HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/21/2022 - FIRST READING OF ORDINANCE NO. 077, 2022, AMENDING Agenda Item 12
Item # 12 Page 1
AGENDA ITEM SUMMARY June 21, 2022
City Council
STAFF
Sue Beck-Ferkiss, Social Policy and Housing Programs Manager
Ingrid Decker, Legal
SUBJECT
First Reading of Ordinance No. 077, 2022, Amending Article VIII of Chapter 7.5 of the Code of the City of Fort
Collins to Create an Administrative Process for Awarding Fee Credits for Certain Affordable Housing Units to
be Constructed in the City.
EXECUTIVE SUMMARY
The purpose of this item is to simplify the way affordable housing fee credits are provided to developers of
qualifying new affordable homes. Through iterative process improvements, flat amounts for fee credits have
been established and codified for new construction and adaptive reuse creating affordable homes targeting
households making no more than 30% area median income (AMI) - the lowest wage-earners in the City. This
Code change would allow staff to administratively award fee credits up to the amount of funds that are
available and that have been appropriated for such purpose. Any requests for more than available funds will
still be subject to Council discretion and appropriation.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
Fee Credit and Fee Waiver History
The City has historically provided fee relief to affordable housing projects. The form of this relief has evolved
over time. Fee credits replaced the City’s prior fee waiver program in 2020 and are currently the City’s only
mechanism to specifically incentivize units serving households that earn 30% or less of AMI. Most
mechanisms to incentivize affordable housing are available for units that serve up to 80% of AMI. Affordable
units for households at or below 30% AMI are the hardest to develop. Rents need to be affordable to these
extremely low-income households and cannot support the cost of development without substantial subsidy. For
instance, a household of two cannot make over $25,800 annually to qualify. The table attached illustrates the
2022 AMI thresholds for the Fort Collins - Loveland MSA. (Attachment 1)
Fee waivers were previously calculated based on the sum of eligible fees, prorated by the percent of the
development’s total units which are restricted to serve ≤30% AMI. Fees historically considered eligible for
waiver include:
• Development Review Fees
• Building Permit Fee
• Capital Expansion Fees (including those for Fire, Police, Streets, and Parks)
Other fees collected by the City that were not considered eligible for waivers include fees which are collected
on behalf of other agencies (such as Larimer County or Poudre School District) and fees for utilities.
Agenda Item 12
Item # 12 Page 2
In 2020, Council changed this subsidy from a waiver to a credit and fixed the amounts of subsidy to $14,000
per unit for newly constructed units and $5,500 per unit for adaptive reuse units where the project gets the
benefit of prior fees paid on the property. While this greatly simplified the administrative process in determining
exact amounts of subsidy, these requests are still subject to Council discretion based upon a finding that the
units qualify and that granting the request will not jeopardize the financial interests of the City. Once granted by
Council, the credits may be used by the developers for any fees owed the City for that project. This process
allows all City fees to be paid and removes the need to reimburse certain departments which was part of the
administrative burden of the former fee waiver process.
2022 Appropriation: A specific appropriation of $350,000 for Affordable Housing Fee Credits was approved in
the 2022 budget. This amount would cover fee credits for at least 25 homes. That satisfies the requirement
that granting requests up to this level will not jeopardize the financial interests of the City. But under current
City Code, Council would still need to make a finding that the units do qualify for fee credits. This final step in
the process improvement for fee credits is to clarify in the Code that an administrative process can be used to
award affordable housing fee credits for qualifying units up to any appropriated amount for this purpose.
Requests for more than the available funding would still be subject to Council approval in the Council’s
discretion.
This streamlined process will save developers time and be more efficient to administer by the City. It allows all
City departments to be paid in full either by the developer or by the credit that has been appropriated. Council
need only be involved for extraordinary requests.
CITY FINANCIAL IMPACTS
Funding for this program has already been appropriated in the amount of $350,000.
BOARD / COMMISSION RECOMMENDATION
The Affordable Housing Board recommends passage of this Ordinance to allow for an administrative process.
PUBLIC OUTREACH
The Affordable Housing Board May meeting was noticed and open to the public. No additional specific
outreach was conducted on this change.
ATTACHMENTS
1. Income Limits 2022 (PDF)
2. Affordable Housing Board Minutes (draft) (PDF)
2022 Income Limits
Income Limits (effective date: 6/15/2022)
2022 Median Income: $111,300
(Fort Collins/Loveland Metropolitan Statistical Area)
City of Fort Collins
Household Members
Income 1 2 3 4 5 6 7 8
100% AMI $75,200 $85,800 $96,600 $107,300 $115,900 $124,500 $133,100 $141,700
80% of AMI* $60,100 $68,650 $77,250 $85,800 $92,700 $99,550 $106,400 $113,300
60% of AMI $45,120 $51,540 $57,960 $64,380 $69,540 $74,700 $79,860 $85,020
50% of AMI* $37,600 $42,950 $48,300 $53,650 $57,950 $62,250 $66,550 $70,850
30% of AMI* $22,550 $25,800 $29,000 $32,200 $34,800 $37,400 $41,910 $46,630
AMI = Area Median Income
51-80%: Low Income Limit (HOME High Income Limit)
31-50%: Very Low Income Limit (HOME Low Income Limit)
0-30%: Extremely Low Income Limit
*80%, 60%, 50% & 30% are the HOME income limits published by HUD. These are the income limits required for projects funded
with CDBG & HOME.
Updated: 5/29/2022
ATTACHMENT 1
AFFORDABLE HOUSING BOARD
REGULAR MEETING
5/5 /202 2 – MINUTES Page 1
May 5, 2022, 4:00-6:00pm
Remote/Online via Zoom due to COVID-19 DRAFT
CALL TO ORDER
At 4:00 PM the meeting was called to order by Tatiana Zentner
1. ROLL CALL
• Board Members Present: Tatiana Zentner, John Singleton, Jennifer Bray, Stefanie Berganini, Bob
Pawlikowski, Kristin Fritz, and Seth Forwood joined in progress.
• Staff Members Present:
• Sue Beck-Ferkiss, Staff Liaison – City of Fort Collins
• Taylor Reynolds, Minutes – City of Fort Collins
• Meaghan DeMasters, Environmental Services – City of Fort Collins
• Heidi O’Mara, Environmental Services – City of Fort Collins
• Selina Lujan Albers, Environmental Services – City of Fort Collins
• Noah Beals, City Planning – City of Fort Collins
• Guests Present:
• Marilyn Heller
• Lisa Cunningham
• Bill King
• Richard Cavendish
• Ruthie (no last name listed)
EDITED DOWN TO FEE CREDIT DISCUSSION
2. NEW BUSINESS
• Fee Credit Municipal Code update – Sue Beck-Ferkiss
• City staff have been working on process improvements to provide fee relief for affordable
housing.
• City Council has approved a budget allocation for ARPA funds to provide construction fee
credits to affordable housing. The City Attorney’s Office requires a code change to allow the
funding to be allocated in a fully administrative process.
• City Council has passed on first reading the additional subsidy for EV at affordable housing
projects. City staff would like to use the same process created for construction fee credits to
ATTACHMENT 2
AFFORDABLE HOUSING BOARD
REGULAR MEETING
5/5 /202 2 – MINUTES Page 2
allocate other subsidies.
•The draft code change language provided to this board for review is more limited than the
language City staff hope to bring to City Council, but they are still on track to make this
recommendation in June.
•City staff hope to test this new process, if approved, with Housing Catalyst who has applied
for fee credits for the Impala Project.
•DISCUSSION SUMMARY:
•Would City Council consider increasing the Area Median Income (AMI) for units
supported by the fee credits?
•The primary focus for City staff will be the code changes that allow for an
administrative process to distribute fee credits and broadening the code
language to allow for future changes.
•This board is invited to provide input for recommended fee credit relief
criteria.
•Do fee credits provide a prorated fee or blanket fee waiver?
•Fee credits can be applied to select fees for 30% AMI affordable housing units
only.
•What would be the additional cost to increase the AMI limits for fee credits from 30%
AMI to 40% AMI?
•Sue Beck-Ferkiss will provide this board with the requested data, including the
number of 30% AMI and 40% AMI affordable units built in the last few years.
•Is there a cap for the amount of credit the City extends for 30% AMI units per year?
•There is not a limit for the credit, however, if the request exceeds the amount
allocated for the fee credits, City staff would have to make a request to City
Council for the remaining funding.
•Board members agree to provide their recommendations supporting the process
changes for fee credits and discuss fee credit eligibility standards at the June meeting.
Stefanie Berganini moved to support a code change allowing for an administrative process where funds have
been appropriated and continue to have funding requests above that amount be reviewed by City Council.
Seconded by John Singleton. Approved 7-0.
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ORDINANCE NO. 077, 2022
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE VIII OF CHAPTER 7.5 THE CODE OF THE CITY OF
FORT COLLINS TO CREATE AN ADMINISTRATIVE PROCESS FOR
AWARDING FEE CREDITS FOR CERTAIN AFFORDABLE HOUSING UNITS
TO BE CONSTRUCTED IN THE CITY
WHEREAS, by adoption of Ordinance No. 065, 1999, the City Council exempted from
the imposition of the City’s capital improvement expansion fees the land development projects
of housing authorities formed pursuant to the provisions of Section 29-4-101, et seq., and
specified various other City fees from which such projects are also to be exempted; and
WHEREAS, on March 19, 2013, the City Council adopted Ordinance No. 037, 2013,
which made amendments to the City Code and Land Use Code limiting the types of projects for
which housing authorities could request fee waivers, and specifying that those waivers are to be
granted at the discretion of City Council upon a determination that proposed waivers will not
jeopardize the financial interests of the City or the timely construction of capital improvements
to be funded by the fees; and
WHEREAS, on November 21, 2017, the City Council adopted Ordinance No. 148, 2017,
to create an incentive for all developers to provide units affordable to those making less than
30% AMI by amending the City Code and Land Use Code to allow all developers of units
targeting that income bracket, not just the housing authority, to request fee waivers for the
affordable portion of their projects; and
WHEREAS, on November 17, 2020, the City Council adopted Ordinance No. 137, 2020,
eliminating affordable housing fee waivers and instead authorizing a flat, per-unit amount per
qualifying affordable unit (a “Credit”) that the City can fund and deposit in a trust account
owned by the City; and
WHEREAS, a developer awarded a credit can then direct that amount to be spent on fee
balances owed to the City during the development of the project; and
WHEREAS, the City Code as revised in 2020 still requires that the City Council approve
a Credit, by ordinance, only if the City Council determines that: (1) the proposed project is
intended to house homeless or disabled persons, as such terms are defined by the Department of
Housing and Urban Development (HUD), or households with an annual income that does not
exceed 30% of the area median income (AMI) for the applicable household size in the Fort
Collins-Loveland metropolitan statistical area, as published by HUD; and (2) the proposed
waiver will not jeopardize the financial interests of the City; and
WHEREAS, to make the process of issuing a Credit more efficient for developers and
City staff, and in the interests of continuous improvement, City staff is recommending that the
City Council amend the City Code to allow staff to award credits through an administrative
process, rather than requiring City Council approval by ordinance, when the City Council has
already appropriated funds specifically for such Credits; and
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WHEREAS, a developer would be still be required to request a Credit prior to the City
issuing any certificates of occupancy for a project, and City staff would ensure the project meets
the affordability requirements for receiving a Credit; and
WHEREAS, if the City received a Credit request exceeding the amount of funds already
appropriated and available to fund the request, City staff would bring the request to the City
Council for consideration, findings, and any necessary appropriation, with approval in the City
Council’s discretion; and
WHEREAS, in the course of preparing this Ordinance, it was noted that Article VIII of
Chapter 7.5 also contains a numbering error, which is corrected by the proposed amendments;
and
WHEREAS, at its regular meeting on May 5, 2022, the Affordable Housing Board voted
to support the change to the City Code described in this Ordinance; and
WHEREAS, the City Council believes it is in the best interests of the City to amend the
City Code accordingly.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS AS FOLLOWS:
Section 1. That the City Council hereby makes and adopts the determinations and
findings outlined in the recitals set forth above.
Section 2. That Section 7.5-101 of the Code of the City of Fort Collins –
“Application for Credit” – is hereby renumbered as Sec. 7.5-102 and amended to read as follows:
Sec. 7.5-1012. - Application for credit.
...
(b) If the City Council has already appropriated funds sufficient and intended for the
purpose of providing fee credits for affordable housing under this Article, the City
Manager or their designee may approve a credit upon determining that the affordable
housing units are intended to house homeless or disabled persons, as such terms are
defined by the United States Department of Housing and Urban Development, or
households with an annual income that does not exceed thirty (30) percent of the area
median income for the applicable household size in the Fort Collins-Loveland
metropolitan statistical area, as published by the United States Department of Housing
and Urban Development. The City Manager or their designee shall notify the developer
in writing whether the project will receive a fee credit.
(bc) If the City Council has not already appropriated funds sufficient and intended for the
purpose of providing fee credits under this Article, Tthe City Council may, by ordinance,
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appropriate additional funds as necessary and approve a credit if the City Council, in its
sole discretion, determines that:
(1) the affordable housing units are intended to house homeless or disabled
persons, as such terms are defined by the United States Department of Housing
and Urban Development, or households with an annual income that does not
exceed thirty (30) percent of the area median income for the applicable household
size in the Fort Collins-Loveland metropolitan statistical area, as published by the
United States Department of Housing and Urban Development; and
(2) the proposed credit will not jeopardize the financial interests of the City.
Section 3. That Section 7.5-102 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 7.5-1023. - Amount of credit and payment process.
...
(b) If the City approves a credit is approved by the City Council for a project, the City
shall deposit a lump sum equal to the total amount of the credit into a trust account held
by the City for the benefit of the project developer, from which the developer may direct
the City to pay balances due to the City for development review fees and capital
expansion fees, except as otherwise expressly prohibited or provided in this Code or other
applicable law.
(c) If any credit remains unused in the trust account one (1) year after the last certificate
of occupancy for the project has been issued, or if construction of the project is not
commenced within three (3) years of the effective date of the notice or ordinance
approving the credit, then the trust account shall terminate and the remaining credit shall
be redeposited in the fund or funds from which the credit was originally paid.
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Introduced, considered favorably on first reading and ordered published this 21st day of
June, A.D. 2022, and to be presented for final passage on the 5th day of July, A.D. 2022.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 5th day of July, A.D. 2022.
Mayor
ATTEST:
City Clerk