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4. Current multifamily housing projects are occurring in the lower density multifamily zones or at densities lower than the maximum level allowed. 5. The best TDR opportunities based on the combination of current zoning provisions and recent development characteristics are: C-2ES zone near the Everett Station where no residential (other than live-work units or projects on sites two acres or larger) is currently allowed and where a major transit station and related public investment in place. C-1 and B-2 zones (proposed MUO and E-1 zones on Evergreen Way) R-3 zone which is extensive and where the current allowed density is low. R-2 zone where duplexes could be allowed on smaller lots. R-1 zone where cottages could be developed at twice current densities. 6. The strongest market opportunities for higher density new development that might benefit from TDR's are sites that offer unique and scarce features, thus justifying a cost premium; and in zones where existing development is at allowable maximum densities. 7. The market should support mixed use projects with multifamily residential development, as well as single purpose residential buildings. 8. Six scenarios provide a combination of the identified zoning and market opportunities; opportunities that are site-specific in most cases, but reflective of opportunities throughout a zone. 9. The financial analysis addresses whether the TDR bonus scenarios are feasible, whether there is an incentive to purchase development rights to achieve the bonus density, and the appropriate value to place on development rights. 10. A project is considered to be feasible if its value at completion exceeds the development cost by an amount equal to 10% of the development cost. 11. The higher density scenarios achieve improved economic performance in most cases, but fall short of the targeted entrepreneurial return of 10%. For many scenarios, the target return could be achieved with realistic potential increases in rent. 12. The scenario that performs the best is the E-1 MUO. 13. The E-1 MUO scenario could support a price per gross square foot of TDR at $5.23, equivalent to a transfer rate of 2.9 square feet at the receiving end, assuming a sending site value of$15,000, and an average unit size of 1,000 gross square feet. 14. Ultimately it is the multifamily tax exemption program that makes the bonus schemes even marginally feasible. EVERETT TRANSFER OF DEVELOPMENT RIGHTS STUDY FINAL REPORT PROPERTY COUNSELORS PAGE 8