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HomeMy WebLinkAbout1987-058 1 RESOLUTION NO. 87-58 2 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND )IRECTING THE EXECUTION OF AN P.~GREEMENT WITH EMPIRE ECONOMICS FOR 3 \ HOUSING MARKET STUDY. 4 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF 3AN BERNARDINO AS FOLLOWS: 5 SECTION 1. The Mayor of the City of San Bernardino is hereby 6 authorized and directed to execute for and on behalf of said city 7 ~n Agreement with Empire Economics for a Housing Market Study, a 8 copy of which is attached hereto as Exhibit "1" and incorporated 9 therein by reference as though fully set forth at length. 10 11 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San 12 regular Bernardino at an nOj()l1rnp.o/ meeting thereof, held on the 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9th day of Mnrr.h , 1987, by the following vote, to wit: AYES: Council Members Estrada. Reillv. Flores. Maudsley, Quiel, Frazier. Strickler NAY S : None ABSENT: None ~~~/'/:;Y2,l,&;;/2<yf .,/ City Clerk II elu day of The foregoing reso1utiOlJfS hereby approve~ this March , 1987. jk' (1.. . ..1J. J .. .. /fQ ..(~)~f.;t..-7-JJ " / d~1J;/ M~yor of t~e City of San ~ern~rdino Approved as to form: ~(!f~ 1 2 3 4 AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO AND EMPIRE ECONOMICS FOR A HOUSING MARKET STUDY THIS AGREEMENT, effective the 25th day of March , 1987, by and between the CITY OF SAN 5 BERNARDINO, a municipal body corporate, hereinafter ref.erred to 6 as "City", and EMPIRE ECONOMICS, a sole proprietorship owned and 7 operated by Joseph Janczyk Evans, Ph.D., hereinafter referred to 8 as "Contractor", sets forth the agreement of the parties. 9 SECTION 1. Recitals. 10 A. The City is in the process of formulating a 11 comprehensive housing policy to guide the City in its efforts to 12 promote a full mix of housing options for its present and future 13 residents. City has circulated a "Request for Proposal" seeking 14 consulting services; all responses have been evaluated. City has 15 determined that Contractor should be selected to perform such 16 services. A copy of the Request for Proposal is appended as 17 Exhibit "A", and is incorporated herein by reference. 18 B. Contractor represents that it has the expertise required 19 to conduct such a comprehensive analysis of market conditions for 20 housing in general, in accordance with the Request for Proposal, 21 and is ready, willing and able to prepare such a comprehensive 22 analysis as desired or required by the Commission. A copy of 23 Contractor's proposal dated February 5, 1987, is appended hereto 24 as Exhibit "B", and is incorporated herein by reference. 25 SECTION 2. Implementation. The parties therefore do agree 26 as follows: 27 A. Contractor shall forthwith commence the study required 28 for the preparation of the comprehensive analysis, and present t I 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 City within three (3) months from the date of execution of this agreement, a comprehensive analysis of the market conditions required by the Request for Proposal, and recommendations in writing for the policy to be'adopted by the City and Commission as specified in the Request for Proposal. In addition, Contractor agrees to meet with and provide advice to the Council during a Council meeting to formulate the policy pursuant to the recommendations of Contractor. B. In addition to the items specified in the Request for Proposal, Contractor agrees to investigate the housing projects currently in the planning process and consider those developments in the assessment of current demand and supply. Contractor shall also include a builder survey within its overall study, and shall consider and assess financing ability factors to make the study more meaningful. C. City agrees to pay, and Contractor agrees to accept as full payment therefor, a sum not less than $9,500, nor more than $10,000, based on the amount of time necessarily expended. D. All services shall be provided in accordance with the proposal dated February 5, 1987, appended hereto as Exhibit "B". SECTION 3. Inde?endent Contractor. At all times during the term of this agreement, Contractor shall be an independent contractor and shall not be considered an officer, agent, servant or employee of the City. City shall have the right to control Contractor only insofar as the results of Contractor's services rendered pursuant to this agreement; however, City shall not have the right to control the means by which Contractor accomplished services rendered pursuant to this agreement. 2 I SECTION 4. Non-Assignable. This contract is entered into 2 with Contractor due to Contractor's particular qualifications and 3 expertise, and Contractor may not assign, either voluntarily or 4 involuntarily, this agreement or any rights, benefits or 5 obligations hereunder, to any other party without first obtaining 6 the approval of the City in writing. 7 SECTION 5. Equal Emplovment Opportunity. During the 8 performance of this agreement, the Contractor agrees as follows: 9 The Contractor will not discriminate against any employee or 10 applicant for employment because of race, color, religion, sex or 11 national origin. The Contractor will take affirmative action to 12 ensure that applicants are employed, and that employees are 13 treated during employment, without regard to their race, color, 14 religion, sex or national origin. Such action shall include, but 15 not be limited to, the following: employment, upgrading, 16 demotion, transfer, recruitment, recruitment advertising, layoff 17 or termination, rates of payor other forms of compensation, and 18 selection for training, including apprenticeship. The Contractor 19 agrees to post in conspicuous places, available to employees and 20 applicants for employment, notices setting forth the provisions 21 of this non-discrimination clause. Contractor will, in all 22 solicitations or advertisements for employees placed by or on 23 behalf of Contractor, state that all qualified applicants will 24 receive consideration for employment without regard to race, 25 color religion, sex or national origin. 26 SECTION 8. Notices. Notices to the parties, unless 27 otherwise requested in writing, shall be sent as follows: 28 Director of Community Development Empire Economics 3 1 City of San Bernardino 300 North "0" Street 2 San Bernardino, CA 92418 Suite 200 35505 Camino Capistrano Capistrano Bch, CA 92624 3 SECTION 9. Term. This agreement shall continue in effect 4 until terminated by either party. This agreement may be 5 terminated at any time by either party upon thirty (30) days 6 written notice to the other party. 7 SECTION 10. The Request for Proposal (Exhibit "A") and the 8 Contractor's Proposal (Exhibit "B"), together with the additional 9 items specified in Section 4B, set forth the scope of work to be 10 provided hereunder. The provisions thereof are hereby 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 specifically incorporated into this agreement. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date first above written. ATTEST: CITY OF~;SAN BERNARDINO 0/ /""' ~ '~"' ,,// /) ,\ / /j // "",./" " ."' 1 ,/ ,.- f / i ~ By d ! LX-{i /1/</ /. rt~AY/ , . ayor',/ ~/D//P~ <;KEy Clerk EMPIRE ECONOMICS Approved as to form: ~:r~ L/ 4 ... . REQUEST FOR PROPOSAL for "HOUSING MARKET STUDY" A. Purpose The City of San Bernardino is seeking consulting services to undertake a study of the potential demand for certain types of housing within the City limits. The study should also include recommended strategies for promoting future development of certain types of housing. B. Background The City of San Bernardino is in the process of formulating a comprehensive housing policy to guide the City in its efforts to promote a full mix of housing options for its present and future residents. In contrast to other Southern California cities, particularly coastal cities, San Bernardino has a considerable supply of housing for low and moderate income families. A number of programs are currently in place to support a further increase in this type of housing, including infill and mortgage revenue bond programs to support new construction as well as rehabilitation programs to preserve the condition and affordability of the present housing stock. The City plans to continue to operate these programs and provide appropriate financial support. As a supplement to these programs and in order to ensure the full range of housing options as described above, the City is interested in encouraging the development of housing affordable to those at higher income levels. A quantity of this type of housing presently exists in the City. However, without additional expansion to keep pace with the corresponding increase of low and moderate income housing, the City may lose the balance which, in the past, has provided for economic integration in San Bernardino. In order to guide the development of the comprehensive housing policy described above, the City needs to know the demand and supply characteristics for each of the housing market segments, as described further below. C. Expectations of the Contract The consultant will estimate the demand and supply characteristics for various types of housing in San Bernardino. Market segments to be analyzed include, 1) custom single-family detached homes in the $200,000(+) range; 2) upscale subdivisions or "move-up" homes in the $125,000 to $200,000 range; 3) townhomes, or two story attached homes, in the $90,000 to $125,000 range; patio homes in the $65,000 to $85,000 range; townhomes in the $90,000 to $125,000 range; condominiums in the $65,000 to $90,000 range; apartments with rents in the $350.00 to $600.00 range; low and moderate income ownership housing in the $30,000 to $70,000 range; and low and moderate income rental housing in the $250.00 to $400.00 EXHIBIT "A" , j . .. range. It is expected that the study will examine the supply and absorption rates for existing and recently constructed homes in these categories in San Bernardino as well as in other comparable Inland Empire cities. It is further expected that, based on the study's findings, the consultant will recommend techniques and/or incentives that the City might use to attract and encourage developers interested in building upscale housing in San Bernardino, specifically for custom homes, move-up homes and townhomes. Accordingly, specific location, size, design and amenity characteristics required to make such housing attractive and marketable should be included as part of the consultant's recommendations. D. Proposal Criteria Consultants responding to this "RFP" should provide evidence of their qualifications as evidenced by previous studies of a similar nature conducted for other cities or counties or for private developers. Names and phone numbers of references should be provided. Specific knowledge of the City of San Bernardino or the other cities and counties in the Inland Empire would be helpful but is not required. Consultants should explain in their proposals the methodology they would employ if selected to perform this study. Such methodology should specify what primary and/or secondary data sources the consultant intends to use, how the availability of private sector financing will be assessed, how absorption rates will be estimated, and any other key aspects of the methodology the consultant intends to employ. The City estimates that this study can be completed in three (3) months time following contract approval. Ten thousand dollars ($10,000) has been reserved for conducting this study. Payment will be made following completion of the study and submission of an acceptable final report. The consultant should state the estimated time and cost of conducting this study and explain any deviations from the City's estimates as stated above. E. Deadline for Submission To be considered, proposals must be complete, signed by a person with responsibility to commit the necessary resources to undertake the study if selected, and be received by the Community Development Department of the City of San Bernardino, City Hall Building, 300 North "0" Street, San Bernardino, California, 92418, attention Maurice Oliva, no later than 4:30 p.m. on Fridav. Februarv 13 19M. , Any questions regarding this "RFP" should be directed to Mr. Oliva at 714/383-5065. Collect calls will not be accepted, and proposal costs will not be reimbursed. KJH/JRT/lb file: rfphousmarketst EMPIRE ECONOMICS Economic-Real Estate Consultant~ · D [g@.rn OWlm ~ FEB I 2 Igar Joseph Janczyk Evans, Ph.D. 35505 Camino Capistrano, Suite 200 Capistrano Beach, California 92624 26300 La Alameda, suite 310 Mission Viejo, California 92691 (714) 661-7012 February 5, 1987 Mr. Kenneth J. Henderson, Director Community Development Department City of San Bernardino, City Hall 300 N. "D" Street, Fifth Floor San Bernardino, CA 92418 Re: Housing Market Study: Comprehensive Housing Policy for San Bernardino City Dear Ken, Empire Economics is pleased to respond to your RFP for the Housing Market Study for San Bernardino City. Accordingly, the purpose of this Proposal by Empire Economics is to provide you with a description of the consulting services that would be required to formulate a Comprehensive Housing Policy for San Bernardino City. Backaround Empire Economics has conducted various studies for San Bernardino City that could be utilized as a basis for formulating a Comprehensive Housing Policy for the city. Specifically, Empire Economics has recently conducted Market Demand Studies for the city's Single- and Multi- Family Bond Programs as well as a Housing Needs Study. Accordingly, the information and results of these studies, along with some supplemental studies for market segments not covered by these studies, would be utilized in formulating a Comprehensive Housing Policy for San Bernardino City. Purnose Empire Economics will conduct a study that will assist the Community Development Department with formulating a comprehensive housing policy to guide the City in its efforts to promote a full mix of housing options for its present and future residents. Empire Economics will address the full mix of housing options, including higher-priced housing as well. Description of Consultina Services Empire Economics would formulate a Comprehensive Housing Policy for San Bernardino City based upon a consideration of all of the relevant market demand and supply conditions and the resulting absorption rates for EXHIBIT liB" housing in each of the various segments of the market. Specifically, the primary components of the study are as follows: Market Conditions Typical ---------------- Market Segments Prices/Rents Demand Supply Programs ----------------- --------------- ------- ------- ---------------- Custom Homes $200,000 $250,000 Moderate Minimal Move-Up Homes $125,000 $200,000 Moderate Minimal Detached Homes $80,000 $125,000 High High Single-family Bonds Patio Homes $65,000 $85,000 High High Single-family Bonds Townhomes $90,000 $125,000 Moderate Minimal Condominiums $65,000 $90,000 Moderate High Market Saturated Apartments $350 $600 Strong Very High Multi-family Bonds Low/Mod Income $30,000 $70,000 strong Moderate Rehab Program Ownership Low/Mod Income $250 $400 Strong Moderate Rehab Program Rentals Multi-Bond Program Please refer to Chart A for the methodology underlying the market study. As can be seen from the above matrix, San Bernardino City already has programs in place that encourage the development of housing in various market segments, primarily through its single- and multi- family bond programs. Additionally, there are some other programs that provide households with funds that can be utilized for the rehabilitation and infill of housing units. However, there appears to be a need for further analysis of which addresses the demand in the market segments for higher-priced housing units, both detached and attached. Specifically, much of the potential demand for this type of housing by households that are employed in San Bernardino city goes to other cities/communities. This may be attributed to the reluctance that various developers have in proceeding with such projects in San Bernardino City because they are uncertain about the demand that their projects would realize. Consequently, the purpose of this supplemental study would be to establish the strength of the market conditions for custom, move-up and luxury townhome projects. Additionally, the features and amenities of such housing would also be considered. The actual development of such a project would benefit the city of San Bernardino, since it would "break the ice" on such projects, and thereby stimulate further projects in the future. The market potential of these products for San Bernardino city would be estimated through a comprehensive analysis of all the economic-social factors that influence their demand including the following: .' * Identification of the upscale housing projects and custom homes in the East Valley since 1980. * Sales rates of these projects, both new and existing * Prices and product characteristics of the projects * Special features, such as view sites, security, etc. Thus, the study will identify the specific economic-design-social factors that have made upscale projects successful! Therefore, the Comprehensive Housing Policy Study would consolidate all of the various studies which have recently been conducted along with the special supplemental study to arrive at policy recommendations for housing in each of the various market segments presented above. This would provide the city with specific objectives regarding its future policies with respect to the development of housing. Data Base Underlvinq the studY Empire E~onomics, due to its substantial experience in conducting studies 1n San Bernardino County and San Bernardino city has an extensive proprietary data base which it will utilize in conducting the Housing Needs for San Bernardino city. Additionally, Empire Economics will also use available published data including: Census, Department HOD, and SCAG, among others. Policy Considerations The key results of the study will be the demand/supply balance of housing in each of the designated market segments along with the programs that are now or may be utilized to maintain an overall balance of housing in San Bernardino city. To facilitate your review of the study, and to assist in focusing on the policy implications, Empire Economics will provide you with a demand/supply graph as shown on the attached page; such a graph will be formulated for each market segment. Additionally, Empire Economics will also be available to present the results of the study to the City Council at a workshop, if so desired. Time Requirements and Financial Considerations The time required to conduct the study is estimated to be some 4-6 weeks; this will include some time for interim meetings to receive feedback from the Council and Staff. The fee for the consulting services reflects the time required to consolidate the various single- and Multi- Family Bond Studies that have been conducted as well as the Housing Needs study. Additionally, there will be a special study on the market segments which have not been analyzed thusfar, namely the custom, move-up and luxury townhome segments. Accordingly, the fee for the entire Comprehensive Housing Program Study is estimated to be $9,500 and it will not exceed $10,000. I am certainly looking forward to providing you with assistance in formulating a Comprehensive Housing Policy for San Bernardino City. Such a policy should prove to be beneficial for the city in setting its future housing goals. APPROVED: APPROVED: Kenneth J. Henderson Date Community Development Department City of San Bernardino anczyk Evans, Ph.D. e Economics 2_7<2:rt) Date "t NUMBER OF HOUISNG UNITS - ANNUALLY (Thousands) I ,-.... ,-.... ,-.... p 0 p p p 0 p p p 0 p 0 p -' ~ ~ . . . . . . . l{ S ~ ~ 8 ~ ~ ~ ~ ~ ~ ~ ~ \0 8 ~ ~ s s 0 0 0 0 e- o ~ (f) lO C ~ -0 -0 '< 0 0 I ~ -0 )> ~ :;:0 - ." (f) n 0 0 ~ :u I ~ ~ z Z lO 0 Oi fT1 0 0 ~I 0 " rn )> G) ~ 0 0 -1 en C w ~. )> (1l ~ r .0.. U) ~ I c 0 lJ ~ rrl LJ '-< ~ (f) \0 (J) - ~ (;J ;u ~ rrl ~ 0 I 0 C (fJ - z (;) ~ lO t)) 01 < < . "' NUMBER OF HOUISNG UNITS - ANNUALLY (Thousands) I '" '" '" p p p p p p p p p p p p p ~ ....4 ....4 . . . ({ ~ S ....4 8 ....4 ~ ~ ~ ~ ~ ~ ~ to 8 ....4 ~ S 0 0 0 0 0 ~ 0 ....4 (J) to C ~ 1J 1J '< 0 0 I ~ lJ )>- ~ ;0 - 'TJ (fJ n 0 0 ~ :u I ....4 ~ Z Z to n " 1"'1 0 n 01 D- O .,., I IiJ )>- 0 ~ 0 0 -I (1l C ~. )>- ~ ~ r 0.. ~ I lO c 0 "'0 ~ n1 Ll ~ ....4 CJ) to (I) - ~ fj ;0 ~ n1 ~ 0 I 0 C CJ) Z G) ....4 to m .. f . ~. CHART A METHODOLOGY UNDERLYIIG THE MARKET/FEASIBILITY STUDY .................................... INTRODUCTION ............................................. ... ... ... DESCRIPTION OF THE CANDIDATE PROJECT ... ... . Location ... ... . Development Status ... ... . Features . Amenities ... ... ... ... DELINEATION OF THE MARKET AREAS ... ... ... ................................................................................................... ..................... ECONOMIC ASSUMPTIONS/PARAMETERS UNDERLYING FORECASTS ..................... ... (Appendix A) ... ... BASIC ASSUMPTIONS FUNDAMENTAL PARAMETERS ... ... ... ... . Growth Paths tor Economic Bases · Composition ot the Economic Base ... ... . Most Probable Mortgage Rate (Industry, Commuters, Retirees & Tourism) ... ... . Rate of Housing Appreciation · Employment/Population/Housing Multipliers ... ... . Rate of Inflation · Market Shares of Detached/Attached Homas ... ... ... ................................................................................................... ..... ... . ...................................................................... ..... ..... ... ... . . ................................................ ................................................. . . . POTENTIAL HOUSING DEMAND FOR THE PROJECT' · HOUSING SUPPLY AND CAPTURE RATES · ., FOR THE CANDIDATE PROJECT · . . . . .. Survey of the Active Residential Projects · . in the Market Region · . Comparable Projects in the Market Region: · Market Segments, Prices & Product Types · . Pro-Rata Capture Rates for the Candidate · Projeot · . Competitiveness of Candidate Project · Project Size · Looation · Product Plans: Prices & Living Areas · Special Amenities · . Capture Rate for the Candidate Project · . . . . . ................................................ ................................................. ..... ..... ... ... . . ............................................................... ..... ... . ..................... ABSORPTION SCHEDULE FOR THE PROJECT .................. ... ... ... . Estimated. Annual Demand for the Candidate Project ... ... . Adjustment of Demand for Projects in Mortgage Bond Issues ... ... . Candidate Project's Capture Rate ... ... . Time Required for. the Candidate Projeot to be Absorbed ... ... ... .............................................................................. ..... ... . ............... FEASIBILITY ANALYSIS OF THE CANDIDATE PROJECT ............ ... ... ... . Revenues of the Projeot ... ... . Costs of the Projeot ... ... . Profitability of the Projeot ... ... . Present Value of the Parcel and Lots ... ... ... .............................................................................. ..... ... . .................. SENSITIVITY ANALYSIS OF THE PROJECT ..................... ... ... ... . Alternative Mortgage Rate Financing Rates ... ... . Alternative Price Appreciation/Cost Inflation ... ... . Summary ... ... ... .............................................................................. . Recent Demographic, Employment and Construction Activity Trends . Forecasts for Employment, Population and Housing Demand . Comparison of Forecasts with Recent Population . Housing Trends . Composition of Housing Demand by Price Ranges, Market Segments and Housing Product Types . Modification of Housing Demand for the Candidate Project Market Segments Product Type Price Range . Potential Housing Demand for the Candidate Project it f' " INVOICE i ' EMPIRE ECONOMICS Joseph Janczyk Evans, Ph.D. 35505 Camino Capistrano, suite 200 Capistrano Beach, California 92624 (714) 661-7012 March 20, 1987 Mr. Kenneth J. Henderson, Director Community Development Department City of San Bernardino, City Hall 300 N. "D" Street, Fifth Floor San Bernardino, CA 92418 Project Name: Housing Market Survey Comprehensive Housing Policy for San Bernardino City FEE ----------- PAYMENTS ------------ Amount Paid Due Balance Presently Due Later Retainer: $6,000 $6,000 Installment: Final Payment: $3,500 $4,000 $9,500 $10,000 $6,000 $3,500 $4,000 $3,500 $4,000 Total: AMOUNT DUE: $6,000 ------------- ------------- EFINITION OF TERMS Installment: the fee for the entire project as shown in the the Letter of Agreement the amount received at the commencement of the project, again as shown in Letter of Agreement the amount due ten days after commencement of the study the amount due and payable upon delivery of the report the amount payable presently, within 10 days of Total Fee: Retainer: Final Payment Amount Due: