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BAE scope of work - add point of indifference calculation

From: domainremoved <Karen>
Date: Tue, 09 Oct 2018 18:23:49 -0700

Dear Mayor Ohtaki and City Councilmembers and Staff,

 

I am a Housing Commissioner, and member of the BMR Guidelines committee of the Housing Commission, but I am writing as myself.

 

I read the proposed scope of work for BAE Urban Economics to do an analysis of Menlo Park’s BMR program on rental residential apartments with great interest, because the next step of the BMR Guidelines Committee is to propose an update to our commercial impact fees and our residential in-lieu fees, and this analysis could be helpful to us, if amended slightly.

 

As discussed at one of the meetings to study the Downtown Specific Plan, Menlo Park prefers to have developers provide BMR units instead of paying in-lieu fees. To incentivize building actual units, Menlo Park should set the BMR inclusionary in-lieu fee at a level that is equal to, or greater than the cost to build the BRM units. One way to measure this is the point of indifference or the dollar amount at which a developer makes the same return by paying the fee versus providing the units.

 

The proposed analysis by BAE could be extremely helpful to us in setting our residential in-lieu fees for BMR rental units, if it can be amended to calculate the point of indifference for studio, 1BR, 2BR and 3BR units in each of the model projects. I believe that the analysis as currently proposed will require the same data that is needed to calculate the point of indifference; so adding the point of indifference calculation should not affect the cost of the analysis, at least not significantly.

 

I’m disappointed that the Housing Commission was not asked to provide input to the scope of the analysis, but glad that this came to my attention. I ask you to request this amendment at your October 9th meeting, where the scope of work appears on your consent agenda.

 

Thank you,

Karen Grove

 

 

 

 

 
Received on Tue Oct 09 2018 - 18:22:23 PDT

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