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HomeMy WebLinkAboutMemo - Mail Packet - 09/02/2025 - Memorandum from Vanessa Fenley re Follow-up from Council Work Session: Measuring Progress on the Housing Strategic Plan 1 Memorandum Date: August 28, 2025 To: Mayor and City Councilmembers Through: Kelly DiMartino, City Manager Tyler Marr, Deputy City Manager Jacob Castillo, Chief Sustainability Officer From: Vanessa Fenley, Sr. Housing Manager, Social Sustainability Department (vfenley@fcgov.com) Subject: Follow-up from Council Work Session: Measuring Progress on the Housing Strategic Plan BOTTOM LINE During the March 25, 2025 Work Session on Council’s affordable housing priority, Councilmembers requested additional information and clarification on two items related to the Housing Strategic Plan: 1) Alignment of the goal to have 10% of the housing stock be deed- restricted and affordable (currently, only around 5.5% of Fort Collins housing stock is deed- restricted and affordable); and 2) Progress on plan strategies, including additional opportunities to further advance strategies. This memo provides detailed updates on the Housing Strategic Plan strategies, including progress made since the work session, and additional context for maintaining the 10% affordable housing goal, informed by internal conversations with staff occurring in recent months. BACKGROUND Adopted in 2021, the Housing Strategic Plan includes 26 strategies developed to:  Increase housing supply and affordability;  Increase housing choice;  Increase stability;  Improve equity;  Preserve existing affordable housing; and  Increase accessibility. Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 2 The primary target driving the Housing Strategic Plan is to have 10% of Fort Collins’ housing stock be deed-restricted and affordable. This goal was included in the City’s 2015 Affordable Housing Strategic Plan, the plan preceding the Housing Strategic Plan. Part of the process of developing the Housing Strategic Plan included examining the City’s progress toward meeting this goal and considering whether the target should be modified. Ultimately, the 10% goal was incorporated into the 2021 Housing Strategic Plan and reaffirmed during the implementation process. Affordable Housing Goal The City of Fort Collins has maintained and reaffirmed through various planning efforts its goal to have 10% of housing be deed-restricted and affordable when the City reaches its planning horizon. Assuming there will be approximately 100,000 – 120,000 housing units developed when Fort Collins reaches its planning horizon, we will need around 10,000 – 12,000 units of affordable housing to meet the 10% goal. Fort Collins currently has around 4,150 units of affordable housing and will need to develop an additional 5,850 to 7,850 to meet the 10% goal. The 10% goal was originally formulated with insight from other Colorado municipalities’ affordable housing goals, and with an expectation that approximately 5% of the housing stock could be considered naturally occurring affordable housing. Combined with the 10% deed- restricted and affordable units, the estimated total of housing units considered affordable would then be closer to 15%. The 10% goal was reaffirmed during the strategic planning process resulting in our current Housing Strategic Plan, adopted in 2021. At that time, Fort Collins would have needed to add approximately 282 units annually to reach the 10% goal. The number of new units needed annually to reach the 10% goal has grown because in any year where there is not substantial affordable housing development to shrink the gap, more production is needed in future years to reach the 10% goal. Over the past five years, Fort Collins has added an average of 113 new units of affordable housing annually: Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 3 Year Number of new affordable units developed 2020 126 2021 123 2022 58 2023 176 2024 83 The City of Fort Collins is in process of developing a Regional Housing Needs Assessment, in collaboration with Larimer County and the City of Loveland. The Regional Housing Needs Assessment will then act as a platform for the City to develop a Housing Action Plan, in compliance with SB24-174. This assessment and planning process provides the City an ideal opportunity to examine and calibrate its housing goals to better match the current development landscape and local conditions. Updating the affordable housing goals may include considerations such as:  Are there alternative benchmarks that would better reflect our objectives?  Should we establish goals for different area median income brackets in addition to an overall goal?  Should we establish goals for retaining or creating new naturally occurring affordable housing in addition to deed-restricted housing? Strategy Progress The following table includes a description of status of each strategy in the Housing Strategic Plan, along with information about opportunities to further progress strategies within current funding and staffing capacity. Many strategies could be expanded with additional funding and/or staffing capacity. Strategy Status and Future Opportunities 1 Assess displacement and gentrification risk  Assessment of displacement and gentrification risk completed in 2021; key data incorporated into data library  Knowledge of neighborhoods in early, mid, or late stages of gentrification can inform decision-making for neighborhood-based programming Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 4 Strategy Status and Future Opportunities  Assessment can be replicated periodically to continue to inform decision-making 2 Promote inclusivity, housing diversity, and affordability as community values  Implementation is ongoing, with many community groups actively involved in shifting community perspectives 3 Implement the 2020 Analysis of Fair Housing Choice Action Steps  Implementation is ongoing; many Action Steps are reflected in Housing Strategic Plan strategies  Updating the Analysis of Impediments to Fair Housing is in progress as part of the Consolidated Plan process 4 Implementation, tracking, and assessment of housing strategies  Implementation is ongoing; housing dashboard launched in 2022 and updated annually 5 Advocate for housing-related legislation at state and federal levels  Implementation is ongoing 6 Evaluate implementation of a visitability policy  Strategy is in process  2022 building code update incorporated requirement of a ground floor bathroom with accessible elements ensuring easy convertibility to fully accessible when needed  Modifications to policy anticipated for building code update (anticipated effective date of Jan. 1, 2026) to provide greater clarity and flexibility for developers 7 Remove barriers to the development of Accessory Dwelling Units  Removing primary barrier of allowing ADUs in land use code completed in 2025, following state legislation  City is finalizing status with DOLA as an “ADU- supportive community”; once approved, the City will be eligible for funding to create pre-approved plans and other resources for ADU customers 8 Extend the City’s affordability term  Strategy completed; City’s affordability term extended from 20 years to 60 years in 2024 as part of Land Use code updates 9 Advance Phase One of the Land Use Code Audit  Strategy completed; Phase 1 of Land Use Code update adopted in 2024 Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 5 Strategy Status and Future Opportunities  Updates to Land Use Code related to Commercial Corridors and Centers anticipated for Fall 2025 10 Refine local affordable housing goal  Strategy completed during early implementation of Housing Strategic Plan  Future opportunities include refining and calibrating targets through future assessment and planning efforts, specifically the Regional Housing Needs Assessment (underway) and a forthcoming Housing Action Plan (estimated to be completed in 2027) 11 Create a new dedicated revenue stream to fund the Affordable Housing Fund  Strategy is in process  Proposed property tax rejected by voters in 2023  Additional revenue for affordable housing proposed through 2025 Community Capital Improvement Program (CCIP)  Future opportunities include exploring other options for dedicated revenue through public sources and cultivating collaborations with philanthropic partners 12 Expand partnership(s) with local Community Development Financial Institution (CDFI) to offer gap financing and low-cost loan pool for affordable housing development  Strategy is in process  Options for providing capital funding as short- and/or long-term revolving loans explored in conjunction with CCIP conversations  Future opportunities include identifying other funding sources to grow loan/financing pools and, if passed by voters, establishing implementation/administration process for CCIP funds 13 Recalibrate existing incentives to reflect current market conditions  Implementation is ongoing  Incentives recalibrated and expanded during Land Use Code Phase 1 updates  Continuing to identify opportunities to recalibrate incentives with Commercial Corridors and Centers Land Use Code update  Future opportunities include monitoring and evaluating impacts of incentives and further refining incentives to yield the desired supply and type of housing 14 Create additional development incentives for affordable housing  Strategy is in process  Incentives recalibrated and expanded during Land Use Code Phase 1 updates; impacts of Land Use Code changes are being monitored Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 6 Strategy Status and Future Opportunities  Continuing to identify opportunities to recalibrate incentives with Commercial Corridors and Centers Land Use Code update 15 Explore/address financing and other barriers to missing middle and innovative housing development  Strategy is in process, with some barriers addressed through Land Use Code updates  Future opportunities include further exploration into challenges for middle housing development and partnering with developers to identify opportunities for innovative development 16 Remove barriers to allowed densities through code revisions  Strategy completed as part of Land Use Code Phase 1 updates  Future opportunities include incorporating changes to density bonuses in the Commercial Corridors and Centers Land Use Code update and continuing to calibrate code to current conditions through regular updates 17 Consider affordable housing requirements as part of the community benefit options for metro districts  Strategy completed; Metro District policy updated in 2021 to allow affordable housing as a community benefit  Brief evaluation of Metro Districts’ affordable housing community benefit incorporated into scope of work for Regional Housing Needs Assessment (in progress) 18 Increase awareness opportunities for creative collaboration across water districts and other regional partners around the challenges with water costs and housing  Strategy is in process; One Water leading conversations with water districts and partners  Additional work in process to explore offsetting or reducing water-related development costs for projects that exceed standard water conservation and efficiency measures 19 Bolster City land bank activity by allocating additional funding to the program  Strategy is in process; additional properties in process of acquisition  Review of land bank policy and program underway to determine if updates to program implementation are needed to ensure program fits with evolving development landscape; future opportunities to be informed by findings from review Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 7 Strategy Status and Future Opportunities 20 Explore the option of a mandated rental license/registry program for long-term rentals and pair with best practice rental regulations  Implementation is ongoing  Rental registry established in 2024 as part of broader Rental Housing Program  More than 77% of properties have submitted registration applications; compliance efforts are ongoing to reach full registration 21 Explore revisions to occupancy limits and family definitions to streamline processes and calibrate the policy to support stable, healthy, and affordable housing citywide  Strategy completed  Land Use Code updated in 2024 to comply with change in state law (HB24-1007) prohibiting local governments from limiting occupancy based on familial relationship 22 Require public sector right of first refusal for affordable developments  Strategy in process  State legislation passed (HB24-1175) requiring right of first refusal for local governments to purchase affordable multifamily properties; work in progress to establish local implementation process 23 Allow tenants right of first refusal for cooperative ownership of multifamily or manufactured housing communities  Strategy is partially complete  State law provides mobile home park residents the opportunity to purchase a park for sale  Future opportunities include exploring options to extend opportunity to purchase rights to multifamily properties 24 Support community organizing efforts in manufactured home communities and increase access to resident rights information, housing resources, and housing programs  Implementation is ongoing  Additional opportunities to support mobile home park residents and achieve a desired quality of service/experience in mobile home parks being explored, with Council work session scheduled for September 2025 25 Fund foreclosure and eviction prevention and legal representation  Implementation is ongoing  The City’s Eviction Legal Defense Fund has helped more than 1200 low-income and cost-burdened Fort Collins residents preserve their housing stability 26 Develop small landlord incentives  Implementation is ongoing; small landlord incentives provided through Rental Housing Program Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B 8 NEXT STEPS Updates on progress for Housing Strategic Plan strategies will continue to be shared with Councilmembers, City Leaders, and the community via memos and work sessions, as appropriate. In addition, staff and the Affordable Housing Executive Team will keep City Council apprised of progress toward completing the Regional Housing Needs Assessment. Additional engagement with Councilmembers, City Leaders and staff, along with community members and key partners will inform the development of the Regional Housing Needs Assessment and Housing Action Plan. The Assessment will be completed in 2026, and the Housing Action Plan will be completed by the end of 2027. This process will enable the City to update and renew its goals and strategies around housing. Docusign Envelope ID: 48FEBF38-5C44-48D4-B553-F4229887A04B