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Judson Brown, City of Santa Ana <br />June 28, 2021 <br />Housing Opportunity Ordinance: Updated In -Lieu Fee Analysis Page 14 <br />Estimating the achievable Affordable Sales Prices for moderate income households is <br />complicated by the fact that KMA believes that the Affordable Sales Prices are too close <br />to the projected market rate sales prices to be marketable when irrevocable resale <br />controls are imposed: <br />1. It is reasonable to assume that a home buyer will not purchase a home that is <br />subject to long-term covenants unless there they receive a substantial discount <br />from the unrestricted market rate sales price- <br />1 <br />In KMA's experience the required discount falls within the range of 3M <br />3. When a 30% discount is applied to the projected market rate sales prices, the <br />achievable prices for moderate income units are estimated as follows: <br />a. The achievable price for three -bedroom units is estimated at $483,000. <br />b. The achievable price for four -bedroom units is estimated at $542,500. <br />The resulting Affordability Gaps are estimated as follows! <br />Estimated Affordability Gaps <br />— Ownership Housing Development <br />Three -Bedroom <br />Four -Bedroom <br />Sales Prices <br />Units <br />Units <br />Market Rate Sales Price <br />$690,000 <br />$775,000 <br />Affordable Sales Price <br />$483,000 <br />$542,500 <br />Affordability Gap Per Unit <br />$207,000 <br />$232,500 <br />As shown in Attachment 2 — Appendix B — Exhibit II, KMA estimates the supportable in - <br />lieu fees at the following amounts: <br />City Council 28 — 19 217d6i6 024i <br />19090 017 D21 <br />