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Page 6 Typical Building Remodel Cost As a point of comparison against the investment thresholds described above, EPS reviewed Redwood City building permit data for 2019 through 2024. As summarized in Table 4, permit records indicate a median project cost of $23 per square foot (interquartile range roughly $13 per square foot at the 25th percentile to $39 per square foot at the 75th percentile), with 75 percent of permits below $34 per square foot. At the upper end, the 99th percentile across the full period is $152 per square foot, with annual 99th-percentile values ranging from $73 to $281 per square foot. Table 4. Distribution of Redwood City Remodel Costs per Square Foot, 2019–2024 Cost of Improvements Average 2019 2020 2021 2022 2023 2024 Minimum $7 $9 $2 $6 $8 $7 $7 25th Percentile $13 $15 $11 $13 $18 $10 $11 Median $23 $31 $21 $23 $23 $21 $19 75th Percentile $39 $35 $40 $30 $36 $49 $42 99th Percentile $152 $101 $143 $175 $281 $136 $73 Maximum $171 $113 $156 $250 $281 $150 $75 It is important to note that permit valuation is a proxy and not a perfect measure of total project cost. While valuations technically include both hard and soft costs, they are frequently underreported by applicants. In addition, the data may obscure scope by aggregating multiple types of work into a single record. For this analysis, EPS isolated permits explicitly reported as multi-unit projects; however, it is possible that some multi- unit jobs were not coded as such, which could bias results downward. Projects also differ in scope intensity (e.g., systems, kitchens, code compliance), so dispersion is expected even when normalized by square foot. To mitigate these issues, EPS emphasizes medians and percentiles (rather than means), reviews potential outliers, and interprets cost per square foot results in conjunction with scenario modeling and external benchmarks. Despite these imperfections, the central tendency of permits remains well below the modeled break-even thresholds, and even the 99th-percentile values are generally at or below the “No Relocation Cost” threshold ($220 per square foot) and near the “High Relocation Cost” threshold ($180 per square foot). This pattern supports the conclusion that most remodels are feasible under the TPA framework, with only occasional, atypically broad scopes approaching infeasibility. As an additional anchor, Marshall & Swift replacement-cost benchmarks for the Peninsula indicate order-of-magnitude new-build hard costs of roughly $266/SF for townhome- style product and about $380/SF for podium multifamily (class/quality and exclusions apply). Relative to these levels, EPS’s rehab feasibility thresholds of $220/SF (no displacement) and $180/SF (with displacement and relocation) sit below typical replacement cost for new construction. This relationship is consistent with observed practice: most economically rational rehab projects that are feasible remain well below full replacement-cost benchmarks. This context helps explain why the extreme tail of the permit distribution is sparse: very high-intensity scopes are relatively rare and, when encountered, are often more logically addressed as replacement projects. 9.A. - Page 80 of 84 185