INC WSIO NARY ZONING ANALYSIS 2 8
200-UNIT MULTIFAMILY (STICK) RENTAL DEVELOPMENT
RKG Associates also modeled a larger, 200-unit multifamily rental development program to
understand if larger projects had different financial performance measures. The analysis revealed that
200-unit programs performed similarly to the 125-unit programs. Under the surface parking
assumption, the Current Market/Baseline Scenario yielded an IRR that is above the proposed 15%
minimum return threshold but still well below the current market expectations of 20+% (17.63%).
Incorporating the model inclusionary zoning policy (20% of units committed to affordability) reduces
the Target Return Scenario return by approximately 100 basis points to 13.95% IRR (Table 14). A
bonus density ratio of 1:1 provides sufficient additional market rate units to offset the financial impact
of the model inclusionary zoning policy, ultimately requiring 42 additional market rate units to
compensate for the 40 income-controlled units priced at 80% of AMI.
200-UNIT MULTIFAMILY (PODIUM) RENTAL DEVELOPMENT
The cost of podium parking in the Downtown area has similar impacts on a 200-unit project as it does
on a 125-unit project. The Current Market/Baseline Scenario yields a 15.42% IRR, approximately 220
basis points below the surface parking scenario. The model inclusionary zoning policy negatively
impacts the financial performance of the project, requiring a 2.5:1 bonus density ratio to have the
Inclusionary/Bonus Density Scenario meet the target return threshold of 15% IRR.
