches to an inclusionary housing framework: an Inclusionary Housing ordinance, a
citywide impact fee, and affordability-by-design incentives and/or requirements.
1. Inclusionary Housing Ordinance
Adoption of an inclusionary housing ordinance would require that all projects over a determined
threshold build affordable units on-site. The city must also allow for alternatives to meet this
requirement, such as an in-lieu fee that can be paid under certain conditions. It is at the City’s
discretion to determine the scale of project and parameters for alternatives. Items to consider
are:
a. Project size threshold
b. Approval level trigger (legislative action, all discretionary projects including CUPs and
maps, or all projects, including by-right development)
c. Percentage of affordability and affordability distribution among product types (rental vs.
for-sale units)
d. Affordability duration
e. Alternative fee amount / amount of land dedication and parameters for allowing such
alternatives
2. Citywide Impact Fee / Commercial linkage fee
As an alternative to an inclusionary housing ordinance, the City may consider a citywide affordable
housing linkage fee and/or commercial linkage fee. Key features of this approach include:
a. Can be applied citywide to all new development, both residential and commercial
b. Can be structured based on residential square-footage so that larger houses, with greater
impact on affordability, pay more while houses below a certain threshold are exempt as
affordable-by-design
c. Must be accompanied by a nexus study to determine true impact of development on
affordable housing needs
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3. Affordability-by-design
The City can implement development standards that encourage and/or require higher density
projects to include units that area affordable-by-design, therefore meeting State goals without
deed restrictions and in a way that distributes units over all projects throughout the City.
Standards may include:
a. Establishing a maximum average or absolute unit size in multi-family developments to
limit development of prime housing sites with traditional single-family units
b. Factoring unit size into density calculations to allow more units to be built on a site if
those units are smaller, affordable-by-design units.
c. Establish design regulations that support higher density development by encouraging
community parking and open space rather than a focus on private garages and yards.
An effective strategy can focus on one solution or can combine these strategies into a multi-pronged
approach depending on the specific goals and need of the community. Identified community goals include
equitable distribution of units throughout the city and developing a successful and robust program that
can achieve balance between feasibility of implementation and ensuring compliance with State mandates.
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