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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 12/05/2013CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD BOARD MEETING MINUTES 300 Laporte Ave Fort Collins, Colorado December 5, 2013 4:00–5:00p.m. Chair: Dan Byers Staff Liaison: Sue Beck-Ferkiss 970-221-6753 City Council Liaison: Lisa Poppaw Board Members present: Dan Byers, Tatiana Martin, Terence Hoaglund, Jeffrey Johnson, Curt Lyons, and Troy Jones Board Members absent: Staff present: Sue Beck-Ferkiss, Social Sustainability Specialist; Dianne Tjalkens, Board Support; Beth Rosen, Affordable Housing Administrator Council Members present: None Guests: Julie Brewen and Chadrick Martinez, FCHA Meeting called to order by Dan Byers at 4:11pm. AGENDA REVIEW No comment. PUBLIC COMMENT Julie thanked the AHB for support of the Redtail project and the letter of recommendation. She thanked Terence and Tatiana for speaking at the Planning and Zoning hearing. APPROVAL OF MINUTES Dan Byers moved to approve the November 7, 2013 minutes with correction below. Terence Hoaglund seconded. Approved unanimously, 5-0-0. (One board member arrived after approval of minutes) Typo on NIMBY. Change E to Y. NEW BUSINESS ITEM 1: FCHA REQUEST TO RELEASE RESTRICTIVE COVENANT ON SINGLE FAMILY PROPERTY Beth Rosen said in 2001 the FCHA received a CDBG loan of $175,000 to rehab properties, including single- and multi-family units. In the past a few covenants were released by a previous City administrator at the sale of properties. People assumed that when a unit sold it released the covenant. With a new administration, City Attorney, and Council, the code is being interpreted differently. Council must approve an ordinance to release an ownership interest in a property. The FCHA owns a 3-bedroom, 1 bath single family unit at 405 Linden and is looking to sell to a buyer that will not be using the property for housing, and will be active in River Corridor development. To release the covenant City Council must approve the release. FCHA has a long term strategic plan to get out of scattered single family units and reinvest the funds into more long term affordable housing. These units are not cost effective and are difficult to maintain. They are requesting to sell, repay the loan of $8,400 that was used to rehabilitate that property, and leverage the funds to purchase other properties. Discussion/Q & A: • Dan asked why this didn’t have to go through Council in the past. • Beth said that it was done administratively through staff and the City Attorney. • Dan asked if City Council requested the release of the covenant come before them. • Beth said staff and the City Attorney have a different interpretation than in the past - which is a restrictive covenant represents an ownership interest in the property. The City has an ownership interest that says the property must remain affordable for 20 years. To release that interest requires an ordinance of City Council. This was done improperly in the past, and staff and Council want to do this properly now. She has looked through documents and there is nothing that said the covenant would be released when sold. • Dan asked Beth if she recommends approval of that with the caveat that it be replaced within 5 years. • Beth said part of development plan is a comparable unit in a future development. Their comparable unit should have the same number of bedrooms, so that there is not a net loss of a type of unit. • Dan said he noticed in the request from FCHA, that the single family homes aren’t cost effective because the rents don’t support the cost of the unit. • Julie said it is a historic home with deferred capital needs. It has functional obsolescence. • Dan asked if it is possible to have a 3 bedroom unit in the future that will be cost effective. • Julie said they have a project in a tax credit neighborhood that contains attached 3 bedroom townhomes that are comparable in size. From vacancy studies they know that the biggest need now is 1 bedroom units. They just did Legacy on the same block and added 72 one bedroom units. But they do understand the concern about losing inventory. She is fine with the condition. • Dan said his concern is the cost effectiveness, and if there are plans to have 3 bedrooms available to families, but not if it wouldn’t be cost effective. • Curt asked how the houses are going to be sold. Are they going at market rate to investors? • Julie said this portfolio has already sold off many of its single family homes. The majority have gone to first time home buyers. The product type lent itself to this. This one was held back because of its location on this block. They silently listed it with a broker, who was putting together a package for redevelopment. FCHA is a major partner in Legacy. They don’t want it to go to a tattoo parlor or Cheba Hut, or someone unable to maintain an historic home. There are times they try to get top dollar because they are leveraging for additional units. • Curt is mindful of workforce housing and concerned that all these homes are snatched up by investors which causes another affordable housing issue. • Julie, if we sell one and get seven workforce units we have increased the permanent inventory. • Dan asked about repaying loan and whether that releases the covenant. • Beth said that with exception of homebuyer’s assistance, the funds are due on sale loan, but you don’t want investors using our money to build appreciation and wealth, then lose affordable housing inventory when the market goes up. They place a 20 year restrictive covenant in order to reduce the marketability of that product for 20 years. An example would be if the FCHA has a four-plex with a covenant, the market value is lower because the potential rent income is lower. This is to prevent cashing out when the market is high and to maintain affordable housing units. • Troy said he thought the City didn’t have any enforcement other than Provincetowne. • Beth said for every rental that the City funds, there is a 20 year covenant. This is one house with $8400 in rehabilitation funds. There is good argument for the life and use of the building. The $8400 has been used in the 10 years since it was rehabbed. Other projects have approached her to sell their properties after 5 years because they are tired of being landlords, and in that case the buyer gets a reduced cost and inherits the covenant • Dan asked if it was possible to require FCHA to replace this. How do you enforce that? • Beth said in theory we would have to take them to court if they didn’t follow through. In reality, we trust their best intention, it will be written as a requirement, with delegated renegotiation power to the city manager. • Julie said they were going to replace the unit anyway, so she is unsure the value of adding it to the ordinance. The Housing Authority Board is appointed by Council and Council can take over if the board runs “rogue.” • Beth said the idea is to make it more palatable to see that there will be no net loss of inventory. This is more in line with strategic plan. • Tatiana asked if it would be commercial or residential. Julie said it will be commercial while the area is redeveloped. Troy Jones moved to recommend a release of Agreement of Restricted Covenants as requested by Fort Collins Housing Authority. Tatiana Martin seconded. The Affordable Housing Board recommends adoption of the Ordinance on First Reading. At a public meeting held on December 5, 2013, the Affordable Housing Board voted to recommend the release of Agreement of Restrictive Covenants Affecting Real Property at 405 Linden with the requirement that the Fort Collins Housing Authority provides a comparable 3-bedroom placement unit to the affordable housing inventory within the next five years. Motion approved unanimously, 6-0-0 ITEM 2: 2013 AHB ANNUAL REPORT DRAFT Sue said she went through the minutes for prior meetings and called out primary business accomplished this year for the draft report. The board has until the end of January to approve the document. The board discussed edits. Sue took notes on changes. Sue will make changes and bring it back to the board at the January meeting for approval. OLD BUSINESS ITEM 1: BUILDING CODES UPDATE—BOARD RECOMMENDATION Discussion/Q & A: • Curt said he felt that since we acknowledged single family houses were not included is relevant. We support this for townhouses and duplexes, but he would like to make clear that the support is because single family homes are not included in the sprinkler code. He would have been disinclined to recommend the request if it included single family homes. • Troy said there are two codes, IBC includes commercial and multi-family. • Curt said when Mike came in he was talking about single family as well, but he backed out of this. • Sue quoted the memo provided to clarify the language of the code. • Curt said this is for new construction and duplexes. • Dan said Jeff brought up the question of offsetting the cost. Sue drafted a suggested motion which is included in the memo sent with the meeting packet. • The board discussed changes to the drafted recommendation. The concern was the rising cost of building due to new codes. • Troy said the recommendation is not to adopt the codes, but that if the codes are adopted Council should be sensitive to the costs that are inherent in adopting the codes and how that affects affordable housing. • Sue said a stronger recommendation would be to not adopt the codes. • Curt said fires are not statistically very probable. He cannot see raising the cost $10,000 for an incident that has extreme rarity. • Tatiana said FCBR is offering a general support with a set of items to be addressed before being passed. • Terence clarified that multifamily homes do not have to have the attics sprinkled now and single family attached townhomes and duplexes don’t have sprinklers required, but they will if this is adopted. • Beth said its okay for a board to say they don’t support something because the costs outweigh the benefits. • Curt said 99% of fire service is EMS; for emergency medical issues, not for houses burning down. • Terrence said there are probably many small fires every year, but the fires you hear about are houses burning, about a dozen times a year. • Troy said how many of the fires are from lax codes? They are probably in older buildings, not built under the 2009 IRC. • Jeffrey said he could support no vinyl siding and sprinklers in attics and decks of multifamily homes, but does not agree with sprinklers in duplexes and townhomes. The justification of the adoption of stricter codes is that it reduces costs of fire services. If that is the case, there should be a corresponding reduction in capital costs. Affordable housing is often thought of as subsidized and multifamily housing. It should include workforce housing and starter homes that aren’t subsidized. Code creep creates stress on non- subsidized affordable housing. • Beth asked if it would be beneficial to get input from affordable housing developers. • Tatiana gave the cost difference for vinyl versus wood siding. • Curt said vinyl siding is a fire hazard. He would like to see getting rid of it. • Troy asked if Chadrick or Julie had any insight into this as a multifamily property developer. • Chadrick asked where this stops. Does it belong in a duplex or single family? Probably not. They had a fire in a four-plex stacked that started on the exterior, then moved in. It trapped people inside because there was no fire suppression. PFA is very sensitive to decks these days because that is where these fires are starting. Weighing a life versus a sprinkler, he would get the sprinkler. • Julie added that as a property management they have smoke free buildings and keep smoking and BBQ grills away from the building, but it is hard to manage. • Tatiana asked how many fires FCHA has had. • Chadrick said at CARE they had 1 to 2 per year that were kitchen/grease fires. There was one major fire over a ten year period. • Curt said it sounded like an agreement in four-plex and up. • Jeffrey drafted a new recommendation based on board input. Jeffrey Johnson moved and Curt Lyons seconded. The Affordable Housing Board recommends the updates to the proposed updates to the 2012 International Building codes with the exception that sprinkler systems for new duplexes and new single family attached homes are not recommended due to the increased cost. The AHB further recommends, in recognition of cost savings to City services, reductions in capital impact fees and street maintenance fees be considered to offset increased costs if the 2012 updates are adopted. Accepted unanimously, 5-1-0. Tatiana opposes. See below. • Tatiana states that she thinks that vinyl siding should be allowed. From an affordability stance it is less expensive. Unless she sees the numbers, she doesn’t think the City should ban vinyl siding, due to cost and maintenance. She wonders which lasts longer and which is easier to maintain. • Curt said there are Victorian homes with wood siding that are still holding strong He has not seen vinyl siding that is 100 years old. Vinyl is one of the worst chemically made plastics. He is adamantly against this chemical and the manufacturing process. It will eventually end up in the landfill. • Dan said it didn’t appear there was a significant cost difference in wood versus vinyl siding. • Sue agreed to draft the memo to Council. OTHER BUSINESS OPEN BOARD DISCUSSION • Tatiana said January 21 the FCHA fee waiver request for Retail Ponds will go to Council. It might be good if the board gave a recommendation to Council. o Chadrick added that he and Sue are working on a package for fee waivers that will go before Council. There was an ordinance for fee waivers for affordable housing with Provincetowne that created the issue of which projects should be entitled to waivers and which should not. There is now a revised ordinance that is specific to 30% or less of AMI and the FCHA. They entered into negotiations to salvage the ordinance rather than lose it completely. o Dan asked if there was a percentage ownership component. o Chadrick said that was an issue with CARE as they were an administrative partner. They had 1/10th of 1% ownership in tax credit deals. There was a lot of discussion about the tax credit structure and limited ownership. o Jeffrey asked if the new proposal will clarify the 1/10th of 1 percent. O Chadrick said it will recognize limited ownership with qualifiers for 30% AMI , homeless and disabled persons. O Sue said that under the new ordinance each project will have to come to Council to see if it qualifies. O Chadrick said they are requesting around $600,000 in fee waivers. O Sue said this may be a discussion item for Council. She will be working on the AIS. There will be time at the January meeting to make a recommendation. Funding affordable housing is difficult and getting fee waivers will be important to the project. O Chadrick will have more detailed numbers to present to the board by the January meeting. • Dan said that December 11 is the Boards and Commissions Community Conversations meeting. Tatiana and Troy agreed to attend. • Curt said that he and Tatiana attended the Gap Analysis Boards, Commissions and Staff event. He has the PowerPoint presentation. O Sue added that the PowerPoint is available online and the full report will be available closer to January. She said the public meeting was also well attended and had meaningful input that will be included in the report. FUTURE MEETING AGENDA DISCUSSION • FCHA Redtail Ponds recommendation to Council. APPRECIATION AND WELL WISHES FOR DAN • Dan thanked members for being part of the Affordable Housing Board. • Sue thanked Dan for his service to the Board. • Chadrick thanked Dan on behalf of FCHA and CARE. – Meeting adjourned at 5:38pm by Chair Dan Byers. – The next meeting of the Affordable Housing Board is scheduled for: January 9 at 4:00PM Participants will meet at: Fort Collins City Hall City Clerk’s Conference Room 300 Laporte Ave