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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 06/06/1996APPROVED JUL 1 1 1996 AFFORDABLE HOUSING BOARD MEETING MINUTES June 6, 1996 Mary Cosggrove, Chairperson (work - 667W3- 2• home - 493-9164) Gina Janett, douncil Liaison The meeting of the Affordable Housing Board began at 4:05 p.m. in the Community Planning Conference Room, 281 North College Avenue, Fort Collins, Colorado. Board members present were Chairperson Mary Cosgrove, Tom Sibbald, Bob Browning and Joanne Greer. Newly appointed members present were Sylvia Glass and Bruce Croissant. Staff members present were Ken Waido, Dickson Robin. Sam Betters and Don Aldridge, from the Larimer Home Improvement Program, were present. Ginny Riley, director of the Larimer County Department of Human Development, Carol Galsesby, head of the Development Program, and Lisa Schwarzburg, AHIS Project Director, were present. Betty Maloney, Lou Stitzel, Denise Case, and Sister Mary Alice were present as observers. Council Liaison Gina Janett arrived later in the meeting. A quorum was not reached, so the meeting was held informally. No public comment was heard. No changes were noted for the May 2nd, 1996 meeting minutes. Ms. Ginny Riley stated that the County took over the direct operation of the Affordable Housing Information System late last fall from a consortium. A presentation was made by the County along with the consulting firm BBC at the Lincoln Center last fall on the system. At the presentation, some concerns were raised about the data that was used to develop the report. Since that time, the County has been working to improve the AHIS. Particularly, when BBC made their presentation in the fall, there was some question on the figures used in the demand model, which forecasts into the future what the need of affordable housing will be. Ms. Riley said the County has decided to obtain more current information to improve the running of the demand model so more reliable information can be obtained by everyone. The Board received a draft report in their packets. Ms. Riley noted that comments and questions on the report were welcome. She added that in addition to what was received in the Board's packets, numbers have been run on the demand model for Fort Collins only. The report received by the Board was for Larimer County. Ms. Schwarzburg noted that the AHIS has three basic components: demographics of Larimer County housing population, housing demand model analysis, and the GIS, Geographic Information System. Ms. Schwarzburg gave the Board a brief overhead projection presentation of the AHIS. Mr. Browning questions whether the CSU student population housing demand factored into the demand model. Ms. Schwarzburg replied that the student population is reflected in the 0 to 19 category and the following age category is in the report as householders. Mr. Browning questions if a true determination of the affordable housing inventory will ever be achieved. Ms. Schwarzburg replied that there are different ways of pulling together different pieces of information, examining the information in unison, and weighing the AHB Minutes June 6, 1996 Page 2 pieces of information. She added that that is why the County is examining housing unit data through the permitting activity and its valuations. She noted that that method is not perfect, it gives some idea of what kind of building activity is taking place. The real estate figures also give an idea of what types of sales are occurring. She noted that the most lacking information comes from the rental data. Ms. Greer noted that discussions had been had on the possibility of using CSU students to perform telephone surveys of the property management companies and apartment complexes to get an idea of what the rental rates are in the area. Ms. Riley said that such phone surveys have been performed, and the draft report covers two particular studies that have some conflicting responses. Mr. Sibbald stated that he believes the entire AHIS process has been flawed from the beginning because a true inventory of Larimer County housing units was never obtained. He stated that the RPC study is questionable. He noted that Gordon Stroh has a more recent survey than the January survey noted in the draft report. Ms. Schwarzburg stated that she had been referring to Mr. Stroh's most recent survey. Mr. Sibbald went on to state that it is his contention the baseline information should be purchased through hiring a consultant. He added that if the County does not want to hire a consultant, the City should do so for its element of the demand analysis. Mr. Sibbald noted that the County has considered everything that is permitted multifamily as a rental opportunity, and that is not the case in Fort Collins. Ms. Schwarzburg reiterated that that is exactly why she felt that several sources needed to be looked at in unison. Mr. Sibbald suggested that a phone survey could be undertaken to contact management companies and question them as to the number of owner occupied units they manage. That number could then be utilized if good baseline information is first obtained. Mr. Sibbald stated that he has bought surveys in the past and paid significantly less than what the County has invested in the AHIS system. He added that that information gave him considerably better baseline information. Ms. Schwarzburg asked if he could share that information with them. Mr. Sibbald replied that he would not and added that the information is outdated at this time, anyway. Ms. Schwarzburg pointed out that Mr. Sibbald had obtained research analysis information for a particular area, but such information is much more difficult to obtain for the entire Larimer County area. Mr. Sibbald replied that if concentration was placed on the four major urban areas: Estes Park, Loveland, Fort Collins, and Berthoud, 97 percent of the area's information could be obtained, which would be sufficient for the entire area. He added that a consultant, such a BBC, could perform that study for less than $10,.000. Mr. Sibbald also noted that the report should absolutely be dated. Ms. Riley said that was a good suggestion and encouraged the Board members not to spread this draft report around to the public. Ms. Riley expects a published final report to occur next week. Ms. Cosgrove raised the issue that the Board has asked the City to set aside $20,000 for the AHIS project. She stated that if the County has an interest level in going onto the next step or perhaps undertaking a step of obtaining better baseline information, to please make contact in that regard. Ms. Riley stated that working with the County sounds like a AHB Minutes • • June 6, 1996 Page 3 good potential partnership project and will let the Board know. Sam Betters and Don Aldridge discussed the Larimer Home Improvement Program request for matching funds. The concerns raised previously by the Board were: granting loans to applicants that could otherwise qualify for a commercial loan, the amount of the loans granted, granting loans in which applicants performed fix -ups of the homes for sale purposes. Mr. Betters gave the Board handouts that contained information he asked not to be made public due to the addresses and incomes of applicants listed on the information. Ms. Cosgrove alerted the Board that they had also received confidential information which contained the names of the applicants in their packets. Mr. Betters stated that LHIP has attempted to look at the issue primarily of, are loans being made to people who could otherwise qualify through a bank? He noted that one of the suggestions of the Board was perhaps each applicant should be required to attempt to obtain a loan through a bank and upon rejections, come back to apply for a LHIP loan. He stated that he felt that policy requirement would overburden the program. In the information Mr. Betters gave to the Board, six loans were highlighted that were believed to be applicants that could obtain bank loans. He noted that those applicants were families that have a large amount of equity in the home. However, he noted that examination of credit rating, income, and debt -to -income ration was also taken into consideration. Mr. Betters stated that with regard to the size of the loans, that is set out in the guidelines established by the Larimer Home Improvement Board. He noted that the guidelines set out a limit of $16,500 in general, and if additional monies are needed, then a request must be made to exceed that amount. Mr. Aldridge stated that discussions were had with the LHIP Board concerning that issue. He noted that one member agreed that $16,500 was too high. Five of the board members did not feel that number was too high. Mr. Aldridge noted that in his opinion $16,500 is a fair limit on the loan. He believes each individual loan needs to be examined on its own merits, and an evaluation should be based on that. Mr. Betters stated in regard to the possibility of providing an opportunity for someone to fix up their home and sell it and reap some benefit from the profit, unless the home is sold to another income -qualified purchaser, the LHIP holds a note against the property, and they will be paid if the home is sold. Mr. Sibbald stated that that money could be made available to other low-income families rather than being locked down into the fix -up house. Mr. Betters agreed that during the time of the fix up, the money is not available for other families. However, once it is sold, the money again becomes available. Therefore, a low- income family is benefitting at all times. Mr. Aldridge added that in addition, the base housing stock is being improved by that loan. Mr. Sibbald questioned the expected self-sustainability date for LHIP. Mr. Betters stated that time is projected to be ten years. However, it may happen sooner because greater payback is being received than expected. Mr. Sibbald noted that the sooner the program can become self -sustainable, the better off it will be and suggested that the program bring the projection figures based on a new model next year. Mr. Betters said they would do that. Mr. Betters noted that the Board had raised some valid concerns, and he believes the AHB Minutes June 6, 1996 Page 4 program has some ways to correct some of those concerns. He added that the program will never be absolutely perfect in all instances and requests that some flexibility is given in how the program is run because too many rules and regulations will create a nightmare. Mr. Waido questioned when the program will submit their application to the State and when the Citys matching funds will be needed. Mr. Aldridge replied that the application has been submitted to the State, but the additional loans need to be secured before the State will grant their money. He expects an additional 60 to 90 days for loan processing. Mr. Waido suggested making a decision on the request for matching funds at the July meeting due to the fact that the Board did not have a quorum. Mr. Robin addressed the Board with an update on the Development Project Priority Processing Criteria. He noted that when the issue was previously discussed, the Board had questions with regard to priority processing for qualified affordable housing projects. That concern related to what type of projects would qualify for priority processing, a project at 80 percent or a project at 100 percent of area median income. Mr. Sibbald stated that he had located a March 12th memo written by John Fischbach. He had concerns with the wording of the memo in that it speaks about a renter or owner of a household maintaining a qualified income. Mr. Robin stated he had also seen that wording and agreed a change needs to be made. Mr. Sibbald also took objection to the wording in the second sentence of the last paragraph of the memo where it speaks of the applicant submitting appropriate and verifiable documentation regarding the project's intended occupants. Mr. Robin agreed that; one, is enforcement necessary; two, if so, how can it be enforced? Mr. Browning questioned what was being considered for a penalty if enforcement is implemented. Mr. Robin stated that the only penalty Staff can think of is if a developer circumvents the intent of the program, they will never again be considered for priority processing. Mr. Sibbald suggested having a developer sign a letter of intent of some nature which is binding to the extent that they verify required occupancy within 18 months of receiving their CO. If verification cannot be made, a penalty of 10 percent of the impact fees would go into the Affordable Housing Trust Fund. Mr. Robin noted that priority processing is not an ordinance at this point, and therefore, that type of enforcement could not be utilized. Mr. Sibbald stated that he still maintains the processing should be at 100 percent of AMI because a basis point increase in mortgage rates has occurred in the last 90 days, and homeownership opportunities are most directly related and correlated to mortgage rate increases. Mr. Browning questioned the possibility of having the Board be the recommending authority for whether or not priority is going to be given based on a presentation of a project. He added that the administrative workload is being increased, and perhaps the burden could be placed on the Board instead. Mr. Waido stated that the did not believe that any Staff time would be saved. Mr. Sibbald added that a conflict of interest could inherently still rest on the Board in that type of situation. Mr. Waido stated that the Board concerns with regard to the 80 or 100 percent of AMI issue would be relayed to Mr. Fischbach. Mr. Robin noted that the Staff affordable AHB Minutes • • June 6, 1996 Page 5 housing team had met and decided maintaining 80 percent and less was probably beneficial given the fact they did not believe at this point promoting construction through the affordable housing program of $120,000-plus homes should be encouraged. The other element considered was the great need for starter home at $100,000 and below, and that would provide an incentive for builders. Mr. Waido gave the Board an update on the Provincetowne SID project. He stated that he had spoken with Tom Vosburg with regard to the guarantee of affordability on the project. Mr. Vosburg had stated that there is a clause in the sales contract which is tied to the COs and stated that the developer can pull two COs for nonaffordable units for every one verifiable affordable unit. Mr. Waido stated that he did not know what would happen if someone defaulted on a contract. Mr. Sibbald stated that he feels that would be an unenforceable mechanism. Ms. Cosgrove suggested that the enforcement goes back to doing future business. Mr. Sibbald stated that he needed to leave the meeting early. Ms. Cosgrove asked if there was any information he would like to share due to the fact this was his last meeting as a Board member. Mr. Sibbald stated that from a personal point of view, he has enjoyed working with fellow Board members. He feels the community has done a poor job of addressing affordable housing needs. He feels the Board has struggled and sent many recommendations forward which, for whatever reason, have not been approved. He does not feel the affordable housing situation has gotten any better. As a matter of fact, he believes it has gotten much worse. He believes for eveyone who believes the solution is going to rest with the public sector and what they will produce, they are sadly mistaken because, ultimately, the solution rests with the private sector. He added that the private sector will not begin to assist in the affordable housing needs until some of the attitudes have changed in the community. Mr. Sibbald continued that he is looking forward to not doing low -mod products in the future because it is more hassle than it is worth, long-term. He hopes the next Board that comes on and the rest of the members that are staying are able to make a dent in the affordable housing situation over the next three or four years and wishes everyone well in their efforts. Ms. Cosgrove thanked Mr. Sibbald for all of his hard work and energy. She noted that the deadline for receiving applications for new Board members is June 10th, and one position is left to be filled. The hope is to fill that position with a developer. A written update report was given to the Board on the Pioneer Mobile Home Park situation. Sister Mary Alice was given the opportunity to speak to the Board at this time due to the fact that she was unable to be present at the beginning of the meeting. She questioned if some type of impact fee could be implemented if a developer dislocates a sizable number of particularly, low-income renters and perhaps the fee should not be confined to just low income. She added control must be obtained due to the fact that as the land sites become more and more valuable, a great number of mostly low-income level people will have their homes taken away from them. She went on to say that by the end of next year, her organization will have built 120 units. However, that amount seems negated in a way as far as housing stock, due to the mobile home parks that will have closed. AHB Minutes June 6, 1996 Page 6 Mr. Waido stated that in a case where developers come to the City or the County for a development approval, at cetera, the Council or Commissioners could enact a policy or ordinance to require a relocation plan or assistance. However, if the project is purely a private sector venture where the government is not involved in any way, then he is unsure of what mechanism could be utilized to get involved. Ms. Cosgrove suggested that Sister Mary Alice submit a memo to the Board presenting the concept of an impact fee. Ms. Janett suggested researching other communities in the country to determine what they have done in situations of this type. Ms. Stitzel was also allowed to speak to the Board at this time. She suggested that both the County and City can address the mobile home park issue in two ways, one is zoning and the other is health and safety. She noted that the City and County do have a prerogative to deal with health and safety, and the City could utilize that reasoning so displacement cannot occur and rent could not be raised to the point that occupants are forced out of their homes. Mr. Waido stated that zoning is a legislative action, and a legislative body will always have the right to change the zoning. Ms. Greer questioned what health and safety issues Ms. Stitzel was referring to. Ms. Stitzel noted homelessness, increased stress that brings on sickness, and violence that is brought on through increased stress. Ms. Cosgrove asked the newly appointed Board members to introduce themselves and give some background. Mr. Croissant stated that he has been a resident of Fort Collins since 1971, is a native of Colorado, and was born and grew up in Greeley. He lives near the Library Park and has a great deal of sympathy for the homeless, does not believe that it is fair that people be homeless, and feels there is an appropriate place for the public sector concerned about such things. He noted that he does not have a great deal of experience with the affordable housing issue, but does desire to be involved in it. Ms. Glass stated that she is an architect, has been living in Fort Collins for only three years, and has always had a concern about affordable housing. She noted that unfortunately most architects do not build affordable housing just as developers usually do not and feels those issues need to be addressed. She looks at all the rules and regulations that exist and knows that that is certainly part of the reason that housing is not affordable. In addition, she feels all new rules and regulations need to be examined closely to determine if they are really justifiable and whether the desired results will actually be achieved. Ms. Cosgrove stated that she would like people to think about the position of chair and vice chair because she would like to be relieved of the position of chair. She does not wish to take on the position of vice chair. Some discussion was had as to what should be done to thank the Board members who will no longer be serving. Ms. Greer stated that she would coordinate that effort. Meeting adjourned at 5:55 p.m.