Presentation from Bring Workers Home regional workforce housing forum in Austin, TX on August 12, 2010.

3. Sample Capital Cost During "Normal" Times Project Investment 10,000,000 Debt Interest Rate 7% (IF AVAILABLE) Required Equity Return 20% (COMPOUNDED) Debt $ 8,000,000 Equity $ 2,000,000 End of First Year End of Year Two End of Year Three End of Year Four Totals Debt Interest $ 560,000 $ 560,000 $ 560,000 $ 560,000 $ 2,240,000 (8,000,000 x Debt Interest Rate) At 20% (compounded) $ 400,000 $ 480,000 $ 576,000 $ 691,200 $ 2,147,200 Total Capital Costs $ 960,000 $ 1,040,000 $ 1,136,000 $ 1,251,200 $ 4,387,200

4. Sample Capital Cost During "Boom" Times Project Investment 10,000,000 Debt Interest Rate 7% (IF AVAILABLE) Required Equity Return 13% (COMPOUNDED) Debt $ 9,000,000 Equity $ 1,000,000 End of First Year End of Year Two End of Year Three End of Year Four Totals Debt Interest $ 630,000 $ 630,000 $ 630,000 $ 630,000 $ 2,520,000 (8,000,000 x Debt Interest Rate) At 13% (compounded) $ 130,000 $ 146,900 $ 165,997 $ 187,577 $ 630,474 Total Capital Costs $ 760,000 $ 776,900 $ 795,997 $ 817,577 $ 3,150,474

5. Sample Capital Cost During "Capital Crunch" Times Project Investment 10,000,000 Debt Interest Rate 7% (IF AVAILABLE) Required Equity Return 30% (COMPOUNDED) Debt $ 5,500,000 Equity $ 4,500,000 End of First Year End of Year Two End of Year Three End of Year Four Totals Debt Interest $ 385,000 $ 385,000 $ 385,000 $ 385,000 $ 1,540,000 (8,000,000 x Debt Interest Rate) At 30% (compounded) $ 1,350,000 $ 1,755,000 $ 2,281,500 $ 2,965,950 $ 8,352,450 Total Capital Costs $ 1,735,000 $ 2,140,000 $ 2,666,500 $ 3,350,950 $ 9,892,450

6. Sample Capital Costs in Differing Times End of First Year End of Year Two End of Year Three End of Year Four Totals Total Capital Costs "Normal" Times $ 960,000 $ 1,040,000 $ 1,136,000 $ 1,251,200 $ 4,387,200 Total Capital Costs "Boom" Times $ 760,000 $ 776,900 $ 795,997 $ 817,577 $ 3,150,474 Total Capital Costs "Capital Crunch" Times $ 1,735,000 $ 2,140,000 $ 2,666,500 $ 3,350,950 $ 9,892,450 So, what does this mean for us? Here are some POSSIBLE conclusions: • Money is available, but not many deals fit the capital requirements. • To make deals fit, investors try to obtain lower land costs and construction/development costs. • In Austin, however, there is NOT a lot of excess lots available (some, but not a tremendous amount), so heavy discounting has not hit this market. • In the Austin area, there is a lot of available raw land (that could be discounted), however, raw land typically comprises 15% to 30% of the cost of a residential lot. This means that heavy discounting of raw land will not produce substantial lot cost savings -- certainly not enough to pay for the additional capital costs being sought today. • Offsetting any land price reductions are the continual development cost increases that occur due to regulatory changes This is NOT a complaint -- just reality. Examples would include capital recovery fees; new code requirements; boundary road fiscal; increased code requirements; increased detention and water quality requirements; top soil changes; affordable housing requirements; fiscal requirements. • Austin is still growing: positive job growth in the last three months; Austin grew 32,000 people through in-migration last year; Austin is ranked first or second in lists for the best places for job growth and in-migrations. Demand will grow. • If the capital does not return to "normal" structures, Austin could face a tight housing market in the next few years.

9. Site Transit Access

11. Property with Topo and Trees

15. Homes For People