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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/21/2017 - SECOND READING OF ORDINANCE NO. 148, 2017, AMENDINAgenda Item 8 Item # 8 Page 1 AGENDA ITEM SUMMARY November 21, 2017 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT Second Reading of Ordinance No. 148, 2017, Amending Various Provisions of the Code of the City of Fort Collins and the Land Use Code to Allow for the Discretionary Waiver of City Fees on Additional Affordable Housing Projects to be Constructed in the City. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on November 7, 2017, changes City policy to allow any developer of housing units targeting households with incomes of no more than 30% area median income (AMI) to request affordable housing fee waivers for the qualifying units and to amend the City Code to reflect this change. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, November 7, 2017 (w/o attachments) (PDF) 2. Ordinance No. 148, 2017 (PDF) Agenda Item 11 Item # 11 Page 1 AGENDA ITEM SUMMARY November 7, 2017 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT t Reading of Ordinance No. 148, 2017, Amending Various Provisions of the Code of the City of Fort Collins and the Land Use Code to Allow for the Discretionary Waiver of City Fees on Additional Affordable Housing Projects to be Constructed in the City. EXECUTIVE SUMMARY The purpose of this item is to change City policy to allow any developer of housing units targeting households with incomes of no more than 30% area median income (AMI) to request affordable housing fee waivers for the qualifying units and to amend the City Code to reflect this change. This matter was presented to the Council Finance Committee on October 16, and will be presented to the Planning and Zoning Board at a work session on November 9 and a hearing on November 16. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION The City has long been committed to affordable housing, and the need for financial support continues to be demonstrated by the increase in the number of applications for local and federal funds and the long waiting lists for available affordable housing in our City. Fee waivers have been one of the consistent incentives available to developers of affordable housing in the City. Historically, most development fees of the Fort Collins Housing Authority were traditionally waived. In March 2013, City Council amended its policies on fee waivers for affordable housing to allow for more discretion in determining the kinds of projects for which City fees should be waived. This was after a large waiver was granted to a project that was being developed primarily by CARE Housing, a local non-profit, with the Housing Authority having only a very small interest. This change limited waiver eligibility to only the Housing Authority, and then only for projects constructed for:  Persons experiencing homelessness  Disabled persons,  Or for households whose income is no greater than 30% of the area median income (AMI) of all City residents. Furthermore, waivers were to be granted at the discretion of City Council upon a determination that the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. The categories of fees for which waivers can be requested include: ATTACHMENT 1 Agenda Item 11 Item # 11 Page 2 (1) Capital expansion fees, (2) Development review fees, and (3) Building permit fees. The City’s waiver policy has greatly restricted the number of projects that qualify for waivers. This policy recognizes that households earning no more than 30% AMI cannot afford market rate housing in our City at this time. The average rent in the City is currently over $1,400 a month. A one-person household at 30% AMI would have a monthly income of about $1,345 - less than the City’s average rent. (Attachment 3) A four-person household would need to pay 68% of their income to afford the average market rate. Ideally, renters would never pay more than 30% of their income on housing. Developers need public subsidy to produce housing that this demographic can afford. In recognition that housing units that target household’s earning no more than 30% AMI requires public support to be offered to that demographic at rates affordable to their income level, the City wishes to incentivize all developers bringing 30% AMI units to the City. The proposed Ordinance allows all developers of units targeting this income bracket to request affordable housing fee waivers. Such request must be made before a certificate of occupancy is issued for the community to assure that this policy apply to only new development projects. Granting fee waivers will still be at the discretion of City Council and subject to a showing that granting the request will not jeopardize the finances of the City or delay any capital improvement funded by impact fees. CITY FINANCIAL IMPACTS When fees are waived, the City forgoes revenue it would otherwise collect. Further, the City’s custom has been to reimburse City departments for all capital expansion fees that are waived out of City funding, usually from the General Fund reserves. Affordable Housing funds in the Community Capital Improvement Fund are another possible source for funding the reimbursement of waived capital expansion fees. Lastly, Staff is proposing a 2019-2020 budget offer for the reimbursement of anticipated capital expansion fees projected to be waived in 2019-2020 as a proactive approach to funding this affordable housing incentive. BOARD / COMMISSION RECOMMENDATION At its August 3, 2017 meeting, the Affordable Housing Board unanimously voted to support the expansion of eligibility to request affordable housing fee waivers. (Attachment 2). The Planning and Zoning Board will consider the proposed changes to the Land Use Code at a work session on November 9 and a hearing on November 16. The Board’s decision will be provided to City Council in its read- before packet on November 21. The Council Finance Committee discussed this and supports expanding fee waivers to all developers of 30% AMI units. PUBLIC OUTREACH Public outreach on expansion of eligibility for waivers was conducted as part of the Housing Affordability Policy Study in 2014 and as part of the Affordable Housing Strategic Plan in 2015. The Affordable Housing Board discussed this expansion at its regular board meeting on August 3, 2017. The public was given an opportunity to comment on staff’s proposal at that time. Additionally, several developers were informally informed of the proposed change and uniformly supported the expansion of eligibility. ATTACHMENTS 1. Council Finance Committee minutes, October 16, 2017 (draft) (PDF) 2. Affordable Housing Board minutes, August 3, 2017 (PDF) 3. 2017 Income Limits (PDF) -1- ORDINANCE NO. 148, 2017 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING VARIOUS PROVISIONS OF THE CODE OF THE CITY OF FORT COLLINS AND THE LAND USE CODE TO ALLOW FOR THE DISCRETIONARY WAIVER OF CITY FEES ON ADDITIONAL AFFORDABLE HOUSING PROJECTS TO BE CONSTRUCTED IN THE CITY WHEREAS, Housing Catalyst (“HC”), formerly the Fort Collins Housing Authority, was formed by the City Council in 1970 pursuant to the authority contained in Section 29-4-101, et seq. of the Colorado Revised Statutes, for the purpose of providing affordable, safe and sanitary housing in the City that is within the means of families of low or moderate income; and WHEREAS, by adoption of Ordinance No. 065, 1999, the City Council exempted from the imposition of the City’s capital improvement expansion fees the land development projects of housing authorities formed pursuant to the provisions of Section 29-4-101, et seq., and specified various other City fees from which such projects are also to be exempted; and WHEREAS, the financial impact of such fee waivers on the City can be substantial, depending upon the size of the project that is exempted, and whether the lost fee revenues need to be replaced by the City; and WHEREAS, on March 19, 2013, the City Council adopted Ordinance No. 037, 2013 (the “2013 Ordinance”), which made amendments to the City Code and Land Use Code limiting the types of projects for which HC could request fee waivers, and specifying that those waivers are to be granted at the discretion of City Council upon a determination that proposed waivers will not jeopardize the financial interests of the City or the timely construction of capital improvements to be funded by the fees; and WHEREAS, the 2013 Ordinance also authorized and directed the Mayor to enter into an intergovernmental agreement between the City and HC documenting HC’s intent to limit future fee waiver applications to affordable housing projects that meet the criteria established by such Ordinance (the “Intergovernmental Agreement”); and WHEREAS, the Intergovernmental Agreement was executed on July 3, 2013; and WHEREAS, the City Code currently provides that the City Council can waive, by ordinance, fees that would otherwise be imposed for an affordable housing project wholly or partially owned by a housing authority only if the City Council determines that: (1) the proposed project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development (HUD), or households with an annual income that does not exceed 30% of the area median income (AMI) for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by HUD; and (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought; and -2- WHEREAS, the general categories of fees that the City Council can consider waiving include capital expansion fees, development review fees and building permit fees; and WHEREAS, the related City Code provisions are based on the recognition that households earning less than 30% AMI cannot afford market rate housing in Fort Collins, and that developers need public subsidies to produce housing that residents in this demographic can afford; and WHEREAS, the City wishes to provide an incentive for all developers to provide units affordable to those making less than 30% AMI by amending the City Code and Land Use Code to allow all developers of units targeting that income bracket to request fee waivers for the affordable portion of their projects; and WHEREAS, a developer would be required to request such waivers prior to the City issuing any certificates of occupancy for a project; and WHEREAS, whether to grant a fee waiver would still be in the discretion of the City Council and subject to a finding that granting the request will not jeopardize the City’s financial interests or timely construction of capital improvements; and WHEREAS, the City Council believes it is in the best interests of the City to amend the City Code and Land Use Code accordingly. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS AS FOLLOWS: Section 1. That the City Council hereby makes and adopts the determinations and findings outlined in the recitals set forth above. Section 2. That Section 7.5-19(b) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 7.5-19. Imposition, computation and collection of fees. ... (b) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Article for an affordable housing project if the City Council, in its sole discretion, determines that: (1) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and -3- (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Section 3. That Section 7.5-48(e) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 7.5-48. Land dedication or in-lieu fees imposed. … (e) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Article for an affordable housing project if the City Council, in its sole discretion, determines that: (1) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Section 4. That Section 7.5-71(c) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 7.5-71. Neighborhood parkland capital expansion fee. … (c) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Article for an affordable housing project if the City Council, in its sole discretion, determines that: -4- (1) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Section 5. That Section 10-28(h) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 10-28 Appeals/variance procedure. … (h) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Article for an affordable housing project if the City Council, in its sole discretion, determines that: (1) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Section 6. That Section 2.2.3 (D)(3) of the Land Use Code of the City of Fort Collins is hereby amended to read as follows: -5- Sec. 2.2.3 Step 3: Development Application Submittal . . . (D) Development Review Fees. … (3) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Chapter for an affordable housing project if the City Council, in its sole discretion, determines that: (a) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and (b) the proposed waiver, if approved by the City Council, will not jeopardize the financial interests of the City. Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Section 7. That Section 2.13.3(E) of the Land Use Code of the City of Fort Collins is hereby amended to read as follows: 2.13.3 Application … (E) Notwithstanding the foregoing, the City Council may, by ordinance, waive the imposition of any fee imposed by the provisions of this Chapter for an affordable housing project if the City Council, in its sole discretion, determines that: (1) the affordable housing project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development, or households with an annual income that does not exceed thirty (30) percent of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area, as published by the Department of Housing and Urban Development; and (2) the proposed waiver, if approved by the City Council, will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. -6- Any waiver of fees hereunder must be applied for in accordance with City application requirements prior to the City’s issuance of any certificates of occupancy for the project that is the subject of the waiver request. Introduced, considered favorably on first reading, and ordered published this 7th day of November, A.D. 2017, and to be presented for final passage on the 21st day of November, A.D. 2017. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 21st day of November, A.D. 2017. __________________________________ Mayor ATTEST: _______________________________ City Clerk