HomeMy WebLinkAboutContractCAG-22-300
AGREEMENT FOR AFFORDABLE HOUSING NEXUS STUDY
THIS AGREEMENT, dated for reference purposes only as August 15, 2022, is by and between the
City of Renton (the "City'), a Washington municipal corporation, and David Rosen Associates
("Consultant"), a California corporation. The City and the Consultant are referred to collectively
in this Agreement as the "Parties." Once fully executed by the Parties, this Agreement is effective
as of the last date signed by both parties.
1. Scope of Work: Consultant agrees to provide professional services for an affordable
housing nexus study as specified in Exhibit A, which is attached and incorporated herein
and may hereinafter be referred to as the "Work."
2. Changes in Scope of Work: The City, without invalidating this Agreement, may order
changesto the Work consisting of additions, deletions or modifications. Any such changes
to the Work shall be ordered by the City in writing and the Compensation shall be
equitably adjusted consistent with the rates set forth in Exhibit A or as otherwise mutually
agreed by the Parties.
3. Time of Performance: Consultant shall commence performance of the Agreement
pursuant to the schedule(s) set forth in Exhibit A. All Work shall be performed by no later
than February 28, 2023.
4. Compensation:
A. Amount. Total compensation to Consultant for Work provided pursuant to this
Agreement shall not exceed eighty-two thousand dollars ($82,000.00), plus any
applicable state and local sales taxes. Compensation shall be paid based upon Work
actually performed according to the rate(s) or amounts specified in Exhibit A. The
Consultant agrees that any hourly or flat rate charged by it for its Work shall remain
locked at the negotiated rate(s) unless otherwise agreed to in writing or provided in
Exhibit A. Except as specifically provided herein, the Consultant shall be solely
responsible for payment of any taxes imposed as a result of the performance and
payment of this Agreement.
B. Method of Payment. On a monthly or no less than quarterly basis during any quarter
in which Work is performed, the Consultant shall submit a voucher or invoice in a form
,specified by the City, including a description of what Work has been performed, the
name of the personnel performing such Work, and any hourly labor charge rate for
such personnel. The Consultant shall also submit a final bill upon completion of all
Work. Payment shall be made by the City for Work performed within thirty (30)
calendar days after receipt and approval by the appropriate City representative of the
voucher or invoice. If the Consultant's performance does not meet the requirements
of this Agreement, the Consultant will correct or modify its performance to comply
with the Agreement. The City may withhold payment for work that does not meet the
requirements of this Agreement.
C. Effect of Payment. Payment for any part of the Work shall not constitute a waiver by
the City of any remedies it may have against the Consultant for failure of the
Consultant to perform the Work or for any breach of this Agreement by the
Consultant.
D. Non -Appropriation of Funds. If sufficient funds are not appropriated or allocated for
payment under this Agreement for any future fiscal period, the City shall not be
obligated to make payments for Work or amounts incurred after the end of the
current fiscal period, and this Agreement will terminate upon the completion of all
remaining Work for which funds are allocated. No penalty or expense shall accrue to
the City in the event this provision applies.
S. Termination:
A. The City reserves the right to terminate this Agreement at any time, with or without
cause by giving ten (10) calendar days' notice to the Consultant in writing. In the event
of such termination or suspension, all finished or unfinished documents, data, studies,
worksheets, models and reports, or other material prepared by the Consultant
pursuant to this Agreement shall be submitted to the City, if any are required as part
of the Work.
B. In the eventthis Agreement isterminated bythe City, the Consultant shall be entitled
to payment for all hours worked to the effective date of termination, less all payments
previously made. If the Agreement isterminated by the City after partial performance
of Work for which the agreed compensation is a fixed fee, the City shall pay the
Consultant an equitable share of the fixed fee. This provision shall not prevent the
City from seeking any legal remedies it may have forthe violation or nonperformance
of any of the provisions of this Agreement and such charges due to the City shall be
deducted from the final payment due the Consultant. No payment shall be made by
the City for any expenses incurred or work done following the effective date of
termination unless authorized in advance in writing by the City.
6. Warranties And Right To Use Work Product: Consultant represents and warrants that
Consultant will perform all Work identified in this Agreement in a professional and
workmanlike manner and in accordance with all reasonable and professional standards
and laws. Compliance with professional standards includes, as applicable, performing the
Work in compliance with applicable City standards or guidelines (e.g. design criteria and
Standard Plans for Road, Bridge and Municipal Construction). Professional engineers shall
certify engineering plans, specifications, plats, and reports, as applicable, pursuant to
RCW 18.43.070. Consultant further represents and warrants that all final work product
created for and delivered to the City pursuant to this Agreement shall be the original work
of the Consultant and free from any intellectual property encumbrance which would
restrict the City from using the work product. Consultant grants to the City a non-
exclusive, perpetual right and license to use, reproduce, distribute, adapt, modify, and
display all final work product produced pursuant to this Agreement. The City's or other's
adaptation, modification or use of the final work products other than for the purposes of
this Agreement shall be without liability to the Consultant. The provisions of this section
shall survive the expiration or termination of this Agreement.
7. Record Maintenance: The Consultant shall maintain accounts and records, which
properly reflect all direct and indirect costs expended and Work provided in the
performance of this Agreement and retain such records for as long as may be required by
applicable Washington State records retention laws, but in any event no less than six
years after the termination of this Agreement. The Consultant agrees to provide access
to and copies of any records related to this Agreement as required by the City to audit
expenditures and charges and/or to comply with the Washington State Public Records Act
(Chapter 42.56 RCW). The provisions of this section shall survive the expiration or
termination of this Agreement.
8. Public Records Compliance: To the full extent the City determines necessary to comply
with the Washington State Public Records Act, Consultant shall make a due diligent search
of all records in its possession or control relating to this Agreement and the Work,
including, but not limited to, e-mail, correspondence, notes, saved telephone messages,
recordings, photos, or drawings and provide them to the City for production. In the event
Consultant believes said records need to be protected from disclosure, it may, at
Consultant's own expense, seek judicial protection. Consultant shall indemnify, defend,
and hold harmless the City for all costs, including attorneys' fees, attendant to any claim
or litigation related to a Public Records Act request for which Consultant has responsive
records and for which Consultant has withheld records or information contained therein,
or not provided them to the City in a timely manner. Consultant shall produce for
distribution any and all records responsive to the Public Records Act request in a timely
manner, unless those records are protected by court order. The provisions of this section
shall survive the expiration or termination of this Agreement.
9. Independent Contractor Relationship:
A. The Consultant is retained by the City only for the purposes and to the extent set forth
in this Agreement. The nature of the relationship between the Consultant and the City
during the period of the Work shall be that of an independent contractor, not
employee. The Consultant, not the City, shall have the power to control and direct the
details, manner or means of Work. Specifically, but not by means of limitation, the
Consultant shall have no obligation to work any particular hours or particular
schedule, unless otherwise indicated in the Scope of Work or where scheduling of
attendance or performance is mutually arranged due to the nature of the Work.
Consultant shall retain the right to designate the means of performing the Work
covered by this agreement, and the Consultant shall be entitled to employ other
workers at such compensation and such other conditions as it may deem proper,
provided, however, that any contract so made by the Consultant is to be paid by it
alone, and that employing such workers, it is acting individually and not as an agent
for the City.
B. The City shall not be responsible for withholding or otherwise deducting federal
income tax or Social Security or contributing to the State Industrial Insurance
Program, or otherwise assuming the duties of an employer with respectto Consultant
or any employee of the Consultant.
C. If the Consultant is a sole proprietorship or if this Agreement is with an individual, the
Consultant agrees to notify the City and complete any required form if the Consultant
retired under a State of Washington retirement system and agrees to indemnify any
losses the City may sustain through the Consultant's failure to do so.
10. Hold Harmless: The Consultant agrees to release, indemnify, defend, and hold harmless
the City, elected officials, employees, officers, representatives, and volunteers from any
and all claims, demands, actions, suits, causes of action, arbitrations, mediations,
proceedings, judgments, awards, injuries, damages, liabilities, taxes, losses, fines, fees,
penalties, expenses, attorney's or attorneys' fees, costs, and/or litigation expenses to or
by any and all persons or entities, arising from, resulting from, or related to the negligent
acts, errors or omissions of the Consultant in its performance of this Agreement or a
breach of this Agreement by Consultant, except for that portion of the claims caused by
the City's sole negligence.
Should a court of competent jurisdiction determine that this agreement is subject to RCW
4.24.115, (Validity of agreement to indemnify against liability for negligence relative to
construction, alteration, improvement, etc., of structure or improvement attached to real
estate...) then, in the event of liability for damages arising out of bodily injury to persons
or damages to property caused by or resulting from the concurrent negligence of the
Consultant and the City, its officers, officials, employees and volunteers, Consultant's
liability shall be only to the extent of Consultant's negligence.
It is further specifically and expressly understood that the indemnification provided in
this Agreement constitute Consultant's waiver of immunity under the Industrial
Insurance Act, RCW Title 51, solely for the purposes of this indemnification. The Parties
have mutually negotiated and agreed to this waiver. The provisions of this section shall
survive the expiration or termination of this Agreement.
11. Gifts and Conflicts: The City's Code of Ethics and Washington State law prohibit City
employees from soliciting, accepting, or receiving any gift, gratuity or favor from any
person, firm or corporation involved in a contract or transaction. To ensure compliance
with the City's Code of Ethics and state law, the Consultant shall not give a gift of any kind
to City employees or officials. Consultant also confirms that Consultant does not have a
business interest or a close family relationship with any City officer or employee who was,
is, or will be involved in selecting the Consultant, negotiating or administering this
Agreement, or evaluating the Consultant's performance of the Work.
12. City of Renton Business License: Unless exempted by the Renton Municipal Code, t
Consultant shall obtain a City of Renton Business License prior to performing any Work
and maintain the business license in good standing throughout the term of this
agreement with the City.
Information regarding acquiring a city business license can be found at:
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Information regarding State business licensing requirements can be found at:
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13. Insurance: Consultant shall secure and maintain:
A. Commercial general liability insurance in the minimum amounts of $1,000,000 for
each occurrence/$2,000,000 aggregate for the Term of this Agreement.
B. In the event that Work delivered pursuant to this Agreement either directly or
indirectly involve or require Professional Services, Professional Liability, Errors and
Omissions coverage shall be provided with minimum limits of $1,000,000 per
occurrence. "Professional Services", for the purpose of this section, shall mean any
Work provided by a licensed professional or Work that requires a professional
standard of care.
C. Workers' compensation coverage, as required by the Industrial Insurance laws of the
State of Washington, shall also be secured.
D. Commercial Automobile Liability for owned, leased, hired or non -owned, leased, hired
or non -owned, with minimum limits of $1,000,000 per occurrence combined single
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limit, if there will be any use of Consultant's vehicles on the City's Premises by or on
behalf of the City, beyond normal commutes.
E. Consultant shall name the City as an Additional Insured on its commercial general
liability policy on a non-contributory primary basis. The City's insurance policies shall
not be a source for payment of any Consultant liability, nor shall the maintenance of
any insurance required by this Agreement be construed to limit the liability of
Consultant to the coverage provided by such insurance or otherwise limit the City's
recourse to any remedy available at law or in equity.
F. Subject to the City's review and acceptance, a certificate of insurance showing the
proper endorsements, shall be delivered to the City before performing the Work.
G. Consultant shall provide the City with written notice of any policy cancellation, within
two (2) business days of their receipt of such notice.
14. Delays: Consultant is not responsible for delays caused by factors beyond the
Consultant's reasonable control. When such delays beyond the Consultant's reasonable
control occur, the City agrees the Consultant is not responsible for damages, nor shall the
Consultant be deemed to be in default of the Agreement.
15. Successors and Assigns: Neither the City nor the Consultant shall assign, transfer or
encumber any rights, duties or interests accruing from this Agreement without the
written consent of the other.
16. Notices: Any notice required under this Agreement will be in writing, addressed to the
appropriate party at the address which appears below (as modified in writing from time
to time by such party), and given personally, by registered or certified mail, return receipt
requested, byfacsimile or by nationally recognized overnight courier service. Time period
for notices shall be deemed to have commenced upon the date of receipt, EXCEPT
facsimile delivery will be deemed to have commenced on the first business day following
transmission. Email and telephone may be used for purposes of administering the
Agreement, but should not be used to give any formal notice required by the Agreement.
CITY OF RENTON
Hannah Bahnmiller
1055 South Grady Way
Renton, WA 98057
Phone: (425) 430-7262
hbahnmiller@rentonwa.govCfick
eater text...
CONSULTANT
David Rosen
3527 Mt. Diablo Blvd., #361
Lafayette, CA 94549
Phone: (501) 451-2552
here to david@draconsultants.com
Fax: (510) 451-2554
17. Discrimination Prohibited: Except to the extent permitted by a bona fide occupational
qualification, the Consultant agrees as follows:
A. Consultant, and Consultant's agents, employees, representatives, and volunteers
with regard to the Work performed or to be performed under this Agreement, shall
not discriminate on the basis of race, color, sex, religion, nationality, creed, marital
status, sexual orientation or preference, age (except minimum age and retirement
provisions), honorably discharged veteran or military status, or the presence of any
sensory, mental or physical handicap, unless based upon a bona fide occupational
qualification in relationship to hiring and employment, in employment or application
for employment, the administration of the delivery of Work or any other benefits
under this Agreement, or procurement of materials or supplies.
B. The Consultant will take affirmative action to insure that applicants are employed and
that employees are treated during employment without regard to their race, creed,
color, national origin, sex, age, sexual orientation, physical, sensory or mental
handicaps, or marital status. Such action shall include, but not be limited to the
following employment, upgrading, demotion or transfer, recruitment or recruitment
advertising, layoff or termination, rates of pay or other forms of compensation and
selection for training.
C. If the Consultant fails to comply with any of this Agreement's non-discrimination
provisions, the City shall have the right, at its option, to cancel the Agreement in
whole or in part.
D. The Consultant is responsible to be aware of and in compliance with all federal, state
and local laws and regulations that may affect the satisfactory completion of the
project, which includes but is not limited to fair labor laws, worker's compensation,
and Title VI of the Federal Civil Rights Act of 1964, and will comply with City of Renton
Council Resolution Number 4085.
18. Miscellaneous: The parties hereby acknowledge:
A. The City is not responsible to train or provide training for Consultant.
B. Consultant will not be reimbursed for job related expenses except to the extent
specifically agreed within the attached exhibits.
C. Consultant shall furnish all tools and/or materials necessary to perform the Work
except to the extent specifically agreed within the attached exhibits.
D. In the event special training, licensing, or certification is required for Consultant to
provide Work he/she will acquire or maintain such at his/her own expense and, if
Consultant employs, sub -contracts, or otherwise assigns the responsibiIityto perform
the Work, said employee/sub-contractor/assignee will acquire and or maintain such
training, licensing, or certification.
E. This is a non-exclusive agreement and Consultant is free to provide his/her Work to
other entities, so long as there is no interruption or interference with the provision of
Work called for in this Agreement.
F. Consultant is responsible for his/her own insurance, including, but not limited to
health insurance.
G. Consultant is responsible for his/her own Worker's Compensation coverage as well as
that for any persons employed by the Consultant.
19. Other Provisions:
A. Approval Authority. Each individual executing this Agreement on behalf of the City
and Consultant represents and warrants that such individuals are duly authorized to
execute and deliver this Agreement on behalf of the City or Consultant.
B. General Administration and Manamgement. The City's project manager is Hannah
Bahnmiller. In providing Work, Consultant shall coordinate with the City's contract
manager or his/her designee.
C. Amendment and Modification. This Agreement may be amended only by an
instrument in writing, duly executed by both Parties.
D. Conflicts. In the event of any inconsistencies between Consultant proposals and this
Agreement, the terms of this Agreement shall prevail. Any exhibits/attachments to
this Agreement are incorporated by reference only to the extent of the purpose for
which they are referenced within this Agreement. To the extent a Consultant
prepared exhibit conflicts with the terms in the body of this Agreement or contains
terms that are extraneous to the purpose for which it is referenced, the terms in the
body of this Agreement shall prevail and the extraneous terms shall not be
incorporated herein.
E. Governing Law. This Agreement shall be made in and shall be governed by and
interpreted in accordance with the laws of the State of Washington and the City of
Renton. Consultant and all of the Consultant's employees shall perform the Work in
accordance with all applicable federal, state, county and city laws, codes and
ordinances.
F. Joint Drafting Effort. This Agreement shall be considered for all purposes as prepared
by the joint efforts of the Parties and shall not be construed against one party or the
other as a result of the preparation, substitution, submission or other event of
negotiation, drafting or execution.
G. Jurisdiction and Venue. Any lawsuit or legal action brought by any party to enforce or
interpret this Agreement or any of its terms or covenants shall be brought in the King
County Superior Court for the State of Washington at the Maleng Regional Justice
Center in Kent, King County, Washington, or its replacement or successor. Consultant
hereby expressly consents to the personal and exclusive jurisdiction and venue of
such court even if Consultant is a foreign corporation not registered with the State of
Washington.
H. Severability. A court of competent jurisdiction's determination that any provision or
part of this Agreement is illegal or unenforceable shall not cancel or invalidate the
remainder of this Agreement, which shall remain in full force and effect.
I. Sole and Entire Agreement. This Agreement contains the entire agreement of the
Parties and any representations or understandings, whether oral or written, not
incorporated are excluded.
J. Time is of the Essence. Time is of the essence of this Agreement and each and all of
its provisions in which performance is a factor. Adherence to completion dates set
forth in the description of the Work is essential to the Consultant's performance of
this Agreement.
K. Third -Party Beneficiaries. Nothing in this Agreement is intended to, nor shall be
construed to give any rights or benefits in the Agreement to anyone other than the
Parties, and all duties and responsibilities undertaken pursuant to this Agreement will
be for the sole and exclusive benefit of the Parties and no one else.
L. Binding Effect. The Parties each bind themselves, their partners, successors, assigns,
and legal representatives to the other party to this Agreement, and to the partners,
successors, assigns, and legal representatives of such other party with respect to all
covenants of the Agreement.
M. Waivers. All waivers shall be in writing and signed by the waiving party. Either party's
failure to enforce any provision of this Agreement shall not be a waiver and shall not
prevent either the City or Consultant from enforcing that provision or any other
provision of this Agreement in the future. Waiver of breach of any provision of this
Agreement shall not be deemed to be a waiver of any prior or subsequent breach
unless it is expressly waived in writing.
N. Counterparts. The Parties may execute this Agreement in any number of
counterparts, each of which shall constitute an original, and all of which will together
constitute this one Agreement.
IN WITNESS WHEREOF, the Parties have voluntarily entered into this Agreement as of the date
last signed by the Parties below.
CITY OF RENTON
By:_
Armondo Pavone
Mayor
09/07/2022
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Date
Attest
Jason A. Seth
City Clerk
Approved as to Legal Form
CONSULTANT
By: (approved by Patrice Kent via email on 8/16/2022)
Shane Maloney
City Attorney
Contract Template Updated 5/21/2021
Exhibit A
City of Renton Affordable Housing Nexus Study
Scope of Services
BACKGROUND:
Housing prices and rents have risen significantly in the City of Renton. The City desires to
increase local funding for affordable housing production to improve access to such units
for low- and moderate -income workers and residents in Renton. As one important
affordable housing revenue tool available to local governments, the City is exploring the
potential use of fees imposed on new residential and/or non-residential development in
the City related to the nexus, or linkage, of such development with impacts to need for
affordable housing ("nexus fees" or "linkage fees"). Such fees are permissible under RCW
36.70A.600, the Growth Management Act ("GMA") or other regulation so long as there is
an "essential nexus" and the fees are "roughly proportional" to the impacts.
Washington Department of Commerce interagency agreement for Housing Action Plan
Implementation ("HAPI", CAG 22-043) provides support for the City to "evaluate use of
linkage fees to generate revenue for affordable housing".
City Council must have adequate information to evaluate the use of linkage or nexus fees,
including the justification, feasibility, and potential revenue generation from such fees.
Therefore, the City sought a firm with experience to quantify the impact of residential and
non-residential development on the need for affordable housing in the City, determine the
maximum linkage fees to mitigate those impacts, and make related policy
recommendations.
SELECTED VENDOR:
DRA has developed nexus fee and inclusionary housing programs, and conducted the
associated economic analyses, for more than 60 jurisdictions throughout the United States
over more than 35 years of practice. DRA has also served as expert witness in cases
presenting challenges to development impact/nexus fees, including the City of Seattle. In
determining a legally justifiable fee amount, DRA uses a conservative approach that
understates the number of low- and moderate -income households and mitigation fee
amounts.
SCOPE OF WORK - OUTLINE:
DRA's proposed approach and scope of work, detailed below, is designed be cost effective
while providing the high level of rigor needed to support the development and imposition
of nexus fees to support affordable housing.
City of Renton Affordable Housing Nexus Study Scope of Work
DRA will work closely with City staff, including the City Attorney, to ensure the City is
satisfied that the proposed methodology meets all legal requirements and is consistent
with current best practices in the industry. DRA's general approach is as follows:
1. Develop residential and non-residential prototypes to be used in the nexus analysis,
financial feasibility analysis, and gap analysis, as applicable;
2. Conduct residential and non-residential nexus analyses to estimate the number of
affordable housing units, by income level, necessary to mitigate the impact of new
market -rate residential and non-residential development on the need for
affordable housing in the City of Renton;
3. Estimate the subsidy requirements, or affordability gap, required to construct the
required new affordable housing units, renter and owner;
4. Calculate the justifiable nexus fee required to fill the affordability gaps and mitigate
the impact of new residential and non-residential development on the need for
affordable housing in Renton;
5. Evaluate the potential impact of a nexus fee, at alternative fee levels, on the
financial feasibility of new residential and non-residential development in the City;
6. Estimate the revenue potential to the City at alternative fee levels; and
7. Provide policy recommendations regarding the potential implementation of
residential and/or non-residential nexus fees.
Scope of Work
Task 1: Project Initiation
DRA will convene a kick-off teleconference with City staff to review and refine the
proposed methodology, scope of work, and project schedule, as well as review key issues
and assumptions for the analysis. In particular, DRA and City staff will discuss the
residential and non-residential prototypes to be used in the nexus, define the financial
feasibility and gap analysis, confirm the income categories to be analyzed, and review
other key assumptions for the analysis.
Prior to the kick-off teleconference, DRA will provide staff with a list of requested documents,
ordinances, policies and other materials relevant to the assignment. DRA will prepare an
agenda, a list of additional information needed (if any), prototype templates for residential and
non-residential uses, and other exhibits for review at the kick-off meeting.
City of Renton Affordable Housing Nexus Study Scope of Work
Deliverable: Memorandum summarizing discussion and decisions made at the kick-off
meeting/teleconference regarding the study methodology, residential and non-residential
prototypes, and key nexus study assumptions.
Task 2: Develop Residential and Non -Residential Development Prototypes
DRA proposes using the same set of residential and non-residential development
prototypes for the nexus impact calculations, the financial feasibility analysis, and the
affordability gap analysis, as applicable.
The prototypes are used in the nexus analysis in Tasks 3 and 4 to document the differential
employment and affordable housing demand impacts based on variations in key factors
such as housing prices and rents for the residential nexus, and non-residential employment
densities and occupational/wage profiles for the non-residential uses. For the nexus
analysis, the key assumptions for the residential prototypes are unit bedroom count
distribution, unit sizes (square feet) and price, and for the non-residential prototypes
building square feet and land use.
The prototypes will also be used in the financial feasibility analysis in Task 6. For the
feasibility analysis, it is useful to describe the prototypes in more detail, including density,
unit bedroom count, building stories, parking requirements and type of building and
parking construction (e.g., Type V wood frame, Type II modified, Type 1 highrise; parking at
grade, below grade, structured above grade, under podium) for the residential prototypes
and construction type and FAR for the non-residential prototypes. This detail improves the
accuracy of the development cost estimates, since hard construction costs vary widely
depending upon type of construction, materials, finishes and other factors.
DRA's budget assumes creating up to five owner and renter residential prototypes and six non-
residential land uses. The residential prototypes may include, for example, single-family homes,
owner townhomes and/or condominiums, and rental apartments at several densities and
construction types. Non-residential land uses may include retail/commercial, office, hotel,
R&D, industrial, warehouse. DRA will work with City staff during the kick-off
meeting/teleconference to identify the prototypes and land uses most appropriate for the
Renton market.
Deliverable: Memorandum documenting the draft residential and non-residential
prototypes to be used in the nexus, feasibility and gap analysis. Following staff review, DRA
will incorporate any revisions to the prototypes and will provide a memo with the final
prototypes to be used in the analysis.
Task 3: Residential Nexus Analysis
This task estimates of the number of affordable housing units by income level necessary to
mitigate the impact of new market -rate residential development on the need for
City of Renton Affordable Housing Nexus Study Scope of Work
affordable housing in Renton. Based on DRA's methodology described below, the quantified
employment and housing demand impacts will vary by the household income of the new
market -rate tenants and homebuyers, to be reflected in the range of housing prototypes.
The analytic steps for the nexus analysis are as follows:
1. Estimate the average rent by unit bedroom count for the rental housing prototypes
based on analysis of current rent data from REALFACTS, on-line sources such as
Rentcafe.com, Rentjungle.com and a survey of selected comparable market -rate
rental developments;
2. Estimate the average sales price by unit bedroom count for the owner housing
prototypes, based on new home sales price data from Dataquick, CoreLogic, Zillow
and a survey of selected comparable properties currently selling in the market;
3. Estimate the total household income of new renters and homebuyers in each
housing prototype, based on typical rent to income ratios and homebuyer
underwriting standards;
4. Estimate the total disposable household income of the new renters and
homebuyers occupying each housing prototype after adjusting for Federal and
State income taxes, Social Security and Medicare (FICA) taxes, and personal savings
based on data from the Tax Policy Center;
5. Using the total disposable household income of each prototype as the input,
employ the IMPLAN model for King County to estimate the number of employees by
industry category generated by the additional household expenditures from each
prototype;
6. Estimate the number of new households represented bythe number of new employees;
and
7. Estimate the number of new employee households meeting very low-, low- and
moderate -income limits, adjusted for household size, based on current income
limits for the City of Renton.
The result of these steps is the estimated number of households by prototype living in the
City and qualifying as low and moderate income based on new market -rate residential
development in the City.
,Deliverable: Residential Nexus chapter of the Administrative Review Draft Report.
Task 4: Non -Residential Nexus Analysis
City of Renton Affordable Housing Nexus Study Scope of Work
In this task, DRA will estimate the demand for affordable housing associated with non-
residential development in Renton. Using DRA's methodology described below, the
quantified employment and housing demand impacts will vary depending upon the
employment densities and occupation/wage profiles of alternative non-residential land
uses.
The non-residential impact methodology employs the following steps:
1. Estimate total new employees in prototype buildings;
2. Estimate new employees living in the City;
3. Adjust for the potential future increase in labor force participation, as appropriate;
4. Adjust from employees to employee households;
5. Distribute employee households by occupation for each prototype;
6. Estimate wages by occupation; and
7. Estimate very low- and low-income households.
The result of these steps is the estimated number of households by prototype living in the
City and qualifying as low and moderate income based on new non-residential
development in the City.
Deliverable: Non -Residential Nexus chapter of the Administrative Review Draft Report.
Task 5: Affordability Gap Analysis and Nexus Fee Calculation
The nexus analysis estimates the number of affordable housing units by income level
necessary to mitigate the impact of new market -rate residential and non-residential
development in Renton. The affordability gap determines the subsidy required to produce
those new affordable units and the resulting nexus fees needed to fill the gaps.
The affordability gap can be calculated from the cost to develop each of the prototypes in
the nexus analysis to determine the nexus fee associated with producing affordable
housing units that are identical to the market -rate units. In actual practice, nexus fees are
often used to fund affordable housing using the type of construction that is most cost
effective given local market conditions and land prices. This type of construction will vary
based on market and economic conditions and zoning across the City, but in many areas
the most cost-effective means of producing new affordable rental units is new low- or mid -
rise apartments. This type of development has lower per unit land costs than lower density
construction but does not incur the high hard construction costs of high -density buildings.
City of Renton Affordable Housing Nexus Study Scope of Work
New affordable ownership units are usually smaller and more modest than higher -end
single-family or luxury condominium units. During the kick-off meeting, as described above,
DRA will collaborate with City staff to identify the appropriate housing prototypes to be used
in the gap analysis to determine justifiable nexus fees.
The following describes the steps in DRA's affordability gap analysis methodology:
1. Calculate the amount a tenant and homebuyer at very low-, low- and moderate -income
levels can afford to contribute to the cost of renting or owning a dwelling unit. DRA
will workwith City staff to define affordable housing expense for owners and renters
for up to four income levels for this analysis. Affordable housing expense will be
defined as a percentage of income spent on housing. For renters, affordable housing
expense includes rent plus utilities. For owners, affordable housing expense typically
includes mortgage principal and interest, property taxes/assessments, insurance, and
homeowner association dues.
2. Calculate the affordable home price supported by affordable housing expense at
each income level and family size, based on the affordable mortgage payment and
assumed financing terms reflecting current anticipated financial market conditions.
The affordable home price includes the affordable mortgage plus an assumed
downpayment.
3. Estimate the cost to purchase or develop ownership and rental units that would be
subsidized using the nexus fee.
4. Calculate the per unit affordable housing gap for renters and owners to be used in
determining the nexus fee.
5. Apply the per unit housing affordability gap for renters and owners to the number
of affordable units required to mitigate the impact of new market -rate residential
and non- residential development by prototype to determine the total mitigation
cost associated with each prototype.
6. Express the mitigation cost, or nexus fee, per residential unit and per net building
square foot.
Deliverable: Affordability Gap Analysis and Nexus Fee Calculation chapter of the
Administrative Review Draft Report.
Task 6: Financial Feasibility Analysis
DRA will evaluate the impact of alternative levels of potential nexus fees on the feasibility of
prototypical residential and non-residential development using both Return on Equity
(ROE) and Residual Land Value (RLV) analysis approaches. The return on equity approach
City of Renton Affordable Housing Nexus Study Scope of Work
calculates the value of a development based on its stabilized income potential and subtracts
the costs of development (including land) to determine the net value of the investment, or
developer/investor profit. Under the ROE approach, the financial feasibility of the
prototypes is measured by the rate of the return on equity that the resulting net investment
value (or profit) represents. Land costs are held fixed at an estimated market land price
and the economic impact of the fee is shown as a change in the dollar amount of the net
value of investment in the prototype and as a change in the ROE.
Land residual analysis methodology calculates the value of a development based on its
income potential and subtracts the costs of development (excluding land but including an
assumed return on equity), to yield the underlying value of the land. When evaluating
alternative land uses, the alternative that generates the highest value to a site is considered
its highest and best use. An alternative that generates a value to the land that is negative,
or well below market land sales prices, is financially infeasible.
Both the ROE and RLV analyses calculate the value of rental prototypes at a point in time
by capitalizing the stabilized net operating income of the prototype, using current
capitalization rates appropriate to the market area. We believe these are the most
appropriate approaches for this level of financial impact analysis. These approaches allow
some degree of timing (in terms of development and stabilization period) to be
incorporated into the analysis, without requiring the specificity of assumptions and
complexity associated with dynamic financial models, such as internal rate of return (IRR)
analysis. DRA will test the sensitivity of the model to different levels of project risk and
changing market conditions by varying the capitalization rate to reflect different historical
levels.
DRA will estimate market rents and operating costs for rental housing and non-residential
uses, as well as sales prices for the owner units, based on a review of market data. We will
estimate the costs of developing each prototype, including land, site improvement, building
and parking, construction, and soft costs, based on a review of available pro formas,
published data, and interviews with local contractors and developers as appropriate.
If DRA determines in conjunction with City staff that there are wide variation in home
prices, rents and/or development costs for certain residential prototypes or nonresidential
land uses across the City's geography, DRA can, with an adjustment to the scope and
budget, conduct the financial feasibility analysis under "low," "middle" and "high"
cost/price scenarios for each prototype (as applicable to that prototype) reflecting the
variation in land prices, home prices and rents for similar products in different market
areas within Renton.
The financial feasibility of each prototype will be evaluated assuming no nexus fees, and
then with up to three alternative levels of nexus fees to evaluate the impact of potential
fees on development financial feasibility.
Based on readily available data on recent development trends and/or estimates of future
City of Renton Affordable Housing Nexus Study Scope of Work
growth, DRA will project the nexus fee revenue generation potential of up to three
alternative levels of nexus fees.
Task 7: Policy Recommendations
Based on the above analyses, DRA will make affordable housing linkage fee policy
recommendations on topics that include, but are not limited to, the following:
• Does the City desire to provide incentives for building housing in lieu of paying the
fee, particularly for a residential linkage fee? If so, we will discuss with the City
incentives, such as density bonuses and parking reductions, that might be offered
to encourage development of on -site affordable housing units;
• Whether to assess the same or different linkage fees for sub -categories of non-
residential development (i.e., office, retail, industrial). DRA will review the range of
justifiable nexus fees by land use from the non-residential nexus analysis and
discuss trade-offs of different approaches, such as simplicity of administration,
versus revenue generation potential, versus differential economic impact;
• Thresholds and/or exemptions for application of the fee, such as square footage or
unit minimums, and potential consequences of thresholds and exemptions on
developer behavior and legal issues;
• Pros and cons of options for payment of fees in lump sum versus installments at
various points in the development process. This will include an assessment of the
trade-offs and impact of alternative fee payments schedules on the ability to raise
funds and on the feasibility of development.
• Whether to assess uniform fees citywide or to vary fees by submarket area,
• Other potential variations in fees (e.g., single-family versus multi -family, high-rise
versus low-rise, structured parking vs. surface parking, etc.)
• Effective date of the fee increase and thresholds for being grandfathered (e.g.,
application deemed complete)
DRA proposes to discuss these issues with City staff at the kick-off teleconference and over the
course of the study and will provide written recommendations to be included in the draft
reports, or separately in a memorandum.
,Deliverable: Memorandum or report section summarizing DRA's conclusions and
recommendations regarding the use of linkage fees.
City of Renton Affordable Housing Nexus Study Scope of Work
Task 8: Draft and Final Reports and Meetings
DRA will prepare an Administrative Review Draft Report (ARD), describing the
methodology, assumptions and findings of Tasks 2 through 7. Detailed analyses and tables
will be provided in the Appendices. DRA will submit two electronic versions of the
Administrative Review Draft Report (in Word and pdf formats).
DRA will incorporate one round of written comments compiled by City staff and will
produce a Final Report. In order to maintain the proposed schedule for completion, DRA
will consider written comments from staff received within 10 working days of receipt of the
ARD—
DRA will submit one copy of the Final Report in pdf format.
The proposed budget includes DRA's attendance at one virtual kick-off meeting and
participation in periodic teleconferences as necessary to complete the scope of work.
Attendance at on -site meetings, if requested, will be provided on a time and expense basis
as approved in writing in advance by the City, if deemed mutually safe for public health
purposes.
Deliverables: ARD and Final Report.
City of Renton Affordable Housing Nexus Study Scope of Work
Budget and Payment Schedule
DRA will complete the Affordable Housing Nexus Study scope of work for a fixed -price
fee per task, summarized below, with payment due according to the Agreement. The total
fixed fee budget of $81,375 includes DRA attendance at one virtual kick-off meeting and
periodic teleconferences as necessary to complete the scope of work.
DRA's hourly rates are shown in Attachment A.
Estimated
Task
Completion
No.
Task
Deliverable
Payment
from Start
�
�
Date'
1
Project Initiation
Memo
$7,875
=2W eeks
2
Prototypes
Memo
$7,875
6 Weeks
3
Residential Nexus
ARD Report Section
$12,600
10 Weeks
4
Non -Residential Nexus
ARD Report Section
$12,600
12 Weeks
5
Affordability Gap
ARD Report Section
$13,650
15 Weeks
_.....
6
� �......... _
Financial Feasibility Analysis
,..
ARD Report Section
_�.
$15,750
15 Weeks
7
Policy Recommendations
Memo or ARD Report
$6,825
17 Weeks
.....
Section
....... ......
8a
ARD Report
$2,625
17 Weeks
8b
......
Final Report
$1,575
20 Weeks
Grand Total
$81,375
'Start Date will be the date DRA receives a written notice to proceed (email acceptable) following execution of the
contract.
City of Renton Affordable Housing Nexus Study Budget and Project Schedule
Attachment A
2022 Professional Fee and Expense Reimbursement Schedule
Principal 1 $375
Principal II $345
Senior Associate $325
Associate $290
Research Associate 1 $260
Research Associate II $255
Data Entry, Word Processing, Administrative $125
Assistance and Accounting
Attachment A: David Paul Rosen & Associates Payment Schedule