Loading...
HomeMy WebLinkAboutAffordable Housing Board - Minutes - 04/04/1996• APPROVED MAY 2 1996 AFFORpABLE HOUSING BOARD MEETING MINUTES April 4, 1996 Mary Cosgrove, Chairperson (work - 667-3232; home - 493-9164) Gina Janett, Council 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, Joanne Greer, Ann Sanders, Tom Sibbald, Susan Nabors, Tony Kavanagh, and Bob Browning. Staff members present were Ken Waido, Dickson Robin. Alan Krcmarik arrived later in the meeting. Tom Chapel was also present from the Engineering Department. Public comment was solicited. Mr. Robin stated that Bill Velo, from Rocky Mountain Research, wanted to speak to the Board regarding an affordable housing project. However, he would be a few minutes late. The Board decided to continue with the agenda and allow public comment upon Mr. Velo's arrival. Moved by Mr. Kavanagh, seconded by Ms. Nabors: To approve the March 7th minutes as written. Motion passed unanimously. Mr. Sibbald noted that he felt some changes needed to be made to the meeting agenda due to greater priority of some items. Mr. Chapel stated that Item E, New Street Standard - Handicapped Ramps, would be going to Council on April 16th. It was determined by the Board, in the interest of time, to simply ask questions of Mr. Chapel rather than hearing a presentation. In response to questioning, Mr. Chapel stated the following: • The basic recommendation is to come closer to meeting the ADA requirements. • The cost impact is a 30 to 60 percent increase over last year's cost. • Approximate cost for a typical residential ramp will be $100 to $300. • ADA guidelines specify visual contrast of some type, and colored concrete is the most effective, easiest, and cheapest way to comply with that guideline. • A new development with the additional expense will increase costs and will impact affordable housing, and this problem cannot be alleviated. • Staff has been working with the Commission on Disabilities, and the commission is agreeing with the recommendation. • This item is being presented to the Board essentially as information, and unless strong objections are felt, Staff plans to go forward with the recommendation. Mr. Sibbald stated that Fort Collins is providing access at a rate greater than any other community he has visited in the last three years, and more money per ramp is being spent to do that. Such communities include Greeley, Longmont, Boulder, Evergreen, Naples, Florida, and San Francisco. He questioned why such was the case. Mr. Chapel replied that he did know about those situations. He believes the City is trying to comply with the law the best they can with the moneys available. Ms. Nabors stated that she has no objections to the recommendation. Ms. Cosgrove thanked Mr. Chapel for his work and for coming to address the Board. Affordable Housing Board Meeting Minutes April 4, 1996 Page 2 Mr. Velo arrived to give a presentation on an affordable housing project proposed to be built on the comer of West Elizabeth and Overland Trail. He gave handouts to the Board, small colored drawings of the site plan, and a statement of the developer's objectives. The proposed project will be on a 36-acre site. It will be a.mixed-use plan. Mr. Velo stated that the development process is currently underway. On April 22nd the developers will present their project to Planning and Zoning. Neighborhood meetings have been held and an additional meeting will be taking place soon. No objections to the concept of affordable housing were expressed by neighbors. The only concern raised at the previous meetings was traffic. The developers have recently had a traffic study performed, and the traffic situation is being analyzed. Mr. Kavanagh questioned the price points on the single-family units. Mr. Velo stated the price will be approximately 120,000 to 150,000. Ms. Cosgrove thanked Mr. Velo for coming and extended an invitation to return if he deemed it necessary. Moved by Mr. Sibbald, seconded by Mr. Kavanagh: To amend the agenda as follows: G, Housing Affordability Index Project Update; D, Dispersal Policy/Options to Inclusionary Zoning; I, Cost of Services Study Update; C, Plan for Future/Results of the City Council Study Session. Motion passed unanimously. Mr. Robin gave the board a brief background on reasoning behind the undertaking of the Housing Affordability Index and what Council would like to achieve from it. Four goals are inherent to the objectives of the index: 1) Quantifying how single-family housing has changed in Fort Collins over the last five years. 2) Determine what role City development impact fees play in terms of changing affordability over the last five years. 3) Comparing affordability in Fort Collins to several other communities. 4) Provide a tool to direct future City actions in addressing differences in affordability. The index measures the percentage of potential home buyers that can afford the hypothetical starter home. Four specific variables are involved in developing the index: 1) Income changes in each community in the years of 1990 and 1995. 2) Changes in actual hard costs, land, and construction, in developing the starter home in 1990 and 1995. 3) Changes which are in development impact fees and permitting fees in 1990 and 1995. 4) Change in interest rates in the years 1990 and 1995. A computer -based model has been developed by an outside source hired by the City. Staff has not yet received a full explanation of the model. The largest single contributor to the change in affordability in Fort Collins was the hard costs. The increase in the cost was offset in large portion by the increase in income the City experienced over the five-year period and also the subsequent decreases in the mortgage rates between 1990 and 1995. Affordable Housing Board Meeting Minutes April 4, 1996 Page 3 Mr. Robin noted one goal of the index is to determine where the City can make a difference in affordability, and Staff has identified a few options. Household income was one of the most significant factors. Staff views that higher -paying jobs and corresponding economic initiatives as something that could help address these factors. A recommendation or suggestion has been made in the HAI that municipal policies be aimed at promoting careful economic development and better jobs in the community. The City could also develop a City -sponsored mortgage buy -down for income -eligible households. The City could also undertake a number of initiatives that would assist in alleviating land prices, one being a land banking process which would increase the amount of land available for development of affordable housing. Also, land development or phasing criteria could be examined. A number of efforts could also be undertaken subsequent to the index, such as undertaking a selective audit of cost data to determine if construction costs actually vary by city. Further sensitivity analysis could be performed using different down payments, interest rates, home prices, at cetera, to determine what items affect the affordability of housing most significantly. Finally, the City could consider setting a target HAI for Fort Collins as a municipality and possibly determine some actions to achieve affordability for a target amount annually. Ms. Nabors questioned whether other communities have developed an HAI and are using it effectively. Mr. Sibbald pointed out that Mr. Velo had stated in his presentation that he had developed the Denver Metro HAI. Mr. Robin stated he will follow up with Mr. Velo on that issue. Mr. Sibbald stated that Mr. Velo's index is much like the National Association of Builders index. Those indexes are not as detailed as the one being undertaken by Staff. Mr. Sibbald stated that he still does not believe the cost of the house proposed is accurate. The two items missing are sales and marketing costs and cost of financing. Mr. Kavanagh added that the cost of the money outlined is also wrong, stating that interest is being lost on that. Ms. Sanders noted that she thought the index was very good. Mr. Sibbald added that he was very encouraged to see a study being undertaken that identifies the median income of the population as the first difficulty. He also believes that in the next step the aspects that are beginning to be developed on pages 5 and 6, which are related to page ii, should particularly be examined. In response to questioning, Mr. Robin stated that Council has received a copy of the information given to the Board earlier in the week. Council Member's Wanner and McCluskey have given Staff some feedback. Mr. Sibbald said that it is going to be extremely difficult to do a comparison of the 1,000 square foot house as compared to other cities because cost of items such as foundation and studs is going to be virtually the same, but items such as mechanical and insulation will be nickel-and-dime on every line item in the construction process. E Affordable Housing Board Meeting Minutes April 4, 1996 Page 4 Ms. Nabors questioned if a builder who builds in all four communities could give information on the actual costs in each community. Ms. Sanders stated that CBA Development would be one such builder. Mr. Kavanagh noted Progressive Builders and Ken Beranser. Mr. Sibbald noted Lou Schuster. Mr. Kavanagh stated that he believes the required income numbers are low in the model given. He also said that he didn't believe any code changes were reflected, and those are the subtle changes that drive up the price of housing. Mr. Sibbald added that he didn't feel fees were so much the problem in affordable housing projects. It is more a case of how the fees are paid and when they are paid. Mr. Robin stated that Council has also requested that Staff perform the same type of analysis for multifamily. The determination was made that a progress report would be given to the Board in May, and in June the outside consultants that developed the computer -based model would come to address the Board. Mr. Robin gave the Board some background information on the dispersal policy/ options to inclusionary zoning. Mr. Robin noted that inclusionary zoning is very prevalent in California that new developments are required to have anywhere from 10 to 25 percent affordable housing. He stated that many legal questions are involved and the City Attorney has been looking into those questions. The Board received, for background information, a copy of an article from Eugene, Oregon, regarding housing dispersal and an article on the constitutionality of inclusionary zoning. Ms. Nabors stated she had spoken to one of the individuals who took part in commenting on the article. That individual stated that the article was very outdated, and it is also totally dependent on what the local case laws and state laws are. Ms. Nabors added that it would be more helpful to get a legal assessment. Mr. Sibbald pointed out that the policy outlined in the article says that housing will be subsidized if it goes into neighborhoods with low concentrations of low-income housing. He added that the way to achieve dispersed housing throughout the community would be to give builders incentives. Ms. Cosgrove questioned the land cost difference of building in areas with low concentrations of affordable housing projects. Mr. Sibbald stated that, comparatively, it would be an insignificant amount of money. Mr. Sibbald said that the cost of all housing will rise because the low- and moderate - income housing will have to be paid for in some way. Mr. Robin questioned the ability of bonus density to alleviate that cost. Mr. Sibbald replied that such would not help because it boils down to income and expenses and cost of the project. Mr. Kavanagh added that bigger -end units will need to be built to get some money back. Moved by Mr. Sibbald, seconded by Ms. Sanders: To make a recommendation that a dispersal policy is desired, and the subsidy allocation balance should be written to target those quadrants of the city that do not now currently contain a proportionate amount of low- and moderate -income housing. 11 • Affordable Housing Board Meeting Minutes April 4, 1996 Page 5 Mr. Kavanagh stated that he believes the dispersal should be encouraged but not forced. Mr. Sibbald added that the subsidy would be a supporting element of the dispersal policy. Ms. Cosgrove questioned how such a plan would affect anyone not applying for CDBG or other funding. Mr. Sibbald replied that it would not, noting that if a developer needed the subsidy, then that developer would have to factor in the proper quadrant. He added that this would be an allocation plan, a strategy to make all of Fort Collins include an element of affordable housing. Mr. Browning questioned whether or not such a plan would encourage more high -end housing with the limits on land that exists at the present time. Mr. Sibbald stated that he was not implying that moneys not be granted into any neighborhood in the city in which an affordable housing project is suggested to be developed. He is suggesting that a target be placed on a preferential basis to subsidize certain neighborhoods such as in the southwest and southeast areas. He added that big developers are looking at a demographic analysis from a computer, and they will find areas in the target locations to build if the subsidy is available because the goal is profit and overhead. Mr. Sibbald noted that serious negative social impacts result from intense concentrations of low- and moderate -income developments. Mr. Kavanagh added that if an affordable housing project is included in a nicer neighborhood, it becomes a nicer project. Mr. Robin questioned whether or not Council has already adopted an inclusionary type policy and subsidies with the Provincetowne project. Mr. Sibbald stated that is a perfect example of a dispersal policy. Mr. Robin questioned if the City could not do other projects like Provincetowne where they do not own the land and subsidize the inclusionary environment with a grant program. Mr. Sibbald replied that the RFP was a request proposal for the project. As part of the score, those projects that have the highest affordability ratio will do better, and that is an incentive. That is not inclusionary zoning. With no further discussion, the motion passed unanimously. Mr. Krcmarik addressed the Board concerning the cost of services study. The Board received a handout of the two options of the cost of services that are being considered. Option 1 varies the size of a proposed fee based on the size of the unit. Option 2 varies the fees just on the categories of multifamily verses single-family. Mr. Sibbald stated that it was his recollection that the Board had recommended looking at the other fixed fees - specifically, the neighborhood park land fee and street oversizing fee - and putting them on the same sliding scale basis as the new fees. Mr. Krcmarik replied that such was not part of the recommendation at this time. Mr. Sibbald stated that one of the failings in the current draft is the lack of consistency and such could be a problem from a legal point of view. Mr. Sibbald stated that there are communities all over the country that have fees based on size, and Mr. Duncan has written papers on that issue. Ms. Cosgrove questioned if Mr. Duncan will be at the review by Council on the 16th of April. Mr. Krcmarik stated that he would not. • 0 Affordable Housing Board Meeting Minutes April 4, 1996 Page 6 In response to questioning, Mr. Krcmarik stated that if all fees were included, the existing fees would be reduced by 40 percent for the smaller units. Mr. Sibbald noted that he had received some information comparing capital fees and benefits for the City of Loveland. The information determined that at the old fee levels there was a $9,500 benefit income over cost per DU in the city of Loveland per single- family unit. Mr. Sibbald questioned whether Fort Collins had done a similar analysis. Mr. Krcmarik replied that it had not; however, one project is underway. Mr. Krcmarik stated that going back to 1990, the City received approximately $580,000 on single-family use tax and approximately $60,000 on multifamily. In 1995 that number went up to $1.2 million on single-family and $234,000 for multifamily. Mr. Sibbald noted that use tax fees are collected up front. Most houses being built pay 100 percent of that use tax on the first 90 days of the building. cycle. Some of the houses built in 1990 did not get occupied until 1992. Some multifamily units did not get occupied for some time after that. Mr. Sibbald stated that it was his belief the use tax was collected so far up front that the real impact of those houses being occupied never catches up with the way the money is paid in. By the time the money is paid in, the houses are also delivering another revenue stream to the City by way of property tax and sales tax, at cetera. He, therefore, questions the logic that another burden should be added to new construction when proper use has not been made of the income that is generated from the housing product currently being produced. Moved by Mr. Kavanagh, seconded by Mr. Browning: To recommend Option 1 with the addition of examining park land and street oversizmg fees in the same notion with the rationale that it best supports affordable housing. Motion passed unanimously. Moved by Mr. Sibbald, seconded by Ms. Sanders: To recommend to Council that only 75 percent of the new impact fees be assessed as the burden of new dwelling unit permits and the remaining 25 percent be considered the burden of the existing community. As a basis for that split, consideration be given to using the use taxes that are collected as part of the permitting process to pick up the 25 percent. Motion passed unanimously. Mr. Waido stated that he would write a memo for Ms. Cosgrove to sign containing the Board's motion and recommendations to send to Council. Mr. Sibbald suggested that the Board hold a retreat to discuss Item C, Plan for Future/Results of the City Council Study Session. Ms. Cosgrove stated that she would determine a couple of possible dates to meet when the most members could attend to discuss the issue. Ms. Sanders moved adjournment. With no objections, the meeting adjourned at 6:15 p.m.