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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 11/02/1995AFFORDABLE HOUSING BOARD MEETING MINUTES November 2, 1995 The meeting of the Affordable Housing Board began at 4:00 p.m. in the Community Planning Conference Room, 281 North College Avenue, Fort Collins, Colorado. Board members present were Chairperson Mary Cosgrove, Joanne Greer, Christa Sarrazin, Tom Sibbald, Tony Kavanagh, Sue Wagner, and Bob Browning. Staff members present were Ken Waido, Dickson Robin, Felix Lee, Joe Frank, Alan Krcmarik, and Tom Vosburg. Gina Janett was present from City Counsel. Doug Schwartz, from the Light and Power Department, was also present. No public comment was heard. No changes were noted in the September 7, 1995, meeting minutes. Moved by Mr. Kavanagh, seconded by Mr. Browning: To approve the minutes as written. Motion approved unanimously. One addition was noted in the October 5, 1995, meeting minutes; that being the man identified as Charlie in the minutes was Charlie Lucas. The determination was made that since the October 5th meeting did not have a quorum, no official approval of the minutes was necessary. Mr. Waido stated that the minutes would be filed as a record of general discussion. The Model Energy Code was revisited for the third time by the Board. Mr. Kavanagh pointed out that mortgage lenders no longer considered energy conservation measures and hadn't utilized energy scores for some time. Mr. Kavanagh stated that energy score essentially means nothing in terms of increased housing affordability. Mr. Sibbald stated that Staff had cited an example that energy code confirmation would increase the mortgage availability from 100,000 to 108,000. Mr. Kavanagh stated that theoretically three basis points are given in the ratio, but such is already being pushed on paper. There is a credit, but in reality, it doesn't exist. Moved by Mr. Sibbald, seconded by Mr. Browning: For recommendation by the Board that City Council not adopt the Model Energy Code as currently written. Mr. Sibbald stated that one of the duties of the Board is to advise Council on actions that would reduce or stabilize the cost of producing housing products, and his belief is the benefits of the new code are not equal to the initial costs. He also believes low and moderate income households would be excluded from homeownership opportunities as a result of the new code. He reiterated his feelings that if some cost could be removed from the existing code, it may be acceptable to add these additional costs in the new code. 41 Affordable Housing Board November 2, 1995 Page 2 Mr. Sibbald also pointed out that builders in Fort Collins have offered energy conservation packages as upgrade options to their housing for years, and historically, the consumer is not willing to pay the extra cost. He sees this as a forced option that the consumer has demonstrated an unwillingness to pay for. Mr. Kavanagh suggested that perhaps it may be easier to implement the code by offering benefits if the upgrade is utilized by the consumer as opposed to being a mandatory implementation. He also stated that the up -front cost is the greatest difficulty for the consumer, and the difficulty of this up -front cost would significantly outweigh small monthly savings on heating bills. Mr. Kavanagh pointed out that any increased cost will have to be reciprocated by the builder in one form or another. Mr. Browning stated that the costs for the Habitat for Humanity houses built since 1992 were approximately as follows: 1992, 42 to $44,000; 1993, $50,000; 1994, $59,000; 1995, $63,000; and the estimated cost for the next two future houses is $80,000 to $85,000. He noted this doubling in price is not solely a result of increased land prices. It also is a result of each added cost that is brought on through increased fees. Ms. Janett stated that she would like to see the individual components of these cost increases. Mr. Lee stated that the Light and Power Department has done extensive research into the cost benefit in savings on bills and feels the benefit does exist. He feels the code addresses long-term affordability for the occupants. Mr. Schwartz stated that the pay back period for the additional up -front cost is approximately four years. He realizes up -front cost is an obstacle for everyone but feels long-term costs need to be considered as carefully as short-term costs. He reiterated that implementation of the code would eliminate potential problems on the front end which would be considerably more expensive to eliminate after the fact. Mr. Sibbald commended Staff on the outstanding cost benefit analysis that has been put together for the code upgrade. However, he feels that using today's comparatively low interest rate is a mistake due to the fact that the interest rate will increase resulting in even greater up -front costs. Mr. Schwartz stated that the economics of the analysis were computed at an 8 1/2 percent interest rate rather than the current rate of 7 1/2 percent. Mr. Sibbald replied that in the not too distant past, interest rates reached 12 percent, and such a rate would have a significant impact on the cost increase. Mr. Sibbald reiterated the 30 to $40,000 difference between the housing prices of surrounding communities and Fort Collins' housing prices. He pointed out that the two areas noted by Staff which have implemented a similar code are Longmont and Boulder, which are areas that already have a higher housing cost than Fort Collins. He believes the increase in costs in Fort Collins will drive low and moderate income people out of the Fort Collins area into surrounding communities such as Loveland and Greeley. Ms. Janett asked why a builder could not somehow change the product being made to fit the market price rather than leave the market due to increased prices. Mr. Sibbald replied that a builder is going to attempt to get a profit margin that's going to make it worth his Affordable Housing Board November 2, 1995 Page 3 while to produce the housing product, and if the cost of producing that product is greater in Fort Collins than it is in Greeley, the builder will be forced to go produce the product where there is a market that will accept the product. Ms. Nabors stated that she would be abstaining from voting because she has had insufficient time to review the material. Ms. Cosgrove stated that she opposed the motion due to her feelings that the code would be worthwhile in the long run. In response to questioning, Mr. Lee stated that no concentrated effort has been focused on looking at the existing code in an effort to remove costs not directly related to safety or health. Motion passed five to one, with one abstention. Mr. Waido addressed the issue regarding extending the City's Development Impact Fee Rebate Program outside the City limits. His recommendation to the Board was that whatever decision was made conceming Mercy Housing's request for rebates, the wording of the ordinance establishing the program and the wording in the program regulations needed to be brought into conformance. In response to questioning, Mr. Waido stated that Mercy Housing would not be willing to annex into the city. Ms. Cosgrove stated that she had gotten a request from the County Staff for information on the cities of Loveland and Fort Collins, which she had forwarded. Therefore, she believes steps are being taken to develop a County policy. Mr. Browning stated that he believes this Board should recommend to Council that Mercy Housing be granted as much rebate as allowed. He feels that the Board should encourage the production of any affordable units, and if such requires a policy change, that change needs to take place. Mr. Waido said that the County Commissioners have waived all fees and charges related to the Mercy Housing project. Mr. Kavanagh feels that allowing a rebate for this project would set a precedent and encourage growth outside of Fort Collins. In response to questioning, Mr. Waido stated that in the Development Review Process this project would have difficulty obtaining the necessary points to achieve density and would therefore need to score approximately 100 percentage points on the chart in all other areas. Mr. Sibbald believes that to the extent that affordable housing projects meet City standards and pay City fees, such projects should be supported through rebates. Affordable Housing Board November 2, 1995 Page 4 A request was made to have Staff explore the possibility of a partial rebate system for affordable housing projects outside of the City limits. Mr. Browning stated that he felt a conceptual approval from Council needed to be obtained prior to expending Staff hours for such an exploration. Mr. Waido pointed out that, the project would be eligible for rebates based on the amount of fees paid to the City. In response to questioning, Mr. Waido stated that the differential between City fees and County fees is as follows: the park land fee is theoretically the same, street fees for the City are somewhat higher, off -site road fees for the City are somewhat higher, and planning fees should be similar due to the fact that both entities use the Uniform Building Code. Mr. Sibbald suggested that a recommendation be made to Council that Staff explore extending the fee rebate program outside the City limits to the extent that the rebates are somehow tied to the fees paid by the individual project and tied to the growth policy statement. Ms. Cosgrove stated that she felt it important to send the message to Council that a consistent policy is desired from project to project. In response to questioning, Mr. Waido stated that the County does not have a similar program of rebates for projects in the county. Moved by Mr. Browning, seconded by Mr. Sibbald: To recommend that the Fee Rebate Program be extended outside the City limits with the conditions to be established by Council. Motion approved unanimously. Mr. Waido addressed the issue of amending the Fee Rebate Program to increase the rebates for owner -occupied projects. He pointed out that when originally designed and drafted, the program gave more rebates to rental projects over homeownership projects. The Board was given copies of the current rebate schedules based on bedroom size, at cetera, for rental projects and based on income, at cetera, for homeownership projects. Ms. Cosgrove questioned the availability of monies if an increase for homeownership rebates was allowed. Mr. Waido stated that even if the expected 1996 monies were to come on line, there would not be sufficient funds in the City's line item for rebates to cover all projects. Ms. Cosgrove suggested that perhaps past years' funding could be utilized for increased rebates. In response to questioning, Mr. Waido said that in order to apply for the rebates, a project must be completed with certificates of occupancy issued and leases for rental projects or sales contracts for homeownership Projects must be executed. In addition, rebates are given on a first -come -first -serve basis. Ms. Janett stated that upon adoption of the program, City Council's sentiment was additional monies would be located if demand exceeded the set -aside funds. Affordable Housing Board November 2, 1995 Page 5 Ms. Cosgrove expressed her frustration with the multiple struggles that exists in attempting to build any affordable housing projects and stated that she felt equal support should be given to homeownership affordable housing projects. Mr. Browning pointed out that once a rebate is received by a builder, nothing prevents that builder from taking the rebate proceeds and using them on a project built in an area outside of Fort Collins. He suggested changing the program to allow the rebates to be granted at the front end of a project rather than upon completion. Lou Stitzel addressed the Board with three reasons why homeownership projects should not be given a lesser amount of rebates. 1) Rebates go to reducing costs on a sliding scale to make it possible to serve the as -low - as -possible population of the area median income. 2) Lesser rebates for homeowners sends a statement that support is only going to rental housing with an implication that no concern is given to limited income individuals owning. 3) Equal if not more complexity exists for allowing limited income individuals to be homeowners. In addition, allowing these people to be homeowners gives back to the community due to the taxes that would be paid. Mr. Kavanagh expressed his feelings that homeownership should be encouraged just as much as rental housing and such would help break a cycle. Mr. Sibbald noted the similarity between the homeownership chart and the rental chart, in that both charts granted a $3,000 per unit rebate at 40 percent of the median income. The determination was made that perhaps the homeownership chart needed to have an additional increment added to include the 30 percent of the area median income. Moved by Mr. Sibbald, seconded by Ms. Greer. To modify the homeownership chart to add another increment of 30 percent, and at the homeownership level, the rebate potential would be $4,200. Ms. Stitzel stated the problem is the Board is really only thinking somewhat of for -profit development, and the only way to be able to serve people in homeownership below 60 percent of the median income is through nonprofit development. Ms. Stitzel gave the Board copies of some charts and a worksheet used by Neighbor to Neighbor to determine mortgages and taxes. Motion approved unanimously. The Board received copies of the draft version of City Council's policy agenda, and Mr. Waido gave a brief report to the Board on what City Council would like to have the Board work on in the area of affordable housing over the next two years. He stated that $150,000 has been requested for additional resources to cant' out the current work program. Mr. Waido also stated that some items that previously on the work program have been deleted due to the probability that insufficient time exists in working on those items. Such items include: development standard review and delayed payment of utility fees. Affordable Housing Board November 2, 1995 Page 6 Ms. Janett suggested that if the Board feels any items exist that have a greater priority than what exists on the work program, a recommendation should be made to Council for a tradeoff with a listed item. Ms. Janett commented on the house production item listed in the work program. She stated that the project team does not include anyone from utilities and noted that the Board has consistently said that sewer, water, and storm are part of house production. Mr. Frank questioned whether or not any discussion has taken place regarding the zoning ordinance for the unrelated household members per bedroom. Ms. Janett replied that a project team is working on that issue and believes it to be a high priority in the City Manager's office. She also stated that the Housing Mix and Distribution Policy is one of her high priorities for City Plan discussion. Mr. Vosburg gave a report to the Board regarding changes to the Land Development Guidance System's Residential Density Chart. A memo was included in the Board's packet which outlined the issues. Mr. Vosburg outlined the problems existing regarding the phasing criteria as follows: - Criterion N, off -site bonus points, is unclear as to how it is supposed to be administered. Staff is proposing language cleanup in that area. - Recent submittals have arisen which claim nearly all of their points through bonus criteria, and very few points are claimed through base criteria. - In the existing criteria, affordable housing falls within the bonus criteria. - At this point in time, all points are basically equal in importance. - Alternative 1 would be to decrease the value of the bonus criteria. - Alternative 2 would be to allow affordable housing to count toward base points, which would strengthen the incentive. The downside of this would be allowing more poorly or marginally located projects to be approved through including the affordable housing element. Mr. Vosburg wished to seek recommendation of one of the two alternatives listed above, and if the Board had concerns, they should identify specific concerns they wished to see addressed in whatever proposal is brought to Council. In response to questioning, Mr. Vosburg stated that discussion has been held by the Growth Management Committee that perhaps very low income should be given additional incentive on the point chart. Discussion was held regarding how monitoring, enforcement, and compliance with affordable housing would be achieved. Mr. Frank stated that the Housing Authority currently monitors affordable housing projects. Discussion was held concerning whether implementation of Alternative 2 would increase the production of affordable housing. It was felt that it would probably not make a difference with the exception of some projects in the northern area which are not near parks and schools and need points for approval. Affordable Housing Board November 2, 1995 Page 7 Mr. Sibbald stated that the people benefitting from such a change would be people outside of the core of the community and feels those are the very people that need to be within the periphery because they need more services. Discussion was held on the additional tool that would exist if such a change were to take place. Ms. Cosgrove stated she felt that this would be a positive statement for affordable housing. Mr. Sibbald stated that such a change would be a paper action that would allow approval of a plan with no monitoring and enforcement. In response to questioning, Mr. Frank stated that from his recollection, the Housing Authority is supposed to receive a yearly report from an affordable housing project describing income levels of the people in the units. He also stated that lack of compliance would be a violation of the zoning ordinance, which would result in a $1,000 fine. Moved by Kavanagh, seconded by Ms. Greer: To accept Alternative No. 2 with the added responsibility to monitor and follow up on the actual implementation of the affordable housing. Ms. Sibbald stated that he would sup rt the motion if the monitoring was done on an ongoing basis by an entity inside the uity Government. Motion approved unanimously. Mr. Robin presented a brief update on the Pioneer Mobile Home Park situation. He stated that the proposed Dry Creek Mobile Home Park went before the Planning and Zoning Board on the 23rd of October requesting MM zoning and annexation. At that meeting, annexation was approved unanimously, and MM zoning was disapproved unanimously. The Dry Creek proposal now goes before the City Council on the 7th of November. Neighbor to Neighbor is continuing to administer the relocation counseling program. To date, 15 households have received assistance. Pioneer Mobile Home Park Homeowners Association has identified two properties for their project. One site is 27 acres, and the other site is 7 acres. The association is looking at prospective financing to purchase these sites for development of manufactured homes. The $235,000 RFT was opened upon October 1st and closed on October 31st. Three proposals were received. The Housing Authority has requested the entire $235,000 for the development of its manufactured housing project consisting of 33 units. Neighbor to Neighbor is requesting $165,000 for its relocation counseling assistance program. TRACK is requesting $62,500 for land acquisition for its 14-unit town house development. The City Home Buyer's Assistance Program is almost out of money. Seventeen applications have been received. One household has closed on a unit and another one is on the verge of closing. Affordable Housing Board November 2, 1995 Page 8 Mr. Waido stated that the redevelopment of the existing Pioneer site on Harmony Road has gone into the conceptual review stage, and the latest indication was that notices to vacate the Pioneer Park will not be issued until March of 1996. Mr. Robin said that Kaufman & Broad's affordable housing project will not be completed until later in 1996. Mr. Robin has encouraged Pioneer residents to contact Kaufman & Broad to get on their waiting list for housing. Ms. Cosgrove questioned whether it would be helpful for the Board to make a recommendation to Council regarding the Dry Creek Park. Ms. Janett replied that it is always helpful to have people supporting an affordable housing project in the audience and at the podium. Mr. Sibbald stated that he felt the Board would be doing themselves a disservice if they injected themselves into a Planning and Zoning issue. Mr. Krcmarik gave the Board an update on the Cost of Services Project as follows: - In 1993 Staff completed the Cost of Development Study, which resulted in questions about whether or not impact fees were at the appropriate levels. - The basic assignment of the project team was to look at some services that the City provides and determine whether or not the buildings and the infrastructures that are necessary to support those services are adequate and how those infrastructure needs might be funded. - The team was asked to look at impact fees that have been used in Loveland and the excise tax used in Boulder. - Data has been collected on some of the services the City provides that have capital infrastructure deficiencies, and an examination was undertaken to determine the outcome of using impact fees, excise taxes, or other funding mechanisms to fund these types of services. - A brief report has been issued that outlines some of the capital deficiencies and the capital needs that each one of the services has. - In calculating estimated costs, a lack of approximately $21 million deficit will result over a ten-year period. Mr. Krcmarik stated that feedback from the public has been obtained, and he is now seeking feedback from the Board. In response to questioning, Mr. Krcmarik stated that the policy guideline was to have action in November on this issue, but he feels that this time line will not be met. Mr. Krcmarik stated that a funding mechanism would hopefully keep even with the additional growth, and the deficit would be made up with tax dollars. Mr. Sibbald stated that a 1,200 square foot house would not have the same impact as a 2,000 square foot house would have. Ms. Janett added that data shows the number of trips generated from a large single-family house is twice as much as the trip generation from an apartment dwelling. Mr. Krcmarik said that the Growth Management Committee has done some research into reduced fee structure for multifamily housing, and the City Attorney believes such reduction is a possibility. 0 Affordable Housing Board November 2, 1995 Page 9 Mr. Sibbald stated that he would not support a recommendation of increased impact fees. He believes that if a need and desire exists to make capital improvements, a bond issue should be held. Ms. Janett stated that new growth needs to pay its own way, and if new growth is not paying for its increment of need, the deficit will continue to grow, and new growth will not eliminate this deficit. Mr. Krcmarik extended an invitation for further comments on the issue at anytime and stated he could return in December if so desired by the Board. Mr. Sibbald said he would like to have the issue returned every month until it is resolved as long as new information has surfaced. Mr. Krcmarik stated that he would bring specific figures as they developed and figures concerning the difference between multifamily services, average residential, and large lot residential. Mr. Waido had copies of the report from the consultants putting together the CDC for any Board member what was interested. Ms. Janett stated that a corporation exists in Loveland with the same mission as the proposed Fort Collins CDC. The issue now exists on whether or not the two entities should become one joint corporation. The existing Loveland Board feels that if an agreement can be reached between the two groups by the end of the year, they would be willing to become a joint organization. If agreements couldn't be reached by the end of the year, the existing corporation would continue on their own due to the fact that they are ready to proceed on a project. A meeting was held between the two groups, and a recommendation of an 11-member board was reached. The initial board would consist of seven seats, three from Fort Collins and three from Loveland, and the seventh member would be a dual citizen with a house in one town and a job in the other. Mr. Waido passed out a survey to the Board members from the Human Relations Commission to obtain information on the composition of the boards and commissions in the City. Ms. Sarrazin moved adjournment, seconded by Ms. Greer. Upon unanimous vote, the meeting adjourned at 6:50 p.m.