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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 08/04/2005CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD MEETING MINUTES 281 N. College Ave. Fort Collins, Colorado August 4, 2005 Kay Rios, Chair Denise Rogers, Vice Chair Ken Waido, Staff Liaison, 970-221-6753 Kurt Kastein, City Council Liaison, 970-223-0425 Board Members Present: Kay Rios, Denise Rogers, Michelle Jacobs, Kevin Brinkman, Joe Rowan, and Peter Tippett. Jon Fairchild was excused. Advance Planning Staff Present: Maurice Head. Council Members Present: None. Guests: Tom Pippin, Managing Director, BBC Research and Consulting; Tess Heffernan, Policy and Project Manager, City Manager's Office. Kay Rios called the meeting to order with a quorum present at 4:05 p.m. There were no comments from the public. New Business Minutes The July 7 minutes were amended to read, on page 2, fourth paragraph under Conflicting City Policies, after "Jon Fairchild asked that PHA be encouraged -but not mandated -by the City during the development review process.": Staff said they will look into it. Peter Tippett moved the minutes be accepted as corrected; Kevin Brinkman seconded, motion carried unanimously. Housing Affordability Model Update Maurice Head introduced Tom Pippin, Managing Director of BBC Research and Consulting, who was invited to give a presentation on the development and use of the Housing Affordability Index Model being updated by BBC for the City. According to Mr. Pippin, the purpose of the model is to quantify the impact of different variables, such as interest rates, on affordable housing using a Housing Affordability Index (HAI). An HAI of 100% is defined to mean that all home owners and renters can afford a hypothetical starter home without being cost burdened. In particular, Fort Collins Affordable Housing Board August 4, 2005 Minutes Page 2 of 5 the finished model will help to quantify how housing affordability has changed in Fort Collins in the last five years, to determine the effect of variables on affordability, and to compare Fort Collins housing affordability with that of Windsor, Colorado Springs, Loveland, Longmont and Greeley. To collect data, BBC sent builders in Fort Collins and other cities surveys with guaranteed anonymity. National data sources include the MLS, NAHB database, 2000 census data, and PCensus, a commercial census product. The model uses a hypothetical single family starter home of 1500 ft2 on a 9600 ft2 lot. Variables include land price, price of construction and labor, interest rates, financial assistance, and various City fees. The model can be run using the hypothetical cost of the hypothetical starter home, or the actual average cost of similar homes from the MLS. In Fort Collins, for example, the actual cost of a 1400 ft2 to 1600 ft2 home is somewhat higher than the hypothetical cost, which will affect model output. The model is sectioned into different Median Family Income categories using HUD guidelines, so that separate HAIs are produced for each income group. Mr. Rowan asked Mr. Pippin to investigate if the model uses a static number or a median family size with MFI. Mr. Brinkman asked if the model includes interest only loans. Mr. Pippin replied that it does not. Mr. Rowan mentioned that first time home buyers are better off without interest only loans. In addition, Mr. Rowan said, the Board would not want something in the model on which they felt the City should not be basing affordable housing policy. After his presentation, Mr. Pippin ran the model in real time. He changed various inputs and showed the model results. For example, increasing the thirty year fixed rate mortgage interest rate from 5.78% to 7% decreased the HAI, which decreased the number of people who could afford a starter home. Adding 5% down payment assistance, on the other hand, increased the HAI. Mr. Rowan asked about the 12% difference between the hypothetical cost and real cost of a Fort Collins home. He asked if the difference was consistent across all five comparison markets. Longmont and FC showed the greatest deviations from hypothetical cost, but there was no consistent trend. BBC has examined data sources and reliability issues, but feels the reasons for the difference are indeterminate. At this point, Mr. Pippin is confident that the framework of a robust model is in place. Additional surveys are needed, however, to add statistical significance to model output. More surveys can be entered as they are obtained, and constants in the model can be periodically updated by City staff. BBC will prepare a final report for the City in September or October. The final report will address suggested revisions, such as separating out student population. Fort Collins Affordable Housing Board August 4, 2005 Minutes Page 3 of 5 It will also include a sensitivity analysis and a study of historical data to check model accuracy. Kay Rios asked staff to provide the Board with copies of the final report. The Board will strategize after receiving the report. 3-Unrelated Ordinance Update Darin Atteberry, City Manager, was expected for this and the following item; Tess Heffernan, Policy and Project Manager for the City Manager's Office, attended in his place. Ms. Heffernan provided Kay Rios with a recap of her comments from the July 7 meeting. In June Council directed the CMO to bring them three ordinance proposals for consideration. All three scenarios would change the 3-unrelated offense from criminal to civil. The second scenario would include a permit system for up to four people, while the third would allow permits for up to four people in designated zones. Ms. Rios reminded the Board that their initial concern regarding changes to the ordinance was the potential increase in costs for renters. The Board has also previously asked why current ordinances are not enforced to help control problem renters, rather than creating more laws. For example, why not require compliance with City noise ordinances? Ms. Rios said many people are not comfortable using current laws because they are not properly enforced. Tess Heffernan said she would follow up on this. Jon Fairchild, who was unable to attend the meeting, had a list of written comments and questions for Ms. Heffernan. His first comment dealt with the costs of permits and inspections. Based on Ms. Heffernan's July 7 figures, Jon Fairchild felt the costs were reasonable, working out to about $5 per month per unit, but he felt that the City should try to keep the costs to that level and try to not go higher. Tess Heffernan replied that the numbers she provided to the Board were for example only. The actual costs would depend on the number of people interested in permits, and whether the City chooses to outsource the inspection work. Mr. Fairchild's second comment dealt with the idea of a flexible limit based on number of bedrooms and parking, instead of an arbitrary set number. Ms. Heffernan replied that the idea was good in theory, but quickly becomes expensive, since all rentals —not just those applying for four people permits —would require inspection. Ms. Jacobs added that such a program could quickly become an "administrative nightmare." Ms. Heffernan agreed, and added that it would not guarantee safer housing stock. Mr. Fairchild asked that if the ordinance keeps three renters as the limit, then council should allow a permit -based exception for four unrelated units. Mr. Fairchild's final comment was a suggestion that any system brought before Council be applicable city-wide. Ms. Heffernan then provided the Board with the latest revision of the three options the City Manager's Office will present to Council. The City code includes a little known Boarding and Rooming House provision that grants certificates of occupancy Fort Collins Affordable Housing Board August 4, 2005 Minutes Page 4 of 5 to boarding and rooming houses in certain areas. The CMO mapped areas with a concentration of renters 51% or higher, and found the areas were well aligned with the areas already zoned for boarding house use. Landlords would be able to apply for a certificate of occupancy for any number of renters, as long as the property passed occupancy and safety inspections. Kay Rios said she would like to wait until after the August 23 Council study session before the Board takes a stance. Ms. Heffernan offered to return at a later date to update the Board. Ms. Rios asked staff to add the 3-unrelated item to the September agenda. Budgeting for Outcomes Update Kay Rios said she had many questions regarding the BFO process, including what inspired the process, when the change to the BFO method started, and what the final results will be. Ms. Heffernan told the Board that when Darin Atteberry was hired as City Manager, he knew one of his biggest challenges would be the City's budget crisis. Mr. Atteberry flew in consultants from Public Services Group, and a former City Manager from Austin, Texas who had worked with the BFO process. Fort Collins's BFO restructuring began soon after the Spring elections. In response to Ms. Rios's question about final results, Ms. Heffernan explained that all offers are now with the lead team, who will make recommendations to Council regarding the offers by September 4. After that date, Council will accept public input and comments through a series of hearings. Ms. Rios commented that the entire process took place very quickly with no Boards and Commissions input. She asked Ms. Heffernan what happens to programs below the funding line, for example staff support for Boards and Commissions. Ms. Rios also mentioned that many of the programs currently near or below the funding line were groups who had supported the "No on 1" platform with the understanding that keeping City grocery sales tax would save them from being cut. She wanted to know how the City intends to be accountable throughout the process and keep the trust of its citizens. Ms. Heffernan responded it was her experience that Council listens and reacts to the concern of citizens. Kay Rios would like the public phase of the BFO process to begin as early as possible. She asked that Darin Atteberry be invited to the next meeting to address Board concerns. She also requested that staff provide the Board with a summary of the August 23 Council work session. Old Business Update/Reports on Sub -Committee Efforts None. Liaison Reports Fort Collins Affordable Housing Board August 4, 2005 Minutes Page 5of5 Ms. Rios, as liaison for Dial -A -Ride, voiced their concerns that although they endorsed the "No on 1" grocery tax platform, they would still be cut from future funding due to the revised budget. She is also concerned that many people and groups who supported "No on 1" were under the impression that their programs would be saved if the issue were voted down. Now this apparently is not the case, and Ms. Rios feels there is a breach of trust between citizen groups and the city. Michelle Jacobs reminded Ms. Rios that the Board, who asked groups for "No on 1" endorsements, was unaware of the current budgeting process at the time. Kay Rios pointed out that the City, however, may have known, and needs to be held responsible for any implications they made to groups regarding future funding. Ms. Jacobs reported that the MPO was hopeful with the new Council in place, and were looking forward to more regional cooperation. A CND referendum recently authorized $10 million for Northern Colorado to use for regional development. Other Business Open Board Discussion Ms. Jacobs mentioned that she had seen an article about Airpark Village in the Northern Colorado Business Report. She asked if there was still affordable housing included. Mr. Head informed her that the affordable housing portion of the project had been scrapped. Ms. Rios asked staff to follow up on this item. Michelle Jacobs presented the board with a handout entitled "Retail Workers Find Housing Options Limited." Meeting adjourned 5:45 pm. Respectfully submitted by Stephanie Sydorko August 22, 2005