CC - Item 5A - SGVCOG Regional Early Action Planning 2.0 Affordable Housing Incubator for City Onwed Properties±10'-0"±10'-0"±4'-0"±5'-0"29'-0"±10'-0"±5'-0"
17'-0"
26'-0"25'-0"±180'-6"26'-0"
26'-0"26'-0"
17'-0"17'-0"±10'-0"31'-0"±7'-9"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
01ILLUSTRATIVE SITE PLAN / SITE - 1
0 20
40 80NHART AVE.HART AVE.MARSHALL ST.MARSHALL ST.GLENDON WAYGLENDON WAYCOURTYARD
P1P1P1 P1P1P1
P2
P2
P2
P2
P2
P3P3 P3
P3P3 P3
P3P3 P3
P4P4 P4
P1
SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
02PERSPECTIVE VIEW / SITE - 1
KEY PLAN
42'-8"2'-6"45'-8"45'-8"69'-9"69'-9"69'-9"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
03TYPICAL BUILDING PLAN / SITE - 1
GROUND FLOOR PLAN
P4P4P4
P3P3P3
P3
P3
P3P3
P3P3
SECOND FLOOR PLANTHIRD FLOOR PLAN
0 8
16 32
17'-0"17'-0"17'-0"±4'-0"4'-7"±4'-0"
1'
-
8
"
3'-0"
HART AVE.HART AVE.GLENDON WAYGLENDON WAYRAMONA BLVD.RAMONA BLVD.FWY. - 10FWY. - 10P0P2 P2 P2P2
THE LORD OF
UNIVERSE CHURCH
P2
SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
04ILLUSTRATIVE SITE PLAN / SITE - 2
0 20
40 80N
SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
05STREET SCENE / SITE - 2PROPERTY LINEKEY PLAN
PROPERTY LINE0 8
16 32
3'-2 1/2"25'-10 1/2"3'-2 1/2"46'-11"25'-10 1/2"53'-4"25'-10 1/2"53'-4"
SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
06TYPICAL BUILDING PLAN / SITE - 2
GROUND FLOOR PLAN
P2P2P2P2P2P2
SECOND FLOOR PLANTHIRD FLOOR PLAN
0 8
16 32
DN
BEDROOM
(12'-0" x 12'-10")
BATH
W.I.C.
W.D.
ENT.
UP
1- CAR
GARAGE
KITCHEN
LIVING
(12'-0" x 13'-0")
PDR.
UP DN
20'-4"20'-3 1/2"3'-3 1/2"20'-4"23'-7"20'-4"23'-7"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
07UNIT PLAN / PLAN - 0 (1 BR + 1.5 BA / 920 S.F.)
GROUND FLOOR PLANSECOND FLOOR PLANTHIRD FLOOR PLAN
0 4
8 16
20'-11 1/2"27'-2"4'-1 1/2"20'-11 1/2"31'-3 1/2"20'-11 1/2"31'-3 1/2"BEDROOM-1
(11'-0" X 14'-7")
W.I.C.
BATH-1
DN
BEDROOM-2
(10'-6" X 12'-1")
BATH-2
ENTRY
2- CAR GARAGE
UP
DINING
KITCHEN
GREAT ROOM
(15'-3" x 9'-9")DECK
(5'-7" x
10'-6")
PDR.L.
UP
DN
W
D
SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
08UNIT PLAN / PLAN - 1 (2 BR + 2.5 BA / 1,249 S.F.)
GROUND FLOOR PLANSECOND FLOOR PLANTHIRD FLOOR PLAN
0 4
8 16
25'-10 1/2"26'-7"BEDROOM - 1
(14'-1" X 11'-0")
BEDROOM - 2
(10'-11" X 10'-10")
L.
DN
W.I.C.
BATH-1 BATH-2
2- CAR GARAGE
ENTRY
UP
DECK
(13'-10" X 4'-4")
DEN
(10'-11" X 9'-18")
PDR.KITCHEN / DINING
LIVING
(14'-1" X 12'-0")W/D
DN
UP
25'-10 1/2"26'-7"25'-10 1/2"23'-4 1/2"3'-2 1/2"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
09UNIT PLAN / PLAN - 2 (2 BR + LOFT + 2.5 BA / 1,252 S.F.)
GROUND FLOOR PLANSECOND FLOOR PLANTHIRD FLOOR PLAN
0 4
8 16
16'-1"42'-8"2'-6"W.I.C.
BEDROOM - 2
(10'-6" X 11'-6")
BATH-2
BATH-1
W.I.C.BEDROOM - 1
(10'-8" X 11'-6")
DN
LIN.
W.
D.
UP
ENTRY
2- CAR
TANDEM GARAGE
W.I.C.
BEDROOM - 3
(10'-6" X 11'-8")
BATH-3
LIVING
(15'-6" X 12'-7")
KITCHEN /
DINING
DN
UP
DECK
(8'-6" X 5'-0")
16'-1"45'-2"16'-1"45'-2"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
10UNIT PLAN / PLAN - 3 (3 BR + 3 BA / 1,545 S.F.)
GROUND FLOOR PLANSECOND FLOOR PLANTHIRD FLOOR PLAN
0 4
8 16
1'-0"20'-10"38'-4"W D
BATH-2
BEDROOM - 2
(10'-11" X 12'-0")
W.I.C.
BATH-1
BEDROOM - 1
(11'-0" X 13'-8")
W.I.C.
DN
2- CAR GARAGE
ENTRY
BEDROOM - 3
(10'-3" X 10'-2")
BATH-3
UP
KITCHEN
DINING
DECK
(11'-0" X 6'-0")
PDR.
GREAT ROOM
(15'-5" X 19'-2")
PAN.
DN
UP
20'-10"38'-4"20'-10"37'-4"SGVCOG/ROSEMEAD
ROSEMEAD, CA# 2507605-08-2026
11UNIT PLAN / PLAN - 4 (3 BR + 3.5 BA / 1,744 S.F.)
GROUND FLOOR PLANSECOND FLOOR PLANTHIRD FLOOR PLAN
0 4
8 16
Task 2.1 Memorandum
DEVELOPMENT FEASIBILITY ANALYSIS
JUNE 15, 2026
PREPARED BY HARRIS & ASSOCIATES
IN COLLABORATION WITH THE SAN GABRIEL VALLEY COUNCIL OF GOVERNMENTS
(SGVCOG)
This Project is funded and managed by the Southern California Association of Governments (SCAG)
with Regional Early Action Program 2021 grant funding from the State of California Department of
Housing and Community Development.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
i
Table of Contents
1 Executive Summary .......................................................................................................... 1
2 Site Details ......................................................................................................................... 1
3 Development Assumptions .............................................................................................. 3
3.1 Prototype Assumptions .............................................................................................. 3
3.2 Affordability Level Assumption ................................................................................. 8
4 Methodology .................................................................................................................... 8
4.1 Project Value ............................................................................................................. 9
4.1.1 Affordable Unit Selling Price ...............................................................................10
4.1.2 Market Unit Selling Price ......................................................................................11
4.2 Development Costs ..................................................................................................12
5 Analysis and Findings .......................................................................................................16
5.1 Financial Feasibility Findings ....................................................................................16
5.2 Prevailing Wage Assumption ...................................................................................21
5.3 Conclusion and Funding Alignment .......................................................................21
5.3.1 Potential Funding Approaches ..........................................................................22
5.3.2 Potential Funding Implementation ....................................................................26
5.4 Disclaimer ..................................................................................................................26
Tables
Table 2-1: City Sites .................................................................................................................. 1
Table 3-1. Prototype Characteristics ...................................................................................... 4
Table 4-1: Moderate Income Sales Price Tables ..................................................................11
Table 4-2: Market-rate Sales Price Tables .............................................................................12
Table 4-3: Direct Costs ............................................................................................................12
Table 4-4: City Development Fees per City Multifamily Unit ................................................13
Table 4-5: Permit Fees by Prototype ......................................................................................13
Table 4-6: Financing Cost Calculator ....................................................................................14
Table 4-7: Summary of Development Costs .........................................................................15
Table 5-1: Development Feasibility Analysis - 80% Scenario ................................................18
Table 5-2: Development Feasibility Analysis – 50% Scenario ..............................................19
Table 5-3. Rosemead PLHA Funds 2019-2023 .......................................................................23
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
ii
Figures
Figure 2-1: City Sites Aerials ..................................................................................................... 1
Figure 2-2: Vicinity Map ........................................................................................................... 2
Figure 3-1. Site 1 Plans .............................................................................................................. 6
Figure 3-2. Site 2 Plans .............................................................................................................. 7
Figure 4-1: Analysis Methodology ........................................................................................... 9
1
1 EXECUTIVE SUMMARY
Harris & Associates (“Harris”) was retained by the San Gabriel Valley Council of
Governments on behalf of the City of Rosemead (“City”) to conduct a preliminary
financial analysis of two (2) potential housing development sites in the City (“City Sites”).
The City is exploring opportunities to support mixed-income residential development on
these sites, combining affordable housing units for households earning no more than
120% of Area Median Income (“AMI”) with units sold at market price (“market-rate”). This
development approach, referred to as “mixed-income” housing, is intended to promote
housing affordability distributed among market-rate housing while maintaining overall
project financial feasibility. This development feasibility analysis (“Analysis”) estimates
development costs and the amount of funding needed and explores site-specific
funding opportunities to render the mixed-income housing development financially
feasible at each location. The Analysis is summarized below.
2 SITE DETAILS
The two (2) City-owned sites (“City Sites”) evaluated as part of this Analysis were recently
acquired by the City and identified as strong opportunities to support future residential
development. The City’s objective is to maximize housing production while ensuring that
each site can support financially feasible mixed-income residential development.
The City Sites are summarized in Table 2-1.
Table 2-1: City Sites
Note: The Maximum Units Allowed calculation only considers size and density exclusive of other factors that
may influence the final number of units. Site 1 is currently zoned Single Family Residential (R-1) and will be
rezoned to Planned Development (P-D) with a High Density Residential (HDR) designation to allow for up to
30 dwelling units per acre.
Site 1, located at Marshall St. and Hart Ave., consists of three parcels (APNs: 8594-022-900,
8594-022-901, and 8594-022-902) totaling 0.84 acres. The site is currently zoned Single
Family Residential (R-1) with a General Plan Land Use Designation of Low Density
Residential. However, the City intends to rezone the parcels to Planned Development
Site Location
Assessor Parcel
Number (APNs)
Lot Size
(Acres)Zoning Max Density
(du/ac)
Max Units
Allowed
1 Marshall St
& Hart Ave
8594-022-900
8594-022-901
8594-022-902
0.84
Planned
Development
(PD)
30 25
2
Ramona
Blvd
& Hart Ave
8594-027-900 0.17
Medium
Multiple
Residential
(R-3)
30 5
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
2
(“P-D”) with a High Density Residential General Plan Land Use Designation to support
higher-density residential development. The City will apply the P-D zoning designation to
provide greater flexibility and more lenient development standards compared to
standard residential zoning districts, promoting housing production and accommodating
ownership housing opportunities on the site.
Site 2, located at Ramona Blvd. and Hart Ave., consists of one parcel (APN: 8594-027-900)
totaling approximately 7,675 square feet (0.18 acres). The site is currently zoned Medium
Multiple Residential with a Design Overlay (R-3/D-O) and has a General Plan Land Use
Designation of High Density Residential. The existing zoning and land use designation
support higher-density residential development of up to 30 units per acre, equal to five
units on Site 2. The Analysis assumes concessions or waivers would be approved to allow
for an additional unit on the site.
Potential development types in the City Sites are limited by parcel size, shape, and
physical constraints. Figure 2-1 shows the aerial views for the City Sites which are located
to the east of Target and north of Interstate 10 Freeway as shown in the vicinity map
(Figure 2-2).
1
Figure 2-1: City Sites Aerials
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
2
Figure 2-2: Vicinity Map
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
3
3 DEVELOPMENT ASSUMPTIONS
3.1 Prototype Assumptions
For purposes of this Analysis, each City Site is represented by a development “Prototype,”
which is a conceptual model used to evaluate the financial feasibility of a potential
mixed-income ownership housing project based on the City Sites’ physical
characteristics, development assumptions, and proposed unit mix.
The Analysis includes two Prototypes corresponding to the two City Sites. Prototype A
corresponds to Site 1 and Prototype B to Site 2. Each Prototype reflects the parcel size,
zoning assumptions, density, unit count, and development standards applicable to that
site. These Prototype assumptions establish the physical development model used to
evaluate project value, development costs, and overall financial feasibility.
The development Prototypes evaluated in this Analysis were developed based on
direction provided by the City and confirmed through an iterative review process. At the
outset, the City directed Harris to evaluate ownership housing products for both City Sites,
with the goal of maximizing the number of feasible residential units while incorporating
affordable units where possible.
Harris worked with the City to confirm key development assumptions for each site,
including the desired housing type, target unit count, applicable density, anticipated
zoning approach, and development standards to be used for site planning purposes. For
Site 1, the Analysis assumes concessions or waivers would be approved to allow relief
from some development standards of the small lot subdivision standards of RMC
17.12.030, and that the City will pursue a Zone Change from Single Family Residential to
Planned Development (“P-D”), with a High Density Residential General Plan Land Use
Designation. The P-D zone is anticipated to provide more flexible development standards
than conventional residential zoning. For Site 2, the Analysis assumes concessions or
waivers would be approved to allow for an additional unit on the site in order to achieve
a more financially feasible development plan. Because Site 2 is less than 10,000 SF (7,675
SF), Site 2 will utilize the City’s Small Lot Ordinance for non-conforming sites which allows
for more flexibility to develop sites under 10,000 SF.
Based on these assumptions, Harris coordinated with RESI Architecture Inc. (“RESI”) to
prepare conceptual site plans for the type of development that would maximize the
development potential of the City Sites. The site plans were used to test how ownership
housing could be accommodated within the physical constraints of each site and to
inform the Analysis. For Site 1, RESI determined that a design using shared walls and shared
driveway access is necessary to maximize the number of units while maintaining desired
front setbacks, given the site’s unusual shape.
It is important to note that the Prototypes are one set of potential designs. The Prototypes
are intended to test the financial feasibility of a representative development concept
rather than prescribe a final site design. As the City progresses through the developer
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
4
solicitation process, it may prioritize a different design, such as one that includes side
yards, fewer shared elements, or other site planning features. While alternative designs
are possible, the site's configuration and development constraints limit the ability to
increase density beyond the proposed 24 units for Site 1 and 6 units for Site 2.
The final Prototypes include a total of 30 one- to three-bedroom, three-story townhome
developments. Specifically, Prototype A (Site 1) includes 24 townhome units consisting of
two- and three-bedroom homes, while Prototype B (Site 2) includes six (6) townhome units
consisting of one- and two-bedroom homes. Furthermore, Prototype A includes open
space and a courtyard, amenities that are typical for a development of its size but that
also increase development costs. Unit mix, bedroom count, and other site planning
assumptions are summarized in Table 3-1.
Table 3-1. Prototype Characteristics
Notes:
Prototype A (Site1) includes amenities such as one parking space, courtyard, and open space which are not
included in Prototype B (Site 2).
1. P0 is 1-bedroom and 1.5-bathroom townhome model with 920 total Square Feet (“SF”).
2. P1 is 2-bedroom and 2.5-bathroom townhome model with 1,260 total SF.
3. P2 is 2-bedroom and 2.5-bathroom townhome model with 1,263 total SF.
4. P3 is 3-bedroom and 3.5-bathroom townhome model with 1,540 total SF.
5. P4 is 3-bedroom and 3.0-bathroom townhome model with 1,763 total SF.
6. Garage Spaces are generally two (2) spaces per townhome. For Prototype B, the one-bedroom unit only has one
garage space.
7. Residential SF represents total building residential area for three-story townhomes.
Prototype Characteristics: Prototype A Prototype B
Site 1 2
Lot Area (ac) 0.84 0.17
Stories 3 3
P01 0 1
P12 7 0
P23 5 5
P34 9 0
P45 3 0
Total Units 24 6
Density (du/ac) 28.2 35.3
Garage Spaces6 48 11
Residential SF7 34,284 7,235
Open Space SF 1,500 N/A
Courtyard SF 1,690 N/A
Driveways SF 9,450 1,960
Open Parking Spaces SF 162 N/A
Landscaping SF 5,010 1,160
Total SF 52,096 10,355
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
5
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
6
Figure 3-1. Site 1 Plans
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
7
Figure 3-2. Site 2 Plans
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
8
3.2 Affordability Level Assumption
A key component of the Analysis was evaluating the level of affordability that could best
balance the City’s housing affordability goals with overall project financial feasibility
within the City’s desired ownership, mixed-income development model. Harris first
evaluated the City Sites’ ability to support a mixed-income ownership project, including
a preliminary review of available funding sources for both affordable and market-rate
ownership units.
Affordable homeownership projects generally have fewer available public funding
sources than rental housing, particularly for smaller-scale developments that combine
market-rate and affordable units. In addition, many affordable housing funding programs
are primarily designed to support deeper affordability levels, often serving households at
or below 80% of Area Median Income (“AMI”). For ownership projects, achieving these
deeper affordability levels significantly reduces affordable unit sales prices while
development costs remain largely unchanged, resulting in substantially larger funding
gaps.
Moderate-income ownership units at 110% AMI allow for higher affordable sales prices
compared to lower-income affordability levels, which improves project revenues and
reduces the amount of subsidy needed to support overall project feasibility. Based on
these constraints, Harris determined that including affordable units at 110% AMI, as
defined by HSC Section 50052.5(b)(4), in combination with market-rate units represents a
relatively financially supportable affordability level for the potential development.
To evaluate how different affordability mixes impact project feasibility, Harris prepared
two development scenarios for each Prototype: (1) an 80% market-rate and 20%
moderate-income unit mix (“80% Scenario”), representing an approach similar to a
traditional inclusionary housing requirement, and (2) a 50% market-rate and 50%
moderate-income unit mix (“50% Scenario”), representing a more affordability-focused
development approach with a greater impact on overall project feasibility. These
scenarios were used to evaluate the relationship between affordability levels, project
revenues, and overall financial feasibility.
4 METHODOLOGY
Using the development and affordability assumptions established in Section 3, Harris
prepared the financial feasibility study as part of the Analysis to evaluate whether the
projected sales revenue from the mixed-income ownership developments would be
sufficient to cover total development costs.
As shown in Figure 4-1, the financial feasibility study begins by calculating the total
project value at completion, which represents the revenue generated from the sale of
the completed townhomes. For ownership housing projects, this value is based on the
projected sales prices of both market-rate and moderate-income units.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
9
The Analysis then calculates total development costs, including construction costs, City
fees, financing costs, entitlement costs, land costs, and other related expenses required
to complete the project. Development costs excluding land are first subtracted from the
total project value to determine the Residual Land Value (“RLV”), which represents the
amount remaining to pay for land after covering development costs.
The RLV is then compared to the market cost of land to evaluate overall project feasibility.
If the RLV meets or exceeds the land cost, the project can generally support
development under current assumptions. If the RLV is less than the land cost, a financing
gap remains and additional funding or other financial support would be needed to
support development. This remaining gap represents the level of funding required for
each Prototype.
Figure 4-1: Analysis Methodology
4.1 Project Value
Because the City Sites are assumed to be ownership, for-sale projects, project value is
derived from the proceeds from the sale of the townhomes. This includes both market-
rate units and moderate-income affordable units within each Prototype.
To determine total project value at completion, Harris first calculated the sales price for
the moderate-income units at 110% of Area Median Income (“AMI”), as well as the
market-rate sales price for each unit type. These values were then applied to each
Prototype’s unit mix to estimate total project revenues under both the 80% and 50%
affordability scenarios.
This approach allows the Analysis to evaluate how different affordability assumptions
affect total project value and overall financial feasibility.
Project Value at Completion (based on projected
revenues)
(minus) Development Costs
(equals) Residual Land Value (amount leftover for
land costs)
(minus) Land Costs
(equals) Financing Gap (Subsidy Needed)
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
10
4.1.1 Affordable Unit Selling Price
Harris calculated the affordable sales prices for moderate-income units at 110% of Area
Median Income (“AMI”), consistent with HSC Section 50052.5(b)(4). These units represent
the affordable component of the mixed-income ownership development evaluated for
both City Sites.
To determine sales prices of the affordable units (representing 110% AMI households),
Harris used Housing and Urban Development (“HUD”) Los Angeles County (“County”)
household definitions to establish one-bedroom as 2-person household (“PHH”), two-
bedroom as 3PHH, and three-bedroom as 4PHH.
As shown in Table 4-1: Moderate Income Sales Price Tables, the Analysis first calculates
the maximum monthly housing cost for each household size by applying the State’s
affordability standard of 35% (HSC 50052.5(b)(4)) of household income. From this amount,
monthly expenses are deducted to determine the maximum monthly principal and
interest (“P&I”) payment a household can support. Monthly expenses consist of insurance
expenses, property taxes 1, homeowners association fees,2 monthly utility expenses,3, and
private mortgage insurance.4
Maximum mortgage, or the maximum 30-year fixed interest rate loan, is calculated from
maximum P&I by taking the present value of maximum P&I across 30 years (360 months)
and the 30-year fixed interest rate of 6.47% as of May 2026.
Finally, Harris assumed a 10% downpayment for moderate-income units which results in
maximum mortgage representing 90% of the sales price. The affordable sales price was
therefore calculated by dividing the maximum mortgage by 0.90, resulting in estimated
affordable sales prices ranging from approximately $270,000 for one-bedroom units to
$344,000 for three-bedroom units.
1 1.16%, per Fiscal Year 25-26 08216 Tax Rate Area
2 Estimated at $329, based on similar local costs
3 Based on Los Angeles County Development Authority (“LACDA”) 2025 utility allowance schedule for single family unit
size
4 1.00%, assumption moderate Private Mortgage Insurance (“PMI”) rate based on common PMI range of 0.50% to 1.50%.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
11
Table 4-1: Moderate Income Sales Price Tables
Notes:
1. Assuming Housing Costs at 35% of Income to calculate the Maximum Monthly Housing Costs based on HSC 50052.5
(b)(4).
2. Insurance Costs are based on similar local costs.
3. Property Tax Rate of 1.16% based on FY 2025-26 TRA 08216.
4. Homeowners Association Costs based on similar local communities with no gate and no pool.
5. Utilities are based on 2025 LACDA Utility Allowance Schedule for Single Family Unit Size.
6. Private Mortgage Insurance assumed as a moderate 1.00% rate.
7. Principal and Interest (“P&I”) Payments.
8. May 2026 Bankrate reported interest rate of 6.47%
9. Downpayment Assumption of 10% for Moderate-income
4.1.2 Market Unit Selling Price
For market-rate units, Harris analyzed recent sales for newly constructed townhomes (built
in 2022 or later) within the City and surrounding areas to determine sales prices for each
unit type. Comparable sales were reviewed using Zillow and other local market data
sources to reflect current ownership housing conditions.
Based on this review, Harris determined average sales prices for $543,000 for one-
bedroom units (2PHH), $730,000 for two-bedroom units (3PHH), and $917,000 for three-
bedroom units (4PHH) as shown in Table 4-2.
1-Bed (2PHH) 2-Bed (3PHH) 3-Bed (3PHH)
2025 AMI $85,300 $95,950 $106,600
% of AMI 110% 110% 110%
% of Income1 35% 35% 35%
Max Housing Costs (Monthly) $2,737 $3,078 $3,420
Less (Monthly Expenses)
Insurance2 $132 $132 $132
Property Taxes3 $269 $307 $344
Homeowners Association4 $329 $329 $329
Utilities5 $246 $302 $368
Private Mortgage Insurance6 $232 $265 $296
Total Monthly Expense $1,208 $1,335 $1,469
Maximum Monthly P&I7 $1,529 $1,743 $1,951
Maximum Mortgage Amount8 $242,639 $276,693 $309,703
Downpayment Assumed9 10% 10% 10%
Sale Price Per Unit $269,599 $307,437 $344,114
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
12
Table 4-2: Market-rate Sales Price Tables
It is important to note that there were no comparable one-bedroom (2PHH) townhome
sales identified in the local market. To estimate the one-bedroom (2PHH) market-rate
sales price, Harris applied the difference of $187,000 between 4PHH and 3PHH sales and
subtracting this difference from the 3PHH sales price.
4.2 Development Costs
Development costs were calculated for each Prototype to estimate the total cost
required to complete the proposed mixed-income ownership developments. Using the
Prototype assumptions established in Section 3, Harris evaluated the full cost of delivering
each project under both affordability scenarios.
Development costs can vary significantly depending on site specifications such as the
developable land area and zoning. Development costs are calculated as the sum of
direct costs, indirect costs (including fees), financing costs, and entitlement costs.
Direct costs (or costs attributable to the physical development of the project) were
calculated in accordance with the CoreLogic Marshall & Swift® Cost Approach (“M&S”)
for new residential construction, a widely used commercial and residential property
valuation tool that provides cost-based estimates for building construction.5 In addition
to the M&S costs, Harris assumed a 5% direct cost contingency which is consistent with
similar local developments as shown in Table 4-3.
Table 4-3: Direct Costs
Notes:
1. Hard Costs are sourced from January 2026 Marshall and Swift cost estimates. M&S provides industry cost estimation
for residential and commercial developments with escalators to regional costs.
2. Assumed a direct cost contingency of 5% per similar local developments.
Indirect Costs (or non-physical costs, also referred to as soft costs) include City
development fees, additional soft costs, developer fees, and cost contingencies.
Additional soft costs, developer fees, and indirect cost contingencies are typically a
percentage of its associated costs. Based on similar local developments, Harris assumed
5 The CoreLogic Marshall & Swift® Valuation Service is updated each month. The Analysis referenced January 2026
development cost estimates for new apartment buildings in Los Angeles County.
Townhome type: Market Price
1-Bed 543,000$
2-Bed 730,000$
3-Bed 917,000$
Direct Costs: Prototype A Prototype B
Hard Costs (M&S)1 $8,809,269 $1,895,205
Direct Cost Contingency2 $440,463 $94,760
Total Direct Costs $9,249,732 $1,989,966
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
13
additional soft costs of 8% of direct costs, developer fee of 10% of direct and indirect
costs, and an indirect cost contingency of 10% of indirect costs.
A breakdown of Fiscal Year (“FY”) 2025-26 City Development Fees for the Prototypes is
provided in Table 4-4 which details all associated fees in a typical multifamily
development unit consistent with the HDR land use for both City Sites. Because Site 2 does
not require a General Plan Amendment or Zone Change, and Site 1 assumes these
actions are undertaken by the City as part of its broader development strategy, these
costs were excluded from the Prototype development costs.
Table 4-4: City Development Fees per City Multifamily Unit
Note: The City Sites are intended for multifamily land use (HDR) and therefore use multifamily fees. The City estimates
development multifamily fees based on a multifamily unit with 2,500 square feet (“SF”) floor area and 400 SF garage. Actual
fees will be determined by the City.
The City’s development multifamily fees are based on a multifamily unit with 2,500 square
feet (“SF”) floor area and 400 SF garage. This yields $11.32 in estimated multifamily permit
fees per square foot (“PSF”). Total Permit fees by Prototype are calculated by multiplying
the $11.32 multifamily permit fees PSF to each Prototype’s total square footage as shown
in Table 4-5.
Table 4-5: Permit Fees by Prototype
Financing Costs reflect construction loan interest during the construction period. Harris
assumed construction loan amount of 70% of total development costs and applied a
6.5% interest rate over a two-year loan term using a 60% average loan balance to
calculate the financing costs.
Approximately, total development costs of $8,660,060 and $1,865,713 were used to
precisely estimate financing costs that best fit for Prototype A and Prototype B,
respectively.
FY 25-26 Rosemead Fees Multifamily
Tentative Subdivision Parcel 1,805.00$
Design Review 1,394.00
Building Permit Fee 7,022.67
Plan Check Fee 5,912.42
School District Fee 6,629.20
Sewer Connection Fee 347.00
Development Impact Fees 5,197.00
Total 28,307.29$
Permit Fees: Prototype A Prototype B
Multifamily Permit Fee 28,307.29$ 28,307.29$
Per Square Foot (PSF) 11.32 11.32
Site SF 34,284 7,235
Permit Fees 388,194.79$ 81,921.28$
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
14
Table 4-6: Financing Cost Calculator
Notes:
1. Total Loan amount assumed as 70% of Total Development Costs. The remaining 30% would be supported by other
funding sources.
2. Interest rates for a conventional construction loan is 6.50% as of May 2026.
Finally, entitlement costs are assumed to be $7,000 per unit, which results in $168,000 and
$42,000 total entitlement costs for Prototype A and B, respectively, based on similar local
development costs.
Altogether, these developmental costs are summarized in Table 4-7 below.
Financing Cost Calculator: Prototype A Prototype B
Total Loan Amount1 $8,660,060 $1,865,713
Average Loan Balance (%) 60% 60%
Interest Rate2 6.50% 6.50%
Construction Term (years) 2 2
Total Financing Costs $675,485 $145,526
Rounded $675,000 $146,000
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
15
Table 4-7: Summary of Development Costs
Notes:
1. Hard Costs are sourced from January 2026 Marshall and Swift (“M&S”) cost estimates. M&S provides industry cost estimation for residential and commercial
developments with escalators to regional costs.
2. Permit Fees are sourced from Rosemead's FY 25-26 Fee Schedule and applying the permit cost of $11.32 per square foot to each City Site's total residential square
footage.
3. Financing Costs are calculated in the Financing Cost Calculator shown in Table 4-6. Total Loan amount assumed as 70% of Total Development Costs. The remaining
30% would be supported by other funding sources.
4. Entitlement Costs are estimated based on similar local developments.
Prototype A Prototype B
Site 1 2
Number of Units 24 6
Direct Costs
Hard Costs (M&S)1 $8,809,269 $1,895,205
Direct Cost Contingency $440,463 $94,760 5%
Total Direct Costs $9,249,732 $1,989,966
Indirect Costs
Fees (Est.)2 $388,195 $81,921
Additional Soft Costs $739,979 $159,197 8%of directs
Developer Fee $1,037,791 $223,108 10%of above directs + indirects
Indirect Cost Contingency $112,817 $24,112 10%of indirects
Total Indirect Costs $2,278,781 $488,339
Financing Costs3 $675,000 $146,000 See Financing Cost Calculator Table
Entitlement Costs4 $168,000 $42,000 $7,000 per unit
Total Development Costs $12,371,514 $2,666,305
Per Res. Unit $562,342 $444,384
Calculation Basis
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
16
5 ANALYSIS AND FINDINGS
Using the project value and development cost assumptions described in Section 4, Harris
evaluated the overall financial feasibility of each Prototype under the two affordability
scenarios established in Section 3.2:
80% market-rate units with 20% moderate-income units (“80% Scenario”), and
50% market-rate units with 50% moderate-income units (“50% Scenario”)
The 80% Scenario represents an approach similar to a development with an inclusionary
housing requirement, where a smaller portion of units are affordable and a larger share
of market-rate units helps support project revenues. The 50% Scenario reflects a more
affordability-focused development approach, with a greater share of moderate-income
units and a corresponding greater impact on overall project feasibility.
To evaluate financial feasibility, Harris compared the total project value at completion
against total development costs for each Prototype. Development costs excluding land
were first subtracted from total project value to determine the Residual Land Value
(“RLV”), which represents the amount remaining to pay for land after covering
development costs.
The RLV was then compared to the estimated market cost of land, based on an analysis
of recent comparable land sales in SGV per CoStar data accessed Q1 2026. Cost of Sale
and Target Investor Payout rates (5% and 25%, respectively) were also applied based on
rates found across other similar local residential developments.
Residual Land Value (“RLV”) signals if a development is feasible. When the RLV matches
or exceeds the market-rate land cost, then the project is deemed feasible because value
generated by revenues can pay the RLV after covering the development costs and
target investor profit. When the RLV is negative, a financing gap remains and additional
financial support is needed to move the project forward. This remaining gap represents
the level of funding required to support each Prototype.
5.1 Financial Feasibility Findings
The findings of the Analysis are summarized in Tables 5-1 through 5-2 below. As the tables
indicate, every Prototype in each scenario requires some level of subsidy , with the 80%
Scenario requiring lower levels of subsidy than the 50% Scenario.
Prototype A (Site 1), which assumes a 24-unit for-sale townhome development, requires
the greatest level of financial support under both scenarios. Under the 50% Scenario,
Prototype A requires approximately $6.0 million in additional funding, compared to
approximately $3.6 million under the 80% Scenario. Compared to Prototype B, the larger
gaps are mostly driven by higher total development costs associated with the larger
project size, additional site amenities such as courtyard and open space areas, and the
site’s irregular parcel shape, which reduces development efficiency.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
17
Prototype B (Site 2), the smaller, 6-unit for-sale townhome development, requires less
overall financial support under both scenarios. Under the 50% Scenario, Prototype B
requires approximately $1.3 million in additional funding, compared to approximately
$700,000 under the 80% Scenario. The smaller scale of the project results in lower total
development costs and fewer moderate-income units, which reduces the overall
funding gap.
As expected, the 80% Scenario requires less additional funding than the 50% Scenario
due to the higher proportion of market-rate units generating greater project revenue. On
a per-unit basis, the 50% Scenario for Prototype A requires the highest level of support at
approximately $248,000 per unit, while the 80% Scenario for Prototype B requires the least
support at approximately $118,000 per unit.
Comparing development costs to net sale proceeds (“NSP”) helps explain the funding
gaps identified in each scenario. Starting with the 80% scenario, Prototype A and B’s
development costs of approximately $12.4 million and $2.7 million (98% and 97% of NSP),
respectively, which are barely covered by their NSP (approximately $12.7 and $2.7 million,
respectively). This corresponds to a positive RLV, but still less than market land costs. For
the 50% scenario, development costs are higher than the lower NSP due to fewer market-
rate units generating less project value. Total development costs for this scenario are
120% of NSP for Prototype A and 122% of NSP for Prototype B. The resulting negative RLV
signals more subsidy needed to make the development feasible compared to the 80%
Scenario.
Generally, cost efficiencies come with delivering more units at once (often referred to as
“economies of scale”). In larger projects, fixed costs can be spread across more units and
construction resources can be used more efficiently.6 However, Prototype A does not
benefit from the economies of scale typically associated with larger developments, even
with 24 potential units, due to site shape constraints, limitations on achievable density,
and the open space and courtyard amenities.
6 National Low Income Housing Coalition. (2018, September 24). The U.S. Government Accountability Office Reviews Cost-
Efficiency of Housing Tax Credit Projects. https://nlihc.org/resource/us-government-accountability-office-reviews-cost-
efficiency-housing-tax-credit-projects
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
18
Table 5-1: Development Feasibility Analysis - 80% Scenario
Unit Type/Income
Restriction
Unit
Count
Sale Price
per Unit Total Unit Type/Income
Restriction
Unit
Count
Sale Price
per Unit Total
110% of AMI 110% of AMI
1-Bed 0 $269,599 $0 1-Bed 1 $269,599 $269,599
2-Bed 4 $307,437 $1,229,747 2-Bed 0 $307,437 $0
3-Bed 0 $344,114 $0 3-Bed 0 $344,114 $0
Market Rate1 Market Rate1
1-Bed 0 $543,000 $0 1-Bed 0 $543,000 $0
2-Bed 8 $730,000 $5,840,000 2-Bed 5 $730,000 $3,650,000
3-Bed 12 $917,000 $11,004,000 3-Bed 0 $917,000 $0
Total Units 24 Total Units 6
Gross Residential
Sales Revenue $18,073,747 Gross Residential
Sales Revenue $3,919,599
Per Unit Per Unit
Total Gross Sales
Revenue (GSR)$18,073,747 $753,073
Total Gross Sales
Revenue (GSR)$3,919,599 $653,267
(Less) Cost of Sale2 5% of GSR
($903,687) ($37,654)(Less) Cost of Sale2 5% of GSR
($195,980) ($32,663)
(Less) Target Investor
Payout2 25% of GSR ($4,518,437) ($188,268)
(Less) Target Investor
Payout2 25% of GSR ($979,900) ($163,317)
Net Sale Proceeds $12,651,623 $527,151 Net Sale Proceeds $2,743,719 $457,287
(Less) Development
Costs ($12,371,514) ($515,480)
(Less) Development
Costs ($2,666,305) ($444,384)
Residual Land Value3 $280,110 $11,671 Residual Land Value3 $77,415 $12,902
(Less) Land Costs4 ($3,867,540) ($161,147)(Less) Land Costs4 ($784,731) ($130,789)
Financing Gap /
(Subsidy Needed)($3,587,430) ($149,476)
Financing Gap /
(Subsidy Needed)($707,316) ($117,886)
RESIDENTIAL UNITS
SITE 1 (PROTOTYPE A)
REVENUES AND COSTSREVENUES AND COSTS
RESIDENTIAL UNITS
SITE 2 (PROTOTYPE B)
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
19
Table 5-2: Development Feasibility Analysis – 50% Scenario
Unit Type/Income
Restriction
Unit
Count
Sale Price
per Unit Total Unit Type/Income
Restriction
Unit
Count
Sale Price
per Unit Total
110% of AMI 110% of AMI
1-Bed 0 $269,599 $0 1-Bed 1 $269,599 $269,599
2-Bed 12 $307,437 $3,689,242 2-Bed 2 $307,437 $614,874
3-Bed 0 $344,114 $0 3-Bed 0 $344,114 $0
Market Rate1 Market Rate1
1-Bed 0 $543,000 $0 1-Bed 0 $543,000 $0
2-Bed 0 $730,000 $0 2-Bed 3 $730,000 $2,190,000
3-Bed 12 $917,000 $11,004,000 3-Bed 0 $917,000 $0
Total Units 24 Total Units 6
Gross Residential
Sales Revenue $14,693,242 Gross Residential
Sales Revenue $3,074,473
Per Unit Per Unit
Total Gross Sales
Revenue (GSR)$14,693,242 $612,218
Total Gross Sales
Revenue (GSR)$3,074,473 $512,412
(Less) Cost of Sale2 5% of GSR ($734,662) ($30,611)(Less) Cost of Sale2 5% of GSR ($153,724) ($25,621)
(Less) Target Investor
Payout2 25% of GSR ($3,673,311) ($153,055)
(Less) Target Investor
Payout2 25% of GSR ($768,618) ($128,103)
Net Sale Proceeds $10,285,270 $428,553 Net Sale Proceeds $2,152,131 $358,688
(Less) Development
Costs ($12,371,514) ($515,480)
(Less) Development
Costs ($2,666,305) ($444,384)
Residual Land Value3 ($2,086,244) ($86,927)Residual Land Value3 ($514,174) ($85,696)
(Less) Land Costs4 ($3,867,540) ($161,147)(Less) Land Costs4 ($784,731) ($130,789)
Financing Gap /
(Subsidy Needed)($5,953,784) ($248,074)
Financing Gap /
(Subsidy Needed)($1,298,905) ($216,484)
SITE 1 (PROTOTYPE A)
RESIDENTIAL UNITS
SITE 2 (PROTOTYPE B)
RESIDENTIAL UNITS
REVENUES AND COSTS REVENUES AND COSTS
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS
20
Notes:
80/20 and 50/50 Market-rate to Moderate-income scenarios were determined in consultation with the City. The 80/20 scenario represents an approach similar to a
development with an inclusionary housing requirement. The 50/50 scenario is more dependent on subsidy.
Site 1 has a higher per unit Development Cost due to the added amenities described in the Site Plans.
50/50 scenario requires more funding support to attain feasibility. Funding options are outlined in the document.
1. Market Rate Sales Price is based on recently built local townhome comparable sales.
a) No comparable sales were found for 1-bedroom homes. The 1-bedroom sale price was calculated by subtracting the gap between the 2-bed and 3-bed
sales prices from the 2-bed sales price.
2. Cost of Sale and Target Investor Payout rates are estimated based on applicable effective rates found across other residential developments.
3. The Residual Land Value (RLV)
a) When positive, means that value generated by the revenues can pay the amount of the RLV for the land after covering the development costs and target
investor profit. When the RLV matches or exceeds the market-rate land cost, then the project is deemed feasible.
b) When negative, means that revenues need to be supported by additional funding sources to make the project feasible.
4. Land Costs are calculated using local market rate land values per acre for recent townhome developments.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
21
5.2 Prevailing Wage Assumption
It is important to note that the City Sites are currently publicly-owned sites. The Analysis
assumes that both City Sites will be sold to a developer at the market rate. Therefore, the
Analysis assumes that prevailing wage requirements would not apply. Prevailing wages
are standardized wage rates set by the California Department of Industrial Relations,
based on surveys of wages paid to workers in specific trades, such as electricians,
carpenters, or laborers, within a defined region.7 The rates typically include both hourly
pay and fringe benefits. The purpose of prevailing wage laws is to ensure fair
compensation, prevent the undercutting of local labor standards, and promote quality
workmanship on publicly funded projects.8
Prevailing wage requirements are generally triggered when a project qualifies as a
“public work,” including situations where public funds or public assets (such as publicly
owned land sold below market value or donated) are provided to support the
development. Prevailing wage applicability depends on the specific structure of public
participation in a project, including the form and timing of any public assistance, so a
project-specific legal review is recommended before implementing any land
contribution or subsidy strategy. When triggered, prevailing wage requirements generally
increase direct development costs by approximately 25%.9 Because prevailing wage
requirements increase construction labor costs, they can materially increase total
development costs and the amount of subsidy required to support project feasibility.
Because this Analysis assumes the land is sold at market value and does not include
discounted land contributions or direct public subsidy tied to construction costs,
prevailing wage was not included in the base financial feasibility study. However, if the
City elects to provide land at a reduced cost or contribute additional public funding tied
to construction, prevailing wage requirements may apply and would materially affect
overall project feasibility.
5.3 Conclusion and Funding Alignment
The Analysis indicates that, under current market conditions, both Prototypes would
require additional financial support to move forward. While the 80% Scenario performs
better financially due to the higher proportion of market-rate units, both scenarios
demonstrate that mixed-income ownership housing on the City Sites will require a layered
financing approach that combines public incentives, private investment, and available
homeownership assistance programs.
7 California Department of Industrial Relations. Prevailing Wage Requirements. Accessed January 14, 2026.
https://www.dir.ca.gov/public-works/prevailing-wage.html
8 Chapter 7: Labor Standards (California Department of Housing and Community Development), accessed January 13,
2026, https://www.hcd.ca.gov/docs/grants-and-funding/chap-07-labor-standards.pdf
9 BAE Urban Economics. The Cost of Affordable Housing: What Drives It and How to Address It. San Diego: San Diego
Housing Commission, April 14, 2025. PDF file, 129 pp. https://sdhc.org/wp-content/uploads/2025/04/Att-1_Affordable-
Housing-Cost-Study-4.17.25.pdf
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
22
Prototype A requires a greater level of financial support due to its larger project size,
higher total development costs, and site design constraints that limit development
efficiency. Prototype B requires a smaller subsidy because of its smaller scale and lower
overall development costs, though it still requires additional funding to support feasibility.
These findings highlight the importance of aligning affordability goals with realistic project
economics. Moderate-income ownership housing at 110% AMI represents a relatively
financially supportable affordability level within the City’s desired mixed-income
ownership model, but even at this level, additional funding strategies are necessary to
close the remaining financing gap.
5.3.1 Potential Funding Approaches
Financing options for these Prototypes are relatively limited compared to lower-income
and rental housing and may require greater reliance on local and private resources.
Many state and federal funding sources prioritize housing for the lowest-income groups.
For the purposes of this Analysis, funding sources are restricted to supporting only
moderate-income units. Market-rate home sales are expected to cover the respective
development costs, and public agencies are generally prevented from subsidizing
market-rate housing.
Funding sources listed below were evaluated based on current funding availability and
their suitability for the Prototypes. Some funding sources considered but not applicable
included the following:
California Debt Limit Allocation Committee assistance which specializes in tax-exempt
private activity bonds for housing financing and offers mortgage credit certificates.
City Community Development Block Grants and the HOME Investment Partnership
Program which support a range of housing activities which include homeownership
assistance and development of affordable housing. However, both programs are
generally restricted to lower-income households.
Measure A funding can technically support moderate-income units. However, these
funds are awarded competitively prioritizing assistance for lower-income households
rather than moderate-income units. Furthermore, these funds require a project labor
agreement, which can increase development costs even more than standard
prevailing wages.
California Housing Finance (“CalHFA”) Agency Mixed Income Financing Programs
support mixed-income rental developments that combine units affordable to lower-
income households with units serving moderate-income households, including up to
approximately 120% AMI. These programs can provide below-market financing and
help bridge gaps in projects that include a range of income levels. However, they
typically require a meaningful share of units to be restricted to lower income levels (at
or below 60% AMI) to qualify.
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
23
The most viable funding approaches include:
City of Rosemead Permanent Local Housing Allocation (PLHA): The most significant
local funding source currently available to support development of the City Sites is
the City's PLHA funding. The City amended its five-year PLHA plan on March 10, 2026
(Resolution No 2026-11) to allocate $1,983,626 in 2019-2023 PLHA funds 10 to support
implementation of the City Sites (Marshall/Hart Projects) and a related
Homeownership Assistance Program. The City specifically identified the Marshall/Hart
Projects as the intended recipient of these funds, demonstrating a clear policy
commitment to advancing affordable homeownership opportunities on the City-
owned sites. Table 5-3 summarizes the PLHA allocations available to the City from
funding years 2019 through 2023.
Table 5-3. Rosemead PLHA Funds 2019-2023
Through its amended PLHA Five-Year Plan, the City programmed these funds for two
complementary activities that directly support the City Sites:
o Activity 2 - Assist with development of the City Sites (Marshall/Hart Projects).
The City Sites development will consist of a new residential development with
for-sale residential units, some of which would be offered at an affordable
housing cost to households with incomes at or below 150% AMI.
o Activity 9 - Support Homeownership Assistance Program, including down
payment assistance. The Homeownership Assistance Program will provide
financial assistance to qualified homebuyers with household incomes at or
below 150% AMI in the form of a zero-interest, deferred loan with no monthly
payments, which may be used to cover a portion of the down payment and
eligible closing costs associated with the purchase of a primary residence.
The City's amended PLHA Plan anticipates a phased implementation strategy for
each activity. For Activity 2, implementation would begin with feasibility analysis and
project planning, followed by entitlement and financing activities, and ultimately
construction and sale of affordable ownership units. For Activity 9, implementation
would begin with development of program guidelines and loan documents, followed
by program launch and borrower qualification, and continuing through ongoing
10 HCD PLHA NOFA Formula. https://www.hcd.ca.gov/funding/plha
Rosemead PLHA
2019 343,238$
2020 533,498$
2021 587,099$
2022 294,255$
2023 225,536$
Total 1,983,626$
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
24
administration of down payment assistance loans and compliance monitoring
through 2029.
Employer-Assisted Housing Programs: Partnerships with major local employers to
provide down payment assistance, shared equity contributions, or other financial
support to eligible workforce households.
Land Contributions and Local Public Funding: Strategic use of publicly owned land
(e.g., discounted sale or land write-down) and local housing funds, such as
inclusionary in-lieu fees, to reduce upfront development costs and improve feasibility.
Generally, applying proceeds from the land sale to a development will trigger
prevailing wage. Alternatively, the City may be able to sell the land at the market
price and use the proceeds as down payment assistance to the affordable
homebuyers to avoid triggering the higher costs of prevailing wages. Because
prevailing wage applicability is highly fact-specific, consultation with legal counsel is
recommended when structuring these transactions.
Resale-Restricted Homeownership Models: Implementation of deed restrictions or
community land trust (CLT) structures to maintain long-term affordability while
reducing initial subsidy requirements.
A CLT model can reduce development costs by separating ownership of the land
from ownership of the moderate-income housing units. This model reduces
development costs by selling the land to SGVCLT 11 which would then guarantee the
affordability of the property through a 99-year Ground Lease. This means that land
where moderate-income units are located will need to be sectioned off to be sold to
SGVCLT. SGVCLT would own the moderate-income land while the homeowner owns
the home. The homeowner or homeowners’ association would pay rent to SGVCLT.
Because the cost of land is removed from the home purchase price, this structure can
significantly reduce the price of the moderate-income homes and improve long-term
affordability.
CalHFA MyHome and CalPlus Programs: MyHome program provides down payment
assistance for the moderate-income households which can reduce private mortgage
insurance costs.12 CalPlus program provides a fixed-interest, 30-year loan with interest
rates lower than market rates to reduce moderate-income homebuyers’ monthly
costs.13
The Prototypes’ moderate-income levels, sales prices, and household sizes are
supported by CalHFA’s loans based on their Annual Report statistics. The sales prices
assumed in the Prototype scenarios are supported by CalHFA’s assistance.
11 San Gabriel Valley Community Land Trust. https://sangabrielvalleyclt.org/about-us/
12 CalHFA My Home Program. https://www.calhfa.ca.gov/homebuyer/programs/myhome.htm
13 CalHFA CalPlus program. https://www.calhfa.ca.gov/homebuyer/programs/calplus.htm
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
25
In Fiscal Year 2024–25, approximately 9% of homes assisted through CalHFA’s single-
family programs had sales prices below $300,000, while an additional 24% fell within
the $300,001 to $400,000 range 14. Because the Prototype moderate-income units fall
within these two ranges, this indicates that a significant share of CalHFA-supported
homebuyers purchase homes at comparable price points.
Additionally, CalHFA provides assistance for the moderate-income households in the
assumed household sizes of 2-4 persons per household and assumed borrower
incomes ranging from $85,000 to $106,000. CalHFA’s Fiscal Year 2024–25 data 15
indicates that approximately 92% of its loan assistance was provided to household
sizes with 1 to four persons, while approximately 55% of assistance was provided to
borrowers with incomes between $70,000 to $130,000. Because the Prototype
households fall within these ranges, the City Sites’ moderate-income ownership units
are well aligned with the income and household characteristics commonly supported
by CalHFA programs.
Direct Downpayment Assistance: The City may be able to sell the sites at fair market
value and dedicate some or all of the sale proceeds to a downpayment assistance
program for the moderate-income homebuyers purchasing the affordable units. By
providing assistance directly to eligible purchasers rather than subsidizing construction
costs, the City can improve affordability and increase the effective purchasing power
of moderate-income households while potentially avoiding prevailing wage
requirements that may be triggered by direct development subsidies or below-market
land conveyances.
This approach also allows the City to recycle a portion of the land value back into the
project to help offset the affordability gap. However, because the development
would still need to be financially feasible prior to the sale of individual homes,
additional financing mechanisms, interim funding sources, or more favorable market
conditions may be necessary to bridge upfront development financing needs.
Overall, improving feasibility for the Prototypes will depend on a combination of strategies
that address both project delivery and homebuyer affordability. On the development
side, reducing upfront costs through land write-downs, local funding participation, and
resale-restricted ownership models such as Community Land Trusts can help close
financing gaps and improve overall project feasibility. On the homebuyer side, programs
such as CalHFA assistance, employer-assisted housing programs, and direct down
payment assistance can reduce purchase barriers for moderate-income households and
support successful unit absorption.
Because fewer state and federal programs support moderate-income ownership
housing, the City may need to play a more active role in structuring support. The feasibility
14 Popular Annual Financial Report. https://www.calhfa.ca.gov/about/financials/reports/24-25/2024-2025-pafr.pdf
15Annual Comprehensive Financial Report. https://www.calhfa.ca.gov/about/financials/reports/24-25/2024-2025-acfr.pdf
TASK 2.1: DEVELOPMENT FEASIBILITY ANALYSIS SUMMARY AND ASSESSMENT OF FUNDING
OPPORTUNITIES
26
of both Prototypes will depend on effective public-private partnerships, early
coordination with developers, and strategic use of City resources.
5.3.2 Potential Funding Implementation
To advance implementation, the City should establish clear policy priorities regarding the
intended role of moderate-income housing within its broader housing strategy. Key
considerations include whether the City’s primary objective is to maximize the total
number of workforce housing units produced, minimize the level of public subsidy
required per unit, preserve long-term affordability, or target specific household income
ranges and occupations. Establishing these priorities will help guide decisions related to
how the City sites are marketed, funding structure, development partnerships, and
affordability requirements.
The City should evaluate how the City Sites can be strategically leveraged to support
financially feasible mixed-income housing development. This may include evaluating
whether the sites should be conveyed through discounted sale, ground lease structures,
or other disposition approaches that reduce upfront development costs while advancing
the City’s housing objectives. The City may also consider partnerships with organizations
such as community land trusts, employers, and financing institutions, as well as the use of
local funding sources, such as inclusionary in-lieu fee revenues, to support homebuyer
assistance or other affordability strategies. Because financing tools available for
moderate-income ownership housing are more limited than those available for lower-
income affordable housing, early coordination with developers, lenders, and financing
partners will be important to align project structuring with available funding sources and
market conditions.
In addition, the City may consider establishing flexible implementation parameters that
allow future development proposals on the City Sites to adapt to changing financial
conditions and development opportunities. Potential considerations include adjusting
unit counts and affordability mixes, phasing development over time, and tailoring
assistance levels based on project feasibility. The City may also consider developing clear
program guidelines or evaluation criteria for future developer selection and project
negotiations to ensure consistency with the City’s housing priorities and desired
affordability outcomes. Continued coordination between site planning, prototype
design, and funding strategy will be essential to translating the concepts addressed by
this Analysis into financially viable mixed-income housing developments.
5.4 Disclaimer
It is important to note that the revenues and development costs projected in the Analysis
are based on point-in-time data and assumptions available when the Analysis was
completed in Q1 2026. Many of these data inputs and assumptions are subject to change
over time. Development costs may vary based on project-specific factors, including final
design, market conditions, timing, regulatory requirements, and the experience,
construction approach, and cost structure of the selected developer.