ALRIGHT GOOD AFTERNOON HOW CALL
THISHEARING OF THE SELECT
COMMITTEE ON HOUSING
AFFORDABILITY FOR THE MIDDLE AND
WORKING CLASS TO ORDER --
GOOD AFTERNOON EVERYONE AND
WELCOME TO THE THIRD HEARING OF
THE SELECT COMMITTEE.
I WANT TO START WITH AN ELECTRIC
COMMENTS --
AS HOUSING PRICES CONTINUE TO
RISE IN CALIFORNIA IT IS
IMPORTANT FOR THOSE OF US IN THE
STATE LEGISLATURE. TO UNDERSTAND
WHAT CONTRIBUTES AT INCENTIVIZE
CONTRIBUTES TO INCENTIVIZE
HOUSING PRODUCTION IN THE STATE
AND WHAT WE MUST CONSIDER WHEN
VOTING ON LEGISLATION HERE IN
THE CAPITAL.
OTHER DIFFERENT FACETS OF
HOUSING FOR THE REGION HOUSING
NEEDS ASSESSMENT ALLOCATION TO
THE FINANCING OF HOUSING
PROJECTS.
AYE IN TODAY'S HEARING WE WILL
FOCUS ON UNDERSTANDING HOW
PERFORMERS OF MIDDLE INCOME
HOUSING DEVELOPMENTS ARE
ASSEMBLED AND CONSIDERED WHEN
BUILDING.
MARKET RATE UNITS --
OUR PANELISTS WALKS THROUGH A
NUMBER OF PERFORMANCE THE ALLEN
COSTS AND REVENUE PRODUCTIONS
FOR FOUR TYPES DEVELOPMENT
SPECIFICALLY IN THE COASTAL
GREEN FELT REDEVELOPMENT.
AND TRADITIONAL INFILL ZONES OF
FOLLOWING THOSE VISITATIONS WITH
AN OPPORTUNITY TO ENGAGE IN THE
IN DEPTH DISCUSSION ON THE
FACTORS AND VARIABLES THAT
IMPACT THESE PERFORMERS.
IT FINALLY WILL HAVE AN
OPPORTUNITY FOR QUESTIONS AND
ANSWERS AS WELL AS FOR PUBLIC
COMMENT.
A BEFORE I GO ANY FURTHER I
WANTED TO KNOW THE KNOWLEDGE AND
APPRECIATE THE CHAIR OF THE
STANDING COMMITTEE ON HOUSING
THE ASSEMBLY MEMBER DAVID CHIU.
OF WHO I KNOW WILL BE WATCHING
THIS ON TAPE LATER --
IN THE DAY --
AS WELL AS THE MEMBERS OF THE
COMMITTEE WILL BE COMING.
OF OUR PANELISTS --
THE FOR THOSE OF WHO ARE
WATCHING TELEVISION ARE FLOOR
SESSION WHEN A LITTLE LONG THAT
ACQUIRED MORE INDULGENCE ON EACH
THESE PEOPLE PANELISTS AS MORE
INDULGENCE ON EACH OF YOU --
AND I APPRECIATE THAT SHOWS IT
NOT SHOWS WERE ALREADY KNOW
WHICH IS YOUR COMMITMENT TO THIS
ISSUE NOTHING TO FIND SOLUTIONS
HER IN THE CAPITAL SO --
WITH US WILL DIVE RIGHT AND IF
IT'S ACCEPTABLE TO ALL --
WE HAVE PRESENTATION OF NUMBER
PRESENTERS I WANT TO INTRODUCE
FOR THE RECORD A DAY SANSOM CEO
OF DEBT OVER HOMES A JOHN NORMAN
VICE PRESIDENT OF BROOKFIELD
RESIDENTIAL.
ACROSS AUSTIN MANAGING PRINCIPAL
A DP FG IDEA DONE MEYER OF
PRESIDENT AND CEO OF THE
CALIFORNIA BUILDING INDUSTRY
ASSOCIATION AND EILEEN REYNOLDS
VICE PRESIDENT OF GOVERNOR FAIRS
AT TEJON RANCH.
TAKE HOME RANGE.
YOU THINK I WOULD GET THAT RIGHT.
A LONG DAY ALREADY.
I WOULD THE FURTHER DO WILL MOVE
TO OUR FIRST UP PANEL.
PLEASE FLOOR IS YOURS
PANEL THAT
WE HAVE FOR YOU TODAY WILL WILL
BE ABLE TO TELL YOU.
ABOUT HOW DIFFICULT IT IS TO TO
BUILD SOMETHING IN CALIFORNIA
AND HOW EXPENSIVE IT IS.
NIGHT TIME I'M ALSO SITTING HERE
AS A FORMER CHAIRMAN OF CB I A I
WAS THE CHAIR INTO --
TWENTY FIFTEEN AND WE REMAIN
VERY ACTIVE IN THE ORGANIZATION.
SO WITHOUT FURTHER ADO ON MY
PURPOSE HERE IS TO INTRODUCE AYE
THE PANEL AND THE FIRST FEW
SLIDES THAT WE HAVE IN OUR POWER
POINT PRESENTATION.
SO I AM.
I WILL START WITH THAT AND WE
ARE GOING TO KICK IT OVER.
TO HERE THE OVERVIEW OF THE
WORKSHOP OUR GOAL THAT A IN THIS
IS THAT THE COMMITTEES THAT THE
COMMITTEE'S GOAL IS WHAT WE
UNDERSTAND IS TO PROVIDE A
CANDID SNAPSHOT.
OF THE DECISION MAKING PROCESS
REGARDING HOMEBUILDING IN
CALIFORNIA.
HOW TO BUILDERS DECIDE WHERE TO
BUILD YOU KNOW WHAT HURDLES TO
ENCOUNTER WHEN THEY'RE DOING IT?
AND WHY DON'T THEY BUILD MORE.
I FOR ONE THAT TONE RANCH WE
HAVE THE POTENTIAL TO BUILD
THIRTY FOUR THOUSAND UNIT
SOMEDAY I BUT THERE ARE MAJOR
CHALLENGES OF THAT.
I AM.
THE WORKSHOP OVER YOU CONTINUES
WE'RE GONNA HAVE HOMEBUILDING
ONE OH ONE PRESENTED BY LAME ARE
SO TO MY LEFT.
AN OVERVIEW OVERVIEW OF THE
DECISION MAKING PROCESS WHEN IT
COMES TO BUILDING HOMES IN
CALIFORNIA.
ALL THE FACTORS THAT INFLUENCE
HOMEBUILDERS CHIP DECISIONS
ABOUT WHAT TO DO EXPLANATION AN
ILLUSTRATION OF WHAT A PRO FORMA
IS AND THAT'S WHAT THE GETTING
INTO THE WEEDS IS THAT'S THE
BUDGETING PROCESS AND HOW YOU
FIGURE OUT.
HOW MUCH YOU'RE GONNA HAVE TO
PAY FOR LAWSUITS AND FEES AND A
WHOLE BUNCH OF THINGS THAT GET
THROWN OUT A PROJECT?
ABROAD LOOK AT FOR HYPOTHETICAL
HOUSING PROJECTS COASTAL
GREENFIELD REDEVELOPMENT INFILL
AND INFILL EXTENSIVELY.
AT THE CONCLUSION WILL DISCUSS
ALSO FOR THE SUCCESSFUL
DEVELOPMENT AND THEN IT'LL BE
TIME FOR Q. AND A SO WITHOUT
FURTHER ADO I AM FIRST I WILL
YOU ALREADY PRETTY MUCH
INTRODUCE OUR PANEL BUT I THINK
I SHOULD.
SHOW YOU WHO WHICH ONE IS WHICH
SO THIS IS LAME ARE SO RIGHT
HERE HE IS TO MY LEFT HE IS THE
HE HAS THE NORTHERN CALIFORNIA
DIVISION PRESIDENT OF SHEA HOMES.
HE'S ALSO A FORMER CHAIR OF CBI
A AYE FROM TWO THOUSAND SIX HE
SHE HOMES BUILT FOURTEEN HUNDRED
AND FIFTY TWO HOMES IN
CALIFORNIA LAST YEAR.
AND THE NEXT PERSON IN LINE WILL
BE DAVE SANSON DAVIS THE CEO OF
THE NOVA HOMES --
HITS IN NORTHERN CALIFORNIA HOME
BUILDER HE'S VICE CHAIRMAN
CURRENTLY OF CTIA SO HE'LL BE
OUR CHAIRMAN NEXT YEAR OF OUR
BOARD.
I'M TO NOVA HOMES BUILT THREE
HUNDRED SEVENTEEN HOMES IN
CALIFORNIA AND TWENTY SEVENTEEN
BEHIND US.
CHRIS AUSTIN HERE EYES BEHIND ME
HE'S THE MANAGING PRINCIPAL OF
THE SACRAMENTO IN CALIFORNIA
OFFICE OF OF THE DP FG SO HE'S
CONSULTED ON A VARIETY OF
PROJECTS OVER TO ENTER PROJECTS
AND HE'S IT FOR HIM.
AND THEN INVOLVED IN FINANCING
AT LEAST EIGHT HUNDRED MILLION
DOLLARS WORTH OF HOUSING
PROJECTS AND FINALLY --
I THAT IS IT NOW I GET TO KICK
IT OVER TO LANE SO LAME IS GOING
TO GIVE YOU.
THE FACETS OF HOMEBUILDING.
THANK YOU MY APOLOGIES FOR
THINGS COULD HAVE YOUR NAME I
DOES HAVE ONE BIT OF AMERICA NO
NO NO PROBLEM.
THANK YOU EILEEN AND THANK YOU
CHAIRMAN GLORIA --
FOR HAVING US HERE TODAY.
OF BEFORE WE DIVE INTO THE FOUR
DIFFERENT EXAMPLES OF THAT WE
WANT TO SHOW TODAY.
I THOUGHT I WOULD FIRST CUTTING
A LITTLE CONTEXT OF OUR BUSINESS
AND HOW --
WORRIED YOU KNOW MEMBERS WITHIN
THE INDUSTRY SOMETIMES TAKE ON
ALL THE DISCIPLINE --
DISCIPLINES THAT COME WITH LAND
DEVELOPMENT ENTITLEMENTS AND
HOMEBUILDING AND SOME GET IF IF
KINDA PARTITIONS.
AND WHEN I MOVE A PARTITION IS
YOU COULD HAVE A PARTICULAR --
LAND DEVELOPER THAT MIGHT FOCUS
ON ACQUISITION JUST THROUGH THE
ENTITLEMENT PROCESS AND SO.
THEY ARE DEALING WITH --
LOOKING AT LAND THEY'RE DEALING
WITH THE ENTITLEMENT PROCESS
SEEN THROUGH A CITY OR A COUNTY.
THEY'RE DEALING WITH REGULATORY
AGENCIES AND THEY'RE WORKING
ULTIMATELY TO A POINT OF GETTING
TO WHAT WE REFER TO AS A
TENTATIVE MAP.
AND AT THAT POINT --
THE PROJECT COULD POTENTIALLY BE
BE SOLD TO ANOTHER --
DEVELOPER --
THAT WOULD THEN TAKE IT FROM
THAT POINT FOR WHICH WOULD BE
SOMEONE THAT WAS BEING AT DOING
THE PHYSICAL DEVELOPMENT OF THE
LAND WERE YOU DOING THE A
GRADING.
YOUR ALSO TAKEN FROM ATTENDED A
MAP TO A FINAL MAP YOU'RE DOING
MORE SPECIFICS ABOUT EXACTLY HOW
THE HOMES ARE GONNA LAY OUT.
YOU'RE DEALING WITH ST LAYOUTS
YOU'RE DEALING WITH SEWER WATER
AND YOU'RE ACTUALLY DOING THOSE
PHYSICAL IMPROVEMENTS ALL TO
REALLY GET THE DEVELOPMENT TO A
POINT OF HAVING FINISHED LOTS.
AT THE POINT OF HAVING FINISHED
LOTS YOU COULD BE A DEVELOPER
THAT WOULD THEN SELL FINISH LOTS
TO WHAT I CALLED MERCHANT
BUILDERS.
AND SOMEONE OUR INDUSTRY THAT'S
REALLY WHAT THEY'RE FOCUSES THEY
ARE TRULY JUST A HOME BUILDER.
THEY'RE NOT A LAND DEVELOPER
THEY COME IN AT THE POINT OF A
FINISH LOT IN THERE DOING WHAT
WE CALL VERTICAL CONSTRUCTION
AND SO.
EACH ONE OF THOSE COMPONENTS
WITHIN THE PROCESS HAS DIFFERENT
RISK IN BASED ON THOSE RISKS THE
HURDLES ARE THE METRICS OF HOW.
WE ANALYZE A PROJECT AND WHETHER
THAT PROJECT HAS KIND OF A GO NO
GO AND THE RISK ASSOCIATED WITH
THAT.
HAVE TO BE DETERMINE OTHERS
SIMILAR TO SHADE HOMES THE
COMPANY I WORK.
FOR WE AT TIMES WILL DO ALL
THREE WE WILL TAKE IT FROM THE
POINT OF TYING UP A PROPERTY
THAT COULD BE WITH THE LANDOWNER
COULD BE IS A GREENFIELD
FARMLAND.
IT COULD BE A RE USE OF A OF AN
OLD INDUSTRIAL BUILDING THAT WE
THINK HAS THE ABILITY DUE TO AN
AREA WHAT MONTH MIGHT NEED SOME
HOUSING. TO MOVE FORWARD IN WITH
THAT YOU HAVE THE COMPLEXITIES
OF THE SAME THE SAME ISSUES BUT
YOU MIGHT HAVE DECONSTRUCTION
YOU MIGHT HAVE ARE MIDDLE
CONCERNS YOU HAVE TO WORK
THROUGH.
THAT WE WOULD TAKE A PROPERTY
ALL THE WAY THROUGH A POINT OF
BUILDING HOUSES OTHERS WOULD
PICK ONE OF THE THREE AND THAT
COULD BE THEIR OVERALL
DISCIPLINE.
IT'S JUST JUST WANT TO MAKE SURE
THAT EVERYONE UNDERSTANDS
DISTINCTION AND HOW WE EVALUATE
PROPERTIES AND YOU'LL SEE A
LITTLE BIT OF THAT ON THE
EXAMPLES THAT WE'RE GOING TO
GIVE YOU.
FACTORS INFLUENCING HOMEBUILDING
YOU KNOW THE HAZARD IS A
SNAPSHOT OF SOME OF THE THINGS
THAT WE ANALYZE.
AND AS I MENTIONED EACH ONE OF
THE COMPONENTS WITH IN THE
PROCESS SOME OF THESE ARE MORE
SIGNIFICANT THAN OTHERS.
RELATIVE TO SOME OF ITS ABOUT IN
TITLE IN A PROJECT TO THE POINT
OF GETTING APPROVED TENTATIVE
MAP WHERE YOU HAVE ALL YOUR
REGULATORY APPROVALS.
YOU'RE REALLY FOCUS ON SOME OF
THOSE EARLY ONES THE ACQUISITION --
PROCESS HOW YOU'RE TYING UP THE
PROPERTY A LOT OF TIMES WE DON'T
GO OUT AND BUY A PROPERTY --
IMMEDIATELY DAY ONE LET'S HAS WE
DO IS WE TIE UP PROPERTIES UNDER
A CONTRACT.
AND AS WE PROGRESS THROUGH AND
WE MITIGATE THE RISKS THAT ARE
INHERENT IN THAT DEVELOPMENT
THROUGH.
WORKING THROUGH CONSULTANTS AND
PROPERTY AND AS WE WORK WITH THE
CITY'S THE REGULATORS AS WE ARE
GET TO A POINT CLOSER TO ATTEND
OF MAP.
WE THEN WILL INVEST MORE DOLLARS
AND ULTIMATELY ACQUIRE THE
PROPERTY.
YOU KNOW OBVIOUSLY THE TIME IT
TAKES TO DO THAT IS A A FUNCTION
OF CERTAIN RETURNS THAT WE'RE
EXPECTING OUR INVESTMENT.
AND SO TIME IS REALLY IMPORTANT
OBVIOUSLY IN THE FINANCING
STRUCTURE THAT WE HAVE FOR A
PARTICULAR DEAL.
REASON WE HAVE SEQUEL UP THERE.
IS THAT SEQUEL CAN BE ONE OF
THOSE IMPEDIMENTS TO OUR TIMING
THE COST OF NOT ONLY.
PROVIDING A PARTICULAR SEQUENCE
CHALLENGE OR LEAST JUST GOING
THROUGH THE PROCESS OF OF THE
SEQUEL A REVIEW BUT THEN THE
POTENTIAL CHALLENGE IN THAT EVEN
IF WE WHEN THE CHALLENGE THERE
COULD BE APPEALED PERIODS.
IF YOU LOOK AT SEEK WITH THE
MOUNTIE YEARS AND SOME OF US
HAVE EXAMPLES OF PROJECTS THAT
HAVE TAKEN US MULTI MULTI YEARS.
TO GET THROUGH APPROVAL PROCESS.
BECAUSE A SEQUEL IS BEING USED
AS A WAY OF CHALLENGING OUR
PROJECT.
ENTITLEMENTS WE TALKED A BIT
ABOUT THAT WORKING THROUGH THE
ENTIRE PROCESS ALONG WITH THE
REGULATORY --
ISSUES WE NEED TO FOCUS ON
DEVELOP AN IMPACT FEE SCHOOL
FEES.
IN EVERY CITY WE HAVE THESE CITY
ARE COUNTIES WE HAVE FEES THAT
WE NEED TO UNDERSTAND THEY'RE
NOT THE SAME --
IN NEED CITY --
I'M I DO A LOT OF DEVELOPMENT IN
LIVERMORE.
THE CITY FEES THERE ARE
APPROACHING OVER A HUNDRED
THIRTY THOUSAND DOLLARS A UNIT.
OTHER CITIES YOU MY WORK AND IT
COULD BE AS LOW AS TWENTY FIVE
TO THIRTY THOUSAND SO WE HAVE TO
UNDERSTAND THE FEE IMPACTS AND
OTHER THINGS THAT ARE REQUIRED
BY THAT CITY.
INCLUDED INCLUSIONARY ZONING
COULD BE IFFY BUT MANY TIMES
INCLUSIONARY ONING IS A
REQUIREMENT SO PORTION OF OUR
HOUSING DEVELOPMENT NEEDS TO BE
WHAT THEY CALL BELOW MARKET RATE
OUR BMR REQUIREMENT.
AND THERE'S DIFFERENT --
FACTORS OF WHETHER IT'S VERY LOW.
AND EACH ONE OF THOSE HAVE.
TIMES THINGS WE HAVE TO ANALYZE
AND BE CONCERNED BUT AS A VERY
VERY INCLUSIONARY ZONING IS A
VERY COSTLY COMPONENT THAT IS
BASE UNIT STRAPPED.
USUALLY ON THE BACKS OF A HOME
BUILDER LAND DEVELOPER. TO TO
TAKE CARE OF EVEN THOUGH.
I WE ALWAYS SAY IN OUR BUSINESS
THAT WE WE BRING FORWARD SUPPLY
AND AS YOU BRING FORWARD SUPPLY
DEMAND IS THE SAME.
ARE STAYS CONSTANT THEM PRICES
SHOULD GO DOWN BUT INCLUSIONARY
ZONING IS SOMETHING WE HAVE TO
DEAL WITH THAT IT'S DIFFERENT IN
MOST CITIES OF SOMEWHERE FROM.
SOME CITIES WHERE THEY DON'T
HAVE IT TO AS MUCH AS IS HIGHEST
25% --
INSURANCE ALONG WITH LIABILITY
WARRANTY IN DEFECT CLAIMS.
SOME PRODUCTS LIKELY SHE HOMES
WE BACK IN THE BUSINESS WE HAVE
FOR WHILE BUILDING TOWNHOMES AND
CONDOS BUT FOR MANY YEARS SINCE
SOME BILLS ARE STILL TODAY.
WON'T TOUCH THAT PRODUCT TYPE
BECAUSE OF THE IT LITIGIOUS
NATURE AND THE INSURANCE
REQUIREMENTS SOME BUILDERS IS
CAN YOU CAN SECURE INSURANCE TO
ALLOW THEM TO BRING THAT FORWARD
SO --
INSURANCE IS A DIFFICULT THING
FOR US TO HAVE TO DEAL WITH
BECAUSE OF THE MANA LAWSUITS
THAT WE HAVE IN OUR INDUSTRY.
INFRASTRUCTURE REALLY
UNDERSTANDING IN IN THIS SITE IN
THE AREA OF DOING BOTH THE
ENTITLEMENTS IN THE LAND
DEVELOPMENT WHAT IS THE
INFRASTRUCTURE REQUIREMENTS WITH
BIGGER DEVELOPMENT SECOND EVEN
INCLUDE.
I RECENTLY WAS PART OF A OF A
FREEWAY OVERPASS AND SO YOU HAVE
THE INTERCHANGES SOMETIMES TO
THE EXTENT OF THE COMMUNITY CAN
BE.
SMALL INFRASTRUCTURE
REQUIREMENTS TO MAJOR MAJOR
IMPROVEMENTS WITHIN THE
INFRASTRUCTURE WITHIN THE
COMMUNITY.
LOOKING AT MATERIALS CURRENTLY
WITH TARIFFS WE ARE CONCERNED
IT'S A LITTLE BIT OF AN UNKNOWN
RIGHT NOW WE'RE WATCHING LUMBER
HAS BEEN SPIKING --
OFFERED THROUGHOUT THIS YEAR
FINALLY TALK ABOUT FOUR WEEKS
AGO AND IT SETTLED DOWN A LITTLE
BIT.
BUT LOOKING AT TERRACE
UNDERSTAND WITH THE STEEL
TARIFFS ARE GOING TO BE NEAR
INDUSTRY AND THE REASON I'M
GOING THROUGH ALL THIS IS FOR
YOU TO UNDERSTAND THAT THE ALL
THE DIFFERENT RISK FACTORS THAT
COME WITH.
WHAT WE DO YEAH I IN BOTH LAND
DEVELOPMENT HOME?
LABOR LOT OF DISCUSSION ABOUT
WITH THE UNIONS OF FOCUSING ON
OUR INDUSTRY --
POTENTIALLY LOOKING FOR
PREVAILING WAGE --
THAT IS VERY VERY EXPENSIVE IF
WE GET TO THE POINT HAVING TO
PAY PREVAILING WAGES AS COMPARED.
TO A NORMAL WAGES THAT OULD
COME FROM WHETHER YOU'RE HIRING
A UNION OR NON YOU.
WHEN YOU GET TO PREVAILING WAGES
I'VE EXAMPLES WHERE THE ADDED
COST CAN BE SO EXORBITANT THAT
THE PROJECT ITSELF JUST WON'T
PENCIL AT ALL --
CLOSING COSTS REALTORS
HOMEOWNERS INSURANCE --
HOME FINANCE ALL THESE THINGS WE
NEED TO FOCUS ON TO MAKE SURE WE
WORK WITH THE OUT REALTORS IN
THE COMMUNITY SO THAT ONLY WERE
HIRING REALTORS TO SELL OUR
HOMES BUT THEN THERE'S REALTORS
WITHIN THE COMMUNITY THAT ARE
BRINGING BUYERS TO US.
AND SO WERE INTERFACING WITH
BOTH SIDES OF THE OF REAL TRUE
COMMUNITY.
AND THOSE ARE JUST EXAMPLES OF
FACTORS THAT ARE ARE THINGS THAT
WE NEED TO FOCUS ON WHATEVER
ANALYZE IN A PROJECT IN THIS IS
STILL A BIT OF A SUMMARY AN
ALTERNATE OVER.
TO DAVE STANCE AND NOW I THINK
WE'LL GIVE THE FIRST EXAMPLE OF
A PROJECT WE WANT TO REVIEW WITH
YOU.
CHAIRMAN IF YOU'RE OKAY WITH
THIS I'M GOING TO STEP BACK AND
LET ANOTHER PANELIST COME AND I
DID FAIL TO INTRODUCE SIDE JOHN
NORMAN WITH BROOKE FIELD HOMES
AND HE WILL BE.
JOINING US THAT FOR ONE OF THE
GREEN FIELD PROJECTS IN HIS
COMPANY BUILT AND NINE HUNDRED
THIRTY FIVE HOMES LAST YEAR SO
THANK [inaudible]
DATE.
VERY GOOD DATA GOOD AFTERNOON
CHAIRMAN GLORIA MEMBERS OF THE
COMMITTEE HERE --
IT'S MY PLEASURE ON BEHALF OF US
CB I A TO A HELP TO ADDRESS.
SOME OF THE QUESTIONS THAT YOU
PRESENTED TO US ON HOW WE
PROVIDE.
WORKFORCE HOUSING INNER
AFFORDABLE HOUSING IN ORDER
BASICALLY HOUSING FOR THE METAL
WHICH IRONICALLY OUR COMPANY IS
A THIRD GENERATION FAMILY
BUILDER DEVELOPER AND I WAS
ALWAYS RAISED BY.
BUILDING FOR THE MASSES THAT WAS
WHAT MY FATHER ALWAYS TAUGHT ME
AND AND THAT'S BEEN PRETTY MUCH
OUR PRINCE ALONG.
YOU'LL SEE ON MY FIRST PROJECT
IT'S NOT A PROJECT FOR THE
MASSES AND THAT IS JUST A BY
PRODUCT OF SOME OF THE THINGS
THAT WAYNE ADDRESSED --
IN THE BULLET POINTS --
WERE TRYING TO CONDENSE AND
CONSOLIDATE THIS FOR YOU AS MUCH
AS WE CANDIDATE DUE TO TIME IN
THE COMPLEXITY OF THE ISSUES.
AND SO IF THERE'S ANYTHING AT
ANYTIME WITH MAYOR ANY OF THE
MEMBERS OF OUR PANEL.
THAT WHERE YOU WANT TO STOP US
OR INTERRUPT US PLEASE THAT FEEL
FREE TO DO SO.
BECAUSE A LOT OF THESE THINGS
THAT WOULD JUST BE OVER MY HEAD --
TO WITH THAT SO MANY OF THESE
ISSUES THAT WE'RE TRYING TO BOIL
DOWN INTO A QUICK SUMMARY AND OF
COURSE WERE ALWAYS.
AVAILABLE AFTER TODAY'S HEARING
DIPS TO FOLLOW UP WITH ANYTHING
THROUGH OUR CPA STAFF.
THE FIRST DEVELOPMENT THAT WE'RE
GONNA DISCUSS --
WAS THE COASTAL REGION WHICH A
LOT OF THE DEVELOPMENT THAT OUR
COMPANY DOES --
BOTH INFILL AND GREEN FIELD
DEVELOPMENT IN THE COASTAL
REGION FROM ORANGE COUNTY TO
NORTHERN CALIFORNIA.
THE PROJECT THAT WE'RE UTILIZING
TODAY HIS --
AND OF SMALL TOWN ABOUT TWENTY
MILES EAST OF SAN FRANCISCO.
IT'S A TOWN THAT THAT OUR
COMPANY HAS SPENT A LOT OF TIME --
EARLY ON IN MY CAREER IN THE
EIGHTIES AND AND THAT WE
DEVELOPED ALL AROUND THIS
PARTICULAR PROJECT THAT'S HOW I
HAD SO MUCH KNOWLEDGE ABOUT IT
AND ALMOST A TWENTY FIVE YEAR
HISTORY WITH THIS PARTICULAR TEN
ACRE PARCEL --
WE ULTIMATELY --
IN TWO THOUSAND EIGHTEEN OBTAIN
APPROVAL FOR AN EIGHTEEN UNIT
DEVELOPMENT ON THE*.
IT'S AT LITTLE OVER TEN ACRES
I'D INDICATED IN OUR AVERAGE
HOME SIZES AROUND TWENTY EIGHT
HUNDRED SQUARE FEET --
THE HISTORY REALLY STARTS OFF --
FOR ME AND FOLLOWING IT BUILDING
IN THE AREA AND TALKING IN THE
FAMILY TWENTY FIVE YEARS AGO AND
THEN THEM DECIDING THAT THEY
WANTED TO SELL THE PROPERTY OVER
TWENTY YEARS AGO.
AND AT THE TIME --
UNDER THAT ARE TEN ZONING WHICH
IS TEN THOUSAND SQUARE FEET PER
LOT THIS SITE WOULD HAVE
TYPICALLY YIELDED ABOUT FORTY
UNITS.
AND THE PURCHASE PRICE THAT THAT
THEY ULTIMATELY WENT INTO
CONTRACT TO SELL IT FOR IS LAME
AND INDICATED.
WAS ABOUT FOUR MILLION DOLLARS
SO JUST KEEP THAT IN MIND
BECAUSE AS I MOVE FORWARD WITH
THIS TWENTY TWENTY FIVE YEARS
AGO EVERYBODY ALWAYS THINKS REAL
ESTATE CALIFORNIA GOES UP UP UP
AND IT DOES FROM SOME REGARDS
BUT THE ONLY THING IN OUR
EQUATION THAT USUALLY.
IS.
FUNGIBLE OR FLEXIBLE IS HIS LAND
WE REALLY CAN'T CONTROL ARE
DIRECT DEVELOPMENT COSTS THE
FEES A LOT OF THE THINGS THAT
WAYNE HAD INDICATED.
AND SO WHEN WE'RE TRYING TO DO
THE ECONOMICS OF THESE DEALS THE
LAND IS REALLY THE FINAL
INGREDIENT AND BECOMING A VERY
SMALL PORTION OF WHAT WE DO --
THIS PROJECT IS A VERY IRONIC
BECAUSE WHEN IT WAS ORIGINALLY
LOOKED AT TWENTY TWENTY FIVE
YEARS AGO I PROBABLY WOULD HAVE
BEEN A PROJECT THAT WAS BUILT
FOR THE METAL.
IT WOULD HAVE BEEN WORKFORCE
HOUSING AND A BEDROOM COMMUNITY --
THAT'S PLAYED A LOT A LOCAL JOBS
AND WHAT NOT.
AND JUST OVER TIME IS AS THINGS
HAVE EVOLVED IN IN OUR SOCIETY
TODAY IT DOESN'T HAVE ANYTHING
TO DO WITH THIS.
PACIFIC COMMUNITY IT'S VERY
TYPICAL IN EVERY TOWN IN
CALIFORNIA --
THE ENTITLEMENTS BECAME MUCH
MORE.
MUCH MORE.
COMPLEX IN THE YIELD AND THE
COST YIELD ONE DOWN COSTS WENT
UP SO WE'RE NOW AT ABOUT TWICE
THE MEDIAN COST OF THE
CALIFORNIA HOME.
ON THIS PARTICULAR SITE.
IF YOU LOOK AT THE AERIAL
PHOTOGRAPH WHICH IS ACTUALLY --
COMPUTER GENERATED RENDERING A
TENANT SPEAKS TO A THOUSAND
WORDS.
AS YOU CAN SEE THE HOMES ON THE
LEFT IN THE FEW HOMES UP IN THE
UPPER RIGHT HAND CORNER IN THAT
BIG OPEN SPOT IN THE MIDDLE IS --
AS WAS.
AN AREA THAT NORMALLY WOULD HAVE
JUST BEEN GREAT IN TERRACE LIKE
MOST --
DEMOGRAPHY IN CALIFORNIA WHERE
WHERE YOU HAVE THAT INTRODUCED
HOUSING YOU YOU WORK THAT INTO
THE SITE DEVELOPMENT AND DESIGN.
AND IT REALLY SHOWS YOU AFTER
TWENTY YEARS OF EFFORT AND
SEVERAL DEVELOPERS THAT FAILED
PRIOR TO US.
HOWLE WHAT IT TAKES TO GET A
PROJECT APPROVING CALIFORNIA
TODAY THAT THIS BY A PARTICULAR
DEVELOPMENT WE WENT INTO THE
CITY?
KNOWING THE FAULTS FOR THE
FAILURES OF ALL THE PREVIOUS
DEVELOPERS STUDY IN THAT MEETING
WITH THE COMMUNITY MEMBERS
TALKING TO THAT THE CITY STAFF
AND GOVERNMENT OFFICIALS.
AND WE CAME AND ORIGINALLY WITH
THE PROJECT SIMILAR THIS IS A
FEW MORE UNITS.
BUT WE CAN HELP BUT SHAVING
ANOTHER. 20% OFF OF THAT SO WHY
HERE WE ARE --
THIS GIVES YOU THE CONTEXT OF
WHERE THE PROJECTS IT'S IT'S
IT'S WHOLLY AN INFILL
DEVELOPMENT --
VERY INTENSE DEVELOPMENT ON ALL
SIDES FROM MEDIUM TO HIGH
DENSITY RESIDENTIAL ON THE
WESTSIDE COMMERCIAL.
ON THE NORTH AND EAST SIDE AND
THEN SOME MEDIUM TO LOW DENSITY
HOUSING --
TO THE SOUTH IN MANY OF WHICH I
BUILT OVER THE YEARS --
AND THIS SITE JUST REMAIN AND
YOU CAN SEE FROM THE AERIAL MAP
AGAIN THAT THE GROSS
INEFFICIENCY OF THE TEN ACRE
SITE.
AND A LESS THAN HALF OF THE
HOMES THAT ULTIMATELY COULD HAVE
[inaudible]
BEEN BUILT --
WHEN THIS PROPERTY ORIGINALLY I
WAS GOING TO BE DEVELOPED TWENTY
YEARS AGO AS I INDICATED THE
PURCHASE PRICE ON IT WAS A?
ROUGHLY FOUR MILLION DOLLARS IF
YOU TOOK THAT INTO TODAY'S
[inaudible]
AT NUMBERS AT TWO AND A HALF
PERCENT INFLATION TO BE ABOUT
SIX POINT SIX MILLION DOLLARS.
BECAUSE OF THE SELLERS SITUATION
HAD CHANGED AND THERE WERE SO
MANY EVOLUTIONS A FAILURE.
ALONG THE WAY WE'RE ABLE TO
STRUCTURE PURCHASE AGREEMENT.
UNDER A CONTRACT AGAIN AS LANDED
INDICATED --
THAT WAS.
VARIABLE BASED ON THE NUMBER OF
LOTS THAT WE GOT FROM FROM THE
PROPERTY AND IT SCALED UP AND
DOWN SO THAT WE COULD STILL
REMAIN MOTIVATED TO TRY TO
GARNER WILL THE MAXIMUM
ENTITLEMENTS FROM THE
JURISDICTION THAT WE COULD.
THROUGH WORKING WITH THE
COMMUNITY.
BUT THAT WE WEREN'T GOING TO BE
DISINCENTIVE EYES FROM FALLING
THROUGH IN CLOSING SO ULTIMATELY
WE CLOSED ON THIS PROPERTY THIS
YEAR FOR TWO MILLION DOLLARS SO.
LESS THAN HALF OF TWENTY YEARS
AGO.
LESSON A THIRD OF WHAT TODAY'S
NET PRESENT VALUE WOULD BE.
BUT THE SELLERS WERE SO TIRED
SEVERAL HAD PASSED AWAY THE
ESTATE JUST WANTED TO LIQUIDATE
THE PROPERTY IN WE WERE
ULTIMATELY ABLE.
TO FIND THE RIGHT FORMULA THAT
WORK FOR EVERYBODY --
AND THE INTERESTING THING WITH
OUR DEVELOPMENT IS --
PROCESS IS IT ALWAYS BOILS DOWN
TO FEASIBILITY AND AND LIKE MOST
BUSINESSES ITS TOP LINE BOTTOM
LINE YOU KNOW WHAT ARE YOUR
REVENUES WHAT WHAT EVEN AT AT
THE END AND AND CAN YOU REMAIN.
VIABLE AND PROFITABLE AND SO ALL
THE ISSUES THAT WAYNE HAD
BROUGHT UP WHICH WE CONSOLIDATED
DRAMATICALLY FOR THIS
PRESENTATION.
REALLY WOULD GO IN TO A COST
ANALYSIS WE HAVE TO TRY TO
PREDETERMINE EVERY SINGLE ONE OF
THE THINGS THAT HE IDENTIFIED.
AND PUT A VALUE TO IT NOW
NORMALLY THIS IS ABOUT A TEN
PAGE EXCELS BREAD SHE PERFORMA
THAT WE ORIGINALLY WERE GOING TO
BURDEN YOU WITH BUT WE THOUGHT
YOU GLOSS OVER AND IN TWO
SECONDS AND AND I WANT WORK WE
BOILED IT DOWN. TO BASICALLY AT
TEN LINE ITEM PERFORMER FOR YOU
TO SHOW YOU KIND OF THE BASIC
COMPONENTS --
BOTH NUMERICALLY AND WITH THE
PIE CHARTS YOU CAN REALLY SEE
THE DYNAMICS OF WHAT GOES INTO
CREATING A HOUSE.
AND MAKING A HOUSE VIABLE AND
THEN HOW YOU CAN ADJUST THAT TO
TRY TO TWEAK IT TO MEET THAT THE
MIDDLE CLASS.
SO -- AGAIN
ON ON THIS WHEN YOU CAN SEE FOR
EXAMPLE ON THIS COASTAL PROJECT.
OUR AVERAGE SALES PRICE FOR
THESE HOMES IS PROJECTED TO BE
LITTLE SHORT OF A MILLION TO ONE
ONE POINT ONE SIX MILLION
DOLLARS --
IF YOU TAKE THE PURCHASE PRICE
FOR THE LAND THAT I INDICATED
THAT IT WORKS OUT ABOUT A
HUNDRED AND FIFTEEN THOUSAND
DOLLARS A LOT.
THAT'S LESS THAN 10% OF THE
TOTAL COST OF THE HOUSE.
IN THE OLD DAYS YOU KNOW WE'VE
WE PAID AS MUCH AS 2030% FOR
LAND.
BUT WEEK AGAIN BECAUSE OF THE
COSTS IN THE DYNAMICS AND AND
WHAT NOT IN TODAY'S DAY AND AGE
AND A LOT OF THESE AREAS THE
LAND COSTS IS THE ONLY VARIABLE
THAT WE CAN GET. TO A POINT
THAT'S ADJUSTABLE SO TO SPEAK
THAT WE CAN MAKE A PROJECT WORK.
BUT OF COURSE YOU HAVE TO HAVE A
WILLING SELLER AND A LOT OF WHAT
WE'RE FACED WITH THEM CHALLENGES
OF CREATING HOUSING TODAY'S WE
CAN'T FIND THE RIGHT PLAN WITH
THE RIGHT ZONING WITH THE RIGHT
ECONOMICS. TO WORK WITH ALL THE
OTHER FACTIONS COME INTO PLAY.
SO ON THIS PARTICULAR PROJECT
AND IT WAS FAIRLY EFFICIENT TO
ENTITLE LEADER ACTUAL REAL
NUMBERS BY THE WAY THIS ISN'T
HYPOTHETICAL THIS PROJECT IS
UNDER CONSTRUCTION AND AND
CURRENTLY SELLING SO.
IT JUST WAS A GOOD COASTAL
EXAMPLE FOR ME. TO UTILIZE FOR
YOU TODAY BECAUSE OF THE REALITY
OF OF THE NUMBERS.
THE ENTITLEMENT COSTS AND THIS
ONE RELATIVELY LOW SOME PROJECTS --
WOULD BE MUCH HIGHER BUT TIME IS
EVERYTHING IN CALPERS ALONG THE
WAY LOS.
PROBABLY THREE TIMES THIS IN
ADDITION TO WHAT WE SPENT
BECAUSE THEY WOULD BRING FORTH
PROJECTS --
APPLICATIONS OF THE CITY IN THEY
WOULD GET REJECTED THEM THEN WE
LEARN FROM THEIR MISTAKES AND
THEN MOVES WE CAME AND PRIDE
THIRD OR FOURTH LINE --
BUT DAY IN THIS PARTICULAR CASE
IT'S LITTLE LESSON TWENTY
THOUSAND DOLLARS A HOME.
SITE IMPROVEMENTS ON THIS ONE
ARE HORRIFIC --
TWO HUNDRED AND SIXTY FIVE
THOUSAND ARE ALMOST A QUARTER OF
THE TOTAL DEVELOPMENT COST.
THIS SITE IMPROVEMENTS WILL YOU
SAW FROM THAT SITE PLAN VERY
INEFFICIENT PLANTS SINGLE LOADED
STREETS.
WHOLE LOT OFF SITE AND ONSITE
INFRASTRUCTURE FOR SO RELATIVELY
FEW HOMES.
IF YOU SIMPLY JUST LOOKED AT
DOUBLING THE YIELD AND KEEPING
THE SITE DEVELOPMENT COSTS --
RELATIVELY THE SAME BECAUSE WE
HAVE TO PUT IN THE SAME STREETS
SAME IMPROVEMENTS.
WE COULD HAVE DRAMATICALLY
BROUGHT THAT COST DOWN FOR THESE
UNITS WILL IMMEDIATELY THINGS
LIKE THIS TAKE IT FROM BEING.
THE MIDDLE CLASS OR WORKFORCE
HOUSING PRODUCT AND IT PUSHES IT
FURTHER AND FURTHER UP.
THE THE CHAIN OF BEING --
MORE OF AN EXECUTIVES DIALER
MANY MORE EXPENSIVE HOME FRANKLY
AND DOESN'T MEET THE MIDDLE.
MIDDLE LAST CLASS DESIGNATION.
PERMITS HERE AGAIN RIGHT DOWN
THE MIDDLE FROM ONE LANE AND
INDICATED SEVENTY THOUSAND
DOLLARS --
AND SOME OF THAT IS THAT FOR
REASONS THAT I'LL GET INTO LATER --
WE DIDN'T PAY AN INCLUSIONARY
FEE HERE --
SCHOOL FEES ARE RELATIVELY
MODEST BECAUSE IT'S AN INFILL
DEVELOPMENT AND THERE WE
OBVIOUSLY ARE WHO FEES CAN
BECOME A HUGE VARIABLE FOR US
AND IN EITHER WITH LEGISLATION
THAT CHANGES.
OR CERTAIN SITUATIONS THAT ARISE
AGAIN WHEN YOU LOOK AT ALL THESE
NUMBERS SOMETIMES IT'S IS DEATH
BY A THOUSAND CUTS TO BUILD A
HOUSE BECAUSE YOU CAN SAIL IT'S
A FEW THOUSAND HERE FEW THOUSAND
THERE BUT WHEN HE KEEPS GOING
THE WRONG WAY.
YOU'LL SEE EVEN ON THIS PROJECT
EVEN THOUGH WE WENT THROUGH ALL
THREE STAGES WE DID THE
ENTITLEMENT.
WE DID A LAND DEVELOPMENT AND
WHERE THE MERCHANT BUILDER
BUILDING THE HOMES.
AND THE BOTTOM LINE IS STILL
BELOW THE INDUSTRY MINIMUM BUT
WE WERE SO FAR COMMITTED TO IT --
WE DECIDED TO GO FORWARD HOPING
FOR THE BEST BUT THAT THE
BUILDER AND MATT PRETAX.
THAT'S BELOW THE MINIMUM
STANDARD THAT THAT AN FDIC
INSURED BANK WILL GENERALLY GO
INTO A REAL ESTATE DEVELOPMENT
PROJECT BECAUSE OF ALL THE RISKS
THAT WAYNE IDENTIFIED.
IF ANYTHING GOES WRONG THE
NUMBERS CAN YOU IMMEDIATELY A
ROAD THAT BUILDER NET.
AND SO THE BANK DOESN'T WANT TO
TAKE OVER THE PROJECT AND TRY TO
FIND SOMETHING THAT WE WEREN'T
ABLE TO DO SO --
WE HAVE TO BE ABLE TO DEVELOP
PROJECTS WHETHER WERE.
PUBLIC OR PRIVATE LIKE OURSELVES.
THE AND THAT'S REASONABLY
SUSTAINABLE FOR THE RISK AND THE
OTHER THINGS --
INVOLVED IN THE PROCESS.
BY THE DIRECT CONSTRUCTION COSTS
AGAIN.
PRETTY TYPICAL 25% BUT THINGS
LIKE TERRORISTS LABOR SHORTAGES
ALL KINDS OF THINGS CAN JUST
SWING THOSE DRAMATICALLY AND WE
REALLY HAVE TO GO INTO THESE
PROJECTS BEING ABLE TO
ADEQUATELY PROTECT OUR COST
LUMBER TARIFFS THAT JUST WENT
INTO EFFECT.
IS ADDED FIFTEEN THOUSAND
DOLLARS ON THE COST OF THIS
HOUSE WE DON'T GET ANYTHING MORE
FOR IT WE CAN'T SELL IT FOR MORE.
EDGES LOWERS THE PROBABILITY.
SELLING COSTS VERY BASIC I NEW
HOMES IT'S VERY SIMILAR TO RE
SALE.
AND THE SOFT COSTS ARE
EVERYTHING THAT IT TAKES TO PUT
A DEVELOPMENT TOGETHER THIRD
PARTY CONSULTANTS.
OUR OFFICE JEAN AN OVERHEAD --
POLL ALL THE OTHER --
BACKROOM BACK OFFICE JOB SITE
SUPERVISION YOU KNOW ALL THE
DIFFERENT COMPONENTS ALL LUMPED
INTO ONE FIFTEEN AND A HALF
PERCENT IS RIGHT DOWN THE MIDDLE
OF INDUSTRY NORMS --
DEPENDING ON THE PROJECT AND
THEN OF COURSE FINANCE COSTS.
SO YOU CAN SEE HERE ON A PRE TAX
IT COMES OUT TO JUST BELOW 10%
DOING ALL THREE PHASES OF THE
DEVELOPMENT AN AFTER TAX.
WE'RE LOOKING AT ABOUT A 5%
RETURN SO WHEN IT'S ALL SAID AND
DONE THAT WE HAVE IF EVERYTHING
GOES PERFECTLY TO REINVEST IN
HAVING THE PRIVILEGE OF DOING
ANOTHER HOUSING DEVELOPMENT
[inaudible]
FOREIGN.
SO THAT'S OUR GOAL FOR SURVIVAL.
AND I THINK THAT --
YOU KNOW THERE'S MANY OTHER
FACTORS WITH THE INCLUSIONARY
AND DENSITY THAT YOU CAN SEE
THAT JUST LITTLE.
THINGS WITH DANCE IF YOU DOUBLE
THE DANCE REALLY BROUGH AND THE
IN THE AFFORDABILITY ON A
PROJECT LIKE THIS MAYBE 3040%
FROM A MILLION TO DOWN THE SEVEN
HUNDRED THOUSAND INCLUSIONARY
HOUSING CAN JUST BE A DISASTER.
FOR THE PROJECT OUT LIKE THAT
BECAUSE ON SOMETHING LIKE THIS
IT'S A SEVEN EIGHT HUNDRED
THOUSAND DOLLARS PER HOUSE
SUBSIDIES SO --
LOVE TO BE ABLE TO SHARE MORE
WITH YOU BUT I KNOW MY TIME IS
LIMITED.
IF I MAY.
BECAUSE I WANNA KNOWLEDGE THE
PRESENCE OF US SOME NUMBERS
BERMAN SANTIAGO AND AND IS THEN
THE SOME NUMBER FRIEDMAN WHO I
BELIEVE WILL COME BACK IN A
MOMENT.
IF WE MAY TAKE A COUPLE QUICK
QUESTIONS WHICH I THINK SOME OF
THE FINANCIAL PRINCIPLES WILL.
APPLY ACROSS THE DIFFERENT
SCENARIOS I THINK THAT THE
DIGITAL SCENARIOS ARE REALLY
MEANT TO BE CONTEXT SENSITIVE
RIGHT -- IN
A DIFFERENT ONE BECAUSE MY
COLLEAGUES HAS QUESTIONS BUT
JUST TO KIND OF TOP WHITE IT FOR
FOLKS -- IS
HE SAID THESE HOUSES SOLD THAT
THE WHITE HOUSE ARE THE POSSIBLY
IN SEOUL SO THE ONE POINT ONE
AND MILLION DOLLAR FIGURE IS
WHAT FOLKS ARE SELLING THESE
PROPERTIES THESE HOMES FOR TODAY
RIGHT.
AND WHAT I THINK IS OFTEN LOST
ON FOLKS WHEN THEY THEY THINK
ABOUT WHAT IT TAKES ACTUALLY
BUILD A HOUSE THEY USUALLY JUST
START THINKING ABOUT THE DIRECT
CONSTRUCTION RIGHT THERE
THINKING ABOUT STICKS AND BRICKS
AND THAT KIND OF STUFF.
WHICH IS THREE HUNDRED THOUSAND
ON THIS PARTICULAR PROJECT RIGHT.
ABOUT THEN THIS THIS SLIDE IS
REALLY DID ILLUSTRATE ALL THE
ADDITIONAL COSTS THAT.
YOU KNOW DEPEND HOW GAUGE
JORDAN'S PROCESS --
YOU MAY NOT BE EXACTLY WHERE OF
CRACKED CORRECT NOW UNDERSTOOD
THE PROJECT THIS WASN'T SUBJECT
TO PUT WAS A SUBJECT PREVAILING
WAGE NO SIR CARVE OUR APPEAL A
OR ANYTHING OF THAT NATURE NONE
AT ALL.
AND THAT'S ALWAYS A RUN BY WHAT
TIME OF THE MIDDLE CLASS AND
UNDERSTANDABLY Y. WITH ONE
ENCOURAGE JOBS THAT ARE IN THAT
IN THAT AREA WHAT'S IN TIME THE
RUB AGAINST WHAT THAT MAY DO TO
SELL COST.
UNITS A TUG IN THE PUSH AND PULL
THE DECISION MAKERS LIKE US HAVE
TO DEAL WITH --
BUT UNDERSTANDING THAT THAT THIS
A MILLION FELL PRICES ABSENT
THAT PARTICULAR REQUIREMENT --
SHE'D JUST HIT A IN A CLOSE RACE
OF EVEN WITHOUT THOSE
REQUIREMENTS ARE STILL TALKING
WELL BEYOND WHAT ANYONE CAN WHAT
AVERAGE CALIFORNIANS CAN AFFORD
RIGHT THAT'S FOR AUNT THAT WITH
REGARD TO THAT THE SIZE OF THE
UNIT YOU'RE TALKING ABOUT A
223-500-2000 TO THIRTY FIVE
HUNDRED SQUARE FEET.
HOMES WHEN WHEN THEY ADDITIONAL
THAT VISUAL DENSITY WAS LIKE
FORTY UNITS THAT WE SAID.
WHAT DOES WHAT IT WOULD HAVE
BEEN AT THIS SIZE WOULD DAY
ABSOLUTELY IF I IF I HAD THE
ABILITY I WOULD HAVE GONE INTO
MORE DETAIL BUT IF WE WERE TO
BUILD THIS IS A FORTY UNIT
DEVELOPMENT PROBABLY THE AVERAGE
SIZE?
AVERAGE SIZE YEARS TWENTY EIGHT
HUNDRED WE PRIDE WOULD HAVE BEEN
AROUND.
TWENTY TWO TO TWENTY THREE
HUNDRED AND WHEN YOU TAKE THE
REDUCTION OF ALL THOSE LINE ITEM
COSTS IN THE DIRECT CONSTRUCTION
COSTS.
WE COULD HAVE PROBABLY SOLD AT
HOME FOR AROUND [inaudible]
SEVEN HUNDRED THOUSAND
INTERESTING WHICH IS STILL
HIGHER RELATIVE.
TO THE MIDDLE FOR THE MEDIAN IN
CALIFORNIA AROUND.
SIX HUNDRED THOUSAND BUT IT'S
40% MORE ATTAINABLE FOR THAT
MUCH LARGER OF A POPULATION
SEGMENT WHERE HOUSING IS SO
BADLY NEEDED IN THIS REGION.
YEAH FOR PUTS A FEW MORE PEOPLE
IN THE NEXT THAN THAN ONE POINT
ONE MILLION AYE CORRECT NOW
THAT'S THAT WOULD USE COSTS IS
EVEN TRUE.
EVEN IF YOU HAD TO SORT OF LEVEL
OFF THE POT ARTIST THE
TOPOGRAPHY SO EVEN I MENTIONED
THAT'S NOT CHEAP --
CLOSE SO EVEN THAT WE STILL HAVE
A SEVERELY REDUCED.
COST MEAN ABSENT YOU SAID SEVEN
HUNDRED THOUSAND IS ABOUT WHICH
IS.
THAT WE WILL HOLD ANY PARTICULAR
FIGURE WITHOUT A BALLPARK RIGHT --
AND THAT WAS A SORT OF A OF A
GOING TO THE POLITICAL PROCESS
OF SEE COUNCIL HEARINGS
COMMUNITY CHARAX THAT KIND OF
STUFF THAT GOT YOU TO THE NUMBER
OF UNITS OF THIS ULTIMATELY WAS
THAT'S CORRECT INTERESTING.
WHAT THE LAST QUESTION I HAVE
AND THEN AGAIN I HOPE IT BECAUSE
ANY QUESTIONS AND GRATEFUL FOR
THEIR TIME AND PRESENTS --
IT WE OFF THEY'RE TALKING ABOUTSMALLER UNITS CLOSER AND NOW ONE
OF THINGS I JUST CARE FACILITIES
IN THE INDUSTRY IS SMALLER
NECESSARILY CHEAPER AND I MEAN I
I WHEN LOOKING AT ALL THE NON
CONSTRUCTION COSTS THAT GO INTO
THE FINAL SALES PRICE.
YOU KNOW ARE WE ON THE RIGHT
TRACK FOR REALLY TRYING TO LOOK
AT YOU KNOW SMALLER HOMES --
CONDENSER UNITS A MICRO UNITS
THINGS THAT NATURE ARE IS THAT
ABOUT SIX OF ONE HALF OF THE
OTHER BECAUSE YOU STILL HAVE TO
PAY THE FEES ARE STILL HAVING.
TO BUILD THE ROADS ETCETERA.
HOW MUCH TIME DO WE HAVE?
A HIGH IT WAS A BILL THERE'S A
RULE OF THUMB THAT I I KNEW THAT
QUESTION WAS GONNA COME UP AND
AND ALL MY COLLEAGUES HERE WILL
PROBABLY HAVE DIFFERENT ANSWERS
FOR A IT IT.
IT DEPENDS OBVIOUSLY IS IS THE
TRUE ANSWER BUT IN MOST CASES
YES ONE ONE WE HAVE.
SITES THAT ARE GROSSLY UNDER
UTILIZED LIKE THIS IT
DRAMATICALLY CHANGES THE OVERALL
COST BECAUSE WHEN YOU'RE.
PROCESSING THAT I I CAN PROCESS
EIGHTEEN LOTS AS EASILY AS I CAN
TWO HUNDRED EIGHTY LOTS I CAN.
I HAVE THE SAME STAFF THE SAME
OVERHEAD --
THE SAME RELATIVE EFFORT THAT
GOES INTO IT AND THEN WHEN YOU
CAN REDUCE.
EVERYONE OF THESE LINE ITEMS IS
JUST BE MORE EFFICIENT IT'S
KINDA LIKE THE FOR HER THE GM
MODEL OF BUILDING CARS.
YOU YOU BUILD THE MIDDLE CLASS
HOUSING BY EFFICIENCY AND
PRODUCTIVITY.
NOT BY TRYING TO BUILD SEMI
CUSTOM HOMES.
AND AND SO DENSITY DOES HELP. TO
A CERTAIN LEVEL WHAT ONCE YOU
GET AND IS SUPER DANCE STUFF
WHERE YOU'RE GONE FROM THREE TO
SIX TO TWELVE STORIES.
THERE'S ALL KINDS OF DIFFERENT
LAYERS OF ECONOMICS IN THAT
WHERE THEY INCREASE INCREMENTAL
DIRECT CONSTRUCTION COSTS GET.
SO MUCH GREATER IT'S IT'S TIED
TO A REAL ESTATE VALUE AGAIN BUT
FOR THE MOST PART.
WITH THAT THE TYPE OF HOUSING
THAT WERE REFERRING TO AND
THAT'S IT WOULD HAVE HELPED
IMMENSELY INTIMATELY INVOLVED
QUESTION IS I THINK SOMETIMES
PEOPLE SAY BACK WHEN WE'RE
ADVOCATING FOR SMALL UNITS OF
THERE'S NOT A MARKET FOR THAT
BUT YOU COULD HAVE SOLD THESE.
JUST AS EASILY AT TWENTY ONE
HUNDRED SQUARE FEET AS YOU COULD
AT THIRTY FIVE HUNDRED SQUARE
FEET MUCH EASIER THEY'RE
ACTUALLY THE DEMAND IS SO MUCH
GREATER FOR THOSE BECAUSE AGAIN.
YOU'RE BUILDING FOR THE MASSES
AS MY FATHER TAUGHT ME YOU'RE
NOT TRYING TO PICK OFF THAT
UPPER AND THEY GET A HIGHER
PROFIT NET PROFIT PER UNIT HERE
TRYING.
TO CREATE HOUSING WHERE THERE'S
A BIGGER MARKET A BIGGER POOL
WHICH IS THE MIDDLE.
WE TALK ABOUT SMALL A DETACHED.
I'M TRYING TO DEVELOP RIGHT NOW
IN THAT SIXTEEN HUNDRED TO TWO
THOUSAND SQUARE FOOT.
PRODUCT AMOUNT MOUND HOUSE WITH
FOUR PROPERTIES THAT WERE ZONED
FOR ATTACHED WITH THE OR
DUPLEXES OR TOWNHOMES.
AND I'M WORKING WITH THE COUNTY
RIGHT NOW TO GET ALL REZONED A
SMALL LOT DETACHED.
BECAUSE THE COST NOW FOR
DELIVERING THAT IS SO MUCH
CHEAPER.
AND THEN IT'S ALSO HAD IN THE
PRICE POINT OF AFFORDABILITY
THAT WOULD BE BEST FOR THAT
MARKET.
AND SO THAT REALLY IS THE KIND
OF THE SWEET SPOT ANOTHER GOOD
THING TO FOCUS ON IS IS A GRANNY
FLATS OR MULTI GEN HOUSING WHERE
WE CAN ADD A UNIT TO A SET A
STANDARD SO ELECT ON THESE HOMES
THAT.
DAVE TALKING ABOUT HERE THOSE
HOMES COULD HAD A AT IT
EXHILARATING UNIT.
THAT YOU CAN EITHER RAN ORG
EFFORT.
BACK THAT'S ANOTHER THING TO
REALLY FOCUS ON FOR FOUR IN THE
STATE [inaudible]
COOL [inaudible]
A MEMBERS ANY QUESTIONS OF
BEFORE I MOVE ON THE NEXT.
NINE SURE PRESENCE AND THAT ONE
THING CHAIR GLORIA --
FOR ORGANIZING TODAY'S HEARING
ARE PRESENT --
THE SILICON VALLEY WHERE I WISH
I COULD BUY HOME FOR ONE POINT
ONE MILLION DOLLARS --
AND AND BUT AND THIS IS A CRISIS
IT'S AFFECTING THE ENTIRE STATE
AND ITS LARGELY A SUPPLY PROBLEM.
THAT WE HAVE SO APPRECIATE YOUR
COMMENT.
AND EXPLAINING SOME THE COSTS OF
JUST GOING BACK TO THE THE
ABBREVIATED PRO FORMA THE
PROVIDED FOR US --
SO THIS DID NOT INCLUDE
PREVAILING WAGE IT ALSO I'M
ASSUMING DID NOT INCLUDE --
IBM ARE.
NO. OH IF IF IF IF YOU DID HAVE
MORE UNITS PER ACRE DO YOU THINK
THOUGH.
THAT THE SUICIDE PERMITS WERE
GONE DOWN PER UNIT BUT DO YOU
THINK YOU'RE ABOUT TO PAY MORE
FOR THE LAND.
POSSIBLY IT WOULD TO WHICH
BROUGHT IT WOULDN'T OF EVEN
DOUBT BUT IT.
WOULD HAVE BEEN A FACTOR --
GOING TO LABOR BECAUSE WAS ALSO
WOULD --
HAVING THIS SUMMER SO IT SPOKE
ABOUT -- ARE
YOU GUYS FACING A LABOR SHORTAGE
AT ALL ARE YOU SEEING THAT
ESPECIALLY NO.
LA FIRES AND DOCTOR WOODS
DISTRICT IN MY AND THOSE ARE ON
THAT -- BY
IS THAT IMPACTING YOUR ABILITY.
TO TO BUILD THAT LABOR SHORTAGES
AND AND TRAIN LABOR.
DRAMATICALLY AFFECTING OUR
ABILITY TO PRODUCE EVEN EVEN IF
WE DO GET A PROJECT TO PROVE NOW.
AND WERE SUCCESSFUL AND BRING IT
TO THE MARKETPLACE TS STATE HAS
MUCH LONGER TO DELIVER THAT
PRODUCT WHICH THEN ANALYZE WITH
INCREASING OUR DIRECT
CONSTRUCTION COSTS USER LABOR
COSTS ARE GOING UP IN INCREASES
ARE FINANCING COSTS BECAUSE IT'S
BURKE TRACKING THE TIME TO DO.
IT --
INCREASE JUST ABOUT EVERY LINE
ITEM THEIR EXCEPT FOR POSSIBLY
SELLING BECAUSE I DIDN'T AND SO
WE THIS FIRST TIME IN MY CAREER
I'VE BEEN BUILDING IN CALIFORNIA
FOR THIRTY FIVE YEARS WHERE WE
WERE IT.
THAT THAT'S ANOTHER PART OF THE
CRISIS HERE AND THEN YOU
MENTIONED AS A MEASURE OF HOW
QUICKLY THAT.
THE LATE IN THE LUMBER TARIFFS
ADDED FIFTEEN THOUSAND DOLLARS
PER UNIT WAS OUT ON THIS PROJECT
YEARS BROWN DID IT REALLY.
SO.
YOU'RE GETTING KIND OF SIDES --
THANK YOU.
YOU'RE WELCOME PERSIA.
THINKING RESPONDED.
THIRD EDITION QUESTION MISTER
WOULD YOU HAVE TO PLEASE.
A POPULAR ONE APOLOGIZE FOR
BEING LATE BUT AND I KNOW YOU'RE
NOT YOU'RE QUITE NOT
SPECIFICALLY TALKING ABOUT THIS
BUT I HAVEN'T AT KIND OF AN
INTEREST IN THE COPY PARK.
AND THAT WAS YOU CORRECT YOUR
FOR YOUR COMPANY UP WE WERE ONE
OF MANY WHEN I MADE THIS ALL
THAT PROBLEM YES RIGHT AND SO
THE BIGGEST IMPEDIMENT FOR A
PROJECT LIKE THAT WHERE IT WILL
LAND WAS ALREADY --
DEVOID OF EVERYTHING --
THE PADS WERE ALL YOU KNOW OR
THE OF THIS THE SO IT WAS ALL
CLEAN AND EVERYTHING.
SO SORTING AREA LIKE THAT WHERE
YOU'VE GOT AN OPPORTUNITY WE'VE
GOT -- AND
SEEK WASN'T IN THE WAY BECAUSE
YOU'VE GOT --
THE ABILITY FOR PEOPLE TO
REBUILD SPECIFICALLY ARE PROJECT
LIKE THAT WHERE IT'S ALMOST
READY MADE.
WHAT WHAT WAS IT THAT THAT KEPT
YOU FROM DOING A PROJECT LIKE
THAT?
THE M. IT YEAH AND I APPRECIATE
YOU ASKING I THINK I THINK OUR
COMPANY --
PART OF OUR PHILOSOPHY IS
HELPING THE COMMUNITY AND AND WE
HAD EVERY INTENTION OF AFTER
BEING TAPPED --
TO GO AND SEE IF THERE WAS
SOMETHING THAT WE CAN DO TO HELP.
AND PROVIDE THE SERVICE THAT.
HOME BUILDERS WERE PRODUCTION
HOMEBUILDERS AND APPLY THAT.
BUILDING A LARGE CHUNK OF HOMES
AT A TIME LIKE COFFEE PARKED AT
THE HELP RESPOND.
WHEN WE GOT STARTED UP THERE
DOING OUR INVESTIGATION AND
THERE WERE THERE WERE A FEW
THINGS ON THE SITE DEVELOPMENT
SIDE THAT WERE?
KIND OF BIG UNKNOWNS WITH STREET
WITH SUN.
WATER AND AND OTHER UTILITY
ADEQUACY BECAUSE CODES OF CHANGE
WITH FIRE SPRINKLERS YOU MAY
HAVE HEARD AND AND THOSE KIND OF
THINGS IN THOSE ANSWERS EARLY ON
WEREN'T THERE THEY MIGHT BE
THERE BY NOW.
BUT ARE OUR MAIN ISSUE.
AND WHY WE DECLINED.
PURSUE IT WITH THE INDIVIDUAL
HOMEOWNERS INSTEAD OF WHERE WE
GOING TO BUY ONE PIECE A LAND WE
BUILD ALL THE HOMES.
WAS BECAUSE WE HAD NO WAY TO
PROTECT OUR BECAUSE AND WHEN
WHEN WE WENT UP THERE WE WENT TO
EVERYONE OF OUR TRADE PARTNERS
WHETHER THEY WERE UNION NON
UNION WHATEVER IT WAS AND ALL OF
OUR SUPLIERS AND WE SAID OKAY
LISTEN WE WE HAVE. TO REBUILD
THESE HOMES WANTED TO FIFTY OR A
HUNDRED AT A TIME.
AND WHAT'S GONNA TAKE WHAT DO
WHAT DO WE HAVE TO GET FROM HERE
TO PAY HERE YOUR LABOR GO.
TO THE NORTH BAY TO REBUILD
THESE HOMES.
AND THE ANSWER WAS WE CAN'T OR
WE WON'T EVER WE CAN'T GIVE YOU
A NUMBER AND I DIDN'T WANT TO BE
FACED.
WITH A BUNCH OF DISAPPOINTED
HOMEOWNERS A YEAR OR TWO DOWN
THE ROAD WHERE THEY SETTLED WITH
THEIR INSURANCE COMPANY FOR ACTS.
AND I'M HAVING TOPAY AX PLUS TO
BUILD THEIR HOME.
BECAUSE WE HAVE NO CONTROL OVER
THE COST AND THEN THEY CAN'T
FINISH THEIR HOME.
I THOUGHT IT WAS BETTER TO LET
THEM KNOW I'M SORRY WE CAN'T
PREDICT YEAR AND COST.
AS MUCH AS THEY WANTED US TO
SIGN A CONTRACT.
AND GIVE THEM A FIXED FEE AND I
WOULD LIKE TO UNDER NORMAL
STANCE POSSIBLY WE COULD.
BUT WE COULDN'T AND I DON'T WANT
TO BE THAT GUY IN THE NEWSPAPER
COUPLE YEARS DOWN THE ROAD WHERE
WE HAVE A BUNCH OF UPSET
HOMEOWNERS.
WHEN WE'RE GOING TO HELP PEOPLE?
AND WE FIND OUT THAT THEY CAN'T
AFFORD TO FINISH THE WHOLE.
SO THAT REALLY WAS THE ISSUE WE
COULD NOT GET LABOR TO GO UP
THERE ON A ON A LARGE SCALE
PRODUCTION.
AT ANY PRICE.
PETS WE'VE WE'VE WHY I'VE HEARD
FROM OTHERS THAT THERE WERE SOME
PEOPLE HAVE SAID WELL THERE IS
AN ADEQUATE LABOR SUPPLY AND AND
AND AND AND YOU WERE ABLE.
TO THAT WHAT THAT WASN'T THE WAY
YOU SAW IT FROM YOUR PER.
AND AND I WENT TO THE PEOPLE
THAT YOU'RE PROBABLY REFERRING
THAT THEY HAVE ADEQUATE LABOR
SUPPLY.
AND WHEN I REALLY ASK THEM TO
SIGN A CONTRACT WITH ME BEFORE I
WOULD SIGN A CONTRACT WITH THE
HOMEOWNERS A WHEN.
VERY VERY DISAPPOINTING VERY
DIFFICULT SITUATION AND I
THOUGHT THAT THE HOMEOWNERS
DESERVE TO KNOW IN ADVANCE SO
THEY CAN MOVE ON WITH THEIR
LIVES.
WE BUILD HOMES FOR A LIVING.
THEY NEED TO GET ON WITH THEIR
LIVES AND THE I JUST THOUGHT
THAT DRAGGING THEM OUT TWO OR
THREE YEARS AND UNPREDICTABLE ON
FEASIBLY FINANCIAL SITUATION
WASN'T THE FAIREST THING TO DO.
FOR EVEN THAT WAS DISAPPOINTING
FOR ALL OF US [inaudible]
THANK YOU.
JIM IF WE MOVE TO THE NEXT NIGHT
WE THEORETICALLY. THIRTY MORE
MINUTES OR SO --
I LEAVE A TV IF AS EFFICIENT WAS
WE'LL SEE HOW EFFICIENTLY
DESTRUCTION INDUSTRY AS OTHER
MAYBE PLOW THROUGH --
THE ORDER THAT YOU WANT IF YOU
WANT TO SKIP OVER ONE OF THE
SCENARIOS THAT'S FINE --
TOO BUT ALTERNATE ACTIVE FOR THE
NEXT PRESENTATION.
MY NAME'S JOHN NORMAN I'M WITH A
BURKE FEEL RESIDENTIAL WE HAVE
OUR FOR OFFICES IN CALIFORNIA.
AND THREE OF THOSE ARE --
COASTAL AND I OF THE INLAND
SACRAMENTO REGION SO WE WILL SEE
SOME DIFFERENCES BETWEEN WHAT
THAT MISTER SAMSON TO STE.
OUR PRESENT AND WEBER AREN'T
GOING TO BE PRESENTING--
BARB COMPANY DOES MASTER PLANS
WE DO INFILL WE DO MAKES YOU
SORT OF THINK THAT LAME TALKED
ABOUT EARLIER ON WE'D DO A WHOLE
RANGE OF THINGS A WORLD SPEAKING
ABOUT.
TURN THE KEYS OVER TO HOMEOWNERS
IN TODAY.
OF THIS PROJECT NEWS --
THREE THOUSAND UNIT PRO
SACRAMENTO REGION ARE TAKEN --
MICROCOSM OF OUT OF ABOUT A
HUNDRED UNITS TO SEE WHAT THAT
WOULD TAKE TO DELIVER WERE IN
BED R. COSTA WORK IN PROGRESS
BECAUSE WE DO NOT HAVE A FINAL
PERMITS YEAH.
I BEEN --
I'VE BEEN UP THIS ON THIS
PROJECT FOR FOURTEEN YEARS OR
PEOPLE FIVE YEARS BEFORE.
I GOT STARTED ON IT WE STILL
HAVE ANOTHER YEAR AND A HALF TO
MEET TWO YEARS TO GO BEFORE WE
CAN BREAK GROUND.
SO AROUND AND I I WILL TELL YOU
WHEN I FIRST STARTED ON THIS
PROJECT --
WE TALKED ABOUT THE DEMOGRAPHICS
USER BUYER AND WE REALIZED AT
THAT TIME THAT THEY WERE ABOUT
FOURTEEN YEARS OLD WELL DON'T
GROW MOST THIRTY SO.
WE WOULD IN THE HOME BY MARKET --
I'VE -- AND
BAY AGAIN --
YOU KNOW THE LAND PORTION OF IT
IS LAND TALKED ABOUT BEFORE WE
WE DEAL WITH WE LONG TERM DEALS
ON THIS AND WE WANT OFF THE EDGE
OF THOSE DEALS AND I'VE GOTTEN
GOOD AT TERROR.
RENEGOTIATING THOSE TO MAKE IT
TO THIS POINT B. IN FRONT OF YOU
TODAY AND STILL HAVE A PROJECT
TO TALK ABOUT --
BEN AND I'D LIKE TO GO BACK --
TO THE SMALLER MAKING A
DIFFERENCE IN COST AROUND AND
AND SINCE WE'RE TALKING ABOUT A
MASTER PLAN BY DEVELOPED AN
AXIOM IN LOOKING AT THE VARIOUS
PROJECTS THAT ARE BENT ON
OVERTIME.
AND IT JUST DOESN'T SEEM TO
MATTER IF IT'S FIVE HUNDRED
UNITS A THOUSAND UNITS OR TEN
THOUSAND UNITS.
IF THEY ALL COST ABOUT TEN TO
TWELVE MILLION DOLLARS TO
ENTITLE.
I DON'T KNOW WHY DOES IT JUSTICE.
AND AND THE MOST THE SMALLER MAY
YES ON THE BUT THERE'S A LOT OF
A GEOGRAPHIC SENSITIVITY TO THAT
IN TERMS OF WHAT'S GOING ON IN
THAT PARTICULAR MARKET.
POWER AND THAT'S KIND OF WORLD
DO WE GO NEXT MESS --
CLOSING THE THIS THE SITE PLAN
FOR WELL FOR THE PROJECT AS
MAJOR INFRASTRUCTURE RUNNING
THROUGH IT ANOTHER ONE OF THE
THINGS IT'S A COMMON.
THEME OF NO WHERE ARE THE BIG
COSTS THAT HIT A PROJECT AND AND
AND A BULLS FOUNDER ECONOMIES OF
SCALE MUCH LIKE MISTER SIMPSON
WAS TALKING ABOUT ON A ON A
DIFFERENT SCALE.
AROUND.
THE COST OF THE MAJOR ROADS
RUNNING THROUGH THERE IT DOESN'T
MATTER IF YOU HAD NO FIVE
HUNDRED UNITS SIR. FIVE THOUSAND
UNITS YOU'RE STILL GONNA HAVE TO
BUILD A BIG ROAD THAT RUNS
THROUGH IT SO.
THE ECONOMIES OF SCALE MAKES A
BIG DIFFERENCE [inaudible]
TOM [inaudible]
ENVIRONMENTAL NEAR.
ENVIRONMENTAL OUR COSTS ARE ON
THIS PROJECT IT'S ABOUT SIX
HUNDRED AND SEVENTY ACRES GROSS
ABOUT FOUR HUNDRED ACRES THAT'S
NOT DEVELOPED AND WE'RE STILL
HAVE TO GO OUT AND SECURE SIX
HUNDRED FORTY ACRES OF OFFSITE
MITIGATION.
SUPPORT IS SO THINK ON YOUR ROOF.
TUNE IN TO TWO AND A HALF TIMES
WHATEVER DEVELOPMENT AREAS IS
WHAT YOU HAVE TO GO OUT AND
SECURE SORRY I'M JUST A LITTLE
CONFUSED BY THE PRESENTATION I
WANT TO BE SURE UNDERSTANDING
BECAUSE YOU SAY A HUNDRED UNITS
BUT THEN YOU JUST MENTION A
COUPLE THOUSAND SO ARE.
USES A PART OF A CONTINUATION OF
AN OLDER DEVELOPMENT IS NOT WHAT
YOUR NO SIR BRAND NEW
DEVELOPMENT IT'S PART IT'S
BROUGH WOULD BE WHAT ONE HUNDRED
UNITS WOULD BE WITH IN THE THREE
THOUSAND UNITS DEVELOP.
SO YOU DEVELOP THREE THOUSAND
ONE TIME KNOW.
IT TAKES A LITTLE TO THE DECADE
TO DECADES TO TO ABSORB ALL THE
THREE THOUSAND THE FIRST ONE
HUNDRED I GOT THE SUIT.
RATS WITH LIKE I'M JUST TRYING
TO UNDERSTAND THAT THE AMOUNT OF
ACREAGE IN THE NUMBER OF UNITS
WILL HAVE A UNDERSTANDING SO
YOU'RE TALKING ABOUT THE TOTAL
AMOUNT OF ACREAGE FOR THE TH THE
WHOLE BUILD UP TO THREE THOUSAND
OUT MAYBE.
MAYBE I SHOULD EXPLAIN ON THE
MASTER PLAN --
WE HAVE TWO OF THE THREE
THOUSAND FORUMS ARE BETTER WITH
THEM AT NEW PERCENT SINCE TALK
ABOUT ONE PRODUCT LINE FOR
EIGHTEEN UNITS IT.
FOUND WE HAVE WILL HAVE ANYWHERE
FROM FIVE TO SIX MAYBE EVEN MORE
PRODUCT LINES RUNNING
CONCURRENTLY EVERYTHING FROM YOU
KNOW SMALL MULTI FAMILY UNITS
BROWN. TO GO LARGER AND I
WOULDN'T SAY A LARGE.
A BIT LARGER HOMES IN THERE THAT
MIGHT BE UP TO FIVE THOUSAND
MAYBE SIX THOUSAND SQUARE FOOT
LOT ON THE VERY TOP.
AND MY LAST QUESTION SO WHAT YOU
GET ON WITH IT IS THEIR
COMMERCIAL MIXED IN THERE AS
WELL AS TO WHERE THEIR SHOPS AND
RESTAURANTS.
SAME QUESTION FOR THE ONE MY I
FLIP TO HEAD TO LOOK AT THE
OTHER PROJECT AS WELL SO OFFICE
IN PLACE YOU KNOW IT'S A GREAT
QUESTION --
WE STARTED THIS MASTER PLAN WITH
ALBERT PARK CENTER BECAUSE WE
CALL IT THEM AND PEDESTRIAN
FRIENDLY WE WE BORROW SET UP A
SERIES PARKS HOW THOSE CONNECT
TOGETHER.
AND AND WE GET THE ROADS LAST SO
HOW WOULD LIVE THERE'S ABOUT
COMMERCIAL INNER SOLAR DAY WE
HAVE MIXED USE.
THERE'S SCHOOL FIRE STATION
WITNESSES SO WHOLE COMMUNITY
THAT'S THAT'S GOING TO BE COMING
FORWARD.
SO THIS HUNDRED UNITS IS. ONE OF
THE ABOUT TYPES OF PRODUCT LINES
THAT WOULD EXIST IN HERE.
TAKE A TIME BUT IT WILL SHOW YOU
SIX DIFFERENT WHAT'S.
AND THIS EXEMPLIFIES AMERICA GO
THROW THE DETAIL ON HERE BUT
JUST A COUPLE OF HIGHLIGHTS AND
AND AND THE THOUGHT PROCESS ON
THIS.
PERMIT FEES THAT EIGHTY THOUSAND
DOLLARS THREE HUNDRED FIFTY
DOLLAR MEMBER AND PERMIT FEES
IT'S OVER HERE. TWENTY SEVEN
THOUSAND ABOUT IS SCHOOL FEES
[inaudible]
BAD NEWS A HUGE HUGE HIT AMOUNT
WAS --
BECAUSE THE LEVEL FOR YOU GROW
LEVEL THREE FEES AND AND SUCH
THAT HAVE HAVE FAR COME TO THE
FOR LACK OF FINANCING FOR
SCHOOLS.
AND BASICALLY THAT'S KEEPING
THIS PROJECT UP ON BLOCKS UNTIL
SOMEONE.
GETS ALL --
THE OTHER --
ITEMS ARE AND WHAT I WANT TO
TALK ABOUT IN TERMS OF WHAT'S
HAPPENING ON ON AN OVERALL BASIS
A LOT OF THE DEVELOPMENT BUT YOU
SEE VERSUS A HOMEBUILDING THAT
YOU SEE GOING ON IN THE REGION.
IS ON OLD LOCKS HOLDING WHAT'S
IT WILL PERSONALLY DEVELOPER.
ARE GREAT IT INFRASTRUCTURE.
THIRD ROUND BUYERS FROM ONE
RESPONDED OUT OF BAY TO CREATE
NEW LOTS IS EXTREMELY EXTREMELY
DIFFICULT AND SO SOME OF THE
NUMBERS THAT YOU SEEN FOR SITE
IMPROVEMENTS THESE IN PUBLIC
BECAUSE HAVE ALL BEEN WIPED OFF
THE BOOKS.
ON THE EXISTING --
POWER PROJECTS IN A MOVE FORWARD --
IN TERMS OF THE VERB PRICING
AGAIN I DON'T GO THROUGH ALL
THAT DETAIL ON THIS BUT GOOD NET
CREEK TSONGAS WAS NEGATIVE FIVE
POINT 6%.
SO WE DON'T HAVE AN AFTER TAX
NUMBER ON HERE BECAUSE WE
HAVEN'T CLEARED A HURDLE.
AND I BY WAY OF COMPARISON.
OVER THAT NINETEEN YEARS WE DONT
JUST CAME OUT OF THE GREAT
RECESSION.
AND I CAN TELL YOU IN THE MIDDLE
OF THE GREAT RECESSION SHOULD WE
CONTINUE MOVING FORWARD WITH
THIS PROJECT WILL IT TAKE SO
LONG.
THAT YOU CAN NEVER STOPAND
WE'RE GOING TO BE DEALING WITH
CYCLES SO WERE.
WORKING ON THE ASSUMPTION THAT
THINGS WILL IMPROVE AND THAT
WILL WORK HARDER AND WORK ON OUR
SITE BECAUSE WE'RE GONNA ALWAYS
OTHER THINGS.
PRICING ARE WILL YEARS MOOD THE
LIMITING FACTOR ON YOUR THE
FORMER NINETY FOUR THOUSAND
DOLLARS TO YOU SEE OVER THERE.
ARE FELIZ.
IS MUCH BETTER THAN THE ONE
POINT TWO MILLION THAT HAVE THEM
AND WOULD BE WORKFORCE FRIENDLY.
BUT WE CAN'T DELIVER IT WITH ALL
THE COSTS THAT ARE IN FRONT OF
US TODAY SO.
WHAT'S HAPPENED IS THAT FOUR
NINETY FOUR THOUSAND IS
BASICALLY THE PRE RECESSION
PRICING THAT WE HAVE HERE IN THE
CYCLE SACRAMENTO REGION.
UNFORTUNATELY THE FEES A SLIGHT
IMPROVEMENT BECAUSE LABOR COSTS
ENVIRONMENTAL COSTS AND
EVERYTHING ELSE HAS GONE UP IT
IS NOT STOP INCREASING SO THE
GAP [inaudible]
CLOSE SO.
THIS PROJECT MY JOHN.
IS TO GET READY. TO DEPLOY.
WHEN THE DYNAMICS ARE THERE
EITHER REDUCING COSTS OR
[inaudible]
PRICE INCREASES BUT WE'LL TALK
ABOUT BEING ABLE TO DEPLOY
LISTEN MARKET DEUCES IN SUSPENSE
UNTIL WE GET.
I FIGURED OUT ONE AT A KNOWLEDGE
THE PRESENCE OF A SOME MEMBER AG
AGO CURRY I THINK YOU FOR COMING --
TAKING A QUICK QUESTIONS ON THIS
ONE IF THERE'S ANY JUST MAYBE TO
BELABOR THE POINT THAT YOU'RE
MAKING -- IS
THAT RIGHT NOW THIS IS THIS IS A
NICE --
WAITING FOR MARKET THAT THE
MARKET PRICES TO CATCH UP WITH
THE COSTS THAT YOU'RE LOOKING AT
WE'RE CONTINUING TO PROCESS. FOR
THE ALMOST PERMITS TO HAVE IT
READY THAT'S MY JOBS HAVE IT
READY.
BECAUSE WHEN WHEN THE NEED IS
THERE WHEN THE PRICING IS THERE
AND AND THE THE ABSORPTION HERE
OR THERE.
I CAN'T SAY LET'S GO START A
PROJECT AND I'LL SEE YOU IN
TWENTY YEARS.
THEIR ARM IT'S PUT THE SWITCH
SHOULD BE READY TO GO BY
UNDENIABLY THE NEED IS THERE BUT
THE PRICING THAT'S NOT.
I AM GONNA PERMITTING PROCESS
SIDE I FEEL DIMENSION THE
FEDERAL PERMITTING PROCESSES ARE
GREAT WHEN FACTOR THAT WE'RE
DEALING WITH AS WELL.
ABOVE OUR PAY GRADE HERE THE
SPECTRAL.
OKAY WILL MOVE TO THAT'S
PRESENTATION THANK YOU VERY MUCH
OF FOR TIME CONSTRAINTS I THINK
WE'LL MOVE TO THE FOURTH PROJECT
THAT'S OKAY UNLESS VENTURE --
WITH THE PROJECT.
ABOUT THAT --
INFILL NEXT DENSITY THIS IS A
PROJECT THAT IS CURRENTLY UNDER
CONSTRUCTION AS YOU CAN SEE.
IN THE TRI VALLEY --
THIS THE PROJECT IS SHE HOMES.
HAS BUILT WE'VE HAD IT FOR MANY
YEARS IN THE FAMILY THIS IS THE
PICTURE OF THE BEAUTIFUL REC
CENTER THAT WE BUILT --
THE FABLESS COMMUNITY IS FOUR
HUNDRED SEVENTY FOUR UNITS --
AND IT IS ALL [inaudible]
TOWN HOMES --
FOR DIFFERENT PRODUCT TYPES OF
THE GET IN TOTAL AT SEVENTEEN
DIFFERENT FLOOR PLANS ALL
RANGING FROM.
TWELVE HUNDRED FIFTY SQUARE FEET
TO TWENTY TWO HUNDRED FIFTY
SQUARE FEET --
IT'S BEEN A VERY SUCCESSFUL
PROJECT FOR US --
TO GET TO THIS POINT TOOK MANY
YEARS OF THE ENTITLEMENT PROCESS
ACTION THIS IS IN THE CITY A
LIVER MORE.
NOW THIS IS JUST THE SITE PLAN
YOU CAN SEE WHERE THE REC CENTER
LIES IN THE LEFT HAND SIDE --
TALK ABOUT A LITTLE BIT OF THE
DYNAMICS --
BEFORE I GO THROUGH THE PRO FORM --
THIS PROJECT.
WHERE WE ACTUALLY OWN THE LAND
SO THIS IS A GOOD EXAMPLE OF
TAKING IT FROM?
PLANNING THROUGH DEALING WITH
ALL OF THE CITY DYNAMICS GOING
THROUGH REGULATORY.
CONCERNS DOING ALL THE LAND
DEVELOPMENT ULTIMATELY BILL IN
THE HOMES AND I HAVE ABOUT A
HUNDRED UNITS LEFT TO BUILD --
THIS PROJECT HAD A COUPLE MAJOR
HURDLES THAT ALL THIS USES SOME
EXAMPLES OF SOME OF THE
CHALLENGES WE WORK THROUGH.
CITY LIVERMORE WHEN YOU'RE
DRIVING ON THE FREEWAY HAS WITH
THE BECAUSE SCENIC CORPS OR IT'S
A VIEW CORRIDOR THEY EXPECT TO
BE ABLE TO SEE WHEN YOUR ON THE
FREEWAY ON A ON AN ANGLE.
THE HILLS BEHIND WHAT WOULD BE
POTENTIALLY THE HOMES.
THE DENSITY THAT WAS ORIGINALLY
PRESCRIBED FOR THE PROPERTY WAS
IN CONFLICT WITH THE VIEW
QUARTERS IF YOU WERE A BILL THAT
THAT DENSITY.
WHICH WAS TWENTY FOUR UNITS THE
ACRE THE HEIGHT OF THOSE
BUILDINGS WOULD PIERCE THROUGH
THE THIS.
VIEW QUORUM AND SO THE IDEA WAS
GOING TO BE DIG A HOLE.
AND BURY THE UNITS INTO THE HOLE
WHAT OUT HOLE WAS AT EIGHT
HUNDRED THOUSAND YARD HOLE IN
ALL THE DEVELOPMENT WHO HAD BEEN
DONE IN THE SURROUNDING AREA
WHICH MEANT THAT.
I WOULD HAVE TO EXPORT THAT DIRT
DOWN ABOUT FIFTEEN MILES DOWN
THE FREEWAY.
AND IT WAS APPROXIMATE TWENTY
DOLLARS A YEAR YOU DO EIGHT
HUNDRED THOUSAND YARDS TIMES
TWENTY DOLLARS THE ARE THAT
SIXTEEN MILLION DOLLARS THAT WAS
JUST ENOUGH MONEY TO MAKE THIS
PROJECT NOT WORK.
ALONG WITH THAT WE HAD
AFFORDABLE HOUSING THAT IT THIS
WAS BE ENTITLED DURING THE
DOWNTURN HAD IT OF THE PMR
REQUIREMENT A 15% WAS MEANT.
SEVEN LITTLE OVER SEVENTY UNITS
WERE NOT TO BE SOLD AT THREE
HUNDRED THOUSAND DOLLARS AND AS
YOU CAN SEE WERE SOLELY SO THAT
EIGHT ARE THOUSAND DOLLARS.
SO TAKE FIVE HUNDRED THOUSAND
DOLLAR SUBSIDY TIMES OVER
SEVENTY UNITS.
YOU CAN SEE THAT'S ANOTHER
THIRTY FIVE MILLION DOLLAR
PAINFUL --
ISSUE FOR THE PROJECT I WAS
FORTUNATE ENOUGH TO WORK WITH
THE CITY AND I FEED OUT WHICH
MEAN I PAID THEM A NICE BIG.
VERY LARGE CHECK WOULD NOT
THIRTY FIVE MILLION OR TO FEE
OUT OF THE PROJECT COULD MOVE
FORWARD.
AS WERE ABOUT TO START THE
PROJECT IN IF I GO BACK TO TIME
WHEN WE WERE READY TO BREAK
CONSTRUCTION.
CALIFORNIA FISH WILDLIFE CAME
ALONG AND TOLD ME THAT THIS.
PROPERTY WAS POTENTIAL HAVE A
DOUBT FOR THE RED LEGGED FROG.
MAKES GIVEN THE TIGER SALAMANDER.
DECEMBER SPECIES --
THE TIGER SALAMANDER EVEN THOUGH
THERE HAVE BEEN COUPLE MILES
AWAY WOULD BE THE ONLY SIDE WE
SEEN ATTIRE SALAMANDER BUT IT
HAD HAVE ATTACK CHARACTERISTICS
THAT COULD POTENTIALLY.
BE HABITAT FOR THE TIGER
SALAMANDER.
A YEAR AND A HALF LATER --
WORKING WITH CALIFORNIA FISH
WILDLIFE AS I WENT TO A PROPERTY
OWNER ABOUT A MILE HALF AWAY HE
TRULY HAD.
TRUE CHARACTERISTICS. FOR A
TIGER SALAMANDER AND PUTTING
DOWN MEN'S AND USE THAT PROPERTY
FOR MITIGATION WHICH WAS FIVE
MILLION DOLLARS BETWEEN THE
ENDOWMENTS AND AND SECURING THE
PROPERTY.
SO FIVE MILLION DOLLARS OF EXTRA
COSTS IN A DELAY OF THE YEAR AND
A HALF I THINKING TO MARKET.
IF I DIDN'T HAVE THAT DELAY.
THE HOMES WERE VALUED AT THE
TIME PRIOR TO THAT CHALLENGE AT
SIX HUNDRED FIFTY DOLLARS SIX
HUNDRED FIFTY THOUSAND A UNIT.
SO IT'S ONE OF THOSE SITUATIONS
WHERE YOU LOOKING GO WILL YOU DO
YOU LOOK LIKE YOU'RE DOING OKAY
AND WE ARE.
WE'RE DOING OKAY BECAUSE PRICES
WENT UP BY A HUNDRED FIFTY
THOUSAND DOLLARS DURING THE
DELAYS THAT I HAD.
WHICH ABSORB THE EXTRA FIVE
MILLION DOLLARS IN COST BUT WHO
LOSES IN THAT EXAMPLE
[inaudible]
THE CONSUMER.
IT OF THIS IS IT THIS RIGHT HERE
IS THE DEVELOPMENT OF YOU LOOK
AT THE WHOLE TRI VALLEY
CURRENTLY FOR NEW HOMES THIS IS
MOST AFFORDABLE DEVELOPMENT
BETWEEN THE CITIES OF PLEASANTON
LIVERMORE DUBLIN AND SAN RAMON
IS THE MOST AFFORDABLE PROJECT
I'M AT EIGHT HUNDRED THOUSAND
DOLLARS IN THESE.
ARE ATTACHED PRODUCTS.
YES DEVELOPMENT OF THE DOWNTURN.
THAT HOUSE PRICES WERE ALREADY
ON THE THREE AND A FIFTY
THOUSAND DOLLARS FOR THE SAME
UNIT.
AND SO THIS IS KIND OF THE VERY
ABILITY YOU HAVE IN TERMS OF
WHAT'S HAPPENING IN THE
MARKETPLACE.
AND AND WHEN YOU CONSTRAINTS
SUPPLY AND YOU HAVE THE JOB
GROWTH THAT WE HAVE SO WE ALL
WANT TO CELEBRATE THAT WE'RE
HAVING THIS GREAT ECONOMY IN THE
BAY AREA.
BUT YOU'VE GOT A BALANCE A
SUPPLY OF HOUSING WITH THE
DEMAND.
AND OBVIOUSLY WE'RE NOT EVEN
CLOSE BECAUSE OF I GET A HAIR
THOUSAND DOLLARS FOR TOWN HOME --
IN THAT'S THE MOST AFFORDABLE
PRODUCT THAT WE HAVE.
SO THIS IS AN EXAMPLE YOU KNOW
IT SUCCESSFUL FOR OUR COMPANY.
BUT IT I DON'T LOOK IT IS BEING
SUCCESSFUL FOR THE COMMUNITY
JUST BECAUSE OF WHAT
UNFORTUNATELY.
YOUNG PEOPLE MOST OF MOST OF THE
PEOPLE THAT ARE BUYING.
IN THIS DEVELOPMENT ARE OUNG
JUST NEWLY STARTING OUT FAMILIES
THE NUMBER OF YOUNG KIDS.
USING THAT REC CENTER I MEAN
IT'S IT'S WONDERFUL BUT IT IS I
KNOW THAT THEY'RE ALL STRETCHING
THEMSELVES TO LIMIT BILL FOR
THIS HOUSE.
THEY WITHOUT OPEN TO QUESTIONS.
QUESTIONS ON THIS PROCESSION
DOCTOR WITH.
JUST A QUICK QUESTION YOU
MENTIONED AFFORDABLE HOUSING IS
A COMPONENT.
HOME WHAT WAS THE PERCENTAGE OUT
IT WAS AT THE TIME IS TWELVE AND
A HALF PERCENT.
AND NOW IT'S AT 15% IN THE CITY
THEY'VE CHANGED IT AND MAYBE
INCREASED.
SO DID YOU GET.
I'VE BEEN ASKED A QUESTION A
PRIDE OF THE ANSWER.
TO AND YOU GET ANY BREAK ON THE
PERMIT FEES ANYTHING RELATED TO
THE CONSTRUCTION OF THE THE
AFFORDABLE UNITS YOU GET NO
BREAK WHEN YOU BUILD AFFORDABLE
UNITS.
IN FACT.
YOU IF YOU TRIED IT DOWNS BACK
AT ALL THOSE UNITS YOU CANNOT DO
THAT EITHER.
DON'T TRY TO COME IN AND HAVE A
DIFFERENT [inaudible]
HOME.
IN FACT THEY WANT TO HAVE OF
DISBURSED THROUGHOUT THE
COMMUNITY IF I TRY TO TAKE HIM
INTO A AN ISOLATED AREA.
NO YOU CAN'T DO THAT IN THE
OTHER MAKE SURE THAT THE SUSPECT
OUT HOME IN FACT BEDROOM COUNT
THERE'S A PRESCRIPTION TO HOW
MANY THREE BEDROOM SEMI TWO
BEDROOMS.
YOU NEED TO HAVE WITHIN THE
COMMUNITY.
AND GET NO BREAK SO YOU LOSE ON
EACH ONE OF THOSE YOU KNOW THAT
TIME YOU LOSE BIG TIME.
MEANS THAT I ALSO THOUGHT
BROUGHT OUT HERE I GIVE MY
EXAMPLE.
THOSE EIGHTY OF THOSE DAMN TO GO
TO SAFEWAY SAFEWAY SENSES FOOD
STAMPS.
BACKED THE GOVERNMENT AND THEY
GET REIMBURSED.
WE DON'T GET A STAMP TO SEND
ANYBODY TO GET REIMBURSED FOR
THE FIVE HUNDRED THOUSAND DOLLAR
PER HOME SUBSIDY THAT WE'RE
PROVIDING.
SOMEHOW OUR PROJECT IS SUPPOSED
ABSORBED THAT COSTS WILL WHO'S
REALLY ABSORB THE COST.
IT'S GOING TO BE THE OTHERS THAT
ARE BUYING THE OTHER. EIGHTY
SEVEN AND A HALF PERCENT OF
HOMES RIGHT.
WHEN HE SAID THAT THE THE TOTAL
COST OF THE INCLUSIONARY QUITE
WAS ABOUT THIRTY FIVE MILLION
YOU FEED OUT WHAT WAS THE FEE
OUT PAYMENT?
WELL I FEED OUT.
I MADE THE AGREEMENT WHEN I FEED
OUT IN 200-092-00010 WHEN THEY
WERE STARTING TO REALLY WANT
THIS PROJECT ANTI FEET OUT OF
FIVE MILLION DOLLARS BUT THERE
WAS A REALLY GOOD NEGOTIATION
DOES ASSEMBLY DOES.
I COULD GET THE IDEAL TODAY.
AND IT JUST IN BECAUSE OF OUR
NEW ALSO I'M SORRY ALSO BECAUSE
WHEN I DID THAT THE PRICING WAS
AT LIKE SIX HUNDRED THOUSAND AT
THAT TIME.
AND SO THE THIS SUBSIDY WAS
CLOSER TO THREE I THOUSAND HOMES
A FIVE ONE THOUSAND OR HOME SO
WASN'T THIRTY FIVE MILLION WOULD.
BUY MILLION TODAY GIVE MORE
PRICES ARE GONE.
THE TIME IT WOULD THE TIME IT
WAS CLOSER TO TWENTY FIVE
MILLION. TWENTY ARE NOT GO STILL
GOT STOLEN --
OKAY THAT'S THE SWINGING
VARIATION IN THE WHAT IT WOULD
HAVE BEEN IN THE RECESSION AND
TO WHAT IT.
IS NOW AND WHAT IT WOULD HAVE
BEEN HAD THE FEDERAL DELAY NOT
HAPPEN RIGHT.
SO THAT THE STATE DELAY WAS THE
SITE.
YEAH SORRY LEFT [inaudible]
AND THEN.
IT.
IT WAS IT WAS LIKE WHEN YOU
REALIZE YOU ARE PART OF THE
PROBLEM YEAH --
BUT A ITS BITS SPEAKS THE THE
EXTREME VOLATILITY MEG AGAIN
AGAINST MY CONSTITUENT
PROSPECTIVELY PEOPLE FIND IT
DIFFICULT TO BELIEVE THE
VARIATION CAN BE.
THAT WIDE IT FEELS ANECDOTAL BUT
IT'S HELPFUL TO SEE IT ON A PAGE
TO KIND OF PAPER PICTURE WILL
SALUTE YOU'RE DEALING WITH --
BUT WE WOULD LIKE TO SEE CHANGE
RIGHT AND HOW WE CAN ALL WORK
CLEVERLY TO MAKE IT SO.
HOME OTHERWISE WANT ONE POINT ON
THAT IS REAL QUICK IS I THINK
PART.
HOW WE LOOK AT OUR BUSINESS AND
THE RETURNS THAT WE EXPECT LIKE
ANY INVESTMENT?
THE MORE RISK WITHIN.
THE HIGHER RETURNS ARE LOOKING
FOR AND GIVEN THAT IT'S SO
UNPREDICTABLE OUR BUSINESS.
THAT I THINK THAT WE WE HAD THIS
PERCEPTION THAT WE'RE LOOKING
FOR HIGH RETURNS IT'S BECAUSE
THE AMOUNT OF TIMES WE LOSE.
WHEN YOU HAVE A SUCCESSFUL
PROJECT WITH THIS ONE WAS YOU
HAVE TO KIND OF MAKE UP FOR ALL
THE PROJECTS THAT YOU NEVER GOT
DONE YEAH?
AND IN THAT JUST BECOMES BECAUSE
IT'S A RISK REWARD A SITUATION.
I SOME MEMBER FRIEDMAN.
JUST SO I'M CLEAR THE THE
HUNDRED THOUSAND DOLLAR PER UNIT
PERMIT FEE HAS SETTING INCLUDING
THE AFFORDABLE HOUSING NOT.
SO WHY ACTUALLY NOW TODAY IT'S A
HUNDRED THIRTY THOUSAND IN THE
REMARK WHY IS THIS THE USER
THOSE ARE HIGH AREN'T THEY ON
YOUR EXTREMELY HIGH.
WIRE THEY SO HIGH FOR THIS
PROJECT COMPARED TO OTHERS AT A
LOCAL KNOW THAT IS WHAT THEY ARE
IN THE CITY A LITTLE MORE CREDIT
SOME SAY IT'S A LOCAL.
CODES ARE YEAH FEES THAT WE PAY
OUR PERMIT FEES THAT WE'RE PAIN
ARE.
OURS.
EACH CITY HAS A DIFFERENT
FEELING STRUCTURE AND SO MANY IN
THIS CASE INCLUDED A THREE
HUNDRED SEVENTY FIVE THOUSAND
DOLLARS FOR ART.
AN ART FEE NOW IN THAT SITUATION
WHAT I DID IS I ACTUALLY BOUGHT
THE ARE TO THE COMMUNITY BECAUSE
I ALSO HAD TO CONNECT TO THE THE
PUBLIC TRAIL SYSTEM AND SO I
WENT OUT COMMISSION VARIOUS
ARTISTS AND PUT PUBLIC ART HONOR
TRAIL SYSTEMS BECAME VALUABLE
FOR THE COMMUNITIES.
I WAS OKAY WITH THAT BUT THAT
WOULD HAVE BEEN A FEE THAT WOULD
HAVE BEEN IN THE PERMIT FEE BUT
BE ARTSY SCHOOL FEES WATER IN
GET ON THE LIST OF ALL THE FEES
THAT ARE IN AND THEN.
SCHOOL FEES AND YEAH THAT'S WHAT
IT'S KIND OF WHATEVER COUNCIL
WANTS APPROVED HIS THEIR FEE
STRUCTURE THAT THEY CAN.
JUSTIFY NO THERE'S A NEXUS STUDY
FOR HOW YOU GO ABOUT DETERMINING
FEES.
BUT IT'S HARD FOR US TO
CHALLENGE THOSE --
THOSE STUDIES CLEAR FOR HUNDRED
AND SEVENTY FIVE UNITS THIS OUT
OF CURIOSITY YOU HAVE NO
COMMERCIAL THIS DEVELOPMENT NOT
IN THIS DEVELOPMENT AND HOW FAR
THESE FOLKS FROM A GROCERY STORE --
WE HELPED BUILD THE INTERCHANGE
ISABEL INTERCHANGE HELP GET THE
FUNDING FOR THAT.
OR TEN YEARS AGO AND IT'S A
MYLAN HALF.
BECAUSE GOES ACTUALLY. THREE
QUARTERS OF A MILE DOWN THE
STREET.
OKAY THANK THANK YOU ANY OTHER
MEMBERS OF THE COMMITTEE BFORE
WE GO TO OUR LAST --
PANEL.
THEN THAT'S WHEN YOU THANKS
MISTER CHAIRMAN ALL KIDS IS
QUICK AND TO THE POINT AND
YOU'VE HEARD FROM BUILDERS WHO
SUCCESSFULLY BUILT IN CALIFORNIA
AND SOME OF THE CHALLENGES THEY
FACE.
AS WAS MENTIONED BEFORE THE
STATE DOES PLAY A KEY ROLE IN
THIS OBVIOUSLY LOCAL GOVERNMENTS
TO TURN THE FEES AS PLAIN JUST
OUTLINED FOR YOU.
ON EACH OF THOSE DECISIONS ON
THE LOCAL GOVERNMENT CAN IMPACT
THE COST.
BUT THE STATE DOES PLAY A ROLE
IN THIS AND SO COUPLE THINGS WE
JUST WANNA BRING TO YOUR
ATTENTION AND I KNOW WHERE AT
THE END OF BOTH HIS HEARING AND
ALSO THE END OF THIS SESSION.
BUT AS YOU PLANNED FOR NEXT YEAR --
BOTH GUBERNATORIAL CANDIDATES OF
EXPRESSES OUR TO BUILD AS MUCH
AS FOUR HUNDRED THOUSAND HOUSING
UNITS IN CALIFORNIA PER YEAR.
LAST YEAR WE PULLED ABOUT A
HUNDRED AND TEN THOUSAND PER THE
LEGEND WAS OFFICE IN THE HOUSING
COMMITTEE DEVELOPMENT OF CPO
SAID INDEPENDENT OF US.
THAT THE CURRENT NEED OF HOUSING
IS A HUNDRED AND EIGHTY THOUSAND
UNITS A YEAR JUST TO KEEP UP
WITH POPULATION GROWTH.
IT'S WERE BUILDING BUT HUNDRED
TEND UNDER FIFTEEN THOUSAND SO
EACH YEAR THE SUPPLIES
DIMINISHING THE DEMAND IS
INCREASING AS YOU SEE THE COST
IS GOING THROUGH THE ROOF.
SO PART OF THIS IS ADDING SUPPLY.
AND WHERE THE STATE CAN HELP IN
THAT A COUPLE THINGS SEEK WAS A
HOLY GRAIL FOR ENVIRONMENTS WE
RESPECT THAT BUT THERE ARE WAYS
TO EXPEDITE.
THE SUPER PROCESS WE USE IT FOR
LARGE STADIUMS AND OTHER MAJOR
EVENTS MIGHT WE CONSIDER FOR
HOUSING.
STATE WATER BOARD THIS MANY
TIMES WE HAVE TO GET WATER KNOW
OUR WATER PROCESS SUPPOSED TO
STATE LAW BUT THEIR WASTE YOU
THAT MUCH MORE EXPEDITIOUSLY.
AND MORE AFFORDABLY.
WE TOUCHED ON DEVELOPER FEES
THERE REALLY IS NO NEXUS --
BUT EVERY TIME A BUILDER SAYS I
DON'T LIKE YOUR NEXUS AGO WILL
GET BACK TO YOU.
WILL GET BACK TO YOU AND TIME
DELAY IS YOUR ENEMY IS A BUILDER
SO THAT'S PART OF THE PROCESS TO
FOR SOMEONE TO BRING CLARITY TO
THAT.
IT'S JUST ANOTHER OPPORTUNITY.
MITIGATION OFFSETS JOHN TOUCHED
ON THIS --
OBIT BUT IF YOU HAVE A FIVE
HUNDRED ACRE PARCEL AND YOU HAVE
TO COME UP WITH SIX HUNDRED
ACRES SOMEWHERE ELSE TO OFFSET
THE MITIGATION.
THAT JUST ADDS CRIMES SO OF
THEIR WAYS TO ADDRESS THAT WE
CAN STILL BILL BEAUTIFUL PARKS.
BUT WE NEED YOU KNOW SIX HUNDRED
ACRES OF OFFSETS.
CODE MANDATES WHETHER IT'S SOLAR
WHETHER IT SEISMIC AND WE DO
HAVE THE MOST.
ENERGY EFFICIENT SEISMICALLY
SAFE HOMES ALREADY IN THE UNITED
STATES IN CALIFORNIA SO THIS
FACTOR THAT IN WHEN YOU LOOK AT
THOSE POLICY DECISIONS THEY DO
IMPACT THE BOTTOM LINE --
AND ALSO JUST DUMB THINGS WITHIN
A ARE BE IN VEHICLE MILES
TRAVELED THESE ARE THINGS THAT
COST -- IN
THE LAST SCENE WE TOUCHED ON WAS
SCHOOLS SO THAT THE STATE OF
CALIFORNIA.
HAS APPROVED NINE BILLION
DOLLARS IN BONDS WITH ONLY
ALLOCATED SIX HUNDRED FORTY
MILLION.
SO THE MORE YOU ALLOCATE SCHOOL
MONIES THE LESS IT COSTS FOR
DEVELOPER FEES AND MOST
IMPORTANTLY THE MORE OUR SCHOOLS
ARE BUILT REFURBISHED.
SO THERE ARE THINGS THAT THE
STATE CAN DO TO ADDRESS THESE
ISSUES AND MISTER CHAIRMAN
MEMBERS ARE HERE WE JUST WANNA
THANK YOU FOR LISTENING TO US ON
THIS.
AS MENTIONED BEFORE THIS IS AN
ONGOING DIALOGUE WORDS THIS
ISN'T ONE AND DONE WE'D LIKE TO
CONTINUE THIS DIALOGUE.
AND WE'RE JUST PART OF IT
THERE'S A WHOLE OTHER COMMUNITY
THAT'S ASSOCIATED WITH BUILDING.
BUT AS THE HOME BUILDERS
NOW WE FEEL VERY STRONGLY THAT
WE CAN BE PART OF THAT SOLUTION
WHEN TO DO THAT GOING FORWARD SO
MISTER CHAIRMAN.
CAN THAT CONCLUDES OUR
PRESENTATION TO YOU WE DO AGAIN
JUST THANK YOU SO MUCH FOR
GIVING US THE TIME TO SHARE
INSIGHTS AND KNOWLEDGE REGARDING
HOMEBUILDING.
THANK YOU DAN UP I WANT TO GIVE
MEMBERS OF THE COMMITTEE ASKING
QUESTIONS BEFORE WE WRAP UP --
OR MAKING IT A COMMENTS AS WELL --
IF THEY'RE NOT HOW DISSIMILAR
THINK THE MEMBERS OF THE
COMMITTEE WHO SHOWED UP TODAY
MISTER SANTIAGO AND HIS FRIEDMAN
MISTER BERMAN IS MISTER WOULD I
MISS OUT YOU ARE CURRY --
I THINK IT SHOWS --
THAT THERE IS A HUGE APPETITE IN
THE LEGISLATURE TO TACKLE ISSUES
OF HOUSING AFFORDABILITY
PARTICULARLY FOR THIS THIS METAL --
THAT I THINK IS OF A CONCERN I'M
SURE ALL OF US SITUATES WHETHER
IT'S A NOR CAL SO COW --
SO COASTAL OR INLAND ALL OF US
ARE DOING WITH IT RIGHT.
ON I THINK TODAY'S PRE
CONVERSATION HELPS TO DEMYSTIFY
I'M SOME OF WHAT IT IS THAT
YOU'RE DEALING WITH TO GET
PRODUCT A TO THE TABLE ON HOW.
YOU CAN START OUT WITH SOMETHING
THAT'S INTENDED TO BE FOR THE
MIDDLE CLASS BUT THROUGH A
VARIETY OF OF LENGTHY.
EXPERIENCE AS YOU MADE IT
SOMEWHERE ELSE I'M I THINK IN MY
TIME IN LOCAL GOVERNMENTS REALLY
LEARNED THAT CERTAINTY IS
INCREDIBLY IMPORTANT IN THIS
PROCESS AND WATCHING THE
VARIABILITY OF THE PRESENTATION.
OF ONE HUNDRED AND FIFTY
THOUSAND TO ENOUGH EIGHT EIGHT
HUNDRED THOUSAND RIGHT --
YOU GET A SENSE OF JUST EXACTLY
WHAT UNCERTAINTY CAN DO IN TERMS
OF TIMING A PROLONGED PROCESS
AND ADDING TO OVERALL COSTS --
MORE SAFER --
I WANNA THINK THE CBI OF FOR
WORKING WITH MY OFFICE TO
DEVELOP SOME THE SNYDERS DEFINE
DEVELOPERS WHO HAD LIVED
EXPERIENCE THAT ARE WILLING TO
SHARE -- TO
TALK ABOUT WHAT THIS LOOKS LIKE
AGAINST OR DEMYSTIFYING THE
PROCESS ACKNOWLEDGING THAT THERE
ARE CERTAIN THAT THE BRICKS
STICKS COSTS ONE THING BUT
THERE'S A LOT OF OTHER STUFF
THAT WE DON'T TALK ABOUT THAT WE
SHOULD PROBABLY HAVE AN
UNDERSTANDING OF I'VE.
FLIRTED WITH THE IDEA OF TRYING
TO INCLUDE --
IN BILLS NOT JUST A FISCAL
IMPACT WHICH WE ALWAYS SEE BUT A
HOUSING IMPACT BUT WHAT COULD
THIS DO IN TERMS OF INCREASING
OR REDUCING THE AMOUNT HOUSING
AND COMMUNITY AS WE LOOK AT SOME
LEGISLATION THAT WE ADVANCE.
A HERE OR MAYBE ASKING LOCALS TO
DO THAT SINCE WE KNOW THAT THEIR
KEY PARTNERS IN THIS --
I WANT TO SAY THAT THE DISH SO
FOR FUTURE HEARINGS WE WANT TO
HAVE A DIALOGUE --
WITH -- THE
WORKERS WHO DO THESE PROJECTS --
WITH THE TRADES TO UNDERSTAND
THEIR PERSPECTIVE ON IT WE KNOW
THERE'S A SHORTAGE OF WORKERS
SIMULTANEOUSLY THERE'S CONCERNS
ABOUT WAGES AND AND AND SOME
CERTAINTY PROCESS ON THEIR END
AND HOW THEY MIGHT BE ABLE TO BE
HELPFUL IN THIS I THINK WE HAVE
A SHARED --
INTEREST IN MAKING SURE THAT
HOUSING GETS BILL BECAUSE
TYPICALLY WE'RE TALKING ABOUT.
THOSE WORKERS AND THE TO BE ABLE
TO ACTUALLY BUILD IT RIGHT --
IN SO THIS IS AN ONGOING
DIALOGUE MIGHT GO HOPE FOR OUT
OF THIS COMMITTEE OF COURSE IS
ALWAYS TO TAKE THE DISCUSSIONS
THAT WE HAVE HERE INTERDICTED
LEGISLATION.
THAT EACH MEMBER WHO'S HERE HAS
DONE IMPORTANT BUILDING IN THE
SHORT TIME THAT MS FREEMAN I'VE
BEEN HERE --
WE HAVE WORKED ON HOUSING ISSUES
ARE THIS IS NOT THE LAST OF THIS
FOR US --
AND AGAIN APPRECIATE EVERYONE'S
TIME EFFORT ATTENTION ON GIVING
US SOMETHING TO TO NOT JUST TALK
ABOUT TODAY BUT TO PUT OUT TO
THE UNIVERSE FOR THE DOZENS AND
DOZENS OF PEOPLE WHO WATCH THIS
ON ON PUBLIC ACCESS --
TO HOPEFULLY AGAIN GET A SENSE
OF WHAT CAN WE DO I JUST CLOSED
WITH A STAT THAT MY CITY
RECENTLY PUT OUT IN THE LAST
SEVEN YEARS.
THE BILL IN THE CITY OF SAN
DIEGO OVER TWENTY THOUSAND UNITS
FOR FOLKS --
AND ABOVE A MODERATE INCOME IN
THAT SAME SEVEN YEARS ABOUT
FORTY FOUR HUNDRED UNITS WERE
BUILT FOR VERY LOW AND LOW
INCOME SAN DIEGANS.
USUALLY THROUGH REDEVELOPMENT OF
FORMERLY DOLLAR PROJECTS TAX
CREDITS ETCETERA. FOR THE MIDDLE
CLASS FOR THOSE SEVEN YEARS FOR
PEOPLE IN THE MIDDLE THIRTY
THREE UNITS IN THE ENTIRE CITY
BUILT OVER THE SEVEN YEARS.
OF ITS HOUSING IS A LADDER THERE
ARE NO ROUNDS IN THE MIDDLE OF
THE LATTER AND THEREFORE THE
DOWNWARD PRESSURE.
AND WHAT MY CONSTITUENCY IN
TERMS OF A OF A GROWTH IN THE
NUMBER OF PEOPLE SLEEPING ON THE
STREETS --
IS A FUNCTION OF THIS INABILITY
TO CREATE THE KINDS OF HOUSING
THAT YOU I THINK WANT TO BASED
ON THE TESTIMONY HERE TODAY.
ON BUT CHRIS WE CAN'T --
SO MY DOOR REMAINS OPEN AND I
APPRECIATE I KNOW THAT YOU ALL
WILL BE IN TOUCH AS WELL BUT
LET'S CONTINUE TO THINK ABOUT
WAYS THAT WE CAN BUILD SOME
LACKS THE SKILL IN THE LATTER.
THAT ARE IN THE MIDDLE OF IT
THAT A PARTY SAY THE COUNTRY
DOES MORE FOR THE MIDDLE CLASS
AND JUST BUILD THIRTY THREE
HOMES --
LET'S FIGURE OUT A WAY TO GET
THE RENTS DOWNLOAD BUTTON
PROVIDED OPPORTUNITY FROM
OWNERSHIP FROM ALL CALIFORNIANS.
AND THANK YOU EVERYONE SO MUCH
OF FREE TIME TODAY.
ANY -- WE
WANT TO TAKE SOME PUBLIC COMMENT
IF THERE'S A WE WISH TO MAKE ANY
COMMENTS A TO THE COMMITTEE
BEFORE WE ADJOURN WE CERTAINLY
WELCOME.
OF THOSE COMMENTS AT THIS TIME.
MICHAEL'S HERE FOR YOUR HELP FOR
EUROPE'S AT YOUR SERVICE.
SEEING AND HEARING NONE I'D SAY
NO HEARING NO ADDITIONAL
QUESTION SPEAK BY MEMBERS OF THE
COMMITTEE WE STAND ADJOURNED
THANK YOU VERY MUCH LAYS IT ON
THE