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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 02/01/1996diCX9^" " AFFORDABLE HOUSING BOARD MEETING MINUTES February 1,1996 City Council Liaison: Gina Janett Chairperson: Mary Cosgrove Home: 493-9164 Work: 667-3232 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, Sue Wagner, Joanne Greer, Ann Sanders, and Tony Kavanagh. Staff members present were Ken Waido, Dickson Robin, and Alan Krcmarik. No public comment was heard. No changes were noted on the January 4th meeting minutes. Moved by Ms. Greer, seconded by Ms. Wagner: To approve the minutes for January 4th, 1996. Motion approved unanimously. Discussion was held concerning issues that should be taken to the March 12th Study Session with City Council. Mr. Waido stated that the Board would probably be given approximately 45 minutes to an hour depending on the items brought forth for discussion. Ms. Cosgrove stated that she would like to have a chart compiled from the last few years of the items where the City has done well in the affordable housing area and the items where the City is still lagging behind in terms of goals. Mr. Waido stated that he could compile such a chart. Ms. Cosgrove suggested asking Council what they would like from the Board. She believes confusion exists on what the Board's role actually is. Ms. Cosgrove also suggested asking Council to prioritize the Board's work program. Ms. Greer noted her frustration with the fact that all of the Board's recommendations that have been put forward don't seem to be recognized whatsoever. Mr. Sibbald added that he sees the Board having no influence on what's going forward to City Council in any way, shape, or form. Mr. Waido stated that Staff has been frustrated with the corporate culture on affordable housing noting that there is no other city departments acceptability of affordable housing. Mr. Sibbald noted that many items have gone forward to Council in the last six months, such as the street standards, which Staff has not considered the Board as having any impact on because they don't see Council acting on any recommendations made by the Board anyway. Mr. Sibbald added that even though the development phasing was brought to the Board, they were redone and did not come back to the Board. In fact, one of the Council members were asked directly if the issue should be taken back to the Board, and AHB Minutes February 1, 1996 Page 2 the Council member said no. Ms. Cosgrove suggested that frustrations of the Board was perhaps one of the items that should be discussed at the Study Session. Ms. Cosgrove suggested that the original documents that created that Board and outlined the purposes of the Board be taken to the Study Session in an effort to determine which items are still accurate. Then, perhaps, the determination could be made of why certain items are not happening or why Council no longer wants the items. The Board could at that point express their frustrations and then, perhaps, move on to the work plan. Mr. Sibbald suggested that consideration needed to be given to whether the Board is even still needed and whether it still serves a purpose. Mr. Browning stated that this Board came on line with probably more hands-on expertise in the area of affordable housing than any other board in the City and all of the members of the Board came in with an agenda. Ms. Sanders agreed and stated that every single person on the Board is in some way or another every day involved in affordable housing. Ms. Wagner stated that she feels a lot of the Board's discussions become sidetracked and much of the discussion isn't productive toward generation of stimulating affordable housing. She feels that the Board hasn't done anything that specifically aims at producing affordable housing. Mr. Sibbald stated that he believes that Council feels the solution to affordable housing is in subsidy. He feels that the majority of the Board believes the solution to affordable housing is to reduce the production costs. Mr. Sibbald pointed out that a tremendous philosophical difference exists between those two beliefs. He stated that from a practical Point of view, there isn't sufficient subsidy and feels that Council refuses to deal with the issue of reducing housing costs. Ms. Cosgrove added that she feels a combination of the two beliefs is the answer. Ms. Sanders suggested that one item for discussion at the Study Session should be the timing of items for review noting the Board receives items for review after they've already been presented to Council. Mr. Sibbald suggested prioritizing the discussion items for the Study Session. His belief is the difference in philosophy between the Board and Council should be addressed first. Mr. Kavanagh stated that his belief was that the question of whether or not the Board was still needed and the philosophical differences in belief should be addressed first. He added that on top of questioning what the Board's role is, the question should be asked of what the City's role is in creating affordable housing. Ms. Cosgrove stated that she believes there are people, such as Chuck Wanner, who would like to be educated in the processes of the Affordable Housing Board. She believes the Study Session will be an opportunity to outline the items that the Board has been promoting and the items the Board still does not believe have gotten much attention. 40 AHB Minutes February 1, 1996 Page 3 Ms. Greer asked if statistics exist to document the fad that the subsidy is going to be depleting in an effort to show that affordable housing assistance will need to be obtained elsewhere. Mr. Waido stated that those statistics do not exist. Mr. Sibbald requested a draft of the memo that will be going to City Council on the Study Session items a week before the Council will receive it so the Board can note changes on the memo. Ms. Cosgrove stated that she and Mr. Waido would work together to develop a draft that the Board will receive before the completed memo goes to Council. Mr. Robin updated the Board on the Pioneer Mobile Home Park Last count taken, around 162 households remained in the Pioneer park Neighbor to Neighbor is continuing in their counseling efforts. Neighbor to Neighbor has determined that most the Pioneer residents do not have the savings or income to become homeowners. However, four households have used the Home Buyer's Assistance Program to get into home ownership, and one more home ownership opportunity is pending. The proposed Dry Creek development is still being negotiated between TRAC and Don Parsons. No preliminary plan has been submitted as of yet. According to Mr. Parsons, no mobile homes older than 1979 will be permitted in the new development. As far as relocating and renovating older mobile homes that exists in the Pioneer park, cost appears to be prohibitive for the Pioneer residents to pursue that that option. Staff has indication from the city manager that both the Dry Creek Mobile Home Park Development and the 12-unit town house development will be expedited through the City development process. CDBG funds set aside for Pioneer assistance projects will be going to Council on February 6th. A meeting was held on the 23rd of January to discuss allocation of the funds. The determination was made at that meeting that the majority of the money will go into a relocation fund for eligible relocation activities for Pioneer residents, such as down payment assistance, moving costs, and damage deposits. Ms. Stitzel has indicated that final dollar figures have still not been reached with Mr. Parsons. The project is hoping to get 50 households from Pioneer. Given all the efforts, it is estimated that between 70 to 90 households will still be at Pioneer Mobile Home Park with no place to go once eviction is complete. This number is approximately half of the park. In response to questioning, Mr. Waido stated that a fair assessment as to how quickly the Dry Creek development could get through the development review process would be October or possibly September. Mr. Robin stated that it is hoped that the project be complete by September 1, 1996. In response to questioning, Mr. Robin stated that the only comment he can make with regard to the financing of Mr. Parsons' project is that one or two banks have been meeting with Mr. Parsons for quite sometime and apparently are willing to go ahead with financing. Mr. Robin was not sure which bank or banks that may be. Alan Krcmarik returned to give the Board an update on the Cost of Services Study. The AHB Minutes February 1, 1996 Page 4 Board received a memo and draft from Mr. Krcmarik. More handouts will be added to that information and some language changes will be made. A new version of the information has been developed, and Steve Roy will be adding a legal memo for Council. January 29th a retreat was held with the Executive Lead Team, and greater diversity of opinion among the Council members exists that was anticipated. Ms. Cosgrove asked for a summary of what Mr. Krcmarik sees as the possible pros and cons of tax on the affordable housing issue. Mr. Krcmarik replied that one of the problems with using an impact fee for affordable housing is there is really no clear nexus. Mr. Roy is uncomfortable trying to impose an affordable housing fee through impact fees. In Boulder all capital recovery fees have been collected through excise taxes, and the excise taxes have much more leeway as to what the monies can be used for. The question was posed to Staff that if the five impact fees were implemented as they were priced out, what impact would that have on the average new home in Fort Collins? Staff obtained the figure of $167,000 as the average price of a new home. Therefore, the impact would be 1.4 percent of the cost. Mr. Sibbald suggested that Staff look at the permit valuations as a truer indication of production costs stating that production cost of the product would be the figure Staff should utilize. Ms. Sanders added that the top 25 percent and bottom 10 percent of the permit amounts should not be used in Staffs calculations due to the fact that the numbers get distorted based on the kinds of products. Mr. Sibbald stated that a rule of thumb is that the material costs of a housing product on the market are approximately 50 percent of its sales price. Mr. Waido stated that the average single-family housing permit value was $92,000, and the average multifamily housing permit value was $43,000. Mr. Krcmarik also questioned if the multifamily unit fees should be scaled down due to the fact that the units are smaller in size. Mr. Sibbald stated that it should be reflective against all housing products. He stated that a sliding fee for multifamily units would penalize the affordable housing home ownership product. Mr. Sibbald stated that the motivation behind the Cost of Services Study Update is that the cost of growth has not fairly been kept up with. However, every housing unit that is permitted or every development unit that is permitted pays a use tax. Mr. Sibbald has been advised that the theory behind the use tax when it was implemented was to enable the City to have money to pay for the impacts of that housing unit when it became occupied. Now, however, that money is typically general fund revenue and has been for years. Mr. Krcmark stated that he would review the records on the implementation of the use tax. His belief is the use tax was implemented as a protection of the local sales tax. Mr. Sibbald stated that his argument would be that perhaps the use tax has been misused. He pointed out that a $75,000 residential permit pays $1,000 of use tax. Therefore, why isn't that counted as a benefit of the development of that housing unit? If that housing unit AHB Minutes February 1, 1996 Page 5 isn't produced, the $1,000 is not available. Why isn't that $1,000 taken from that house and put into the library fund? Mr. Krcmarik stated that in October Staff laid out the option that the existing revenues could be utilized for the cost of services, and Staff was told to instead pursue the cost of recovery impact fees or excise taxes. Ms. Cosgrove stated that a study would perhaps need to be undertaken to determine the trickle -down effect of utilizing the use tax to meet the cost of services rather than what the tax is currently being used for. Mr. Krcmarik stated that the first thing sales and use tax _covers is the debt service, and once that is covered, the freedom exists to allocate the tax wherever it is deemed necessary. Ms. Cosgrove replied that she sees real merit to utilizing the use tax to meet the cost of services, however, the reality is insufficient funds exists to go around now unless some cuts are made elsewhere. Mr. Sibbald argued that new growth has been subsidizing the current citizen's demand for new service, and the way the taxes have been collected for years would have given the City the money needed to meet the cost of services. Moved by Mr. Sibbald, seconded by Ms. Sanders: To suggest that Staff revisit the allocation of the use tax to determine if, perhaps, new development is subsidizing the existing general fund. In follow-up Mr. Sibbald stated that the use tax in the past has probably gone more for infrastructure -type projects and less to subsidizing property taxes. Mr. Krcmarik replied that the entire revenue structure has changed. Before sales tax existed, the major revenue source for the City was property tax. Now the property tax is, perhaps, $7 million; and the sales and use tax is, perhaps, $42 million. Therefore, in support of his motion, Mr. Sibbald stated that is the reason that the cost of housing is, in part, where it is and why it's always going to increase. Ms. Cosgrove questioned if the level that exists now under the old use tax would be enough to cover the expenses if it were isolated and earmarked. Mr. Krcmarik stated that he believe the majority of the time it is a little short. Motion approved unanimously. Mr. Waldo stated that the Provincetowne RFP received two proposals. Those proposals are going to be going to the Council Finance Committee February 7th. Decision will then be made on what to do with the RFP. Staff at this point does not have a recommendation. Mr. Waldo stated that if anybody had comments on the Community Vision and Goals, give them to him for incorporation into the document. Mr. Sibbald urged the Board to look at the Vision and Goals document. He pointed out that three specific areas exists in the document that are absolutely going to drive housing and housing costs. He added that the Board needs to have their say in the document because it will be adopted by Council in March and will be the overriding document for the next 20 years for the City of Fort Collins. Mr. Waldo notified the Board that the Street Standards are going to Council but will be coming to the Board in March. Phasing Criteria is going back to Council, and the East AHB Minutes February 1, 1996 Page 6 Side/West Side Design Guidelines are also going to Council. One of the options going before Council on the„East Side/West Side Design is the suggestion to raise the minimum lot size to 10,000 square feet, which will eliminate approximately 50 percent of the lots within the two neighborhoods as being eligible for accessory units without going through the PUD process. Ms. Sanders moved adjournment, seconded by Ms. Greer. Upon unanimous vote, the meeting adjourned at 6:20 p.m.