The University Corporation

Faculty/Staff Housing Assessment and Project Program

Executive Summary
June 7, 2005

I
The North Campus-University Park Development Corporation (NCUPDC) retained Valeo Companies Inc. to aid in the conceptualization of a plan for faculty/staff housing to satisfy unique housing demands caused by current Southern California housing market pressures. California State University Northridge (CSUN) has determined that the lack of affordably priced housing in Southern California may negatively impact the attraction and retention of high quality faculty and staff. The goals of the Faculty/Staff Housing Assessment and Project Program were to: A. Assess and define:

1. Unique Housing need
2. Campus Master Plan (North Campus and Halsted sites)
3. Local Housing Market
4. Policy Parameters (and make recommendations)
5. Project Program
6. Affordability
7. Framework for Ownership/Finance Structure
8. Project Implementation/Phasing
9. Focused Response to the Campus Needs

B. Develop recommendations for the creation of a housing project that would:
1. Serve as a recruitment and retention tool;
2. Foster a sense of community and collegiality;
3. Result in a quality community within campus and economic constraints; and
4. Enable the development to be financially self-sustaining and explore the potential for positive economic generation.

II. Project Team
A. Campus Lead - The University Corporation (TUC) and North Campus University Park Development Corporation (NCUPDC).
B. Campus Support - CSUN Division of Administration and Finance
C. Consultant - Valeo Companies

III. Study Methodology and Findings - Data gather, research, analyze, synthesize
A. Stake holder interviews / focus groups - Identified issues
B. Faculty and staff survey - Quantified issues
C. Campus Master Plan, review of campus sites and community services
D. Finding: Campus growth and operations statistics
E. Finding: Local housing market -- expensive and is impacting recruitment and retention
F. Recommendation: Program implementation determinants

IV. Campus Interviews, Focus Groups and Survey
A. Campus Interviews, focus groups and the Faculty & Staff Survey (635 responses) indicated strong campus-wide support for the project (93.6%).
B. High participation (estimating half of the 50% who indicated a desire to participate) likely from existing faculty & staff, and annual household incomes ranged from below $40,000 to over $200,000.
C. Town homes appealed to approximately 70% of the respondents, which fits the purchasing capability of the typical respondent (approximately $90,000 average annual household income).

V. Demand and Supply Analysis
A. Demand and Supply Analysis - Estimate +/- 300 home demand today and over 850 homes at the 2035 campus build out.
B. Long-Term Supply & Demand - An average three to four year delivery interval over a 20+ year period with a fifty home per phase increment is optimum to assure supply does not exceed demand. Future off campus site acquisitions will be required to fulfill the total demand beyond 2021.
C. Housing Mix - Calibrate program to serve the faculty and staff within a household income band between $40 and $100K. Assumptions: Those who earn over $100,000 can be served off-campus and those who earn below $40,000 are assumed to be locally recruited and already have their housing provided.
D. Affordability - 30% of the housing is dedicated to rentals to serve the $40 to $60K household income band and 70% of the housing is dedicated home ownership to serve the $60 to $100K household income band

VI. Market Overview
A. New Town Homes - Limited supply of new homes are available in the Northridge area. One new town home project has homes from 1,118 - 1,587 square feet with pricing from $490,000 to $590,000. The town home project, Arbors Lofts, recently sold out with final pricing from $620,000 to $695,000 for 1,340 - 1,836 square feet.
B. Detached New Homes - Two projects are in the Northridge area and each project has 3 plans, ranging in size from approximately 2,000 - 2,800 square feet. One project is advertising pricing at the low $700,000s, the other project from the mid $700,000's.
C. Attached Re-sale Homes - Resale homes, both condominiums and town homes, vary in size, age and quality. Homes are between 900 and 2,000 square feet in size, and priced from $240,000 to $529,000. On a price per square foot basis, this ranged from $228 to $335. The average size was found to be 1,325 square feet and the average price was $373,000.
D. Detached Resale Homes - Most re-sales in the area were built in the 1950's and 1960's. These are between 1,392 and 2,422 square feet in size, and priced from $460,000 to $650,000. On a price per square foot basis, this ranged from $256 to $476. The average size was found to be approximately 1,350 square feet and the average price was $556,000.
E. Apartment Rentals - Apartments range in size from 385 square feet for a studio apartment to 1,850 square feet for a three-bedroom unit. Monthly rents range from $725 to $2,510, respectively. A typical two-bedroom/two-bath apartment averaged 941 square feet in size at a monthly rent of $1,384, or $1.47 per square foot rent per month.

VII. Opportunity and Constraint Analysis

A. North Campus Site
Opportunities for this site include its size (±30 acres), which enables a community scale to be created. Other positive site attributes include being relatively close to the campus core, the site' s relatively flat topography, ingress and egress to the region with the potential for retail use at the intersection of Lassen and Zelzah, potential views and an enhanced sense of security from utilizing the existing dirt stockpile, and the ability to deliver a quality project at prices significantly below the open market. Additionally, the local schools are very strong, some of the highest rated within the Los Angeles School District .

Constraints include traffic and noise from the surrounding streets, walking distance to the campus core is relatively long, ingress and egress needs to be planned to minimize potential issues, utility capacities, relocation of existing parking, relocation of the student housing, the influence of the Mini Med site along with the soccer stadium and practice field. B. Halsted Site

Opportunities include the close proximity to the main campus, the site' s topography, and the ability to deliver a quality project at prices significantly below the open market. As with the North Campus site, the local schools are very strong and some of the highest rated within the Los Angeles School District .

Constraints include traffic and noise from being surrounded by streets on three sides, the western edge is bordered by an older apartment project, utility capacities, existing parking will need to be relocated and existing building on the site are utilized for campus activities.

VIII. Housing Project
A. Overview - program described as an "urban village" where the housing is primarily attached and at higher densities. Factors that led to this direction included:

1. Acceptability of attached housing;
2. Limited land resource;
3. Dual incomes allowing a larger percent of housing needs to be provided for off campus in the surrounding communities; and
4. Ability to generate more for-sale homes at higher densities allows the opportunity to fund apartments and maintain homes in affordable ranges that meet the income levels of new and existing faculty and staff.

B. Housing types - A total of 532 homes are targeted for the North Campus and Halsted sites and will be comprised of 150 rental homes and 382 for-sale homes. The homes will be predominately town homes, with the possibility of some condominiums and small lot single-family homes. Actual site planning will determine the long-term housing plan for the sites. Apartment homes should average 850 square feet and consist of 1, 2 and 3 bedroom homes. For-sale homes are projected to range from 2-bedroom homes around 1,000 square feet to 5-bedroom homes of approximately 2,000 square feet.

C. Overall Density - Utilizing 30 acres of the North Campus and 4 acres on the Halsted site, 532 homes produces an average density of 18.3 homes per acre. The homes are generally 3-story and range from 25 - 27 homes per acre for the apartments to 12 - 14 homes per acre for the larger duplexes. Included within the density is up to 5 acres for community amenities such as a central green, parks, swimming pools and basketball courts.

IX. Financing
A. Financing Structure - The financial pro forma' s have been prepared based upon the CSU System Wide Revenue Bond (SRB) financing for both the construction financing (overnight paper) and long-term debt (30-year bonds). The SRB currently does not provide for predevelopment financing and if not available through the Housing Corporation, will need to be secured through another source. Prior to the commencement of construction, approximately $2.5 million can be expected to be required for preconstruction costs.

B. Cash Flows & Pro forma Assumptions - Based upon the size and the scope of the project, utilizing the SRB program, and local market conditions, the pro forma' s were designed to accomplish the following:

1. Project is to be constructed utilizing 100% debt financing;
2. Maximize affordability;
3. Ensure long term operational sustainability for the for-sale and rental homes;
4. Provide annual cash flow from the homes back to NCUPDC/CSUN, for ongoing faculty housing needs.

X. Ground Lease Structure
A. Ground Lease (University to NCUPDC) - University is to lease campus land to NCUPDC on a long-term, 99-year basis for the for-sale housing and a minimum thirty-five year term for the rental housing.
B. Ground Lease (NCUPDC to faculty or staff member) - NCUPDC will execute long term declining ground leases to the individual homebuyers. The ground lease will generally follow templates established at other campuses.
C. Policy - CSUN is to determine the key program policy considerations including: eligibility and priority, ground rent and fees, resale price index, community association structure, association rules and regulations.

XI. Implementation Strategy/Phasing
The goal for the North Campus Village is to create a vibrant, faculty and staff community, characterized by thriving personal and family interaction and social, recreational and academic activity.

XII. Overall Guiding Principles
A. The following is a summary of the development goals and objectives for achieving a distinctive, environmentally responsive, quality village responding to the history of the campus and region, while looking to the promise of the future:

1. Create a unique, high-quality collegial family environment that embraces the unique qualities of the university and the surrounding environment (Northridge, San Fernando Valley ).
2. Create an immersion environment, where the architecture, landscape, and support facilities provide a total experience supporting the needs of the residents and articulating the unique experience of living in Southern California.
3. Reflect the university's commitment to creativity, quality and progress.
4. Incorporate "green" principles throughout the design and implementation process.
5. Create an environment that fosters community and campus spirit and interaction to bring about a strong sense of belonging.
6. Enhance the city, campus, village, and neighborhood context through comprehensive urban design and strong, positive urban form.
7. Create a distinct and "vital" village structure.
8. Create a fabric and structure that allows for continued, well-organized growth of the village over time.