Inclusionary Zoning

= How to use this PowerPoint =This policy tool is not for public distribution. It has been especially created for Members of: Smart Growth Americas Local Leaders Council Sustainable Communities Learning NetworkThe following template presentation is designed to explain inclusionary housing policy to a public audience and to lay out a vision for a new or strengthened proposal in your community. The presentation may be branded with your logo and images from your community, and slides may be adjusted, added, or deleted as needed.

The notes section of each slide provides suggested talking points and tips for customization. The template may be used as a basis for a public presentation and other communications tools as you roll out your inclusionary housing policy.

If you have questions, contact localleaderscouncil@smartgrowthamerica.org. About this presentation template:This policy tool was created for members of Smart Growth Americas Local Leaders Council Sustainable Communities Learning Network

The following template presentation is designed to explain what is inclusionary housing policy (also called inclusionary zoning) and to lay out a vision for a new or strengthened proposal in your community. The presentation may be branded with your logo, contact information, and images from your community and slides may be adjusted, added, or deleted as needed.

The notes section of each slide provides suggested talking points, as well as, tips for customization. The template could be used as a basis for developing a public presentation and other communications tools as you roll out your inclusionary housing policy.

Please do not publically circulate this template. If you have questions, contact localleaderscouncil@smartgrowthamerica.org.

1An introduction to Inclusionary Housing

What is inclusionary housing?Broadway Crossing, Seattle, WA. Photo by HOME TA, FlickrPromoting the inclusion of housing units that are affordable for moderate and low income households in new residential projects by providing incentives and cost offsets to developers. Inclusionary zoning promotes the inclusion of housing units that are affordable to moderate and low income households in new residential projects by providing incentives and cost offsets to developers.

Inclusionary housing is also called inclusionary zoning sometimes.

It engages the private sector in the affordable housing solution by offering financial and other incentives to new housing developments, rehabilitation projects, condominium conversions, etc to increase the availability of affordable rental and ownership units in those same neighborhoods.

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Photo: Broadway Crossing in Seattle, WA. Via Flickr: http://www.flickr.com/photos/hometa/6512798101/in/set-72157628446466445

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Why use it? Increase housing choices for families earning less than the area median income (AMI)

Maintain economic diversity of neighborhoods

Prevent or slow the dislocation caused by gentrification

Casa Dominguez, Los Angeles, CA. Photo by HOME TA, FlickrInclusionary housing programs have several benefits. Specifically, they:

1) Increase housing choices for families earning below the area median income (AMI)

2) Maintain economic diversity of neighborhoods

3) Prevent or slow dislocation caused by of gentrification

Photo: Casa Dominguez in Los Angeles County, CA. Via Flickr: http://www.flickr.com/photos/hometa/6512777811/in/set-72157628422051771.4Defining affordability Affordable:Rent and utilities OR mortgage, taxes, and utilities cost 30% or less of the gross household income.[your city name]Household sizeAMI1$__, ___2$__, ___3$__, ___Area median income (AMI):The dollar amount where half the population earns less and half earns moreCUSTOMIZE this slide: Enter the AMI for 1, 2, and 4 person households for your your city/ area into the chart. You can get these numbers from your city planning office or look it up online at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. ------------

Generally, housing is considered affordable if the household spends not more than 30% of its gross income on rent and utilities or a mortgage, taxes, and utilities. Housing that costs more than 30% of the gross income begins to substantially strain the household budget, which also has to pay for transportation costs, food, and other needs.

The area median income or AMI is a good indicator of a households buying power. It is the dollar amount where half the population earns less and half earns more. Here, the area median income for a household of 1 is $______, for a household of 2 is $______, and for a household of 4 is $_______.

Households earning less than the AMI frequently struggle to find good housing options that work within their budgets. The rapidly escalating housing market has priced out more and more households from the neighborhoods they work in and want to live in.

Lets look at what affordability means in our community.5

CUSTOMIZE this slide: The numbers provided in the chart are for the Twin Cities region (MN) base on 2008 AMI. You can customize this chart for your region by double clicking the chart and entering 100% AMI numbers for 1, 2, and 4 person households in your region. All the other numbers including wages, rent and affordable purchase price will be automatically updated. Providing this information to your audience will help them get a clear picture of what affordability means in your community. *If the chart seems to confusing, show only one or two household scenarios instead of all three.

NOTE the formula for affordable purchase price is still under construction---------------

This chart shows what the affordable rent and home purchase rates would be for households in different income bands.

The first set of numbers relates to a household of 1 person; the middle set is for a household of 2 people; and the third set is for a household of 4 people.

Lets look at a family of 4 thats at 100% AMI (which is right in the middle of the income scale). That household can afford a $_____ home or a monthly rent of $_____ based on the rule that 30% or less of household income should go toward housing costs. But half the population earns less than the area median income.

As you can see on the chart, moderate income families can afford considerably less and low income families have the fewest housing choices per their budget restrictions. Mixed use, multi modal transit friendly neighborhoods become even more out of reach for lower income families because high public demand to live there drives up housing costs in those neighborhoods all the higher.

When we look at the household of two, this could be a young couple, a parent and child or perhaps an adult and elder parent. 2-person households with a single earner have a difficult time finding good housing options. By looking at those rental and purchase affordability numbers you can begin to understand howl limited there choices may be, especially if they want to live near transit or close to where the jobs are located.

The inclusionary housing policy is about giving more people housing choices that are close to their jobs and in more neighborhoods throughout the community. We need affordable housing options to exist near transit, in the downtown, and in emerging neighborhoods for people in all income groups.

By partnering with developers and making sure all new housing projects include some affordable options helps families in these income bands have a better shot at living in the neighborhoods of their choice. Without a program like inclusionary housing, more of these families will be stuck as these affordability numbers illustrate.

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Who qualifies?St. David's South Austin Medical Center, Austin, TX, Photo via http://photoblog.statesman.com Nurses, teachers Fire fighters, police officers Service, manufacturing, construction workers Others making less than the AMIInclusionary zoning would help make homes more affordable for a lot of people. Professionals like firefighters and nurses and many others often qualify for reduced rate housing often do not earn enough to own or rent in the communities they serve. Households earning below the area median income (or AMI) would qualify for housing units made available through this program.

In our city, th earea median inclome levels

For example, the area median income in our community is $________. Many ordinances set a qualifying threshold at 80% of that, which for us would be $_________ per year. [Give examples of professions that earn less than this.]

Pictured: Nurses at St. David's South Austin Medical Center in Austin, TX. Via http://photoblog.statesman.com/national-nurses-week-st-davids-south-austin-hospital-celebrates-in-vintage-way.7How it worksMajor components of inclusionary housing

Require housing developers to price some units so they are affordable to moderate and low income households.

Provide developers with cost offsets and bonuses to compensate for revenues lost by making some units affordable.Usually, inclusionary housing is one part of a more comprehensive strategy that includes other policies and programs.

Hundreds of communities use inclusionary housing as part of their affordable housing and workforce housing strategies. Some have been in place for decades and others just a few years. In some places the program is run by a nonprofit housing agency or a community land trust. But in most cases it is administered by the local government

Inclusionary housing has two main components. It:

Requires new housing developments or rehabilitation projects above a certain size to price a specified percentage of the units so they are affordable to moderate and low income households.

Provides developers with cost offsets and bonuses to compensate for revenues lost by renting or selling units below the market rate.9Key elements

Define affordability, set AMI limitsSpecify the affordable housing set aside that will be required of residential development projectsDetermine alternatives to construction of affordable units:Fee in-lieuLand transferOff site construction The first component involves these key elements:

Defining affordability by establishing the qualifying AMI categories

Specifying the mandatory affordable housing set aside required for projects (5%, 10%, 30%?)

Determining alternative options in special cases where constructing the units too difficult

Pay a fee to a housing trust fund in lieu of building the affordable unitsTransfer land to the communityBuild the affordable units off site10Cost off-sets

Density bonus, transfer of development rights (TDR)Land donation by the municipalityReduced parking requirements, flexible zoning/design Property or sales tax abatementLow interest loan to the developerReduced development fees, expedited permitting The cost offsets must also be clearly defined. Even thought the affordable set aside is mandatory, in most cases the community supports the developer by providing one or more ways to help defray the added cost of supplying affordable housing. Common options include:

Providing a density bonus above what the zoning allows by right to the developer to use on site (or sometimes transferable to another site). Allowing the construction of a few more units can increase the number of market rate units the developer can sell or rent.

The municipality could donate land to the project.

Reducing parking requirements for projects that will include affordable units can cut significant costs for developers. Plus, car ownership per household may be lower in residential projects that include affordable units. Alternatively, the community can offer more flexible zoning and design requirements on the project site to give the developer more options in figuring out how to make the project work.

Waiving or reducing property and sales tax for a specified number of years can help a project get through those first critical years until it starts to turn a profit.

Some municipalities have provided low interest loans to help developers assemble the financing portfolio that will help build affordable housing units for the community.

Reduced or waived development impact fees or expedited permitting can save on project costs leading up to construction.11Success storiesCUSTOMIZE this section: Five case studies are includes. Choose 2-3 of them for your presentation so as not to overwhelm your audience.------------

As I said, hundreds of communities are using this program. Lets take a look at a few of them

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Montgomery County, MD (2011 Population: 989,794) The Ashmore (Germantown, MD) project includes affordable unitsPhoto via Photo via: http://www.greetingshomesforsale.comProgram Structure Applicable to projects of 20 or more units Mandatory 12.5-15% affordable set aside Developers receive up to 22% density bonusAt Citys discretion: Off-site construction option Fee in lieu or land transfer to the City options 50% parking reduction and/or impact fee reductionResults 13,475 affordable units generated (1976 2012) Affordable for 30 years ownership units, 99 years for rentals Affordability thresholds: 70% AMI for rental and ownership unitsMontgomery County, Maryland was one of the first places to establish an Inclusionary housing program, and it is called the Moderately Priced Dwelling Unit (MPDU) program.

Their policy has a mandatory 12.5% to 15% affordable set aside for new subdivisions or high-rises that will have 20 or more units. (Subdivisions not served by county water/sewer service are exempt.) Rental units are required to remain affordable for 99 years, and ownership units for 30 years . In both cases, affordable is defined as 70% AMI.

Developers get a density bonus as a cost off-set (up to 22% depending on number of affordable units produced).

The county can excuse a project from building the affordable units if the developer can make a convincing case. The following alternative options are possible in such instances. These options are granted on a case by case basis:

- The developer can transfer a piece of land to the county- The developer can construct the affordable units on another site within the county (subject to approval) Or, the developer can pay a fee in-lieu of constructing the units.

Montgomery County has generated over 13,475 affordable units during the life of the program. (That breaks down to 9,442 for sale units and 4,033 rental units.

The photo shows the Ashmore at Germantown development in Montgomery County, MD which includes affordable units. (http://www.greetingshomesforsale.com/showthread.php?tid=283&subject=The+Ashmore+at+Germantown+Community!)

-------------More info: Montgomery County The MPDU Process for Developers web site, accessed 4/1/2013. http://www6.montgomerycountymd.gov/dhctmpl.asp?url=/content/dhca/housing/housing_P/mpdu/MPDU_Process_Developers.asp.

Anderson, M., Opening the Door to Inclusionary Housing workbook, Business and Professional People for the Public Interest, 2003, , pp 89-93. www.bpichicago.org/rah//pubs/opening_the_door.pdf.13

8300 block of Mackinaw Ave, an inclusionary housing project Photo by reallyboring, FlickrProgram Structure Applicable to projects of 10 or more units that receive government assistance : - density bonus - land purchased form the city - part of a downtown planned development - tax increment financing10-20% affordable set aside Optional fee in lieu of $1000,000 per unitResults 984 affordable units generated (since 2003) and $20 million in fees for housing Affordable for 30 or 99 years Affordability thresholds: 60% AMI for rental units 100% AMI for ownershipChicago, IL(2011 Population: 2.7 million) Chicago adopted its inclusionary housing policy in 2003 and expanded it in 2007. This program is not as strong as Montgomery Countys. In Chicago, residential projects of 10 or more units that receive some kind of government assistance must produce affordable units. (Developments that do not receive specific government assistance do not require an affordable housing set aside.)

Developments built on land purchased from the city or that are subject to a density bonus or other zoning flexibility must set aside 10% of units as affordable. Developments receiving financial assistance such as tax increment financing (TIF) are required to do a 20% affordable set aside.

Affordable units must remain affordable for 30 years. Projects targeted for the Chicago Community Land Trust must remain affordable for 99 years. The affordability threshold is set at 60% AMI for rentals and 100% AMI for ownership.

Developers have the option to construct the affordable units themselves or pay a fee of $100,000 per unit, which supports city affordable housing programs.

Since 2003, about 984 affordable units were generated wit this program. Once the real estate market and economy get stronger, the program could generate as many as 1,000 affordable units per year. In a review of the Chicagos inclusionary housing policy, the Metropolitan Agency for Planning found that if Chicago had instituted the same policy as Montgomery County in 1974 (the same year Montgomery County started their program) and applied it to only half of the Citys new structures, about 20,000 affordable units would have been created.

The photo shows the 8300 block of Mackinaw Ave. in south Chicago which includes affordable units mixed with market rate units. (http://www.flickr.com/photos/reallyboring/4383861368/in/photostream/)

----------More info: City of Chicago Housing web site, Affordable Requirements Ordinance, accessed 4/1/2013. http://www.cityofchicago.org/city/en/depts/dcd/supp_info/affordable_housingrequirementsordinance.html

CMAP GoTo 2040 web site, Inclusionary Housing report, retrieved 4/1/2013. http://www.cmap.illinois.gov/strategy-papers/inclusionary-zoning14

Program Structure Applicable to projects of 5 or more unitsMandatory 25%-35% affordable set aside Density bonus (1-for-1)Option to dedicate land to the CityAt Citys discretion: Fee in lieu ($2,400 to $23,272 per unit) Reduced parking requirements, design flexibilityResults 1,802 affordable units generated (1990 2011) Permanent affordability on rental units Target income bands: 40-80% AMI for rental units 80-120 % AMI for ownershipThe Owendale Community Apartments include affordable unitsPhoto: http://www.community.coop/ymhaDavis, CA(2011 Population: 66,016) Davis, CA turned their their inclusionary housing guidelines into mandatory law in 1990. Ownership projects of 5 or more units and rental projects of 5-19 units must make 25% of the units affordable. Rental projects of 20 or more require a 35% affordable set aside. These are among the highest required set asides in the country.

Affordable rental units are intended to remain permanently affordable. Davis has an aggressive program that aims to create more options for low and very low income households. The target income bands are tiered; a smaller set aside is required if units will be made affordable to households in lower income bands. For rental units the target AMU range is 40 to 80% AMI; and 80% to 120% for ownership units.

Developers get a 1-for-1 density bonus, so every affordable unit they produce earns then the right to a bonus market rate unit. Developers have the option to dedicate land to the city instead of building the affordable units (1 acre minimum required, with designated zoning and infrastructure standards). Or, they can also propose an alternate plan to meet the affordability goals, which subject to city approval.

On a case by case basis, the City can allow the developer to pay a fee in lieu of constructing the affordable units in undue hardship or financial burden is demonstrated. The fee is $23,727 per affordable unit not constructed for downtown projects with less than 15 units.

Between 1990 and 2011, the policy has created 1,802 affordable units; and 976 of these are permanently affordable at very low and low-income rents.

The photo shows the Owendale Community Apartments in Davis, and these include affordable units. (http://www.community.coop/ymha/)

-------More info: Anderson, M., Opening the Door to Inclusionary Housing workbook, Business and Professional People for the Public Interest, 2003, , pp 73-76. www.bpichicago.org/rah//pubs/opening_the_door.pdf.

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Program Structure Applicable to projects of 5 or more units Mandatory 15% affordable set aside Developers receive 5% - 35% density bonus.At Citys discretion: Option to dedicate land to the City or nonprofit developer instead Fee in lieu ($2,400 to $22,000/unit) Exemption/relaxation of growth controls that limit amount or pace of residential developmentResults 1,336 affordable units Affordable for 30 years Affordability thresholds: 50% AMI for rental units 80% AMI for ownershipPetaluma, CA(2011 Population: 58,453) Petaluma, CAs inclusionary zoning policy was adopted in 1984. They have exceeded their General Plan goal to provide 10-15% of all market rate units as affordable. Over the last fifteen years, 22.5% of new housing has been in the affordable range.

The Petaluma policy requires a mandatory 15% affordable set aside for residential projects 5 units or more.

Available cost offsets include:- Density bonuses (5%-35% depending on type of project and number of affordable units produced)- Fee in lieu ($2,400 to $22,500 based on project size)- Option to dedicate land to the city or nonprofit housing developer Exemption/relaxation of growth controls that limit amount or pace of residential development

The policy has produced 1,336 units in the city. The affordability period is 30 years. For rental units affordable is defined at 50% AMI. For ownership affordable is set at 80% AMI.

---------------More info: City of Petaluma - Housing Division website. Accessed 4/12013. http://cityofpetaluma.net/cmgr/housing.html

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King Street Housing has 17 units that will be permanently affordablePhoto by HOME TA, FlickrProgram Structure Applicable to projects of 5 or more units Mandatory 15-25% affordable set aside Developers receive 15-25% density bonus.At Citys discretion: Off-site construction (50% more units required) Fee in lieu ($100K/unit, indexed to inflation; 50% more units required) 50% parking reduction and/or impact fee reductionResults 200 affordable units generated (1990 2006) Affordable for 99 years Affordability thresholds: 65% AMI for rental units 75% AMI for ownershipBurlington, VT (2011 Population: 42,645 ) Burlington, VTs inclusionary zoning policy includes a mandatory 15% to 25% affordable set aside (depending on target AMI) for projects 5 units or more

Incentives available include:- Density bonus (15%-25% depending on area density; PUDs not eligible)- Off-site construction (at city's discretion, must provide 50% more units)- Fee in lieu (at city's discretion, must provide 50% more units; $100,000/unit, indexed to inflation)- 50% Parking reduction (at city's discretion)50% Impact fee reduction (at city's discretion, undiscounted fee is $2,500 per 1,000sf of living space)

Units are to remain affordable for 99 years. For rental units, the affordability threshold is set at 65% AMI. For ownership the threshold is set at 75% AMI.

Between 1990 and 2006, Burlington has created 200 affordable units.

Pictured: King Street Housing in Burlington, VT has 17 units that will be affordable in perpetuity. Photo via Flickr: http://www.flickr.com/photos/hometa/6512764901/17Inclusionary housing proposal for [ your community name ]CUSTOMIZE this slide: In the next set of slides you will describe your proposal for inclusionary housing in your community.--------

Weve gone over how this policy works and how some other communities are using it. Now, lets talk about how we can bring it here to our community.

Here is my inclusionary housing proposal18Program Structure Applicable to new residential and residential rehabilitation projects of 10 or more units Mandatory 12.5% affordable set aside; 20% for projects near transit, downtown Affordability thresholds: 50% AMI for rental units 80% AMI for ownership Must remain affordable for 99 years CUSTOMIZE this slide: Once you decide how to structure your inclusionary housing bill, lay out the parameters for your audience highlighting the main elements. Sample text is provided to get you started. ------------

The program structure would be structured as follows.

New residential projects or major residential rehabilitation projects over 10 units would be required to make 12.5% of the units affordable for the following AMI categories:

50% AMI for rental units 80% AMI for ownership

Projects within walking distance of a transit stop (a quarter mile, which is about a 5 minute walk) or within the boundaries of the downtown [or business] district, the set aside will be a little higher -- 20%. We want to make sure as new residential projects are built near transit and near jobs, that they include affordable options. Projects in these areas also tend to have greater profit potential.

Affordable rental and ownership units must remain affordable for 99 years after which time they revert to market rate units. During that 99 years, ownership units may be sold, but not at market rates. The owner will still benefit from the equity they build up.

If these requirements cannot be met due to physical site limitations or undue financial burden (which must be proven), the developer will be able to:

Pay a $__, ___ per unit fee in lieu of building the affordable units. These funds will go to the affordable housing trust fund and will be used to support the inclusionary housing program and support other affordable housing programs in the city.

19Cost offsets for Developers Density bonus, transfer development rights Parking reduction, flexible zoning/design Development fee reduction Property and sales tax reduction (first 3 years)CUSTOMIZE this slide: Once you decide how to structure your inclusionary housing bill, lay out the parameters here. Sample text is provided to get you started. * Consider adding a background photo of a main street, your downtown area, or other neighborhood in your community to add visual interest to the slide.------------

To help offset the cost of including affordable options in their housing projects, developers will be eligible for the following benefits:

A 1-for-1 density bonus. Projects will be allowed an additional unit above what is allowed under by-right zoning for each affordable unit produced. If site limitations do not allow the construction of bonus units, the developer may transfer the bonus development rights to another site.

Parking requirements will be relaxed based on the number of units produced. Projects in the downtown/business district and near transit will be eligible for up to 50% parking reduction. Other design flexibility may be applied on a case by case basis.

Projects producing affordable units will be eligible for a significant reduction in development fees based on the number of units produced.

Finally, for the first three years, these properties will be eligible for a 50% reduction in property taxes sales taxes.

20Opt-out provisionsAt the citys discretion: Option to construct affordable units off site (50% more units required) Fee in lieu ($125,000/unit, indexed to inflation) Option to dedicate land to the City Option to propose alternate plan to meet the affordability goalsCUSTOMIZE this slide: Once you decide how to structure your inclusionary housing bill, lay out the parameters here. Sample text is provided to get you started. * Consider adding a background photo of a main street, your downtown area, or other neighborhood in your community to add visual interest to the slide.------------

In cases where the developer can show the inclusionary housing requirements cannot be met due to physical site limitations or undue financial burden, the following alternative options would be made available on a case by case basis at eth discretion of the City:

- Construct the affordable units on a different site. If the developer chooses this option, 50% more units must be constructed. This provision is designed at discouraging building units off site. The goal of the policy is to promote inclusion of affordable housing in all projects.

Pay a $100,000 per unit fee in lieu of building the affordable units. These funds will go to the affordable housing trust fund and will be used to support the inclusionary housing program and support other affordable housing initiatives in the city. This fee would be adjusted annually to keep up with inflation. If the fee option is granted, it would be required for 50% more units to encourage building of affordable units instead of opting out.

In some cases, the developer may transfer land to the City, which could then be used for a projects that includes affordable housing.

Developers can also propose an alternate solution to meet the affordability goal related to their project for the city to consider. 21Goal:Increase affordable housing choices and createeconomically diverse neighborhoods.

Learn more about this proposal at www. .

Support inclusionary housing in our community.

Questions?ConclusionCUSTOMIZE this slide: Add a web site where people can learn about your bill or policy proposal and get related information about hearings, etc. Also specify at least one way how people can support the policy.------------

In conclusion, Id like to reiterate that the purpose of this policy is simple but critically important. We have to find ways of increasing affordable housing options in our community so that we have economically diverse neighborhoods and so people can live closer to work and transit choices.

Inclusionary housing is a tried and true approach that has worked for hundreds of communities. Its time we leverage this solution here.

You can learn more about this proposal and follow the progress the bill at the web site listed on this slide.

I hope you will support inclusionary housing in our community by reaching out to your and testifying at the bill hearing about why you think this approach would be good for our community.

Now, lets take some questions.22Housing Affordability ChartVery low incomeLow incomeModerate incomeMedian income(30% AMI)(50% AMI)(60% AMI)(80% AMI)(100% AMI)ONE (1) person household$16,989$28,315$33,978$45,304$56,630(Annual gross income)Hourly wages$8.17$13.61$16.34$21.78$27.23Affordable monthly rent$425$708$849$1,133$1,416Affordable home purchase$57,400$95,500$114,600$145,300$191,100TWO (2) people household$30,000$50,000$60,000$80,000$64,720(Annual gross income)Hourly wages$14.42$24.04$28.85$38.46$31.12Affordable monthly rent$485$809$971$1,294$1,618Affordable home purchase$65,500$109,200$131,000$166,000$218,400FOUR (4) people household$24,270$40,450$48,540$64,720$80,900(Annual gross income)Hourly wages$11.67$19.45$23.34$31.12$38.89Affordable monthly rent$607$1,011$1,214$1,618$2,023Affordable home purchase$81,800$136,500$163,800$207,500$273,000

NotesNotes for "Housing Affordability Chart"* The baseline numbers are for the Twin CIties (MN) region, based on the 2008 AMI. You can customize by adding your region's AMI.* Income bands included (AMI): 30%, 50%, 60%, 80%, 100%* To determine your local AMI, contact the planning department (or MPO) www.http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.* Hourly wages are calculated by dividing gross annual income by 52 weeks and dividing that by 40 hours [the typical working hours in one week]* Monthly rent are calculated by taking 30% of gross annual income divided by 12 months* Home purchase price calculated by: ______________________