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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 09/22/2014CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD BOARD MEETING MINUTES CIC Room, City Hall 300 Laporte Ave Fort Collins, Colorado September 22, 2014 4:00–6:00pm Chair: Troy Jones Staff Liaison: Sue Beck-Ferkiss 970-221-6753 City Council Liaison: Lisa Poppaw Board Members present: Tatiana Martin, Terence Hoaglund, Troy Jones, Jeffrey Johnson, Eloise Emery, Curt Lyons Board Members absent: Diane Cohn Staff present: Sue Beck-Ferkiss, Social Sustainability Specialist; Dianne Tjalkens, Board Support Council Members present: None Guests: Randy Mergler, Nancy McDuffie, Eric Sutherland, Cherly Distaso, John Baker, Joe Rowan Meeting called to order by Troy Jones at 4:03pm. AGENDA REVIEW No comment. PUBLIC COMMENT No comment. OLD BUSINESS ITEM 1: HOUSING AFFORDABILITY POLICY STUDY DRAFT REPORT Sue showed a graph of housing inventory gaps. There are excess units in some income categories and a deficit in others. After reviewing the recommendations, Sue began looking at what is already happening in the City. Seniors said the You+2 occupancy rule was limiting their housing. Neighborhood Services said no one had previously asked for an exception, so they will market the existing code options to senior and to ask them to work with Neighborhood Services. Neighborhood Services will track data to determine actual need. The Planning Department is already working on removing minimum house size, and shifting to number of rooms and room size codes. City Plan has already set a goal of encouraging ADUs; one way to do this is by looking at the fee structure. A fee study would be necessary to implement any changes in fees. Staff is waiting for HUD to release new standards on Home Buyer Assistance, and then can move from a maximum assistance of $10,000 to $20,000 on a soft second mortgage. The hope is to influence those at the higher end of low income to purchase homes that meet their needs. This can be implemented administratively if the HUD standards allow. Construction defect litigation is causing a lack of inventory in townhomes and condos. This is causing a gap for first time homebuyer and seniors. The City will support legislative solutions to this problem in the upcoming legislative session. One short term strategy that staff needs to take a leadership role in is incentive policies such as negotiations for publicly supported development. Sue is working with Economic Health on this issue. The program would be triggered by the use of public financing and could add criteria for affordable housing into URA assistance such as TIF, share backs, or other public financing. The City had a more robust fee waiver policy before 2013. A change in policy would open the waivers up to other developers than FCHA. There could be maximum waiver amounts per unit and an annual maximum number of units to be subsidized. For Land Bank staff may want to look more closely at whether it is time to sell. The current ordinance does not allow for mixed use, but must be used 100% for affordable housing. The ordinance also says the City cannot sell for more than 90% of fair market value. The appraisals will take into account market value and market value with restrictions considered. If the value is severely depressed by the restrictions, it may be time to look into a trust; however, that does not provide for income that could be used to purchase more property for the future. We want to determine the best way to put the land into play, but not all properties need to be treated the same way. Additionally when looking at fee waivers we have to consider back fill. For preserving manufactured home communities, there is an interim option rather than moving directly to implementing a manufactured home district. The idea is to create an easement that upgrades infrastructure and maintains affordability. High performers will not be changing use any time soon, but some parks that have infrastructure needs and may be a good place to start. Long term strategies may include identifying an alternative funding source. Another is infrastructure improvements in the City’s north east quadrant since it contains much of the available developable land. Staff is not recommending an inclusionary housing ordinance (IHO). Because of the state-wide law against rent control, IHOs have not been used for rental housing, which is Fort Collins greatest need. With the commuter shed, there are owner products that would compete with deed restricted ownership units in the city. Because the price differential is not wide enough, it is not a good tool at this time. It is more effective in markets saturated by high-end homes. The commercial linkage fee is also not being brought forward. Because Fort Collins market competes with surrounding areas for sales tax revenue, a linkage fee could discourage business attraction. What the Gaps Analysis and this study have told us is that we have a misalignment of inventory. While much of this is out of the City’s control as housing is market driven, policy can look at how to positively affect the future. We want to see short term impact and determine if we are moving in the right direction. Discussion/Q & A: • Terrence said that when you are zoned for duplexes you can do attached ADUs, but the fee structure is not there. • Troy asked if in the event any strategy comes up with a new funding stream, do you lump it into the affordable housing funds, or apply it toward fee reductions? If we try to justify with a fee analysis, you may find the fees go up or stay where they are. We can find another way to pay for them, though. • Curt said his concern on reducing minimum house size is that if fees and land costs stay the same, builders cannot make the numbers work to build smaller homes. Sue said the small project fee can help to start and a rebalanced fee structure would be necessary to get real traction. We can work with Planning and Zoning, but it is difficult to influence the cost of land. • Curt said the City increased fees on houses under 1200 ft2, while decreasing for under 2500 ft2. Sue will look into that process. • Eloise asked if HBA is interest free. Sue said she believes so. There may be a nominal administrative fee. • Tatiana said HUD has an income limit. Is there a way to look at the funding differently to consider people between 80% and 120% AMI to use City dollars to fund, since that money is not regulated by HUD. Those are the people looking for houses to purchase now. Sue said she can look at this closer. Staff has been hesitant to make that kind of change because of a desire to keep the program standardized. Sue will look into the challenges of creating a dual process. Tatiana said you have to look at the people who are willing and able to move up if they have some assistance. Sue said mostly we are concerned with the first time homebuyer, because theoretically second time buyers have equity. • Curt asked for the HUD AMI standards. Sue said it is based on number of people in household. Curt said you have to make $55,000 to be able to afford a house in Fort Collins. If you are at 100% AMI you could still not be making enough to buy a house. Starting salary for a teacher in PSD is $32,000. Sue said the trending is only going up, and until we get more entry level housing online, we will see this continue. In the City of Fort Collins we are seeing about 5 section 8 vouchers being used to purchase homes annually. Part of the pressure in the rental market is people are not being able to move up into ownership. Due to the recession, high student loans, etc., we are seeing people enter ownership later. • Curt added that there is more and more contractual employment that does not allow people to qualify for mortgages. Sue added that people are also expected to have credit ratings in high 700s to qualify and FHA is carrying almost 30% of mortgages, which has increased FHA insurance premiums. We ae seeing HBA clients who are looking at $200-300 per month payments for insurance. • Tatiana asked what the City will do to support legislative action regarding construction defect litigation. Sue said this matter is on the agenda of the Council Legislative Committee. The board could also add its voice at the state level. Tatiana said getting FCHA and N2N as well as other agencies together would be helpful. Sue said this board could help to bring them together as an advocate. • Troy said if the construction industry would not be scared to build, it could help alleviate a gap for first time buyers. • Troy asked what would entice a developer to build affordable housing. Sue said when a developer requests TIF, there could be a matrix that gives ideal outcomes for affordable housing so the negotiators can have guidance to get what is needed. • Curt said this is a quid pro quo negotiation. Sue agreed that this is when a developer is asking the City to invest in its project. It would be a fair time to ask what the development can provide to the City in terms of affordable housing or fee in lieu. Tatiana asked how URA feels about this. Sue said they are interested. • Terrence added that the fee waivers program would have to be set so that FCHA cannot wipe out the entire fund with one project. Sue said that is where the maximum per unit would come into play. • Troy said one consideration that is different than 2013, is that the City was completely broke then and tightening the belt. That is not so much the case now so we may get a different answer to the question. Sue said we want to offer a program that does not jeopardized the City’s interests and gives the development community an idea of what to expect. • Troy asked how the community land trust concept works. Sue said we own the property outright. We could sell the property and condition the sale on making sure affordable housing goals were met. A limitation of a certain amount of time would be put on the property. After the time expires it can be sold, redeveloped, etc. If instead of selling, we put it in trust and only sold the right to develop for a period of time, we retain control of the land. The developer does not buy the land, so conceivably they could more readily offer units to low end earners since removing land cost reduces development costs. • Tatiana asked about community temperature on the various options for Land Bank properties. Sue said there is support for all. Tatiana asked if there could be different ordinances for each property. Sue said the idea would be to make a program that is more flexible. There is a staff team that will be working on this. • Tatiana asked why renters are put before owners on many slides and said that the order of their listing suggests renters are more important. Sue will review and prioritize more clearly for additional public outreach. The calendar is changing on this, which will allow more time to flesh out the concepts and get Council guidance. • Jeffrey said the Land Bank has two options, but a third could be to have an exchange. Troy said if the land is better suited for what we identify in the strategic plan, if a developer wants to trade a property we want for something they have, we could lift some restrictions. Sue reminded the board that we do have to abide by the current restrictions until such time as Council chooses to change the ordinance. • Curt asked the history of the rent control law in Colorado. Sue said the Telluride case prohibits rent control. Rent control is used in big cities, is controversial, and there has not been consensus on its effectiveness. • Tatiana asked where the mall falls into this. We have a work session November 25 and the mall has to agree to the terms by December 1. Sue answered that the mall agreement had a provision that said anything that is in place that would have applied to the mall project they would retroactively pay. That does not get them off the hook for anything that would be triggered in the future while they are in development. Secondly, the negotiators anticipated an IHO, but the more we looked at that tool, the more the experts agreed that does not fit our current or future needs. It is not a good strategy for the City. The incentive policy is the kind of policy that would have affected the mall; however, now there are no policies we are putting forward that would affect the mall, giving us more time to determine the best programs and policies for the City. • Troy said he likes the idea that in the event of a new pool of money we suggest to Council spending it on the new ideas in this plan that are unfunded such as the mobile home infrastructure upgrades in exchange for an easement and/or the fee balancing for small units. Common sense says the fees for small houses are disproportionate to their impact, especially in an infill area. • Jeffrey said on the capital expansion fees, if there is a new source of revenue, the source should be applied to that. The issue with capital expansion fees is that they are not logical. If it truly is “growth pays its way,” he would like to see the funds go to backfill what is required. • Troy asked when you throw in the towel arguing the point that the fees are too high for small houses? That argument is going nowhere. Curt said that is not what he is suggesting. • Tatiana would like to see a program fee to fund HBA assistance. • Curt said he agrees that the fees are disproportionate to the impact small homes on infill and redevelopment. • Jeffrey added that a year ago the City said the study was not all about the mall and was open minded in approach. What we’ve heard tonight proves that true and is huge in terms of credibility for the City. PUBLIC COMMENT on HAPS Eric Sutherland—He is in disagreement about the applicability of this study to the mall. The mall drove this process as a test case. All the agreements here should be viewed through the lens of the mall. The type of housing we are expecting to be built in the future is similar to what is built with the mall. The City should be asking why we have affordable housing issues to begin with. TIF being used in excess with the mall should be looked at. This study is so Fort Collins centric, while what happens here will be largely dependent on what the surrounding communities decide to do. The question of Timnath, they took Walmart that employs people at low wages and creates an affordable housing issue. It creates a need for public services that need to be funded. With TIF, we have to be more careful. In this case Fort Collins is at fault for creating a need for affordable housing, a class of people who need affordable housing through means that are not legal to begin with. Timnath did not have blight and should not have used TIF. TIF is supposed to remedy blight, so that when the project is completed the funds go back. We need to look at where we are making the mistakes that are driving these needs. For example, people who shop at Walmart in Timnath give tax dollars to Timnath, but get a rebate on food taxes in Fort Collins. Joe Rowan—Congratulations on coming up with a plan that diverts from the original plan that would have created more problems than it solves. Employers aren’t creating an affordable housing problem. People don’t move here for low wage jobs, they move here for higher wage jobs. Employers are paying the burden on taxes. Adding taxes makes it harder to compete. The impact of inclusionary zoning and encouraging Council discussions to move away from that is important. A community land trust is viable. Colorado Springs and Boulder have well-functioning land trusts. It is not a free system; it must be supported and developed with a sustainable economic model. Construction defect litigation is a real impediment. Rent control is not a terrible issue. It eliminates anything that is federally financed. You already have the exclusion. Most rental housing is built with federal dollars which excepts it from that legality. The fee structure is counter-productive to the affordable housing we are trying to create. Small units are more affordable, except for the fee structure. The premise behind capital expansion fees, we are charging for what has been paid for with taxes. The point should be made that in regard to equitability of capital expansion fees, Council has taken the direction that we are only adding a little bit here and there, but every little bit adds up to an awful lot. We are starting to see the cumulative effect despite the charts we have that fees are consistent over time. However, the cost of construction is going up as well. You are on the right track. Nancy McDuffie—There are lots of homeless people and others who are living in crowded conditions and this does not seem to affect that at all. Weren’t there several apartment and condo units built off Timberline near the police station that were severely damaged with mold and people had to move out? How was it allowed for them to be built that way? She lives in a condo and there are lots of people renting. It seems like a big problem that people are paying high rent to live there. • Board members agreed they had not heard anything about the mold issue. Cheryl Distaso—She was on the stakeholder group, but has not read the study yet. She would like to see more community outreach. We need evening outreach, otherwise we are limiting the discussion to people who are developers, agencies, etc., instead of regular working people who live in Fort Collins. She works with the homeless community and she does not see where this will impact that directly. • Sue added that we have a Healthy Homes program in the City that gives a free analysis and report on indoor air quality in homes and includes suggestions on mitigation of issues. • Tatiana said Eric is right about reaching out to other communities. People come to Fort Collins for jobs. There needs to be better outreach to Wellington Housing Authority and others to see what their plans are. What are the surrounding areas doing? If we have this plan, but Wellington comes along with something opposite, it could impact our overall plans. • Eloise said she agrees, however, the more time staff spends on this the more money it costs. If we include surrounding communities, it becomes a joint project. • Sue said we did an analysis of what our neighbors are doing that they have published. Loveland and Boulder have done housing studies, in addition to others. She has a compilation on what our neighboring cities are doing and is happy to share. The data influenced our work. • Tatiana said we looked at affordability across all income levels. If we move someone from a rental to ownership, it opens a rental unit for someone who has a voucher. We are really trying to look at everyone. • Nancy said that assumes everyone moves up. Some people move down. • Tatiana said if you get a family out of an apartment and into ownership, seniors and others can move into smaller units. • Nancy said she was thinking of foreclosures. • Tatiana and Sue said that the foreclosure effect is minimal here. NEXT MEETING AGENDA • Presentations on housing applications are this Thursday and the video will be available Friday or Monday. Board members are welcome to attend. Questions the board would like to ask can be sent to Sue to forward to the applicants. This is the last time we will be using this structure. When the new structure is developed, the board will be informed. The board’s ranking of the applications will be at the regular meeting, October 2. There are six applicants. Recommendations will need to be submitted to CDBG Commission before October 16. If this board needs to explain its recommendations, a member can attend the CDBG Commission deliberations. • The Affordable Housing Strategic Plan can be discussed in the October meeting. • Construction Defects will be calendared for the December meeting. • Tatiana said HPI’s annual fundraiser is this Thursday. Sue added that a client will come speak and it is a great opportunity to learn more about that program. It is at the Marriott and there is no charge, but attendees are asked to RSVP in advance. – Meeting adjourned at 5:49pm by Troy Jones – The next meeting of the Affordable Housing Board is scheduled for: October 2 at 4:00pm Participants will meet at: Fort Collins City Hall Council Information Center 300 Laporte Ave