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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 06/09/2015 - 2015-2019 AFFORDABLE HOUSING STRATEGIC PLANDATE: STAFF: June 9, 2015 Sue Beck-Ferkiss, Social Sustainability Specialist Beth Sowder, Director of Social Sustainability Clay Frickey, Associate Planner WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION 2015-2019 Affordable Housing Strategic Plan. EXECUTIVE SUMMARY The purpose of this item is to inform City Council about the draft 2015-2019 Affordable Housing Strategic Plan and provide an opportunity for Council feedback and guidance to staff. While the City currently has over 3,000 units of affordable housing, the need continues to outpace the supply. The updated Affordable Housing Strategic Plan has 5 refined goals informed by input and analysis and is connected to other City Plans and studies. City Council’s guidance is requested on which goals, strategies, and policies staff should pursue. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council generally agree with the stated goals and policies outlined in the draft plan? 2. Would Council like the strategies to be prioritized? BACKGROUND / DISCUSSION Historically and currently, Fort Collins recognizes the value of having affordable housing options for low-income residents. It is important to define the City’s role in the provision of affordable housing. While the ultimate goal is to have a sustainable housing system with options for residents of all ages and income levels at all life stages, the City does not develop or build housing. The City’s role is that of a funder, facilitator, regulator, policy maker and partner. Our housing system is dependent on the real estate market. Real estate is a commodity driven market that greatly influences the housing options available in our community. Still, by focusing policy and funding resources through strategic planning to targeted demographics, we achieve the best chance of helping the market produce the housing types and communities our residents need. The City’s ultimate objective is to add affordable units to the housing inventory. Some housing for very low wage earners cannot be reached by the real estate market alone and requires subsidy investments to make it affordable for the end user. This strategic planning process also provides a good opportunity to look for barriers standing in the way of our development partners producing the desired housing in an effort to truly incentivize affordable development. Affordable Housing Defined While the Housing Affordability Policy Study (HAPS) analyzed the entire housing continuum with the goal of having good housing options for all City residents, this plan specifically addresses affordable housing. Fort Collins defines affordable housing as:  Housing intended for residents making 80% or less of the area median income (AMI). (Attachment 1).  To be affordable, renters can pay no more than 30% of their gross income on rent and utilities  Home owners can pay no more than 38% of their gross income on housing costs including principle, interest, taxes, insurance, utilities, and home owners’ association dues. June 9, 2015 Page 2 There are needs for housing options at all levels of the housing continuum, with the greatest needs identified in the 50% AMI or less income range. An example of the types of needed housing, who provides it locally, and the City’s role is attached. (Attachment 2). Current Look at Affordable Housing in Fort Collins The City’s proclivity for planning has had beneficial results in the area of affordable housing. The City continues to add affordable stock to the inventory and has successfully located this housing in all areas of the City. (Attachment 9). The City has partnered with the Fort Collins Housing Authority, non-profit developers, and private developers to accomplish this. Below is a chart that shows the number of affordable housing units as a ratio of overall housing units in Fort Collins from 1999 to 2015. As a proportion, the City of Fort Collins has added more affordable housing units to its building stock than market rate units since 1999. This means the City has consistently provided more affordable housing options for its citizens during the past 15 years. Despite this increase in affordable housing, many in our community struggle to afford to live in Fort Collins. The proposed strategies aim to continue this upward trajectory in the provision of affordable housing units throughout Fort Collins. Affordable Housing Strategic Plan The 2015-2019 Affordable Housing Strategic Plan is the City’s fourth consecutive affordable housing strategic plan. Unlike the 5-Year Consolidated Plan, for instance, that is required by the federal Department of Housing and Urban Development (HUD) and includes affordable housing as well as other topics, the City’s Affordable Housing Strategic Plan is done to set policy and funding priorities internally. While it is considered a best practice to have a strategic plan, it is not a requirement. A subcommittee of staff from the Social Sustainability department and the Planning department has been assisted by Affordable Housing Boardmembers and a member of the Community Development Block Grant Commission in crafting the draft plan. June 9, 2015 Page 3 The draft 2015-2019 Affordable Housing Strategic Plan is attached. (Attachment 3) The structure of the plan is to first provide selected data based on foundational studies conducted from late 2013 through 2015, providing snapshots of our dynamic housing system. Example reports include:  Social Sustainability Gaps Analysis  Housing Affordability Policy Study (Attachment 4)  2015-2019 HUD Consolidated Plan Furthermore, this plan has been influenced by several community conversations such as the Community Conversations on Homelessness and the Summit on Aging. Staff has been intentional about providing opportunities for public input and seeking input from the business community as well as boards and commissions. (See Public Engagement Plan-Attachment 5) In addition to conducting public forums on the draft plan, a web based comment form has been available to anyone wishing to comment on the subject of affordable housing in our community. (Attachment 6). There will be additional opportunities for public input between the work session and when the plan comes for formal Council consideration in August. Plan Format The plan includes:  Guiding Principles, which is a new section intended to improve usability of the plan  Projected financial resources for the five year plan term  Goals, Objectives and Strategies that constitutes the City’s action plan  City’s partners in affordable housing  Recommended policies intended to further the goals (See attached AHSP Action item and Policy Status)  Metrics to measure outcomes will be added to this draft The five pillars of this plan are its goals:  Increase the inventory of affordable rental units  Preserving the long-term affordability and physical condition of the existing stock of housing  Increase housing and associated supportive services for people with special needs  Supporting opportunities to obtain and sustain affordable homeownership  Refining development incentives and expanding funding sources These goals are designed to be flexible enough to meet the demands of the next five years, and are paired with specific strategies designed to achieve the goals. These goals are not in any particular order to allow support to flow to the best projects, as long as they are providing housing that meets one of the goals. While similar to the goals of the last Affordable Housing Strategic Plan because the community needs have not changed significantly, these goals have been refined to reflect what we have learned in the studies describing today’s housing system. For instance, the preservation goal has been broadened from rental inventory to all affordable housing stock. A previous goal around Homebuyer Assistance was broadened to supporting opportunities to obtain and sustain homeownership. The goal to refine development incentives and expand funding sources is called out as a new goal because changes in funding at the state and federal level have elevated the importance of this work, even though the subject was included under strategies in prior plans. Recommendations from HAPS While cities all over the country are working on providing affordable housing options to their communities, there is no one proven solution. Strategies that work in one area of the country may not work in Fort Collins or even be permissible under Colorado law. Strategies that produce units in a good real estate market will not necessarily produce units in a down real estate market. Solutions need to be tailored to the current needs, political climate and legal environment of the jurisdiction. Most Cities use multiple affordable housing incentives, policies and programs making it difficult to establish which one is responsible for the production of units. If all goes well, the various incentives, policies and programs work in concert to achieve the desired result. For that reason, this plan relies heavily on the recently completed Housing Affordability Policy Study (HAPS). June 9, 2015 Page 4 Many HAPS recommendations have been included in the delineated strategies; including:  Land Bank Program - One recommendation was to activate the Land Bank Program by providing some of the Land Bank parcels to partners for development as affordable housing. The Land Bank Program has five parcels totaling about 50 acres that were purchased between 2001 and 2006 for the purpose of future affordable housing development. (See Land Bank Map-Attachment 10) Consultants Economics and Planning Systems, INC. (EPS), who authored HAPS have been contracted to conduct a market analysis to assist the City in determining whether it is time to develop any of these parcels and which parcels to prioritize. They are building on the 2014 appraisals the City had done. A Status Update from EPS regarding this project is provided. (Attachment 8) The final report is due to staff on June 10, 2015. An update will be provided to Council.  Construction Defect Litigation Issue - Another HAPS recommendation was to advocate at the State level for a solution to the construction defect litigation issue that seems to be stifling the production of necessary attached for-sale products such as condominiums and town homes. While the state legislature considered several bills designed to provide reform, it failed to pass a bill in the 2014 or 2015 sessions. This issue remains a matter of high concern statewide. It is anticipated that the legislature will again attempt to pass reform legislation in the 2016 session. Some municipalities are passing local ordinances to bypass the barriers imposed by the state law, including Lakewood, Lone Tree, Littleton and Parker. It is too soon to see whether these local actions will remedy the statewide issue in a way that will produce attached for-sale product. An internal group at the City has been formed to study this issue. Staff guidance on whether City Council wishes to focus on construction defect reform locally, at the State level, or both would be most helpful.  Boulder’s Policies - Boulder’s housing system is also struggling to provide affordable choices to its residents. For years Boulder has used an Inclusionary Housing Ordinance requiring the production of a certain percent of affordable units be provided when market units are built. They have dedicated funding sources for affordable housing, such as an excise tax on all residential and commercial development based on floor area, and a dedicated property tax for affordable housing. They also added a commercial linkage fee this year as an additional tool and another component of the community’s overall affordable housing strategy. Commercial linkage fees are a form of impact fee assessed on new commercial developments or major employers. They are designed to mitigate the need for work force housing generated by a new or expanded commercial business. Revenues are used to fund the development of affordable housing for the added work force. Because linkage fees are a type of impact fee, they require a nexus study. Such a study provides a quantitative basis for the connection (or nexus) between the affordable housing demand generated and the amount of space being developed. Because employee generation rates differ widely among land uses, communities using commercial linkage fees distinguish between retail, restaurant, office, hotel, and industrial space for example. As an impact fee it is important to note that it can only be used to pay for the impact of the new development and may not be used to address existing deficiencies. It is too soon to see if this new tool will have the desired results in Boulder. As previously noted, it will be difficult to trace desired results to one component of Boulder’s overall strategies. In any event, EPS does not recommend a communitywide commercial linkage program for Fort Collins at this time because:  Commercial linkage programs are more appropriate in markets without as much competition for sales tax revenues;  Linkage programs generally face opposition from the commercial development industry;  The Fort Collins market competes with surrounding municipalities for sales tax revenues, and the establishment of a linkage fee could potentially discourage development. (HAPS, p.65). Goals and Strategies The current draft AHSP contains a myriad of strategies to help the City achieve its affordable housing goals. Some strategies are reasonably certain to accomplish the goal of adding more affordable units to the City’s inventory. For instance, prioritizing the use of the City’s annual Private Activity Bond (PAB) capacity for affordable June 9, 2015 Page 5 housing for the next 5 years will likely yield positive results. PABs are required in 4% Low Income Housing Tax Credit program, which several of our partners are successfully using to develop housing. Some strategies are less directly tied to an immediate outcome, but could be very fruitful in the end. For instance, using focus groups of developers, including both non-profit and for-profit, to determine incentives the City could implement to encourage affordable housing development may not yield results as directly, but may enhance the City’s incentives in a meaningful way for the long run. Strategies are organized in each goal area and then on a time line. Some strategies that are not being recommended at this time are listed further out on the time line to make sure they are revisited periodically to see if conditions have changed enough to merit consideration of those strategies. Policies not recommended at this time: Policy Reason Inclusionary Housing Ordinance Deed restricted homes would be at same price point as unrestricted homes Commercial Linkage Fee Commercial linkage fees add costs and makes Fort Collins less competitive with surrounding municipalities Recommended policies: Policy Expected Outcome Activate Land Bank 500-600 additional affordable units Improve financial and non-financial incentives Incentivize the types of units that are needed in the City’s affordable inventory Preserve affordable units in exchange for affordability commitment Maintain supply of affordable units Council feedback requested for the following policies: Policy Expected Outcome Progressive fee structure Fees commensurate with impact of development and dwelling units size Phased improvements of existing housing Incremental improvement in condition of housing Remove barriers to accessory dwelling units (ADU) Increase supply of affordable units Construction Defect Litigation reform Increase supply of townhomes and condominiums ATTACHMENTS 1. AMI Income Limits 2015 (PDF) 2. Affordable Housing Handout (PDF) 3. Affordable Housing Strategic Plan (Draft May 28, 2015) (PDF) 4. Housing Affordability Policy Study Report (PDF) 5. Public Engagement Plan (PDF) 6. Summary of Public Comments (PDF) 7. AHSP Action Item and Policy Status (PDF) 8. EPS Land Bank-Status Update, May 27, 2015 (PDF) 9. Affordable Housing Map (PDF) 10. Land Bank Parcels Map (PDF) 11. Sustainability Assessment Summary and Tool (PDF) 12. Powerpoint presentation (PDF) 2015 Income Limits Income Limits (effective date 03/06/15) 2015 Median Income: $79,300 (Fort Collins/Loveland Metropolitan Statistical Area) City of Fort Collins Household Members Income 1 2 3 4 5 6 7 8 100% of AMI 55,600 63,500 71,400 79,300 85,700 92,000 98,400 104,700 80% of AMI* 43,600 49,800 56,050 62,250 67,250 72,250 77,200 82,200 60% of AMI 33,360 38,100 42,840 47,580 51,420 55,200 59,040 65,820 50% of AMI* 27,250 31,150 35,050 38,900 42,050 45,150 48,250 51350 30% of AMI* 16,350 18,700 21,050 24,250 28,140 32,570 36,730 48,890 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%, 50% & 30% are the Section 8 income limits published by HUD. These are the same income limits required for projects funded with CDBG & HOME. Revised March 11, 2015 ATTACHMENT 1 Shelters • Catholic Charities • Crossroads • Faith Family Hospital • Fort Collins Rescue Mission Transitional Housing (< 2 years) • Catholic Charities • Crossroads • Corbett House • Matthews House Permanent Supportive Housing • FCHA* Section 8 • FCHA* • Volunteers of America • Neighbor2Neighbor • Matthews House • Catholic Charities Public Housing • FCHA* Home Buyers Assistance Program Entry-level Home & Above • Habitat for Humanity • Private Developers ONGOING IMPROVEMENT Affordable Rental Units Subsidized Senior Housing • Volunteers of America • FCHA* • DMA Plaza Disabled Housing • Non-proﬁt • Private Developers *Fort Collins Housing Authority 5 Homes a Year Senior Ho sing Affordable Rental Units/ Tax Credit • FCHA* • Non-proﬁt • Private Developers *Bullets are examples. Not intended as an ehaustive list. City Supports • Development Incentives • Grants & Loans • Financing Support • Policy • Private Activity Bonds (Letters for LIHTC Support) ATTACHMENT 2 Emergency Shelter Transitional and Permanent Supportive Housing Affordable Housing • Rental • Homeownership Entry-level Housing • Rental • Homeownership Market Housing • Rental • Homeownership Non-market (subsidized) Market 0% 30% HOUSING CONTINUUM AND RENTAL INVENTORY GAPS Area 60% 80% 100% Median Income 120%+ Higher Subsidy Lower Income No Subsidy Higher Income Maximum affordable rent including utilities $569 8,838 4,238 Rental gap *no. of excess units that are affordable to income level Estimate without students $948 4,003* $1,516 5,826* $1,895 883* $2,274 5 $2,275 1,913 Source: HUD 2013 Median Family Income for Fort Collins-Loveland was $75,800, 2012 ACS and BBC Research & Consulting 1 EXECUTIVE SUMMARY ............................................................................................................... 2 1. INTRODUCTION ................................................................................................................... 332 2. GUIDING PRINCIPLES ...................................................................................................... 151513 3. FINANCIAL RESOURCES ................................................................................................... 161614 4. GOALS, OBJECTIVES, AND STRATEGIES ............................................................................... 222220 4.1. GOAL: INCREASE THE INVENTORY OF AFFORDABLE RENTAL HOUSING UNITS .......................... 232321 4.2. GOAL: PRESERVE EXISTING AFFORDABLE HOUSING UNITS .................................................. 272725 4.3. GOAL: INCREASE HOUSING AND FACILITIES FOR PEOPLE WITH SPECIAL NEEDS ....................... 292927 4.4. GOAL: SUPPORT OPPORTUNITIES TO OBTAIN AND SUSTAIN AFFORDABLE HOMEOWNERSHIP ...... 333331 4.5. GOAL: REFINE DEVELOPMENT INCENTIVES AND EXPLORE ALTERNATIVE FUNDING SOURCES. ....... 363634 5. PARTNERS IN AFFORDABLE HOUSING ................................................................................ 393837 6. RECOMMENDED POLICIES ............................................................................................... 424140 ATTACHMENT 3 2 Executive Summary Fort Collins envisions a housing system that provides housing options for all residents regardless of income, age or life stage. While the City plays an important role in encouraging the production of housing through funding, regulating, facilitating, and creating policy, it is important to note that the City does not develop or build housing. The City’s vision includes choices for all. This 2015‐2019 Affordable Housing Strategic Plan is specifically directed to creating affordable housing, which is for residents earning 80% Area Median Income (AMI) or less., the The studies this plan is predicatedthat form the foundation of this plan on looked at our entire housing inventory and system. They found we hadthe City has gaps in inventory at all income levels, but the biggest need was for the lowest wage earners. Because funding resources are limited and there are never enough grant dollars to invest in all housing developments, these resources must be targeted toward housing for the lowest wage earners. Still, the City looks for policy that will improve our entire housing system. This is important in terms of the City’s current housing needs. While rentals for low wage earners are the biggest identified need, it is clear that middle wage earners looking for rentals and homes to own are also having a difficult time finding available housing that is affordable to them. This plan provides an overview of current housing conditions and looks at trending for the next 5 years. It articulates five strategic goals, and delineates strategies to achieve the goals. This document will guide the City’s funding and policy for affordable housing from 2015‐2019. 3 1. Introduction The City of Fort Collins believes one of the keys to a healthy community is the ability to house its citizens in high quality, affordable housing. The City remains committed to this ideal through the Affordable Housing Strategic Plan. The purpose of this plan is to guide resources for future funding and policy decisions for developing affordable housing. This plan provides a foundation that allows flexibility for supporting affordable housing. This plan does not contain a prioritized list of action items or a predetermined dollar amount for specific projects. The five pillars of this plan are its goals: 1. Increase the inventory of affordable rental units 2. Preserving the long‐term affordability and physical condition of the existing stock of housing 3. Increase housing and associated supportive services for people with special needs 4. Supporting opportunities to obtain and sustain affordable homeownership 5. Refining development incentives and expanding funding sources. Affordable housing has a direct impact on the social, economic and environmental health of our community. Socially, affordable housing has a stigma. Many people think affordable housing refers to public housing projects from the 1950s and 60s. Affordable housing in Fort Collins, however, takes many forms and is integrated within the community. Economically, the more a household has to spend on housing the less money they have for other needs. Housing costs will typically take precedence over other staples such as food, transportation and medical care. These factors lead to less individual wellness and less community prosperity. Individual wellness leads to more stable housing conditions, which leads to more stable families and neighborhoods. From an environmental perspective, a lack of affordable housing pushes some community members out that work here but need to live elsewhere. This creates congestion on our roads and increased pollution, which damages the environment that the Fort Collins community cherishes. Thus to create a healthier community, Fort Collins must actively pursue policies to ensure that people from all walks of life can find an affordable, quality place to live. The City’s role in the provision of affordable housing falls into four categories: policy, regulation, facilitation and funding. The City’s affordable housing policies encourage a variety of housing throughout the community so all of its citizens can live in safe, good quality and affordable housing. Its policies should encourage the construction of new and preservation of existing affordable housing units. Its policies, as expressed in City Plan, should also continue to evenly disperse affordable housing throughout the community to promote healthy mixed income neighborhoods. The City should also continuously monitor its affordable housing policies to ensure they are reflective of the best practices in encouraging the development of affordable housing. The City’s regulatory role is to eliminate barriers to the development of affordable housing. Many of the City’s regulations add time and costs to housing projects. The City implemented 4 these regulations to maximize the quality of development in the community. However, many developers see some of these regulations as driving up costs and over‐processing projects that they could accomplish in other communities with relative ease. The City’s challenge is to find the right balance between regulations that ensure quality development without discouraging affordable housing. City staff should consistently update these regulations to ensure there are as few barriers to providing high quality affordable housing as possible. The availability of City funds can make or break an affordable housing project. The City’s role in funding affordable housing is to be an early piece of the funding puzzle so affordable housing providers can leverage these funds to get access to private, foundation, state and federal funds. Funders often prefer to support affordable housing projects that have the backing of the municipality. This funding strategy allows the City to help kick start affordable housing projects that otherwise could have been difficult to fund. The first iteration of this plan, Priority Affordable Housing Needs and Strategies, was created in 1999 to establish goals and strategies to increase the provision of affordable housing. Since then, City has updated the plan every five years to reassess its policy goals and refine its strategies. The current update uses the Housing Affordability Policy Study (HAPS) as its foundation. A copy of this report can be found at http://www.fcgov.com/sustainability/pdf/HAPSFinalReport.pdf. HAPS was conducted in 2014 to provide a detailed assessment of housing affordability policy and needs for the City of Fort Collins. HAPS also investigated the efficacy of housing affordability policies used in other similar communities nationwide. The study made policy recommendations with a detailed analysis of current housing and socioeconomic trends to support its findings. 1.1. The Housing Continuum One of the guiding principles of this plan is that members of all income and age brackets should be able to find adequate housing in Fort Collins. The provision of adequate housing to all income brackets has proven to be a challenge, however. From a developer’s perspective, low‐ income households are not a lucrative target market since they cannot afford high rents or mortgages. As such, many developers will forego constructing affordable housing units and target higher income tenants since they can turn a profit easier. In this scenario, very few developers build affordable housing units. To combat this dilemma, many programs at the federal, state and local level offer money to subsidize the construction of affordable housing units. Cities also enact various policies to incentivize the construction of affordable housing such as density bonuses, fee waivers and in some cases, requirements for providing affordable housing as a part of certain types of development. Often times, these subsidies are sufficient to build units affordable to households earning 60% of AMI or more. However, this still leaves many households underserved. Many households that earn less than 60% of AMI cannot find affordable housing and as a result end up renting or owning a home they cannot afford. These households require a greater level of subsidy for developers to provide housing that is truly affordable to them. Below is a graph that shows the relationship between subsidy needed and income. 5 Source: City of Fort Collins, Communications and Public Involvement Office Another issue with affordable housing is the stigma attached. As discussed earlier, many community members equate low‐income housing with run down, large‐scale housing projects built in the post‐World War II period. The affordable housing inventory of the City is a testament to how this has changed. Often times, community members are quick to object to affordable housing in their neighborhood. Since affordable housing in Fort Collins is defined as serving incomes up to 80% area median income (AMI) many residents actually qualifiy for and live in affordable housing. The continuum below shows what AMI range many common professions fall into when supporting a family of 4 in Fort Collins. Source: Bureau of Labor Statistics What this continuum shows is that many members of the Fort Collins community that provide vital services have a difficult time affording to live in Fort Collins. This is especially true if the sole income earner works in one of the professions along this continuum. This means many 6 families in the community have difficult choices to make. Should they live closer to work at the expense of putting money away in case of a medical emergency? On the other hand, should they live further away from Fort Collins, which means spending less time with their family and spending more money on transportation? Many of these families choose to live outside of Fort Collins. This phenomenon is colloquially known as the Drive Till You Qualify effect. Since housing is expensive in Fort Collins, many families choose to reside in surrounding communities since rent is cheaper. The impact of this phenomenon is that more people commute in to Fort Collins, which results in more traffic congestion. Increased traffic congestion leads to more pollution, which leads to a decreased quality of life for the community. By encouraging the development of more affordable housing, Fort Collins is attempting to create an inclusive community that everyone can call home. In doing so, Fort Collins hopes to also combat the social stigma attached to affordable housing and minimize the impact of the Drive Till You Qualify phenomenon. How acute is the affordable housing issue in Fort Collins? What follows is a brief discussion of various indicators that suggest the scale of the affordable housing issue in Fort Collins. 1.2 The Need for High Quality Affordable Housing Affordable housing is one of the most important issues facing our community. According to the 2013 Citizen Survey, affordable housing was the number one challenge identified by respondents facing Fort Collins (City of Fort Collins, Communications and Public Involvement Office). The perception of a lack of affordable housing in Fort Collins is confirmed by looking at the socioeconomic and housing trends of the area. The following discussion provides an overview of why the need for affordable housing in Fort Collins is especially acute. The table above shows the vacancy rate in Fort Collins along with the average rent from 1995 to 2013. Rents in Fort Collins have steadily increased over the past 20 years with a current average monthly rent of $1,209.96 as of the fourth quarter, 2014 (Colorado Department of Housing). In comparing the trends of vacancy rate and average monthly rent, it is clear that as the vacancy rate has dropped average rents have increased. A worrying sign is that even though vacancy rates have spiked in the past decade, these spikes have not necessarily correlated to a 7 drop in the average rent even when the vacancy rate is higher. This shows that merely increasing supply and a correspondingly higher vacancy rate may not result in an easing of rising rents. This could be due to the lingering impacts of the Great Recession. The Great Recession resulted in a decrease in housing production. As such, the Fort Collins market is catching up with the pent up demand for housing. It will take time for increased inventory to have an effect on average rental rates. The tables above show the gap in affordability for the household earning the area median income trying to purchase the median priced home in various northern Colorado communities in 2000 and 2013. In Fort Collins in 2000, the median sales price of homes was $168,000 but a family earning the area median income could only afford a home priced at $124,500. This 8 means a family earning the area median income had $43,500 gap between what they could afford and the median priced home. This affordability gap has widened in Fort Collins since 2000. In 2013, the gap between the affordable for sale price and median sales price of homes was $54,400 in Fort Collins. Over the same period, all of the other communities in this study except Longmont saw a decrease in the affordability gap. This means while other communities have become more affordable, Fort Collins has become less affordable to middle‐income families looking to buy a home. This affordability gap has widened not only due to increased home prices but also flat household income growth. Source: U.S. Department of Housing and Urban Development The above graphic shows the trend in area median income for Fort Collins since 2001. From 2008 to 2014, area median income was relatively flat in Fort Collins. While area median income has increased in 2015, the housing affordability gaps graphic shows that wages and home prices have moved in different directions. With home prices increasing and wages flat or stagnant, there has been increased strain put on families trying to afford their current housing. More families are cost‐burdened as a result of these trends. $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Fort Collins Area Median Income Area Median Income 9 Sources: U.S. Department of Housing and Urban Development, Larimer County Housing Needs Assessment, Housing Affordability Policy Study Missing sources for all these The increase in housing prices combined with flat income growth has affected the amount of money families spend on housing. Since the first Affordable Housing Strategic Plan in 1999, the number of cost‐burdened homeowners has more than doubled from 3,500 to 8,425 now. A cost‐burdened household is one that spends more than 30% of its income on housing. While some of these cost‐burdened households are wealthy and are cost‐burdened by choice, the majority of these households simply cannot afford the home they own. By spending a large percentage of their income on housing, cost‐burdened households have less money to spend on other necessities like food, transportation and medical care. This lessens local consumer activity and negatively affects the local economy. This also leads to a scenario where large, unexpected expenses or bills can put households at risk of losing their home. The lower the household income, the less resilient they are in capacity to overcome even minor financial challenges. An increase in quality affordable housing will help households at lower income levels avoid this precarious financial scenario. 3,500 3,629 4,000 8,425 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1999 AHSP 2004 AHSP 2009 AHSP 2015 AHSP Number of cost burdened homeowners Number of cost burdened homeowners 10 Sources: U.S. Department of Housing and Urban Development, Larimer County Housing Needs Assessment, Housing Affordability Policy Study A related issue to cost‐burdened homeowners is renters that are looking to move into homeownership but cannot afford a down payment. Since 1999, the number of renter households that earn 51‐80% of the area median income that could benefit from homebuyers assistance has more than doubled from 2,400 to 5,823 currently. Many of the renters that could benefit from homebuyers assistance are currently living in housing affordable to lower income households. By assisting homebuyers, the City can help households enter homeownership while freeing up affordable units. 2,400 2,997 4,550 5,823 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1999 AHSP 2004 AHSP 2009 AHSP 2015 AHSP Number of renter households 51‐80% AMI that could benefit from homebuyers assistance Number of renter households 51‐ 80% AMI that could benefit from homebuyers assistance 11 Sources: U.S. Department of Housing and Urban Development, Larimer County Housing Needs Assessment, Housing Affordability Policy Study Where Fort Collins has made progress regarding affordable housing is in the provision of affordable rental housing. While there are still 8,800 cost‐burdened renter households in Fort Collins, this is a decrease of 3,200 when compared to 2009. It is important to note that cost‐ burdened renter households often include students and seniors living on a fixed income. Many students receive some financial support from their families and are cost‐burdened in name only. Seniors living on a fixed income also appear cost‐burdened but many times have a lifetime of accumulated wealth to support them. As such, the true number of cost‐burdened households is a fraction of what is represented in this chart. While Fort Collins has made progress related to this metric, a sizable number of renters are still cost burdened and could benefit from more affordable rental units. 7,800 8,556 12,000 8,800 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1999 AHSP 2004 AHSP 2009 AHSP 2015 AHSP Number of cost burdened renter households Number of cost burdened renter households 12 Source: City of Fort Collins, Social Sustainability Department 314 217 466 1245 441 0 200 400 600 800 1000 1200 1400 Number of Affordable Rental Units Built Number of Rental Units Built 107 0 75 85 11 0 20 40 60 80 100 120 Number of Affordable Owner Units Built Number of Owner Units Built 13 Fort Collins has also made significant progress in supporting affordable housing developments. Since the first Affordable Housing Strategic Plan was adopted in 1999, Fort Collins has produced more affordable housing than at any other time in its history. In the past 5 years alone, Fort Collins has helped support the development of a comparable number of affordable rental units as the 1990s. This is still a slower rate than what the City helped provide from 2000‐2009. Also there has been less development of affordable ownership units since 2010. At first glance, this development is troubling. However, when looking at the ratio of publicly assisted housing to the overall housing stock it is clear this downturn in affordable housing production is in line with less overall development activity in Fort Collins. Sources: U.S. Department of Housing and Urban Development, Larimer County Housing Needs Assessment, Housing Affordability Policy Study Since 1999, the ratio of affordable housing to market rate housing has improved. This means that affordable housing projects are making up a greater percentage of all development projects than in the past. Therefore, while the amount of affordable housing units developed has gone down since 2010, they are making up a larger percentage of development projects. While the improved provision of affordable housing units is an encouraging trend, Fort Collins must do more to continue to encourage more affordable housing projects in the face of rising home prices, rising rents and flat incomes. There are more cost‐burdened households in Fort Collins than ever before and home prices continue to rise. It is crucial that Fort Collins refines 3.33% 4.41% 4.85% 5.17% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 1999 AHSP 2004 AHSP 2009 AHSP 2015 AHSP Percentage of overall housing units that are publicly assisted, affordable housing 14 its affordable housing policies in light of these trends to ensure Fort Collins is a livable community for all. 15 2. Guiding Principles The following statements are the principles that embody the spirit of the Affordable Housing Strategic Plan. All of the goals, policies and objectives in this plan were created with the following principles in mind.  Affordable housing supports economic development, ensures diversity and builds community  Affordable housing is ultimately someone’s home; it should be safe, attractive, livable  Affordable housing options should be available throughout the city, not concentrated in one area  Affordable housing must include options for special needs and vulnerable populations  Affordable housing supports a stable workforce at all wage levels  Needs of all stakeholders must be considered in the development of affordable housing  Public and private collaboration is crucial to the success of our affordable housing plan  Successful solutions for affordable housing require community‐wide investment and support  Our affordable housing plan must be specific enough to generate real solutions and flexible enough to address the changing landscape of the community  Limited financial resources must be targeted for housing the lowest income households. Policy should be used all along the continuum to stimulate a wide range of housing choice for residents at all ages, income levels and life stages. 16 3. Financial Resources Financing affordable housing is difficult at best. The availability of subsidy is limited and subject to cuts to the Federal budget. Federal funds are not likely to increase and have been trending downward. While there is a continuing need for City funding, this must be weighed against the need to fund other important projects and programs. It is important for the City to continue to seek additional dedicated funding streams specifically to fund affordable housing. 3.1. Federal Grants and City General Fund Budget The City of Fort Collins currently has three sources of funds available to provide financial assistance to affordable housing programs and projects: the federal Community Development Block Grant (CDBG) Program Entitlement Grant, the federal Home Investment Partnership (HOME) Program Participating Jurisdiction Grant, and the City’s own General Fund Budget Affordable Housing Fund (AHF). A new fund will also soon be available called the Affordable Housing Capital Fund. Traditionally, the policy for allocation of these funding sources for affordable housing has been 65% of CDBG funds, 90% of HOME funds, and 100% of the Affordable Housing Fund. Table 1: Estimated Available Funding for Affordable Housing Funding Source 2015 Annual Allocation 2015‐2019 Total (estimated) Federal CDBG Entitlement Grant $618,402 $3,100,902 CDBG Program Income $55,000 $250,000 Federal HOME Program Grant $467,100 $2,447,100 HOME Program Income $110,000 $250,000 City Affordable Housing Fund $525,000 $2,025,000 Affordable Housing Capital Fund $0 $2,000,000 Annual Total $1,775,502 $10,073,002 Source: U.S. Department of Housing and Urban Development and the City of Fort Collins Social Sustainability Department These funds should only be used in projects able to leverage money from private, foundation, state, and/or other federal sources in order to support the complex systems of housing, public/human services, and community infrastructure. The amount of annual allocation from all these funding sources varies per year. HUD determines the annual allocation amounts for CDGB and HOME grant funds. The estimated five year sum is based on the average allocation for the last 5 years. Program income is generated when developments repay loan funds upon sale or refinance. While hard to predict, an annual average of $50,000 was used for both program income estimates. City Council determines the Affordable Housing Fund through the budgeting for outcomes process. In 2013 and 2014, as well as the prior two budget years, $325,000 was allocated to this fund. That amount was increased to $525,000 for 2015 and 2016. A minimum of $133,000 for this fund is assured. The estimate for the AHF is also based on the average allocation for the past 5 years. It has not yet 17 been determined when Affordable Housing Capital Fund monies will be available, nor in what manner they will be paid out. However, that fund was projected to have $4 million in 10 years, the estimate assumes half of that fund will be available during the first five years. While the five year estimates are rough at best, it is important to note that these estimates show reduced allocations in both CDBG and HOME from the preceding 5 year period. This is consistent with what we believe is a trend of reduced federal funding moving into the future. However, with local investment increasing we anticipate an overall increase in available housing funding. Generally, CDBG funds can only be used by the local government recipient, or awarded to a non‐profit or governmental entity to carry out an eligible activity and to serve at least 51% low and moderate income residents. Examples of eligible activities are: • Homeowner Rehabilitation • Home purchase activities • Rental housing acquisition, rehabilitation, utility connection, site clearance, and public improvements Typically, CDBG funds are not a good match for new construction and related fees. CDBG funds cannot be used for private sector development. The HOME program is focused on providing housing opportunity for low and moderate‐income households, under 80% area median income, with the following objectives: • Provide decent affordable housing to lower‐income households • Expand the capacity of non‐profit housing providers • Strengthen the ability of state and local governments to provide housing • Leverage private section participation HOME funds allow virtually any form of financial assistance or subsidy to be provided for eligible projects and eligible activities. Examples of eligible activities include: • Home Buyers Assistance • Homeowner rehabilitation • Construction of rental housing • Acquisition of rental housing • Tenant Based Rental Assistance HOME funds also have additional requirements, such as: • 25% local match requirement • Underwriting criteria and guidelines to ensure feasibility and sustainability • Property standard guidelines • Long‐term monitoring and compliance standards for rental housing. The Affordable Housing Fund was created in 1993 to provide additional funding for ongoing affordable housing needs. Historically, the City has used AHF to fund financing gaps in affordable housing projects and to fund projects that were either ineligible for CDBG/HOME and/or were administratively cumbersome under the federal guidelines. The AHF gives the City 18 tremendous flexibility because it is not hindered with federal guidelines, regulations, and reporting requirements. It also shows a local commitment to financially support affordable housing programs. It can be used as a source for the required local match for the HOME program. The Affordable Housing Capital Fund (AHCF) was created by the passage of Ballot Measure #1 in April 2015. The AHCF will be defined by Ordinance, but will likely be restricted for use in development proposals that would add new units of housing or would preserve affordable units that are at risk of becoming market rate due to pending sale or expiration of deed restrictions. The new fund would only be available for development costs associated with housing units. Only “bricks and sticks” and not any staff or service support would be appropriate for this fund. For instance, this fund would not cover administrative costs, staff salaries, or pay for rental assistance. These funds could be available in combination with federal funds and other city resources or alone. 3.2. Allocation of Financial Resources The City currently allocates its financial resources through a competitive process. Annually there is a spring competitive process, with an optional fall process available if appropriate because funds are available to distribute or for other time sensitive issues. The competitive process evaluates applications for funding based on the City’s priority affordable housing needs and on priorities established in this Strategic Plan. Proposals which receive funding are determined to be the best of those in competition for the available funds during any particular cycle. Too often, the amount of requested funding exceeds the level of funding available during a cycle. Thus, not every application receives funding, and some applications will not receive the full amount requested. The following criteria guide funding allocation decisions: 1. Impact/Benefit: The lower the AMI of the end user the higher the benefit or impact. 2. Need/Priority: This will take into consideration the City priorities as defined in the current Housing Strategic Plan 3. Feasibility: Will the housing be built soon and how long will it remain affordable? 4. Leveraging Resources: How is the entire development going to be funded and who else is investing in the development? Projects should be able to demonstrate significant leverage from multiple sources other than the City of Fort Collins allocation of CDBG or HOME dollars to provide economic benefits to Fort Collins. Examples of such sources are: private capital; investor equity; owner equity; and foundation funds. 5. Capacity and History: This looks at the applicant’s capacity to construct the development and their historic track record based on other projects they have developed. 6. Sustainability: Using a triple bottom line analysis, will the project further the sustainability goals of the City? Does it encourage use of transit? Is it near 19 PABs are tax‐exempt bonds that can be issued by eligible authorities. Annually, the state provides Fort Collins a maximum amount of PABs that the City can issue. The City can choose to assign these bonds to another eligible entity, such as the Fort Collins Housing Authority. The proceeds of the sale of the bonds may be used for projects that include a public benefit, such as affordable housing development and rehabilitation. PABs are an attractive financing mechanism since they usually have lower interest costs than typical commercial financing options since they are tax exempt. employment centers and schools? Will it be built to last and using environmentally friendly building practices? 3.3. Private Activity Bonds Private Activity Bond (PAB) financing is another potential funding source for the development of affordable housing. The City’s current PAB allocation is a little over $7.6 million. Larimer County and the State of Colorado have additional PAB allocations available from which Fort Collins projects could also apply. Although every project is different, the City could provide PAB assistance to help fund about 50% of a project’s cost. There are other potential uses for PAB financing, especially for economic development purposes, but the City could give preference to affordable rental housing projects when allocating its PABs. The expense of PABs makes them very difficult to use to build housing for very low income renters (less than 50% of AMI). They do, however, work well for projects affordable to households earning between 50% and 60% of AMI. Affordable units at the 50%‐60% AMI level are often needed to help assure an affordable project will cash flow and entice both non‐profit and for‐profit developers to build mixed‐income projects. PAB financing is required for 4% tax credit development and can also be required for special funding such as disaster relief funds. While the local allocation was returned to the state for many years, the City has assigned its allocation to the Fort Collins Housing Authority in 2013 and 2014, and has plans to do so again in 2015. Some cities have begun using PAB financing in “bifurcated” mixed income developments. Bifurcated structures target bond capacity to finance only the low‐income units in a mixed‐ income development, rather than financing the entire project. This structure allows for a smaller allocation of bond capacity to be used for such mixed‐income developments and the resulting bond capacity savings can be used for other projects, theoretically increasing the amount of affordable housing that can be financed each year. As financial strategies using PAB become more popular, the City can consider allocating the bond capacity to multiple development projects. 3.4. Development Incentives In addition to financial assistance through the competitive process, the City offers a variety of development incentives to those building qualified affordable housing projects. To be considered “qualified” a project must offer at least 10% of the total units to households earning 80% or less of AMI. If it meets that definition, the project is eligible to receive the following: 20 • Impact Fee Delay. Impact fees are typically paid at the time that building permits are issued. This incentive allows developers to delay the payment of those impact fees until a certificate of occupancy is issued, or December 1 of that year, whichever happens first. • Priority Processing. Affordable housing projects are eligible to receive an expedited development review and permitting process. Density Bonus. Affordable housing projects proposed in the Low Density Mixed‐Use Neighborhood (LMN) zone are eligible to increase the maximum allowed density from 8 to 12 dwelling units per acre. Fee Waivers. In March of 2013, Fort Collins fee waiver policy was changed by City Council. Fee waivers are now only provided to the Fort Collins Housing Authority for developments that will house individuals making 30% or less AMI at the City Council’s discretion. All requests for fee waivers must be brought before Council for a determination. Additionally, a finding must be made that granting the fee waiver request will not jeopardize the finances of the City or stop a project that fees are designed to fund from being built. Land Bank Program. The City owns five parcels totaling about 50 acres of land for future development. This program is designed to encourage the City to purchase land with development impediments and hold the land for between 5 and 15 years in the expectation that at least some of these impediments will have been removed by market rate development. When the time is right, land will be sold or otherwise provided to a developer for the production of rental and/or for sale affordable housing. Any revenue generated from the sale of a land bank asset will be used to purchase more land bank properties. 3.5. Home Ownership Home Buyer Assistance Program. The City of Fort Collins provides loans to income‐eligible households to cover a portion of the required down payment and closing costs for buyers who have not been on title to a home for the past three years. The loan is to be paid back in full either when the house is sold, transferred out of the buyer’s name, rented, or if the buyer seeks a second lien (such as a home equity loan). Eligible households can receive a loan of up to 5% of their purchase price (maximum of $15,000) to cover down payment, closing costs or both. The HAPS Stakeholders made a good case that existing development incentives are not enough alone to stimulate affordable housing development. It is encouraged that the City look for additional ways to provide incentives that will stimulate the production of affordable units. 3.6. Explore. Explore Innovative Funding Strategies Social Impact Bonds. The City should explore leveraging Social Impact Bonds to finance supportive housing. Social Impact Bonds are an innovative tool for government to leverage private sector capital to finance the delivery of services that address a wide range of chronic social problems. Also known as “Pay for Success” contracts, private investors pay for and 21 assume the risk of a program being able to deliver measurable results. The government only pays back the private investor if independent evaluators determine that the initiative or program has achieved specific outcomes that both create benefits for society and generate savings for the public sector. The City is committed to exploring the possibility of using Social Impact Bonds to finance affordable housing especially for the hardest to house residents with barriers to accessing housing. Partner With Philanthropic Organizations. The City will explore partnering with foundations to serve vulnerable populations and families who are most in need of affordable housing. Through the use of grants and below market rate loans, philanthropy can provide flexible capital that can supplement current City programs and be the source for innovative pilots that “test” new strategies to combat homelessness, serve the elderly, and provide needed social services and job training. Strengthen Public/Private, Public/Public and Philanthropic Partnerships. Investment in housing by the private sector is critical to the City’s housing stock, particularly in publicly sponsored projects that leverage private sector capital for affordable housing and community development. Expanding the use of those programs and strengthening private sector relationships will be imperative to maximizing the City’s ability to support these crucial goals. Working with financial institutions, pension funds, financial intermediaries and philanthropic organizations, the City will also seek to find the best ways to leverage private capital. Also, the City will work on partnering with the State and Federal government to identify new sources to fund affordable housing in the City. The City will support efforts to expand state‐wide funding and investigate accessing new federal funding programs such as the National Housing Trust Fund. 22 4. Goals, Objectives, and Strategies Based upon the demand for affordable housing, five primary goals have been identified and prioritized to guide future funding and policy decisions: (1) Increase the inventory of affordable rental units, especially for households earning less than 50% AMI. (2) Preserving the long‐term affordability and physical condition of the existing stock of housing (3) Increase housing and associated supportive services for people with special needs (4) Supporting opportunities to obtain and sustain affordable homeownership (5) Refining development incentives and expanding funding sources. These goals are in no particular order. The City defines what is considered “affordable” based upon income. Each year, the Department of Housing and Urban Development (HUD) provides annual income limits for the Fort Collins/Loveland Metropolitan Statistical Area (Larimer County). Table 2 provides information on the equivalency of Area Median Income (AMI) levels to HUD classifications and the maximum affordable monthly rent. Another common measure is the Department of Health and Human Services poverty guidelines. Appendix A provides more detail about how the poverty guidelines are established, and how they relate to HUD’s income classifications. Table 112: 2015 Area Median Income (AMI) Equivalencies Percent of AMI AMI1 HUD Classification Maximum Affordable Monthly Rent Mortgage supported by same monthly payment 100% $79,300 Moderate Income $1,983 $301,153 80% $62,250 Low Income $1,556 $203,579 60% $47,580 Low Income $1,190 $119,669 50% $38,900 Very Low Income $973 $70,024 30% $24,250 Extremely Low Income $606 $0 Source: U.S. Department of Housing and Urban Development, last column City of Fort Collins The upcoming sections provide justifications for each goal based upon the data provided by HAPS Objectives are established for each goal based upon the anticipated amount of funding over the next five years. Finally, strategies are identified and arranged as an Action Plan to provide specific actions needed to accomplish each goal. 1 Annual income for a household of four. 23 4.1. Goal: Increase the Inventory of Affordable Rental Housing Units The first priority should be to increase the inventory of affordable rental units, which can be accomplished through two different methods. One method is to construct new, affordable rentals. A second method is through the acquisition of former market rate or mixed rental rate units usually located in apartment complexes. Such purchases will typically entail some level of rehabilitation. Acquisition and rehabilitation projects, especially by the housing authority and non‐profit agencies, generally provide the opportunity to restrict the rent levels for longer periods of time than can be achieved with new construction projects by for‐profit developers. 4.1.1. Justification The Housing Affordability Policy Study identified which income categories have the greatest need for rental housing. According to HAPS, there are 7,972 cost‐burdened renter households earning less than $25,000 per year. Creating new units that households earning below $25,000 per year can afford is very difficult under current market conditions for Fort Collins without substantial public subsidy. The Fort Collins Consolidated Plan shows a large number of renter households across the AMI spectrum that are cost‐burdened. The table below shows the number of rental households that are cost‐burdened or severely cost‐burdened (where housing costs are greater than 50% of income) in Fort Collins by AMI level. Table X: Number of Cost‐Burdened and Severely Cost‐Burdened Rental Households 0‐30% AMI 31‐50% AMI 51‐80% AMI Total Housing cost burden greater than 30% of income 6,269 4,354 2,590 13,213 Housing cost burden greater than 50% of income 5,825 2,009 440 8,274 Source: Fort Collins Consolidated Plan 24 Both sets of data show that there is a large need for more affordable housing at low AMI levels. The data also shows households earning less than 30% of AMI are more likely to be severely cost‐burdened. These households face more difficult budget decisions and have less of a safety net in the event of an unforeseen expense. As such, the City should continue to prioritize affordable rental housing units that serve households earning less than 30% AMI. What the Consolidated Plan data also shows is that there is a growing need for more affordable housing towards the middle of the AMI spectrum. This growing lack of affordable housing for middle‐income households is also reflected in the rising rents and average for sale prices of homes in Fort Collins. Thus, it is important Fort Collins implements policies to ensure middle‐ income households also have access to affordable housing in the community. 4.1.2. Objective  Produce as many new rental units affordable to households earning 50% and less of AMI as possible. The largest need for rental housing remains households earning less than 50% AMI. Private developers also have a difficult time producing units for this income bracket due to the subsidy needed for these developments to be profitable. The City should continue to prioritize funding projects that serve households that earn 50% and less of AMI.  Incentivize new rental units affordable to households earning 60‐80% of AMI. There is a growing need for affordable units for households earning up to 80% of AMI. If trends in home and rental prices continue their upward trend, more households will be cost‐burdened. The City should develop incentives that promote producing units in this income range. The City should also explore a blended approach where developers can get access to incentives by producing mixed income developments. These mixed income developments could include market rate units along with units affordable to households earning less than 30% AMI all the way up to 80% AMI. 4.1.3. Five ‐Year Strategies/Action Plan The following strategies are presented as an Action Plan for the City to help implement the goal to increase the inventory of affordable rental housing units and achieve the objective to produce as many new rental housing units affordable to households earning 50% and less of AMI, given available funding. The Action Plan is divided into three periods:  Short‐term strategies ‐ completion in 2015 or 2016  Medium‐term strategies ‐ completion in 2017 or 2018  Long‐term strategies ‐ completion in 2019 or later 25 The Action Plan also identifies the method in which the City will accomplish these action items. The methods include:  Ongoing City functions  Ordinances adopted by City Council  Resolutions that adopt City policies or priorities  Administrative functions by City staff The Planning and Social Sustainability departments will incorporate the following strategies into their work programs during the next five years according to the Action Plan. However, the timing of staff work on the strategies will ultimately depend upon the level of staffing available, prioritization of projects, and resources available to the department. (Each goal section of this plan will follow this format). Table 5 lists each strategy that the City should implement over the next five years and the action required to accomplish each. Table 225: Five‐Year Implementation Strategies 2015 ‐ 2016 Strategies Action Required Contribute a significant amount of its financial resources to increase the affordable rental housing inventory for very low income renters, especially units for households at 50% AMI and belowMetro districts None, existing and ongoing City function Motivate developers to increase production of affordable rental housing units by providing financial assistance and other development incentives None, existing and ongoing City function Use some CDBG, HOME, or AHF dollars to partially finance the acquisition and conversion of existing, market‐rate rental units to affordable housing None, existing and ongoing City function Regularly (at least every three years) review and update all existing City incentive programs, which include the current Priority Processing, Development Review Fee Waiver, Impact Fee Delay, Density Bonus, and other programs which are yet to be established such as reduced fees for affordable housing projects among others Administrative Annually review City Land Bank Program properties and determine if the timing is right for those properties to be offered for sale to provide additional affordable housing units in Fort Collins and if appropriate, sell properties Administrative 26 Continue to examine and reform regulatory concerns that could be barriers to the production of affordable housing None, existing and ongoing City function Investigate ways to remove barriers to construction of accessory dwelling units (ADUs) Administrative Establish a priority for the use of Private Activity Bonds for affordable housing purposes Resolution Create aUse focus groups of developers, including both non‐profit and for‐ profit, to determine effective incentives the City could implement to encourage low incomeaffordable housing development Administrative 2017 ‐ 2018 Strategies Action Required Explore an expedited fee determination process for projects using Low Income Housing Tax Credits Administrative Give preference to projects that set aside some of their units for very low‐ income tenants under 50% AMI in any competitive allocation of Private Activity Bonds Resolution 2019 + Strategies Action Required Using the Downtown Development Authority’s (DDA) Green Grant and Façade Grant Programs as models, investigate the development of a DDA sponsored Affordable Housing Grant Program, which would incentivize the inclusion of affordable units in DDA funded residential projects Administrative Investigate the potential of requiring mixed‐use and residential development and redevelopment projects, which request Tax Increment Financing (TIF) assistance from the Urban Renewal Authority (URA), to provide a minimum percentage of affordable units. Consider having a minimum number of total units that would trigger this requirement Administrative Consider re‐evaluating ordinances that encourage construction of smaller homes Ordinance Investigate the potential of requiring commercial projects which request TIF assistance from the URA to contribute funding towards affordable housing development Administrative 27 4.2. Goal: Preserve Existing Affordable Housing Units The City should also give priority to preserve the existing supply of affordable housing units. City policy mandates that units built with public assistance remain affordable for a period of 20 years. As the housing stock continues to age, the City should be vigilant about those projects approaching that 20‐year mark. The current number of affordable housing units must remain in the affordable inventory rather than converting to market rate units. Many affordable housing units also benefit from investment in upgrades to ensure lower utility and maintenance costs. The City should continue offering programs and investigate further programs to enhance the affordability of existing housing units. 4.2.1. Justification Attention should be given to housing projects that address the need for rehabilitation of existing housing stock and overcoming deficiencies regarding safety and sanitary conditions of existing units. The US Census reports that 6,262, or 11.2%, of Fort Collins’ housing units were built before 1960. Often times these units are in need of health and safety repairs. With the number of new building permits showing a sharp decline in recent years, and considering the cost of building new affordable units, attention should be given to the rehabilitation of existing units and preserving their affordability for the long‐term. Often rehabilitation will extend the affordability period, helping to keep the property in the affordable hsouing inventory in to the future. Other housing units may have old windows, poor insulation or roofing that drive up utility costs. High utility costs contribute to the affordability of housing. Programs that reduce utility costs can result in greater long‐term affordability and help the City achieve its environmental goals established in City Plan and the Climate Action Plan. 4.2.2. Objective  Monitor the status of existing affordable housing units and provide assistance as necessary in order to maintain them as part of the existing inventory. Table 6 reports the current number of affordable housing units located within the City that have received some form of public assistance. The City should not only monitor their affordability status but also their condition as it relates to utility costs. Table 336: City of Fort Collins’ Publicly‐Assisted Affordable Housing Inventory, 2014 Affordable Unit Type Number located in Fort Collins Rental 2,726 Owner‐Occupied 278 Assisted Living 71 Total 3,075 Source: City of Fort Collins Social Sustainability Department. 28 4.2.3. Five‐Year Strategies Table 447: Five‐Year Implementation Strategies/Action Plan 2015 ‐ 2016 Strategies Action Required Create a tiered approach where the greater the investment the longer the affordability period. Continue to use CDBG, HOME, or AHF dollars to buy and rehabilitate existing privately‐owned affordable housing units so they do not convert to market rate units. Such proposals should be given as high a priority as projects producing new units None, existing and ongoing City function Incentivize private landlords to invest in property in exchange for 20‐year affordability restriction Ordinance Explore preservation program that provides relief from full building code standards for a period of time Administrative Investigate further incentives for owners and renters to maintain the current available stock of affordable housing including mobile home parks Administrative Implement selected rehabilitation programs identified in the Redevelopment Displacement Mitigation Strategy Administrative Create a tiered approach where greater investment by the City requires a longer affordability period Administrative 2017 ‐ 2018 Strategies Action Required Investigate a rental‐rehabilitation program for private owners of rental properties requiring an affordability commitment Ordinance Explore creating web portal consolidating information about all home improvement programs in Fort Collins Administrative 2019 + Strategies Action Required Investigate a Limited Partnership/Shared Equity ownership structure to maintain the affordability of for‐sale units Resolution 29 4.3. Goal: Increase Housing and Facilities Services for People With Special Needs The third priority should be to increase housing and facilities for people with special needs. This broad category includes those who are homeless, seniors, persons with disabilities, and victims of domestic violence. These groups generally require housing units tailored to specific needs not typically or adequately addressed by market‐driven development. Many times a network of support services is needed to keep these populations stable and independent. 4.3.1. Justification The following illustrates some of the special needs, but does not indicate priority. People who are Homeless. A point‐in‐time study conducted by the Homeward 2020 project in January 2015 found 301 homeless people in Fort Collins. The number of homeless people in Fort Collins has been steadily increasing since 2013. An increasing number of Fort Collins’ homeless population is also going unsheltered, which has a profound impact on the community at large. Source: Homeward 2020, 2015 Fort Collins Point‐in‐Time Count Fort Collins also has more individuals experiencing chronic homelessness. Chronic homelessness is where an individual or family experiences homelessness for more than a year or has at least four periods of homelessness in the past three years. The chronically homeless tend to require more services to stay housed, as they are more likely to have mental health, substance abuse or other issues that keep them out of housing. With the rise of chronically homeless in Fort Collins, it is important to facilitate the development of housing and supportive services for this population. 30 Source: Homeward 2020, 2015 Fort Collins Point‐in‐Time Count Similarly, the City commissioned GAPS analysis also identified 1,021 homeless children in the Poudre School District. This is an increase of 213 students when compared to the 2009 AHSP. Students in unstable housing conditions tend to underperform in school, which can have a life‐ long impact on their employability and earning potential. Underperforming students also have an impact on standardized test scores, which can ultimately affect the funding and services the school can provide. This ripple effect creates a negative feedback loop that creates a cycle of poverty that has long‐term impacts on the socioeconomic composition of the community. To combat homelessness, the City has partnered with Homeward 2020 on a plan to make homelessness in Fort Collins rare, short lived and non‐recurring. The policy recommendations from this plan will feed into this larger plan to reduce homelessness. Persons with Disabilities. This population includes persons with various physical and mental challenges who more often suffer the negative effects of high housing costs. That problem can be even more acute for households needing accessible features in their dwelling. The following table shows the amount of disabled persons in Fort Collins by type of disability. Type of Disability Number of Persons Individuals with hearing difficulty 3,315 Individuals with vision difficulty 1,617 Individuals with cognitive difficulty 3,765 Individuals with an ambulatory difficulty 4,391 Individuals with a self‐care difficulty 1,667 Individuals with an independent living difficulty 3,190 Source: US Census Informant interviews indicated that organizations which provide supportive services or housing for disabled customers do not have enough low‐rent options for the number of people who 31 need them. Therefore, it is important to expand the supply of housing that is both accessible and affordable. Seniors. Justification: According to the Highland Group’s report Need and Opportunities in Housing and Care: Next 25 Years, there is a significant unmet demand for more age‐qualified affordable rentals. Affordable assisted living is in great demand, including group home models. There is also a need for 55+ for‐sale communities. The mix of available housing inventory in the County will increasingly be a mismatch with the age and income mix of the population. The Community needs more affordable senior rentals and for‐sale options, more accessible designs, and more rental multi‐family and shared living opportunities. Source: Need and Opportunities in Housing and Care: Next 25 Years, Highland Group, May 4, 2015 Victims of Domestic Violence. According to the 2014 Fort Collins Social Sustainability Gap Analysis, there are 550 people in Fort Collins in need of services on a monthly basis to assist with issues related to domestic violence. There is currently no housing designed for victims of domestic violence, which makes discharge after a temporary stay at Crossroads Safehouse, Fort Collins’ domestic violence shelter, challenging. Access to services, health care and longer‐term mental health care are key needs for this population. Crossroads serves both male and female victims of domestic violence. POSSIBLE SIDE BAR: Picture of Crossroads with this language: Victims of Domestic Violence Victims of domestic violence need urgent supportive services and resources. Establishing income support and rapidly obtaining shelter and supportive housing are critical components to avoiding additional trauma. 4.3.2. Objective  Continue to encourage the development of projects that meet the housing and facility needs of populations within the identified special needs categories. 4.3.3. Five ‐Year Strategies Table 558: Five‐Year Implementation Strategies/Action Plan 2015 ‐ 2019 Strategies Action Required 32 2015‐2019 Strategies Action Required Support community initiatives identifying homeless needs and develop action plans to reduce the homeless population in Fort Collins, and participate in partnerships exploring solutions for homelessness None, existing and ongoing City function Explore design standards that better allow for aging in place for new construction Administrative Investigate unmet transit needs for special populations Administrative Investigate what barriers that prevent aging in place Administrative Explore relaxing site upgrades for changes of use that serve community needs Ordinance Explore provision of temporary, supervised accommodations for those transitioning out of homelessness Administrative Support projects producing affordable units to serve persons with disabilities None, existing and ongoing City function Support projects producing affordable units to serve cost‐burdened senior citizens None, existing and ongoing City function Support projects providing help, counseling, crisis intervention services, facilities, and housing to victims of domestic violence. None, existing and ongoing City function 33 4.4. Goal: Support opportunities to obtain and sustain affordable homeownership Fort Collins must continue to help homebuyers earning less than 80% of AMI achieve affordable ownership. Good homebuyer counseling, fixed‐rate mortgage products, and down payment assistance can assure that individuals and families can become homeowners for the long term. Renters who enter homeownership, in effect, move up the housing chain and open up rental units, thereby increasing the supply of such units. 4.4.1. Justification The data provided in HAPS affirmed that households earning 51‐80% of AMI are excellent candidates for homebuyer assistance programs. There are 5,823 renter households in Fort Collins with incomes between 51‐80% of AMI that could benefit from such assistance. (HAPS) Further, the study identified almost 1,000 cash burdened homeowners who pay so much for housing that they do not have enough income to cover the rest of their basic needs. Strategies to protect these vulnerable households from involuntary displacement and to protect their housing units from unsafe conditions must be continued and built upon. 4.4.2. Objective  Encourage and support assistance to first‐time homebuyers. The City’s Homebuyer Assistance Program currently provides up to $15,000 in down payment and closing cost assistance per rental household to become first‐time homeowners. The average loan amount in 2009 was $8,093. Surprisingly this amount has not changed much, although it has varied in the last few years. The average loan amount moved up to $8,200 in 2013 and dipped to $6,800 in 2012. The average loan amount in 2014 was $8,800. With home sales prices trending upwards, we should see this amount continue to increase. Actual allocations for the first‐time homebuyer program will depend upon the number of applications that are submitted and that qualify for assistance. This program has assisted up to 70 households at the peak and as few as 8 households in one year. Market conditions affect the ability of this program to incentivize home ownership.  Support the sustainability of home ownership for low‐income and moderate‐income home owners. As price escalation increases pressures on fixed income seniors and other low income households, the City will look for ways to assist home owners to stay in their homes. Tax assistance or other programs will be investigated to provide alternatives to involuntary displacement due to changing neighborhood conditions or for any other reason. The City will explore ways to accommodate new housing types under existing regulations to determine 34 whether changes to the land use code are recommended. The City will also continue to support the use of accessory dwelling units for affordable housing and investigate barriers to this use.  Assist low‐income and moderate‐income households to preserve the condition of the existing stock of affordable home ownership housing. Some consumers of affordable housing have such little income that an emergency repair or a safety concern can put their housing into jeopardy. The City will continue to partner with programs like the Larimer Home Improvement Program to provide low or no cost loans to home owners for needed home improvements. The City will explore additional ways to support struggling home owners with keeping their homes in a safe condition. The City will continue to work with the State legislature to remove impediments to building attached home ownership product that is a good source of affordable housing, such as construction defect litigation legislation. Since this issue was not resolved in the 2015 Legislative Session, the City will consider what options are available for local jurisdictions to take action. 4.4.3. Five ‐Year Strategies Table 6610: Five‐Year Implementation Strategies/Action Plan 2015 ‐ 2016 Strategies Action Required 2016 ‐ 2017 Strategies Action Required 2017 ‐ 2018 Strategies Action Required 35 2018‐2019 Strategies Action Required 2015‐2016 Strategies Action Required Continue to provide loans to eligible households to cover down payment and closing costs up to a maximum of 6% of the sales price (5% for down payment and 1% for closing costs if there are no seller concessions) offered under the City’s existing Homebuyer Assistance program. Buyers must make an earnest money deposit of $1,000 or 1% of purchase price (whichever is greater) with their own funds. None, existing and ongoing City function Assistance will be in the form of a loan which is paid back in full when the house is either sold, transferred out of the buyer's name, rented, or if buyer seeks another second lien (like a home equity loan) on the property. Added to the payment (which is also due at sale, rental or transfer) is 5% interest on the principal. None, existing and ongoing City function Rebalance City fees to encourage development of smaller units Ordinance Explore remedies to state‐level construction defects litigation Administrative 2017‐2019 Strategies Action Required Investigate infrastructure improvements that could make land more affordable to develop for homeownership opportunities Ordinance Promote partnerships with schools and universities to create awareness and participation Administrative Expand home buyers assistance to include credit unions Administrative Investigate a Limited Partnership/Shared Equity ownership structure to maintain the affordability of for‐sale units. Resolution 36 4.5. Goal: Refine development incentives and explore alternative funding sources. Financing affordable housing is a major challenge requiring the use of many funding sources for each development. The local development community has complained that the City’s current financial and non‐financial incentives do not provide enough support to encourage the development of affordable housing. Large amounts of subsidy are required for housing for the lowest wage earners. Low income housing tax credit programs require soft costs for expertise in this technical process. Federal budget cuts continue to limit funds available for subsidy. It is necessary for the City to explore creating additional dedicated funding streams specifically to fund affordable housing and to consider reworking existing incentives to provide true value to the development community. 4.5.1. Justification In the HAPS study, the consultants discuss both cost reduction strategies and alternative funding options. In order to create an environment where developers wish to produce affordable housing communities, the City must work with the industry on finding the best funding sources and true development incentives to encourage the type of housing our residents need. 4.5.2. Objective  Incentivize the production of affordable housing. Fort Collins’ list of financial and non‐financial incentives must be rejuvenated with funding and innovation in order to truly encourage development. In 2013, the City actually limited its waiver policy at a time when additional support through waivers might have been very beneficial. This could be revisited. While the HAPS conclusion was that strong regulatory programs like inclusionary housing ordinances and commercial linkage fees are not appropriate for Fort Collins’ housing system at this time, the City must review this issue at least every other year to see if the housing conditions have changed or legal obstacles have been removed.  New funding partnerships and sources identified to allow maximum subsidy investment in affordable housing. While Fort Collins targets federal funds and City funding sources to the production of affordable housing, additional funding sources and strategies would accelerate the rate of production of needed units. The new Affordable Housing Capital Fund is a dedicated sales tax income stream for the next 10 years that will produce $4 million for capital needs for affordable housing. These funds must be leveraged with additional funding sources to actually produce or preserve units. 37 The State has promoted new state‐wide funding strategies, such as a document recording fee, however to date these efforts have not been successful. The City will continue to advocate for state‐wide funding for this issue. Regional conversation might allow efficiencies and collaboration. The City will lead a regional dialogue to encourage regional solutions. The City will continue to advocate for increased federal funding, even though the trending shows federal funding decreasing. Additional federal programs such as the National Housing Trust Fund, designed to invest in rental housing for low wage earners, will be monitored to determine how they will allocate those funds. 4.5.3. Five ‐Year Strategies Table 7710: Five‐Year Implementation Strategies/Action Plan 2015 ‐ 2016 Strategies Action Required Explore the use of Social Impact Bonds or Pay it Forward financing 38 2015‐2016 Strategies Action Required Recommend best use of Affordable Housing Capital Fund including but not limited to investing in additional land bank parcels, back filling fee waivers and investing in new housing Administrative Streamline City fees and provide comprehensive list of all City fees related to development projects Administrative Facilitate discussion on infill development fees and requirements Administrative Consider employer assisted housing partnerships Administrative Facilitate a regional conversation on how to best incentivize affordable housing development in Northern Colorado Administrative Get industry input on how to strengthen financial and non‐financial incentives None, existing and ongoing City function 2017‐2018 Strategies Action Required Explore the use of new financial tools to incentivize development Administrative Review HAPS recommendations such as excise tax, real estate transfer tax, amongst others Administrative Explore Inclusionary Housing Ordinance Administrative 2019 + Strategies Action Required Explore the creation of a new affordable housing sales tax Administrative Invest in additional land bank parcels Ordinance Explore the creation of a commercial linkage fee for affordable housing on all new commercial development in the City Administrative 39 5. Partners in Affordable Housing While the City of Fort Collins is an important player in addressing the affordable housing needs of its citizens, other partners are required to contribute important resources for the community to meet its needs. In fact, the City does not build or develop housing but relies on partners to do that. This section briefly discusses the other partners and their roles, because the City cannot solve all of the community’s affordable housing needs alone. 5.1. Private For‐Profit Developers Typically, for‐profit developers build affordable rental housing for the purpose of owning and operating it. They will maintain ownership of it for at least as long as their funding sources require it to remain affordable. Some profit is made from the development and construction of the buildings, but the asset, and the earnings that come from managing that asset, are the ultimate goal. Once the funding sources remove affordability restrictions from a project, the for‐profit owner may choose to sell it for a profit. The Low Income Housing Tax Credit (LIHTC) program and the available bond financing have been instrumental in getting for‐profits to build affordable rental housing. This program has also involved private investors in affordable housing production to a greater extent than ever before. Most of the projects built by for‐profits with this financing mechanism provide housing at the top end of the “affordable” scale – to households earning 60% of AMI. Where competition for tax credits dictates, they may attempt to reach lower income households and target special populations. 5.2. Private Non‐Profit Developers There are two fundamental differences between for‐profit and non‐profit developers. The first, most obvious difference is that non‐profits have a charitable purpose. The other is that non‐ profits do not distribute corporate profits to shareholders. However, that is not to say that they do not earn profits on their projects. Indeed, not‐for‐profits must generate revenue from projects in order to survive and grow. So long as their profits are reinvested in their charitable purpose, their 501(c) (3) tax‐exempt status is protected. In addition, most non‐profits are able to fund‐raise from outside sources to cover administrative and operating costs not covered by rental revenue. Non‐profit organizations are able to access some additional financing sources that for‐profits cannot use. These funding sources may be available to both, but give preference to non‐profits. Non‐profits tend to be more willing to mix and match different financing sources to make a project as affordable as possible. Therefore, their projects generally serve lower income households than for‐profits. Unfortunately, non‐profits generally do not have the staff and the capacity to develop as many affordable housing projects as for‐profits do. “Capacity” refers to the number of staff, the experience of staff, and to the availability of start‐up or predevelopment capital. As a result, their projects tend to be smaller in size. 40 5.3. Private Non‐Profit Service Providers Providing affordable, stable housing for low and very‐low income households often involves more than just putting a roof over people’s heads. Additionally, some of the services needed may include credit and budget counseling, foreclosure intervention, emergency rental assistance, life skills training, parenting skills, increased education, vocational training, health care, childcare, substance abuse counseling, family counseling, etc. All of these services contribute to a stable and healthy home. This is especially true for households or individuals who are trying to escape homelessness and/or break the cycle of poverty. The City of Fort Collins allocates 15% of CDBG program funds and the City’s own Human Services Program funds to local service providers. These services are a critical component to achieving self‐sufficiency and maintaining housing stability. 5.4. Fort Collins Housing Authority The Fort Collins Housing Authority (FCHA) is a quasi‐governmental agency created by the City of Fort Collins. The City Council appoints its Board of Commissioners, but has no involvement in its day‐to‐day operations. Historically, its primary mission was to own and operate public housing units and to operate the Section 8 Housing Choice Voucher program, which subsidizes rents in privately owned rental properties. These programs are generally the only affordable housing options available to households earning less than 30% AMI. Both programs require that the residents pay no more than 30% of their income towards rent, while the remainder of the rent is subsidized by HUD. Nationally, the public housing inventory has deteriorated as the HUD subsidy has been insufficient to fund the reserves required to address the long‐term capital needs of the properties. FHCA has recently received permission from HUD to participate in the Rental Assistance Demonstration (RAD) project. This will allow the residents of public housing to be relocated to other properties while retaining their rental assistance. Over the course of this plan, FCHA will reposition their public housing units and direct the funds to the development of additional affordable housing through its non‐profit subsidiary, The Villages, Ltd., whose mission is to develop, acquire and preserve affordable rental housing. 5.5. Financial Institutions Since the late 1970s, all federally insured financial institutions (commercial banks, savings banks, and savings and loan associations) have been subject to the Community Reinvestment Act (CRA). Under this law, such institutions have a continuing and affirmative obligation to help meet the credit needs of their entire communities, including low‐ and moderate‐income neighborhoods, consistent with safe and sound operation. The federal agencies that regulate these institutions are responsible for evaluating how well each one meets this obligation, and are required to take that record into account when the institution applies for expansion or restructuring, such as through a merger or acquisition. The evaluation takes into account the institution’s financial capacity and size, legal impediments and local economic conditions and demographics, including the competitive environment. The assessment does not rely on absolute standards. Institutions are not required to adopt specific activities or offer specific 41 types or amounts of credit. Each institution has considerable flexibility in determining how it can best help meet the credit needs of its entire community. Many lenders got into the business of mortgage lending to lower income first time homebuyers because of CRA requirements, but they now see targeted affordable and minority loans as good business. Most major banks now offer targeted loan products through more flexible loan terms or underwriting standards and subsidized interest rates or closing costs. Outreach, education and credit counseling are usually major components of these efforts. Many also offer lower down payment requirements or higher maximum debt‐to‐income ratios to low income borrowers. Construction and permanent loan financing for affordable rental developments is also covered in CRA reviews. Fort Collins Housing Authority and the local non‐profit housing providers have good relationships with area banks that allow them to access relatively low‐interest loans. However, these loans need to be as small a part of project financing as possible to keep rents as low as possible. 5.6. Housing Funders It frequently takes multiple layers of funding, from many different sources, to develop an affordable housing project. When providing funding for housing, the City frequently works with the following partners: Colorado Housing and Finance Authority (CHFA), Colorado Division of Housing (DOH), Department of Housing and Urban Development (HUD), Funding Partners for Housing Solutions. Because all funding sources have different requirements, it is important to coordinate the resources allocated to a project in the most efficient and cost‐effective manner. Frequently, the initial funding commitment by the City allows a project to leverage additional dollars from the other housing funders. 42 6. Recommended Policies These policies are designed to aid City decision‐making regarding affordable housing development in the community, and are related directly to the affordable housing goals and strategies presented in this Affordable Housing Strategic Plan (AHSP). These goals policies are not in any particular order. AHSP‐1 The City will allocate available financial assistance from its federal CDBG and HOME Entitlement Grant Programs and the City’s own AHF through a competitive process to the proposals that best address the priority needs identified in this Strategic Plan, according to the following priorities: (1) Increase the inventory of rental housing for households earning below 50% of the AMI (2) Preserve the long‐term affordability and physical condition of the existing stock of affordable rental housing (3) Increase housing and supportive services for people with special needs (4) Support opportunities to obtain and sustain affordable homeownership (5) Refine development incentives and expand funding sources. AHSP‐1.1 Of the total available funding, 65% of CDBG, 90% of HOME and 100% of the AHF will be available to projects that meet affordable housing goals. AHSP‐1.2 The City shall continue to implement objective criteria to aid in the analysis and comparison of the merits of the applications requesting City financial assistance through the competitive process. The objective criteria may include, but not be limited to: • Number/percentage of affordable units included in the project’s total housing mix • Number/percentage of households served at various income levels • Whether or not a special population is served • Leveraging ratio of City funds to other financial resources • Proximity to transit • Length of affordability commitment The criteria shall be periodically reviewed to determine if it contributes effectively to the analysis of the submitted proposals. 43 AHSP‐2 The City will maintain a package of non‐financial incentives (density bonuses, priority processing, etc.) designed to motivate developers to increase production of affordable housing, both for rent and for sale. The City’s package of non‐financial incentives shall be periodically reviewed and adjusted so that it maintains its effectiveness. AHSP‐2.1 The City will investigate specific incentives related to density bonuses, relaxed parking standards, and fee delays for affordable housing projects. AHSP‐3 The City will periodically review its Land Bank Program properties and determine if the timing is right for some of those properties to be offered for sale to provide additional affordable housing units to address the higher priority needs identified in this Strategic Plan. The proceeds from land sales shall be returned to the Land Bank program. AHSP‐3.1 If timing is appropriate, sell Land Bank properties to qualified developer and return proceeds to the Land Bank Program. AHSP‐4 The City will continue to examine and reform regulatory concerns that could be barriers to the production of affordable housing including but not limited to Inclusionary Housing Ordinances, commercial or residential linkage fees, etc. AHSP‐4.1 Support reform of statewide issues including legislation regarding construction defect litigation. AHSP‐4.2 Determine what options the City has to stimulate the production of multifamily for‐sale product given the statewide construction defect litigation issue that is contributing to an underproduction of this housing type. AHSP‐5 Create a focus group of developers, including both non‐profit and for‐profit, to determine effective incentives the City could implement to encourage low‐income housing development. AHSP‐6 Explore an expedited fee determination process for projects using Low Income Housing Tax Credits (LIHTC). 44 AHSP‐7 In the allocation of Private Activity Bonds (PABs) for affordable housing, preference will be given to projects that set aside some of their units for very low income households under 50% of AMI. AHSP‐7.1 For the term of this Affordable Housing Strategic Plan, the preferred use of the City’s annual PAB allocation from the state will be for the development or preservation of affordable housing. AHSP‐7.2 If there is competition for Private Activity Bond allocation, the City will give priority to developments that serve more households earning under 50% of AMI. AHSP‐3 The City will require City‐assisted affordable housing to carry a minimum 20‐year commitment to affordability. A higher priority for financial assistance shall be given to projects committing to be affordable for periods in excess of 40 years. AHSP‐4 Funding of affordable housing projects through the competitive process shall be in the form of loans so that when the loans are repaid, they will provide sources of revenue to allocate to future affordable housing projects. AHSP‐5 When feasible, the City shall commit its financial assistance early in a project’s planning process in order to help the developer leverage additional resources to cover the balance of their project’s financing needs. However, this early commitment shall be reviewed every six months to assure a project is making significant progress in securing additional funding, or the early commitment can be withdrawn. AHSP‐6 In the allocation of Private Activity Bonds (PABs) for affordable housing, preference will be given to projects that set aside some of their units for very low income households under 50% of AMI. AHSP‐6.1 For the term of this Affordable Housing Strategic Plan, the preferred use of the City’s annual PAB allocation from the state will be for the development or preservation of affordable housing. 45 AHSP‐6.2 If there is competition for Private Activity Bond allocation, the City will give priority to developments that serve more households earning under 50% of AMI. AHSP‐7 The City will only consider subsidizing projects containing units with rents affordable to households earning more than 50% of AMI if they also contain a significant number of lower income (less than 30% of AMI) units. AHSP‐88 Explore using the Downtown Development Authority’s (DDA) Green Grant and Façade Grant Programs as models to create a DDA sponsored Affordable Housing Grant Program, which would incentivize the inclusion of affordable units in DDA funded residential projects. AHSP‐99 Whenever a redevelopment project requesting Tax Increment Financing (TIF) assistance from either the DDA or Urban Renewal Authority (URA) plans to remove units which are affordable to households at the 50% AMI level or below, such units shall be replaced either as part of the redevelopment project or at another location. AHSP‐9.1 Require commercial projects that request TIF assistance from the URA to contribute funding towards affordable housing development. AHSP‐10 The City will periodically review its Land Bank Program properties and determine if the timing is right for some of those properties to be offered for sale to provide additional affordable housing units to address the higher priority needs identified in this Strategic Plan. The proceeds from land sales shall be returned to the Land Bank program. AHSP‐11 The City will continue to examine and reform regulatory concerns that could be barriers to the production of affordable housing including but not limited to Inclusionary Housing Ordinances, commercial or residential linkage fees, etc. AHSP‐11.1 Support reform of state‐wide issues including legislation regarding construction defect litigation. 46 AHSP‐11.2 Determine what options the City has to stimulate the production of multifamily for‐ sale product given the state‐wide construction defect litigation issue that is contributing to an underproduction of this important housing inventory type.AHSP‐10 Re‐evaluate fee structure that discourages construction of smaller homes such as plant investment fees, development review fees, and street and sidewalk improvements, amongst others. AHSP‐10.1 The City should streamline its fees and provide a comprehensive list of all City fees related to development projects early in the development review process. AHSP‐11 Investigate ways to remove barriers to construction of accessory dwelling units (ADUs) such as floor area ratio (FAR) limits, density requirements, and zone districts in which ADUs are allowed, amongst others. AHSP‐12 Develop incentive program to encourage private landlords to invest in their property in exchange for a 20‐year affordability restriction. AHSP‐13 Explore a preservation program that provides relief from the full building code for a period of time for the rehabilitation of existing housing units. The program should emphasize meeting building code standards that enhance basic safety features while exempting portions of the Green Building Code. AHSP‐14 Investigate further incentives for owners and renters to maintain the current available stock of affordable housing including mobile home parks. AHSP‐15 Implement selected rehabilitation programs identified in the Redevelopment Displacement Mitigation Strategy. AHSP‐16 Implement a tiered approach to supporting rehabilitation projects where the greater investment by the City requires a longer affordability period. AHSP‐17 Create a web portal consolidating information about all home improvement programs in Fort Collins. 47 AHSP‐18 Investigate a Limited Partnership/Shared Equity ownership structure to maintain the affordability of for‐sale units. AHSP‐192 The City will support community initiatives that identify homeless needs and develop action plans to reduce the homeless population in Fort Collins. The City will also participate in partnerships that explore solutions for homelessness. AHSP‐20 Explore design standards that better allow for aging in place for new construction. AHSP‐21 Investigate what barriers that prevent aging in place. AHSP‐22 Investigate unmet transit needs for special populations. AHSP‐23 Explore relaxing site upgrades for changes of use that serve community needs. AHSP‐24 Explore provision of temporary, supervised accommodations for those transitioning out of homelessness. AHSP‐25 The City will support projects that will produce affordable units to serve persons with disabilities, and cost‐burdened senior citizens. AHSP‐26 Support projects providing help, counseling, crisis intervention services, facilities, and housing to victims of domestic violence. AHSP‐13 The City will support projects that will produce affordable units to serve persons with disabilities, and “cost‐burdened” senior citizens. AHSP‐2714 The City will continue to provide loans to eligible households to cover down payment and closing costs up to the amount reasonably needed to make the units affordable based on the household’s income level. 48 AHSP‐1274.1 The City’s subsidy should will be in the form of a loan which is paid back in full when the house is either sold, transferred out of the buyer's name, rented, or if the buyer seeks another second lien (like a home equity loan) on the property. Added to the payment (which is also due at sale, rental or transfer) is 5% interest on the principal. AHSP‐28 Investigate infrastructure improvements that could make land more affordable to develop for homeownership opportunities. AHSP‐29 Promote partnerships with schools and universities to create awareness and participation. AHSP‐30 Expand homebuyer’s assistance to include credit unions. AHSP‐31 Recommend best use of Affordable Housing Capital Fund including but not limited to investing in additional land bank parcels, back filling fee waivers and investing in new housing. AHSP‐32 Consider employer assisted housing partnerships. AHSP‐33 Facilitate a regional conversation on how to best incentivize affordable housing development in Northern Colorado. AHSP‐34 Review HAPS recommendations such as excise tax, real estate transfer tax, amongst others. AHSP‐35 Explore Inclusionary Housing Ordinance. AHSP‐36 The City should explore options for creating a more permanent source of revenue for the Affordable Housing Fund and/or Affordable Housing Capital Fund such as an affordable housing sales tax. AHSP‐37 Explore the creation of a commercial linkage fee for affordable housing on all new commercial development in the City 49 AHSP‐3815 The City should strongly consider regular increases in the Affordable Housing Fund with every City budget cycle in order to provide additional financial resources to address the affordable housing goals identified in this Strategic Plan. AHSP‐16 The City should explore options for creating a more permanent source of revenue for the Affordable Housing Fund. AHSP‐17 The City should encourage affordable housing developers, when feasible, to use “Green Building” techniques that will help make the units more energy‐efficient and sustainable. AHSP‐3198 The City recognizes that market variation can affect policy outcomes. In developing policies and priorities that support the production of new rental affordable housing, the City shall consider the long term sustainability of the affordable inventory in both markets with high vacancy rates as well as low vacancy rates. Historically, a disproportionate number of units designated to serve households earning 60% ‐ 80% of the Area Median Income are easily absorbed in a market with high rents and low‐vacancy rates, but have difficulty competing with market rent housing in markets with higher vacancy rates. AHSP‐3189.1 In allocating scarce financial resources, the City must prioritize investments in housing for the lowest wage earners. Still policy will be used to incentivize housing for the entire affordable housing continuum from no income to 80% AMI. AHSP‐3198.2 In order to create policy promoting long‐term community revitalization and economic diversity, the City will explore using mixed income development strategies that include low‐income, moderate income and market rate units. Final Report Fort Collins Housing Affordability Policy Study Prepared for: City of Fort Collins Social Sustainability Department Prepared by: Economic & Planning Systems, Inc. September 5, 2014 EPS #133074 ATTACHMENT 4 Acknowledgements In addition to the many citizens who participated in public outreach through Open Houses and otherwise, the HAPS team would like to thank the following people for contributing to this work: City Technical Advisory Team Mary Pat Aardrup, Volunteer Coordinator, Environmental Services Mary Atchison, Director Social Sustainability Department Sue Beck-Ferkiss, Social Sustainability Specialist Josh Birks, Director Economic Health Department Carrie Daggett, Deputy City Attorney Ingrid Decker, Senior Assistant City Attorney Rebecca Everette, Associate Planner Clay Frickey, Planning Intern Cameron Gloss, Planning Manager Bruce Hendee, Assistant City Manager Jessica Ping-Small, Revenue and Project Manager, Finance Dianne Tjalkens, Social Sustainability Emily Wilmsen, Public Relations Coordinator Advisory Role Jeffrey Johnson and Troy Jones, Chair Curt Lyons and Terence Hoaglund Diane Cohn, Eloise Emery, and Tatiana Martin, Vice Chair Housing Affordability Policy Stakeholders Shannon Ash, Care Housing Michael Bello, Larkspur Homes, LLC Mark Benjamin, Crown Jade Design and Engineering, LLC Kristin Candella, Fort Collins Habitat for Humanity Giselle Carter, Code Inspector Fred Croci, Wolverine Management Group, Inc. Dave Derbes, Brinkman Partners Cheryl Distaso, Fort Collins Community Action Network Tom Dougherty, Dougherty Construction Michael Ehler, Realtec Kelly Evans, Neighbor to Neighbor David Everitt, Everitt Companies Vanessa Fenley, Homeward 2020 Jake Hallauer, Chrisland Commercial Real Estate, Inc. Gerry Horak, City Councilmember Ann Hutchison, Fort Collins Area Chamber of Commerce Nancy Jackson, Disabled Resource Services Kevin Jones, Fort Collins Area Chamber of Commerce Les Kaplan, Imago Enterprises Inc. Morgan Kidder, Journey Homes Kristin Krasnove Fritz, Fort Collins Housing Authority Steve Kuehneman, Neighbor 2 Neighbor Susan Larson, Fort Collins Housing Authority Mike Lenkten, McDermott Properties Courtney Levingston, City Planner Selina Lujan, City Program Assistant Christie Mathews, Colorado State University Housing Cathy Mathis, Fort Collins Housing Authority Dana McBride, Dana McBride Custom Homes Arthur McDermott, McDermott Properties Greg Miederna, HBA of Northern Colorado John Minatta, BV Townhomes Beth Mitchell, Citizen Jon Prouty, Laguanitas Companies Steve Ramer, Fort Collins Mennonite Fellowship Christopher Reilly, The Group Kelly Robenhagen, Office of Senator Kefalas Table of Contents 1.0 EXECUTIVE SUMMARY ............................................................................................ 1 1.1 Introduction ..................................................................................................... 1 1.2 Public Process ................................................................................................... 1 1.3 Findings ........................................................................................................... 2 1.4 Recommendations ............................................................................................. 4 2.0 ECONOMIC AND DEMOGRAPHIC CONDITIONS .................................................................. 8 2.1 Trade Area ....................................................................................................... 8 2.2 Demographics .................................................................................................. 9 2.3 Employment, Incomes, and Commuting ............................................................. 11 2.4 Housing Market ............................................................................................... 15 2.5 Housing Affordability ....................................................................................... 24 2.6 Housing Cost Components ................................................................................ 29 3.0 HOUSING ISSUES AND NEEDS ................................................................................. 32 3.1 Assessment of Need ........................................................................................ 32 4.0 BEST PRACTICES ................................................................................................ 38 4.1 Overview ....................................................................................................... 38 4.2 Affordable Housing Tools .................................................................................. 38 4.3 Summary and Conclusions ............................................................................... 50 5.0 RECOMMENDATIONS ............................................................................................ 51 5.1 Cost Reduction Options .................................................................................... 52 5.2 Regulatory Changes ........................................................................................ 54 5.3 Legislative Option ........................................................................................... 58 5.4 Other Considerations ....................................................................................... 58 5.5 Not Recommended .......................................................................................... 58 5.6 Alternative Funding Options.............................................................................. 60 A PPENDIX A: S UPPORTING T ABLES .................................................................. 66 Supporting Tables and Charts ................................................................................... 67 A PPENDIX B: I MPACT OF M INIMUM W AGE I NCREASE....................................... 68 A PPENDIX C: C OMPARABLE C OMMUNITY H OUSING P ROGRAMS ........................ 76 Comparable Community Housing Programs ................................................................ 77 A PPENDIX D: P UBLIC P ROCESS S UMMARY M ATERIAL ...................................... 87 Stakeholder Workshop 1 .......................................................................................... 88 Stakeholder Workshop 2 .......................................................................................... 91 Stakeholder Workshop 3 .......................................................................................... 94 Public Open House ................................................................................................ 101 List of Tables Table 1 Ownership Housing Gaps, 2000 and 2012 ......................................................... 26 Table 2 Rental Housing Gaps, 2000 and 2012 ............................................................... 27 Table 3 Occupancy Limits in University Towns ............................................................... 42 List of Figures Figure 1 Impact of Recommended/Not Recommended Policies ........................................... 4 Figure 2 Land Use Controls ............................................................................................ 6 Figure 3 Revenue-Generating Tools ................................................................................ 7 Figure 4 Fort Collins Economic Trade Area ....................................................................... 8 Figure 5 Population Trends in Surrounding Communities, 2000-2012 .................................. 9 Figure 6 Fort Collins Population Distribution by Age, 2000-2012 ....................................... 10 Figure 7 Fort Collins Household Distribution by Tenure, 2000-2012 ................................... 10 Figure 8 Comparative Wage and Salary Job Trends, 2000-2014 ....................................... 11 Figure 9 HUD Median Household Income Trends, 2000-2014............................................ 12 Figure 10 Average Annual Change in CPI-Adjusted Household Median Income, 2000-2012 .... 13 Figure 11 Fort Collins Economic Trade Area Commuting Patterns, 2011 ............................... 14 Figure 12 City of Fort Collins Residential Construction Trends, 2000-2013 ........................... 15 Figure 13 Housing Inventory, 2000 and 2012 .................................................................. 16 Figure 14 Normalized Ownership Housing Sale Price Trends, 2000-2013 ............................. 17 Figure 15 Annual Average CPI-Adjusted Sales Price Change, 2000-2013 ............................. 18 Figure 16 Rental Market Trends, 1995-2013 .................................................................... 19 Figure 17 CSU Student Population Trends, 2000-2013 ...................................................... 20 Figure 18 Graduate Student Assistantships by Income Level, 2010-2014 ............................ 20 Figure 19 CSU On-Campus Housing Development Pipeline ................................................. 21 Figure 20 Multifamily Development Pipeline ..................................................................... 23 Figure 21 Fort Collins Trade Area Affordability Gaps, 2000 ................................................. 24 Figure 22 Fort Collins Trade Area Affordability Gaps, 2013 ................................................. 25 Figure 23 Trends in Housing Cost Components, 2000-2013 ............................................... 31 Figure 24 Projection of Ownership Affordability Gap, 2022 ................................................. 34 Figure 25 Land Use Controls .......................................................................................... 41 Figure 26 Revenue-Generating Tools .............................................................................. 49 Figure 27 Impact of Recommended/Not Recommended Policies ......................................... 51 Figure 28 Trends in Housing Cost Components, 2000-2013 ............................................... 52 Figure 29 Affordability Gaps in Fort Collins and Surrounding Communities, 2013 .................. 63 Figure 30 Spectrum of Existing and New Sales (2013) Against Deed-Restricted Housing ....... 64 Economic & Planning Systems, Inc. 1 133074-Final Report 1.0 EXECUTIVE SUMMARY 1.1 Introduction This study was commissioned by the Office of Social Sustainability to provide a detailed assessment of housing affordability policy and needs for the City of Fort Collins. Among the triggers for this study were a general increased interest in understanding the status of the housing market, concerns over the lack of rental inventory (i.e. extremely low vacancy rate) and its affordability, and perceptions of the escalation in ownership housing prices. It is also not the first time the City has made an effort to characterize housing market conditions, issues or needs, and taken action to evaluate the implementation of various housing affordability policy solutions. More than a decade ago, the City completed a nexus study to identify the nexus between the construction of new market rate development and the demand for affordable housing,1 a land bank feasibility study2 that resulted in the creation of a land bank, and most recently, a social infrastructure gaps analysis,3 which included an estimate of housing inventory gaps. As concerns surrounding housing affordability have grown during the past decade, the City Council has identified it as a priority. Because it is anticipated that providing affordable housing to meet current and future needs will require a combination of legislative, cost-reduction, regulatory, and alternative funding strategies, EPS was contracted, along with Clarion Associates, to examine the current market, its needs, and identify whether policy tools or funding mechanisms could be implemented to address the issues and needs. The City currently has very little by way of housing policy or funding mechanisms to address any existing and known issues. As mentioned above, the City established a land bank over 10 years ago for the purpose of acquiring land and selling it to developers to provide subsidized housing. The City has also had an affordable housing incentive policy since 1988. The City does not, however, have any dedicated funding source, such as a sales, lodging, or property tax. It also does not collect any type of fee for an affordable housing fund. 1.2 Public Process The purpose was to involve the public and stakeholders in a process that opened dialogue to topics such as housing conditions and trends, as well as perceived issues and possible solutions. EPS prepared an overview of the findings and summary of best practices for presentation in the first of several public involvement activities. Working with Clarion Associates, EPS facilitated workshops to review the findings to date and best practices options, pertinent issues in adopting an ordinance, and open the discussion around which options might be appropriate for the City. 1 Fort Collins Affordable Housing Study: Working Paper 1, Impact of New Market Rate Residential and New Non-Residential Development on Local Affordable Housing Demand, December 1, 2001. BAE 2 Land Bank Feasibility Study, December 2000. BAE 3 Fort Collins Social Sustainability Gaps Analysis, Revised Draft April 15, 2014. BBC Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 2 Final Report The initial workshop was geared towards key stakeholders; participants included key housing developers and housing advocates with targeted invitations to ensure that appropriate stakeholders were involved. 1.3 Findings 1. Local employment growth has been stronger than regional growth, and incomes have barely kept pace with the cost of living. Fort Collins experienced strong growth from 2000 to 2007, did not lose as many jobs during the recession as the state and region did, and through 2013 recovered more quickly. While household incomes grew at an average of 1.9 percent per year, inflation increased by 2.2 percent per year during the same period. Overall, household incomes increased 30 percent while the cost of living has increased 36 percent. This implies that households with the median income had slightly lower buying power than they did 14 years ago. 2. Housing prices have risen faster than incomes, and the affordability gap for households with median income has widened. While household median incomes have risen 30 percent since 2000, housing costs have risen 43 percent in Fort Collins. This disparity is illustrated by an analysis of the gap between the purchasing power of a household earning the median income and the median housing sales price. Between 2000 and 2012, it expanded from approximately $43,000 to $54,000. If similar trends in housing prices and income are projected 10 years into the future, the affordability gap would widen to approximately $90,000, a 65 percent increase over the current gap. 3. Most of the increase in housing costs has been attributable to the rise in hard costs (labor and materials) and land. Average housing prices escalated from $194,900 in 2000 to $278,400 in 2013, an increase of $83,500 (42 percent increase), of which the escalation of land costs accounted for 37 percent of this increase ($30,600), hard costs accounted to 60 percent ($50,200), and city fees and taxes contributed to 9 percent ($7,500), while the remainder, a floating amount for other soft costs and developer profit, actually declined 6 percent. 4. In-commuting has increased while out-commuting has remained flat. Between 2003 and 2011, out-commuting from Fort Collins remained relatively flat and the number of in-commuters increased by more than 9,400 jobs. From the eight surrounding communities, in-commuting increased by approximately 5,000 jobs, of which more than 70 percent commute in from Greeley, Johnstown, Loveland, and Wellington, all of which are more affordable communities in terms of median housing sales prices. 5. Demand for rental housing is tightening the market, but also stimulating construction. Market demand for rental housing has driven citywide vacancy rates from more than 12 percent in early 2003 to 2 percent by the end of 2013 and driven monthly rental rates to record highs. As indicative of market pressure, the development pipeline reveals that Fort Collins is entering a substantial development cycle of multifamily rental housing construction. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 3 Final Report 6. Multifamily residential accounts for a majority of recent and proposed construction activity. Between 2000 and 2007, single-family units accounted for 70 percent of all annual construction activity. Since then, single-family has accounted for just 50 percent of activity. In several years since the recession, multifamily construction (mainly rental) has accounted for 60 to 70 percent of all activity. In total, there are more than 4,800 multifamily units in various stages of development and planning, according to the City’s Building Department. If all of them are built, it would increase the supply of rental units by 19 percent. 7. The threat of construction defects claims has had a material impact on multifamily for-sale housing development. While the magnitude of effects caused by the threat of construction defects claims on residential construction activity is difficult to quantify, the perception of the issue represents a reality. It affects communities throughout the state and is complicated by the entanglement of legal, financial, and insurance issues. Although not the sole cause for the lack of for-sale multifamily housing construction, developers and builders view the risk of exposure to lawsuits as a significant deterrent to developing projects. Today, Fort Collins is not alone in experiencing a shortage of for-sale multifamily construction and it is also not the only community to perceive this issue to be closely linked to the cause for the lack of for-sale multifamily construction. 8. Approximately 1,000 ownership households are cost-burdened. An analysis of the distribution of housing units by income level and households by income level reveals that there are approximately 400 households (with a mortgage) earning less than $25,000 and spending more than 30 percent of their income on housing. There are also approximately 580 households earning between $25,000 and $50,000 who are cost- burdened. 9. Between 1,250 and 2,400 renter households are cost-burdened. An analysis of the distribution of rental housing units and households by income level reveals a total of nearly 8,000 renter households earning less than $25,000 who spend more than 30 percent of their gross household income on rent. A separate analysis of CSU’s student population revealed that there are between 5,740 and 6,885 student renter households and who fall into the $25,000 income category. Accordingly, this portion of renter households as well as the small portion (fewer than 200) who earn more than $25,000 are netted out of the total cost-burden estimate. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 4 Final Report 1.4 Recommendations Following are EPS’ seven recommendations based on the findings and analysis. Detailed explanations are provided in Chapter 5.0. Figure 1, also presented in Chapter 5.0, illustrates the estimated impact (in gradients of low, medium, or high) that each recommendation is likely to have on the City’s four issues related to housing affordability. Those four issues are: 1) wages not keeping pace with housing costs; 2) housing in other communities is meeting the affordability needs for the City’s workforce; 3) need for affordable ownership housing; and 4) the need for affordable rental housing. Of the recommendations, disposition of the City’s land bank properties and working for a legislative solution to the threat of construction defects claims are likely to have the greatest positive impact on any of these 4 issues. Other options are shown in gray, as they represent options not recommended at all (but provided as acknowledgement of extensive discussions during the stakeholder process) or not recommended at this time (given general political concerns). As illustrated, the revenue- generating options, i.e. excise tax, time-limited sales or property tax, would have the largest impact of all options being considered. Each option is discussed in greater detail in Chapter 5.0. Figure 1 Impact of Recommended/Not Recommended Policies Re/Examine MarginalFeeStructure FeeWaiversfor AffordableProjects PublicFinancing BasedIncentivePolicy Affordable HousingEasements Reductionof MinimumHouseSize DispositionofCity's LandBankProperties SupportConst. DefectClaimReform CodeͲBased IncentivePolicy Modificationsto 3ͲUnrelatedRule RevenueͲGenerating FundingMechanisms Inclusionary HousingOrdinance Commercial Linkage HOUSINGINOTHERCOMMUNITIESISMEETING AFFORDABILITY NEEDSFORCITY'SWORKFORCE;I.E.INͲCOMMUTINGISUP NEEDFORAFFORDABLEOWNERSHIPHOUSING ISSUE RECOMMENDATION NEEDFORAFFORDABLERENTALHOUSING WAGES NOTKEEPINGPACEWITHHOUSINGCOSTS IMPACT Recommended NotRecommended High Med Low Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 5 Final Report 1. Re-examine marginal fee structures. EPS recommends that the City re-examine its permit, plan check, and capital expansion fee structures to ensure equitability and appropriateness as related to the proportionate impact on the construction of smaller units. The objective of such an effort would be to incentivize developers to construct smaller, i.e. potentially more affordable, homes. 2. Fee waivers for affordable housing. While the City should not over-commit General Fund resources, EPS recommends the City (in combination with the evaluation of alternative funding sources) re-examine its ability to fund fee waivers for affordable housing projects. EPS also recommends that the City reevaluate its definition of applicable affordable housing to include a wider spectrum of AMI levels more commensurate with standard affordable housing definitions (i.e. workforce housing). 3. Establish a public financing-based incentive policy. EPS recommends that the City consider a limited version of an incentives ordinance policy that is negotiated on a case by case basis. The policy’s provisions would be triggered by the use of public financing, e.g. tax increment finance, etc., (not fee waivers for affordable housing). At the center of this recommendation is the notion of a quid pro quo, where if a development receives something from the City, it should provide a public good in return. As such, the City would need to establish among its criteria for projects receiving tax increment finance, sharebacks, or another type of public financing that affordable housing is defined as a “public good”. 4. Establish affordable housing easement/agreements. EPS recommends the City pursue a policy that provides for an easement or an agreement that is recorded in property records, which effectively bind future owners of certain manufactured home parks to preserve existing uses. This recommendation could potentially also be more broadly applied as a tool to preserve other types of affordable housing. EPS also acknowledges that there may be a multitude of different more market-based solutions, policies, or strategic direction that the City can explore with regard to this housing need. 5. Reduce the minimum allowable home size. EPS recommends that the City reevaluate its basis for the minimum ownership dwelling unit size and adjust it downward to allow greater flexibility to the development industry in providing smaller and more affordable housing units. 6. Identify a disposition strategy for the City’s land bank properties. EPS recommends that the City, having fulfilled the land bank’s intent, put at least one of its properties into play for affordable housing. Either of two options is advised: a) issue an RFP for a site’s development; or b) convert the land bank into a land trust. Both options allow for the participation of various non-profit housing partners. 7. Work with elected officials to remedy the threat of construction defect claims. EPS encourages the City of Fort Collins to engage its elected officials and state representatives in the pursuit of a remedy to the issues surrounding construction defects claims in particular during the next legislative session. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 6 Final Report 1.4.1 Land Use Controls The following is a summary of several common regulatory tools used by communities throughout the U.S. to address housing affordability issues. Please refer to Chapter 4.0, page 41 for more detail. Figure 2 Land Use Controls InclusionaryHousing Ordinance IncentiveZoning Ordinances CommercialLinkage ResidentialLinkage Whatisit? භAddresseshousinggapsfrom inflatedhousingprices භRequiresapercentofhousingbe providedataffordablelevels භRespondstodevelopmentand redevelopmentpressurerequesting specialpermits භRequiresresidenƟal/commercial developmenttoprovideaffordable housingand/orpublicamenities භAddresseshousingneedby commercialgrowth භRequirescommercialdevelopment toprovidehousingunits(orpaya fee)basedonnewemployees generated භAddresseshousingneedfrom marketforlargesecondͲhomes භDeveloperprovidesemployee housingunitsorpaysfeeinͲlieu Whatisatypicalaffordable housingbuildrequirement? 10%to30% 10%to20% 20%to100%ofemployeegeneration bylanduse 10%to20% Whatincentivesareused? Bonusdensity,feewaivers,expedited review,parkingreduction,unit equivalency;publicfunding assistance Densitybonus,reducedparking requirement,reducedopenspace,or anyvariancetozoning Bonusdensity;feewaivers Bonusdensity,feewaivers,expedited review,parkingreduction,unit equivalency Aretherealternative satisfactionoptions? PaymentoffeeinͲlieu;offsiteunits; housingcertificates;combination IH/ROunitsandvoluntaryadoption ofRETA PaymentoffeeinͲlieu PaymentoffeeinͲlieu;land dedication;offsiteunits;deedͲ Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 7 Final Report 1.4.2 Revenue-Generating Tools The following is a summary of several common revenue-generating tools used by communities throughout the U.S. to address housing affordability issues. Please refer to Chapter 4.0, page 49 for more detail. Figure 3 Revenue-Generating Tools ExciseTax Dedicated SalesTax Occupational PrivilegeTax (HeadTax) UseTax(on Construction Materials) Dedicated LodgingTax Document RecordingFee RETT/RETA Dedicated PropertyTax Whatisit? Residentialand commercial developmentpaya feepersqftofnew floorarea Additional assessmenton taxablegoods Taxassessedper workerpermonth Additional assessmenton construction materials Additional assessmenton lodging Additionalfeeper document Advaloremtax (RETT)orvoluntary assessmenton saleofhome (RETA) Additionalmill levy Whatisatypical assessment? $0.50to$13.00 persqft 0.25%to0.50% $4to$10per monthperworker 0.35%to3.00% 2%to4% $3perdocument 0.1%to2.0% 0.17to0.80mills Howisitadministered? Needcollection Economic & Planning Systems, Inc. 8 133074-Final Report 2.0 ECONOMIC AND DEMOGRAPHIC CONDITIONS Housing affordability policy is best established when it is grounded on an analysis of local and regional economic and demographic conditions. The content of this chapter is tailored to provide a clear picture of the economic and demographic context. Using data to characterize trends in population, employment, incomes, commuting, housing market conditions and pricing, an analysis of housing gaps and cost components synthesizes much of the preceding analysis, which identifies and characterizes the magnitude of need with respect to housing affordability policy. 2.1 Trade Area As a starting point, the trade area was determined based on commuting patterns, as detailed later in this chapter. Figure 4 illustrates which 8 communities function as a regional economic unit, characterized by commuting to and from Fort Collins. Figure 4 Fort Collins Economic Trade Area Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 9 Final Report 2.2 Demographics Although not a comprehensive review of the demographic trends and conditions of Fort Collins, this section presents a few of the higher-level series of information that frame the context for the following housing affordability policy analysis. It also serves as a basic foundation on which to build an understanding of the needs of the distressed populations. Taking cues from other research conducted simultaneously to this project, this section identifies those demographic cohorts (i.e. distressed populations) which have surfaced through the HAPS public involvement process. 2.2.1 Population and Households Figure 5 illustrates the increase in population for Fort Collins and the surrounding municipalities. To illustrate comparable magnitudes of growth in these communities, this graphic displays the growth of each population in proportion to its 2000 level. The population of Fort Collins has grown by 25 percent over its 2000 base, or by nearly 30,000 persons, which reflects annual growth of nearly 2,500 persons. By contrast, Johnstown has grown more than 170 percent above its 2000 level, but it has only grown by approximately 6,800 persons and 560 persons per year. The highest level of growth was experienced by Timnath, which reached more than 400 percent of its 2000 level, though its population grew from approximately 200 to 1,200 between 2000 and 2012. The lowest growth was experienced by Berthoud, which grew by 9 percent over its 2000 level, an increase of just 400 persons. Figure 5 Population Trends in Surrounding Communities, 2000-2012 Ͳ50% 0% 50% 100% 150% 200% 250% 300% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 PopulationGrowthas%of2000Levels Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor FortCollins Source:U.S.Census;Colorado DepartmentofLocalAffairs;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 10 Final Report A closer focus at Fort Collins’ growth (shown in Figure 6) by a distribution of age groups illustrates several notable points of demographic change. The percent of population between the ages 45 and 75 years increased from 21 percent to 27 percent between 2000 and 2012. The City’s population of 20 to 34 year-olds also increased, though slightly from 33 to 34 percent. In actual numbers, 45 to 75 year-olds accounted for more than 50 percent of the total population growth between 2000 and 2012, and 20 to 34 year-olds accounted for 37 percent of total population growth. There were declines in the number of 10 to 14 year-olds and 35 to 44 year-olds. Figure 6 Fort Collins Population Distribution by Age, 2000-2012 The portion of renter-occupied households has increased from 43 percent in 2000 to just over 44 percent in 2012, which is indicative of a population whose younger cohorts have become a greater presence, as shown in Figure 7. Likewise, the portion of owner-occupied households has decreased from approximately 57 percent in 2000 to less than 56 percent in 2012. Figure 7 Fort Collins Household Distribution by Tenure, 2000-2012 0% 5% 10% 15% 20% Under5 years 5to9 years 10to14 years 15to19 years 20to24 years 25to34 years 35to44 years 45to54 years 55to59 years 60to64 years 65to74 years 75to84 years 85years andover FortCollinsPopulationDistributionbyAgeCategory 2000 2010 2012 Source:U.S.Census;Colorado DepartmentofLocalAffairs;Economic&PlanningSystems 57.1% 42.9% 55.8% 44.2% 55.7% 44.3% Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 11 Final Report 2.3 Employment, Incomes, and Commuting Population growth is largely fueled by employment and income growth. This section provides details on the growth in wage and salary jobs in Fort Collins, median household incomes as defined by the Department of Housing and Urban Development, and commuting patterns between Fort Collins and the surrounding communities. 2.3.1 Wage and Salary Jobs According to information from the Colorado Department of Labor and Employment, total wage and salary employment in the Fort Collins-Loveland MSA increased by an average of 1.5 percent per year between 2000 and 2014.4 The MSA experienced generally stronger growth in the years leading up to the Great Recession,5 did not lose as many jobs during the recession, and recovered more quickly than other geographies. By contrast, the state’s employment has increased by 0.9 percent since 2000 and the nation’s employment by an average of 0.3 percent. In the Fort Collins-Loveland MSA, nearly 4,300 jobs were lost following the recession, the state lost 121,000 jobs, and the nation lost nearly 7.7 million jobs. Whereas the Fort Collins-Loveland MSA recovered its pre-recession employment peak in mid-2012, the state had only recovered its pre-recession peak by the end of 2013, and the nation had not recovered its pre-recession peak as of March 2014. Figure 8 Comparative Wage and Salary Job Trends, 2000-2014 4 The BLS reports county-level seasonally-adjusted employment information tracked by individual state departments of labor and employment. The information it reports are wage and salary jobs (i.e. those jobs for which unemployment insurance records are filed by employers). Sole proprietors (i.e. the self-employed, as typically represent 20 to 30 percent of a total workforce) are not included in this overview. 5 According to the National Bureau of Economic Research, the official arbiter of U.S. recessions, the Great Recession as it has been called, began in December 2007 and ended in June 2009. 80% 100% 120% 140% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EmploymentTrendsasaPercentof2000Levels Recessions FortCollins/LovelandMSA StateofColorado Nation Source:BLS; ColoradoDepartmentofLabor&Employment;NationalBureauofEconomicResearch;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 12 Final Report While the engine of employment growth in the Fort Collins-Loveland MSA is strong, household incomes have not kept pace with the cost of living. Figure 9 illustrates a 14-year trend in household incomes in constant and inflation-adjusted dollars, using data from the Department of Housing and Urban Development (HUD).6 While household incomes have grown (in constant dollars) at 1.9 percent per year on average, inflation has increased at 2.2 percent per year.7 With an adjustment for cost of living, household incomes have actually declined by 0.3 percent per year since 2000, which implies that households with the median income have lower buying power than they did 14 years ago. Figure 9 HUD Median Household Income Trends, 2000-2014 6 Data are presented using an extrapolation of the standard 4-person household metric provided by HUD. The household incomes shown are calibrated to the average household size of 2.5 persons in Fort Collins. 7 Using the Bureau of Labor Statistics consumer price index for western urban consumers. $47,900 $49,500 $51,700 $55,100 $56,600 $58,900 $58,900 $58,900 $63,800 $63,900 $63,700 $65,300 $66,100 $64,500 $62,500 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 InflationͲAdjustedIncome MedianHouseholdIncome(2.5Ͳpersons) Source:U.S.DepartmentofHousing andUrbanDevelopment;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 13 Final Report Data from the U.S. Census and BLS indicate that household median incomes have fallen when adjusted for cost of living at the national and state levels slightly more than for households in the City of Fort Collins, shown in Figure 10. Inflation-adjusted incomes have also fallen for Greeley, Longmont, and Loveland. Berthoud, Johnstown, Timnath, Wellington, and Windsor have all had higher annual average income growth than Fort Collins. It should be noted that these locations are those from which in-commuting has increased significantly, and part of the trend is due to the higher income household working in Fort Collins but living and commuting from surrounding communities. Figure 10 Average Annual Change in CPI-Adjusted Household Median Income, 2000-2012 Ͳ0.7% Ͳ0.8% Ͳ0.6% 0.2% Ͳ0.5% 0.9% Ͳ1.2% Ͳ0.7% 3.4% 0.9% 1.0% Ͳ2.0% Ͳ1.0% 0.0% 1.0% 2.0% 3.0% 4.0% Source:U.S.Census;BLS; Economic&PlanningSystems AnnualCPIͲAdjused MedianIncome Changes,2000Ͳ2012 Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 14 Final Report 2.3.2 Commuting Patterns Between 2003 and 2011, out-commuting from Fort Collins remained relatively flat, and the number of in-commuters increased by more than 9,400 (illustrated in Figure 11). From the surrounding communities illustrated below, in-commuting increased by approximately 5,000 jobs. That is, approximately 5,000 new jobs to the Fort Collins workforce chose to live elsewhere, whether for lifestyle preference or economic reasons. Of that estimate, nearly 87 percent commute in from Greeley, Loveland, Wellington, and Windsor. Figure 11 Fort Collins Economic Trade Area Commuting Patterns, 2011 Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 15 Final Report 2.4 Housing Market This section documents trends and conditions in for-sale and rental housing. Where available, housing market trends and conditions in surrounding communities are evaluated, particularly in the ownership housing market. 2.4.1 Residential Construction Trends Between 2000 and 2007, single-family detached housing construction accounted for an average of nearly 800 units per year, according to data obtained from the City’s Building Department. On average, single-family construction accounted for nearly 70 percent of all units built during the year. Since 2008, however, single-family construction has averaged approximately 330 units per year and accounted for just 50 percent of units built. The increased predominance of multifamily unit construction seems to be fueled in part by a sharply declining rental housing vacancies, as well as demands placed on the market by an increase in CSU student population (both issues are explored below). Another possible pressure on the rental market was the spike in foreclosures during the recession, which pushed some households from ownership to rental. Additionally, since passage of HB-1394 in 2010, which provided clarification regarding contractor general liability insurance and gave rise to greater risk of construction defects claims on for-sale multifamily projects (i.e. condominiums), the predominance of multifamily construction has been rental housing, and as also discussed later in this chapter, there continues to be a large pipeline of multifamily rental housing coming on line. Figure 12 City of Fort Collins Residential Construction Trends, 2000-2013 985 1,144 1,224 973 987 735 458 408 264 153 177 258 469 650 597 748 312 425 308 409 320 211 524 79 66 456 674 781 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 NewResidentialUnitConstruction Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 16 Final Report 2.4.2 Housing Inventory The distribution of housing by tenure, shown in Figure 13, also reveals the general shift toward rental housing. Between 2000 and 2012, the portion of owner-occupied housing dropped from 55 to 53 percent, and the portion of renter-occupied housing increased from 41 to 42 percent. On average, while overall housing unit inventory grew by 1.8 percent per year between 2000 and 2012, owner-occupancy increased at 1.6 percent, and renter-occupancy increased at 2.0 percent per year. Figure 13 Housing Inventory, 2000 and 2012 26,175 31,583 19,707 25,095 1,884 2,744 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2000 2012 OwnerͲOccupied RenterͲOccupied Vacant Source:U.S. Census;Economic&Planning Systems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 17 Final Report 2.4.3 Housing Costs This section examines the general trends in the cost of housing in the for-sale and rental markets. It includes collection and analysis on a variety of data sources, including the local multiple listing service to gather records of the sale of new and existing for-sale housing, as well as information from the Colorado Division of Housing on records of rental housing monthly rents and vacancy rates. 2.4.3.1 For-Sale Housing Given available data, the following chart presents information on the relative increases in average housing sales prices for Fort Collins and a selection of surrounding communities.8 Overall, sales prices have risen by 2.8 percent per year in Fort Collins, or an overall increase of 42 percent between 2000 and 2013. By comparison to surrounding communities, Fort Collins experienced the second highest total increase in housing prices and Windsor experienced the highest escalation. Figure 14 Normalized Ownership Housing Sale Price Trends, 2000-2013 As a point of comparison to the inflation-adjusted wages, which reveal a comparison of household buying power in 2000 versus 2012, the following Figure 15 illustrates the annual average change in housing sales prices for Fort Collins and the surrounding communities when adjusted for cost of living increases. 8 Figure 14 shows the relative, or normalized, increases in housing sales prices. This provides a point of relative increase for subsequent years’ sales prices to a base year, defined as 2000 in the chart. The Figure provided in the Appendix A, Figure 1, shows the actual prices. While showing the actual sales prices, such a chart does not reveal the same point of comparison. 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 OverallSalesPriceas%of2000SalesPrice FortCollins(42.8%) Berthoud(35.6%) Greeley(24.0%) Johnstown(42.2%) Longmont(30.3%) Loveland(32.5%) Wellington(27.0%) Windsor(60.9%) Source:ElevationRealEstate;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 18 Final Report On average, housing sales prices have increased at 0.5 percent per year when adjusted for inflation, compared to a decline of 0.6 percent per year in household median income. In Berthoud, where household incomes increased by 0.2 percent per year, inflation-adjusted sales prices increased by 0.1 percent. In Johnstown, also a community with relatively high in- commuting to Fort Collins, incomes increased by an average of 0.9 percent per year when adjusted for inflation and housing prices increased by 0.5 percent per year. In Loveland, where a predominance of in-commuting to Fort Collins occurs, inflation-adjusted incomes had decreased by 0.7 percent per year, but housing sales prices had remained fairly flat when adjusted for cost of living increases. By contrast, in Windsor, where housing prices increased by 1.5 percent per year on average, incomes also increased by 1.0 percent per year. Overall, the dynamics of affordability shifted in Fort Collins and the surrounding communities. While housing prices in Loveland, Fort Collins, and Windsor became somewhat less affordable, housing prices in Berthoud, Greeley, Johnstown, and Wellington actually became more affordable to households earning the median income when adjusted for inflation. Figure 15 Annual Average CPI-Adjusted Sales Price Change, 2000-2013 0.5% 0.1% Ͳ0.6% 0.5% Ͳ0.2% 0.0% Ͳ0.4% 1.5% Ͳ1.0% Ͳ0.5% 0.0% 0.5% 1.0% 1.5% 2.0% FortCollins Berthoud Greeley Johnstown Longmont Loveland Wellington Windsor Source:ElevationsRealEstate; Economic&PlanningSystems AnnualCPIͲAdjused SalesPrice Changes,2000Ͳ2013 Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 19 Final Report 2.4.3.2 Rental Housing The analysis of rental housing market conditions focused on specific concerns surrounding the availability of inventory and the pipeline of multifamily (student-oriented versus other rental product), as well as how CSU’s student population affects demand for rental housing in general. A few of the questions this section addresses are: x How big is the CSU student population, and how much is it growing? x What the impact of CSU’s student body on rental housing demand? x What is the impact on the rental housing gaps analysis? x What is the university doing about their on- and off-campus housing needs? As indicated previously, the rental market has experienced a tightening since 2003, as the citywide vacancy rate has sharply declined from more than 12 percent in early 2003 to 2 percent toward the end of 2013,9 as shown in Figure 16. Figure 16 Rental Market Trends, 1995-2013 Rental vacancy rates below 5 percent are generally sufficient to stimulate both increases in rental rates and the construction of new units. As discussed later in this chapter, there is a considerable pipeline of rental housing in the pipeline, and rental rates have increased at a higher rate since approximately the beginning of 2010, when the vacancy rate dropped below 5 percent. 9 According to more recent sources, the vacancy rate has continued is decline to less than 2 percent through the first half of 2014. 0% 2% 4% 6% 8% 10% 12% 14% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2007 2008 2009 2010 2011 2012 2013 AverageMonthlyRent VacancyRate Source:CDOH;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 20 Final Report 2.4.4 Student Housing One component of rental housing demand is Colorado State University’s (CSU) student population, shown below in Figure 17. The trend presented here, since 2000, illustrates that CSU’s student body has grown at 1.2 percent per year, a rate which it has maintained since 2000 – reflecting growth in the student body of approximately 300 students per year (approximately 270 undergraduates per year and approximately 30 graduate/professional students per year). Figure 17 CSU Student Population Trends, 2000-2013 Relevant to the analysis of rental housing gaps, detailed later in this chapter, EPS also compiled research to estimate the number of graduate students that do or do not fall into the category of households earning $25,000 per year or less. The analysis of available data shows that nearly 10 percent of students holding graduate assistantships are earning above $25,000. Figure 18 Graduate Student Assistantships by Income Level, 2010-2014 23,098 23,934 24,735 25,042 25,382 24,947 24,670 24,983 25,011 25,413 26,356 26,735 26,769 27,034 0 5,000 10,000 15,000 20,000 25,000 30,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Grad./Prof. Undergraduates Source:CSU,InstitutionalResearch;Economic &PlanningSystems 0 500 1,000 1,500 2,000 2,500 2010 2011 2012 2013 2014 $25,000orhigher Below$25,000/Year Source:CSU, InstitutionalResearchDept.;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 21 Final Report 2.4.4.1 On-Campus Student Housing CSU is also working to address its own housing needs. Because undergraduates are required to live on-campus during their first year, CSU plans to increase its on-campus bed capacity by nearly 2,000 over the next 7 years –from a total of 5,600 beds in 13 residential halls to more than 7,500 by 2020.10 The university also has off-campus capacity of 1,200 beds in apartments, for a total of 6,800 beds in its current capacity.11 According to the 2013 Student Housing Action Plan (SHAP), CSU states that “most, if not all, of the housing needs will be met in the next five to seven years by the increase in on-campus housing and the…student-oriented multifamily bedrooms currently under construction or in the development process.”12 At the moment, that number of student-oriented bed capacity totals nearly 5,200. Although it is commonly understood that the university aspires to reach a total student body of 36,000, it is not likely to reach that goal until 2040 at its historic rate of growth. Figure 19 CSU On-Campus Housing Development Pipeline 10 This compares to the average increase in undergraduates per year of 270. Additionally, according to CSU staff, it is estimated that between 20 and 25 percent of undergraduates return to living on campus the following year (the current figure is closer to 20 percent). As such, CSU estimates that currently 30 percent of the beds occupied in the apartments are undergraduates. The apartments are currently occupied at 99 percent. 11 According to CSU staff, the apartments are largely occupied by upper-classmen, not undergraduates, as they are required to live in the dormitories on campus during their first year. 12 Student Housing Action Plan, p. 10. 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 2011Ͳ12 2012Ͳ13 2013Ͳ14 2014Ͳ15 2015Ͳ16 2016Ͳ17 2017Ͳ18 2018Ͳ19 2019Ͳ20 CSUStudentHousingProgramCapacity 1stYear StudentUnit Demand Total Program Capacity Source:CSUStudentHousingActionPlan,2013;Economic&PlanningSystems LorySite: +600beds Ͳ400offline 4thFloors: +200 net +240beds NorthAggie: +1,000beds Ͳ150offline Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 22 Final Report 2.4.4.2 Off-Campus Student Housing Based on information from the SHAP and from staff at the university’s Institutional Research Division, approximately 75 percent of the current student body (an estimated 20,250 students) lives off-campus. Of this, it is estimated that approximately 10 percent of off-campus students reside outside of Fort Collins (approximately 2,025 students), and that within the City of Fort Collins, approximately 5 percent of off-campus students live at home (accounting for approximately 1,000 students). Approximately 17,210 students are estimated to reside in rental units throughout the City. Data from the Institutional Research Division exist but are insufficiently detailed to determine precisely how many units these 17,210 students occupy. As such, EPS estimates that these off-campus students generate demand for between 5,740 and 6,885 units (assuming either 3.0 or 2.5 students per rental unit).13 2.4.5 Development Pipeline Information from the City of Fort Collins Department of Community Development and Neighborhood Services, dated July 2014, breaks down the pipeline of multifamily housing developments into categories of student-oriented and non-student-oriented projects, as shown in Figure 20. In total, there are more than 4,800 units (over 9,600 beds) in various stages of development and planning, according to the City’s information. If all of them are built, it would increase the City’s supply of rental units by 19 percent (4,827 divided by 25,095 units in 2012). 2.4.5.1 Student-Oriented Rental Development The City’s information also indicates that there are a total of 1,843 student-oriented units (5,193 beds) in various stages of development, including the categories: approved, under construction, recently-completed, approved PDP, submitted, under review, and conceptual or preliminary. As shown, approximately 1,149 units (3,193 beds) fall into the first category of approved/under construction/recently completed, and in addition to another 312 units (1,115 beds) that have either been approved or are under review, there are another 413 units (885 beds) proposed in conceptual or preliminary projects. 13 Given the 3-unrelated persons occupancy rule, which applies uniformly throughout the City, EPS does not believe that an average of greater than 3.0 students per unit is an appropriate factor for determining the number of units occupied in the City by students. Discussions with CSU staff indicate that the factor is more realistically between 2.5 and 3.0, even given the likelihood that some students could be living with more than 3 unrelated peers in units without an exemption. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 23 Final Report 2.4.5.2 Other Market-Rate Rental Development According to the City’s data (as of July 2014), there are a total of 3,136 other units (4,727 beds) in various stages of development, including the categories: approved, under construction, recently-completed, approved PDP, submitted, under review, and conceptual or preliminary. As shown, approximately 1,017 units (1,505 beds) fall into the first category off approved/under construction/recently completed, and in addition to another 1,406 units (2,377 beds) that have either been approved or are under review, there are another 713 units (845 beds) proposed in conceptual or preliminary projects. Figure 20 Multifamily Development Pipeline 3,193 1,505 194 2,157 921 220 1,149 885 845 1,017 79 1,306 233 100 413 713 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 StudentͲOriented Other StudentͲOriented Other StudentͲOriented Other StudentͲOriented Other Approved/Under Construction/Recently Completed ApprovedPDP/Submitted UnderReview Conceptual/Preliminary Beds Units Source:CityofFortCollins,Department ofCommunityDevelopment&NeighborhoodServices;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 24 Final Report 2.5 Housing Affordability The definition of housing affordability lies at the intersection of housing costs and household incomes. 14 This section provides a juxtaposition of the affordable housing purchase price for a household earning the area median income (AMI) against median housing price levels for Fort Collins and the surrounding communities. 2.5.1 Community Comparison Using metrics for lending terms appropriate to the markets of 2000 and 2013, the following figures illustrate the extent of affordability gaps between what households could afford to buy and the median-priced house in 2000 and in 2012. In 2000, shown in Figure 21, the gap between what a household in Fort Collins could afford and the median of what was available was $43,500. While gaps for local households in Johnstown, Loveland, Timnath, and Wellington also existed, they each offered less expensive housing options than Fort Collins. Figure 21 Fort Collins Trade Area Affordability Gaps, 2000 14 Affordability is defined as a household spending no more than 30 percent of its income on housing, including payments on principal, interest, taxes, and insurance. EPS also includes a monetary assumption for HOA dues for analyses in markets where this is common, such as Fort Collins. The assumptions used in this analysis reflect average lending terms and conditions for each time period evaluated, 2000 and 2012. For 2000, the assumptions are: 8 percent mortgage interest rate; 30-year fixed rate mortgage, 5 percent downpayment; property taxes of 1 percent of total housing value per year; insurance of $400 per year; and HOA dues of $100 per month. For 2012, the assumptions are: 5 percent mortgage interest rate; 30-year fixed rate mortgage, 5 percent downpayment; property taxes of 1 percent of total housing value per year; insurance of $500 per year; and HOA dues of $150 per month. $124,500 $151,200 $98,500 $144,400 $145,800 $132,600 $146,000 $135,500 $158,000 $43,500 $63,651 $36,500 $22,750 $40,775 $28,850 $9,000 $22,125 $19,615 $168,000 $214,851 $135,000 $167,150 $186,575 $161,450 $155,000 $157,625 $177,615 $0 $50,000 $100,000 $150,000 $200,000 $250,000 FortCollins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor AffordablePurchasePrice Gap MedianSalesPrice Source:U.S. Census;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 25 Final Report As previously noted, Fort Collins became slightly less affordable to households earning median income when adjusting incomes and the price of housing by CPI. Using a different set of metrics, Figure 22 illustrates that by 2013, the affordability gap for Fort Collins had widened for households earning median income. Berthoud, Greeley, Johnstown, and Wellington all became more affordable when looking at incomes and housing prices adjusted for inflation. The following figure for affordability gaps in 2013, compared to the previous figure, confirms that the affordability gaps of those communities decreased during this time were actually eliminated in the cases of Johnstown and Wellington. In conjunction with the information on commuting patterns, it is interesting to note that where housing has become relatively more affordable to households are communities responsible for the greatest increases of in-commuting. Fort Collins working households appear to be choosing to live outside of Fort Collins, based on either lifestyle preferences or purely economic (i.e. housing affordability) reasons. Figure 22 Fort Collins Trade Area Affordability Gaps, 2013 $190,600 $261,900 $151,800 $273,500 $207,300 $200,800 $385,800 $256,700 $303,400 $54,400 $8,000 $15,575 $42,850 $18,200 $245,000 $269,900 $167,375 $232,513 $250,150 $219,000 $363,671 $215,600 $297,904 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 FortCollins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor AffordablePrice Gap MedianSalesPrice Source:U.S. Census;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 26 Final Report 2.5.2 Gap Analysis This section presents an estimate of housing gaps by income level for owner- and renter- occupied housing using data on the distribution of households by income level and distributions of owner-occupied inventory by value and renter-occupied inventory by monthly rental rate. The datasets are converted to an income-level basis for direct comparison in a gaps analysis. A gap analysis basically identifies the portion of households in the City that are housing cost-burdened at certain income levels, but does not imply that more units need to be built. Owner Housing Gaps Table 1 illustrates the components of the gap analysis, which include a juxtaposition of the number of owner housing units available at various income levels, using information from the U.S. Census and the distribution of ownership inventory at housing value levels. The results of the gap analysis for 2012 show that there are approximately 2,000 households earning less than $25,000 per year and approximately 580 households earning between $25,000 and $50,000 who are cost-burdened (i.e. spending more than 30 percent of their gross household income on housing). 15 The demographics and sub-groups of these cost-burdened households includes elderly or retired households, disabled, mobile home owners, and households who do not have a mortgage, but some retirement or other income. According to the U.S. Census, there were approximately 1,600 owner-occupied households in 2012 with incomes less than $25,000 and no mortgage. Subtracting these households results in a net cost-burden estimate in the “less than $25,000” category of approximately 400 households.16 Table 1 Ownership Housing Gaps, 2000 and 2012 15 This is an industry standard metric (30 percent) used in housing affordability studies, and is primarily guided by the direction of the Department of Housing and Urban Development’s and U.S. Census’s definition of cost-burden. 16 A similar statistic is not available from the U.S. Census for the year 2000. 2000 2012 2000 2012 2000 2012 Income Category Less than $25,000 Less than $69,300 238 1,507 3,516 3,519 -3,278 -2,012 $25,000 to $49,999 $69,301 to $176,100 5,906 4,343 6,338 4,920 -432 -577 $50,000 to $74,999 $176,101 to $283,100 12,996 12,876 6,552 6,112 6,444 6,764 $75,000 to $99,999 $283,101 to $389,900 4,491 6,654 4,620 5,563 -129 1,091 $100,000 to $149,999 $389,901 to $601,700 1,917 4,218 3,440 6,798 -1,523 -2,580 $150,000 or more More than $601,701 603 1,986 1,686 4,671 -1,083 -2,685 Total 26,152 31,583 26,152 31,583 0 0 Source: U.S. Census; Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-Demographics.xlsx]TABLE 8 - Owner Gaps (2) Affordable Home Price Range (2012) Units Owner Households Gaps Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 27 Final Report 2.5.2.1 Rental Housing Gaps Table 2 illustrates the analysis of housing gaps in the rental inventory, i.e. the juxtaposition of the number rental housing inventory by income and affordability level, using information from the U.S. Census on the distribution of households by income levels and the distribution of rental unit inventory by monthly rental rates. The results of the gap analysis for 2012 show that there are approximately 8,000 renter households earning less than $25,000 per year spending more than 30 percent of their gross household income on rents. As discussed previously, it is estimated that between 5,740 and 6,885 renter households in Fort Collins are occupied by students and likely fall into the income category of $25,000 or less. While it is recognized that a perfect data source for this estimate does not exist, the estimated student-occupied rental households are netted out from the total rental housing gap. The estimated number of graduate assistantships17 (160) that fall above the income level $25,000, which are counted as one household per assistantship results in an estimated range of cost- burdened rental households between 1,250 and 2,400 households18 . Table 2 Rental Housing Gaps, 2000 and 2012 17 There are a total of approximately 1,600 graduate/professional assistantships, of which 10 percent earn alone more than $25,000 per year. 18 Low estimate: 7,972 – 6,885 + 160 = 1,247; high estimate: 7,972 – 5,740 + 800 = 2,392. 2000 2012 2000 2012 2000 2012 Income Category Less than $25,000 Less than $625 7,429 2,761 9,173 10,733 -1,744 -7,972 $25,000 to $49,999 $626 to $1,249 10,726 15,935 6,434 7,667 4,292 8,268 $50,000 to $74,999 $1,250 to $1,874 1,334 5,154 2,609 3,805 -1,275 1,349 $75,000 or More More than $1,874 187 1,245 1,460 2,890 -1,273 -1,645 Total 19,676 25,095 19,676 25,095 0 0 Source: U.S. Census; Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-Demographics.xlsx]TABLE 8 - Renter Gaps (2) Affordable Monthly Rent Range (2012) Units Renter Households Gaps Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 28 Final Report 2.5.3 Distressed Populations In the context of the owner and rental inventory gap analyses, it becomes clear that there are subgroups of demographics of various socioeconomic characteristics who are netted out of the final calculation, but as for the remaining “net” estimates of cost-burdened households, it is not entirely clear, i.e. without primary survey research, to identify which population subgroups may accurately account for these households. This section addresses the various potentially distressed populations that are presumed to be subcomponents of those households experiencing some level of cost burden as estimated in the gap analyses. Such groups might include the elderly or retired households, mentally- or physically-disabled, single-parent families, etc. Using information assembled as a part of the social infrastructure gaps analysis, this section presents a high level summation of a few of those demographics to put the magnitude of household cost burden into perspective. Information also comes from the U.S. Census, information compiled from various City sources, including the Fort Collins Housing Authority, and the 2013 Point-in-Time Survey on homelessness. x Elderly: It is estimated that there are 12,500 seniors in the City of Fort Collins, approximately 4,600 of which have disabilities, and of which 40 percent live alone. x Persons with Disability: It is estimated that approximately 10,000 residents are living with one or more disability, 50 percent of which are 18 to 64 years old, 46 percent of which are seniors, and 4 percent of which are children. Only 47 percent of these residents are employed, and unemployment among the disabled is an estimated 16 percent. x Living Below Poverty: The federal poverty level in 2013 was $19,530, and it is estimated that there are approximately 2,900 families live in poverty and approximately 27,200 residents (approximately 18 percent) in Fort Collins living below this level, although it is also estimated that approximately 56 percent of them are students. Nevertheless, the trend has been rising, where between 2005 and 2012, the number of non-student residents in poverty increased by 4,000. Additionally, the poverty rate among single parents ranges from 28 percent among single fathers to 36 percent among single mothers. x Homeless: While beyond the scope of this study, homelessness is a serious and persistent issue for Fort Collins. The most recent PIT survey counted between 250 and 500 homeless on a given night, and estimates that there are approximately 1,000 households receiving rental assistance. x FCHA Wait List: The Fort Collins Housing Authority manages a variety of programs and projects in Fort Collins and Wellington, including Section 8 Housing Choice Vouchers and project-based vouchers. According to recent research, there are approximately 150 scattered public housing units, recent projects, such as Redtail Ponds and Villages with a combined 860 units, and housing and project-based vouchers totaling 1,100 vouchers. In comparison, the magnitude of the wait list for the FCHA is more than 1,700 as of April 2014, of which approximately 85 percent are extremely low-income households (at 30 percent of AMI, or an income of approximately $18,750), and the remainder are very low income, between 30 and 50 percent AMI (up to $31,250). Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 29 Final Report 2.6 Housing Cost Components This section of the economic and demographic context is an analysis of the various components of housing cost and how they relate to overall housing affordability issues in the City. The study process, particularly the first stakeholder workshop, raised several questions and served as the impetus for this analysis: x What are the components of housing cost escalation? x What causes housing costs to escalate? x How much have each of the components contributed to housing cost increase? x How much of the total cost of housing can the City influence? As indicated previously in this chapter, housing prices increased at 2.8 percent per year from 2000 to 2013.19 Average housing prices escalated from $194,900 in 2000 to $278,400 in 2013, an increase of $83,500 (42 percent increase). Figure 23 illustrates this overall trend, but contains a breakdown of the major components of housing cost. For example, it was found that the escalation of land costs accounted for 37 percent of the total increase ($30,600), hard costs contributed to 60 percent ($50,200), and city fees and taxes contributed to 9 percent ($7,500), while the remainder, a floating amount for other soft costs and developer profit, described in greater detail below, actually declined. 2.6.1 Components Four major categories of cost were identified and quantified using different sources, including the local MLS, Larimer County Assessor land sales records, information on fees from the Building Department, Engineering, Development Review Services, as well as indexes from the Engineering News Record and Bureau of Labor Statistics. The costs and methodologies for estimated them are: x Land: Land costs can be anywhere from 15 to 25 percent or more of the total cost of housing, depending on the type of housing (i.e. single-family versus multifamily). From 2000 to 2013, land costs increased at an average of 4.6 percent per year, from approximately 20 percent of total housing cost in 2000 to 25 percent in 2013. During the height of the housing boom, however, land values increased to 30 percent of the cost of housing, according to EPS’s analysis of Larimer County Assessor data on the sale of raw land to master developers and commercial home-builders.20 x Hard Costs: Hard costs typically range between 50 and 55 percent of the total cost of housing, of which 50 percent is usually labor cost and the remainder is materials cost. While data on annual changes in construction costs for the Fort Collins market does not exist, EPS used the BLS’s producer price index for residential construction to determine that, nationwide, residential materials costs have escalated at 3.1 percent annually since 2000. 19 Data compiled from the local MLS were not detailed enough by year to identify the annual average sales price of new product. For this analysis, EPS is using the overall average sales price of housing in Fort Collins as a proxy to determine the proportions of different cost components. 20 Specifically, the data presented represent the cost of a finished lot, including infrastructure and water (as a portion of total housing sales prices). They represent the portion (i.e. percentage) of land to housing sales price, but are presented here calibrated to fit the housing price data available. Actual lot sales prices, as with new unit sales prices are higher than depicted by these numbers. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 30 Final Report Another important component of the hard costs, though falling more under the category of city-related costs, are the costs associated with contractors meeting the enhanced requirements of several new updates to the building code. Specifically, the recent adoptions of the 2009 International Residential Code (IRC), which went into effect at the beginning of 2010, the adoption of the Green Code Amendments, which went into effect at the beginning of 2012, and the adoption of the 2012 IRC, which went into effect toward the beginning of 2014, all contribute to the rising cost of housing construction. An analysis conducted by the City’s Community Development & Neighborhood Services, dated April 2014, indicates that, collectively, these enhancements in the local building code amount to an additional $5,900 to $6,900 per 2,000-square foot single-family home. While these changes took effect largely toward the end and outside the time frame evaluated here, they represent between 2.0 and 2.5 percent of the overall price of housing in 2013. x City Fees and Taxes: This category includes building permit fees, plan check fees, capital expansion fees (e.g. street oversizing, fire, police, general government, and parks), utility fees (e.g. water, wastewater, stormwater plant investment fees), and use taxes. In 2000, these city fees and taxes accounted for 9 percent of total housing costs and by 2013 still accounted for 9 percent of total costs. Overall, city fees and taxes increased at a parallel rate to overall cost, or 2.8 percent annually. In actual dollar terms, however, city fees and taxes increased by approximately $7,500 over the course of the 13 years.21 x Other Soft Costs: The last category of housing costs are associated with other soft costs, such as architectural and engineering fees, general contractor, legal, insurance, and financing costs. While these components are generally set by outside contractors and services, their fees must be paid. Developer profit and fee, on the other hand, while generally estimable, are not set fees, but rather, the amount of profit a project makes is highly dependent on the success and timing of a project. As such, EPS did not set this number at any particular amount; rather, this portion of the “Other Soft Costs” floats throughout the time series, reflecting the reality that during the recession, it is apparent that when this category of costs decreased from approximately 24 percent to 13 percent, developer profit margins were squeezed severely.22 21 According to information collected from various City departments, a new formula for building permit and plan check fees went into effect at the beginning of 2012; both new and old formulas were built into this time-series analysis. During this period, no major adjustments, other than annual escalations using the consumer price index from the BLS, were made to the capital expansion fees. There was a major update to the utility fees in 2003, and those fees are generally escalated using the Engineering New Records city cost index. The City’s use tax rate increased from 3.00 percent in 2011 to 3.85 percent, and the County’s use tax rate decreased from 0.80 percent to 0.60 percent. 22 It should be noted that a typical range for soft costs is between 25 and 35 percent of total hard costs, depending on the type and scale of a project. In EPS’s analysis, soft costs range between 25 and 37 percent, depending on the year. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 31 Final Report Figure 23 Trends in Housing Cost Components, 2000-2013 The primary purpose of this analysis is to identify what extent of housing costs and subsequent increases can be controlled at all by the City either directly or indirectly. As identified here, at most, the City has purview over an estimated 11 percent of the cost of housing (including all city fees and taxes, in addition to the 2 percent attributable to the recent building code enhancements). It is highly unlikely that substantial reductions in any of these components would equal even half of this gap, given that the ownership affordability gap between what a household earning the median income can afford to buy and the median sales price in Fort Collins is $54,400, which represents nearly 20 percent of the average price stated in this trend ($278,400). x Land: The cost of land has increased from 20 percent to 25 percent of the total cost of housing. If land settled back at roughly 20 percent of the cost to construct housing, which the City has little chance of manipulating, it could potentially lower costs by 5 percent. x Hard costs: The cost of enhanced building code amounted to 2 to 3 percent of total housing costs. It should be acknowledged, however, that it is not necessarily in the interest of the city to reverse these decisions. x City Fees and Taxes: The portion of city fees and taxes related to permit, plan check and non-utility capital expansion fees account for just 4 percent of overall costs. A 25 percent reduction in these fees collectively could reduce overall housing costs by 1 percent, but again, a reduction in capital expansion fees (which 75 percent of these costs are related to) is also not necessarily in the interest of the City because it would potentially come at a cost to the community in the form of a reduction in infrastructure spending. $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 AverageHousingCostsbyComponent CityFees&Taxes[Note4] OtherSoftCosts&Profit(FloatingAmount)[Note3] HardCosts[Note2] Land[Note1] Source:CityofFortCollins;Larimer CountyAssessor;ElevationsRealEstate; Economic&PlanningSystems [Note1]:LandvaluesarebasedondatacompiledfromtheLarimerCountyAssessor's office.Theyrepresentthecostofafinishedlot includinginfrastructureandwater(asaportionoftotalhousingsalesprices).Theyaccuratelyrepresenttheportion(i.e. percentage) oflandtohousingsalesprice,butpresentedhere,theyhavebeencalibrateddowntofitthehousingpricedataavailable.Actuallot salesprices,aswithnewunitsalespricesarehigherthandepictedbythesenumbers. [Note2]:Thisincludesthecostofmaterialsandlabor. [Note3]:Thisincludesothersoftcosts,suchasarchitetureandengineering,legal,andinsurance.Developerprofitisestimatedasa floatingamount,i.e.thedifferencebetweentheotherthreecomponentsandtheoverallhousingpricedatapoints. [Note4]:ThesefeesandtaxeswereestimatedwiththeassistanceofCityofFortCollinsstaff,includingDevelopmentReviewServices, Engineering,andtheBuildingDepartment. [Note5]:ThesetotalsrepresenttheaverageofnewandexistinghomesalesthroughoutFortCollins.Theyalsorepresentdetached (i.e.singleͲfamily)andattached(i.e.condominiums,townhomes,duplexes)housinganddonotincluderental. [Note6]:Thiscomponentanalysisandtrendswerecreatedforthepurposesofdiscussingvariouscostcomponentsusingbest availabledata.Giventhelimitationsandavailabilityofnewsalesdatatrends,overalltrendswereused.Asaresult,the depicted overallcostswillbenoticeablylowerthanactual"coststobuild".Thatis,thesetrendsdonotdepictprecisecoststobuild inFort CollinsͲ theyarearepresentation.Suchactualcoststobuildwouldbehigher. Economic & Planning Systems, Inc. 32 133074-Final Report 3.0 HOUSING ISSUES AND NEEDS This chapter provides an assessment of the City’s housing affordability issues and needs including: a) ownership and commuting conditions; b) rental and student housing trends; c) housing cost components; and d) distressed populations. The objective is to help the City visualize the extent to which housing affordability issues exist and to what degree the City is able to effectively address them. While the analysis has shown the City has some affordability challenges, many of them do not have tipping points per se, i.e., points at which the trend or condition becomes so pronounced as to warrant action. In such cases, the most appropriate response may be to craft a policy or strategy guided by the interest to address the challenge before it becomes worse. The City’s greatest current challenge is that of weighing the benefits of taking action on what seem to be comparatively modest issues or challenges against the political and monetary costs of implementing them. On the one hand, some challenges are not currently great enough to warrant costly policies. On the other hand, it is possible that a continuation of trends along recent trajectories could produce challenges that are significant enough to warrant policy or strategy action. It is, therefore, the intent of this section to present a menu of potential short-, mid-, and long-term approaches to addressing the existing and projected needs. 3.1 Assessment of Need This section summarizes the trends and conditions that illustrate to what degree specific issues exist and how they may change in the future. It is critical, however, that while reviewing these summaries, the City contemplate the extent to which it is comfortable with the current conditions and the extent to which regional circumstances are compensating for local issues. For example, one of the major (and specific) issues facing the City is to what extent it is comfortable with the current in-commuting trends. Is the City comfortable with the surrounding markets serving as a reservoir of more affordable housing for its own workforce (i.e. “drive till you qualify”). And, to the extent that an ample supply of affordable for-sale housing continues to exist in surrounding communities, it becomes a matter of City policy, to determine whether incentivizing or subsidizing housing within the City to reduce the number of in-commuters is warranted. 3.1.1 Income, Ownership Housing, and Commuting 3.1.1.1 Household Incomes At the root of housing affordability issues are income and wages. When incomes keep pace with the rise in housing costs, affordability is not a challenge, but when increases in income are exceeded by the cost of housing, affordability becomes a challenge. In Fort Collins, housing costs rose 42 percent between 2000 and 2012 while median household incomes increased 38 percent. On this metric alone, the City has become slightly less affordable over the last 12 years. The most direct solution would be to raise income levels. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 33 Final Report It is important to consider that households contain multiple job-holders and that their income levels usually vary. Although influencing income levels of all job-holders is not possible, an increased (local or state) minimum wage may be one possible mechanism to address this issue. While EPS recognizes that such an option would not likely fare well with Fort Collins’ business community, the question was raised by a City Council member during a work session as to what extent an increased minimum wage might positively impact housing cost-burden issues in the City. EPS responded with a brief analysis and opinion provided in Appendix B, but a more complete and extensive analysis would be necessary to prove out a number of issues raised. The findings suggest that on one hand, an increased minimum wage could have a positive impact on lifting 10 percent of households out of a cost-burden situation, but the extent to which businesses would eliminate jobs (which is likely) because of the increased associated labor costs was beyond the scope of the brief analysis. 3.1.1.2 Commuting Patterns In-commuting is commonplace for an employment center and metro area like Fort Collins. As illustrated, great numbers of workers commute to and from the many surrounding communities for multiple reasons. Households with two job-holders often decide to live in one community or another for economic or lifestyle reasons. One job-holder may work in Fort Collins, for example, while the other works in Loveland. Where they choose to live is based on economic and social factors, as well as proximity to amenities or community. Where another household with one worker in Fort Collins and Loveland chooses to live might be based on a completely different set of priorities. At issue is the fact that commuting is a common practice and becoming more common than out-commuting. The question for the City is whether and to what extent it can exercise any control or have any influence over this trend. While some portion of the in-commuters may have based their decisions to live elsewhere on fundamental household economics, others may have based their decisions on the lack of available housing in Fort Collins. There is, however, no absolute threshold of in-commuting that motivates a government to take action. It is a relatively subjective factor around which it is difficult to reach a consensus among policy makers. However, our experience on this issue is that it becomes a policy issue that needs to be addressed when local employers have difficulty attracting or retaining workers. 3.1.1.3 Ownership Housing The desire for an adequate supply of affordable ownership housing is an important political and economic issue, particularly as expressed by stakeholders throughout this process, but it is not one characterized by enormous need, as shown by the analysis of housing gaps in the previous chapter. The analysis showed that while housing costs have risen 42 percent in Fort Collins, incomes have risen by 38 percent (using HUD data) or by 20 percent (using Census data). On an annual basis, it showed that housing costs escalated by 2.8 percent on average versus 1.5 percent for household incomes. It also showed that, adjusted for inflation, housing costs increased at 0.5 percent, whereas incomes decreased at 0.6 percent per year. Further analysis showed that the affordability gap between the purchasing power of a household earning the median income and the median housing sales price expanded from approximately $43,000 in 2000 to $54,000 in 2012. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 34 Final Report While a detailed analysis of local and regional economic conditions is not a part of this study, a simple projection23 of these historic trends to 2022 (10 years from the last available comprehensive data) reasonably estimates the City’s current trajectory. The purpose is to illustrate how affordability gaps might change in Fort Collins and the surrounding 8 communities if the trends in household median income and median housing sales prices continue unchanged. The results indicate that that median household income would increase to $62,000 in 2012 dollars (a 16 percent increase over 2012), the median sales price would increase to $318,000 (a 30 percent increase over 2012), and the affordability gap would widen to approximately $90,000, a 65 percent increase over the current gap. While these statistics alone might raise concern, many of the surrounding communities, i.e. Greeley, Johnstown, Loveland, and Wellington, which are currently characterized by more affordable housing to Fort Collins households, would remain more affordable communities – specifically, working households employed in Fort Collins. It is also projected that Berthoud and Longmont would become more affordable to Fort Collins households by this time, which is currently not the case. Figure 24 Projection of Ownership Affordability Gap, 2022 Assuming also that these communities have adequate area to develop and/or annex from the counties, it is projected that the supply of affordable for-sale housing within the commute-shed would be sufficient to largely address the need. It is, therefore, a City policy decision to determine if incentivizing or subsidizing housing within the City to reduce the number of in- commuters is warranted. 23 For the sake of simplicity, the projection of these trends also assumes that the underlying economic conditions, such as the dynamics of the local and regional labor markets, continue as they have for the past 14 years. The projection also assumes, for the sake of simplicity, that the interaction of local and regional supply of housing, which affect the escalation of housing prices, also remains on its current course. $227,700 $343,900 $184,000 $382,700 $230,300 $236,500 $695,300 $359,900 $429,300 $90,400 $10,200 $76,200 $34,000 $318,100 $316,100 $194,200 $292,200 $306,500 $270,500 $656,300 $267,800 $426,200 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 FortCollins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor AffordablePrice Gap MedianSalesPrice Source:Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 35 Final Report 3.1.1.4 Construction Defect Claims The magnitude of effects caused by the threat of construction defects claims on the residential construction industry are difficult to quantify. This issue affects communities throughout the state and is complicated by the entanglement of legal, financial, and insurance issues. Although not the sole cause for the lack of for-sale multifamily housing construction, developers and builders view the risk of exposure to lawsuits as a significant deterrent to developing for-sale multifamily housing projects. During the 1990s and up to the early 2000s, construction defects claims affected predominately single-family housing. As the state’s population boomed and, as a result, housing construction increased into the early 2000s, demand for multifamily housing became more commonplace. Multifamily (for-sale) developments soon became a more frequent target of construction defects lawsuits due to “scaleability”. That is, if a building defect was identified in one out of 200 units in a project, the claim could be interpolated to all units and a suit filed on behalf of all 200 units. The legal environment has evolved since the 1990s, as well. In the early 2000s, passage of the Construction Defect Action Reform Act (CDARA), which governs construction defects claims, allows for and, according to some in the construction community, even discourages pre-suit settlements. In 2010, HB 10-1394 “Concerning Commercial Liability Insurance Policies Issued to Construction Professionals”24 potentially exacerbated the situation where demand for new multifamily for-sale construction was already weak. The intent was to provide courts clarity on how to interpret general liability insurance provisions and therefore claims. While not a direct cause of the enactment of this bill, a number of insurance providers left the state, leaving a potentially more competitive and costlier environment for developers to acquire commercial general liability insurance policies.25 Today, Fort Collins is not alone in experiencing a shortage of for-sale multifamily construction, and it is also not the only community to perceive this issue to be closely linked to the cause for the lack of for-sale multifamily construction. Because the provision of attached multifamily housing is commonly associated with more affordable housing options, overcoming this current obstacle to this inventory’s development could provide more affordable housing in Fort Collins and the rest of the state. 24 The bill’s origins stem from two liability insurance cases, known by their abbreviated titles, General Security and Greystone, both decided in 2009. In General Security, the insurance provider (General Security), had denied that it was responsible for providing coverage for a construction defect, where existing statute defined it as an accident/occurrence. Part of the bill’s purpose is to clarify how courts interpret future claims, and that the bill is a response to what was perceived as a failure of the court to “properly consider a construction professional’s reasonable expectation that an insurer would defend the construction professional against an action or notice of claim.” 25 The legislation’s intent is to clarify the definitions of a construction defect for claims purposes, and to generally provide greater certainty. In the first part of the legislation, it is stated that “insurance policies issued to construction professionals have become increasingly complex, often containing multiple, lengthy endorsements and exclusions conflicting with the reasonable expectations of the insured.” In response, the act declares that insurance coverage and an insurer’s duty to defend shall be interpreted broadly in favor of the insured. It also ensures that a court still consider application of any exclusions to coverage, because it was not intended to “create insurance coverage that is not included in the insurance policy.” It also places extra burden on the insurance providers. One provision requires that insurance providers have a duty to defend the policy holder in the event of a notice of claim process even if the insurer owes a duty to defend or not. The idea was to reduce defect litigation by encouraging pre-suit settlements. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 36 Final Report 3.2 Rental and Student Housing 3.2.1 Rental Housing At the onset of this project, it was observed that vacancy rates, as detailed below, were 2 percent or below. As is common in development cycles, low vacancy rates coupled with high rental rates stimulate construction, as is evident by the number of units in the rental housing development pipeline. It was noted in a recent study that the rental housing gap for Fort Collins is approximately 8,000 units for households earning $25,000 or less, of which approximately 4,000 units were likely occupied by student households. This study more closely examined the rental market to make a more accurate determination of rental housing “gaps”. As such, an analysis of CSU’s student population and breakdown of on- and off-campus students revealed that 5,700 to 6,900 rental units are likely occupied by students with household incomes below $25,000. Moreover, recognizing that a portion of graduate and professional students have incomes greater than $25,000, EPS also estimates that the net renter household “gap” is lower and is estimated to be between 1,250 and 2,400. 3.2.2 Rental Pipeline As noted in that Chapter 2.0, the pace of single-family construction following the Great Recession has decreased from nearly 70 percent of the total construction market pre-recession to approximately 50 percent of the market post-recession. Moreover, the local market is in the midst of a major cycle in the construction of rental housing inventory. While the rental housing construction has been stimulated by a sharp decline in the rental housing vacancy rate, the magnitude of units coming on line within the next 3 to 5 years is estimated to be more than 5,000, a 20 percent increase in the City’s supply of rental housing units. If only those units in the pipeline that were under construction, with PDP approval, and under review were built (i.e. approximately 3,900 units), it is projected that in 5 years the overall rental housing vacancy rate would reach a more stable 5 percent. 3.3 Housing Cost Components As indicated by the housing affordability gaps analysis, closing the current housing affordability gap of $54,400 would require a reduction in overall pricing by nearly 20 percent, unrealistic from the perspective of what portion the City actually has purview over, which is estimated at no more than 11 percent. 3.3.1 Rising Costs Increases in hard costs and land prices are the two largest contributors to the increase in overall housing costs (60 percent and 37 percent respectively); however, they are largely outside the City’s control. Only about 2 percent of total housing costs can be attributable to the adoption of enhanced building code. The remaining hard costs, which typically account for 50 to 55 percent of the total cost of construction, are outside the control of the City. Similarly, land costs, which typically account for 15 to 25 percent of the cost of housing, is also not a component of the cost of housing that over which the City has direct control26 . 26 Discussions have revolved around the possibility and tension between support and opposition for a reexamination of the City’s growth management area in the next city plan, but debates have also centered on whether a relaxation of the GMA would substantially and positively affect the cost of land. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 37 Final Report 3.4 Distressed Populations Chapter 2.0 identifies various populations who may be distressed with respect to housing affordability. While difficult to quantify without primary survey data, this study did assess the extent of housing cost-burden for ownership and renter households. The analysis also narrowed in on a smaller subset of the cost-burdened populations than is apparent from a cursory juxtaposition of the distribution of housing units and households by income level. That is, among ownership households, it was determined that net of households without a mortgage, there are still approximately 1,000 households who spend more than 30 percent of their pre-tax income on housing. And among renter households, it was determined that net of student renter households, there are between 1,250 and 2,400 households who are cost-burdened. While it was beyond the specific scope of this more general housing affordability study to identify specific issues and conditions surrounding distressed populations, such an analysis was conducted and completed toward the onset of this process. As such, a more comprehensive description and characterization of the issues facing Fort Collins’ distressed populations may be found in the recently-completed social sustainability gaps analysis. Economic & Planning Systems, Inc. 38 133074-Final Report 4.0 BEST PRACTICES This chapter contains a summary of methods and techniques used to address a spectrum of housing affordability issues in the U.S. It identifies land use and regulatory techniques commonly used to accomplish narrowly defined and targeted housing objectives, and it identifies alternative funding methods used to address housing issues from a broader, more community- wide perspective. 4.1 Overview There are a range of reasons why communities adopt affordable housing tools. Many do so because local and regional housing market assessments have concluded that a significant portion of the local workforce has been priced out and forced to commute. Beyond the determination of the presence and extent of these patterns, these communities make policy determination based on quality of life considerations. For example, if a portion of the workforce, such as teachers, police, fire protection, and other municipal employees, cannot afford to live locally, then they are not readily available to address health, safety, and welfare needs. As a result, the motivation to develop programs to address affordable housing is largely based on some or all of the following conditions: x Housing Costs - The sales price of locally available housing exceeds what a permanent- resident household can afford. x Housing Availability – The development community is clearly oriented to building more expensive housing than is affordable to the local workforce. x Commuting Patterns – A large portion of the local workforce cannot afford to live in the community and is forced into long commutes from more affordable locations. x Employee Shortages – Local businesses find it difficult to recruit and or retain employees. 4.2 Affordable Housing Tools The analysis of best practices is structured as a matrix of policy or financing strategy options used in similar university towns and other comparable communities. The tools for providing affordable housing can be separated into two major categories, land use regulatory mechanisms that require developers to mitigate the impacts of development on affordable housing needs and other funding and financing methods that generate revenues dedicated to affordable housing. 4.2.1 Land Use Controls There are several land use or regulatory controls that communities use to address housing affordability issues. Some presented here, such as the inclusionary housing ordinance, commercial and residential linkage programs, may not be appropriate for the City of Fort Collins, while others, such as the incentive zoning ordinance, are more pertinent to the City’s magnitude of housing affordability issues. There are also land use controls specific to the local context, such as occupancy limits and affordable housing preservation easements (i.e. agreements), that may relevant to the Fort Collins context. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 39 Final Report 4.2.1.1 Inclusionary Housing Inclusionary housing (or zoning) refers to planning ordinances that require developers to “set aside” a portion of new housing construction as affordable to households at specified income levels. IHO set-aside requirements generally range from 10 to 30 percent, and the affordability level generally ranges from 60 to 100 percent of area median income (AMI), 27 based on family size defined by HUD. In most versions of an IHO, a developer can comply with its requirements by building the units on site as a part of the overall project master plan and/or by building them in an off-site location. Alternatively, many IHO programs allow for all or a portion of the housing requirement to be met by cash-in-lieu (CIL) payments – i.e. the payment of a fee in-lieu of building units. IHO ordinances are generally enacted by home rule cities or counties as land use regulations under the health, safety, and welfare provisions. In most states, statutory cities or counties do not have the ability to adopt such ordinances. In Colorado and the Rocky Mountain West, the IHO is most commonly the cornerstone of many resort community’s affordable housing programs including Aspen and Pitkin County, Telluride and San Miguel County, Breckenridge, Park City, UT, and Jackson and Teton County, WY. But there are also IHOs in Colorado’s urban markets like Denver and Boulder. Nationally, more than 200 communities have adopted some form of inclusionary zoning. Montgomery County, Maryland was one of the earliest to adopt an IHO and has built over 10,000 affordable housing units. All cities and towns in Massachusetts are subject to General Law Chapter 40B which requires communities with less than 10 percent affordable housing to require new developments to provide 20 percent affordable housing and redevelopments to provide 15 percent affordable units. There are many major cities, with IHOs such as New York City, San Francisco, San Diego, and Sacramento, and a number of smaller urban markets with major universities with IHOs including Madison, WI; Davis, CA; Cambridge, MA; Palo Alto, CA; Burlington, VT; and Princeton, NJ. There are a number of states with rent-control prohibitions or limitations which have placed restrictions on the use of IHOs for rental housing. California invalidated IHO provisions for rental housing in 2009 when its courts found that such regulation constituted a form of rent control that violated the Costa-Hawkins Rental Housing Act of 1996. In Colorado, courts found that IHOs for rental housing were also a form of rent control in violation of state statutes. As a result, the Telluride Decision, as it is referred to, bars communities from enacting mandatory IHOs for rental housing. The legislature, however, recently made limited provisions for housing authorities or similar entities to own and manage deed-restricted affordable housing under HB10-1017, which has left room for rental housing to be provided in the context of an IHO through voluntary (i.e. not mandatory) developer agreements. Aspen and Boulder, two of the more prominent examples of communities with such policies, continue to apply their IHO to rental housing projects. 27 The AMI defined by the Department of Housing and Urban Development is the standard by which households qualify for housing that is subsidized with federal funding, such as Community Development Block Grant (CDBG) funding. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 40 Final Report 4.2.1.2 Incentive Zoning Ordinance Incentive zoning differs from IHOs in that it does not require a development or redevelopment to set aside a certain percentage of units as affordable (typically between 10 and 20 percent). Rather, when a substantial variance is requested, such as a major change in land use, a parking reduction, an upzoning or change to the height restriction or density, is an affordable housing set-aside triggered. Another difference between this and the inclusionary zoning ordinance is its breadth of applicability. Whereas an IHO places the burden of producing new affordable housing inventory on new residential developments, the incentive zoning ordinance is often more broadly written as to apply to new (residential and/or non-residential) development and redevelopment. Communities with this type of ordinance can require that a developer build affordable housing, pay a fee in- lieu, dedicate land to the city, or dedicate existing housing stock as permanently affordable. For many communities, the incentive zoning ordinance functions as a component of a larger strategy. Used in conjunction with inclusionary housing requirements and other alternative affordable housing funding mechanisms, it can be a very effective complementary strategy. For example, Chicago, Seattle, Cambridge, and Boston each have an incentive zoning policy, but in each of these communities, local/regional housing affordability challenges and issues have resulted in unique combinations of regulatory and non-regulatory (i.e. funding or partnership) strategies. Additionally, there are variations on the requirements or objectives of such ordinances in these communities, such as Cambridge’s preference for the payment of the fee in- lieu to an affordable housing fund or Seattle’s preference for childcare facilities. 4.2.1.3 Commercial Linkage Commercial linkage fees are a form of impact fee assessed on new commercial developments or major employers. They are designed to mitigate the need for workforce housing generated by new or expanding commercial business or development. In some cases, commercial linkage programs require the construction of employee housing (as is commonly the case in the Rocky Mountain West’s resort settings), but typically revenues are used to fund the development of affordable housing. Because linkage fees are a type of impact fee, they require a nexus study. Such a study provides a quantitative basis for the connection (i.e. the nexus) between the affordable housing demand generated and the amount of space being developed or redeveloped. Fees are often calculated on a per 1,000 square-foot basis of commercial space and based on the number of employees generated by a particular type of land use. Because employee generation rates differ widely among land uses, communities with a commercial linkage program (or similar) distinguish between retail, restaurant, office, hotel, and industrial space, for example. It is important to note that commercial linkage fees, like development impact fees and as they are a variation on exactions, can only be used to pay for the impact of the new development and may not be used to address existing deficiencies. As is the case in many other communities, commercial linkage programs are often just one component of the community’s affordable housing strategy. In conjunction with an IHO or IZO, for example, a community is able to address the demands for affordable housing generated by both new residential and commercial development. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 41 Final Report 4.2.1.4 Residential Linkage A less common practice, and more prevalent in higher-end or resort markets, are residential linkage programs. These fees are assessed against residential development (also on a per- square foot basis) to mitigate the affordable housing needs of new employment the expenditure of new households are estimated to generate. In Teton County/Jackson, WY, for example, these fees are imposed on large vacation homes (e.g. greater than 2,500 square-feet of habitable floor area) to mitigate the demand for service employees to provide property management, landscape maintenance, cleaning, road maintenance, and snow removal services. In Telluride, these fees are applied to resort lodging developments to mitigate the requirements for accommodations related employment such as waiters, maids, and other service workers. Figure 25 Land Use Controls InclusionaryHousing Ordinance IncentiveZoning Ordinances CommercialLinkage ResidentialLinkage Whatisit? භAddresseshousinggapsfrom inflatedhousingprices භRequiresapercentofhousingbe providedataffordablelevels භRespondstodevelopmentand redevelopmentpressurerequesting specialpermits භRequiresresidenƟal/commercial developmenttoprovideaffordable housingand/orpublicamenities භAddresseshousingneedby commercialgrowth භRequirescommercialdevelopment toprovidehousingunits(orpaya fee)basedonnewemployees generated භAddresseshousingneedfrom marketforlargesecondͲhomes භDeveloperprovidesemployee housingunitsorpaysfeeinͲlieu Whatisatypicalaffordable housingbuildrequirement? 10%to30% 10%to20% 20%to100%ofemployeegeneration bylanduse 10%to20% Whatincentivesareused? Bonusdensity,feewaivers,expedited review,parkingreduction,unit equivalency;publicfunding assistance Densitybonus,reducedparking requirement,reducedopenspace,or anyvariancetozoning Bonusdensity;feewaivers Bonusdensity,feewaivers,expedited review,parkingreduction,unit equivalency Aretherealternative satisfactionoptions? PaymentoffeeinͲlieu;offsiteunits; Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 42 Final Report 4.2.2 Other Land Use Controls There are a range of other land use controls and practices with varying degrees of impact on housing affordability identified by the staff and stakeholders in the public and stakeholder involvement process, as well as in the Affordable Housing Redevelopment Displacement Mitigation Strategy, dated March 26, 2013. 4.2.2.1 Occupancy Limits One regulatory tool common in university towns is the maximum occupancy limit. The occupancy ordinance, referred to as the “3-unrelated rule” in Fort Collins, is often enacted to mitigate against nuisance and parking issues,28 as has been the case in other university towns (Table 3). Specifically, the City’s occupancy ordinance dates to 1964 and has treated violations as a criminal offense, which resulted in enforcement challenges for many years. This issue was brought to the attention of City Council in 2005, at which time City planning staff were directed to more actively enforce the provision and report back with results. As a result of these efforts, violation of the ordinance was decriminalized in 2007 (making it merely a civil offense). A couple years later it was noted in a City Council work session that a reduction in the overall City housing vacancy rate was identified as related to enforcement of the ordinance. Table 3 Occupancy Limits in University Towns 28 Because limited parking continues to be an issue around the university, CSU is actively engaged in many efforts that indirectly impact the demand for off-campus parking, according to CSU staff interviewed during this study. A primary example includes the annual participation of more than 4,500 students and 2,000 parents to educate them relying less on automobile transportation during their time at school. Simultaneously, CSU invests a considerable amount of resources into maintaining and actively enhancing its bicycle infrastructure. 3-Unrelated 4-Unrelated (or more) Greenville, NC (2014) Greenville, NC (2012) Norman, OK Boulder, CO (high density zone) Colorado Springs, CO Denver, CO (multi-unit zone) Pueblo, CO Little Rock, AR Boulder, CO (low density zone) Champaign, IL Denver, CO (single-unit zone) Louisville, KY Tempe, AZ Ann Arbor, MI Evanston, IL Bozeman, MT Bloomington, IN Chapel Hill, NC Bowling Green, OH Oxford, OH Philadelphia, PA Fairfax, VA Salt Lake City, UT Burlington, VT Williamsburg, VA Milwaukee, WI Madison, WI Source: College Tow n Life; Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-Occupancy Limits.xlsx]Summary Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 43 Final Report With rental housing demand growing as a result of an increased student population at CSU, the issue continues to be highlighted as a factor affecting housing availability. The City does, however, allow Extra-Occupancy Rental Houses (EORH) in most zones of the City in the form of an administrative exemption. This exemption grants occupancy to households of more than three unrelated persons if the owner can demonstrate that the property is appropriate for more than three renters and adequate parking is provided. The City Council directed staff to conduct public outreach to gauge support for increasing the availability of EORHs within the existing Neighborhood Conservation Medium-Density (NCM) zone, according to a City memo dated September 9, 2010. The general public, property owners in the NCM zone, and members of the Associated Students of Colorado State University (ASCSU) participated in the process. Overall, 272 responses were received and indicated that nearly three-quarters of respondents did not support allowing extra occupancy in the NCM zone. As a result of these findings, staff did not recommend moving forward with the expansion of the EORH within the NCM zone. 4.2.2.2 Affordable Housing Preservation Easement Another tool that may be relevant to the Fort Collins market is an affordable housing preservation easement. This type of an agreement is based on a premise similar to that of a historic preservation easement whereby property owners voluntarily agree to preserve a historic building or preserve open space in return for a public benefit. Restrictions imposed on their property are generally documented through an easement or an agreement, which notifies the public and any potential buyer that the future use of the land is restricted in certain ways. In general, an easement is an interest in real property where technically, in the example of an historic building, an owner sells the right to demolish the historic building or build on open space. On the other hand, an agreement is a contract where the owner has agreed not to tear it down or build on open space in return for a public benefit. In effect, both tools achieve the same result and bind future owners of the property. In the case of affordable housing, a similar approach can be used to encourage preservation of existing affordable housing inventory. For example, the owner of a housing project pledges to maintain a certain percent of the existing housing units affordable at a certain level of affordability for a predetermined number of years. The owner agrees to such an agreement provided that a city can offer the property owner something of economic value in return. In the case of historic buildings, federal and/or state tax incentives are often available to property owners. And although an easement can reduce the (highest and best use) value of the property, which reduces the owner’s property taxes, the lower tax liability is generally not enough of an incentive. As a result, the most appropriate benefit returned to a property owner who makes such an agreement is a tax, fee, or assessment rebates – that is, local governments are often required to forego revenue that it would otherwise have available to pursue other priorities. Alternatively, local governments can simply provide payment for the easement. 4.2.3 Alternative Funding Sources There are a range of other funding sources in use for providing affordable housing that have been implemented in both urban and resort settings. These sources are shown in Figure 26 and summarized below. Most of these funding sources are enabled under county or municipality home rule powers as noted. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 44 Final Report 2.4.3.1 Excise Tax An excise tax is a tax paid on units of production (e.g. construction materials) by the developer that becomes a part of the cost of the final product purchased by end user. It differs from the sales tax, which is applied to the final purchase price and paid directly by the end-user. A number of communities (e.g. Boulder and Snowmass Village) have excise taxes on construction materials and designate their revenues to the development of affordable housing. Boulder’s excise tax, for example, is $160 per 1,000 square feet of residential development and $340 per 1,000 square feet of commercial development. Snowmass Village’s excise tax is calculated on a complex formula and only applies to residential expansions over 550 square feet. In practice, because larger residential expansions often pay as much as $150,000 to $200,000, the tax has generated more than $3.4 million in the last six years. One advantage the excise tax has over a linkage fee is that it does not require a nexus study and does not require funds collected to be allocated to a specified set of improvements. But because it is a tax and not a fee, it requires voter approval. 4.2.3.2 Dedicated Sales Tax Some communities use a dedicated sales tax to fund affordable housing. In tourism-oriented markets, this can be an attractive funding option because a majority of the taxes are often paid by visitors. Aspen has a 0.45 percent tax that currently generates about $2.75 million per year in revenues. Such a tax can only be implemented in home rule cities or counties and requires voter approval. The obvious disadvantage to the sales tax, however, is that in metropolitan areas, communities compete heavily with each other for sales tax revenues. As such, any increase in sales tax is likely to face political opposition. 4.2.3.3 Occupational Privilege Tax An occupational privilege tax (“head tax”) is a tax calculated on a per-worker basis that can be assessed on the employer, employee or both. It has most often been used by larger cities for general fund revenues or for designated services. The City and County of Denver, for example, has a $9.75 per month head tax, $5.75 of which is paid by the employer and $4.00 by the employee. It revenues are split 50/50 to the general fund and the capital improvement fund. Aurora and Greenwood Village also have a head tax. Nationally, Kansas City, Chicago and Seattle (though it was recently repealed) also have head taxes. EPS is not aware of any communities that have implemented a head tax dedicated to affordable housing; however, the City of Boulder recently contemplated the establishment of a head tax for affordable housing, but the effort was unsuccessful for a variety of reasons. The City of Fort Collins also investigated a head tax in the past, but encountered opposition from the Chamber of Commerce as it is seen by some as anti-business with the potential to affect economic development efforts. It is however one of the more appropriate taxes because of its relationship to general wage levels and affordability issues. A disadvantage is that it is a flat tax and does not increase with inflation or appreciation as a sales or property tax does. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 45 Final Report 4.2.3.4 Lodging Tax A dedicated lodging tax can also be used to fund affordable housing, however using lodging tax revenues for such purposes is less common. Lodging taxes in larger cities can be as high as 15 or 20 percent, but for the most part, a majority of revenues generated are dedicated to tourism, marketing, and promotions, as well as supportive facilities, such as convention centers. In Fort Collins, approximately 70 percent of the lodging tax is used to fund the Convention & Visitors Bureau and cultural events. Outside of this core funding purpose, while a nexus between tourism and the demand for service level jobs (i.e. affordable housing) can be made, it is difficult to build a case to use these funds for activities that do not directly benefit visitation. For example, revenues from Snowmass Village’s 2.4 percent lodging tax (in addition to its overall rate of 10.4 percent, which is restricted to the marketing and promotion of special events and the development of tourism, are used to fund housing programs. San Francisco, CA, and Columbus, OH, for example, also dedicate a portion of lodging tax revenues to affordable housing. Columbus has generated approximately $17 million per year in lodging tax revenues, 8.5 percent of which is dedicated to funding the Affordable Housing Trust, the Greater Columbus Arts Council, and Human Services. 4.2.3.5 Document Recording Fee The City of Fort Collins does not have a document recording fee, however Larimer County does. A document recording fee is a fee applied to the sale of real estate at the time of closing. These fees are generally applied at the state and/or county level and vary greatly in rate. It is similar in nature to an excise tax in that it is calculated as a fee per value of construction. A number of cities have imposed an additional document recording fees specifically dedicated to affordable housing including St. Louis, MO, and Bucks County, PA. Recent efforts to impose additional doc fees at the state level in Colorado for affordable housing have encountered opposition from the Board of Realtors and the Home Builders Association. 4.2.3.6 Real Estate Transfer Tax Real estate transfer taxes (RETTs) are taxes imposed by states, counties, and cities on the transfer of title within the jurisdiction. RETTS are often enacted as a general revenue source but can also be designated for specific purposes such as affordable housing. In most cases, it is an ad valorem (property) tax based on the value of the property transferred. A total of 37 states and the District of Columbia provide for this tax. The rates vary greatly from 0.01 percent to as high as 4.0 percent in Pittsburgh, PA. Colorado has a modest 0.01 percent tax at the state level. A number of resort communities including Aspen, Snowmass Village, Vail, Breckenridge, Telluride, and Winter Park have adopted local RETTS ranging from 1.0 to 2.0 percent. Only Aspen, however, has designated its RETT revenues to affordable housing. Of importance is that an amendment to the state constitution has prohibited any additional local RETTs from being implemented, although existing programs are grandfathered. On the other hand, a number of other Colorado communities have negotiated real estate transfer assessments (RETAs) with major developers. Different from a RETT, a RETA is a voluntary negotiated agreement between a municipality and a developer that becomes a deed restriction on the sale. The disadvantage of a RETA is that it only applies to a new housing development Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 46 Final Report where the developer agrees to the restriction; it does not apply more uniformly to sales or re- sales community-wide. In Denver, for example, the Stapleton redevelopment project assesses a 0.25 percent RETA on the sale of housing in excess of $100,000. 4.2.3.7 Dedicated Property Tax Similar to the dedicated sales tax, a number of communities have approved an additional property tax levy dedicated to affordable housing. Although Boulder has a small mill levy that generates funding for affordable housing, more successful examples are found in Cambridge, MA where significant funds via a property tax surcharge are generated (more on this example is provided in Appendix C). But perhaps the most successful case study is Seattle, which since 1981 has passed 5 voter-approval housing levies (more is also provided on this example in Appendix C). In Colorado, a property tax increase would be subject to TABOR and require city-wide voter approval. Other than for school related initiatives, it is generally harder to implement a property tax increase than a sales tax increase. For this solution to work in the City of Fort Collins, a regional solution (i.e. involving Larimer County) would have to occur. 4.2.4 Housing Development Programs There are a number of programmatic structures for building, operating, and managing affordable housing including housing authorities and community land trusts as summarized below. 4.2.4.1 Housing Authorities Cities and counties in Colorado can establish a housing authority by resolution of the governing body, as established by C.R.S. § 29-4-201 and C.R.S. § 29-4-501.29 Housing authorities can develop, own, and manage publicly owned affordable housing, and they can function as an entity of the city or county or as a separate governmental entity. The Fort Collins Housing Authority (FCHA), a quasi-governmental entity, which does not receive funding from the City, is an integral component of the community’s efforts to address housing affordability issues. It manages more than 150 public housing units, as well as its Redtail Ponds development, Villages affordable housing development, and manages the Section 8 housing choice voucher program, and resident services program. One of the major benefits of the housing authority model is its ability to receive a wide spectrum of funding to devote to community projects. Because housing authorities are interpreted in legal opinions as enterprises rather than local districts, as long as their annual grant revenue from state and local governments is less than ten percent of their total budget, according to information from the Department of Local Affairs, certain expenditures by these authorities are not counted against the local or county government limits imposed by TABOR. 29 Creation of a City/Town Housing Authority (HA) is initiated when a petition, sponsored by twenty-five (25) residents of a community, is filed with the town/city clerk indicating the need for such an authority. After concluding at a community hearing that an HA is needed, a resolution is adopted and forwarded to the mayor’s or county clerk’s office. Upon filing a signed certificate by the newly appointed Housing Authority board with the Colorado Division of Local Government in the Department of Local Affairs, the municipal governing board can act as the board of directors of the authority, or appoint a board of housing commissioners. These officials and their successors are constituted as a housing authority, which is a body corporate and politic. Once established, an HA may employ a secretary who shall be an executive director. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 47 Final Report 4.2.4.2 Housing Trusts Housing trust funds (HTFs) are state, county or municipal organizations that may collect and disburse funds for constructing and operating affordable housing. There are over 700 trust funds in the U.S. Local trusts typically collect and disburse funds from a city’s other housing programs, such as dedicated sales taxes, excise taxes, and CIL from IHO programs. 4.2.4.3 Community Land Trusts Another organizational model, the community land trust (CLT), is a non-profit that provides permanently affordable housing units by acquiring land and removing it from the speculative for- profit real estate market. CLTs hold the land they own “in trust” in perpetuity for the benefit of the community by ensuring that is will always remain affordable for homebuyers. CLTs were enabled under Section 213 of the Housing and Community Development Act of 1992. There are currently over 250 CLTs in the U.S. including the Colorado Community Land Trust in Denver (formerly the Lowry Community Land Trust) and the Thistle Community Land Trust in Boulder. A CLT typically acquires land for affordable housing in its designated community. The land is transferred to a developer and ultimately a homeowner under a long term land lease. The CLT generally leases the land to a qualified homeowner at a reduced rate to subsidize the housing unit price. It retains the option to repurchase the housing unit upon sale and the resale price is set by formula to give the homeowner a fair return on its investment but also to maintain affordability for future homeowners. x Colorado Community Land Trust - The Colorado Community Land Trust (CCLT) is a 501(c)(3) nonprofit organization founded in 2002 with the mission of creating, and preserving in perpetuity, affordable home ownership opportunities for moderate income individuals and families. Originally called the Lowry Community Land Trust, CCLT initially focused on the redevelopment of the former Lowry Air Force Base. In 2006, the service area was expanded to include the entire Denver metro area. In general, CCLT ensures long-term afford ability by maintaining and owning the land and by limiting the resale price of the home, allowing the seller to benefit from some appreciation (25 percent return of equity) while still keeping the resale price affordable. It has a total of 189 properties, including two projects at Lowry – e.g. Maple Park, a 68 home development built in 2004 and Falcon Point, a 72 unit townhouse development built in 2007. To date, none of the homeowners have lost their homes through foreclosure. x The Housing Trust - The Housing Trust is an independent community development 501(c)3 non-profit corporation based in Santa Fe and serving the northern New Mexico counties. The Trust was formed in 1992 by the City of Santa Fe, Enterprise Community Partners, and existing housing non-profit groups to provide an umbrella housing organization that could directly assist potential homeowners and work to obtain land, project financing, and other resources needed to accelerate affordable housing efforts in Santa Fe. The Housing Trust has produced 500 units of housing in Santa Fe and provided hands-on training and individual counseling for nearly 5,000 potential homeowners. To date, none of the 1,200 homeowners assisted through the Trust have lost their homes through foreclosure. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 48 Final Report 4.2.5 University/City Partnerships A number of colleges and universities have formalized their commitments to affordable housing through partnerships with the local municipality. Such partnerships are typically funded through an initial endowment from the university and/or funded through ongoing donations or local or state contributions as briefly summarized in the examples below: x University of Chicago: The University of Chicago subsidizes housing for low-income residents in surrounding neighborhoods with projects in Woodlawn and Jackson Park Terrace. It owns and maintains 2,000 rental units on the south side of Chicago for student and faculty housing. Currently, it is estimated that 65 percent of the University’s faculty and 3,000 staff members live in the neighborhoods surrounding campus.30 x Duke University: The Duke-Durham Neighborhood Partnership was founded in 1996 and has raised more than $12 million to invest in partner neighborhoods, including a $4 million investment in Self-Help, a community development lender to support development of affordable housing.31 x University of Iowa: The Neighborhood Partnership is an effort with the City of Iowa City focusing on neighborhoods near the University campus that have a single-family character but also have a large renter population. The program is dedicated to ensuring that the University of Iowa Campus and surrounding neighborhoods remain vital, safe, affordable, and attractive places to live and work for both renters and homeowners.32 x Harvard University: In 2000, Harvard University launched the Harvard University 20/20/2000 Initiative, under which the University committed $20 million of low-interest financing to support affordable housing in both Cambridge and Boston. This initiative has helped to fund about 17 percent of built and renovated affordable housing since the program’s inception. It also administers a $6,000,000 revolving loan fund.33 30 Refer to this website for more information: http://www.uchicago.edu/community/development_housing/ 31 Refer to this website for more information: http://community.duke.edu/ 32 Refer to this website for more information: http://www.icgov.org/?id=1995 33 Refer to Appendix C for more information. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 49 Final Report Figure 26 Revenue-Generating Tools ExciseTax Dedicated SalesTax Occupational PrivilegeTax (HeadTax) UseTax(on Construction Materials) Dedicated LodgingTax Document RecordingFee RETT/RETA Dedicated PropertyTax Whatisit? Residentialand commercial developmentpaya feepersqftofnew floorarea Additional assessmenton taxablegoods Taxassessedper workerpermonth Additional assessmenton construction materials Additional assessmenton lodging Additionalfeeper document Advaloremtax (RETT)orvoluntary assessmenton saleofhome (RETA) Additionalmill levy Whatisatypical assessment? $0.50to$13.00 persqft 0.25%to0.50% $4to$10per monthperworker 0.35%to3.00% 2%to4% $3perdocument 0.1%to2.0% 0.17to0.80mills Howisitadministered? Needcollection system Existingsalestax structure Needcollection Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 50 Final Report 4.3 Summary and Conclusions Most communities with robust affordable housing programs rely on an IHO applied to residential development and/or commercial linkage applied to employment uses to generate affordable housing units to address the affordable housing impacts of new development. Many communities also use additional funding sources such as an excise tax, dedicated sales or property tax, head tax, doc fee, and/or RETA. Home rule cities in Colorado have the authority to impose all of these regulations, taxes or fees under home rule powers subject to City Council and/or voter approvals as noted above. Economic & Planning Systems, Inc. 51 133074-Final Report 5.0 RECOMMENDATIONS EPS’ recommendations are based on analysis of economic, demographic, and housing market trends, and they incorporate ideas, input, and guidance from stakeholders, as well as the considerations of City staff and City Council. They represent policy solutions deemed presently feasible. Among the objectives in crafting these recommendations were that they be tailored to local and regional conditions, the regulatory and political environment, and that they balance the requirements of a policy tool with the positive impacts to addressing housing issues. x Prioritize regenerative, or ongoing, rather than one-time fixes x Emphasize tools with the greatest potential impact x Ensure that any recommended code changes are compatible with existing code x Pinpoint recommended programs to address the issue where the greatest burden exists x Focus on solutions with broad stakeholder support Among the policy tools recommended, the following exclude revenue-generating options, as they lack sufficient support to be implemented at this time. It should be noted, however, that the City should consider these options for the future, as they are powerful tools to remedying housing issues and they have the broadest and greatest impact on the issues (Figure 27). Figure 27 Impact of Recommended/Not Recommended Policies Re/Examine MarginalFeeStructure FeeWaiversfor AffordableProjects PublicFinancing BasedIncentivePolicy Affordable HousingEasements Reductionof MinimumHouseSize DispositionofCity's LandBankProperties SupportConst. DefectClaimReform CodeͲBased IncentivePolicy Modificationsto 3ͲUnrelatedRule RevenueͲGenerating FundingMechanisms Inclusionary HousingOrdinance Commercial Linkage HOUSINGINOTHERCOMMUNITIESISMEETING AFFORDABILITY NEEDSFORCITY'SWORKFORCE;I.E.INͲCOMMUTINGISUP NEEDFORAFFORDABLEOWNERSHIPHOUSING ISSUE RECOMMENDATION NEEDFORAFFORDABLERENTALHOUSING WAGES NOTKEEPINGPACEWITHHOUSINGCOSTS IMPACT Recommended NotRecommended High Med Low Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 52 Final Report 5.1 Cost Reduction Options There are actions that the City can take to influence several aspects of overall ownership housing costs. While much of the discussion that follows concern the development of ownership housing, the recommendations have the potential to positively affect development costs of rental housing as well. A considerable effort was made to identify the extent to which these costs have changed over time, and discussions among stakeholders were lively and engaged on multiple levels of the implications of these findings. EPS’s analysis of affordability in this study incorporated not only an examination of affordability and housing price trends in Fort Collins and the surrounding communities, but also an examination of the components of the cost of housing in Fort Collins. Figure 28 depicts a combination of multiple data sources to illustrate the trends in a few of the largest overall cost components of housing – land, hard cost, and soft costs, including architecture and engineering, contractors, a floating amount for developer fee and profit, as well as city and county fees and taxes. Figure 28 Trends in Housing Cost Components, 2000-2013 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 AverageHousingCostsbyComponent CityFees&Taxes[Note4] OtherSoftCosts&Profit(FloatingAmount)[Note3] HardCosts[Note2] Land[Note1] Source:CityofFortCollins;Larimer CountyAssessor;ElevationsRealEstate; Economic&PlanningSystems [Note1]:LandvaluesarebasedondatacompiledfromtheLarimerCountyAssessor's office.Theyrepresentthecostofafinishedlot includinginfrastructureandwater(asaportionoftotalhousingsalesprices).Theyaccuratelyrepresenttheportion(i.e. percentage) oflandtohousingsalesprice,butpresentedhere,theyhavebeencalibrateddowntofitthehousingpricedataavailable.Actuallot salesprices,aswithnewunitsalespricesarehigherthandepictedbythesenumbers. [Note2]:Thisincludesthecostofmaterialsandlabor. [Note3]:Thisincludesothersoftcosts,suchasarchitetureandengineering,legal,andinsurance.Developerprofitisestimatedasa floatingamount,i.e.thedifferencebetweentheotherthreecomponentsandtheoverallhousingpricedatapoints. [Note4]:ThesefeesandtaxeswereestimatedwiththeassistanceofCityofFortCollinsstaff,includingDevelopmentReviewServices, Engineering,andtheBuildingDepartment. [Note5]:ThesetotalsrepresenttheaverageofnewandexistinghomesalesthroughoutFortCollins.Theyalsorepresentdetached (i.e.singleͲfamily)andattached(i.e.condominiums,townhomes,duplexes)housinganddonotincluderental. [Note6]:Thiscomponentanalysisandtrendswerecreatedforthepurposesofdiscussingvariouscostcomponentsusingbest availabledata.Giventhelimitationsandavailabilityofnewsalesdatatrends,overalltrendswereused.Asaresult,the depicted overallcostswillbenoticeablylowerthanactual"coststobuild".Thatis,thesetrendsdonotdepictprecisecoststobuild inFort CollinsͲ theyarearepresentation.Suchactualcoststobuildwouldbehigher. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 53 Final Report 1. Marginal City Fee Structures The marginal fee structure of the City’s fees discourage the construction of smaller, i.e. more affordable, units. Background The examination of overall costs show that fees and taxes increased by an estimated $7,500 between 2000 and 2013. During this time, updates to the structure of the permit and plan check fees were made, as were updates to specific calculation of utility capital expansion fees. As noted by multiple stakeholders, the structure of the city’s fees and building code incentivizes the construction of larger units, because many are charged on a per-unit basis rather than a per square-foot basis. Recommendation EPS recommends that the City re-examine its fee structures, particularly its permit, plan check, and capital expansion fees, to ensure equitability and appropriateness,34 particularly related to the disproportionate impact of fees on constructing smaller units. It would be the objective of such an effort to incentivize developers to construct smaller, potentially more affordable homes. Impact Permit and plan check fees are approximately 1 percent of the total cost of a housing unit, and capital expansion fees are approximately 6 percent of the cost of a housing unit. If permit and plan check fees were reduced even by 50 percent, it would reduce the overall cost of new housing by 0.5 percent. Likewise, a 10 percent reduction in capital expansion fees would result in a reduction of 0.5 percent in the cost of new housing. 2. Fee Waivers for Affordable Housing As shown in Figure 28, City fees and taxes account for an estimated 9 percent of the cost of building a home. Fee waivers for affordable housing can be an incentive to the development of housing. The City has had an affordable housing incentives policy with regard to the development of units by the Fort Collins Housing Authority since 1988, and the policy has been modified several times since then to expand the scope of fees for which a project could receive a waiver. Most recently, however, the ordinance was revisited and modified to apply only to projects that provided housing for households earning less than 30 percent AMI and subject to City Council approval. One of the issues (according to Agenda Item Summary 13 dated March 5, 2013) was a concern over the City’s ability to back fill these fee waivers with General Fund dollars. 34 EPS recognizes that the permit and plan check fees were recently updated as of January 1, 2012 based on a cost-recovery analysis, and as summarized by the Agenda Item Summary, dated September 6, 2011. As such, the permit and plan check fees were updated simultaneously to achieve a higher cost-recovery position than were previously being achieved. It is also recognized that the City is in the process of updating its capital expansion fees, changes which have not affected the analysis of cost components in this study, however. Furthermore, EPS recognizes that the recommendation to re-examine the per square-foot basis of the capital expansion fees would require a legal nexus study to justify either differential fees based on the size of the unit, or a different analysis to establish the connection between capital facilities impacts and the size of a unit in terms of square feet. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 54 Final Report Recommendation While the City should not over-commit General Fund resources, EPS recommends the City (in combination with the evaluation of alternative funding sources) re-examine its ability to fund fee waivers for affordable housing projects. And as it currently applies only to projects of the FCHA that provide units below 30 percent AMI, EPS also recommends that the City reevaluate its definition of applicable affordable housing to include a wider spectrum of AMI levels more commensurate with other affordable housing products (i.e. workforce housing) and to consider eligibility criteria for other providers, such as for-profit and non-profit developers. Impact Recognizing that funding for fee waivers must be back-filled from other sources, like the General Fund, and given that the City has already experienced administrative and political challenges approving fee waivers, it is estimated that such a strategy would have an impact on reducing the cost to develop affordable housing to a developer by approximately 4 percent. City fees such as permit, plan check, and capital expansion fees (excluding utility capital expansion fees) account for approximately 4 percent of the cost of new housing as noted in this report, depending on size and value. 5.2 Regulatory Changes 3. Incentive Policy Although housing affordability conditions in the City have not reached the point where a weighty regulatory tool like an IHO or linkage fee is warranted, there exists, however, a degree of need that could be addressed through a milder policy applied to more limited situations. There are two general concepts that frame this issue: incentive zoning ordinances and development agreements common in annexations or major re/developments receiving public financing. Incentive zoning ordinances (e.g. Cambridge and Seattle) provide guidance for a scaled incentive policy solution. The provisions of incentive zoning ordinances are typically triggered by requests for modification to code that have significant economic value, such as height or density bonuses, parking requirement reductions, setback modifications, FAR modifications, or use variances. In these situations, developments that perceive a market or economic value in greater height or density, for example, are granted the additional floor area in return for the construction of affordable housing or a predetermined (per-square foot) monetary contribution to an affordable housing fund. These ordinances are also often applied to any development or redevelopment (residential, non-residential, or mixed use) that requests such a modification. The annexation agreement or major development agreement between a developer and the City illustrates the second important guiding concept for a modified incentives policy. The most relevant feature of these agreements is that of negotiated terms on a case-by-case basis. In these instances, a municipality typically agrees to provide a certain level of public assistance or incentives in return for the assurance of a public good, such as infrastructure, open space, or another public amenity. Recommendation EPS recommends that the City consider a limited version of the incentives ordinance policy that is negotiated on a case by case basis. The policy’s provisions would be triggered by the use of public financing, e.g. tax increment finance, etc., (not fee waivers for affordable housing), rather Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 55 Final Report than a mere variance to code as in the Cambridge or Seattle examples. At the center of this recommendation is the notion of a quid pro quo. That is, if a development receives incentives from the City, it should provide a public good in return.35 As such, the City would need to modify its criteria for projects receiving tax increment finance, sharebacks, or another type of public financing to include affordable housing provisions. To the extent the City is interested in pursuing this recommendation, it will need to make political determinations of the extent to which affordable or workforce housing would be provided in a development and/or the amount of a fee in-lieu of housing in the case of a development not intending to build units. As for the number of units (or percent of units set aside at a particular AMI level, for example), the City would need to identify the percent of units to be provided and at what affordability level (e.g. 10 percent of housing between 60 and 80 percent AMI). As for a payment of a fee in-lieu of building units, the City may use the cost to construct units or a percent of the affordable sales price of the unit as in the examples from inclusionary housing ordinances from around the state and country. In the case of commercial developments receiving public finance assistance, the City could choose to link the requirement of providing affordable housing to a percent of the employees generated by the development, as in the case of a commercial linkage program model. In this case, especially, a nexus study36 would likely be required (subject to determinations made by the City’s legal staff) that provides a legal and quantitative basis between the generation of employees and the provision of housing. Impact The scale of the impact would also depend on the scale of development to which this policy would apply and the number of developments of this scale in the future. 4. Affordable Housing Easement/ Agreement Manufactured housing represents an important part of the City’s existing affordable housing inventory. The loss of existing units would be detrimental to the overall affordable housing inventory. As described previously, the easement or agreement could both be used to encourage preservation of existing affordable housing whereby the owner pledges to keep housing affordable at certain levels for a certain number of years and where the city offers the property owner something in return. Typically, tax/fee/assessment rebates are generally offered to the property owner. 35 In practice, developments that receive a negotiated amount of public financing are likely to negotiate for a higher public financing amount to compensate for the additional requirement. But since the source of public financing is typically related to a share-back of sales tax revenues, this incentive policy structure would essentially ensure that a portion of the benefit is returned to the City in the form of affordable housing infrastructure. 36 A nexus study provides a quantitative basis for the establishment of an affordable housing requirement, such as a housing fee, that links the magnitude of the per square-foot fee to the estimated housing demand generated by each increment of land use in a development. These studies provide the legal basis for the establishment of a housing fee and a quantitative relationship between the fee and the scale of the development in the event. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 56 Final Report Recommendation EPS recommends the City pursue a policy that provides for an easement or an agreement that is recorded in property records, which effectively bind future owners of certain manufactured home parks to preserve existing uses. This recommendation could potentially also be more broadly applied as a tool to preserve other types of affordable housing. EPS also acknowledges that there may be other market-based solutions, policies, or strategic direction that the City can explore with regard to this housing need. Impact The cost of such a policy option is anticipated to be associated with the administrative process it would take to write such code language and/or guidelines, the time in the planning process to approve such changes to the zoning code, as well as the cost of the easement itself. In addition to being possibly a political determination, the value of an easement could be more appropriately estimated by conducting a net present value assessment, such that the net present value of foregone future rent or sales revenues were estimated. There is possible additional benefit to the city in moving forward with this option, especially in that existing quality manufactured housing would be preserved as an integral part of the affordable housing inventory. To the extent that other developments would move forward under such zoning, there could be additional benefits. 5. Reduction of Minimum Home Size The City’s building code currently does not allow single-family homes to be built smaller than 800 square feet. Where land values have appreciated to the point that building housing under an existing regulatory structure has become costly, the ability to develop housing options on either smaller lot sizes or construct smaller units is a regulatory option worth pursuing. In some communities, the option of micro-housing (units generally smaller than 800 square feet) has gained increasing attention as one solution among others to address increasing housing costs. Recommendation EPS recommends that the City reevaluate its basis for the minimum ownership dwelling unit size and adjust it downward to allow greater flexibility to the development industry in providing smaller and more affordable housing units. Impact This policy is not anticipated to have a significant cost impact on the City. Its impact on addressing affordable housing needs, however, would be subject to the strength of the market for these smaller products. 6. Land Bank Properties Through the creation of a Land Bank in 2001, the City acquired five properties between 2002 and 2006 with a total assessed value of $3.2 million (in 2009 dollars), according to a 2010 status update. It was the City’s intent to hold these properties until such time that development in their vicinity began to encroach and surround them. As more than a decade has passed since the acquisition of the first site, development now surrounds several of the sites. As such, the time is appropriate for the City to consider using one or more of these sites for its intended purpose(s) including affordable housing. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 57 Final Report Among several 501(c)3 organizational structures, the Public Housing Authority (PHA) and Land Trust models are perhaps the strongest and most relevant to this situation. Since Fort Collins already has an effective PHA, the land trust model is a compelling option because of its flexible organizational model structure, but there a few questions the City must address before moving forward with one or the other disposition options. Recommendation Overall, EPS recommends that the City, having fulfilled the land bank’s intent, use one or more of its properties for affordable housing either through an RFP for a site’s development; or by placing the properties in a community land trust. It should be noted that both options allow for the participation of various non-profit housing partners (specifically the Fort Collins Housing Authority and Catholic Charities) who have expressed interest in developing one or more of the sites. RFP Options – Under this option, the City would continue its land bank program. EPS envisions that the City would issue an RFP, to which any combination of non-profit and/or for-profit developers may respond. Because the land would be used as leverage, the RFP could stipulate the desired timing of development, desired land uses, scale of affordable housing use, and a number of other development requirements such as level of affordability, minimum duration of affordability, and statement of appraised value. Under this option, some key considerations are: x Sale of a site would generate immediate revenue for acquiring other properties for the current land bank program x Relinquishes direct/long-term control of land to another entity Land Trust Option – Under this option, the City would place some or all of its land bank assets with a community land trust, similar to the Colorado Community Land Trust. This option would not generate funding itself, but would be as a pass-through vehicle for federal, state, and/or local funding. Because a land trust’s mission as a 501(c)3 can be written broadly to grant it powers to acquire, develop, own, lease, and manage property, and because it can apply for similar funding as a housing authority (e.g. CDBG, HOME), its functions could closely resemble the FCHA’s. Under this option, some key considerations are: x Gives the City greatest direct control over the long-term affordability of its properties x Generate ongoing revenues through land rents to support the trust’s administrative operations x Could be costlier than selling to the FCHA, for example; as such, ensuring low operational costs means clarifying with the Larimer County assessor whether such an entity would have tax-exempt status One question that distinguishes these options from each other is whether the City would prefer to have long-term (i.e. direct) control over the land bank properties. On the one hand, direct control over the land may come at a greater cost administratively through the creation of a land trust. But selling (or leasing, i.e. partnering) with one or more properties to the FCHA or similar entity means that the partner organization’s structure could absorb administrative costs. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 58 Final Report Impact If half of the 50 acres of land bank properties were developed, it would generate 300 workforce units at a townhouse density of 12 units per acre or 625 rental units at a density of 25 units per acre. Under either disposition option, the cost of land would not be passed through to the homebuyer, and given that land accounts for an average of 25 percent of the final sales price of a home, this option would make a significant impact on the identified need for affordable ownership or rental housing. 5.3 Legislative Option 7. Construction Defect Remedies The threat of construction defects claims lawsuits negatively affects the market for for-sale multifamily housing construction. Solving issues stemming from the threat of construction defects claims falls outside of the local policy arena and into the realm of a state-level concern, but the issue is significant. Recommendation EPS encourages the City of Fort Collins to engage its elected officials and state representatives in the pursuit of a remedy to the issues surrounding construction defects claims in particular during the next legislative session. 5.4 Other Considerations It is also worth reiterating a few other considerations, some of which originate from the Affordable Housing Redevelopment Displacement Mitigation Strategy, dated March 26, 2013. In that report, while focused primarily on the mitigation of issues related to manufactured housing districts, the two issues related to housing affordability, and specifically the preservation of it, are: 1) draft a manufactured home park zoning district; and 2) ensure that the notification process is begun in a timely manner (i.e. possibly sooner), that it becomes easier for existing parks to be redeveloped or relocated, rather than eliminated. In terms of cost-reduction measures, the City may also wish to explore an increase to its loan limits for eligible households under the Home Buyer Assistance program. The HBA program loan limit is set at 5 percent of the purchase price or a maximum of $10,000, but because average prices (for new homes especially) have escalated well beyond the point where 5 percent and $10,000 were roughly equivalent, a higher maximum threshold, to the extent the increase can be justified, would be effective. 5.5 Not Recommended The following affordable housing policy options are not recommended at this time. They are, however, described in detail as to why they are not appropriate for consideration at this time, and/or whether they would be appropriate for consideration at another time. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 59 Final Report 5.5.1 Incentive Policy in Land Use Code One of the most commonly used tools used to encourage market driven production of affordable housing is a zoning-based incentive. That is, builders who commit to deed restricting X percent of their units at Y percent AMI for at least Z years receive a zoning benefit that allows them to build more units, or more efficiently build them, or to get approvals faster than those builders who do not make similar commitments. While a variety of zoning incentives can be offered, the most common ones are (a) additional building density, (b) additional building height, (c) additional lot coverage (less on-site open space), and (d) reduced on-site parking requirements. In theory, the additional revenue generated by being able to build more units on a given piece of property compensates the developer for the lower average per unit sales price they achieve when the sales prices for the affordable units are added in. In practice, that means the incentives generally need to be substantial, not simply token amounts (10 percent density incentives are sometimes criticized as tokens that will not change a builder’s pro forma enough to warrant incorporation of affordable units, while 25 to 30 percent incentives are sometimes considered large enough to achieve that result). While it is tempting to draft incentive provisions that are discretionary (i.e. requiring a showing or hearing before some body that awards the incentive), it is much more effective to make the incentives a part of code, so that builders know they will not need to go to the time, expense, and potential NIMBY (not-in-my-back-yard) battle, that a discretionary process involves. Because the conventional incentives offered in this type of a land use control, i.e. the density bonus, additional building height, and reduced parking requirements, would not carry substantial economic value for the City’s developers, as noted on numerous occasions during the stakeholder involvement process, EPS does not believe that this option would have a strong enough impact to warrant consideration. 5.5.2 Modifications to 3-Unrelated Rule This highly controversial issue surfaced during discussions of rental housing needs where it was noted as a possible solution to solving or relieving some of the pressure on the existing rental inventory. The issue also surfaced during discussions of the housing needs of distressed populations, such as the elderly, but with regard to ownership housing, not rental housing. According to City Neighborhood Services staff, areas throughout the City allow Extra Occupancy Rental Houses (EORH)37 , but through an exemption process.38 In 2010, City Council decided against expanding the allowance of EORHs into two additional zones, which at the time were designated Neighborhood Conservation Medium Density.39 37 A copy of this map can be found at: http://www.fcgov.com/neighborhoodservices/pdf/occupancy-zone-map.pdf 38 Currently, the owner of a property who intends to lease the property to more than three unrelated persons within a designated zone in the City needs to file an Occupancy Disclosure Form with the City. 39 According to Neighborhood Services, City staff initially supported the allowance of EORHs in these proposed NCM zones, but after the findings of public outreach revealed that 72 percent of the respondents to a mail survey indicated their disapproval of such a prospect, City staff recommended in memo to the City Manager dated September 9, 2010, that the designation of EORH in the NCM zone not be pursued. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 60 Final Report Research presented in this report shows that occupancy limit ordinances vary widely from community to community,40 and while not providing clear direction for the City, there are a few regional examples of cities (Boulder and Denver) where occupancy limits are increased in high- density or multifamily unit zones only. Recognizing that dialogue surrounding this issue is polarized, and that there is strong opposition to this option, were the City ever to pursue a modification to this occupancy limit in the future, EPS believes it should be done on a city-wide basis, rather than on the basis of zones throughout the City. On the other hand, the City may wish to evaluate streamlining its EORH exemption process, or expanding it to include exceptions for owner-occupied housing, options which do not seem to face as strong political opposition as relaxing the 3-unrelated rule. Another related solution, which also seems to have more support, could be the establishment of a landlord licensing and training program, similar to those practiced in other university towns with occupancy restrictions. Such a program provides neighborhoods and residents with assurance that landlords, and ultimately the tenants, are aware of relevant city regulations, e.g. nuisance ordinances.41 On the issue of relaxing the 3-unrelated rule, it is difficult to quantify what the impacts that such a policy change could have on overall housing affordability and/or vacancy levels in the rental housing supply. Some have suggested that landlords might take advantage of a situation where the maximum occupancy is increased to 4-unrelated persons but not lower rents, thus effecting no change on overall rental housing cost burdens, in which case, the impacts while opening up inventory (i.e. bed capacity particularly as it relates to student housing demands), would not positively affect housing affordability issues. On the issue of reviewing and streamlining the exemption process by which landlords may obtain exemptions from the 3-unrelated rule, it is presumed that such an option could have some positive impacts associated with the supply of rental housing. 5.6 Alternative Funding Options EPS recognizes that the current political and economic market present challenges that would make advancing a campaign to establish an alternative and dedicated funding source for housing issues stand little chance at passage. Nevertheless, they are described here in detail and estimates of their impact are given, because, were the City to pursue such options, they would have the largest impact of all options considered. These options are also removed from the listed recommendations because it is acknowledged that the City is currently preparing for a capital improvements campaign to renew a 0.25 percent sales tax for capital facilities. As such, any additional taxes would dilute the current efforts and likely challenge both efforts. 40 A survey of communities throughout the U.S. shows that there seems to be no correlation between the size of a city and whether it allows three or four (or more) unrelated persons per rental unit. A list was compiled on the website www.collegetownlife.com, but is no longer an active website. PDFs of the survey data still exist, which were summarized in the research in this report. 41 It is important to note that CSU and the City are actively engaged in ongoing efforts to mitigate nuisance issues arising from college students renting units within residential neighborhoods. Party Registration is an effort between CSU and the City to provide students hosting parties with an opportunity to receive a warning, providing a 20-minute window to voluntarily terminate a party after a noise complaint is received. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 61 Final Report As such, the following are three taxes used by other communities to address housing goals, such as the acquisition of land for affordable housing development, subsidies to leverage private- sector development, the rehabilitation of existing units, or other needs. While some of these funding sources are used by communities on a permanent basis, others institute them on a time- limited basis, which would be more appropriate to the Fort Collins market, i.e. funding discrete projects and goals over a short period of time, such as three to five years. 5.6.1 Excise Tax The excise tax is a tax on construction materials for all new development. Boulder’s excise tax, for example is $160 per 1,000 square feet of residential development and $340 per 1,000 square feet of commercial development. The excise tax is a preferable option by comparison to a linkage fee, because it does not require a complicated nexus study to establish its basis, and it does not require that funds collected be allocated to a specified set of improvements. It does, however, require voter approval. As one possible option to explore in the future, EPS recommends a modest form of this tax because it would more broadly distribute the burden of providing an alternative funding source for affordable housing. It is difficult to estimate the impact that this tax would have, because it is highly related to activity in the construction market. 5.6.2 Dedicated Sales Tax The most broadly-based funding source is the sales tax. A number of communities have imposed a dedicated sales tax collected to fund affordable housing construction and programs, but many communities adopt this mechanism in a time-limited format. In 2013, Fort Collins collected more than $92 million in sales tax revenue based on an estimated $2.5 billion in total taxable sales. As an example of how much revenue could be raised under this alternative, at a similar level of taxable sales as 2013, a dedicated sales tax of ¼ cent in the City could generate approximately $6 million in funds for affordable housing goals.42 Given that there is strong resistance to any additional tax, EPS would recommend that the City consider pursuing this option as a long-term strategy, and that it be considered on a time-limited basis. While a more comprehensive impact assessment of an increased sales tax rate might be required, EPS estimates that the basic impact on households earning 100 percent of AMI ($53,400), who currently spend approximately 34 percent of their total annual income on retail goods and services (an estimated $18,100), would be minimal. Based on information from the U.S. Census of Retail Trade, an additional ¼ cent sales tax would add approximately $45 in additional taxes on $18,100 of retail goods and services expenditure per year ($18,100 x 0.0025). 5.6.3 Dedicated Property Tax A third, and potentially the most equitable, taxing option that the City could explore in the future is a dedicated and time-limited property tax mill. As of 2013, there was approximately $4.2 billion in total property valuation in Larimer County. To generate a similar $6 million in one year, a property tax mill of 1.400 could be adopted. Alternatively, to generate this amount over three years would require the adoption of a 0.47 mill property tax. 42 EPS has used the smallest common increment of a sales tax (¼ cent) to estimate the potential revenues from a time-limited dedicated sales tax. The $6 million figure is not necessarily representative of a determined amount according to an estimation of need, but a benchmark for comparison against what amount of mill levy would be necessary to assess to generate the same amount in property tax revenues. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 62 Final Report As with the pursuit of a dedicated and time-limited sales tax, EPS would recommend that the City pursue a time-limited property tax dedicated to housing as a component of a longer-term funding strategy. Because this option would also face community opposition, particularly from the business community, EPS recommends that a very small mill levy of 1 mill or less, as used in the example, be pursued because the burden of a property tax mill falls more heavily on non- residential assessed valuation than residential assessed valuation, based on the stipulations of the Gallagher Amendment. As stated previously, for this solution to be successful, it would also have to be evaluated on a regional level, i.e. where Larimer County is involved. Again, while a more comprehensive impact assessment of an increased property tax rate might be required, EPS estimates that the impact on a household with a home of median-value ($241,600 as of 2013) would see their annual property tax liability increase by approximately $27. Based on the statewide assessment of 7.96 percent, 1.400 mills on an assessed value of approximately $19,200 would be approximately $27 per year. 5.6.4 Inclusionary Housing Ordinance An Inclusionary Housing Ordinance (IHO), as it applies to either ownership or rental housing, is also not recommended for the following reasons: x An IHO directed at Fort Collins’ greatest housing need, i.e. rental housing, would face legal and logistical challenges;43 x IHOs are effective where the supply of housing product affordable to low AMI levels is scarce; x IHOs are effective in markets saturated by high-end home sales, such as resort markets; x IHOs are inefficient tools when the price range of deed-restricted units is partially or completely overlapped by the presence of existing or new home sales prices elsewhere in the competitive market area, which in the case of Fort Collins, extends to the surrounding towns, as shown in Figure 29 and Figure 30.44 43 The City of Boulder is the only urban municipality in Colorado to have an IHO for rental housing development. Because of the limitations on rent control identified by the case Lot 34 Ventures v. Telluride more than a decade ago, a municipality may not legally require a developer to provide rental units at a prescribed rent level. Only through a legal and administrative process that has to date not been legally challenged, and through the provisions of HB 1017, which clarified that municipalities may enter into a voluntary agreement regarding rents on private properties, the City of Boulder maintains its requirement that projects of more than 4 units must provide 10 percent affordable rental units. The City Attorney’s office also stipulates other requirements which must be met by a developer of affordable rental product, such as that the affordable rental inventory must be owned and operated by a housing authority or similar entity. In EPS’s work with the City of Boulder on this issue, it became apparent that, although developers were attempting to provide for the units on site, logistical, legal, and even lending issues arose such that made meeting all the requirements extremely difficult. 44 Figure 2 illustrates the similarity of median housing sales prices in surrounding communities. While the main intent of this graphic is to illustrates that there are affordability gaps in several of the surrounding communities with respect to median household incomes, it also illustrates that because there are communities with more affordable housing, an IHO creating deed- restricted units in the market would: a) further encourage household choices to buy homes elsewhere in the trade area, and b) not be effective for reasons stated in the following discussion of price bands. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 63 Final Report Figure 29 Affordability Gaps in Fort Collins and Surrounding Communities, 2013 Figure 30 depicts 99 percent of existing and new home sales in Fort Collins during 201345 . Illustrated in this graphic are more than 3,500 home sales, approximately 22 percent (more than 770) of which fell below $190,600, or affordable to households earning 100 percent of the Area Median Income ($53,400). Also shown are the typical price ranges for units that would be sold as deed-restricted (i.e. income-restricted) under a regulatory structure such as an inclusionary housing ordinance. The blue shaded area demarks the range of housing affordability typically targeted by an IHO for affordable housing – 80 percent to 100 percent AMI, or housing priced between $152,000 and $190,000. One of the issues this would create in Fort Collins would be that deed-restricted housing created by an IHO would compete directly with market-rate housing. Faced with the choice between free market and deed-restricted housing, a household inevitably chooses a free- market unit to benefit from the possibility of unrestricted housing value appreciation, whereas deed-restricted units have value appreciation limits. Another issue is that the cost to build a home, specifically lot values, in Fort Collins is too high. That is, without subsidy, housing cannot be built for less than $200,000. As a result, the gap between the cost to construct units and what they are required to sell for is often passed on to the market rate units built in the remainder of the project. This issue, however, would not be unique to Fort Collins. 45 Sales of housing above $800,000 are excluded for simplicity of this illustration. $190,600 $261,900 $151,800 $273,500 $207,300 $200,800 $385,800 $256,700 $303,400 $54,400 $8,000 $15,575 $42,850 $18,200 $245,000 $269,900 $167,375 $232,513 $250,150 $219,000 $363,671 $215,600 $297,904 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 FortCollins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor AffordablePrice Gap MedianSalesPrice Source:U.S. Census;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 64 Final Report As a point of reference, Denver’s IHO is tailored to require residential developments to provide units at 80 percent or 95 percent of AMI, depending on type of construction. In Denver, not only is there a considerably greater gap in the availability of housing affordable to these household income categories, but the ordinance has faced considerable opposition from the development and building community since its inception more than 10 years ago. The alternative to an IHO targeted toward 80 percent to 100 percent AMI would be an IHO tailored to address 60 percent AMI. At this range, there is less competitive market inventory (approximately 7 percent of existing home sales were affordable between 60 percent and 80 percent AMI). At this level, however, the gap between the cost of construction and the target sales price is exacerbated, decreasing its practical effectiveness. The green shaded area indicates a common range of housing affordability typically targeted by an IHO tailored to address workforce housing needs – 100 percent to 120 percent AMI, or housing priced between $190,000 and $229,000. In Fort Collins, 20 percent of sales in 2013 fell between these AMI levels. Some communities, e.g. Davis, CA, have adopted IHOs that address their workforce housing needs. Again, this tool is most effective in markets where housing product in this range either is not being built or exists in scarce quantities in the supply. Figure 30 Spectrum of Existing and New Sales (2013) Against Deed-Restricted Housing $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 19% 60% 68% 76% 83% 89% 93% 97% 102% 105% 108% 112% 114% 117% 119% 121% 124% 127% 130% 134% 136% 140% 145% 150% 155% 162% 168% 175% 184% 193% Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 65 Final Report Commercial Linkage Commercial linkage fees are a form of impact fee assessed on new commercial developments or major employers based on mitigating the need for workforce housing generated by the new or expanding commercial business or development providing commercial space for new business. Because they are basically an impact fee, linkage fees require a nexus study to establish the basis for the fee.46 EPS does not recommend a community-wide commercial linkage program at this time for the following reasons: x Commercial linkage programs are more appropriate in markets without as much competition for sales tax revenues; x Linkage programs generally face opposition from the commercial development industry, because most of the burden is placed on non-residential development; x The Fort Collins market competes with surrounding municipalities for sales tax revenues, and the establishment of a linkage fee could potentially discourage development. It should be noted that this recommendation not to pursue a community-wide commercial linkage program differs from EPS’s recommendation to pursue an incentive policy ordinance that incorporates one of the mechanism of a nexus study that would be used as a part of the linkage program establishment. The major distinction is that EPS’s recommendation for an incentive policy ordinance applies only to developments where public financing is involved and not all developments. 46 This is the same type of nexus study as may be required to establish a basis for fees identified under the incentive policy ordinance option #3. The point of difference is that a full commercial linkage program would be assessed community-wide and not conditionally, as recommended. Appendix A: Supporting Tables Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 67 Appendix Supporting Tables and Charts The following are tables and charts to supplement material in parts of the report with additional detail. Figure A1 Overall Average Sales Price Trends, 2000-2013 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 OverallSalesPrices FortCollins(2.8%) Berthoud(2.4%) Greeley(1.7%) Johnstown(2.7%) Longmont(2.1%) Loveland(2.2%) Wellington(1.9%) Windsor(3.7%) Source:ElevationRealEstate;Economic&PlanningSystems Appendix B: Impact of Minimum Wage Increase Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 69 Appendix M EMORANDUM To: Mary Atchison and Sue Beck-Ferkiss, Office of Social Sustainability From: Dan Guimond and David Schwartz, Economic & Planning Systems Subject: Impact of $10 Minimum Wage on Housing Gap Analysis Date: June 20, 2014 At the City Council Work Session on May 27, 2014, Councilman Overbeck requested EPS to evaluate the impact of raising the minimum wage to $10.00 on the analysis of housing gaps and needs. This memo summarizes EPS’s analysis of the issues. Minimum Wage Trends Colorado’s minimum wage has increased from $6.85 to $8.00 per hour over the past 7 years, as illustrated in Figure B1. Annually, the minimum wage has increased at 2.2 percent, or an average of $0.16 per hour each year. Figure B1 Minimum Wage Trends $6.85 $7.02 $7.28 $7.24 $7.36 $7.64 $7.78 $8.00 $6.00 $6.50 $7.00 $7.50 $8.00 $8.50 2007 2008 2009 2010 2011 2012 2013 2014 StateofColoradoMinimumWage Source:Colorado DepartmentofLabor&Employment;Economic&PlanningSystems Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 70 Appendix Wage Levels The first part of this analysis estimates the relationship between household incomes and hourly wage levels. The U.S. Census reports information on the number of households in household income categories from less than $10,000 to $150,000 or more. Figure B2 shows the estimated hourly wage of households at those respective income levels based on the following assumptions. x Multiple Jobs per Household: EPS assumes an average of 1.5 jobs per household. This means that the first step in estimating hourly wages is to divide the household income categories by 1.5 – e.g. a household income of $25,000 would imply that a single job-holder earns approximately $16,667 per year. x Hours Worked per Year: EPS assumes that each job holder is paid at an hourly rate for 2,080 hours worked per year (52 weeks multiplied by 40 hours per week, including 2 weeks paid vacation). In the example from above, a job-holder earning $16,666 per year would be earning $8.01 per hour. x Lower Income Levels: For households earning less than $25,000 per year, EPS assumes there is also an under-employment factor. We estimate that job holders are paid the state minimum wage and calculate the number of hours per household required to reach the total income in each range. Figure B2 Estimated Hourly Wage by Household Income $7.64 $7.64 $7.64 $8.01 $11.22 $16.03 $24.04 $32.05 $48.08 $48.08 and above $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 Lessthan $10,000 $10,000to $14,999 $15,000to $19,999 $20,000to $24,999 $25,000to $34,999 $35,000to $49,999 $50,000to $74,999 $75,000to $99,999 $100,000to $149,999 $150,000or more EstimatedHourlyWageforWorkingHouseholds [Note 1]:Forallhouseholds,thesecalculationsassumethatthereare1.5jobsperhouseholds,andthatjobsaretypicallypaidfor 2,080hoursperyear. [Note2]:Thisanalysisalsoassumesthatforworkinghouseholdswithincomesbelow$25,000,jobsmaybepartͲtimebutpaidminimumwage. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 71 Appendix Redistribution of Households by Income Table B1 shows the methodology for re-estimating the income levels of households that would be affected by an increase to the minimum wage: x Column 1: This is the maximum household income relevant to the respective income range. x Column 2: Estimated annual income for single job-holders, based on a factor of 1.5 jobs per household. These estimates reflect the maximum income per category. x Column 3: Estimated hours worked per year. On average, full-time workers are paid for 2,080 hours, representing pay for 50 weeks of 40 hours per week per year and 2 weeks paid vacation. (Below household incomes of $20,000, it is assumed that job-holders are under- employed, i.e. paid minimum wage at 2012 levels ($7.64) but paid for fewer than 2,080 hours per year.47 ) x Column 4: These are the estimate hourly rates per job-holder. x Column 5: New $10.00 minimum wage is applied to the relevant household income categories.48 x Column 6: The new per-job minimum wage is factored up by the respective number of hours worked x Column 7: The per-job wages are factored up by 1.5 jobs per household. The resulting numbers reflect the new distribution of household income levels. Table B1 Estimation of New Household Incomes 47 While the minimum wage for tipped employees in 2012 was $4.62, data were not available to factor this into the analysis. 48 For simplicity of analysis, EPS does not assume that the increase in minimum wage affects wage levels of higher income jobs. Annual (per HH) Annual (per job) Hours (per Year) per Hour per Hour Annual (per job) Annual (per HH) 1.5 jobs / HH [Note 1 & 2] 1.5 jobs / HH Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Households by Income Less than $10,000 [2] $9,999 $6,666 873 $7.64 $10.00 $8,725 $13,088 $10,000 to $14,999 [2] $14,999 $9,999 1,309 $7.64 $10.00 $13,088 $19,632 $15,000 to $19,999 [2] $19,999 $13,333 1,745 $7.64 $10.00 $17,451 $26,177 $20,000 to $24,999 $24,999 $16,666 2,080 $8.01 $10.00 $20,800 $31,200 $25,000 to $34,999 $34,999 $23,333 2,080 $11.22 --- --- --- $35,000 to $49,999 $49,999 $33,333 2,080 $16.03 --- --- --- $50,000 to $74,999 $74,999 $49,999 2,080 $24.04 --- --- --- $75,000 to $99,999 $99,999 $66,666 2,080 $32.05 --- --- --- $100,000 to $149,999 $149,999 $99,999 2,080 $48.08 --- --- --- $150,000 or more $150,000 $100,000 2,080 $48.08 --- --- --- [Note 1]: This assumes each job holder is paid for 2,080 hours per year, including 2 w eeks of paid vacation. [Note 2]: Below a household income of $20,000, it is assumed that job-holders are under-employed, i.e. earning minimum w age but not paid for 2,080 hours per year. Source: Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-M inimum Wage Impact Estimate.xlsx]Table 3a - Redist Summary Existing Wages New Wages Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 72 Appendix Table B2 shows the methodology for redistributing the number of households according to their new respective income levels by the appropriate category. Each column is described. x Column 1: Existing distribution of households by income (2012), according to the U.S. Census. x Column 2: According to the U.S. Census, approximately 16 percent of all households are unemployed - e.g. in the laborforce and unemployed or out of the laborforce and retired. The estimates shown here are calibrated to approximate this 16 percent (or 9,388 households) figure for 2012.49 x Column 3: The difference between [Column 1] and [Column 2], this shows the number of employed households at and below the $25,000 per year level, for which a minimum wage increase will result in a redistribution. x Column 4: As a result of the new household income calculations described in Table 1, some households are lifted to higher income categories. This column illustrates that income category reassignment. For example, there are 1,835 employed households (current) earning between $10,000 and $14,999 which are now estimated to earn between $13,088 and $19,63250 ; some of these 1,835 households remain in the same category and some are placed in the higher category.51 x Column 5: This is the distribution of other (current) employed households. x Column 6: [Column 2] + [Column 4] + [Column 5] = the new distribution of households of households by income level. Table B2 Redistribution of Households by Income 49 This analysis assumes that a majority of unemployed households fall in lower income categories. As such, EPS estimates that 90 percent of unemployed households fall at or below $25,000 per year, and 10 percent falling above this level. EPS has made the following assumptions in estimating this apportionment by income: 1) total unemployed households equals 9,388 (U.S. Census, 2012); 2) 5 percent of households between $25,000 and $34,999 are unemployed; 3) 5 percent of households between $35,000 and $49,999 are unemployed; and 4) 57 percent of households at or below $25,000 are unemployed. 50 Shown in Table 1. 51 Column 4 does not equal Column 3 due to rounding. Total HHs (2012) HHs not Working Working HHs < $25K Shifted HHs Other HHs New Distri- bution (A) [Note 1] (B) (C) (A)+(B)+(C) Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Households by Income Less than $10,000 [2] 4,555 2,594 1,961 --- --- 2,594 $10,000 to $14,999 [2] 3,222 1,835 1,387 2,492 --- 4,326 $15,000 to $19,999 [2] 3,632 2,068 1,564 945 --- 3,013 $20,000 to $24,999 3,938 2,242 1,696 1,195 --- 3,437 $25,000 to $34,999 5,391 270 --- 1,977 5,121 7,368 $35,000 to $49,999 7,599 380 --- --- 7,219 7,599 $50,000 to $74,999 9,668 0 --- --- 9,668 9,668 $75,000 to $99,999 7,369 0 --- --- 7,369 7,369 $100,000 to $149,999 7,905 0 --- --- 7,905 7,905 $150,000 or more 5,122 0 --- --- 5,122 5,122 Total 58,401 9,388 6,609 6,608 42,405 58,401 [Note 1]: According to the U.S. Census, there w ere 9,388 households in Fort Collins w ithout employment. Source: Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-M inimum Wage Impact Estimate.xlsx]Table 3b - Redist Summary Household Redistribution Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 73 Appendix Figure B3 illustrates the shift in households in various income categories below $25,000 per year to higher income categories. This illustration depicts only employed households, and illustrates the magnitude of shifts that occur from various income levels. Figure B3 Estimated Redistribution of Working Households by Income Figure B4 shows the redistribution of all (owner and renter) households, also adding back the unemployed households by income level. Overall, there are approximately 2,000 fewer households in the “less than $10,000” category, 1,100 more households in the “$10,000 to $14,999” category, and nearly 2,000 more households in the $25,000 to $34,999” category. Figure B4 Existing and New Distributions of Households by Income 0 2,000 4,000 6,000 8,000 10,000 12,000 Lessthan $10,000 $10,000to $14,999 $15,000to $19,999 $20,000to $24,999 $25,000to $34,999 $35,000to $49,999 $50,000to $74,999 $75,000to $99,999 $100,000to $149,999 $150,000or more EstimatedDistributionofWorkingHouseholds Existing Distribution Estimated Redistribution Based on$10.00 /hour Distributionof Remaining Households [Note1]:Alldatapresentedinthisgraphicrepresent2012conditions. Theminimumwage,asshown,was$7.64in2012. Source:U.S.Census;ColoradoDepartmentofLabor&Employment;Economic&PlanningSystems 0 2,000 4,000 6,000 8,000 10,000 12,000 Lessthan Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 74 Appendix Impact on Cost-Burden Current Housing Gaps (Cost-Burden) EPS estimates that the current gross number of households cost-burdened at incomes of $25,000 or less is approximately 7,970, as shown below in Table B3. This means that approximately 8,000 households spend more than 30 percent of their household incomes on housing. (As noted in EPS’s work in the HAPS process, between 5,700 and 6,900 of these households under $25,000 are estimated to be student-occupied.) Table B3 Current Estimate of Rental Housing Gaps New Housing Gaps To calculate the impact on cost burden and the housing gaps analysis, EPS used the existing distribution of households by tenure by income level. Applying these factors to the above redistribution and existing housing units, EPS estimates that the number of cost-burdened households under $25,000 decreases from approximately 7,970 to approximately 7,140, a net decrease of 830 households. This implies that approximately 830 households in the City, or a 10 percent reduction, would be lifted out of a cost-burdened situation. Table B4 New Estimate of Rental Housing Gaps 2000 2012 2000 2012 2000 2012 Income Category Less than $25,000 Less than $625 7,429 2,761 9,173 10,733 -1,744 -7,972 $25,000 to $49,999 $626 to $1,249 10,726 15,935 6,434 7,667 4,292 8,268 $50,000 to $74,999 $1,250 to $1,874 1,334 5,154 2,609 3,805 -1,275 1,349 $75,000 or More More than $1,874 187 1,245 1,460 2,890 -1,273 -1,645 Total 19,676 25,095 19,676 25,095 0 0 Source: U.S. Census; Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-M inimum Wage Impact Estimate.xlsx]Table 4 - OLD Gap Est Affordable Monthly Rent Range Units Renter Households Gaps 2000 2012 2000 2012 2000 2012 Income Category Less than $25,000 Less than $625 7,429 2,761 9,173 9,897 -1,744 -7,136 $25,000 to $49,999 $626 to $1,249 10,726 15,935 6,434 8,592 4,292 7,343 $50,000 to $74,999 $1,250 to $1,874 1,334 5,154 2,609 3,575 -1,275 1,580 $75,000 or More More than $1,874 187 1,245 1,460 3,031 -1,273 -1,786 Total 19,676 25,095 19,676 25,095 0 0 Source: U.S. Census; Economic & Planning Systems H:\133074-Fort Collins Housing Study\Data\[133074-M inimum Wage Impact Estimate.xlsx]Table 5 - NEW Gap Est Affordable Monthly Rent Range Units Renter Households Gaps Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 75 Appendix Employment Impact The overall impact of an increased minimum wage on employment levels (i.e. potential job losses) is beyond the scope of the question posed by the City Council. There are, however, a few points from other national research of relevance to this discussion. In February 2014, the Congressional Budget Office (CBO) released a study of the Administration’s proposed $10.10 and $9.00 federal minimum wage options. This non-partisan study concluded that not only would it raise household incomes for lower-income households, but could result in much smaller overall (national) employment losses than many have feared. The CBO estimated that the $10.10 option could result in the loss of 900,000 jobs or 0.6 percent52 of total nationwide employment by 2016, and the $9.00 option could result in the loss of 300,000 jobs or 0.2 percent of total employment. Numerous other studies of the effects of an increased minimum wage on employment levels have been conducted over the past 40 years. A February 2013 study by the Center for Economic and Policy Research (CERP) concluded that past studies with the most precise estimates of impact on employment levels were “heavily clustered at or near zero”. While not a comprehensive review of the vast research on the subject, EPS believes there is much more to be said about the potentially positive ripple effects of an increased minimum wage on business than any minor negative impacts. The research cited also does not account for the positive indirect multiplier effect of increased household incomes. For example, while a higher minimum wage increases the cost of labor, this cost results in greater income for households, who in turn spend a portion (approximately 34 percent, according to the Census of Retail Trade) of that income on retail goods. That is, the businesses (mainly retail) that are impacted by the increased cost of labor also become the beneficiaries of increased business as a result of the increased expenditure on retail goods. 52 Based on the May 2014 nationwide employment total of approximately 145,814,000 jobs. Appendix C: Comparable Community Housing Programs Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 77 Appendix Comparable Community Housing Programs As noted, many comparable communities use multiple tools and funding sources to address their affordable housing needs. The six communities profiled below have unique, robust, long standing, and proven affordable housing programs with relevance to the Fort Collins context. Boulder, Colorado The City of Boulder has one of the more comprehensive affordable housing programs in the country. The City established a housing authority in 1966 and has experimented with many types of affordable housing programs over the years. It currently has an IHO, excise taxes for residential and commercial development, and a housing authority that takes an active role in the development as well as management of affordable housing. Inclusionary For-Sale Housing The City’s Inclusionary Housing (IH) Ordinance requires new residential development to contribute at least 20 percent of the total units as permanently affordable housing. This requirement applies to all new residential development projects regardless of size. Options for meeting this requirement include on-site permanently affordable units, off-site existing or new housing units dedicated as permanently affordable, vacant land for affordable units, or cash-in- lieu (CIL) payments. The provided ownership housing must be affordable to household earning no more that 10 percent above the HUD AMI which is currently 66.4 percent for a two-person household. The rental housing maximum is set at 60 percent of AMI. The maximum housing price is established based on unit size with a typical 2 bedroom/2 bath attached unit priced at a maximum of $164,200. The CIL for projects of 5 units or more is currently $132,927 for an attached unit and $157,194 for a detached unit. The CIL amounts for projects with 4 or fewer units are lower. For-sale housing projects should provide at least half of the affordable units on-site with the remainder paid though CIL. There a CIL penalty (equal to a 50 percent premium) for electing to use a CIL for more than 50 percent of the required housing units. Inclusionary Rental Housing The City is subject to certain legal restrictions in the application of IH to rental housing projects. As a result, the City’s IH Ordinance allows a private rental project to meet the IH requirements through any combination of on-site units, off-site units, or CIL. The City also allows developers to comply with the IHO requirements by providing either for-sale or rental units, although during the past 7 years. The Colorado Statutes (CRS 32-12-301) prohibit municipalities and counties from imposing rent controls on private properties. The Telluride decision (Town of Telluride vs. Lot Thirty Four Ventures, 2000) confirmed that local inclusionary housing ordinances could not mandate rent controls. HB10-1017 amended the Rent Control Statute to provide clarification on the ability of municipalities to enter into voluntary agreements regarding rents on private properties. According to the Boulder City Attorney’s Office, HB10-1017 provides the following direction: x Clarifies that the rent control statute applies only to private residential property or private residential housing units. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 78 Appendix x Clarifies that nothing in the rent control statute prohibits or restricts the right of a property owner and a public entity from entering into a voluntary agreement to place rent controls on a private residential housing unit or places a restriction on the deed to the property. x Precludes the denial of an application for a development permit if the applicant declines to enter into such an agreement. x Specifies the statute does not preclude public entities from cooperatively entering into an agreement, nor preclude the assignment of rights and remedies to any party to the agreement. x The exemption to rent control by a city or county is though a “housing authority or similar agency”. The City therefore continues to require all new housing developments in excess of four units (ownership and rental) to comply with the City’s IHO requirements. The criteria to meet the “housing authority or similar agency” provision requires the dedicated housing units to be owned and operated by Boulder Housing Partners as the City’s housing authority, or by a non-profit housing entity such as Thistle Housing with a similar mission and focus Single purpose entities established to own, operate, and manage the affordable housing units in a single project do not meet the minimum standards. Developers have had difficulty complying with the city’s goal of getting on-site rental housing due to the separate ownership requirements. No projects have successfully implemented an on- site housing solution to date, and all rental projects have opted to pay the CIL. A number of additional projects are pursuing off-site housing options and several additional projects have paid the CIL. In general, the City’s two IHOs have been relatively successful, although administratively challenging at times. In total, the City estimates that more than 400 for-sale affordable units have been created and more than 800 rental units have been built. It is important to note, however, that because rental units are generally built by BHP or Thistle, CIL serves as leverage to get more units built with non-competitive 4 percent low-income housing tax credits. As a result, there is a multiplier effect to the number of rental units created. Excise Taxes The city also requires all new development to pay an excise tax. An excise tax is similar to a linkage fee requiring developers to pay a fee assessed per square foot of development. The City has a residential housing excise tax assessed at $0.23 per square foot of residential development (excluding affordable housing units) and a nonresidential fee of $0.50 per square foot of development. Boulder Housing Partners Boulder Housing Partners (BHP) was originally the Housing Authority of the City of Boulder (HACB), created in 1966 to own, manage, and build affordable housing using HUD funding and assistance programs. In the 1990s, HACB took on a more active development role using the city’s housing fund, other financing sources, and partnerships. As a result of its expanded role, it became Boulder Housing Partners in 2001. Among its projects, BHP developed the 27-acre Holiday Drive-In site in 2008 as a mixed income community with 334 homes including 138 affordable housing units. It also recently acquired the adjacent Boulder Mobile Manor mobile Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 79 Appendix home park which was converted to 59 single family, duplex and triplex fixed foundation units. These units, now called Red Oak Park, will be 100 percent affordable deed-restricted rental units at 30, 40 and 50 percent AMI. Burlington, Vermont Burlington has many similarities to Boulder. It is largely built out and a combination of urban growth limits, conservation land acquisition, and a thriving job market has led to a persistent “housing affordability and availability crisis”. The city has an IZO that was instituted in 1990 as part of a broader housing strategy. It is the first locally initiated IZO to index the set-aside to the price of the market rate units. It is also the first to require affordable units to be deed restricted for 99 years. Inclusionary Zoning Ordinance The IZO applies to new market rate development of 5 or more units with a set-aside of 15 to 25 percent depending on the price of the units. The 15 percent requirement applies to projects where the average sale or rental price is affordable to household earning up to 139 percent of AMI or less. Projects at 140 to 179 percent of AMI are required to set aside 20 percent and projects over 180 percent of AMI are required to set aside 25 percent. The ordinance does not allow for a CIL but allows for off-site construction at 125 percent of the on-site requirement. It also provides a range of developer incentives including fee waivers and a 15 to 25 percent density and lot coverage bonus. Housing Trust Fund The city council also established a housing trust fund to receive and disperse funds for affordable housing under its direction. The City funds its trust fund through a 0.1 mill property tax, which generates currently approximately $190,000 per year, of which 15 percent is allocated to administration, at least 50 percent is used for subsidies and the construction or rehab or protection of affordable units, and the remainder of which are used for capacity grants. Champlain Housing Trust The Champlain Housing Trust (CHT) is a non-profit housing corporation formed in 2006 through the merger of the Burlington Community Land Trust and the Lack Champlain Housing Development Corporation. The CHT has $43 million in assets, nearly 1,500 rental apartments and 440 deed-restricted homes in the three-county Burlington area. CHT also has five cooperative housing projects with 81 apartments and an additional 42 unit project under construction in Burlington’s Old North End. The Trust also administers Burlington’s IZO housing program. Denver, Colorado The City and County of Denver’s IHO was passed in 2002 and was a major achievement for affordable housing policy. The IHO addressed an expanding population and economy that resulted in rising housing costs. The City recognized the need to expand workforce housing options and maintain a diversified housing supply. The city requires 10 percent of units built in structures with 30 or more units to be built as moderately-priced dwelling units (MPDU). The IHO was tailored to give a developer the option of constructing MPDUs or paying a cash in-lieu (CIL) fee. To encourage construction of units, the Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 80 Appendix ordinance included a few incentives such as a density bonus and a cash incentive for up to 50 percent of required MPDU.S built. Since that time, however, the Great Recession has rewritten assumptions about need, production, and feasibility. In addition, the City and County of Denver has revamped its approach to land use regulation with the adoption of the form-based zoning code. To the detriment of the IHO’s effectiveness, however, form-based code eliminated the possibility of the density bonus, which according to many in the housing and development community, is the most powerful incentive an IHO can offer. The City is currently reevaluating its IHO policies. There are a number of issues concerning the effectiveness of the IHO in need of review. While 1,150 MPDUs have been created over the last 12 years, about 15 percent were lost to foreclosure. As a result, the City has enacted amendments to the covenants on IHO units to prevent further loss of the inventory. It is also currently evaluating other formulas by which the IHO can become more flexible. Cambridge, Massachusetts The City of Cambridge adopted an inclusionary zoning ordinance in 1998 after rent control was prohibited in Massachusetts. The IZO applies to both residential and non-residential development, and produces both affordable rental and ownership units. Effectively, the City’s Inclusionary Zoning Ordinance is a combined IZO and commercial linkage program. In addition, the City also has an Incentive Zoning Ordinance, which requires developers seeking a Special Permit, such as increased density, waiver of requirements, etc. to pay a housing mitigation fee or create units. Both programs were created for the purpose of mitigating the impacts of commercial and residential development on the availability and cost of housing and especially housing affordable to low and moderate income households, whereby creating a mechanism by which commercial and residential development can contribute in a direct way to increasing the supply of affordable housing in exchange for a greater density or intensity of development than otherwise permitted by right. The City also has the Cambridge Affordable Housing Trust (CAHT), established in 1988, which is funded through the Community Preservation Act, which is funded through a combination of property taxes, state matches, and fees paid through the Inclusionary Zoning Ordinance by commercial developments. Overall, the CAHT has overseen the creation and preservation of 2,600 affordable rental and ownership units. The Housing Division of the City, independent of the CAHT, and under the Inclusionary Zoning Ordinance, has overseen the creation of 450 to 500 units through developments. Incentive Zoning Ordinance The City's IZO requires developers seeking certain Special Permits to comply with the Incentive Zoning provisions. Incentive zoning applies to commercial developments of more than 30,000 square feet of gross floor area. The provisions apply when a developer seeks: an increase in the density or intensity use, such as increased floor area or height; waiver or reduction of parking requirements; changes in dimensional requirements; or additional uses that result in an increase in density or intensity of use. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 81 Appendix Developers with projects that are subject to the IZO are required to make a housing contribution (HC) or create affordable housing units. The HC is currently $4.44 for every square foot of gross floor area over 2,500 square feet of the portion of the project authorized by the Special Permit. The amount of the HC may be adjusted annually by the Cambridge Affordable Housing Trust. Payment of the HC is required before the issuance of certificates of occupancy for developments subject to the IZO. Developers may instead elect to create affordable units or donate land to be used exclusively for the development of affordable housing in the city. Affordable units or land donation must be of equivalent benefit as the HC toward addressing the City’s affordable housing needs. Note to the administration of the ordinance: the provisions of the ordinance will be reviewed and recalculated every 3 years by the City Council based on consideration of current economic trends including by not limited to development activity, commercial rents per square foot, employment growth, and housing trends measured in terms of vacancy rates, production statistics, and prices for units. Inclusionary Zoning Ordinance The City’s IZO was one of several actions taken designed to encourage the development of affordable housing, including a surcharge on property tax for housing and a rezoning of the entire City to support additional residential development. The IZO requires any new project of 10 units or 10,000 square feet to provide 15 percent of the units as affordable to a household earning 65 percent of the Boston Primary Statistical Area AMI. To offset the effect, the project receives a 30 percent density bonus for residential development. Developments under the threshold of 10 units may also voluntarily comply with these requirements; in so doing, they may be granted the same incentives as under the IZO. There are two primary incentives offered to a project under the ordinance: a density bonus and minimum lot area reduction. The density bonus is estimated as an increase in 30 percent of the normally permitted FAR in the applicable zoning district, at least 50 percent of which must be allocated for affordable housing. In a mixed-use zoning district, however, additional FAR may be applied to the entire lot, but any gross floor area from an increased FAR must be allocated to residential uses, excluding hotel or motel uses. The primary goal of the Cambridge IZO is to encourage the development of affordable units on- site. Therefore, the ordinance only allows for an in lieu payment to mitigate the requirement if the project can demonstrate a significant hardship. The planning board ultimately makes the decision concerning a project’s hardship and ability to use the in-lieu payment option. The in- lieu payment would be calculated as the difference between the average sales price at the project and the affordable sales price applicable to the project. To date, no project has opted for the in lieu approach. All projects have constructed the required affordable units on-site. Despite the lack of options available to the development community in Cambridge, many developers have indicated they appreciate the clarity and predictability of the requirement. The development community has integrated the requirement into their initial analysis of project feasibility and typically negotiates a lower land price if the IZO impacts feasibility. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 82 Appendix Cambridge Affordable Housing Trust The Cambridge Affordable Housing Trust was established in 1988 in response to escalating housing prices and a severe shortage of affordable housing for many low- and moderate-income residents. With the mission of creating and preserving affordable housing opportunities, the Trust has continued to be active in responding to the increasing need for affordable housing in the years since the end of rent control in the mid-1990s. The Trust’s nine members include experts in housing policy, real estate finance, development, planning, and design. The Trust provides funding to assist non-profit housing organizations and the Cambridge Housing Authority in creating new affordable housing, preserving the affordability of existing housing, and rehabilitating multifamily housing. The Trust also offers financial assistance to first-time homebuyers and provides housing policy advice to City staff. The Cambridge Affordable Housing Trust receives significant financial support through the Community Preservation Act (CPA). Adopted by the Cambridge City Council and Cambridge voters in 2001, the CPA is a financing tool for Massachusetts communities to expand the supply of affordable housing, protect historic sites, and preserve open space. Under the CPA, local funds that are dedicated to these uses are eligible for matching funds from the state. In FY06, the City Council appropriated $9.6 million generated from the CPA to the Trust to support affordable housing in the city. It should be noted here that while Colorado does not have a comparable statewide funding tool for addressing affordable housing issues, it does have a Housing Investment Trust Fund, which was modified in the previoU.S legislative year (2013-14).53 The Incentive Zoning Ordinance, adopted in 1988, generates funding for the Cambridge Affordable Housing Trust by requiring developers of certain non-residential projects to mitigate the impact of their development through a contribution to the Affordable Housing Trust. In 2000, Harvard University launched the Harvard University 20/20/2000 Initiative, under which the University committed $20 million of low-interest financing to support affordable housing in both Cambridge and Boston. According to a report by the Harvard Gazette in November 2010, this initiative has helped to fund about 17 percent of built and renovated affordable housing since the program’s inception.54 Administering a $6,000,000 revolving loan fund, the Cambridge Affordable Housing Trust is one of three housing lenders selected by Harvard to manage these funds. Davis, California The City of Davis only has an Affordable Housing Ordinance for ownership housing. Prior to 2009, Davis was one of the more interesting case studies with two different IHOs, one of which established requirements for developments to provide affordable housing for low income households, or generally under 80 percent AMI; the other IHO applied to middle income housing, which established requirements for developments to provide affordable units for households earning between 120 and 180 percent AMI. 53 According to the Colorado Department of Housing website, the Colorado Housing Investment Fund funds can be used for short term, low-interest loans to bridge long-term permanent financing sources or as short-term loan guarantees for new construction and rehabilitation. For more information, refer to the DOH website at: http://www.colorado.gov/cs/Satellite/DOLA- Main/CBON/1251638415915 54 Statistic obtained from: http://news.harvard.edu/gazette/story/2010/11/harvard%E2%80%99s-20202000-affordable-housing- initiative-helped-build-renovate-4350-units-in-boston-and-cambridge/ Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 83 Appendix Enacted in 1990, the Affordable Housing Ordinance, which remains, originally required that rental or ownership developments of 5 or more units provide a percentage as affordable. The AHO requires that projects with 5 to 26 units set aside 25 percent of all units as affordable, and projects with more than 26 units set aside 35 percent of all units as affordable. As mentioned previously, inclusionary housing ordinances for rental housing were invalidated in 2009 by a California Court of Appeals decision, which referred to a rent control provision of the Rental Housing Act of 1996. The City, however, still contains requirements for its rental requirements, but only where a rezoning is required (i.e. if a property has a by-right rental development potential, the rental set-aside cannot be enforced). Additionally, the City enacted a Middle Income Housing Ordinance in 2006 that established further requirements for ownership projects of 26 or more units to provide housing to meet the needs of its workforce. That ordinance has been suspended, but not repealed, since 2009. Affordable Housing Requirement The Davis inclusionary zoning ordinance is applicable to projects of five or more units including subdivisions and multifamily buildings. The ordinance requires that a total of up to 25 percent of units be affordable and provides a one-for-one density bonus for each affordable unit. The calculation is made after the density bonus is applied. Income targets in the projects are between 80 and 120 percent of AMI, and must average 100 percent. As a result of the City’s continued suburban growth, the ordinance is oriented towards receiving land dedications from developers. x Projects totaling between 5 and 75 units are also required to provide units on-site. x Projects totaling 76 to 200 units are required to provide units on-site, as well as land dedicated to the City that can accommodate the affordable housing for the project in its entirety. x Projects totaling 201 units or more are also required to provide 25 percent of units as affordable. In this case, however, the developer is required to provide 12.5 percent of the units on site and 12.5 percent shall be developed through a land dedication to the City. A contribution of in-lieu payments is allowed for a limited number of projects which must contain 15 or fewer units (or 38 bedrooms) in the City’s downtown/Core Area. The fee is calculated as the difference between the City’s cost to develop a unit exclusive of land, and the price at which it can sell a unit at 80 to 120 percent of AMI. The result of this calculation was then reduced by 50 percent to account for the City’s policy goals and the higher costs of downtown development. When required, the City of Davis has been very successful receiving on-site units to satisfy the IZO requirement. However, the larger effect of the policy results from the land dedication provision within the AMI targets. Representatives from the City indicated that the policy has allowed non-profit developers to provide a significant amount of special needs housing and low- income housing below the IZO. Middle Income Housing Requirement In addition to meeting affordable housing needs, the City of Davis had implemented a middle income housing ordinance to address the needs of its local workforce as well as other underserved households. A study of middle income housing needs, impacts, and options had found that the housing market was not providing adequate ownership housing opportunities for middle income households. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 84 Appendix Middle income households are defined as those who cannot afford to purchase even the least expensive market rate housing being developed and cannot qualify for affordable housing units provided for low and moderate income households under the Affordable Housing Ordinance requirements. Specifically, middle income households are those earning between 120 percent and 180 percent of the Yolo County median income, as published by HUD. A further stipulation of the ordinance is that the average pricing of the middle income units will be affordable to households earning 140 percent of the AMI. Under this ordinance, a development of ownership residential units greater than 26 units is required to provide middle income housing units. This ordinance, unlike the affordable housing ordinance, offers no density bonus incentive. Its requirements were: x Projects with 26 to 35 units are required to provide 10 percent middle income units; x Projects with 35 to 49 units are required to provide 15 percent middle income units; and x Projects with 50 or more units are required to provide 20 percent middle income units Aspen/Pitkin County The City of Aspen and Pitkin County both created their affordable housing program in 1974. In 1982, both entities were combined into the Aspen/Pitkin County Housing Authority. There are two main funding sources for the housing program, a 1.0 percent RETT (City of Aspen only) and a portion of the City/County sales tax. The purpose of the housing program is “to create a balanced community representative of the various types of people that live, work and retire in the area and to assure the existence of a supply of desirable and affordable housing for persons currently employed in Pitkin County, persons who were employed in Pitkin County prior to retirement, the disabled who have worked or are working in Pitkin County, and other qualified persons of Pitkin County as stated in the Aspen/Pitkin County Affordable Housing Guidelines.” There is an overall goal to house 60 percent of the area workforce locally. Today the requirement to construct affordable and workforce housing is controlled through the City’s Growth Management Quota System (GMQS). The system affects any new residential and commercial construction in the City. Though the City characterizes its affordable housing requirements as more general employee housing requirements, the City has each of the major affordable housing tools: an IHO for multifamily residential construction, residential linkage program for single-family and duplex construction, and a commercial linkage program for non- residential development. The GMQS requires residential development provide a total of 30 percent of total floor area as affordable. Commercial development must provide affordable housing for 60 percent of the anticipated employees through commercial mitigation. Overall, the program has overseen the construction of approximately 2,800 affordable residential units, approximately 1,500 for-sale units and 1,300 rental units. As with most IHOs or linkage programs, a developer may construct units off-site or pay a fee in- lieu of the construction requirement. The in-lieu payment, however, must be approved by APCHA. The CIL differs by housing category, from $264,228 for a low-income unit (Category 1) to $130,213 for a middle income unit (Category 4). Each year the CIL is increased by 3 percent or the Consumer Price Index (CPI), whichever is greater. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 85 Appendix Aspen has recently adopted another alternative to the onsite, offsite, and payment of a CIL option: a housing certificate program. This program, established in 2010, created an open market solution, much like a "cap and trade" program functions to benefit the environment by incentivizing the reduction of emissions. A developer who provides affordable housing units beyond the required amount by zoning receives housing certificates that another development may purchase in lieu of building units. The City does not place value on these certificates, so their value is determined in the free market by the two developers. If there are no or insufficient certificates to purchase, the developer must return to the Planning Board and/or City Council to amend the final approval and satisfy the affordable housing requirement either through the construction of units or payment of a CIL. Eligible Households The program is focused on full-time employees within Pitkin County working a minimum of 1,500 hours per year. Renters currently have an annual household limit of $51,000 for a two person household in Category 1 up to $213,000 for Category 4 housing units. Ownership units are focused on families of full time employees with a maximum income of $42,400 for one dependent for Category 1 units up to $150,500 for Category 4 units. Strengths and Weaknesses Aspen and Pitkin County have the most comprehensive and aggressive program in the nation. All residential development is subject to the housing IHO mitigation with a requirement of 30 percent of the total floor area and all commercial development is required to provide 60 percent of total space for affordable housing. The program also benefits from multiple additional funding sources including the RETT in the City and a dedicated sales tax in the County. In spite of the high level of funding, Aspen still has a challenge getting housing units built. There is neighborhood resistance to the development of affordable housing that is exacerbated by the differences in housing size, mix, and price with free market units. The APCHA has tried to address this issue by purchasing available sites for ownership affordable housing, but even some of these projects have been controversial and have taken years to be implemented. Seattle, WA In a market that was increasingly pricing out portions of its workforce, the City of Seattle established an affordable housing incentive program to new commercial development in Downtown in 2001. Incentive zoning granted developers additional density for a project that provided affordable units or paid a fee in-lieu. In 2006, the program was expanded to apply to residential developments in downtown, as well. Through its evolution, various zones have been added throughout the City with mid-rise zones scattered north and south of downtown in urban centers and along corridors, whereas the high- rise and similar zones are concentrated in and around downtown. At different scales of development, the program is applied in varying degrees. In high-rise zones, participating developments choosing not to build units can make a cash in-lieu payment to the City. In mid- rise zones, however, developers are generally required to provide affordable units on-site and are not given the cash in-lieu option. Housing Affordability Policy Study September 5, 2014 Economic & Planning Systems, Inc. 86 Appendix Since establishment of the program in 2001, over 100 units have been produced on-site and approximately $27 million in cash in-lieu fees have been collected, which have been pooled with the City’s housing levy to produce units elsewhere. Commercial Development Within zones of Downtown, developers must first agree to build a LEED Silver certified structure to receive the first increment of bonus density. The second increment of bonus density is apportioned in portions of 75 percent and 25 respectively for developments meeting specific respective requirements. Developments that provide affordable housing or childcare space receive the additional 75 percent density bonus, and developments that provide additional open space (in the form of TDRs) or public amenity features receive the additional 25 percent density bonus. Residential Development In the Downtown mixed use zones, development may build to 290 feet. To acquire height to a maximum of 400 feet, developers may participate in the incentive program, which like the commercial development program, requires developers to first commit to building the structure as LEED Silver certified. Developers can either build affordable housing on site or pay a fee in- lieu (on the basis of a cost per square foot) to the Housing Fund. Housing Levy Seattle has had remarkable success in the use of a dedicated property tax to fund affordable housing needs of a wide variety. With its first voter-approved housing levy in 1981, Seattle has funded 4 additional bonds and/or levies for these purposes. In 2009, the City passed its fifth, a 7-year dedicated property tax mill of approximately 0.17 to fund $145 million for affordable housing opportunities for low-income residents. Since the first housing levy, Seattle has funded more than 10,000 affordable apartments for seniors, formerly homeless individuals and families, and low- to moderate-income wage earners, as well as provided loans to more than 600 first-time homebuyers and rental assistance to more than 4,000 households. The 2009 levy is estimated to produce nearly 1,700 rental housing units, 175 housing units through acquisition and rehab, preserve 220 rental units, facilitate homebuyer assistance for 180 home purchases, and provide rental assistance and homelessness prevention for more than 3,000 households. To date, the City is either on target to reaching all these goals or has surpassed the goals with less funding than anticipated. Appendix D: Public Process Summary Material Economic & Planning Systems, Inc. 88 Appendix Stakeholder Workshop 1 The first stakeholder meeting was conducted on March 12, 2014. EPS prepared a presentation of best practices in comparable communities on the regulatory and non-regulatory tools that are in common practice among other communities with similar housing issues or affordability concerns. During this meeting, many questions were raised concerning the necessity of looking at various regulatory tools, the desire to identify more fundamental trends, such as the components of the cost of housing and whether there were components which the City could influence, and what the trends and conditions were related to the rental market, particularly concerning what the university (CSU) is doing to address its own housing needs. Notes were taken during this meeting, which formed the basis of approach to the second stakeholder meeting. This meeting was also conducted in a more lecture-style seating format, and it was decided that smaller groups engaged in topical discussions for the following meeting would be more appropriate. Summary of Comments and Questions x Unintended consequences? x Longitudinal studies? x Data sources x Mechanisms that increase cost of housing, i.e., design standards x Land supply impact on price? x Overall housing cost x Consensus: Drivers – other policy solutions (broad-based approach) x Utilities as percent of income x Manufactured housing flex in zoning, city should be a part x How do you maintain affordable housing? x How did communities define their issues, and did it make a difference? x And should it be a community solution? x Service workforce and student housing influence x BPs and code and impact fees that are differentiated by types of housing x Zoning 3 unrelated issue – affects students x Understanding exactly where the burden falls x Criteria for defining geography x What is CSU doing? x Look at transportation proximity x Control development standards costs (e.g., Thornton) x Ensure comments/concerns are reported in study Economic & Planning Systems, Inc. 89 Appendix Comment Cards Table D1 Comment Card Question 1 Table D2 Comment Card Question 2 Whatadvantagedoyouseein: Comments No–None,regressive(burdenslowincomepeople) None Wouldsupport Broadbase Housingandtransportation Thiswouldspreadtheburdenofcostsacrosstheentire population No–Regressiveunlessaffordablehousingisexcepted None Addstounaffordability–don’tlike Morewidelyspread Broadbase Affordabilityindex Sameas“a” Ok–Notregressive None Acceptablethoughlacksnexus None Includeanalysisoflandthathastransitaccess Notsureexactlyhowthiswouldwork NoͲRegressiveunlessaffordablehousingisexcepted None Favorthismost None A&Bdothebestjobatsharingtheburden a. dedicatedsalestax b. dedicatedpropertytax c. dedicatedlodgingtax d. excisetax Whatadvantagesdoyouseein: Comments Fora,bandc–Onlyokayifminimalamountperitem Fora,bandcͲNoneZoningshouldbeastaticmapand notchangeforextendedperiodsoftime(10+up) $162m$54m Thosecouldreallywork Manipulative AddCSUtostakeholders Ilikeusingcarrotsbetterthansticks ThecitygivesincentivestoFoothillsMall,Woodward(?) gov.,etc. None None Disadvantage–doesn’tspreadtheburdenwell Bringinworkers–nohousing None None Disadvantage–doesn’tspreadtheburdenwelleither b. commerciallinkage c. inclusionaryhousing a. incentivezoning Economic & Planning Systems, Inc. 90 Appendix Table D3 Comment Card Question 3 Table D4 Comment Card Question 4 Table D5 Comment Card Question 5 Table D6 Comment Card Question 6 WhichincentiveswouldbeeffectiveinFortCollins? Support Densityincreases 5 Heightincreases 4 Parkingreductions 4 Lotcoverageincreases 5 Openspacereductions 4 Exemptionsfromsomebuildingdesignrequirements 4 Comment:Limitsizeofhousing,encouragesmaller Aconditionofincentivescouldbeprovidedresidents withannualpassestoMAXtransit,toreducetheneedfor asecondcarforfamilies,therebyincreasingtheamount ofthehouseholdincomeavailableforhousing Incentivesforverysmallunits(Sohoincludinginunit bikestorage500Ͳ6000sf2ͲBRunits).Triggerincentives. Themoreregulatory(builders?) ZoningrestoredformanyofhousingͲdeletecommercial. Energyefficiencyrewardsforcertificationsbeyondcode orevenenergystar. Canwedosmallgroupstakeholdermeetings? Onalevelplayingfield,nooneisrequiredtopayan affordablehousingfee;whenadevelopergetsaspecial concessionorURAmoney,thentheyhavetopaythefee. DoyouhaveoutͲofͲtheͲboxideasforincentives? Howtosupplement(?)continuedaffordabilityafter subsequentresales. Donotincreasethecostofhousingforalltosubsidise forafew. Lowinterestratesexist,moneytobemade,cityincentives growth,morepeoplemoreneed,commerciallinksand excisefees. Energycosts,astheyrise,of“junk”codebuilthousing, lookatnetzeroorpassivehouse. Anotherwaytoprovideadditionalaffordableunitswould betorelaxtheimpactfeesrequiredtobuildAccessory DwellingUnits. Whatmightwehavemissed? None–noexceptions–Removethebarrierforall. Highdensity IfadevelopergetsaspecialconcessionorURAgrant money. Whattypeofdevelopmentshould“trigger”anincentive Economic & Planning Systems, Inc. 91 Appendix Table D7 Comment Card Question 7 Table D8 Comment Card Question 8 Stakeholder Workshop 2 The second stakeholder meeting occurred on April 16, 2014. This meeting was conducted in the format of multiple focus groups, with smaller tables centered around four different topic areas (related to the issues raised in the first stakeholder workshop, and relevant to the trends and conditions identified in the research – these four areas were: 1) ownership housing and commuting patterns; 2) rental and student housing market conditions; 3) housing cost components; and 4) distressed populations.). A brief presentation introducing the concepts began the meeting, followed by 20-minute segments during which table leaders briefly presented the core of approximately 4 slides of substantive material concerning each topic, then fielded and noted questions, comments, and requests for any additional information. During the meeting, participants were able to attend three of the four different table topic groups. At the conclusion of the meeting, a synopsis of the comments was made and a review of the next steps made. City staff and EPS also had decided that a third stakeholder workshop, though not a part of the original scope, would be appropriate to wrap up the discussions of the issues and make Yes.Allexemptionsforonedevelopmentshouldbe appliedtoallunits. Limitsizeofhousing;allowgreaterheightgetonlycertain zone. Ofcourse.Questionistoobroad. AccessoryDwellingUnits(ADUs)ininfillareashaveless impactthannewconstructionontheedgeoftown,and thereforeshouldchargelessforwaterandsewertapfees, therebymakingtheunitsmoreaffordabletocreate. Shouldtherebeexemptionsorlimitations? ProvideIncentivesforsmallSFunitsandletmarketprice accordingly. Ifonedevelopmentneedsthelesseningofzoning,fees, andetc.,alldevelopmentsneedthelesseningofzoning, feesandetc. Manufacturedhousingparksshouldbeprotected,small housingzonedwithnogaragesandcommonopenarea. Youcan’tonlyburdendevelopmentcommunityforthis solution. Presentationwasfocusedonworkforce(service/detail) asdefinitionofaffordability.Policyandstudiesneedto includelowandveryͲlowincomepopulationsaswell. Additionalcomments/questions Economic & Planning Systems, Inc. 92 Appendix connections to recommended solutions. After asking about availability of the stakeholders, positive response directed City staff to plan a third workshop. Summary of Comments & Questions Ownership and Commuting Patterns x Need a mix of housing for renters and owners x Johnstown is the only area left to build in / attracting higher incomes x Job growth is greater than housing availability x Interesting to see comparison to national trends x Dramatic difference in affordability between Fort Collins and Greeley x 2000-2009 recession, prices are down less than we thought x AMI has gone down, housing prices have gone up = hardship x Focus on loss of competitive edge x Affordability gaps were bigger in 2000 x Where can we change the trend lines x How much of this is where we are in the economic cycle x Policy implementation always lags x Commuting data is difficult to interpret x What about two spouses commuting to different communities x Trends will ripple into surrounding communities x 42%? Artificial increase? x Trends are not sustainable x Market forces and fees push towards bigger homes x Incomes are not increasing enough as housing costs x Need down payment assistance and financial education x If trends continue there will be a lack of diversity x Gentrification x Trading off housing cost for transportation costs x Need more manufactured housing Rental and Student Housing x How to get enough subsidies to meet the lowest income need group x New student housing is displacing land that could be used by non-student renters x New student housing tends to be top end and not affordable to many students x CSU isn’t taking responsibility for housing students x Students demand houses more than apartments x Concern we are headed towards a bubble in the rental market – Construction defect x People who could otherwise buy are being forced into the rental market x Foreclosure victims are now in the rental market x Students shouldn’t be separated from other cost burdened populations --- no they are temporarily poor, not the same x Interest in affordable housing is not reflected in City’s policies x Manufactured housing is a significant component of non-subsidized rental stock x Boarding houses present challenges like parking and need at least 5 units to be viable to a developer x U + 2 hurts rentals overall but is good for owner occupancy housing market Economic & Planning Systems, Inc. 93 Appendix x Hard for homeowners to break into market with the U + 2 because investors acquire property faster x Investors like the predictability of U + 2 x Consider U + 3 in certain parts of town x Should students and multifamily housing be considered same in terms of code? x Extra restrictions on multifamily because of issues with student housing x Student housing issues are management and behavioral issues not land use code x Is there data on if the U + 2 reduces nuisances? Would U + 3 increase nuisances? x Make policy based on long term goals and trends Housing Cost Components x Land availability and GMA x Code isn’t allowing for growth in GMA x Payback on environmental efficiency is too long and codes are getting stricter x Raw water costs could escalate quickly x No condo development at all – Construction defect x Street standards drive up costs x Sprinkler systems drive up costs x Need more incentives for deed restricted affordable housing x Values of deed restrictions increases over time x If fees waived, has to be made up elsewhere x Permit fees encourage larger units – no break for small units x More expensive to get approval from and P and Z because of legal fees to avoid appeals x Land costs rising where we want affordable housing x Fire codes require access on all codes of the building x Land costs are too high to support single family, must be multi family x Developers should be allowed at the table when the fees are being determined by the City of Fort Collins x All costs have increased over the years x Should affordable housing have to pay the same fees as non-affordable housing Distressed Populations x The number on the FCHA waitlist is too long and the percentage of low income people on it is too high x Not sure first time homebuyers are distressed, but they are putting pressure on rental market x It’s going to get worse – senior populations are growing x Need housing for single women with low incomes x Mobile home parks are being closed and redeveloped x Section 8 voucher units may not pass inspection x HUD payments aren’t keeping up with rental costs x Fewer FCHA SROs are actually owned by FCHA, many are not suited to multi family x Half in public housing are disabled, moving is hard and they need a stable place to live x Two year waitlist is unacceptable x Lack of down payment is a barrier to move up x Increased demand for affordable 1 BR and 3 BR x City should waive 12-15% of fees for affordable housing in trade for permanent deed restrictions 6% Economic & Planning Systems, Inc. 94 Appendix x Need housing combined with services x Rental bubble may exceed need but not for the lowest income x Need more data showing unfilled gap and demand above 30% AMI x Developers can’t go this low under current system x As a community we don’t have the obligation to take care of students x DMA moving to tenant based rather than housing based vouchers Stakeholder Workshop 3 The third stakeholder workshop occurred on May 7, 2014. The format of this workshop differed still from the other two. Using a large roundtable format, EPS presented a high-level overview of the issues and possible policy solutions noted in the 4 topic areas presented in the second workshop. City staff made a computer polling tool available for all participants. During the second half of the workshop, participants were invited to respond to multiple choice questions, which were structured to gauge the level of support for various policy solutions. The results of that polling are provided below. Easel Notes x What kind of zoning incentives would have real value that enable builders to build at lower rental/sales rates x How much $$ would a tax have to raise, what would it be used for, and how much difference in affordability would it make x How do we explain high support for city fee waivers with low support for a separate (presumably lower) fee structure for affordable housing x Triggers for incentives should be performance-based – you get incentives if you produce X amount of housing at Y AMI – not based on identity of proposer or type of application being filed x Reduce barriers against tiny houses and cottage housing projects x Explore creative financing issues x Community Reinvestment Act investments in affordable housing x City guarantees (partial?) of AH-related land and construction loans x Explore use of metro districts for AH purposes x Get creative about reducing water costs x Distressed groups category should include the homeless x Lobby/preserve/strengthen LIHTC programs at state and federal level x Find ways to create ownership housing deed-restricted in perpetuity x Buying land for the Land Trust could reduce supply for other AH builders x Strengthen incentives to preserve/renovate/enhance existing AH stock x City or FCHA could broker voluntary rentals of SFD rentals to low-income residents at below market rents Polling Results Question 1: Which of the following would be effective in increasing housing units in Fort Collins (Choose your top 3)? (Multiple Choice - Multiple Response) Economic & Planning Systems, Inc. 95 Appendix Figure D1 Workshop 3 Question 1 Question 2: I support using the following option as a means of ensuring housing affordability? (Choose all that apply) (Multiple Choice - Multiple Response) Figure D2 Workshop 3 Question 2 Question 3: Regarding the cost of city development fees – which statement(s) do you agree with:(choose all that apply) (Multiple Choice) Percent Count Lobbying for state legislation to change construction defects law 16% 14 Providing waivers for affordable housing projects 24% 22 Incentive policy ordinance 11% 10 Relax the 3-unrelated rule 10% 9 Upgrade public infrastructure in Northeast Fort Collins 9% 8 Preserve mobile home parks 6% 5 Start landlord licensing program 4% 4 Pass new tax to support subsidized housing 12% 11 Create land trust 8% 7 None of the above / other 0% 0 Totals 100% 90 Responses 0% 5% 10% 15% 20% 25% 30% Percent Count Lobbying for state legislation to change construction defects law 13% 21 Providing waivers for affordable housing projects 16% 25 Incentive policy ordinance 10% 16 Relax the 3-unrelated rule 14% 22 Upgrade public infrastructure in Northeast Fort Collins 8% 12 Preserve mobile home parks 11% 17 Start landlord licensing program 6% 9 Pass new tax to support subsidized housing 11% 18 Create land trust 12% 19 None of the above / other 0% 0 Totals 100% 159 Responses 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Economic & Planning Systems, Inc. 96 Appendix Figure D3 Workshop 3 Question 3 Question 4: If the City was to relax the 3 unrelated rule, the best option would be...(Choose up to 2)? (Multiple Choice - Multiple Response) Figure D4 Workshop 3 Question 4 Question 5: The best use of the City’s land bank properties is to... (Choose 1) (Multiple Choice) Percent Count Fort Collins fee structure discourages the production of small units 13% 4 Fort Collins should have a separate fee structure for affordable housing 22% 7 Fort Collins should have a streamlined process for affordable housing similar to the City’s small project program 56% 18 None of the above / other 9% 3 Totals 100% 32 Responses 0% 10% 20% 30% 40% 50% 60% FortCollinsfee structurediscourages theproductionof smallunits FortCollinsshould haveaseparatefee structurefor affordablehousing FortCollinsshould haveastreamlined processfor affordablehousing similartotheCity’s smallproject program Noneoftheabove/ other Percent Count Relax to 4 unrelated community-wide 17% 10 Relax to 4 unrelated in certain zones 38% 22 Relax to 4 unrelated for seniors (55+) 10% 6 Rental Occupancy Permit process for owner-occupied units 26% 15 Streamline Extended Rental Occupancy Permit process for seniors (55+) 7% 4 None of the above / other 2% 1 Totals 100% 58 Responses 0% 5% Economic & Planning Systems, Inc. 97 Appendix Figure D5 Workshop 3 Question 5 Question 6: An Incentive Policy should be triggered when... (Choose all that apply) (Multiple Choice - Multiple Response) Figure D6 Workshop 3 Question 6 Question 7: With which of the following statements do you agree? (choose all that apply) (Multiple Choice - Multiple Response) Percent Count Sell the land to developers for the production of affordable housing and buy more land 39% 12 Put the land into a community trust and use for affordable housing 58% 18 Hold onto the properties until there are no other available lots 3% 1 None of the above / other 0% 0 Totals 100% 31 Responses 0% 10% 20% 30% 40% 50% 60% 70% Sellthelandto developersforthe productionof affordablehousing andbuymoreland Putthelandintoa communitytrustand useforaffordable housing Holdontothe propertiesuntilthere arenootheravailable lots Noneoftheabove/ other Percent Count Tax increment financing is provided 35% 17 Any non-housing public subsidy is provided 15% 7 A zoning variance is granted 17% 8 Any land code provision is adjusted at developer’s request 15% 7 None of the above / other 19% 9 Totals 100% 48 Responses 0% 5% 10% 15% 20% 25% 30% Economic & Planning Systems, Inc. 98 Appendix Figure D7 Workshop 3 Question 7 Question 8: I would support the City lobbying the state about... (choose all that apply) (Multiple Choice) Figure D8 Workshop 3 Question 8 Question 9: In considering alternative funding sources, the best funding source would be: (Multiple Choice) Percent Count Home Parks offer affordable housing and must be protected 33% 18 A Mobile Home Park District is a good way to preserve these units 25% 14 A voluntary affordable housing easement program should be explored to preserve mobile home parks 29% 16 Mobile home parks are not the best land use and should be redeveloped 5% 3 None of the above / other 7% 4 Totals 100% 55 Responses 0% 5% 10% 15% 20% 25% 30% 35% MobileHome Parksoffer affordable housingand mustbe protected AMobileHome ParkDistrictisa goodwayto preservethese units Avoluntary affordable housing easement programshould beexploredto preservemobile homeparks Mobilehome parksarenotthe bestlanduse andshouldbe redeveloped Noneofthe above/other Percent Count Construction defect litigation 13% 4 State version of Low Income Housing Tax Credit program 27% 8 Economic & Planning Systems, Inc. 99 Appendix Figure D9 Workshop 3 Question 9 Question 10: In considering alternative funding sources, the best funding source would be: (Multiple Choice) Figure D10 Workshop 3 Question 10 Question 11: Which of the following should be eligible for fee waivers when developing affordable housing:(select all that apply) (Multiple Choice) Percent Count Excise Tax 0% 0 Dedicated Sales Tax 57% 12 Time-limited Property Tax 5% 1 A community land trust 10% 2 None of the above / other 29% 6 Totals 100% 21 Responses 0% 10% 20% 30% 40% 50% 60% ExciseTax DedicatedSales Tax TimeͲlimited PropertyTax Acommunity landtrust Noneofthe above/other Percent Count Excise Tax 4% 1 Dedicated Sales Tax 52% 14 Time-limited Property Tax 19% 5 A community land trust 0% 0 None of the above / other 26% 7 Totals 100% 27 Responses 0% 10% 20% 30% 40% 50% 60% ExciseTax DedicatedSales Tax TimeͲlimited PropertyTax Acommunity landtrust Noneofthe above/other Economic & Planning Systems, Inc. 100 Appendix Figure D11 Workshop 3 Question 11 Percent Count Housing Authority 4% 1 Non-profit developers 18% 5 Private developers 21% 6 The type of project, not the developer, should trigger waivers 57% 16 None of the above / other 0% 0 Totals 100% 28 Responses 0% 10% 20% 30% 40% 50% 60% Housing Authority NonͲprofit developers Private developers Thetypeof project,notthe developer, shouldtrigger waivers Noneofthe above/other Economic & Planning Systems, Inc. 101 Appendix Public Open House This open house took place on May 21, 2014. Table D9 Public Open House, Poster 1 Support Oppose Support Oppose Relaxtofourunrelatedcitywide 9138 Relaxtofourunrelatedincertainzones 4168 Relaxtofourunrelatedforseniorsaged55andup 3 0 11 3 StreamlineexemptionprocessforownerͲoccupiedhomes2025 Streamlineexemptionprocessforseniorsaged55andup4075 LandlordLicensingProgram 1081 OpenHouse1OpenHouse2 Landlordsdonotseemtotakeownershipintheupkeepoftheirrentalproperties. RentalapartmentsinownerͲoccupiedhomes(basements,etc.)shouldnotbeillegalbasedonlyonzoning density.Alsoshouldlookatseparateheatingandentrance. CommentsPOH#2: Morespecificregulations. Absolutelynot!It’sworkingtoowell! Veryagainstrelaxing3Ͳunrelatedandchangingto4. Propertiesrentedbystudentsareveryeasytoidentify—parking,trash,conditionofyard,etc. REGULATORY:Relaxthe3ͲUnrelatedRule CommentsPOH#1: FortCollinscannotaffordoverlyconservativehousingpolicieslikeYou+2.Allowfourunrelatedindividualsto cohabitatelikeothercollegetownsandhaveconsequences/protectionsinplaceforrowdy households/landlordstoaddressproblemcases. Don’tremove3Ͳunrelatedruleforsinglefamilyzones.ItwouldresultinwarehousingresidentsinoverͲpriced homes.3Ͳunrelatedhasmadestarterhomesaffordableforfamilies. Remove3Ͳunrelatedrule.Landlordpermitprogramwithfundingfromincreasedoccupancygoingtoaffordable housingfund. Considerexemptionsforthe“2 nd Range”restrictionformultiͲgenerationalfamilies. Economic & Planning Systems, Inc. 102 Appendix Table D10 Public Open House, Poster 2 Table D12 Public Open House, Poster 3 Support Oppose Support Oppose FixConstructionDefectslaw 6042 ApprovetheStateLowIncomeTaxCreditProgram 3071 PassstateͲwidefundingmeasureforaffordablehousing 6 0 12 1 OpenHouse1OpenHouse2 CommentsPOH#2: None Legislative:LobbyStateLegislature CommentsPOH#1: Canwegetacleardefinitionofwhatisbeingdefinedas“affordable”? Trimcurrentinefficienciesincurrentsystemtoreduceadmin. Adoptrealestatetransfertaxorsimilarfeestocreatestatehousingtrustfund.thismayrequirevoterapproval. Support Oppose Support Oppose FeeWaiversforAffordableHousing 3050 StreamlineProcessforAffordableHousing 2090 AdjustMarginalCostStructureofFees(reducefeesforsmaller units) 5091 ReduceorRemoveMinimumSizeforHomes 9 0 13 3 OpenHouse1 CommentsPOH#2: Okaytoreducedependingonneighborhood(houseminimum). Isupportreducedsize. Allowfor“TinyHouse”neighborhoods—or3bedroomslessthan1000squarefeet. CostReduction: CommentsPOH#1: Reducethenumberswhohavehousingthatdonotqualifyandabuses Veryimportanttoreview/actonthis—Oldrequirementsnolongerapplywithourenvironment. OpenHouse2 Economic & Planning Systems, Inc. 103 Appendix Table D13 Public Open House, Poster 4 Table D14 Public Open House, Poster 5 Support Oppose Support Oppose NonͲSubsidyTriggered 3 0 5 0 SubsidyVariety 2030 PartofNegotiation 0000 TriggeredbyPublicFinancing 0 0 0 0 Don’tseeHousingAuthority’sexistingsinglefamilyhomes.Improvethemthroughpracticalconstruction Retailpricepersquarefootmatrix—includingongoingincreasepercentage. Taxingwillnotsolvethis.BringbackFCHA—helptobuyprogram. UseTIFfinancingforaffordablehousing. CommentsPOH#2: Affordable“student”housing? REGULATORY:IncentivePolicyOrdinance CommentsPOH#1: OpenHouse1OpenHouse2 Support Oppose Support Oppose GrowthManagementArea 0032 RemoveImpedimentsonAvailableLand 1041 ProvideInfrastructureImprovementsinNortheast 3061 NorthCollegeisurbansprawl. GMAincreasessmart. Wellthoughtoutinfill. REGULATORY:EvaluateLandConstraints CommentsPOH#1: Becautioushere—avoidsprawlwhenpossible. Weneedsidewalks. Thisisaregionalissue—IsTimnathcontributing? CommentsPOH#2: OpenHouse1OpenHouse2 Economic & Planning Systems, Inc. 104 Appendix Table D15 Public Open House, Poster 6 Table D16 Public Open House, Poster 7 Support Oppose Support Oppose AffordableHousingEasementOption 8060 PreserveExistingMobileHomeParks 13 0 10 0 CreateNewManufacturedHousingCommunities 11 0 6 2 Considerothervalueengineeringapproaches—systemͲbuilt,modular,preͲassembled,etc. Nice(createmanufacturedhousing) Createnewmanufacturedhousingcommunitieswithtransportationinmind! CommentsPOH#2: Whymobilehomes?Apartmentsaremoreefficient. Lookintorecycledhomemovement. REGULATORY:AddressManufactured Housing CommentsPOH#1: Programsforupgrades OpenHouse1OpenHouse2 Support Oppose Support Oppose ExciseTax 6425 DedicatedSalesTax 6252 TimeLimitedPropertyTax 1131 None ALTERNATIVEFUNDINGSOURCES CommentsPOH#1: Reviewandassesscurrentbudget. Taxingwillnotsolvethis—let’sseedataon#soffolksneedingaffordablehousing. AskCongressionalrepstourgeU.S.HousingSecretaryMelWatttocreateHousingTrustFund.Also,create CommentsPOH#2: OpenHouse1OpenHouse2 Economic & Planning Systems, Inc. 105 Appendix Table D17 Public Open House, Poster 8 Table D18 Public Open House, Poster 9 Support Oppose Support Oppose CommunityLandTrust 3060 CreateEndowedFoundation 3 0 2 1 SellforAffordableHousing 7042 MaintainforFutureUse 0010 Affordablehousessopeoplecanownhomeandproperty. 1stbuyerbacktocity OrsellbacktononͲprofitbuilder/lender CommentsPOH#2: Thissoundslikesellingacarforgasmoney. ALTERNATIVEFUNDINGSOURCES:LandBank Program CommentsPOH#1: Createendowmentforaffordablehousing,perhapssimilartoSandSpringsHomeVillagethroughpublic CreateaninterͲchurchhousingcorporationsimilartothatcreatedbyJimGeller(Rev.BobGeller’sson)among Undocumentedpaytaxes,butaren’teligible./ OpenHouse1OpenHouse2 Support Oppose Support Oppose HousingAuthority 3050 NotͲforͲProfitDevelopers 5 0 11 0 ForͲProfitDevelopers 1138 AllAffordableHousingProjects 11090 CommentsPOH#1: YesonNotͲforͲProfitdeveloperfeewaiversunderspecificandtargetedguidelines(public/privatepartnerships) Creategapfundingtooffsetdifferenceofvoucherandmarketrent.Increaseaccountabilitywithintheagency. CommentsPOH#2: None COSTREDUCTIONOPTION:WhoShouldBe EligibleforFeeWaivers? OpenHouse1OpenHouse2 +RXVLQJ$IIRUGDELOLW\6WUDWHJLF3ODQ 3XEOLF(QJDJHPHQW3ODQ 38%/,&(1*$*(0(176800$5< 352-(&77,7/( +RXVLQJ3ULRULWLHV6WUDWHJLF3ODQ 29(5$//38%/,&,192/9(0(17/(9(/ ,QYROYH %27720/,1(48(67,21 +RZVKRXOGWKH&LW\SULRULWL]HKRXVLQJJRDOVWRVXSSRUWDVRFLDOO\VXVWDLQDEOHKRXVLQJV\VWHP" 38%/,&(1*$*(0(17$&7,9,7,(6 $EURDGUDQJHRIDSSURDFKHVDQGWHFKQLTXHVZLOOEHXVHGWRHQJDJHPHPEHUVRIWKHSXEOLFNH\ VWDNHKROGHUJURXSV&LW\GHSDUWPHQWVOHGE\6RFLDO6XVWDLQDELOLW\&LW\ERDUGVDQGFRPPLVVLRQVDQG&LW\ &RXQFLOLQWKH+RXVLQJ3ULRULWLHV6WUDWHJLF3ODQ²LQFOXGLQJSXEOLFHYHQWVDGYLVRU\FRPPLWWHHV RQOLQHHQJDJHPHQWDQGEURDGFDVWQRWLILFDWLRQDQGRXWUHDFKDVDSSURSULDWH 3ODQQLQJ .H\$FWLYLWLHV • *DWKHULQSXWRQWKH+RXVLQJ3ULRULWLHV6WUDWHJLF3ODQJRDOVDQGVWUDWHJLHV • 6HHNWRXQGHUVWDQGSXEOLF·VGHVLUHVIRUFXUUHQWDQGSRWHQWLDOIXWXUHRSSRUWXQLWLHVLVVXHVDQG QHHGVWRDGGUHVVDIIRUGDEOHKRXVLQJ • *RDOVRIWKHGUDIWSODQDVGHYHORSHGIURPWKH+RXVLQJ$IIRUGDELOLW\3ROLF\6WXG\ +$36 +RXVLQJ$IIRUGDELOLW\6WUDWHJLF3ODQ 3XEOLF(QJDJHPHQW3ODQ • 7KH&LW\PXVWFRQWLQXHLWVSUDFWLFHRIHYHQO\GLVSHUVLQJDIIRUGDEOHKRXVLQJWKURXJKRXWWKH FRPPXQLW\,WLVWKH&LW\·VSROLF\²VSHOOHGRXWLQ&LW\3ODQWRKDYHDIIRUGDEOHKRXVLQJWKURXJKRXW WKHFLW\QRWLQLVRODWHGGLVWULFWV • 7KHKRPHRZQHUVKLSDIIRUGDELOLW\JDSLVZLGHQLQJLQ)RUW&ROOLQVDQGUHQWVKDYHLQFUHDVHGDV YDFDQF\KDVGHFUHDVHG $GGLWLRQDO0HVVDJLQJ 4XLFN)DFWV +RXVLQJ$IIRUGDELOLW\6WUDWHJLF3ODQ 3XEOLF(QJDJHPHQW3ODQ :KLFKHQJDJHPHQWWRROVVHHPPRVWHIIHFWLYHIRUWKLVLVVXH" 3XEOLFHQJDJHPHQWPDUNHWLQJPDWHULDOVFRXOGLQFOXGHEXWDUHQRWOLPLWHGWR )DFWVKHHW V +RXVLQJ$IIRUGDELOLW\6WUDWHJLF3ODQ 3XEOLF(QJDJHPHQW3ODQ • 'LVFXVVSRVVLEOHHGLWRULDOERDUGZLWK&LW\0DQDJHU·V2IILFH²WRRFFXUDIWHU&RXQFLOZRUNVHVVLRQ" (PLO\6XH March 9, 2015 Superboards Meeting Table Notes Number 1:  Building costs make it hard to sell at affordable prices  Chafa - $71,200 income vs $41,070 – o Max for single -> ? o Also ratio can be off so FHA can’t apply.  ? HOA -> could land be deeded to city to reduce HOA costs. o Public vs Private  Senior cohousing – o 4 – 42 units? o 40% shortfall for seniors who have no family  Alternative housing o Types – multi uses for common space o Look at Land Use Code  Hughes Stadium? Could the City annex for affordable housing  Commercial zones change to residential to allow more space to build o Right mix of types / should process code change  New development – look into requiring owner occupied or some ration to give homeowners a chance against investors.  Transportation? Number 2:  Is transportation “supportive services?”  Affordable Housing interactive with green action plan?  U+2 – too blanket  Rental situations need review  Goals have to include transportation o Available o Dial-A-Ride o Bus Ride  Who is going to bite the bullet between what it costs to build something affordable  Are “Nature in City” goals in direct competition with infill developments?  Developing services that allow for neighborhoods to be walkable/livable (more neighborhood based business vs city-wide business.  More emphasis on lifting people to a higher level wage Number 3:  Incentive for development to include transportation consideration  Consideration of childcare, grocery stores  Minimum wages?  Goals too vague – how would you measure?  Density – high density along transit routes  ADU’s  Housing – 10 minute to transit  Affordable Housing walkability = ¼ mile to bus stop ATTACHMENT 6  Affordable Housing Capital Fund – pay for fees rather than waive  Send Kristin Legislative Policy  Sell Land Bank  Rental licensing fee  Where you’re getting a return on your investment o Leveraging o Number of cents per $ - measurability  Incentives – Community tiny homes  Commercial incentives – (5?) hsg Number 4:  What if you are older and need to rent, but don’t want to live with students  Student problem with U+2, cannot afford rent (specific example = 2 individuals are roommates, one making $12/hr the other $8.50) even together struggle to make rent.  U+2 not in place with new units (the Summit, etc.)  Landlord accountability!  We need infill (Natural Resources)  Enforcement of current nuisance regulations  Need townhouses & Condos  In strategic plan include trade-offs, including opportunities. If City does X what does that do to Y  Review U+2 rent is so high the it makes it very difficult for the younger community  Natural Resources – infill instead of/versus sprawl and promote landscaping  Owners occupancy Number 5:  Per goal 1: possibly change wording to read Increase the inventory of affordable rental units for ALL wage earners.  Looking at the map of affordable rental units: what is the trickle-down effect and how does it relate to schools, traffic, and activity in community parks.  Overall presentation seems a bit skeptical, a lot of the numbers seem like smoke and mirrors and don't add up.  Affordable housing units don't seem evenly distributed through-out the City.  Would like a breakdown of necessary units for each type of wage earner. (Do we need more units for those earning 30% or less AMI, or do we need more for those earning 80%+ AMI?)  Many individuals are stuck with a static income problem and they need to be looked at and helped. (ex: retirees and those earning wages that have not changed in the last 10+ years, seniors, etc.)  Would like to see a map with the GIS system that shows location of AH projects coupled with schools, parks, and transportation options.  Goals seem broad overall. How could one track how they are accomplished? Would like to see them drilled down and written in a way that can be measured.  Like the concept that the 5 goals are written in no particular order. They each tie into each other and should not be focused on specifically.  Transportation should be acknowledged in one of the goals since this is a very relevant item when it comes to housing. You can't live somewhere if it is impossible to get to work, supplies, or food.  What is the City seeing in regards to transportation, type of housing, and density issues?  Would like to see different kinds of data. Understand that HUD numbers are what the nation uses, but Fort Collins is different. Would like to see both sets of numbers. Number 6:  People first advocacy group - need for down payment assistance and supplemental income (and maintenance costs)  Start up costs - can make payments but down payment can be a problem  Speaking to prioritization - suggest not to prioritize to supplement each other  Really like the addition of the 5th goal  Look at geographic locations - how do people get there? Need transportation to jobs and other place people go o Maybe another goal  Should be tax incentives  City is not just the city limits - example; flood impacts  Like regrouping existing units and infill  Gap of income for people - assistance cliff  80-100% still needs to be part of the goal  Goals broad enough to encompass everything Number 7:  What other funding sources does City have to help develop affordable housing?  How does 9% City fees & taxes for housing costs compare to other communities in Colorado?  How are you addressing land costs?  Goals are generally on the right track  Need a focus on affordable senior housing  The City needs larger housing projects o Mixed age o Mixed income  Goals 2, 3, 4 + 5 are specific  Goal 1 is too general o Feels like Goals 2-5 encompass goal 1  Should Goal 1 be changed to include ownership and be the overall vision for the plan?  Will we meet the rental gaps with the proposed development in the pipeline?  Target empty nesters and first time home buyers  What about homeless people with mental health issues?  Do not prioritize goals  Could you create goals for specific categories of people? o I.e., seniors, homeless, people with special needs, first time home buyers, etc.  Call out specific groups clearly  Create performance measures for goals  Track measures and assess progress during next plan update  Mention transit explicitly o Focus on multi-modal transit  Senior Transportation Coalition would like to meet  Locate housing in close proximity to transit  Create a quality of life measurement for affordable housing o Proximity to transit, trails, parks, amenities, etc.  How does plan address people in transitional situations? o Families temporarily doubled up, people transitioning out of homelessness, etc. May 12, 2015 Public Forum Table Notes Troy’s Table Goal 1:  Not just city issue  Increase supply (need land available, fee structure that works)  Remove barriers o Process barriers o Regulatory barriers  Developable land supply o Infrastructure o Water rights  Provide infrastructure o Invest in transit o Support services close by affordable housing  Utility solutions o Stormwater improvements that take properly zoned property out of the flood plain o Expand City’s water service boundary to include more of the area within the City of Fort Collins  Transportation a big deal for affordable rental units o Maybe divert some affordable housing money to more transit Goal 2:  Physical condition upgrade should be private sector or link any money given to obligation to restrict rent  Block grants for blighted areas could be tied to rehab if rent prices restricted Goal 3:  Adopt universal design standards for new construction that won’t increase cost o Example: showers that can be easily retrofitted  Amend stormwater standards in some locations to allow buildings to be less elevated  Allow people to age in place o Grants and home improvement loans to add accessibility features (ramps, doorways, etc.)  Make homes for victims of domestic violence easier to easier to site o Example: Pederson facility with barbed wire should blend  Transportation - special needs folks tend to be less mobile  Not just transit but individual mobility (disabled van) - not just on the caregiver Goal 4:  Homebuyers Assistance  Resolve construction defects issue  Increase opportunities for ADUs either internal or external  Laws that enable people to live in RVs (central facilities to take showers, etc.)  Community kitchen/shower facility, pay as you use  Need more subsidies for maintenance for homeowners  Promote/allow smaller units (cottage houses) o Younger population o Retirees o Singles  Fees/impediments to ADUs need to be addressed Goal 5:  Federal - we all pay  Local - sales tax  Inclusionary zoning - other tenants in building  New sources - new affordable housing sales tax? Beth’s Table Goal 1:  Construction defects - majority owners  Streamline planning process o Developers not sure how many in the pipeline o Make information more available and notify businesses how far along o Timelines on projects in process  Reduced fee structure  A metro district - sell bonds and recapture cost  Reduction of parking requirements Goal 2:  ADUs affordable - plug into existing tap o At the same time there would be improvements to existing infrastructure  Low income loans to upgrade  Modify code to allow two kitchens  Redevelopment - more units rather than preserving 4-plexes, 8-plexes without rezoning? Goal 3:  U+2 variances  ADUs  Don’t force design criteria - fund retrofitting of older units  Demand driven in real time vs. guessing future needs o Encourage owners to build main floor masters w/ main floor utility room Goal 4:  Construction Defects - City draft local ordinance  Water partnerships - sell water to ELCO - would put housing in GMA o Assist climate goals o Grow tax base  Rehab programs  Partnerships - social investment impact $, earned equity and rent to own Goal 5:  Reduction of parking and height restrictions  Reduce or eliminate fees in re-development areas  Reduction of park fees when contributing land  What community has incentives that are working?  Why does it take 2.5 years to get a plat approved? Diane’s Table Goal 1:  Tax-credit process - prefer to get tax credits before acquiring entitlements. Decrease city entitlement process from 9 months to 4-6 months to decrease risk  Need more flexibility in funding cycle (City and CHAFA)  Water expense is prohibitive  Not much developable land in City water district CBT costs increase  U+2 does not create efficient use of existing space  Fee waivers - other communities o more case-by-case basis than FC  Financial assistance to developers - loans  Should be most important goal  UBC changes to costs green code changes code to cost Goal 2:  Rehab required updates to current code. Instead make code make percentage improvements for heat exchange, safety, etc. Builders are figuring out how to technically get around codes and make changes. Otherwise, may choose not to rehab units or choose to go higher to market rate for rent or sale. Pre and post measurements of outcomes (electricity, water, etc.) plus affordability for tenants  If external needs assessment, need grant for that because it doesn’t fix anything. Or no required needs assessment.  Scale city programs so that smaller land lords can gain as much as larger projects  Title deed restrictions are disincentive. Prorated payback to get out of it or lien mechanism Goal 3:  Increase priority for $ for these - 30% boost in qualified census track and senior, other boosts?  Tiny homes, shared living (U+2)  Indirectly funding infrastructure that benefits seniors aging in place longer - curb cuts, transportation, benches, lighting and home services  Partnerships with health systems so neighborhoods to improve healthy living Goal 4:  Construction defects - address at city level  Don’t zone mobile home parks separately  FAR code for ADUs is not best way to address issue Goal 5:  Streamline entitlement process - 12 months to 6 months  AHCF raises costs to individuals - bad idea  Transfer tax on sale of real estate for funding  Concentrate AHCF to fewer units but they will be more affordable  Density bonus not much of incentive based on increased cost for more stories Clay’s Table Goal 1:  Revisit U+2  Loosen design criteria o Vinyl siding limitations problematic  Increase density o Discussion across zone districts o Not materializing even though we allow it  Relax illegal duplex o Make it easier to convert homes to duplexes  ADUs - require owner must occupy unit  Explore IHO?  Look for opportunities to require affordable housing o Requirement if public money involved  Remove barriers to development in Mountain Vista  More proportional share of utility charges  Water rights an issue in ELCO  Tiny homes o Treat like mobile home parks for utilities Goal 2:  Adopt-a-unit/mobile home park o Church or non-profit that can rehab mobile home parks o Larimer County Home Improvement Program - build on that  Should not just be targeted at rentals o Need for seniors to age in place  Need to embrace mobile home parks as part of the community  SP3 program - give priority to affordable housing  Expand utilities program for solar panels/finance improvements through utility bill  Educate homeowners on opportunities  0% interest loans for home improvements  Online survey - what home improvement programs do I qualify for?  Work with banks that need CRA credits for lowering interest rates  Interest rate depends on type of investment  Embrace affordable housing community  Incentivize landlords to invest in improvements  How do we align building code requirements to rehabs? o Address public safety issues, maybe not green building code requirements Goal 3:  NIMBY issue  Education about issue  Density  Allow group homes in neighborhoods? o Incentivize?  Better support smaller group homes  Need more $  Funding source to help Volunteers of America with retrofitting homes for accessibility  Build more relationships and partnerships  Change of use triggering site upgrades o Tweak, remove for some projects Goal 4:  Building on support for Habitat for Humanity  Graduated forgiveness o Longer owner stays in homes, less they owe when they sell  Construction Defect Litigation o Develop local solution or try to repeal state level legislation  Tension between ownership and rental Goal 5:  Use land bank proceeds to put into AHCF?  Know what fees are -> more predictable fees  Improve user experience o Streamline fees o Make sure departments are coordinating better with fees  List of all fees  Use AHCF to backfill waivers Map 19, 2015 Open House Notes Goal 1:  Affordable homeownership, not rental  What about an appraisal process for rentals to help set standards for what is economically sustainable and/or feasible for people at or below the AMI?  Some see eliminating U+2 as a solution since more people will be in each unit and therefore decreasing the demand for number of units. I disagree with this thinking since more people in each unit will increase cash flow per unit and therefore result in investors bidding up the cost of homes. This drives more people to renting, drives up rents, further increases cash flow, and the cycle continues to repeat itself. Furthermore, these investors are far less likely to make energy saving investments on the properties they buy vs. if the owner was living in the property.  Consider a more moderate increase of years to 30 (or 25) rather than 40 years  Consider re-evaluating ordinances for tiny houses and encourage building of smaller and more affordable homes  Removing barriers to accessory dwelling units  Review 3-unrelated rule, especially for 4 and 5 bedroom houses  Clarify what involuntary displacement means Goal 2:  Offer further incentives for owners and renters to maintain the current available stock  Emphasize green rehab Goal 3:  For homeless - at least provide access to legal camping and resting places  While we continue to meet the needs of homeless individuals, I think priority should be on those strapped with housing costs they can’t afford to prevent further homelessness  Direct more resources at the thousands of people struggling with affordable housing and less toward 130 people with special needs Goal 4:  As the median cost of housing has increased, threshold for City aid has not increased accordingly  Please include strategies that will help to bring more units to the market more quickly so as to slow the extreme cost increases that are occurring because of a lack of housing availability. Overall increase have a regressive impact on lower income housing  Incorporate strategies that encourage the City to addressing infrastructure related issues such as water, roads, electric and other key City provide infrastructure that are creating cost burdens and barriers to more units come into the overall market  Expand homebuyer assistance to include credit unions so homeowners can use a mortgage processor that continues to handle the processing of the mortgage in house  Consideration of fees that discourage small units and higher levels of density in key corridors  Promote partnerships with schools and universities to create awareness and participation. This is a long view/thought Goal 5:  There does not appear to be any emphasis on affordable housing for middle class working families. As median prices continue to increase, these people are being driven to the rental market, further adding to that problem and driving up rents, which increase rental cashflow, that in turn further drives up prices  Economic policy needs to be included because tax dollars are being waived to expand jobs but those jobs don’t pay enough to live in the area and pay weird so mortgage companies don’t want to provide mortgage money  Consider employer assisted housing E-mail Comments May 11, 2015 Thanks, Susan; as noted earlier, I will be out of the office this week. I will try to review more of this on my return. I can tell you first hand that not only is affordable housing an issue, rent is just out of control. I was able to purchase a home here in Windsor for less than an acquaintance was able to lease a 1 Bedroom apartment in Fort Collins. That does not bode well for a work force in Fort Collins. Unfortunately, I also have a standing set of meetings on Tuesday evenings, so not likely to make next week’s meeting, but I’ll see what I can do. Thanks, Greg Gregory A. Miedema, CAPS, CGB, CGP, CGR Executive Officer, NOCO HBA May 12, 2015 Susan: There is little to nothing is this draft that addresses public policy addressing effort to reduce the cost of housing. A major cost factor is the growing dependence by the City upon the ELCO and Loveland-Fort Collins Water Districts (not the City Water Utility) who have become the water suppliers for over 70 percent of the vacant ground in the City’s GMA. This is not a “textbook” issue, but one specifically impacting the Fort Collins affordable housing challenge. Simply put, it will cost 4 times the cost for raw water from these districts than from the City Utility. This translate to approximately $25,000 to $ 30,000 more for a single family residence built within most of the future development land in the GMA. This condition is solvable via a variety of water sharing arrangements and water delivery system consolidation strategies. However, the problem needs to be acknowledged first. Already, there are over 1,000 housing units fully approved within the City but dead-in-the-water due to prohibitive water costs. This condition is already increasing the cost of existing housing and making affordability more and more difficult. Your draft completely ignores what could be the largest single increased cost component to affordable housing. Les Kaplan Web Comments Date: 5/13/15 Name: Matt Rogers Email Address: matthew.rogers@colostate.edu Comments: The Avery Park/Campus West neighborhoods offer an outstanding solution to the lack of affordable family homes and/or family rental units in Fort Collins. I encourage the City to continue development of high-density student housing options along the MAX corridor, freeing rental units that can be used for family and resident housing. Developing the landlord registration process too will help with this - consolidating the landlord cadre into a smaller, more professional group will help 'weed out' absentee, casual investor types, freeing their properties for affordable purchase and redevelopment. Date: 5/17/15 Name: Lillian Laybourn Email Address: llaybourn@earthlink.net Comments: If the city would change the minimum square footage of an abode, many peopled could live affordably for about $50,000.00 =/- and much less, in a Tiny House, on trailers and from containers. A Tiny House is basically anything under 500 sf. I can't afford to own my own home but am working toward a Tiny House on wheels. My rent is under the average of $1000.00 per month, and this is the ONLY option open to me to obtain home ownership. Just GOGGLE "Tiny Houses" this is a huge national and international movement for affordable housing. Please, look into this, I need a place to park my home. Date: 5/17/15 Name: Stacy Email Address: Stacy_fernandes@msn.com Comments: My husband and I would love to make FortCollins our home, but because homes are only for the rich here we will probably be going back to Wyoming. It is not fair that the middle class has to fight the rich for a dream home. Why dont you people as our city council do something to stop this. If nothing is done FortCollins will lose everything just like Wyoming did years ago.This is our dream also not just millionaires that move into this state and take everything over. I will personally tell my friends to move somewhere else and leave this town a ghost town. Date: 5/19/15 Name: Kristi Zambrano Email Address: kristi.smith3@gmail.com Comments: We recently moved into the Kechter Crossing neighborhood.....off of Kechter just east of Timberline. Our community is filled with small children! And, it appears that with the development of Mail Creek and Toll Brother's developments here, that there will be a large influx of even more families with children. We've been out and about on our bikes with our children, trying to find safe ways to get to parks and around town from here, but haven't been able to find any. The sidewalks and bike lane on Kechter ends before it gets to our community. The closest bike path can only be accessed by crossing an active railroad line. We have no park or playground in our neighborhood and now have to drive to get there. Are there any plans to add parks, green space, bike paths and/or bike lanes to this part of town? There are going to be 100s of children in this part of town within the year. There is a plot of land near us (at Kechter and Tilden) that is vacant...this would be a fabulous area for a park or green space! Thanks so much for your time! - Kristi Zambrano 2427 Copper Crest Lane Date: 5/19/15 Name: Brian Zambrano Email Address: brianz@gmail.com Comments: My family and I j just moved into the Kechter Crossing neighborhood. While I encourage the building of affordable housing, I'm already starting to become concerned with the amount of development and lack of green space. Our neighborhood, Mail Creek and the Toll Brothers developments will turn this area into a pretty dense neighborhood. I was happy that the open space next to us off Kechter Rd. would stay open. We don't have a park or any biking trail next to us. I very much hope the city realizes this before selling it off to another developer. There are many many kids in this area...we need a park for them to play in which is nearby. In addition, we don't have any biking trails which link up with the other trails in the city or which link up with the nearby schools (or biking trails). Date: 5/19/15 Name: Brooke Cunningham Email Address: brooke.m.cunningham@gmail.com Comments: I just wanted to say that I agree fully with the conclusion that affordable rental units needs to be a focus - it is incredibly challenging to find something that does not consume over 40% of my (decent) monthly salary. Furthermore, I'd love to be able to buy a house in the near future but the lack of affordable options coupled with the fact that I'm unable to save much because I'm paying so much in rent makes purchasing a home extraordinarily challenging. I do really appreciate all the hard work that has gone into this strategic plan and am very excited to see that some attention is being paid to this very timely topic. Great work City of Fort Collins team! Date: 5/20/15 Name: Michael Martinez Email Address: 2442mike@gmail.com Comments: I am seeing so many multi-family housing developments going up all around Fort Collins. I believe that this has taken away from the beauty and quality of life feeling in the town. I was born in this town and love it, but it is starting to feel like a Denver suburb and not the town I grew up in. The traffic is horrible a direct result of bad planning and efforts to produce more affordable housing and thus more people with more cars etc. We should go back to single family homes with large lots. I have been here for 52 years, but I will be looking to retire in another city if things keep going the way they are going in my home town. Date: 5/20/15 Name: Erik Kuitert Email Address: erikuitert@hotmail.com Comments: BLANK Date: 5/21/15 Name: Devin Hirning Organization: Hirning Consulting Email Address: news@hirning.us Comments: After listening to affordable housing debates and attending the Affordable Housing Strategic Plan forum, I am increasingly concerned that potential options to deal with the issue are too focused on lifting growth restrictions that will not necessarily produce our desired results. The following was just sent to the Coloradoan for publication as a Soapbox.I'd like to make sure the points are considered as a public comment. Thanks for your time and consideration. According to a 2014 U.S. Conference of Mayors survey, “City officials identified lack of affordable housing as the leading cause of homelessness among families with children,”(1) and since housing assistance is the number one request for Larimer County residents in need(2), we are wise to deal with escalating costs. Conversely, our senior population is expected to double within 15 years(3) and a 2014 Wells Fargo report found that “half of those aged 50 – 75 have saved less than $25,000” for retirement(4) -- indicating home value is a primary source of retirement savings. The pending tsunami of retired homeowners, includes many who undoubtedly welcome asset appreciation when the only alternative could be total dependence on family and the state. Housing affordability strategies will inevitably create both winners and losers. We must carefully define our goals and ensure that any losses are mitigated by beneficial and measurable outcomes. In an attempt to address affordable housing, state legislators pursued construction defects reform. Condominiums are traditionally a more affordable form of housing but current laws make it too easy for condo owners to sue developers. Reformers contend that restricting litigation will lower risk and encourage construction while opponents argue increased construction won’t produce the intended results. A recent report by Colorado Ethics Watch suggests that homebuilders are exploiting the affordable housing crisis to make building luxury condominiums more profitable(5). The report is based on case studies which could render conclusions specious. However, the inferences are reinforced by national trends. At a recent “State of the Industry” event held by the Board of Realtors, a primary advocate for construction defects reform, the keynote speaker reportedly stated: "A bump in construction may increase supply, but not necessarily lower housing prices, Eisenberg said. One would think that with nationwide student debt problems, flat wage growth, lack of available credit and low income rates that builders would construct more affordable homes, he said. However, the average new homes is bigger (2,400 square feet) than ever before and being sold to 'rich people' not strapped for funds. 'This is good for the builders, but not for the local economies.'"(6) An Inclusionary Housing Ordinance (IHO) is one of the few tools available to governments that directly bind initiatives like construction defects reform to building affordable homes.(7) Surprisingly, it’s a tool Fort Collins is not seriously considering. IHOs have two basic forms. The first form requires developers include a specified percentage of affordable homes in new housing developments or they must pay an opt-out fee which supports alternative initiatives. Both Denver and Boulder employ this strategy and Denver recently revised its ordinance because developers unexpectedly opted to build higher-end homes and paid the opt-out fees.(8) The second form IHOs take is rent control which potentially helps the greatest number of Fort Collins residents struggling to find affordable homes.(9) This option is not available because a poorly-conceived state law(10) encroaches on local governments by making rent control illegal.(11) The Fort Collins 2015 Legislative Priorities overlooks this law. Although it lists construction defects reform as a way to address poverty, affordable housing and homelessness, there is no mention of this rent control statute which directly impacts our most “severely cost burdened”(9) households. Let’s explore all options when revising our Affordable Housing Strategic Plan then connect initiatives to expected and quantifiable results. Devin Hirning Fort Collins 1) Hunger and Homelessness Survey: A Status Report on Hunger and Homelessness in America’s Cities, The United States Conference of Mayors, December 2014 http://usmayors.org/pressreleases/uploads/2014/1211-report-hh.pdf 2) 2014 Snapshot, United Way of Larimer County 2-1-1 http://uwaylc.org/wp-content/uploads/wordpress/2014-Year-in-Review-Snapshot.pdf 3) Larimer's senior population to double within 15 years, Adrian D. Garcia, The Coloradoan, May 7, 2015 http://www.coloradoan.com/story/news/2015/05/08/larimer-county-aging/70967140/ 4) 2014 Wells Fargo Middle-Class Retirement Study https://www08.wellsfargomedia.com/downloads/pdf/com/retirement-employee- benefits/insights/2014-retirement-study.pdf 5) House of Cash, Colorado Ethics Watch, released April 21, 2015 http://crew.3cdn.net/ba88fa8f7b6c8b37ec_gum6b3i17.pdf 6) Economists: Fort Collins not in housing bubble, Adrian D. Garcia, The Coloradoan, April 14, 2015 http://www.coloradoan.com/story/money/2015/04/14/fort-collins-housing-market/25778083/ 7) Achieving Lasting Affordability through Inclusionary Housing, Robert Hickey, Lisa Sturtevant, and Emily Thaden, Lincoln Institute of Land Policy, July 2014 http://communitylandtrust.org/wp-content/uploads/2014/08/CLT-inclusion-July2014-LincLandInst.pdf 8) Denver mayor: Affordable housing shortage threatens city's identity, Rachel Estabrook, Colorado Public Radio, November 17, 2014 http://www.cpr.org/news/story/denver-mayor-affordable-housing-shortage-threatens-citys-identity 9) 2015-2019 Five-Year Consolidated Plan, Public Review Draft, April - May 2015 http://www.fcgov.com/sustainability/pdf/SSDConPlanFINALDraft.pdf 10) Colorado Revised Statute 38-12-301 http://www.lexisnexis.com/hottopics/Colorado/ 11) Colorado needs rent control, Catherine Humenuk, The Denver Post, September 24, 2014 http://www.denverpost.com/ci_26597581/colorado-needs-rent-control 12) City of Fort Collins 2015 Legislative Priorities http://www.fcgov.com/citymanager/pdf/legislative-priorities-2015.pdf Date: 5-26-15 Name: michael baute Organization: Spring Kite Farm Email Address: michael@springkitefarm.com Comments: Hi there, The creative class has built a wonderful town-we are small business owners, artists, farmers, brewers, and other stakeholders who unwittingly practice place making economic development for everyone's benefit. We are being pushed out of town, and tenament style apartment complexes are not something we are interested in living in. You've put yourselves on the map through great urban and community design, the APA is impressed with Fort Collins. As such, it troubles me to think that the breathe of your creativity regarding affordable housing lies in simply designed cheap apartments. I challenge you to creatively design the future of this town, to hang on to us creative people by continuing to provide entrepreneurial opportunities for smart and classy development. I'm talking co- housing, artist and farmer cooperatives, affordable multi use flats in midtown, above the Midtown Market maybe. As a community developer, as an urban farmer about to get pushed out of town by skyrocketing land values, and as the Board Chair for the NoCo Food Cluster, I urge you to be more creative in your design, to create a livable and affordable community for those of us building it. In soil we trust, Michael Baute Owner- Spring Kite Farm Chair- Northern Colorado Food Cluster Date: 5/26/15 Name: Nicole Email Address: kitty19761@yahoo.com Comments: BLANK Date: 5/26/15 Name: Vinnie Johnson Email Address: vinster316@hotmail.com Comments: BLANK Date: 5/26/15 Name: Jamie Email Address: vannice215@gmail.com Comments: I have significant concerns about the impact of affordable housing on the Kechter corridor. It will depress home values, over crowd and already significantly over crowded area, put more burden on elementary/middle schools that are already at capacity. Further, there seems to be some significantly biased planning regarding the removal of certain low income housing and the placement of new developments. Date: 5/26/15 Name: Paul.kramer@yahoo.com Email Address: Paul.kramer@yahoo.com Comments: I'm not in support of building affordable housing on Kechter Rd near Kechter crossing. It doesn't make sense to put affordable housing in between million dollar houses and half million dollar houses. I also think Fort Collins already has way more affordable housing than many other cities and doesn't need more. I prefer to let market forces determine how affordable the housing is. If people can't find housing they can afford in Fort Collins, they can get housing in another nearby city. Date: 5/26/15 Name: Daniel Holmes Email Address: daniel.wyandt@comcast.net Comments: The residents of Fort Collins have built a wonderful neighborhood in south east Fort Collins. The home values are excellent and south east Fort Collins draws many people to live in the city limits. Plopping low income housing into the middle of this lowers values, ruining citizen's investments and shows us that we would do best to live in another neighboring city. Date: 5/26/15 Name: Dawn Everly Email Address: Everlyd07@gmail.com Comments: In full support! Date: 5/26/15 Name: Michelle Athanasiou Email Address: jandmathanasiou@hotmail.com Comments: My comment is not related to whether affordable housing is needed in Fort Collins. I believe that it is. Rather, my concern is related to development of either of the Kechter properties at this time. As has been reported repeatedly in the Coloradoan and by Poudre School District, ALL the school in this area are overcrowded, and they are expected to become even more so. For example, according to the Coloradoan, Fossil Ridge High School, built to accommodate slightly under 2000 students, is projected to reach 2500 by the 2019-2020 school year. Yes, bond issues will be voted on, but if those don't pass, I have seen no acceptable solutions. WHY would we be talking about adding MORE homes to the area at this time???? Is this an issue of the right hand not talking to the left hand? Any plans for development need to consider all interests. I would argue that we should not consider adding more homes to this area unless and until new schools are built. There are other properties in areas that can handle the growth better. Can't those be developed first? Respectfully, Michelle. Date: 5/26/15 Name: Laura Murphy Email Address: mrs.lauramurphy@hotmail.com Comments: a great use of the space would be a park or open area. A rec center is also needied on the south end of town. The area would be a good spot for that. Date: 5/26/15 Name: Joyce DeVaney Email Address: jdevaney6@comcast.net 2. Comments: Kudos to the City for an outstanding 5 Year Strategic Plan. The needs assessment process & attempt to include stakeholders was exemplary. I applaud the goals. Specifically, I encourage more rapid re-housing options. We need to address homelessness through permanent affordable housing units. It is cheaper in the long run to build permanent units (e.g. Redtail Ponds) than to pay for services to the homeless. Why are we not tapping our land banks to develop affordable units? We need to be more creative in developing financing incentives for developers; new apartment units are being built, but they are not affordable. The City needs to put more emphasis on prevention (e.g. Homelessness Prevention Initiative). I am especially concerned about families with children & homeless youth. Those under 18 cannot stay at the shelters without parents. Where do they sleep? On the streets? Working families with children are living in their cars. That is inexcusable in our affluent community. We need to expand the extra occupancy zones. It is unconscionable that Fort Collins does not provide bus service on Sundays & Holidays. How are low income people without cars supposed to get to jobs? Finally, let's take advantage of the Inclusionary Housing Ordinance (IHO). That is a must! Thank you. I hope the City supports the Strategic Plan in concept & in dollars. Date: 5/26/15 Name: Marilyn Heller Email Address: mmhellers@gmail.com Comments: Inclusionary zoning would be a tough sell here, buy I think it should be suggested. Maybe more exceptions to 3 unrelated rule, or better publicity of how to get an exception. The Housing first model saves money by reducing homelessness. Date: 5/26/15 Name: Michael Defever Email Address: kelsangrinzin@gmail.com Comments: Easing the 3-unrelated law seems like the quickest way to get some rental relief. How about 4 unrelated? Fort Collins decided it wanted to fill in, rather than sprawl, and college students are happy to have several housemates. 3-unrelated is enforcing low-density, so perhaps it is not the right solution for us for the problem it was intended to address. 2015Ͳ2016Strategies ActionRequired RelatedPolicies Contributeasignificantamountofitsfinancialresourcestoincreasetheaffordablerentalhousinginventoryforverylowincomerenters,especiallyunitsfor householdsat50%AMIandbelow None,existingandongoingCityfunction AHSPͲ1 Motivatedeveloperstoincreaseproductionofaffordablerentalhousingunitsbyprovidingfinancialassistanceandotherdevelopmentincentives None,existingandongoingCityfunction AHSPͲ2 UsesomeCDBG,HOME,orAHFdollarstopartiallyfinancetheacquisitionandconversionofexisting,marketͲraterentalunitstoaffordablehousing None,existingandongoingCityfunction AHSPͲ1 Regularly(atleasteverythreeyears)reviewandupdateallexistingCityincentiveprograms,whichincludethecurrentPriorityProcessing,DevelopmentReviewFee Waiver,ImpactFeeDelay,DensityBonus,andotherprogramswhichareyettobeestablishedsuchasreducedfeesforaffordablehousingprojectsamongothers Administrative AHSPͲ2,AHSPͲ10 AnnuallyreviewCityLandBankProgrampropertiesanddetermineifthetimingisrightforthosepropertiestobeofferedforsaletoprovideadditionalaffordable housingunitsinFortCollinsandifappropriate,sellproperties Administrative AHSPͲ3Ͳ3.1 Continuetoexamineandreformregulatoryconcernsthatcouldbebarrierstotheproductionofaffordablehousing None,existingandongoingCityfunction AHSPͲ4Ͳ4.2 Investigatewaystoremovebarrierstoconstructionofaccessorydwellingunits(ADUs) Administrative AHSPͲ11 EstablishapriorityfortheuseofPrivateActivityBondsforaffordablehousingpurposes Resolution AHSPͲ7 Usefocusgroupsofdevelopers,includingbothnonͲprofitandforͲprofit,todetermineeffectiveincentivestheCitycouldimplementtoencourageaffordable housingdevelopment Administrative AHSPͲ5 2017Ͳ2018Strategies ActionRequired RelatedPolicies ExploreanexpeditedfeedeterminationprocessforprojectsusingLowIncomeHousingTaxCredits Administrative AHSPͲ6 GivepreferencetoprojectsthatsetasidesomeoftheirunitsforverylowͲincometenantsunder50%AMIinanycompetitiveallocationofPrivateActivityBonds Resolution AHSPͲ7Ͳ7.2 2019+Strategies ActionRequired RelatedPolicies UsingtheDowntownDevelopmentAuthority’s(DDA)GreenGrantandFaçadeGrantProgramsasmodels,investigatethedevelopmentofaDDAsponsored AffordableHousingGrantProgram,whichwouldincentivizetheinclusionofaffordableunitsinDDAfundedresidentialprojects Administrative AHSPͲ8 InvestigatethepotentialofrequiringmixedͲuseandresidentialdevelopmentandredevelopmentprojects,whichrequestTaxIncrementFinancing(TIF)assistance fromtheUrbanRenewalAuthority(URA),toprovideaminimumpercentageofaffordableunits.Considerhavingaminimumnumberoftotalunitsthatwould triggerthisrequirement Administrative AHSPͲ9 ConsiderreͲevaluatingordinancesthatencourageconstructionofsmallerhomes Ordinance AHSPͲ10 InvestigatethepotentialofrequiringcommercialprojectswhichrequestTIFassistancefromtheURAtocontributefundingtowardsaffordablehousing development Administrative AHSPͲ9.1 2015Ͳ2016Strategies ActionRequired RelatedPolicies ContinuetouseCDBG,HOME,orAHFdollarstobuyandrehabilitateexistingprivatelyͲownedaffordablehousingunitssotheydonotconverttomarketrateunits. Suchproposalsshouldbegivenashighapriorityasprojectsproducingnewunits None,existingandongoingCityfunction AHSPͲ1 Incentivizeprivatelandlordstoinvestinpropertyinexchangefor20Ͳyearaffordabilityrestriction Ordinance AHSPͲ12 Explorepreservationprogramthatprovidesrelieffromfullbuildingcodestandardsforaperiodoftimetoallowphasedimprovements Administrative AHSPͲ13 Investigateincentivesforownersandrenterstomaintainthecurrentavailablestockofaffordablehousingincludingmobilehomeparks Administrative AHSPͲ14 ImplementselectedrehabilitationprogramsidentifiedintheRedevelopmentDisplacementMitigationStrategy Administrative AHSPͲ15 CreateatieredapproachwheregreaterinvestmentbytheCityrequiresalongeraffordabilityperiod Administrative AHSPͲ16 2017Ͳ2018Strategies ActionRequired RelatedPolicies InvestigatearentalͲrehabilitationprogramforprivateownersofrentalpropertiesrequiringanaffordabilitycommitment Ordinance AHSPͲ13 ExplorecreatingwebportalconsolidatinginformationaboutallhomeimprovementprogramsinFortCollins Administrative AHSPͲ17 2019+Strategies ActionRequired RelatedPolicies InvestigateaLimitedPartnership/SharedEquityownershipstructuretomaintaintheaffordabilityofforͲsaleunits Resoultion AHSPͲ18 2015Ͳ2019Strategies ActionRequired RelatedPolicies SupportcommunityinitiativesidentifyinghomelessneedsanddevelopactionplanstoreducethehomelesspopulationinFortCollins,andparticipatein partnershipsexploringsolutionsforhomelessness None,existingandongoingCityfunction AHSPͲ19 Exploredesignstandardsthatbetterallowforaginginplacefornewconstruction Administrative AHSPͲ20 Goal:IncreasetheInventoryofAffordableRentalHousingUnits Goal:PreservetheLongͲTermAffordabilityandPhysicalConditionofExistingStockofAffordableHousing Goal:IncreaseHousingandServicesforPeoplewithSpecialNeeds ATTACHMENT 7 Investigatewhatbarriersthatpreventaginginplace Administrative AHSPͲ21 Investigateunmettransitneedsforspecialpopulations Administrative AHSPͲ22 Explorerelaxingsiteupgradesforchangesofusethatservecommunityneeds Ordinance AHSPͲ23 Exploreprovisionoftemporary,supervisedaccommodationsforthosetransitioningoutofhomelessness Administrative AHSPͲ24 Supportprojectsproducingaffordableunitstoservepersonswithdisabilities None,existingandongoingCityfunction AHSPͲ25 SupportprojectsproducingaffordableunitstoservecostͲburdenedseniorcitizens None,existingandongoingCityfunction AHSPͲ25 InvestigatetheuseofSocialImpactBondsforfinancingaffordablehousing Administrative AHSPͲ19,25,26,33 Supportprojectsprovidinghelp,counseling,crisisinterventionservices,facilities,andhousingtovictimsofdomesticviolence. None,existingandongoingCityfunction AHSPͲ26 2015Ͳ2016Strategies ActionRequired RelatedPolicies Continuetoprovideloanstoeligiblehouseholdstocoverdownpaymentandclosingcostsuptoamaximumof6%ofthesalesprice(5%fordownpaymentand1% forclosingcostsiftherearenosellerconcessions)offeredundertheCity’sexistingHomebuyerAssistanceprogram.Buyersmustmakeanearnestmoneydepositof $1,000or1%ofpurchaseprice(whicheverisgreater)withtheirownfunds. None,existingandongoingCityfunction AHSPͲ27 Assistancewillbeintheformofaloanwhichispaidbackinfullwhenthehouseiseithersold,transferredoutofthebuyer'sname,rented,orifbuyerseeksanother secondlien(likeahomeequityloan)ontheproperty.Addedtothepayment(whichisalsodueatsale,rentalortransfer)is5%interestontheprincipal. None,existingandongoingCityfunction AHSPͲ27.1 RebalanceCityfeestoencouragedevelopmentofsmallerunits Ordinance AHSPͲ2,AHSPͲ10 ExploreremediestostateͲlevelconstructiondefectslitigation Administrative AHSPͲ4.1Ͳ4.2 2017Ͳ2019Strategies ActionRequired RelatedPolicies Investigateinfrastructureimprovementsthatcouldmakelandmoreaffordabletodevelopforhomeownershipopportunities Ordinance AHSPͲ28 Promotepartnershipswithschoolsanduniversitiestocreateawarenessandparticipation Administrative AHSPͲ29 ExpandtheeligibilityofparticipatinglendersintheHBAprogramtoincludecreditunionsandnonͲCHFAparticipatinglenders Administrative AHSPͲ30 InvestigateaLimitedPartnership/SharedEquityownershipstructuretomaintaintheaffordabilityofforͲsaleunits. Resolution AHSPͲ18 2015Ͳ2016Strategies ActionRequired RelatedPolicies RecommendbestuseofAffordableHousingCapitalFundincludingbutnotlimitedtoinvestinginadditionallandbankparcels,backfillingfeewaiversandinvesting innewhousing Administrative AHSPͲ31 StreamlineCityfeesandprovidecomprehensivelistofallCityfeesrelatedtodevelopmentprojects Administrative AHSPͲ10.1 Facilitatediscussiononinfilldevelopmentfeesandrequirements Administrative AHSPͲ5 Consideremployerassistedhousingpartnerships Administrative AHSPͲ32 FacilitatearegionalconversationonhowtobestincentivizeaffordablehousingdevelopmentinNorthernColorado Administrative AHSPͲ33 InvestigatetheuseofSocialImpactBondsforfinancingaffordablehousing Administrative AHSPͲ19,25,26,33 Explorerebatesforextraordinarydevelopmentcoststhatimpededevlopmentofaffordableunits Administrative AHSPͲ1,5,12 GetindustryinputonhowtostrengthenfinancialandnonͲfinancialincentives None,existingandongoingCityfunction AHSPͲ5 2017Ͳ2018Strategies ActionRequired RelatedPolicies Exploretheuseofnewfinancialtoolstoincentivizedevelopment Administrative AHSPͲ2,AHSPͲ5 ReviewHAPSrecommendationssuchasexcisetax,realestatetransfertax,amongstothers Administrative AHSPͲ34 ExploreInclusionaryHousingOrdinance Administrative AHSPͲ35 2019+Strategies ActionRequired RelatedPolicies Explorethecreationofanewaffordablehousingsalestax Administrative AHSPͲ36 Investinadditionallandbankparcels Ordinance AHSPͲ3Ͳ3.1 ExplorethecreationofacommerciallinkagefeeforaffordablehousingonallnewcommercialdevelopmentintheCity Administrative AHSPͲ37 Goal:SupportOpportunitiestoObtainandSustainAffordableHomeownership Goal:RefineDevelopmentIncentivesandExpandFundingSources M EMORANDUM To: Sue Beck-Ferkiss, Social Sustainability Specialist City of Fort Collins From: Dan Guimond and David Schwartz, Economic & Planning Systems Subject: Update on Land Bank Property Study Date: May 27, 2015 This is an update on the work EPS is completing to advise the Office of Social Sustainability on strategies for the disposition of the City’s five land bank properties. Completed x Project initiation x Site tour x Assembly of baseline data: appraisals, city research and information, general market trends and conditions (residential and non- residential) In-Process x Developer and broker interviews x Assessment of development opportunities x Disposition strategy x Prioritization and timing considerations x Implementation considerations ATTACHMENT 8 S SHIELDS ST S COLLEGE AVE S TAFT HILL RD E VINE DR S TIMBERLINE RD LAPORTE AVE S LEMAY AVE E PROSPECT RD E DOUGLAS RD N OVERLAND TRL W DRAKE RD E DRAKE RD E TRILBY RD N SHIELDS ST E MULBERRY ST W MULBERRY ST W PROSPECT RD S OVERLAND TRL E COUNTY ROAD 30 S COUNTY ROAD 5 STATE HIGHWAY 392 COUNTY ROAD 54G ZIEGLER RD W TRILBY RD E HARMONY RD CARPENTER RD E LINCOLN AVE N TAFT HILL RD RIVERSIDE AVE W HARMONY RD W HORSETOOTH RD N COLLEGE AVE TURNBERRY RD W COUNTY ROAD 38E W ELIZABETH ST MAIN ST COUNTRY CLUB RD N LEMAY AVE REMINGTON ST S COUNTY ROAD 19 TERRY LAKE RD RICHARDS LAKE RD MOUNTAIN VISTA DR N US HIGHWAY 287 W VINE DR S MASON ST STRAUSS CABIN RD N TIMBERLINE RD N COUNTY ROAD 5 E WILLOX LN GREGORY RD W WILLOX LN GIDDINGS RD W LAUREL ST S SUMMIT VIEW DR KECHTER RD W DOUGLAS RD W MOUNTAIN AVE S COUNTY ROAD 9 S US HIGHWAY 287 S SHIELDS ST S COLLEGE AVE S TAFT HILL RD E VINE DR S TIMBERLINE RD LAPORTE AVE S LEMAY AVE E PROSPECT RD E DOUGLAS RD N OVERLAND TRL W DRAKE RD E DRAKE RD E TRILBY RD N SHIELDS ST E MULBERRY ST W MULBERRY ST W PROSPECT RD S OVERLAND TRL E COUNTY ROAD 30 S COUNTY ROAD 5 STATE HIGHWAY 392 COUNTY ROAD 54G ZIEGLER RD W TRILBY RD E HARMONY RD CARPENTER RD E LINCOLN AVE N TAFT HILL RD RIVERSIDE AVE W HARMONY RD W HORSETOOTH RD N COLLEGE AVE TURNBERRY RD W COUNTY ROAD 38E W ELIZABETH ST MAIN ST COUNTRY CLUB RD N LEMAY AVE REMINGTON ST S COUNTY ROAD 19 TERRY LAKE RD RICHARDS LAKE RD MOUNTAIN VISTA DR N US HIGHWAY 287 W VINE DR S MASON ST STRAUSS CABIN RD N TIMBERLINE RD N COUNTY ROAD 5 E WILLOX LN GREGORY RD W WILLOX LN GIDDINGS RD W LAUREL ST S SUMMIT VIEW DR W DOUGLAS RD W MOUNTAIN AVE S COUNTY ROAD 9 S US HIGHWAY 287 N COUNTY ROAD 9 SUSTAINABILITY ASSESSMENT SUMMARY DATE: May 27, 2015 SUBJECT: Sustainability Assessment (SA) Summary for 2015 -2019 Affordable Housing Strategic Plan Key issues identified: x Social - Stabilizing housing, stabilizes lives x Environmental - Better to control growth and combat sprawl by accommodating growth and regulating it. Rehab and better use of existing inventory produces less GHG typically than new construction. x Short term construction benefits, affordable housing long term work force support. Suggested mitigation actions: x Economic - Avoid policies that create less competitive business environment x Environmental - Green Building Code Standards, purposeful Green Built Environments, and allowing smaller housing types Economic , 2.0 Social , 3.0 Environmental 1.0 Rating Average, 2.0 0 0.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 2.0 3.0 4.0 Sustainability Rating Rating without mitigation Rating with mitigation Rating Legend 3 Very positive 2 Moderately positive 1 Slightly positive 0 Not relevant or neutral -1 Slightly negative -2 Moderately negative, impact likely -3 Very negative, impact expected ATTACHMENT 11 ΎdŚĞ&ŽƌƚŽůůŝŶƐ^dǁĂƐĚĞǀĞůŽƉĞĚďǇŵŽĚŝĨǇŝŶŐƚŚĞdƌŝƉůĞŽƚƚŽŵ>ŝŶĞ;d>ͿŶĂůǇƐŝƐdŽŽůĚĞǀĞůŽƉĞĚďǇƵŐĞŶĞ͕KƌĞŐŽŶ͕:ƵůǇϮϬϬϵ͘ϭ City of Fort Collins SUSTAINABILITY ASSESSMENT TOOL (SAT) (November 2014) Creating a sustainable community Plan Fort Collins is an expression of the community’s resolve to act sustainably: to systemically, creatively, and thoughtfully utilize environmental, human, and economic resources to meet our present needs and those of future generations without compromising the ecosystems upon which we depend. How to use the tool The Sustainability Assessment Tool (SAT) is designed to inform a deeper understanding of how policy and program choices affect the social equity, environmental health and economic health of the community. The City of Fort Collins has developed a Sustainability Assessment Framework that describes the purpose, objectives, and guidelines to assist City Program/Project Managers to determine: • The process for cross-department collaboration in using the SAT • Timing for applying a SAT • When to apply a SAT • How to document the results of the SAT and present at City Council Work Sessions and Regular Council Meetings Further detailed guidance is available at: http://citynet.fcgov.com/sustainability/sustainabilityassessments.php The SAT does not dictate a particular course of action; rather, the analysis provides policy makers and staff with a greater awareness of some of the trade-offs, benefits and consequences associated with a proposal, leading to more mindful decision-making. Brief description of proposal Please provide a brief description of your proposal – 100 words or less dŚĞϮϬϭϱͲϮϬϭϵĨĨŽƌĚĂďůĞ,ŽƵƐŝŶŐ^ƚƌĂƚĞŐŝĐWůĂŶĞƐƚĂďůŝƐŚĞƐƉŽůŝĐǇĂŶĚĨƵŶĚŝŶŐƉƌŝŽƌŝƚŝĞƐŝŶĂŶĞĨĨŽƌƚƚŽŝŶĨůƵĞŶĐĞƚŚĞŚŽƵƐŝŶŐƐǇƐƚĞŵƚŽƉƌŽǀŝĚĞĂĨĨŽƌĚĂďůĞ ŚŽƵƐŝŶŐ͘ĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐŝƐƚĂƌŐĞƚĞĚƚŽƌĞƐŝĚĞŶƚƐǁŚŽƐĞŝŶĐŽŵĞŝƐϴϬйŽƌůĞƐƐŽĨƚŚĞĂƌĞĂŵĞĚŝĂŶŝŶĐŽŵĞ͘'ŽĂůƐĂƌĞĂƌƚŝĐƵůĂƚĞĚĂŶĚƐƚƌĂƚĞŐŝĞƐĐƌĞĂƚĞĚƚŽĂĚĚ ĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐƵŶŝƚƐ͕ƉƌĞƐĞƌǀĞĞǆŝƐƚŝŶŐŝŶǀĞŶƚŽƌǇŽĨĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐ͕ƉƌŽǀŝĚĞŚŽƵƐŝŶŐŽƉƚŝŽŶƐƚŽƐƉĞĐŝĂůŶĞĞĚƐƉŽƉƵůĂƚŝŽŶƐ͕ƐƵƉƉŽƌƚƚŚĞŽďƚĞŶƚŝŽŶĂŶĚ ƌĞƚĞŶƚŝŽŶŽĨŚŽŵĞŽǁŶĞƌƐŚŝƉ͕ĂŶĚƌĞĨŝŶĞŝŶĐĞŶƚŝǀĞƐĂŶĚĞǆƉĂŶĚĨƵŶĚŝŶŐƐŽƵƌĐĞƐƚŽƉƌŽǀŝĚĞĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐ͘ Staff lead(s):Sue Beck-Ferkiss, Social Sustainability Specialist, 221-6753 Please note staff name, position/division and phone number ůĂǇ&ƌŝĐŬĞǇ͕WůĂŶŶŝŶŐĚĞƉĂƌƚŵĞŶƚ ĞƚŚ^ŽǁĚĞƌ͕^ŽĐŝĂů^ƵƐƚĂŝŶĂďŝůŝƚǇ ĞƚŚZŽƐĞŶ͕^ŽĐŝĂů^ƵƐƚĂŝŶĂďŝůŝƚǇ :ŽƐŚŝƌŬƐ͕ĐŽŶŽŵŝĐ,ĞĂůƚŚ DĂƌǇWĂƚĂƌĚƌƵƉ͕ŶǀŝƌŽŶŵĞŶƚĂů^ĞƌǀŝĐĞƐ Ϯ Social Equity Described: Placing priority upon protecting, respecting, and fulfilling the full range of universal human rights, including those pertaining to civil, political, social, economic, and cultural concerns. Providing adequate access to employment, food, housing, clothing, recreational opportunities, a safe and healthy environment and social services. Eliminating systemic barriers to equitable treatment and inclusion, and accommodating the differences among people. Emphasizing justice, impartiality, and equal opportunity for all. Goal/Outcome: It is our priority to support an equitable and adequate social system that ensures access to employment, food, housing, clothing, education, recreational opportunities, a safe and healthy environment and social services. Additionally, we support equal access to services and seek to avoid negative impact for all people regardless of age, economic status, ability, immigration or citizenship status, race/ethnicity, gender, relationship status, religion, or sexual orientation. Equal opportunities for all people are sought. A community in which basic human rights are addressed, basic human needs are met, and all people have access to tools and resources to develop their capacity. This tool will help identify how the proposal affects community members and if there is a difference in how the decisions affect one or more social groups. Areas of consideration in creating a vibrant socially equitable Fort Collins are: basic needs, inclusion, community safety, culture, neighborhoods, and advancing social equity. Analysis Prompts • The prompts below are examples of the issues that need to be addressed. They are not a checklist. Not all prompts and issues will be relevant for any one project. Issues not covered by these prompts may be very pertinent to a proposal - please include them in the analysis. • Is this proposal affected by any current policy, procedure or action plan? Has advice been sought from organizations that have a high level of expertise, or may be significantly affected by this proposal? Proposal Description ϮϬϭϰͲϮϬϭϵĨĨŽƌĚĂďůĞ,ŽƵƐŝŶŐ^ƚƌĂƚĞŐŝĐWůĂŶ 1. Meeting Basic Human Needs • How does the proposal impact access to food, shelter, employment, health care, educational and recreational opportunities, a safe and healthy living environment or social services? • Does this proposal affect the physical or mental health of individuals, or the status of public health in our community? • How does this proposal contribute to helping people achieve and maintain an adequate standard of living, including housing, or food affordability, employment opportunities, healthy families, or other resiliency factors? Analysis/Discussion • ,ŽƵƐŝŶŐŝƐĂďĂƐŝĐŶĞĞĚ • ŶŚĂŶĐŝŶŐŚŽƵƐŝŶŐƐƚĂďŝůŝƚǇĨŽƌůŽǁͲŝŶĐŽŵĞĨĂŵŝůŝĞƐĂŶĚŝŶĚŝǀŝĚƵĂůƐ ĐƌĞĂƚĞƐƐƚĂďŝůŝƚǇĂŶĚĞŶŚĂŶĐĞƐƚŚĞŝƌƋƵĂůŝƚǇŽĨůŝĨĞ • WĂǇŝŶŐůĞƐƐĨŽƌŚŽƵƐŝŶŐĨƌĞĞƐƵƉĨƵŶĚƐĨŽƌŽƚŚĞƌďĂƐŝĐŶĞĞĚƐ • ĞƐŝŐŶĞĚƚŽĞŶĐŽƵƌĂŐĞƉƌŽǀŝƐŝŽŶŽĨŚŽƵƐŝŶŐŶĞĂƌũŽďƐĂŶĚƚƌĂŶƐŝƚ • ,ŽƵƐŝŶŐƐƚĂďŝůŝƚǇŝŵƉƌŽǀĞƐƉŚǇƐŝĐĂůĂŶĚŵĞŶƚĂůŚĞĂůƚŚĨĨŽƌĚĂďůĞ ŚŽƵƐŝŶŐĐĂŶůĞĂĚƚŽĂƌĞĚƵĐƚŝŽŶŝŶĐĞƌƚĂŝŶĐƌŝŵĞƐ;Ğ͘Ő͘ƌĞĚƵĐĞĚ ŝŶƐƚĂŶĐĞƐŽĨĚŽŵĞƐƚŝĐǀŝŽůĞŶĐĞĂƐĨĂŵŝůŝĞƐĂƌĞůĞƐƐƐƚƌĞƐƐĞĚͿ 2. Addressing Inequities and being Inclusive • Are there any inequities to specific population subsets in this proposal? If so, how will they be addressed? • Does this proposal meet the standards of the Americans with Disabilities Act? • How does this proposal support the participation, growth • ,ŽƵƐŝŶŐĨŽƌƐƉĞĐŝĂůƉŽƉƵůĂƚŝŽŶƐŝƐĚĞƐŝŐŶĞĚƚŽƌĞŵĞĚǇĐĞƌƚĂŝŶŝŶ ĞƋƵŝƚŝĞƐ • ƵƌƌĞŶƚĐŽŶƐƚƌƵĐƚŝŽŶƐƚĂŶĚĂƌĚƐĂƉƉůǇ͕ŵĞĞƚŝŶŐΘ&Ăŝƌ,ŽƵƐŝŶŐ • ^ƚĂďůĞŚŽƵƐŝŶŐŝƐĐƌŝƚŝĐĂůĨŽƌĚĞǀĞůŽƉŵĞŶƚ • KƵƚƌĞĂĐŚŚĂƐďĞŐƵŶĂŶĚǁŝůůĐŽŶƚŝŶƵĞʹ^ĞǀĞƌĂůĐŽŵŵƵŶŝƚǇ ĐŽŶǀĞƌƐĂƚŝŽŶƐŚĂǀĞĐŽŶƚƌŝďƵƚĞĚƚŽƉůĂŶŽƵƚƌĞĂĐŚŝŶĐůƵĚŝŶŐƚŚĞ ϯ and healthy development of our youth? Does it include Developmental Assets? • If the proposal affects a vulnerable section of our community (i.e. youth, persons with disabilities, etc.) ŽŵŵƵŶŝƚǇŽŶǀĞƌƐĂƚŝŽŶŽŶ,ŽŵĞůĞƐƐŶĞƐƐ͕ƚŚĞ^ƵŵŵŝƚŽŶŐŝŶŐ͕ƚŚĞ ^ŽĐŝĂů^ƵƐƚĂŝŶĂďŝůŝƚǇ'ĂƉƐŶĂůǇƐŝƐ͕ƚŚĞ,ŽƵƐŝŶŐĂĨĨŽƌĚĂďŝůŝƚǇWŽůŝĐǇ ^ƚƵĚǇŽƵƚƌĞĂĐŚŝŶĐůƵĚŝŶŐƚǁŽŽƵŶĐŝůtŽƌŬ^ĞƐƐŝŽŶƐ͕ϱzĞĂƌ,h ŽŶƐŽůŝĚĂƚĞĚWůĂŶ͕ĂŶĚƚǁŽƉƵďůŝĐĨŽƌƵŵƐƉůƵƐŵĂŶǇƉƌĞƐĞŶƚĂƚŝŽŶƐŽŶ ƚŚĞƉůĂŶŝƚƐĞůĨ͘^ĞĞKƵƚƌĞĂĐŚWůĂŶ͘ 3. Ensuring Community Safety • How does this proposal address the specific safety and personal security needs of groups within the community, including women, people with disabilities, seniors, minorities, religious groups, children, immigrants, workers and others? • WůĂŶƉƌŽŵŽƚĞƐŚŽƵƐŝŶŐĨŽƌĂůůƐƉĞĐŝĂůŶĞĞĚƐƉŽƉƵůĂƚŝŽŶƐ • ^ĞƌǀŝĐĞƐĂƌĞĐŽŶƚĞŵƉůĂƚĞĚĨŽƌŵŽƐƚǀƵůŶĞƌĂďůĞƉŽƉƵůĂƚŝŽŶƐ • ^ƵƉƉŽƌƚĞĚƵĐĂƚŝŽŶĂďŽƵƚĨĂŝƌŚŽƵƐŝŶŐĂŶĚŝŶĨŽƌŵĂƚŝŽŶĂďŽƵƚĐŽŵƉůĂŝŶƚ ƉƌŽĐĞƐƐ 4. Culture • Is this proposal culturally appropriate and how does it affirm or deny the cultures of diverse communities? • How does this proposal create opportunities for artistic and cultural expression? • ,ŽƵƐŝŶŐǁŝůůďĞĂǀĂŝůĂďůĞƚŽĂůůŝŶĐŽŵĞƋƵĂůŝĨǇŝŶŐŚŽƵƐĞŚŽůĚ • /ŶĚŝƌĞĐƚůǇƐƵƉƉŽƌƚƐĐƵůƚƵƌĂůĞǆĐŚĂŶŐĞďǇƐƚĂďŝůŝǌŝŶŐŚŽƵƐĞŚŽůĚƐĂŶĚ ďƵŝůĚŝŶŐĐŽŵŵƵŶŝƚǇƐĞƚƚŝŶŐƐǁŚĞƌĞĐƵůƚƵƌĂůĞǆĐŚĂŶŐĞƐĐĂŶŽƌŐĂŶŝĐĂůůǇ ŽĐĐƵƌ 5. Addressing the Needs of Neighborhoods • How does this proposal impact specific Fort Collins neighborhoods? • How are community members, stakeholders and interested parties provided with opportunities for meaningful participation in the decision making process of this proposal? • How does this proposal enhance neighborhoods and stakeholders’ sense of commitment and stewardship to our community? • ŝƚǇWůĂŶĞŶĐŽƵƌĂŐĞƐĚŝǀĞƌƐŝĨŝĐĂƚŝŽŶŝŶƚŚĞůŽĐĂƚŝŽŶƐĨŽƌĂĨĨŽƌĚĂďůĞ ŚŽƵƐŝŶŐĐŽŵŵƵŶŝƚŝĞƐ • tŚŝůĞƚŚĞƌĞŝƐĂƉĞƌĐĞƉƚŝŽŶƚŚĂƚĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐĐŽŵŵƵŶŝƚŝĞƐůŽǁĞƌ ŚŽƵƐŝŶŐǀĂůƵĞƐ͕ƚŚŝƐŚĂƐŶŽƚďĞĞŶƉƌŽǀĞŶ • EŽƚŝŶŵǇďĂĐŬǇĂƌĚĂƚƚŝƚƵĚĞŵƵƐƚďĞŽǀĞƌĐŽŵĞ • ůůŽǁŝŶŐĨŽůŬƐƚŽůŝǀĞǁŚĞƌĞƚŚĞǇǁŽƌŬŝŶĐƌĞĂƐĞƐƚŚĞŝƌƐĞŶƐĞŽĨ ĐŽŵŵƵŶŝƚǇͲŵŽƌĞůŝŬĞůǇƚŽĨĂůůŝŶůŽǀĞǁŝƚŚƚŚĞĐŝƚǇ • ŵƉůĞŽƉƉŽƌƚƵŶŝƚŝĞƐŚĂǀĞďĞĞŶĂŶĚǁŝůůĐŽŶƚŝŶƵĞƚŽďĞŽĨĨĞƌĞĚĨŽƌ ƉƵďůŝĐŝŶƉƵƚ͘ 6. Building Capacity to Advance Social Equity • What plans have been made to communicate about and share the activities and impacts of this proposal within the City organization and/or the community? • How does this proposal strengthen collaboration and cooperation between the City organization and community members? • ^ĞĞKƵƚƌĞĂĐŚWůĂŶ • ŝƚǇŽƵŶĐŝůtŽƌŬ^ĞƐƐŝŽŶ͕ƉƌĞƐĞŶƚĂƚŝŽŶƐƚŽďŽĂƌĚƐĂŶĚĐŽŵŵŝƐƐŝŽŶƐ͕ ĨŽĐƵƐŐƌŽƵƉƐŽĨŝŶĚƵƐƚƌǇƉƌŽĨĞƐƐŝŽŶĂůƐ͕ƉƌĞƐƐƌĞůĞĂƐĞƐ͕ĞĚŝƚŽƌŝĂůďŽĂƌĚƐ • ZĞƋƵĞƐƚĨŽƌƉƌŽƉŽƐĂůƐ • ^ŽĐŝĂůŵĞĚŝĂ ϰ Potential mitigation strategies: ŶͬĂ Overall, the effect of this proposal on social equity would be: Please reach a consensus or take a group average on the rating, enter an “x” in one of the following boxes and indicate the overall rating. Rating represents group consensus 3 Rating represents group average нϯ нϮ нϭ Ϭ Ͳϭ ͲϮ Ͳϯ Very positive Moderately positive Slightly positive Not relevant or neutral Slightly negative Moderately negative, impact likely Very negative, impact expected ϲ Environmental Health Described: Healthy, resilient ecosystems, clean air, water, and land. Decreased pollution and waste, lower carbon emissions that contribute to climate change, lower fossil fuel use, decreased or no toxic product use. Prevent pollution, reduce use, promote reuse, and recycle natural resources. Goal/Outcome: Protect, preserve, and restore the natural environment to ensure long-term maintenance of ecosystem functions necessary for support of future generations of all species. Avoid or eliminate adverse environmental impacts of all activities, continually review all activities to identify and implement strategies to prevent pollution; reduce energy consumption and increase energy efficiency; conserve water; reduce consumption and waste of natural resources; reuse, recycle and purchase recycled content products; reduce reliance on non-renewable resources. Analysis Prompts • The prompts below are examples of issues that need to be addressed. They are not a checklist. Not all prompts and issues will be relevant for any one project. Issues not covered by these prompts may be very pertinent to a proposal - please include them in the analysis. • Is this proposal affected by any current policy, procedure or action plan? Has advice been sought from organizations that have a high level of expertise, or may be significantly affected by this proposal? 1. Environmental Impact • Does this proposal affect ecosystem functions or processes related to land, water, air, or plant or ϱ prevention of pollution, and effective practices for reducing, reusing, and recycling of natural resources? • Does this proposal require or promote the continuous improvement of the environmental performance of the City organization or community? • Will this proposal affect the visual/landscape or aesthetic elements of the community? • ,ŽƵƐŝŶŐďƵŝůƚǁŝƚŚ>Žǁ/ŶĐŽŵĞ,ŽƵƐŝŶŐdĂǆƌĞĚŝƚƐ;>/,dͿƌĞƋƵŝƌĞ ƐƉĞĐŝĨŝĐŐƌĞĞŶƐƚĂŶĚĂƌĚƐ • ZĞŚĂďĂŶĚƉƌĞƐĞƌǀĂƚŝŽŶĐƌĞĂƚĞƐůĞƐƐ','ƚŚĂŶŶĞǁĐŽŶƐƚƌƵĐƚŝŽŶ • ,ŽŵĞďƵǇĞƌƐƐŝƐƚĂŶĐĞƉƌŽŐƌĂŵĞŶĐŽƵƌĂŐĞƐƚŚĞƉƵƌĐŚĂƐĞŽĨĞǆŝƐƚŝŶŐ ŚŽŵĞƐ • ZĞŚĂďŝůŝƚĂƚŝŽŶŝŵƉƌŽǀĞƐƋƵĂůŝƚǇŽĨƐƚŽĐŬ͕ŚĞĂůƚŚŽĨƵŶŝƚƐ͕ĂŶĚ ĞŶǀŝƌŽŶŵĞŶƚĂůƉĞƌĨŽƌŵĂŶĐĞĐŽŶƚƌŝďƵƚŝŶŐƚŽůĞƐƐďƌŽǁŶĐůŽƵĚ͕ůĞƐƐ ƐƉƌĂǁů͕ĂŶĚŚĞĂůƚŚŝĞƌƌĞƐŝĚĞŶƚƐ 2. Climate Change • Does this proposal directly generate or require the generation of greenhouse gases (such as through electricity consumption or transportation)? • How does this proposal align with the carbon reduction goals for 2020 goal adopted by the City Council? • Will this proposal, or ongoing operations result in an increase or decrease in greenhouse gas emissions? • How does this proposal affect the community’s efforts to reduce greenhouse gas emissions or otherwise mitigate adverse climate change activities? • ƌĞĂƚŝŶŐŚŽƵƐŝŶŐĂŶĚƌĞŚĂďŝůŝƚĂƚŝŶŐŚŽƵƐŝŶŐŝƐĐŽŶƐƵŵƉƚŝŽŶƚŚĂƚĐĂƵƐĞƐ ǁĂƐƚĞĂŶĚ','͘ • ŽŶƐŝƐƚĞŶƚǁŝƚŚĂůůϰŵĂũŽƌƐĞĐƚŝŽŶƐŽĨƚŚĞůŝŵĂƚĞĐƚŝŽŶWůĂŶŝŶĐůƵĚŝŶŐ ďƵŝůĚŝŶŐ͕ĂĚǀĂŶĐĞĚŵŽďŝůŝƚǇ͕ĞŶĞƌŐǇƐƵƉƉůǇĂŶĚǁĂƐƚĞƌĞĚƵĐƚŝŽŶ͘ • ^ŚŽƌƚƚĞƌŵŝŶĐƌĞĂƐĞƐ','ďƵƚŽǀĞƌĂůůďĞŶĞĨŝƚƐƚŚƌŽƵŐŚƌĞĚƵĐƚŝŽŶƐŝŶƚŚĞ ůŽŶŐƚĞƌŵ͘ 3. Protect, Preserve, Restore • Does this proposal result in the development or modification of land resources or ecosystem functions? • Does this proposal align itself with policies and procedures related to the preservation or restoration of natural habitat, greenways, protected wetlands, migratory pathways, or the urban growth boundary • How does this proposal serve to protect, preserve, or restore important ecological functions or processes? • /ŶĨŝůůĂŶĚĐŽŵƉĂĐƚĚĞǀĞůŽƉŵĞŶƚŵŝŶŝŵŝǌĞƐƉƌĂǁůĂŶĚĂůůŽǁƐĨŽƌ ĂƉƉƌŽƉƌŝĂƚĞůĂŶĚƵƐĞ • WůĂŶĂůŝŐŶƐǁŝƚŚƉŽůŝĐŝĞƐ • ^ŽŵĞĚĞǀĞůŽƉŵĞŶƚĂĐƚŝǀŝƚǇĐŽƵůĚŝŶĐůƵĚĞƉƌĞƐĞƌǀĂƚŝŽŶŽƌƌĞƐƚŽƌĂƚŝŽŶŽĨ ĞĐŽůŽŐŝĐĂůĨƵŶĐƚŝŽŶƐ 4. Pollution Prevention • Does this proposal generate, or cause to be generated, waste products that can contaminate the environment? • Does this proposal require or promote pollution prevention through choice of materials, chemicals, operational practices and/or engineering controls? • Does this proposal require or promote prevention of pollution from toxic substances or other pollutants regulated by the state or federal government? • Will this proposal create significant amounts of waste or • tŚŝůĞǁĂƐƚĞƉƌŽĚƵĐƚƐĂƌĞĐƌĞĂƚĞĚďǇĐŽŶƐƚƌƵĐƚŝŽŶĂĐƚŝǀŝƚǇ͕ďƵŝůĚŝŶŐ ĐŽĚĞƐĂŶĚ'ƌĞĞŶƵŝůƚŶǀŝƌŽŶŵĞŶƚŵŝƚŝŐĂƚĞƚŚŝƐŝŵƉĂĐƚ ϲ pollution? 5. Rethink, Replace, Reduce, Reuse, Recirculate/Recycle • Does this proposal prioritize the rethinking of the materials or goods needed, reduction of resource or materials use, reuse of current natural resources or materials or energy products, or result in byproducts that are recyclable or can be re-circulated? • DĂǇĂůůŽǁůĞƐƐŚŽƵƐŝŶŐƚŽďĞďƵŝůƚƌĞĚƵĐŝŶŐƐŽƵƌĐĞŵĂƚĞƌŝĂůƐĨŽƌŶĞǁ ĐŽŶƐƚƌƵĐƚŝŽŶ • >ŝŬĞůǇƚŽĞŶŚĂŶĐĞƐƵƐƚĂŝŶĂďůĞƉƌĂĐƚŝĐĞƐ • /ĨůĂŶĚďĂŶŬĚĞǀĞůŽƉĞĚŝƚǁŝůůŶĞƚĂůŽƐƐŽĨƌĂǁůĂŶĚĂŶĚŚŽƌƐĞƉƌŽƉĞƌƚǇ 6. Emphasize Local • Does this proposal emphasize use of local materials, vendors, and or services to reduce resources and environmental impact of producing and transporting proposed goods and materials? • Will the proposal cause adverse environmental effects somewhere other than the place where the action will take place? • dŚĞŚŽƉĞŝƐƚŚĂƚƚŚŝƐǁŝůůƐůŽǁŐƌŽǁƚŚŝŶŽƵƚͲůǇŝŶŐĐŽŵŵƵŶŝƚŝĞƐƚŚĂƚ ŵĂǇĂůůŽǁĚĞǀĞůŽƉŵĞŶƚƵŶĚĞƌůĞƐƐƐƚƌŝŶŐĞŶƚŐƵŝĚĞůŝŶĞƐĂŶĚĚĞƚĞƌŝŶͲ ĐŽŵŵƵƚŝŶŐǁŚŝĐŚŝƐŶŽƚĂƐƵƐƚĂŝŶĂďůĞƉƌĂĐƚŝĐĞ Environmental Health Summary dŚŝƐĐŽŶĐĞƉƚŝƐĐŽŶƐŝƐƚĞŶƚǁŝƚŚƚŚĞĐŽŶĐĞƉƚƐŽĨƚŚĞ'ƌĞĞŶƵŝůƚŶǀŝƌŽŶŵĞŶƚ͕ĂƉƌŽŐƌĂŵƐƵƉƉŽƌƚĞĚďǇƚŚĞŝƚǇ͘ŽŵƉĂĐƚĐŽŵŵƵŶŝƚŝĞƐƚŚĂƚĞĨĨŝĐŝĞŶƚůǇƵƐĞĞǆŝƐƚŝŶŐ ďƵŝůĚŝŶŐƐƚŽĐŬŚĂǀĞůĞƐƐŶĞŐĂƚŝǀĞŝŵƉĂĐƚƐŽŶŵĂŶǇĂƐƉĞĐƚƐŽĨƚŚĞŶĂƚƵƌĂůĞŶǀŝƌŽŶŵĞŶƚŝŶĐůƵĚŝŶŐƉƌĞƐĞƌǀĂƚŝŽŶŽĨŶĂƚƵƌĂůĂƌĞĂƐ͕ǁĂƚĞƌĂŶĚĂŝƌƋƵĂůŝƚǇ͕ǁĂƚĞƌ ƋƵĂŶƚŝƚǇ͕ŶĂƚŝǀĞŚĂďŝƚĂƚ͕ŚĂďŝƚĂƚĐŽŶŶĞĐƚŝǀŝƚǇ͕ĂŶĚƌĞĚƵĐƚŝŽŶŽĨ'ƌĞĞŶŚŽƵƐĞ'ĂƐ;','ͿĞŵŝƐƐŝŽŶƐƚŚĂƚĐŽŶƚƌŝďƵƚĞƚŽĐůŝŵĂƚĞĐŚĂŶŐĞ͘dŚĞŵĂŐŶŝƚƵĚĞŽĨƚŚĞ ĞŶǀŝƌŽŶŵĞŶƚĂůŝŵƉĂĐƚŝƐƚŝĞĚƚŽĂŵŽƵŶƚŽĨƉŽƉƵůĂƚŝŽŶŚŽƵƐĞĚ͘ Key issues: Better to control growth and combat sprawl by accommodating growth and regulating it. Rehab and better use of existing inventory produces less GHG typically than new construction. Potential mitigation strategies: Green Building Code Standards, purposeful Green Built Environments, and allowing smaller housing types Overall, the effect of this proposal on environmental health would be: Please reach a consensus or take a group average on the rating, enter an “x” in one of the following boxes and indicate the overall rating. Rating represents group consensus 1 нϯ нϮ нϭ Ϭ Ͳϭ ͲϮ Ͳϯ Very positive Moderately positive Slightly positive Not relevant or neutral Slightly negative Moderately negative, impact likely Very negative, impact expected ϳ Rating represents group average ϲ Economic Health Described: Support of healthy local economy with new jobs, businesses, and economic opportunities; focus on development of a diverse economy, enhanced sustainable practices for existing businesses, green and clean technology jobs, creation or retention of family waged jobs. Goal/Outcome: A stable, diverse and equitable economy; support of business development opportunities. Analysis Prompts • The prompts below are examples of the issues that need to be addressed. They are not a checklist. Not all prompts and issues will be relevant for any one project. Issues not covered by these prompts may be very pertinent to a proposal - please include them in the analysis • Is this proposal affected by any current policy, procedure or action plan? Has advice been sought from organizations that have a high level of expertise, or may be significantly affected by this proposal? 1. Infrastructure and Government • How will this proposal benefit the local economy? • If this proposal is an investment in infrastructure is it designed and will it be managed to optimize the use of resources including operating in a fossil fuel constrained society? • Can the proposal be funded partially or fully by grants, user fees or charges, staged development, or partnering with another agency? • How will the proposal impact business growth or operations (ability to complete desired project or remain in operation), such as access to needed permits, infrastructure and capital? Analysis/Discussion • tŽƌŬĨŽƌĐĞŚŽƵƐŝŶŐƐƵƉƉŽƌƚƐďƵƐŝŶĞƐƐ • ŽŶƐƚƌƵĐƚŝŽŶďĞŶĞĨŝƚƐůŽĐĂůĞĐŽŶŽŵǇ • ^ĂǀŝŶŐƚƌĂŶƐŝƚĐŽƐƚƐďǇůŝǀŝŶŐŶĞĂƌǁŽƌŬĨƌĞĞƐƵƉŝŶĐŽŵĞĨŽƌŽƚŚĞƌ ƉƵƌĐŚĂƐĞƐďĞŶĞĨŝƚƚŝŶŐƚŚĞĞĐŽŶŽŵǇ • >ĞǀĞƌĂŐĞĨĞĚĞƌĂů͕ƐƚĂƚĞĂŶĚƉŚŝůĂŶƚŚƌŽƉŝĐĚŽůůĂƌƐƚŚĂƚĨůŽǁƚŽůŽĐĂů ĞĐŽŶŽŵǇ;ĂƚůĞĂƐƚΨϭ͘ϱŵŝůůŝŽŶĂŶŶƵĂůůǇŝŶĨĞĚĞƌĂůĨƵŶĚƐĂůŽŶĞͿ • ^ƚƌĞĂŵůŝŶĞĨĞĞƐĂŶĚƉƌŽĐĞƐƐǁŽƵůĚďĞŶĞĨŝƚďƵƐŝŶĞƐƐĂŶĚĚĞǀĞůŽƉĞƌƐ • ŽŵŵĞƌĐŝĂůůŝŶŬĂŐĞĂŶĚĞǆĐŝƐĞĨĞĞƐǁŽƵůĚĂĚĚĐŽƐƚƚŽĚĞǀĞůŽƉŝŶŽƵƌ ĐŽŵŵƵŶŝƚǇƉƵƚƚŝŶŐƚŚĞŝƚǇĂƚĂĐŽŵƉĞƚŝƚŝǀĞĚŝƐĂĚǀĂŶƚĂŐĞĂŶĚĐŽƵůĚďĞ ĂŶĞŐĂƚŝǀĞĞĨĨĞĐƚŽŶƚŚĞĞĐŽŶŽŵǇ 2. Employment and Training • What are the impacts of this proposal on job creation within Larimer County? • Are apprenticeships, volunteer or intern opportunities available? • How will this proposal enhance the skills of the local workforce? • ŽŶƐƚƌƵĐƚŝŽŶũŽďƐ • WƌŽƉĞƌƚǇŵĂŶĂŐĞŵĞŶƚ͕ĨĂĐŝůŝƚŝĞƐŵĂŝŶƚĞŶĂŶĐĞĂŶĚŽƚŚĞƌĚŝƌĞĐƚũŽď ƉƌŽĚƵĐƚŝŽŶ • /ŶĐƌĞĂƐĞĚũŽďƌĞƚĞŶƚŝŽŶĂŶĚĐƌĞĂƚŝŽŶĨƌŽŵĂĐĐŽŵŵŽĚĂƚŝŶŐŵŽƌĞ ƌĞƐŝĚĞŶƚƐŝŶƚŚĞŝƚǇ 3. Diversified and Innovative Economy • How does this proposal support innovative or entrepreneurial activity? • Will “clean technology” or “green” jobs be created in this proposal? • How will the proposal impact start-up or existing businesses or • ,ŽƵƐŝŶŐďƵŝůƚǁŝƚŚ>Žǁ/ŶĐŽŵĞ,ŽƵƐŝŶŐdĂǆƌĞĚŝƚƐ;>/,dͿƌĞƋƵŝƌĞ ƐƉĞĐŝĨŝĐŐƌĞĞŶƐƚĂŶĚĂƌĚƐ ϴ development projects? 4. Support or Develop Sustainable Businesses • What percentage of this proposal budget relies on local services or products? Identify purchases from Larimer County and the State of Colorado. • Will this proposal enhance the tools available to businesses to incorporate more sustainable practices in operations and products? • Are there opportunities to profile sustainable and socially responsible leadership of local businesses or educate businesses on triple bottom line practices? • /ŶĐůƵƐŝŽŶĂƌǇ,ŽƵƐŝŶŐKƌĚŝŶĂŶĐĞ;/,KͿŽƌŽŵŵĞƌĐŝĂů>ŝŶŬĂŐĞĐŽƵůĚĂĚĚ ĐŽƐƚƐĂŶĚŝŶŚŝďŝƚƉƌŽũĞĐƚƐ • ĚŽƉƚĂhŶŝƚƉƌŽŐƌĂŵ͕ǁŚĞƌĞďƵƐŝŶĞƐƐŽƌĨĂŝƚŚĐŽŵŵƵŶŝƚŝĞƐĐŽƵůĚ ƉƵƌĐŚĂƐĞĂŶĚŝŵƉƌŽǀĞƵŶŝƚƐĂŶĚƉƌŽǀŝĚĞƚŚĞƐĞƚŽƌĞƐŝĚĞŶƚƐĂƚďĞůŽǁ ŵĂƌŬĞƚƌĞŶƚƐ͘ • WƌŽǀŝĚŝŶŐĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐƌĞŵŽǀĞƐĂďĂƌƌŝĞƌƚŽĨƵůůĞŶŐĂŐĞŵĞŶƚŝŶ ƚŚĞǁŽƌŬĨŽƌĐĞ • WůĂĐĞŵĂƚƚĞƌƐʹƌĞĚĞǀĞůŽƉŵĞŶƚŝƐŽƉƉŽƌƚƵŶŝƚǇĨŽƌŚŽƵƐŝŶŐ • tĂŶƚƚŽŵĂŝŶƚĂŝŶŽƌŝŵƉƌŽǀĞƉĞƌĐĞŶƚĂŐĞŽĨƌĞƐŝĚĞŶƚƐƚŚĂƚůŝǀĞĂŶĚ ǁŽƌŬŝŶŝƚǇ;ƵƌƌĞŶƚůǇϱϱйͿ 5. Relevance to Local Economic Development Strategy Economic Prosperity Summary Workforce housing part of healthy business environment. Key issues: Short term construction benefits, affordable housing long term work force support. Potential mitigation strategies: ǀŽŝĚƉŽůŝĐŝĞƐƚŚĂƚĐƌĞĂƚĞůĞƐƐĐŽŵƉĞƚŝƚŝǀĞďƵƐŝŶĞƐƐĞŶǀŝƌŽŶŵĞŶƚ Overall, the effect of this proposal on economic prosperity will be: Please reach a consensus or take a group average on the rating, enter an “x” in one of the following boxes and indicate the overall rating. Rating represents group consensus 2 Rating represents group average нϯ нϮ нϭ Ϭ Ͳϭ ͲϮ Ͳϯ Very positive Moderately positive Slightly positive Not relevant or neutral Slightly negative Moderately negative, impact likely Very negative, impact expected ϲ Affordable Housing Strategic Plan June 9, 2015 ATTACHMENT 12 Questions for Council Consideration 1. Does Council generally agree with the stated goals and policies outlined in the draft plan? 2. Would Council like the strategies to be prioritized? 2 City’s Role in Affordable Housing • Policy direction • Funder • Facilitator • Regulator • NOT a builder Where we are today 4 3.33% 4.41% 4.85% 5.17% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 1999 AHSP 2004 AHSP 2009 AHSP 2015 AHSP Percentage of overall housing units that are publicly assisted, affordable housing 5 Affordable Housing Locations Current Challenges • Many cost-burdened renters • Rising rents, historic low vacancies • Home ownership gaps Current Challenges • Housing more expensive to build Affordable Housing Definitions Housing Affordability vs. Affordable Housing Fort Collins definition: –Dwelling unit affordable for 80% > AMI •Renters: cost 30% > gross income •Homeowners: cost 38%> gross income 8 Fort Collins AMI Limits Percent of AMI AMI HUD Classification Maximum Affordable Monthly Rent 100% $79,300 Moderate Income $1,983 80% $62,250 Low Income $1,556 60% $47,580 Low Income $1,190 50% $38,900 Very Low Income $973 30% $24,250 Extremely Low Income $606 Who Does Affordable Housing Serve? Relationship of Income to Need for Subsidy 0 30% 60% 80% 100% 120% HIGH LOW SUBSIDY NEEDED TO BE AFFORDABLE PERCENT OF AREA MEDIAN INCOME LEVEL OF SUBSIDY Units available and affordable to 100 HH earning 30% AMI 12 13 Land Bank Program Proposed 5 Strategic Goals • Increase the inventory of rental housing • Preserve affordability of existing housing • Increase housing for special needs populations • Support affordable homeownership • Refine incentives and expand funding sources Goal: Increase Inventory of Affordable Rental Units • Many cost-burdened, low income renters Goal: Increase Inventory of Affordable Rental Units • Growing gap 31-80% AMI 16 0-30% AMI 31-50% AMI 51-80% AMI Total Housing cost burden greater than 30% of income 6,269 4,354 2,590 13,213 Housing cost burden greater than 50% of income 5,825 2,009 440 8,274 Number of Cost-Burdened and Severely Cost- Burdened Rental Households Source: CHAS 2007-2011 Goal: Preserve Existing Affordable Housing Units • Aging Inventory • Preserve physical condition of existing stock - Improve livability and sustainability of stock Year Unit Built Owner-Occupied Renter-Occupied Number % Number % 2000 or later 7,575 24% 3,624 15% 1980-1999 13,339 42% 8,479 35% 1950-1979 9,024 28% 10,156 41% Before 1950 1,937 6% 2,295 9% Total 31,875 100% 24,554 100% Goal: Increase Housing and Facilities for People With Special Needs • Growing special needs populations Special Need Category Number Individuals with hearing difficulty 3,315 Individuals with vision difficulty 1,617 Individuals with cognitive difficulty 3,765 Individuals with an ambulatory difficulty 4,391 Individuals with a self-care difficulty 1,667 Individuals with an independent living difficulty 3,190 Goal: Increase Housing and Facilities for People With Special Needs • Growing senior population Goal: Home Ownership Support • Price escalation continues Goal: Development Incentives & Alternative Funding Sources Profits squeezed Other Colorado Communities Communities • Boulder • Denver • Aspen • Vail • Snowmass • Telluride Policies • Inclusionary Housing Ordinance • Commercial Linkage Fee • Property Tax • Excise Tax • Head Tax 22 Policies Not Recommended 23 Policy Reason Inclusionary Housing Ordinance Deed restricted homes would be at same price point as unrestricted homes Commercial Linkage Fee Commercial linkage fees add costs and makes Fort Collins less competitive with surrounding municipalities Recommended Policies 24 Policy Expected Outcome Activate Land Bank 500-600 additional affordable units Improve financial and non-financial incentives Incentivizing the types of units that are missing in our inventory Preserve affordable units in exchange for affordability commitment Maintain supply of affordable units Policies for Feedback 25 Policy Expected Outcome Progressive fee structure Fees commensurate with impact of development Phased improvements of existing housing Incremental improvement in condition of housing Remove barriers to accessory dwelling units (ADUs) Increase supply of affordable units Construction Defect Litigation remedy Increase supply of townhomes and condominiums Next Steps 26 • Vision • Data analysis and metrics • Outreach • August 18th Regular Meeting Questions for Council Consideration 1. Does Council generally agree with the stated goals and policies outlined in the draft plan? 2. Would Council like the strategies to be prioritized? 27 Contact Sue Beck-Ferkiss Social Sustainability Specialist sbeckferkiss@fcgov.com 221.6753 Clay Frickey Associate Planner cfrickey@fcgov.com 224.6045 • ^ƚƌĞĂŵůŝŶĞĚƉƌŽĐĞƐƐŝŵƉƌŽǀĞƐŽƉĞƌĂƚŝŽŶĂůĐĂƉĂĐŝƚǇ • /ŵƉƌŽǀŝŶŐŚŽƵƐŝŶŐƋƵĂůŝƚǇĂŶĚƌĞĚƵĐŝŶŐƵƚŝůŝƚǇĐŽƐƚƐ • >ĞƐƐƉƌŽĚƵĐƚŝŽŶŽĨĐŽŶƐƚƌƵĐƚŝŽŶĚĞďƌŝƐĨƌŽŵŵĂŶƵĨĂĐƚƵƌĞŽĨŶĞǁ ďƵŝůĚŝŶŐƐŝĨĞǆŝƐƚŝŶŐďƵŝůĚŝŶŐƐƚŽĐŬĐĂŶďĞƵƚŝůŝǌĞĚŵŽƌĞĞĨĨŝĐŝĞŶƚůǇ • >ĞƐƐĂŝƌĞŵŝƐƐŝŽŶƐŽĨƉĂƌƚŝĐƵůĂƚĞƐ͕ŚĂǌĂƌĚŽƵƐĂŝƌƉŽůůƵƚĂŶƚƐ͕ĂŶĚ','Ɛ ĂƐƐŽĐŝĂƚĞĚǁŝƚŚŶĞǁĐŽŶƐƚƌƵĐƚŝŽŶ animal communities? • Will this proposal generate data or knowledge related to the use of resources? • Will this proposal promote or support education in Analysis/Discussion • >ĞƐƐĐŽŵŵƵƚŝŶŐƉƌŽĚƵĐĞƐůĞƐƐ'ƌĞĞŶŚŽƵƐĞ'ĂƐĞŵŝƐƐŝŽŶ;','ͿĂŶĚ ƉŽůůƵƚŝŽŶ • dŽƚŚĞĞǆƚĞŶƚƚŚĂƚŶĞǁĐŽŶƐƚƌƵĐƚŝŽŶŝƐŶĞĐĞƐƐĂƌǇƚŽĂĐĐŽŵŵŽĚĂƚĞ ŐƌŽǁƚŚǁŚŝĐŚĚŽĞƐĐƌĞĂƚĞ','͕ŝƚǇƐƚĂŶĚĂƌĚƐĐƌĞĂƚĞĞĨĨŝĐŝĞŶƚĂŶĚ ƐƵƐƚĂŝŶĂďůĞďƵŝůĚŝŶŐƐƚŽŵŝƚŝŐĂƚĞƚŚĞŝŵƉĂĐƚ • tĞďƐŝƚĞĐŽŵŵĞŶƚĨŽƌŵ Social Equity Summary tŽƌŬŝŶŐŝŶƚŚĞƐĂŵĞƉůĂĐĞĂƐǇŽƵůŝǀĞŝŶĐƌĞĂƐĞƐŽƉƉŽƌƚƵŶŝƚŝĞƐĨŽƌĐŽŵŵƵŶŝƚǇĐŽŶŶĞĐƚŝŽŶĂŶĚĞŶŐĂŐĞŵĞŶƚ͕ŝƐŵŽƌĞĞĨĨŝĐŝĞŶƚ͕ůĞƐƐĞǆƉĞŶƐŝǀĞĂŶĚƐƚƌĞƐƐĨƵů͕ůĞƐƐ ƚŝŵĞĐŽŶƐƵŵŝŶŐĂŶĚĨƌĞĞƐƵƉƚƌĂŶƐŝƚĨƵŶĚƐĨŽƌŽƚŚĞƌŚŽƵƐĞŚŽůĚŶĞĞĚƐ͘ Key issues: Stabilizing housing, stabilizes lives BOARDWALK DR S COUNTY ROAD 13 E COUNTY ROAD 50 E COUNTY ROAD 48 S COUNTY ROAD 11 N COUNTY ROAD 17 E HORSETOOTH RD E COUNTY ROAD 38 9TH ST E COUNTY ROAD 54 E COUNTY ROAD 52 JOHN F KENNEDY PKWY E COUNTY ROAD 36 E SUNIGA RD N TAFT HILL RD S TIMBERLINE RD W VINE DR ZIEGLER RD S MASON ST N TAFT HILL RD E COUNTY ROAD 30 E HORSETOOTH RD E COUNTY ROAD 30 ZIEGLER RD KECHTER RD TURNBERRY RD S LEMAY AVE S COUNTY ROAD 5 Land Bank Parcels CITY OF FORT COLLINS GEOGRAPHIC INFORMATION SYSTEM MAP PRODUCTS These map products and all underlying data are developed for use by the City of Fort Collins for its internal purposes only, and were not designed or intended for general use by members of the public. 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Printed: June 04, 2015 0 0.5 1 1.5 2 Miles Scale 1:62,856 © H:\Affordable Housing Strategic Plan\Plan Documents\Affordable Housing Map 11x17.mxd Land Bank Parcels Arterial Major Arterial Interstate City Limits - Area ATTACHMENT 10 N COUNTY ROAD 9 BOARDWALK DR S COUNTY ROAD 13 E COUNTY ROAD 50 E COUNTY ROAD 48 S COUNTY ROAD 11 N COUNTY ROAD 17 E HORSETOOTH RD E COUNTY ROAD 38 9TH ST E COUNTY ROAD 54 E COUNTY ROAD 52 JOHN F KENNEDY PKWY E COUNTY ROAD 36 E SUNIGA RD N TAFT HILL RD S TIMBERLINE RD W VINE DR ZIEGLER RD S MASON ST N TAFT HILL RD E COUNTY ROAD 30 E HORSETOOTH RD E COUNTY ROAD 30 ZIEGLER RD KECHTER RD TURNBERRY RD S LEMAY AVE S COUNTY ROAD 5 Affordable Housing Locations CITY GEOGRAPHIC These and were map OF not products FORT designed and INFORMATION COLLINS or all intended underlying for general data SYSTEM are use developed by members MAP for use PRODUCTS of the by the public. City The of Fort City Collins makes for no its representation internal purposes or only, warranty dimensions, as to contours, its accuracy, property timeliness, boundaries, or completeness, or placement and of location in particular, of any its map accuracy features in thereon. labeling or THE displaying CITY OF FORT COLLINS PARTICULAR MAKES PURPOSE, NO WARRANTY EXPRESSED OF MERCHANTABILITY OR IMPLIED, WITH OR RESPECT WARRANTY TO THESE FOR FITNESS MAP PRODUCTS OF USE FOR OR THE UNDERLYING FAULTS, and assumes DATA. 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0DUFK²)LQDOL]HPHVVDJLQJWRVWDNHKROGHUV6XSHU%RDUGVDQG&RPPLVVLRQ 0HHWLQJ • 0D\²+$366WDNHKROGHUPHHWLQJDQGSXEOLFRXWUHDFK • -XQH²&LW\&RXQFLOZRUNVHVVLRQ • -XQH²&RQWLQXHGRXWUHDFKWRFLYLFJURXSVEXVLQHVVFRPPXQLW\UHDOWRUVHWF • -XO\²&LW\&RXQFLOWRFRQVLGHUDGRSWLRQ DQG WKH6RFLDO6XVWDLQDELOLW\*DSV$QDO\VLVDUHWR o ,QFUHDVHWKHLQYHQWRU\RIDIIRUGDEOHUHQWDOXQLWV o 3UHVHUYHWKHORQJWHUPDIIRUGDELOLW\DQGSK\VLFDOFRQGLWLRQRIWKHH[LVWLQJVWRFNRI DIIRUGDEOHUHQWDOKRXVLQJ o ,QFUHDVHKRXVLQJDQGDVVRFLDWHGVXSSRUWLYHVHUYLFHVIRUSHRSOHZLWKVSHFLDOQHHGV LQFOXGLQJSHRSOHZKRDUHKRPHOHVVGRPHVWLFYLROHQFHYLFWLPVSHRSOHZLWKSK\VLFDOPHQWDO DQGEHKDYLRUDOKHDOWKLVVXHVDQGVHQLRUFLWL]HQV o 6XSSRUWRSSRUWXQLWLHVWRREWDLQDQGVXVWDLQDIIRUGDEOHKRPHRZQHUVKLS o 5HILQHGHYHORSPHQWLQFHQWLYHVDQGH[SORUHDOWHUQDWLYHIXQGLQJVRXUFHV .H\0HVVDJLQJ • :HNQRZDIIRUGDEOHKRXVLQJLVDQLVVXHRILPSRUWDQFHWRRXUFRPPXQLW\7KH+RXVLQJ $IIRUGDELOLW\3ROLF\6WXG\EHJDQWRORRNDWILQGLQJFUHDWLYHVROXWLRQVDQGWRROVWRFUHDWHKRXVLQJ RSSRUWXQLWLHVIRUDOO7KH+RXVLQJ3ULRULWLHV6WUDWHJLF3ODQZLOOEHWKHYHKLFOHWR LPSOHPHQWDQGFRQWLQXHWRH[SORUH+$36UHFRPPHQGDWLRQVDQGSURYLGHDQDFWLRQSODQIRUWKLV ZRUN • 7KH+RXVLQJ3ULRULWLHV6WUDWHJLF3ODQZLOOLQFRUSRUDWHSXEOLFLQSXWRQZKDWUHFRPPHQGHGWRROV IURPWKH+RXVLQJ$IIRUGDELOLW\3ROLF\6WXG\VKRXOGEHLPSOHPHQWHG • 7KH+RXVLQJ$IIRUGDELOLW\3ULRULWLHV3ODQZLOOXSGDWHWKH$IIRUGDEOH +RXVLQJ6WUDWHJLF3ODQ7KLVZLOOEHWKHIRXUWKILYH\HDUSODQWKH&LW\KDVDGRSWHGWRVHUYHDVD URDGPDSIRUJXLGLQJ&LW\SROLF\RQDIIRUGDEOHKRXVLQJ ATTACHMENT 5 Increasing state funding for affordable housing 53% 16 None of the above / other 7% 2 Totals 100% 30 Responses 0% 10% 20% 30% 40% 50% 60% Constructiondefect litigation StateversionofLow IncomeHousingTax Creditprogram Increasingstate fundingfor affordablehousing Noneoftheabove/ other 35% 40% Taxincrement financingis provided AnynonͲhousing publicsubsidyis provided Azoning varianceis granted Anylandcode provisionis adjustedat developer’s request Noneofthe above/other 10% 15% 20% 25% 30% 35% 40% $10,000 $10,000to $14,999 $15,000to $19,999 $20,000to $24,999 $25,000to $34,999 $35,000to $49,999 $50,000to $74,999 $75,000to $99,999 $100,000to $149,999 $150,000or more NewDistributionofAllHouseholds Existing Distribution Source:Economic&PlanningSystems New Distribution [Note3]:MinimumwageforthestateofColoradoin2012was$7.64perhour. Source:ColoradoDepartmentofLabor&Employment;Economic&PlanningSystems 202% 218% 237% 265% 312% ExistingandNewHomeSalesPriceDistribution,2013 DistributionofSalesAffordablebyFortCollinsAreaMedianIncome SalesofMarketͲRate HousingAvailableat 100%AMIorBelow (22%ofAllSales) SalesPrice Rangefor DeedͲRestricted AFFORDABLE Housing (at80%to100%AMI) SalesPrice Rangefor DeedͲRestricted WORKFORCE Housing (at100%to120%AMI) system;needto educate businesses Existingtax structure Existingtax structure Ifcollected, existingsystem (typicallyCounty inCO) State,county,or city Existingstructure Whoisaffected? භNew development භResidents භBusinesses භVisitors භEmployers භEmployees භDevelopers භContractors භVisitors භLegal භBusiness භRealestate භRealestate භRealestate Whatareitsadvantages/ disadvantages? භBurdenonnew residentialand commercial development භGenerates revenueatpaceof development භVoterapproval required භCouldgenerate highrevenues භVoterapproval required භBroadest distributionof burden භWouldhavetobe employerͲpaid භAddressesboth existingandnew needs භVoterapproval required භStrongnexusto newresidential development භVoterapproval required භReasonable nexusexists භLodgingindustry expectstouse fundsfortourism භVoterapproval required භAppliesto broadertypesof documents භWeaknexusto housing භCanbeimposed voluntarily භAppliestonew salessubjectto developer agreement භCouldgenerate highrevenues භVoterapproval required Whousesit? Cambridge,MA SanFrancisco,CA Berkeley,CA Boulder,CO Parker,CO Aspen/Pitkin County,CO St.Paul,MN Dayton,OH Denver,CO Aurora,CO GreenwoodVillage, CO St.Louis,MO SanMiguelCounty, CO SanFrancisco,CA Columbus,OH SnowmassVillage, CO Indianapolis,IN JacksonCounty, MO BucksCounty,PA Philadelphia,PA Aspen,CO; SnowmassVillage, CO Vail,CO Breckenridge,CO Telluride,CO WinterPark,CO PitkinCounty,CO Boulder,CO Cambridge,MA Seattle,WA Source:Economic&PlanningSystems H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Funding Options AlternativeFundingOptions housingcertificates;combination IH/ROunitsandvoluntaryadoption ofRETA PaymentoffeeinͲlieu PaymentoffeeinͲlieu;land dedication;offsiteunits;deedͲ restrictedcommercialspace PaymentoffeeinͲlieu;land dedication;offsiteunits Whatarethelegal/nexus issues? Doesnotrequirevoterapproval,no nexusstudyrequired Nonexusstudyrequired Requiresnexusstudyand documentation Requiresnexusstudyand documentation Whoisaffected? භNewresidenƟaldevelopment භNewresidentaldevelopment භBusinesses භVisitors Newcommercialdevelopment Newresidentialdevelopment Whatareitsadvantages/ disadvantages? භAddressescommunityworkforce housingneeds(i.e.ownershipor rental) භLimitstheburdentonew residentialdevelopment භMostcommonamongthe programsidentified භValueofincenƟvesisrelaƟvetothe market භSuccessisdependentonthevalue ofrespectiveincentiveswithinthe market භAddressesworkforcehousing needs භBroadenstheburdentowide varietyoflanduses භRequiresnexusanalysis භAddressesseasonal/service workerhousingneeds(i.e.rental) භLimitstheburdenonmarketto large2ndhomes භRequirescomplicatednexus analysis Whousesit? Boulder,CO Denver,CO Burlington,VT Cambridge,MA Davis,CA Cambridge,MA Seattle,WA Chicago,IL Boston,MA Vail,CO Aspen/PitkinCounty,CO Telluride,CO ParkCity,UT Telluride,CO Jackson/TetonCounty,WY Source:Economic&PlanningSystems H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Housing Programs w Res Linkage AffordableHousingPrograms +850 net Newsom/ Aylesworth: +900 net 2013Ͳ14Program Capacity=5,600beds 2017Ͳ18Program Capacity=7,550beds MultiͲFamily/MixedͲUse SingleͲFamily Source:CityofFortCollins;Economic&PlanningSystems 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% OwnerͲOccupied RenterͲOccupied 2000 2010 2012 Source:U.S. Census;Economic&PlanningSystems system Existingsalestax structure Needcollection system;needto educate businesses Existingtax structure Existingtax structure Ifcollected, existingsystem (typicallyCounty inCO) State,county,or city Existingstructure Whoisaffected? භNew development භResidents භBusinesses භVisitors භEmployers භEmployees භDevelopers භContractors භVisitors භLegal භBusiness භRealestate භRealestate භRealestate Whatareitsadvantages/ disadvantages? භBurdenonnew residentialand commercial development භGenerates revenueatpaceof development භVoterapproval required භCouldgenerate highrevenues භVoterapproval required භBroadest distributionof burden භWouldhavetobe employerͲpaid භAddressesboth existingandnew needs භVoterapproval required භStrongnexusto newresidential development භVoterapproval required භReasonable nexusexists භLodgingindustry expectstouse fundsfortourism භVoterapproval required භAppliesto broadertypesof documents භWeaknexusto housing භCanbeimposed voluntarily භAppliestonew salessubjectto developer agreement භCouldgenerate highrevenues භVoterapproval required Whousesit? Cambridge,MA SanFrancisco,CA Berkeley,CA Boulder,CO Parker,CO Aspen/Pitkin County,CO St.Paul,MN Dayton,OH Denver,CO Aurora,CO GreenwoodVillage, CO St.Louis,MO SanMiguelCounty, CO SanFrancisco,CA Columbus,OH SnowmassVillage, CO Indianapolis,IN JacksonCounty, MO BucksCounty,PA Philadelphia,PA Aspen,CO; SnowmassVillage, CO Vail,CO Breckenridge,CO Telluride,CO WinterPark,CO PitkinCounty,CO Boulder,CO Cambridge,MA Seattle,WA Source:Economic&PlanningSystems H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Funding Options AlternativeFundingOptions restrictedcommercialspace PaymentoffeeinͲlieu;land dedication;offsiteunits Whatarethelegal/nexus issues? Doesnotrequirevoterapproval,no nexusstudyrequired Nonexusstudyrequired Requiresnexusstudyand documentation Requiresnexusstudyand documentation Whoisaffected? භNewresidenƟaldevelopment භNewresidentaldevelopment භBusinesses භVisitors Newcommercialdevelopment Newresidentialdevelopment Whatareitsadvantages/ disadvantages? භAddressescommunityworkforce housingneeds(i.e.ownershipor rental) භLimitstheburdentonew residentialdevelopment භMostcommonamongthe programsidentified භValueofincenƟvesisrelaƟvetothe market භSuccessisdependentonthevalue ofrespectiveincentiveswithinthe market භAddressesworkforcehousing needs භBroadenstheburdentowide varietyoflanduses භRequiresnexusanalysis භAddressesseasonal/service workerhousingneeds(i.e.rental) භLimitstheburdenonmarketto large2ndhomes භRequirescomplicatednexus analysis Whousesit? Boulder,CO Denver,CO Burlington,VT Cambridge,MA Davis,CA Cambridge,MA Seattle,WA Chicago,IL Boston,MA Vail,CO Aspen/PitkinCounty,CO Telluride,CO ParkCity,UT Telluride,CO Jackson/TetonCounty,WY Source:Economic&PlanningSystems H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Housing Programs w Res Linkage AffordableHousingPrograms Joe Rowan, Funding Partners Mike Salza, FCBR/Coldwell Banker Jeff Schneider, Armstead Construction, Inc. Clint Skutchan, Fort Collins Board of Realtors Mike Sollenberger, Sollenberger Properties Bill Swalling, Waters’ Edge Developments, LLLP Debora Wagner, Colorado Legal Services Nancy York, Citizen City Executive Leadership Darin Atteberry, City Manager Jeff Mihelich, Deputy City Manager Bruce Hendee, Assistant City Manager Mary Atchison, Director, Social Sustainability Department City Boards Affordable Housing Board Council Finance Committee Economic Advisory Board Futures Committee Planning and Zoning Senior Advisory Board City Council Karen Weitkunat, Mayor Bob Overbeck, Councilmember, District 1 Lisa Poppaw, Councilmember, District 2 Gino Campana, Councilmember, District 3 Wade Troxell, Councilmember, District 4 Ross Cunniff, Councilmember, District 5 Gerry Horak, Councilmember, District 6 Social Sustainability Department 321 Maple Street Fort Collins, CO 80524 (970) 221-6734 http://www.fcgov.com/socialsustainability Consultant Team Dan Guimond David Schwartz Economic & Planning Systems, Inc. 730 17th Street, Suite 630 Denver, CO 80202-3511 Don Elliott Clarion Associates 621 17th Street, Suite 2250 Denver, CO 80293