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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 04/04/2013ATTACHMENT 5 CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD MINUTES BOARD MEETING 281 N. College Ave. Fort Collins, Colorado Apr. 4, 2013 4 to 6 p.m. Chair: Dan Byers Staff Liaison: Joe Frank 970-221-6752 City Council Liaison: Lisa Poppaw Board Members present: Tatiana Martin, Troy Jones, Terence Hoaglund, Dan Byers, Jeffrey Johnson, Curt Lyons Board Members absent: Karen Miller Staff present: Joe Frank, Director, Social Sustainability Department; Beth Rosen, Affordable Housing Administrator; Michele Dunlop, Note Taker Council Members present: None Guests: Marilyn Heller, League of Women Voters Meeting called to order with a quorum present at 4:00 p.m. by Chair Dan Byers. AGENDA REVIEW Chair Dan Byers queried the Board for additions or subtractions to the agenda. No commentary. PUBLIC COMMENT Marilyn Heller reminded the Board that the League of Women Voters’ affordable housing team will be hosting a public panel on Tuesday, April 9 at 7:00 p.m. at the Harmony Library. She distributed a financial advice pamphlet relevant to affordable housing, and Director Joe Frank suggested it might be a great resource to add to the Social Sustainability Department website. Chair Dan Byers added that 2-1-1 and the City of Fort Collins might also find the information useful. 2-1-1 is United Way’s telephone answer/referral service regarding community services. APPROVAL OF MINUTES The minutes of the meeting of March 7, 2013 were approved as presented on a motion from Troy Jones, seconded by Tatiana Martin, with 4:0 in favor. Jeffrey Johnson abstained. NEW BUSINESS MEETING RELOCATION Director Joe Frank proposed relocating meetings of the Affordable Housing Board to the Council Information Center at City Hall (300 Laporte Ave), beginning May 2, 2013. He suggested that the building could provide better parking, access and security. The Board agreed to the change. COMPETITIVE PROCESS Chair Dan Byers thanked the Board for its involvement in the CDBG’s competitive process review. Beth Rosen also expressed appreciation for the Board’s clear presentation of rankings and consensus. The Affordable Housing Board’s final recommendations have been relayed to the CDBG. PROVINCETOWNE Director Joe Frank provided an update on the status of Provincetowne Condominiums Master Covenant. Recommended revisions to the Provincetowne covenant were tabled at the March 19, 2013 meeting of the City Council. The Council wanted to guarantee a public benefit from the money the City of Fort Collins invested in the project, and additionally expressed concern over possible violations of the covenant. The Council suggested maintaining owner occupancy of Provincetowne units as well as a price cap. Some members of the Council were amenable to removing income and eligible buyer restrictions. Joe noted that a work session has been scheduled with the City Council for April 23, 2013 to discuss potential options. Beth Rosen offered additional background on Provincetowne. Provincetowne Condominiums consists of 120 town house condominium units. Of those 120, 90 were originally designated as affordable housing and sold with deed restrictions, 20 were foreclosed, and one was never properly recorded. This leaves the City of Fort Collins with an interest in the remaining 69 Provincetowne units. The first issue, Beth explained, is administrative. The current covenant was set up to be self-regulating, with very little involvement from City staff – but that hasn’t been working. Units have been sold without disclosure of the covenant, and new owners claim not to have known about restrictions. The City of Fort Collins was expected to qualify and approve eligible buyers, but that system was never put in place and that process hasn’t been happening. Keeping the existing covenant and overseeing compliance would require additional resources from City staff to design a process, create forms, reach out to realtors, monitor and enforce the covenants, and address violations. The second issue is on the side of the owners. Beth described hearing from current owners and realtors who have been unable to sell Provincetowne units in the current market. Prospective buyers won’t agree to the covenant. Owners in financial hardship can’t turn their units into rentals. Units are devalued and lost to foreclosure – and as soon as a property is foreclosed, the affordability covenants are lost completely and the City loses its interest. In an effort to address these two issues, Beth distributed a hand-out with information on different tracks the City could pursue, ranging from least to most restrictive. Possibilities with an emphasis on assisting current owners include: releasing the master covenant, scaling the master covenant down to only require owner occupancy, and maintaining both owner occupancy and a maximum purchase price in the master covenant. Possibilities with an emphasis on protecting future affordability include: enforcing the provisions of the current master covenant and revising the covenant to include maximum purchase price. Beth noted that enforcing the current master covenant may force more owners into foreclosure. Artificial restraints are turning away potential home buyers. With these issues in mind, Joe Frank and Beth Rosen requested feedback and recommendations from the Affordable Housing Board. Over the course of discussion, the Board raised a number of points: • Current covenant restrictions prevent owners from taking advantage of market appreciation. • Loosening covenant restraints may not have a negative impact on affordability, as the units are already on the low end of the market. • Fort Collins doesn’t have the kind of cost affordability gap (as seen in Aspen) that would require a maximum purchase price provision. • The cumulative impacts of the current covenant make it difficult to find new owners. If a property goes into foreclosure, the City loses its interest in the unit. This is lose-lose. • Removing the owner occupancy restriction could change the character of the neighborhood by bringing in investors and renters. • There may not be a market for units with restrictive covenants. Provincetowne units may be undesirable due to artificial restraints, when other housing options are available on the market. • The City could offer a new covenant, but home owners would not accept a more restrictive one. • The City could remove all provisions and market forces might still make it difficult for owners to sell their units. • Guaranteeing that owners, realtors and prospective buyers are kept informed of Provincetowne covenants is important. A suggestion was made for the City of Fort Collins to send out yearly reminders. Additional facts and points of interest brought to the table: • The original covenant received FHA approval in 2006. • Around 9-10 Provincetowne units are currently estimated to be in violation of the covenant. • If no changes are made to the covenant owners will be released from restrictions as early as 2023. • An eligible buyer is currently someone at or below 80% of area median income (AMI). • 80% of AMI for a family of four is $53,350. 80% of AMI for one person is $38,750. Realtors are struggling to find income eligible buyers who want and can afford Provincetowne units. Buyers purchasing a home through home buyer assistance aren’t choosing units under $150,000. They’re purchasing within the $180,000 - $230,000 range. After a lengthy and engaging discussion, the Board concluded that the eligible buyer restriction may be the most problematic issue. Chair Dan Byers pointed out that the realtors may be right – there may not be many income eligible buyers, as defined by the master covenant, interested in Provincetowne units. Beth Rosen observed that there are buyers interested in Provincetowne units, whose incomes look too high on paper. The reality of their financial situations, however, is that they do need affordable housing. Director Joe Frank recommended the option of raising the eligible buyer restriction to 110% or 120% of AMI. Chair Dan Byers agreed that this might open a door to families who need affordable housing, but are currently disqualified based on income. Jeffrey Johnson pointed out that opening the units to a broader market may also assist owners in violation of the master covenant, who are going to need an exit strategy when the City begins to enforce restrictions. Director Joe Frank asked the Board if it would be appropriate to request input from the neighborhood before changing the master covenant. Tatiana Martin answered that it would be a very good idea to get a feel for the neighborhood and its wants. Troy Jones suggested that it would also offer the City an opportunity to educate the neighborhood and explain the issue. The Affordable Housing Board continued to discuss the drawbacks and benefits provided by different restrictions. Members of the Board agreed that it would be ideal to maintain owner occupancy requirements and eliminate eligible buyer restrictions. Failing that, the Board agreed that the eligible buyer restrictions – if kept in place – should be loosened to around 120% AMI. Troy Jones moved that the Board recommend to Council that the eligible buyer element of the Provincetowne covenant be removed. However, in the event the Council chooses not to remove it, the Board recommends that additional staff time be budgeted for enforcement of the covenant. If the eligible buyer restriction remains in the covenant, the Board recommends that an eligible buyer be defined as 120% of AMI. Terence Hoaglund seconded the motion, which was approved 6:0. Following the motion, the Affordable Housing Board reached a consensus to send a memo to Beth Rosen with an updated recommendation for the Provincetowne project. GUEST SPEAKERS Troy Jones brought up previous guest speaker Bruce Hendee and suggested bringing him back to discuss the City of Fort Collins’ triple bottom line focus in greater detail with the Affordable Housing Board. Chair Dan Byers agreed that it would be a good idea to invite him back. He also suggested inviting speakers from Neighbor to Neighbor, Habitat for Humanity, CARE and the Fort Collins Housing Authority to address new members of the Board. Jeffrey Johnson added that it might also be valuable to invite City Council Liaison Lisa Poppaw to join the Board for another meeting. CLOSING COMMENTS Chair Dan Byers announced that Jeffrey Coon, Chair of the Commission on Disability, is forming a subcommittee to address the affordability of accessible housing. The subcommittee will meet on Thursday, April 11 from 1-2 PM in the Council Information Center at City Hall. Dan encouraged members of the Affordable Housing Board to attend the meeting. Afterwards, Chair Dan Byers requested liaison reports. Curt Lyons reported a mixed development project planned for the Foothills Fashion Mall with 800 units (studio, one, two, and three bedroom) and underground parking. He speculated on the impact this development might have on affordable housing. – Meeting adjourned at 6:03 PM by Chair Dan Byers. – The next meeting of the Affordable Housing Board is scheduled for: May 2, 2013 at 4:00 PM Affordable Housing Board meetings have a new location! Fort Collins City Hall Council Information Center 300 Laporte Ave