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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 01/07/1999r CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD Meeting Minutes January 7, 1999 Bob Browning, Vice Chair Ken Waido, Staff Liaison Chuck Wanner, City Council Liaison The meeting of the Affordable Housing Board was called to order by Chairman Bob Browning, beginning at 4:10 p.m., at 281 North College Avenue, Fort Collins, Colorado. Board members present included: Bob Browning, Kay Rios, Bruce Croissant, David Danforth, Isabel Garity, Joanne Greer, Stacy Overton, and Mickey Willis. Staff present: Ken Waido and Ann Watts. City Council Liaison present: Chuck Wanner. Others present: Joe Frank, Greg Byrne, Alan Krcmarik, Krista Moberly, Lou Stitzel, and Betty Malone. Public Comment: Betty Malone addressed the Board. The salient points of her presentation were: The market is not solving the problem of affordable housing. The problem should be viewed throughout the whole spectrum, from homeless to migrants to SRO needs, and up to the 80% AMI level. The problem has grown even while units are being added. The presence of 18,000 or more students who compete for the same housing further complicates the problem. Ms. Malone further stated that the presence of a living wage for all workers would help diminish the problem. Businesses that rely heavily on minimum wage workers should not be specially attracted. Some other means to help alleviate the affordable housing problem: Cheaper land costs and land banking; sales tax for affordable housing; taxes on more expensive homes to offset the cost of affordable ones; encouraging business to buy into affordable housing for their minimum -wage workers; agreements with CSU to provide more affordable housing; preserve existing neighborhoods so that they may be retained as family communities rather than being converting into student housing. In response, Ms. Rios maintained that CSU is trying to aid the student housing situation and cited examples of the problems and solutions being reviewed. Ms. Malone maintained that student housing is destroying some neighborhoods, and cited hers as an example. Rusty Collins spoke favorably of the emphasis on new construction within the City but also asked that preservation be given equal consideration. He noted that when Northwood is sold, all Section 8 vouchers presently there will be moving, perhaps to different cities or states, and the housing will revert to market -rate units. He noted other existing developments potentially at risk to lose affordable housing stock. Affordable Housing Board Meeting of January 7, 1999 Page 2 Mr. Collins stated that while Neighbor to Neighbor has produced 24 units in a year through acquisition and conversion, the failure to preserve an existing development can result in the loss of 180 units. Furthermore, he noted that concentration on existing housing can produce units without the type of delay that is incurred in the planning process for new units. He also asked that attention be given to the below 60% AMI niche, and stated that that niche can also be served through preservation of existing housing. Mr. Danforth asked how Mr. Collins' concerns are addressed in the competitive process. Mr. Browning stated that the concerns could be addressed in the competitive process and implementation thereof. Ms. Watts noted, in response to further comments, that while no additional information is presently available in regards to the competitive process, there is a preference toward building new units. The newer revisions give equal weight to preservation, but buying and converting units is not as high a priority as new construction. In the competitive process, none of these possibilities would be eliminated. Approval of minutes Minutes of November 5, 1998. Ms. Rios asked if a Board member is on the Land Banking Committee; Ms. Watts affirmed that has occurred. Ms. Rios clarified her comments at page 4, toward the top, to say that Staff had a different view of the role of the Board than her perspective. She felt that the Board needed to have a strong statement of what its role is. Minutes of December 3, 1998. Ms. Rios noted that the Affordable Housing Coalition of Larimer County may be involved in the networking luncheon but not as major host. "Contacts are being made" is not the correct statement. Members of the Senior Attainable Housing Committee are continuing to serve senior housing complexes. Mr. Browning requested a more complete grammar check on the minutes. Moved by Mr. Danforth, seconded by Ms. Overton: To approve both sets of minutes as amended. Motion approved unanimously. Concorde Capital Phil Brown reported for Concorde Capital, a developer of affordable housing based on Columbus, Ohio, presently building in Colorado Springs. Mr. Brown requested the Board's recommendation of City Council approval to induce Private Activity Bonds for a 150-unit project at the corner of Conifer and Redwood. Following are the salient portions of the discussion: Concorde Capital is a smaller company than some of the developers who have entered the Fort Collins market. Concorde has done rehabs and SROs at the 30-40 percent AMI bracket. That AMI level is generally difficult to serve, and Concorde is willing to Affordable Housing Board • • Meeting of January 7, 1999 Page 3 work with local nonprofits to help address that situation. Their philosophy is to build value housing that provides the most space for the least amount of money. Mr. Brown distributed a packet with information on Concorde. Concorde is currently studying market rates and AMI levels for Fort Collins. Since they are based in the Ohio State area, they are familiar with the impact that student housing has on market rates. Mr. Brown's preliminary indication was a market rate of $700-800 for a two- or three -bedroom unit. In response to questions, Mr. Krcmarik noted that the City has $2.7 million of Private Activity Bond allocation for 1999. If City Council were to induce this project, then the developer would go to the State for additional bond and tax credit financing. At 25 percent equity on a $14.2 million project, the amount of bond financing needed from the State would be close to $8 million. Board members and Staff discussed that the City inducement would be needed to leverage the project; and that no other viable applicants were under consideration. In response to questions by Board members, Mr. Brown stated that Concorde was interested in Fort Collins as the kind of smaller, close-knit market that they were accustomed to, and enjoyed, dealing with. Concorde has ties to Colorado financing institutions. The proposed project is planned for ranch and townhome units. Ranch units are attractive to senior residents. Concorde desires a mix of housing types and residents. Concorde originally had planned a project in Fort Collins but could not proceed due to site and planning approval difficulties. At that point, through discussions with Ms. Watts, they were further encouraged to proceed with affordable housing in Fort Collins. In response to questions by Board members, Staff members stated that this appeared to be the best proposal yet made for the bond inducements. If the project does not proceed, the inducements would revert to the City for use in another project, should one occur. Although the deadline is in September, the inducements can be carried forward for an ongoing project. Cooperative efforts with CHFA provide another possible avenue should the project be delayed. In response to questioning by Mr. Krcmarik and Ms. Watts, Mr. Brown noted that HUD has designated parts of Fort Collins as "difficult -to -develop" and as "qualified census tracks." This project's site has both designations. If a Private Activity Bond allocation from the City and State were received, these designations would increase the project's eligible basis for tax credits by 30 percent. Therefore Concorde could receive more equity for the project from investors. This particular incentive is what allows private development to address AMI levels below 60 percent. In response to questions by the Board, Mr. Brown stated that he believed the term of affordability to be at 20 years. Due diligence is being performed on the 13-acre site; no Affordable Housing Board Meeting of January 7, 1999 Page 4 site plan has yet been prepared. The site plan will be developed by March due to State deadlines. Ms. Watts noted that a conceptual review meeting would be held on January 25th and she invited any interested Board members to attend. Discussion was held over the viability of Private Activity Bond financing for rehab projects. Although it is an eligible use, the State is not interested in that type of participation at this time. CHFA is looking at other ways to stimulate rehab activity. Comments by Board members: Combining market -rate and affordable units is a desirable strategy, where the affordable units are supported by the market -rate units. The project appears to be a good one in concept. Moved by Ms. Rios, seconded by Ms. Greer: To recommend approval of the issuance of Private Activity Bonds for the proposed 150 unit project to be developed by Concorde Capital, Inc. near the corner of Conifer and Redwood Streets in northern Fort Collins. Motion approved unanimously. Work Plan discussion Ms. Rios stated that the Work Plan was a result of concepts generated by Staff rather than by the Board. Mr. Browning noted that the Board could introduce its own concepts. Mr. Willis noted an irony of having a goal to develop fee rebate programs that are now being cut. Ms. Watts and Mr. Browning noted that the program was developed to work better at the start of the year when the competitive process did not appear likely. Affordable Housing Program Revisions Ms. Watts noted the changes in the most recent draft copy, particularly the provisions dealing with 20-year minimums, occupancy buy -ins, and affordability requirements to low-income people for access to any incentives. Ms. Rios disputed whether the Board has asked for that provision to be withdrawn; Mr. Browning replied that the revision was a Staff recommendation due to the paucity of such units coming online. While the package implies a disagreement between the Board and P&Z on such an issue, no such implication should be taken to Council. The Board discussed desirability of a 20-year restriction in particular and long-term affordability requirements in general. Although many applicants may not exist presently, the restriction should remain should applications increase. Applicants will not want a long restriction for incentives that bring as little as $500. Staff noted that the program affects very few units. Although the developer reaps the benefit of the program, the restriction particularly affects the low-income family who is faced with the restriction regarding resale. Further discussion encompassed the desirability of creating however many new units that such a program would generate. The affordability requirement would work out well Affordable Housing Board • • Meeting of January 7, 1999 Page S within the competitive process. Many developers will not want this type of restriction for the amount of incentive they receive. Other developments that would certainly benefit from this program would be the Housing Authority or a community land trust. If the concept has little meaning toward the significance of the entire document, perhaps it should be written out. The consensus of the Board was to avoid creating an issue with Council between the Board and P&Z on this item. In response to requests, Ms. Watts reviewed the chart on page 3 with the Board. During discussion, it was asked that the language regarding "free money" be amended to reflect a more concrete understanding of the concepts involved. "Difference" or "leveraged incentive" were among the suggested changes. Board members expressed concern that the goal of 10 percent affordability for new developments was not being met within the document. Staff noted that the means to enforce this would be inclusionary zoning. Regulations would be needed to strictly enforce this concept. Mr. Browning noted that the structure is to provide incentive of 10 percent affordability for individual projects that wish to qualify. The Board would not want a situation where the potential for housing becomes restricted due to affordability requirements. Discussion was held whether the incentive program would achieve the desired results. The intent of the program is to increase incentives, reduce barriers, and aid developers in becoming more knowledgeable of the system. It was noted that inclusionary zoning has been deemed to be a form of rent control and therefore illegal. Board members expressed concern that the incentives were simply insufficient to generate the desired results. Mr. Browning suggested that the language be kept as stated; that the numbers are a best estimate; that the program can be amended as deemed necessary, depending upon its results. Discussion was held on requirements of the programs in the event that a resident's income rises. Various government programs, as well as CARE, have restrictions in place regarding this. The pros and cons of such programs were discussed. It was noted that an increase in family does often does not equate to an increase in the number of wage earners. Moved by Ms. Rios, seconded by Ms. Garity: To accept the document with the proposed changes as noted. Motion approved with two opposed, Priority Needs and Strategies Report Ms. Rios noted her objection to using the competitive process. Mr. Browning stated that the general consensus was to offer the taxpayer the best use of tax dollars and that should the concept not develop as envisioned, it can then be amended. There were no Affordable Housing Board Meeting of January 7, 1999 Page 6 other objections to the competitive process, as defined in the document and in previous discussions. The final document will go to Council on January 18; presentation to the Finance Committee on January 21; Council study session to be held on January 26; and review at Council meeting on February 2. Discussion was held whether the document favored new construction over preservation. Sections were noted where preservation was mentioned and accounted for. The project that will provide units by the best use of resources will receive the highest priority. The intricacies of competitive process versus administrative process were discussed. The public input was noted. Ms. Watts will summarize this for the final report. Ms. Stitzel supplemented her comments by stating that anytime a competitive process is used over an administrative process, nonprofits suffer by having to wait longer for their subsidy. Mr. Browning stated that the effective amount of subsidy may be increased by the competitive process. Mr. Collins' comments will be supplemented by his comments at this meeting. SROs should receive further mention. Discussion was held over the amount of mention given to special needs population and the definition of "family." Further mention could be made of special needs population. Board, Staff, and Mr. Wanner discussed the level of population growth mentioned in the Concorde proposal. The level mentioned is for a baseline, standard for further assessment of planning. It was generally concluded that the 2.2 percent standard mentioned in the report should be further reviewed. Further discussion was tabled to the next Board meeting at 4:30 p.m. on January 14. Several Board members stated that although there were troublesome aspects of the report, it was an honorable effort and deserved to move forward. Other Business Ms. Watts stated that the State Housing Board will have a public hearing on Tuesday, January 12, in Denver, and invited interested Board members to attend. The hearing will encompass affordable housing needs for the state. The meeting recessed at 7:20 p.m.