2022-03-01 CC Agenda Packet - PRESENTATION - ITEM D10 - Inclusionary Housing StudyCITY OF
ELSEGUNDO
City of El Segundo
Inclusionary Housing Study
City Council Meeting
March 1, 2022
Agenda
1. Background on Inclusionary Housing Study
2. What is Inclusionary Housing?
I Feasibility Impacts of Inclusionary Housing
4. Potential Next Steps
5. Other Affordable Housing Tools
6. Questions/Discussion
ELSECUNDU
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 2
Background on IH Study
LEAP Grant Award $65,000 (no city match requirement)
. Original Grant Application (June 2020)
• Rezone specific R-3 neighborhood, to a new, R-4 Zone
• August 2020: Determined not feasible
. Updated Grant Application (December 2020)
• Project Description: Prepare an Inclusionary Housing Ordinance
• Economic & Planning Systems (EPS) hired on April 19, 2021
. Deadline Date to Complete Project: June 30, 2023
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 3
ELSEGUYDO
Inclusionary Housing
• One of several strategies available to support affordable
housing production and preservation
• Requires new residential development to provide a proportion
of units as affordable
• An Inclusionary Housing Ordinance is an identified program in
City's recently -adopted Housing Element
ELSEGUNDO
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 4
Development Feasibility Analysis
• Inclusionary units must be sold or leased at less than
market value, but cost the same to construct as market -rate
units
• Important to understand if new projects are still financially
feasible even with the costs of inclusionary housing
requirements
• Analyze financials of generic market -rate development
project types with different inclusionary requirements
3/2/2022
City of El Segundo 1 350 Main St. El Segundo, CA 90245
61
E SEGUNDO
6.00%
5.00% -�
4.00%
3.00 %
2.00%
1.00%
0.00 %
No Inclusionary
W
Inclusionary Scenario Feasibility -
2-Bedroom Rental Prototypes
Return of Cost Threshold:
5.00%
5% Very Low
® 30 units/acre Q 40 units/acre 50 units/acre
8% Low
35%
30%
25%
20%
15% P
`
10%
5% `
0% II
U
Inclusionary Scenario Feasibility -
For Sale Prototypes
teturn
'hreshold; r
.5%a -
_r
i r
u =
r .
No Inclusionary 10% Low and Moderate 12% Moderate 5% Low
0 Single Family 0 Townhomes
Preliminary Feasibility Findings
• An inclusionary housing policy could be feasible
• Single family and townhome units appear able to provide
affordable units while still yielding an attractive return
• Multifamily rental projects have some room to feasibly
provide affordable units, particularly at higher densities
ELSEGUNDO
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 8
Potential Next Steps
• Receive direction from the Council regarding further study of
inclusionary housing or other affordable housing tools
• If directed to continue, EPS will:
• Coordinate with Many Mansions to conduct public workshop on NO
• Refine feasibility analysis and prepare recommendations for
requirements
• Present findings and recommendations at workshops with Planning
Commission and with City Council
• Develop ordinance in coordination development of the Affordable
Housing Program by Many Mansions
• Present ordinance at public hearing
ELSEGUNDO
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 9
Other Affordable Housing Strategies
• Commercial Linkage Fee — new commercial development
pays fee to support development of affordable housing units
• Overlay Zones and Development Incentives — provide
developers with incentives and concessions in return for
affordable housing units
• EPS and Many Mansions could analyze examples of these, including:
• Affordable housing overlay district
• Religious facilities overlay district
ELSEGUYDO
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 10
CITY OF
ELSE GUNDO
Questions/Discussion
3/2/2022 City of El Segundo 1 350 Main St. El Segundo, CA 90245 11