HomeMy WebLinkAboutMemo - Mail Packet - 10/7/2014 - Memorandum From Mary Atchison Re: Update On Social Sustainability Department Accomplishments In 2014 And Staff Actions Related To Homelessness IssuesCity of Fort Collins
Competitive Process Review
Final Report
April 2014
The Novak Consulting Group
Strengthening organizations from the inside out.
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The Novak Consulting Group
Strengthening organizations from the inside out.
Table of Contents
Executive Summary.......................................................................................................................................1
Methodology.................................................................................................................................................2
The Fort Collins Competitive Process ...........................................................................................................3
Focus Group Summary..............................................................................................................................7
Peer Jurisdiction Benchmarking....................................................................................................................9
Process Improvement Recommendations..................................................................................................16
Strategic Priorities...................................................................................................................................16
Process Improvements ...........................................................................................................................17
Roles and Responsibilities.......................................................................................................................19
Conclusion...................................................................................................................................................21
Attachment A: Fort Collins Competitive Process Existing Process Maps
Attachment B: Focus Group Information
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City of Fort Collins Page 1
Competitive Process Review
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Strengthening organizations from the inside out.
Executive Summary
The City of Fort Collins, Colorado engaged The Novak Consulting Group to conduct an assessment of its
Competitive Process – the City’s process for allocating local and federal funding to eligible affordable
housing, community development, human services, and related activities. The purpose of this
engagement was to document the City’s process, solicit input from key stakeholders, research the
processes used in comparable jurisdictions, and identify opportunities to improve the City’s process,
based on established guidelines and regulations.
Process improvement recommendations relative to the City’s Competitive Process have been developed
based on interviews with staff, feedback from stakeholders, and review of background information and
peer jurisdiction research. The recommendations have been categorized in the following topic areas:
strategic priorities; process improvements; and roles and responsibilities, and are summarized below.
Strategic Priorities
RECOMMENDATION 1: Work with the City Council to articulate priorities for Competitive Process
funding.
Process Improvements
RECOMMENDATION 2: Separate all affordable housing projects from the Competitive Process.
RECOMMENDATION 3: Consider using City funds only to fund public service and public facilities projects.
RECOMMENDATION 4: Eliminate the Pre Application Phase.
RECOMMENDATION 5: Make the Technical Assistance meetings optional.
RECOMMENDATION 6: Develop a mechanism for evaluating the effectiveness of funding decisions.
RECOMMENDATION 7: Review contract monitoring and reporting processes to ensure compliance.
Roles and Responsibilities
RECOMMENDATION 8: Review and modify the name and charge of the CDBG Commission.
RECOMMENDATION 9: Clarify the role of Social Sustainability staff in the Competitive Process; remove
requests for City staff funding from the Competitive Process.
Page 2 City of Fort Collins
Competitive Process Review
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Methodology
In order to complete the objectives of this engagement, The Novak Consulting Group first met with the
Department of Social Sustainability leadership in February 2014 to collect initial information.
Subsequently, the consulting team met with the Social Sustainability staff team to map the Competitive
Process. Individual interviews were held with Social Sustainability staff, two City Councilmembers, and
representatives from the Finance Department and the City Attorney’s Office. Representatives from the
Denver regional office of the U.S. Department of Housing and Urban Development were also contacted.
To solicit input from other stakeholders of the Competitive Process, focus group sessions were held with
the Community Development Block Grant Commission, the Affordable Housing Board, and
representatives from the housing and human services sector who have been applicants of the City’s
Competitive Process. The purpose of the interviews and focus groups was to learn about the elements
of the process that are currently working well and opportunities that exist for greater efficiency and
effectiveness.
Additionally, significant background information was provided by City staff and reviewed as part of the
analysis, including staff documents, department policies, quarterly and annual reports, budgets,
organizational charts, and other related information. To further inform the fieldwork, interviews, and
analysis, the City tasked The Novak Consulting Group with conducting benchmarking research.
This process afforded The Novak Consulting Group the opportunity to understand what currently works
well with the City’s Competitive Process and make several recommendations for the City to consider as
it seeks to improve the allocation of local and federal funding. This report details the results of this
review.
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The Fort Collins Competitive Process
One of the major priorities of the U.S. Department of Housing and Urban Development (HUD) is the
creation of affordable housing. Two of the Department’s most important programs designed to assist
communities in developing affordable homeownership and rental units for low-income households are
the Community Development Block Grant (CDBG) and the Home Investment Partnership (HOME)
Programs.1 The City of Fort Collins receives both CDBG and HOME funding from HUD. The focus areas
of the CDBG Program are the provision of decent housing and the expansion of economic opportunities,
principally for persons of low and moderate income. The focus of the HOME Program is to increase the
supply of decent, safe, and affordable housing for persons of low and moderate income.2
Some jurisdictions that receive CDBG and HOME monies use the funding to complete projects
themselves, often using in-house expertise. Others, however, award the money to sub-recipient
organizations in the community that are willing and able to complete eligible projects. HUD provides
guidance on the spectrum of approaches to select CDBG and HOME sub-recipients, from most formal to
least formal3:
Formal Process
o Such as a Notice of Funds Availability or a Request for Proposals
o Generally accepts applications once a year
Limited Application Process
o Such as an Assisted Request for Proposals
o Less detailed applications are required
Solicitation of Applications
o Such as a Request for Qualifications
o Allows only qualified applicants to move forward
“Open Door” Process
o Allows for a revolving review cycle with applications reviewed anytime they are received
The City of Fort Collins allocates its funding with the expressed purpose of enhancing the community's
sustainability by addressing needs among its citizens who are income-challenged.4 Using a formal
process, known as the Competitive Process, the City makes both federal and local funding available to
eligible sub-recipients for affordable housing, community development, human services, and related
activities. Federal CDBG and HOME funding is supplemented with local funding through three City
sources: Affordable Housing Fund (AHF); Human Services Program (HSP); and Keep Fort Collins Great
(KFCG) funding.
The Competitive Process includes two funding cycles, one held in the spring and one held in the fall. The
City accepts sub-recipient applications for four main types of projects: Public Services; Public Facilities;
Affordable Housing; and Economic Development.
1 Home and CDBG Guidebook https://www.onecpd.info/resources/documents/HOME-CDBGGuidebook.pdf
2 “Background Information on the CDBG and HOME Programs” document provided by City of Fort Collins staff
3 Home and CDBG Guidebook https://www.onecpd.info/resources/documents/HOME-CDBGGuidebook.pdf
4 City of Fort Collins website http://www.fcgov.com/socialsustainability/competitiveprocessfaq.php
Page 4 City of Fort Collins
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CDBG, HSP, and KFCG funds are made available in the spring to affordable housing, public services,
public facilities, and economic development programs/projects. HOME and AHF monies are made
available in the fall for affordable housing programs/projects only.5 The following table summarizes the
eligible funding sources for each project type.
Table 1: Funding Sources for Competitive Process Projects
Projects
Federal Funding City of Fort Collins Funding
CBDG HOME
Human
Services
Program
Affordable
Housing
Fund
Keep Fort
Collins Great
Public Services X X X
Public Facilities X
Affordable Housing X X X
Economic Development X
Historically, an average of approximately $2.8 million is awarded annually through the Competitive
Process. Over the past 13 years, the City has contributed, on average, approximately 32% of the funding
from local sources, and approximately 68% from federal funding sources. The following figure shows
the percentage of funding awarded from local and federal sources over time.
Figure 1: Local and Federal Funding
5 “Background Information on the Competitive Process” document provided by City of Fort Collins staff
64% 64% 61%
77% 76%
68%
72% 78%
69% 65% 62%
65% 60%
36% 36% 39%
23% 24%
32%
28% 22%
31% 35% 38%
35% 40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Competitive Process: Local and Federal Funding
Federal Funding Local Funding
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The amount of funds available each year has fluctuated. The total funding level decreased by 16%
between FY 2001 and FY 2013. The lowest level of funding awarded through the Competitive Process
was $2.14 million in FY 2007; the highest level of funding awarded was $3.17 million in FY 2002. The
following table and figure depict the historical funding for the Competitive Process.
Table 2: Funding History, By Type
Year CDBG HOME HSP + KFCG AHF
ANNUAL
TOTAL
FY 2001 $1,227,000 $683,000 $369,781 $671,950 $2,951,731
FY 2002 $1,209,000 $684,000 $384,572 893,962 $3,171,534
FY 2003 $1,243,000 $726,510 $399,955 493,962 $2,863,427
FY 2004 $1,219,000 $723,006 $370,457 695,898 $3,008,361
FY 2005 $1,154,086 $681,881 $370,457 735,898 $2,942,322
FY 2006 $1,037,758 $645,419 $332,000 333,000 $2,348,177
FY 2007 $1,034,986 $640,931 $335,000 133,000 $2,143,917
FY 2008 $998,391 $618,429 $440,334 333,000 $2,390,154
FY 2009 $1,017,568 $686,973 $440,334 136,000 $2,552,0126
FY 2010 $1,104,431 $682,541 $389,601 188,890 $2,365,463
FY 2011 $923,469 $599,259 $540,334 325,024 $2,388,086
FY 2012 $977,728 $543,317 $540,334 325,047 $2,386,426
FY 2013 $995,649 $521,147 $640,733 333,047 $2,490,576
Figure 2: Funding History, by Type
6 Includes $271,137 in ARR Act of 2009 funding
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Competitive Process: Funding History
CDBG HOME ARR Act AHF HSP + KFCG
Page 6 City of Fort Collins
Competitive Process Review
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The Office of Social Sustainability is responsible for administering the Competitive Process. In FY 2014,
the Office of Social Sustainability had a budget of $1,099,001 and five full time equivalent (FTE)
employees. The Competitive Process in the City is comprised of five distinct phases:
1. Preparation and Pre-Application Phase
2. Application and Review Phase
3. Pre-Contract Phase
4. Contract and Project Management Phase
5. Monitoring Phase
Based on the process mapping exercise conducted with Social Sustainability staff, three unique maps
were developed, and are included as Attachment A. These maps detail the steps required in each phase
of the Competitive Process for public services, public facilities, and housing projects.
While the Fort Collins City Council has ultimate decision making authority for the allocation of funds,
two citizen advisory boards assist the Council with the Competitive Process. Housing applications are
reviewed by the Affordable Housing Board, which prioritizes the applications and submits
recommendations to the CDBG Commission. The duties and functions of the Affordable Housing Board
are established by City ordinance and set forth in Sec. 2-83:7
1. To advise the City Council on all matters pertaining to affordable housing issues of concern to
the City;
2. To aid and guide the development of City-wide affordable housing programs to address
currently existing and potential affordable housing issues;
3. To promote citizen participation and public education on City-wide affordable housing issues;
4. To be aware of and coordinate with the various other City boards and commissions whose
actions may affect affordable housing in the community; and
5. To perform other such duties and functions and have other powers as provided by the City
Council.
The CDBG Commission reviews all Competitive Process applications and provides funding
recommendations to the City Council. The duties and functions of the CDBG Commission are
established by City ordinance as set forth in Sec. 2-183:8
1. To advise the City Council on matters pertaining to the Department of Housing and Urban
Development's Community Development Block Grant (CDBG) Program;
2. To promote the CDBG Program within the City with special attention to the three (3) low- and
moderate-income neighborhood strategy areas of Holy Family, Laurel School, and Buckingham,
Alta Vista and Andersonville (B.A.V.A.);
3. To assess the community development needs of low- and moderate-income individuals and
families and suggest programs to meet those needs;
4. To provide recommendations to the City Council concerning the expenditure of CDBG funds
received from the Department of Housing and Urban Development;
5. To perform such other duties and functions and have such other powers as may be provided by
ordinance of the City Council.
7 Ord. No. 84, 1993, 8-3-93
8 Ord. No. 98, 1990, § 3, 9-4-90
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Focus Group Summary
To solicit feedback about the Competitive Process in the City of Fort Collins, focus group sessions were
held with the CDBG Commission, the Affordable Housing Board, and representatives from the housing
and human services sector who were previous applicants of the City’s Competitive Process. The
following is a summary of several of the main themes from each focus group. Complete responses from
each session are included as Attachment B.
Housing and Human Services Agencies
What are you most appreciative of, regarding the Competitive Process?
Staff are great advisors; open, knowledgeable, helpful, almost co-writers; supportive
partnership
Staff truly want agencies to succeed
Iterative process is productive
Technical Assistance meetings are great for clarification and feedback
Consistent and efficient process with clear expectations
Additional City funding on top of CDBG funding is appreciated
Timeframe is manageable
Online application enables collaboration within agencies
What frustrates you about the Competitive Process?
Lack of flexibility in application process – inability to address new areas of need
Presentation format – five minutes is not enough time to present our information
City budget timeline is not the same as agency budget calendars
Reporting timelines are not flexible
CDBG Commission decisions appear subjective and arbitrary, with no clear criteria
Lack of information sharing at CDBG Commission meetings
CDBG Commission
What are you most appreciative of, regarding the Competitive Process?
Have a direct impact on the community; tangible results of Commission’s work
Feel like Commission’s time spent on the process is value-added
We have a voice, feel heard, and are appreciated
Staff does a great job of guiding us and the process, but they do not drive the decisions
What frustrates you about the Competitive Process?
Need to review the priorities of the City before making funding recommendations
More projects lead to less money for each project
Staff can overstep their role as advisors and be advocates; staff must be impartial
City is an applicant in the process; this is a conflict of interest
Need clarity in role definitions - staff, CDBG Commission, City Council
Page 8 City of Fort Collins
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Affordable Housing Board
What are you most appreciative of, regarding the Competitive Process?
Streamlined, efficient process
Allows for good decisions and face-to-face discussion
What frustrates you about the Competitive Process?
Lack of Q&A dialogue
Variety in quality of applications
Can be a disconnect with Council because of level of detail they receive
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Peer Jurisdiction Benchmarking
Informed comparisons of how other local governments operate can lead to operational improvements.
Municipalities often make use of new and different approaches which may evolve into best practices
that can be replicated in other settings. The Novak Consulting Group researched seven comparison local
governments, described below.
The City of Aurora, Colorado is a community of approximately 339,030 residents and spans 154.73
square miles in north-central Colorado. The City of Aurora is spread across Adams County, Arapahoe
County, and Douglas County. The Community Development Division, part of the City of Aurora’s
Neighborhood Services Department, is responsible for administering federal CDBG, HOME, and
Emergency Shelter Grant (ESG) funds. For FY 2014, the Division had a budget of $910,273 and 17.2 FTEs.
The City implements CDBG, HOME, and ESG projects in-house, soliciting applications when the project
cannot be completed by City departments.
The City of Boulder, Colorado is a community of approximately 101,808 residents and spans 24.66
square miles. The Funding, Compliance and Asset Management Division, part of the City of Boulder’s
Housing Department, is responsible for administering federal CDBG and HOME funds as well as local
Community Housing Assistance Program (CHAP), Affordable Housing Fund (AHF), and Human Services
Fund (HSF) monies. The City of Boulder is the lead agency for the Boulder, Broomfield Regional
Consortium which includes the Cities of Boulder, Longmont, Lafayette, Louisville, City/County of
Broomfield, Boulder County, Towns of Erie, Jamestown, Lyons, Nederland, Superior and Ward. The City
of Boulder administers its own HOME/CDBG programs in addition to the administration of HOME
programs in Broomfield and Boulder County. For FY 2014, the Division had 4.94 FTEs. Division-level
budget information was not available. The City has a formal process for selecting sub-recipients to
complete CDBG, HOME, CHAP, AHF, and HSF projects.
The City of Denver, Colorado is a community of approximately 634,265 residents and spans 153.00
square miles. The City and County of Denver are a consolidated government. The Housing and
Neighborhood Division, part of the City/County of Denver’s Office of Economic Development, is
responsible for administering federal funds, including, CDBG, HOME, Housing Opportunities for People
with AIDS (HOPWA), and ESG monies. For FY 2014, the Division had a budget of $20,344,129 and 32.50
FTEs. The City has a formal process for selecting sub-recipients to complete CDBG, HOME, HOPWA, and
ESG projects.
The City of Lakewood, Colorado is a community of approximately 145,516 residents and spans 42.88
square miles. The City of Lakewood is the most populous city in Jefferson County. The Comprehensive
Planning and Research Division, part of the City of Lakewood’s Planning Department, is responsible for
administering federal CDBG and HOME funds. Division-level budget and staffing information was not
available. 2012 was the final year that the City of Lakewood received HOME funding directly from HUD.
In an effort to increase efficiency and address affordable housing issues on a regional level, Lakewood
joined the Jefferson County HOME Consortium. The City implements CDBG and HOME projects in-
house, soliciting applications when the project cannot be completed by City departments.
The City of Loveland, Colorado is a community of approximately 70,223 residents and spans 33.59
square miles. The City is located in Larimer County. The Community Partnership Office, a division of the
City of Loveland’s Development Services Department, is responsible for administering federal CDBG
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funds as well as local Human Services Grant funds. For FY 2014, the Division has a budget of $658,320
and 2.0 FTEs. The City has a formal process for selecting sub-recipients to complete CDBG projects.
Douglas County, Colorado is a community of approximately 298,215 residents and spans 840.25 square
miles. The Community Services Section, a division of the Douglas County Department of Community
Development, is responsible for administering federal CDBG and HOME funds. For FY 2014, the Section
had a total budget of $2,138,439 and 3.0 FTEs. The County has a formal process for selecting sub-
recipients to complete CDBG projects.
Jefferson County, Colorado is a community of approximately 545,358 residents and spans 764.21
square miles. The Community Development Division, part of Jefferson County’s Human Services
Department, is responsible for administering federal CDBG, HOME, Community Services Block Grant
(CSBG), and Neighborhood Stabilization Program (NSP) funds. In FY 2014, the Division had a total
budget of $2,066,481 and 4.0 FTEs. The County has a formal process for selecting sub-recipients to
complete CDBG, HOME, CSBG, and NSP projects.
Figure 3. Map of Benchmark Cities and Counties
Basic demographic information of the comparison cities and counties is summarized and contrasted
against the City of Fort Collins in the following table. Demographic and income data are from the
Census Bureau. Douglas County and the City of Loveland had the highest population growth rates, with
the City of Fort Collins having the third highest growth rate of the comparison jurisdictions. The City of
Fort Collins also had the third highest percentage of persons below poverty level, following the cities of
Boulder and Denver. The median household income in the City of Fort Collins is less than the average of
the comparison jurisdictions.
Denver
Loveland
Fort Collins
DOUGLAS
COUNTY
Lakewood
Boulder
JEFFERSON
COUNTY
Aurora
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Table 3: Demographics of Benchmark Jurisdictions
Jurisdiction 2012 Population
Estimate
Population
Growth Rate
Median Household
Income
Persons Below
Poverty Level
City of Fort Collins 148,612 25.3% $53,359 18.1%
City of Aurora 339,030 22.7% $51,048 16.2%
City of Boulder 101,808 7.5% $56,206 21.6%
City of Denver 634,265 14.4% $49,091 18.9%
City of Lakewood 145,516 1.0% $55,093 12.7%
City of Loveland 70,223 38.8% $55,838 9.4%
Douglas County 298,215 69.7% $101,108 4.0%
Jefferson County 545,358 3.5% $68,748 8.6%
Comparison data for the benchmark cities are summarized in the following table. Specific budget data
are from the peer communities’ FY 2014 budgets. Additional data are derived from each peer
communities’ Comprehensive Annual Performance Evaluation Report (CAPER) and from conversations
with comparison jurisdiction staff.
Table 4: Comparison Statistics of Benchmark Jurisdictions
Jurisdiction Total Division Budget Division FTEs Applications
per Cycle
City of Fort Collins $1,099,001 5.0 5-46
City of Aurora $910,273 17.2 N/A
City of Boulder Data not available 4.94 45-50
City of Denver $20,344,129 32.5 100
City of Lakewood Data not available Data not available N/A
City of Loveland $658,320 2.0 23
Douglas County $2,138,439 3.0 15-18
Jefferson County $2,066,481 4.0 13
Funding
All of the comparison jurisdictions receive CDBG funding and all, except the City of Loveland, receive
HOME funding. The cities of Fort Collins, Boulder, and Loveland include city funds for disbursement
along with federal monies. The following table shows the different types of funding available in each
jurisdiction.
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Table 5: Federal and Local Funds Used in Benchmark Jurisdictions
CDBG HOME HOPWA ESG CSBG NSP Local Funds
City of Fort Collins X X X X X
City of Aurora X X X
City of Boulder X X X
City of Denver X X X X
City of Lakewood X X
City of Loveland X X
Douglas County X X
Jefferson County X X X X
All comparison jurisdictions estimate the amount of federal funding they will receive until they have
final numbers from HUD. Communities tend to assume a 5% to 10% decrease in funding each year.
Several jurisdictions acknowledged that CDBG funds are key to leveraging other public and private
resources to address community needs. Organizations can leverage federal funding to secure state
housing funds, local foundation dollars, and private sources of funding. The City of Loveland tracks its
leveraging performance. For example, according to the City’s 2012/2013 CAPER, $450,000 of funding
contributed to the grant process by the City leveraged approximately $18.6 million in additional funding;
$253,362 of CDBG funds resulted in an additional $3,255,812 in other Federal/State, United Way, and
Other/Donation funds for a total of $3,509,174.
Process
While all organizations receiving federal CDBG and HOME money must abide by strict HUD regulations,
room for flexibility remains in the process. As a result, none of the comparison jurisdictions processes
are exactly alike. Given this variability, different phases of the process will be discussed in turn.
Number of Funding Cycles and Cycle Timing
Similar to the City of Fort Collins, the City of Boulder has two funding processes, one for housing projects
and one for CDBG projects. The housing process begins in June, and the CDBG process begins in July.
The City of Loveland, Jefferson County, and Douglas County accept applications once per year. The City
of Denver has historically only accepted applications once per year, but decided to implement a second
funding cycle for public facilities projects only. While the City of Aurora completes many projects in-
house, it accepts CDBG funding applications for projects the City intends to contract out once per year
and then accepts HOME funding applications on a rolling basis.
The Cities of Fort Collins and Loveland are the only comparison jurisdictions that have application
deadlines in January. Applications are due to the City of Denver in August, Douglas County in
November, and Jefferson County in October. Applications are due to the City of Boulder in July for
housing projects and September for other projects. Staff in comparison organizations with summer and
fall deadlines spend the spring months drafting their Annual Action Plans and CAPERs, which are both
required by HUD.
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Pre-Application Phase
The comparison jurisdictions require a letter of intent, including an estimate of the amount requested,
from each applicant in order to confirm eligibility with HUD’s strict requirements. The City of Loveland
does not vet public service applicants because most of the money for public services projects comes
from the City and is therefore not subject to HUD eligibility requirements.
Technical Assistance
Technical Assistance takes a different form in the comparison communities than it does in the City of
Fort Collins. Most comparison jurisdictions host an optional pre-application training or “Q&A” meeting,
often before the applications are available. None of the comparison jurisdictions provide the one-on-
one guidance the City of Fort Collins provides. Instead, staff from comparison jurisdictions are available
to answer applicant questions until the application deadline. The City of Loveland hosts three meetings,
one for housing applicants and two for public services applicants. The City’s Grant Guide is distributed
in advance of meetings and meeting time is spent reviewing estimated funding available, applications
instructions, and other related information. Applicants are encouraged to ask questions and staff
answers questions in the group meetings; staff does not provide feedback on applications or provide
individual assistance to applicants.
Application Process
Once an applicant is deemed eligible based upon their letter of intent, applications are made available.
Unlike the City of Fort Collins, the comparison communities do not provide individual guidance on
applications. Instead they only answer applicant questions.
All comparison jurisdictions have staff review and rank applications first. The Cities of Fort Collins,
Loveland, and Denver have adopted ranking matrices to assist in the ranking of applications. However,
since priorities differ from community to community, so do the weights assigned to each element.
Douglas County developed a Microsoft® Excel® evaluation tool that staff and Board members use to
rank applicants.
Decision-Making Process
Among the comparison jurisdictions, the most common decision-making model involves a citizen
advisory board reviewing applications and submitting recommendations to the final decision-making
authority. The City of Denver is the only jurisdiction that does not involve a citizen advisory committee
in the decision process. In Denver, the Mayor makes the final funding decision. City staff rank
applications, then the Director of the Office of Economic Development develops recommendations that
are submitted to the Mayor for final decision.
In Jefferson County, the Community Development Advisory Board reviews applications and makes
recommendations to the Jefferson County Board of County Commissioners. In Douglas County, the
CDBG Advisory Board reviews applications and makes recommendations to the Douglas County Board of
County Commissioners. Despite the fact that the City of Aurora completes most projects in-house, the
City still has a Housing and Community Development Board that reviews all project proposals and then
submits recommendations to the City Council.
Page 14 City of Fort Collins
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The City of Loveland’s decision process is quite similar, but instead has two citizen commissions that
review different types of projects. The Human Services Commission advises the City Council on the
allocation of funds for projects that meet the goals established in the Five-Year Consolidated Plan. The
Affordable Housing Commission reviews all "bricks and mortar" grant applications made to the City for
CDBG funds related to housing, hears presentations from applicant agencies, and makes
recommendations to the City Council. To help the Human Services Commission connect with applicants
and make informed decisions, the Commission visits two applicants each year on a rotating basis. From
the visits, all the questions asked and materials distributed are compiled into a book and every member
receives a copy. New commission members are given copies of past books as part of their onboarding.
The City of Boulder’s process is unique as the City Manager makes the final funding decision. However,
the Community Development Advisory Committee still hears applicant presentations, reviews
applications, and develops recommendations.
Contract and Monitoring Phases
The contract and monitoring phases of the process result in fewer variations than the other phases
because so many of the activities in these phases are in place to meet HUD requirements. Many of the
comparison jurisdictions use the risk assessment provided by HUD to determine the recommended level
of monitoring and structure their monitoring based on the recommendation.
The comparison jurisdictions do not report any issues when it comes to the perception of their
processes. However, the City of Loveland was the only jurisdiction that formally surveyed agencies to
receive input on how to improve the process.
Douglas County is unique as County staff hosts a project management workshop before the contracts
are signed. This is viewed by the County and the sub-recipients as being very helpful. County staff
believes this leads to fewer issues later in the process. Douglas County also makes templates available
to agencies to assist in meeting reporting requirements. For example, County staff created a
spreadsheet for applicants to enter drawdowns, client statistics, and other information that must be
reported at project closeout. The spreadsheet includes a summary sheet with embedded formulas so
that quarterly information can be easily aggregated for the required annual report or project closeout
report.
The following table summarizes the practices in place in the comparison communities.
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Table 6: Summary of Practices Used in Benchmark Jurisdictions
Funding Cycles
(and Timing) Pre-Application
Technical
Assistance (TA) Application Decision-Making
Contract and
Monitoring
City of
Fort Collins
2 cycles (spring
and fall)
Pre-application Individual TA
meetings
- Staff evaluate first
- Ranking matrix
used
- Affordable Housing Board submits
recommendations to the CDBG
Commission
- CDBG Commission submits
recommendations to City Council
N/A
City of
Aurora
N/A N/A N/A N/A Housing and Community
Development Board submits
recommendations to City Council
N/A
City of
Boulder
2 cycles (Housing
in June and CDBG
in July)
Letter of intent Available for
questions
- Staff evaluate first
- City Manager
submits
recommendations
to the City Council
Community Development Advisory
Board submits recommendations to
City Council
HUD Risk
Assessment
City of
Denver
2 cycles (added an
additional Public
Facilities cycle this
year)
None 2 optional group
meetings
- Staff evaluate first
- Ranking matrix
used
Page 16 City of Fort Collins
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Process Improvement Recommendations
The improvement recommendations relative to the City’s Competitive Process have been categorized in
the following topic areas: strategic priorities; process improvements; and roles and responsibilities.
Strategic Priorities
RECOMMENDATION 1: Work with the City Council to articulate priorities for Competitive Process
funding.
The focus of the City of Fort Collins’ Social Sustainability efforts is to provide funding to housing and
human service agencies to meet the needs of low and moderate income citizens. The City also works to
develop and implement policies that promote and support self-sufficiency for low-income citizens. A
Gap Analysis is currently being conducted by an outside consultant to identify the human services needs
in the community and how the City should be involved in closing those gaps. While the Gap Analysis is
still in draft form, it is clear that many needs exist throughout a variety of sectors in the community.
The number of applications submitted each funding cycle through the Competitive Process has
continued to increase. In 2008, 36 applications were received through both funding cycles (spring and
fall). This number has steadily risen since then; 55 applications were received in 2013. While not all
requests are funded, the majority of them are, either wholly or in part, and many represent repeat sub-
recipients. However, as evidenced by Figure 2, the amount of funding available through the Competitive
Process has not kept pace with the number of applications received and funding requested.
Feedback from agencies as well as other stakeholders of the Competitive Process suggests a lack of
strategic direction regarding funding priorities. While each application is reviewed on its merits,
applications are not assessed for alignment with articulated community priorities that are established by
the City Council. As the number of applications continues to increase, determining where the City
should focus its limited resources is critical. The Gap Analysis and subsequent Social Sustainability
Strategic Plan presents an important opportunity to establish clear priorities for the Competitive
Process. These priorities would represent strategic policy direction from the City Council and provide
clarity for staff, the CDBG Commission, the Affordable Housing Board, and agencies on what
measureable outcomes the City expects.
Developing priorities, and only funding projects that align with those priorities, will most likely result in
fewer approved projects each cycle. It is recommended that the City reduce the number of federally
funded projects each cycle. HUD has provided guidance regarding sub-recipients and advises that only
five federally funded projects should be managed at any given time. Further, HUD advises against
managing more than 15 federally funded projects in order to maintain proper oversight.
Additionally, HUD recommends a focused approach to the allocation of funds. While the focus may
change, the priority should be maintained for several years in order to have impact in a community.
CDBG and HOME funds are not intended to be used to sustain agencies, but rather provide initial
assistance while the agencies develop their financial infrastructure. Using these funds for ongoing
operations, particularly on a multi-year basis, is discouraged.
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Process Improvements
RECOMMENDATION 2: Separate all affordable housing projects from the Competitive Process.
Currently the City accepts applications for affordable housing projects during both the spring and fall
Competitive Process cycles. Prior to 2000, funding was awarded annually. In part to accommodate
housing projects, an additional cycle was added, thus allowing housing projects two opportunities each
year to request funding.
The Affordable Housing Board plays a critical role in the evaluation of these housing projects. All
housing-related applications are reviewed by the Affordable Housing Board and assessed against the
priorities that have been established in the Affordable Housing Strategic Plan 2010-2014:
Increase the inventory of affordable rental housing units
Preserve existing affordable housing units
Increase housing and facilities for people with special needs
Provide financial assistance for first-time home buyers
Recommendations from the Affordable Housing Board are forwarded to the CDBG Commission for
consideration, as it deliberates on all applications received through the Competitive Process. Because of
the Affordable Housing Board’s focused scope of work and expertise relative to housing, the CDBG
Commission places great value in the recommendations it receives. According to staff and the CDBG
Commission, recommendations from the Affordable Housing Board are rarely modified by the
Commission.
In reality, affordable housing projects are often very complex, requiring multiple funding sources,
underwriting, and often environmental impact assessments. These projects also have very different
timelines, especially when compared to other types of projects that are subject to the Competitive
Process. Under the City’s current process, CDBG or HOME funding is approved for a project by the City
before the underwriting process takes place. In some instances, projects do not successfully complete
the underwriting process and therefore are either cancelled or delayed. In the meantime, however, the
funding that has been allocated to the cancelled or delayed projects remained committed and
unavailable for other projects that may be further along in the process.
As a result of the substantial review affordable housing projects already receive and the complexity of
these projects, it is recommended that they be separated from the Competitive Process. Under this
proposal, applications for affordable housing projects would be submitted and reviewed on a revolving
basis as they are received – and as a project is ready for funding. The Affordable Housing Board would
continue to review applications as they do now, but recommendations would be forwarded directly to
the City Council for review and approval.
RECOMMENDATION 3: Consider using City funds only to fund public service and public facilities
projects.
The City currently utilizes both City and federal sources to fund public service projects. Public facility
projects have typically been funded with CDBG money; however, public facility projects have only been
funded when additional CDBG money is available, which is not often. There are currently 10 public
facilities projects that are being managed by City staff, eight of which are several years old.
Page 18 City of Fort Collins
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Any sub-recipient of federal funds is subject to the strict eligibility and reporting requirements
established and monitored by HUD. According to HUD, it is not advisable to co-mingle funds.
Separating the funding and only funding public service and public facilities projects with City funds
would provide the City with greater flexibility in addressing its own sustainability priorities. It would also
reduce the staff time currently dedicated to compliance monitoring.
RECOMMENDATION 4: Eliminate the Pre Application Phase.
All Competitive Process applicants are required to complete a pre application. Like the application
process itself, this is administered online through ZoomGrants™. The purpose of the pre application is
to determine applicant eligibility prior to the completion of the formal application.
According to agencies who participated in the focus group, they view this phase as a duplicative step in
the process. The questions that are asked at the pre application phase are different than those asked at
the application phase. Often applicants do not have their proposal fully vetted at the time of pre
application and changes occur with the project after the pre application is submitted.
Additionally, staff acknowledge that very few applications are actually rejected at the pre application
phase for ineligibility. Staff provides information to all potential applicants regarding eligibility
requirements at the beginning of the cycle. Already limited staff time should not be spent on this
cursory review. Rather, the onus should be on the applicant to review the requirements and seek
additional information if needed to determine eligibility.
RECOMMENDATION 5: Make the Technical Assistance meetings optional.
Once applications are submitted to the City, all applicants are required to schedule and attend a one-
hour Technical Assistance meeting with City staff. The purpose of these individual meetings is to review
the application procedures and address any questions of the applicant. Additionally, staff remains
available to answer questions and assist applicants throughout the process after the Technical
Assistance meeting. Given the number of applications received each cycle, these meetings consume a
significant amount of staff time – up to 46 hours, depending upon the number of applications received.
Agencies who participated in the focus group provided very positive feedback about the Technical
Assistance meetings. They find these meetings to be instructive, as staff provides guidance that they use
in developing their applications. According to the agencies, there is often little feedback that the
agencies receive during the Deliberation Meeting with the CDBG Commission. As a result, they rely on
staff’s knowledge of the Commission to help them develop a more favorable application.
As evidenced in the benchmark research, the Technical Assistance process in Fort Collins is unique.
However, these meetings represent significant staff resources that could be applied elsewhere.
Therefore, it is recommended that, at a minimum, Technical Assistance meetings should be optional for
applicants and limited to a shorter time (thirty minutes per meeting) to reduce the impact on staff. As
stated previously, the onus should be on the applicant to develop a compelling application, which meets
established criteria and is in alignment with City priorities.
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RECOMMENDATION 6: Develop a mechanism for evaluating the effectiveness of funding decisions.
As described previously, the purpose of the City’s allocation of funding is to enhance the community's
sustainability by addressing the needs of income-challenged citizens. In order to evaluate the City’s
impact, it is necessary to develop a mechanism to determine the results of the funding decisions.
All sub-recipients are required to submit routine reports and are subject to monitoring by City staff to
ensure compliance. However, there is no robust process in place to evaluate a sub-recipient’s
effectiveness in the community.
Staff maintains regular contact with sub-recipients throughout the year. However, the CDBG
Commission members only receive information about the project at the time of application review; a
five minute presentation by the applicant to describe their work and their request. If a significant issue
arises with a sub-recipient during the year, staff may bring it to the attention of the Commission.
The CDBG Commission should utilize its monthly meetings outside of the funding cycle to meet with and
receive information about the agencies and the projects funded by the City. This will allow the
Commission to evaluate the effectiveness and impact of their funding decisions and be more informed
when additional projects are presented in the next funding cycle. Reducing the number of sub-
recipients and modifying the Competitive Process to only include one cycle allows additional time for
the CDBG Commission to complete this work.
Staff must also be an active participant in this review process. They have significant interaction with the
sub-recipients throughout the year and maintain a large body of knowledge about the agencies and
their projects. Currently use of staff’s expertise is limited to ranking recommendations during the
review phase, which is not the best use of their knowledge.
RECOMMENDATION 7: Review contract monitoring and reporting processes to ensure compliance.
In 2012, the City’s internal audit identified process issues with regard to the reporting of program
income and other contract reporting procedures. While the City has taken steps to address these issues,
it is important for the City to ensure appropriate policies and procedures are in place. Additional study
of the City’s contract monitoring and reporting procedures is warranted to prevent future findings.
Roles and Responsibilities
RECOMMENDATION 8: Review and modify the name and charge of the CDBG Commission.
The City Clerk is currently in the process of leading an effort to review all City of Fort Collins boards and
commissions; included in that review is the CDBG Commission. Given the recommended changes
outlined in this report, it is appropriate to review the charge of the Commission and give consideration
to modifying its name. The CDBG Commission does not solely recommend allocation of the City’s CDBG
funds. The scope of the Commission is broader and its name and charge should more accurately reflect
the work of the Commission.
Page 20 City of Fort Collins
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RECOMMENDATION 9: Clarify the role of Social Sustainability staff in the Competitive Process; remove
requests for City staff funding from the Competitive Process.
Due to budget constraints in recent years, Social Sustainability staff has had to request funding for staff
positions through the Competitive Process. The CDBG Commission has no practical choice but to
recommend funding the staff positions; as such, the City’s application is not necessarily on an even
playing field with outside providers. Staff is currently working on a solution to this funding issue, which
is being proposed by staff in the current City budget process. Should it be necessary to use HUD funding
to supplement City staff, these allocations should not be subject to the Competitive Process. It is not
appropriate for staff funding to compete with community–based public service, public facility, and
affordable housing projects.
Additionally, the role of Social Sustainability staff in the Completive Process should be clarified. During
the focus group sessions, agencies described a very positive, supportive relationship with City staff.
While developing productive working relationships among staff and the housing and human services
community is essential, balance must be maintained to ensure fair and equal treatment of agencies and
the most effective and efficient use limited staff time.
City of Fort Collins Page 21
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Conclusion
The Novak Consulting Group’s documentation and review of the Competitive Process in the City of Fort
Collins resulted in a number of recommendations to streamline and improve the effectiveness of the
process. The Competitive Process serves a vital need in the Fort Collins community. The
recommendations contained in this report are intended to help the City more effectively utilize its
funding to result in greater community impact. Focusing the efforts of staff on the most value-added
activities will also increase productivity.
The commitment demonstrated by the staff and stakeholders who participated in this review indicates
strong potential for successful implementation of these findings and recommendations.
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Attachment A –
Fort Collins Competitive Process Existing Process Maps
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The Novak Consulting Group
Strengthening organizations from the inside out.
The Novak Consulting Group
Strengthening organizations from the inside out.
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Strengthening organizations from the inside out.
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Attachment B – Focus Group Information
Housing and Human Services Agencies
1. List 3 words to describe your experience with the Competitive Process.
Collaborative Individualized Random Supportive
Stressful Non-Politicized Communicative Open
Repetitive Consistent Straightforward Not Conducive to Creativity
Customer-Friendly Helpful Efficient Opportunity to Educate Board
Biased Narrow Focus Easy Short
Concise Friendly Cumbersome Critical for Community
Complex Subjective Unorganized Regulatory
2. What are you most appreciative of, regarding the Competitive Process?
Staff are great advisors - open, knowledgeable, helpful, almost co-writers
Technical Assistance meetings are great for clarification and feedback
Communication
Supportive partnership
Consistency
Questions from the Commission
Extra funding provided by the City on top of CDBG funding
Timeframe is manageable
Clear expectations
Online application enables collaboration within agencies
Iterative process with staff is productive
It is efficient
Staff truly want agencies to succeed
3. What frustrates you about the Competitive Process?
Reporting timeline
Presentation format – 5 minutes is not enough time
Lack of flexibility in application process – inability to address new areas of need
Budget timeline is not the same as agency budget calendars
Randomness of CDBG Commission decisions
Lack of information sharing at Commission meetings
Subjective and arbitrary – no clear criteria
Adversarial nature of the process
Multiple budgets unnecessary
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4. Describe your experience (comments or concerns) with each phase of the Competitive Process?
Phase Comment/Concern
Pre Application What’s the purpose? Seems to be a rubber stamp
Feels like a mini-grant
Can repeat agencies be exempt?
Helpful conversation
Simple, online, quick response
Don’t know exact amount of funding necessary at this point.
Submitting a range would be easier.
Duplication – changes during application phase result in need to
update pre-application
Technical Assistance Helpful
Rare
Receive feedback to create better application
Staff care – want agencies to be successful
Provides context for both sides
Relationship-based process
Fair and supportive
Staff have knowledge from pre-application about overall requests
and give strategic advice
Opportunity to test ideas/projects
Application Online is helpful
Budget still needs improvement
o Difficult to fit information into predefined categories
o Improved from last year
Need for multiple budgets not clear (Housing only) – would prefer to
submit only operating and project budgets
ZoomGrants offers no opportunity to format application
Some documents required on ZoomGrants are not required by City
ZoomGrants provides good support
Questions 1, 2, and 4 should be emphasized early because time
consuming
Presentation/Deliberation Commission doesn’t do site visits – feels removed
Good to give Commission packets/additional information
Sterile, no interaction, impersonal, no relationship
Questions in advance would be effective
Commission is well prepared and asks good questions
Not clear if staff has the opportunity to correct
misinformation/answer question from the Commission
Presentation feedback would be helpful
Public Comment/City
Council Decision
Sterile
Random
Transparency in process is critical – required by nonprofits but no
reciprocated in the process
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Phase Comment/Concern
Scoring sheet could be helpful
Not always clear what happens between CDBG Commission
deliberations and City Council meeting
Would be helpful to understand goals/priorities and how decisions
are made
Hard for agencies to see screen
Contract/Monitoring More flexibility in terms of when agencies can request to drawdown
funding
Having examples in reporting requirements was very helpful
Consistency of reporting is appreciated
Like the addition of single father family category
Good drawdown response time
Staff is nonjudgmental when there are mistakes
Gentle nudges when a deadline has passed are appreciated
This phase is a strength of City staff
Good timeline – contract signed far enough in advance of deadline
5. Any other comments or suggestions regarding the Competitive Process?
Video from each agency
o Only as a supplement to the presentation which is a relationship building opportunity
o Should be an opportunity for all agencies
Enough money to fund all requests in full
Is the process effective for Council?
Colorado Division of Housing assigns each applicant a dedicated staff person and much more
interactive process
Estimate available funds and communicate whether funding is expected to increase or decrease
Host presentations by funded agencies and feature agencies in City publications
“What will you do if you don’t get money?”
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CDBG Commission
1. List 3 words to describe your experience with the Competitive Process.
Arduous Adversarial Entitlement Hard decisions
Grueling Scrutiny Random Not enough $ to do
what is needed
Unbalanced Inequitable Doesn’t fit in a master
plan
Satisfying
2. What are you most appreciative of, regarding the Competitive Process?
Have a direct impact on the community
Can see the tangible results of our work
CDBG members do their job
o Intense study and consideration
o Openness for discussion
o Dedicated, caring members
Feel like our time spent on the process is value-added; we are not wasting our time
We have a voice, feel heard, and are appreciated
Staff goes a great job of guiding us and the process, but they do not drive the decisions
Appreciate the time the staff puts into the process
3. What frustrates you about the Competitive Process?
Staff can overstep their role as advisors and be advocates
City is an applicant in the Competitive Process – this is a conflict of interest as the City competes
with the agencies
o Staffing decisions for City staff should be removed from the Competitive Process
Need clarity in role definitions
o Staff, CDBG Commission, City Council
o Staff need to be impartial
Fort Collins Housing Authority has an unfair advantage over other agencies since they do not
pay all City fees and they have a City Councilmember on their board
Since United Way changed their funding process, the City has seen an increase in the number of
applicants (especially new applicants) and there is no additional funding to assist these agencies
o More projects lead to less money for each project
Need to review the priorities of the City before making funding recommendations
o Would be helpful to have someone (i.e. City Manager/Deputy City Manager) meet with
the CDBG Commission to review the City’s priorities
Economic development requests are not a priority; many other more important projects to fund
first
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4. Describe your experience (comments or concerns) with each phase of the Competitive Process?
Phase Comment/Concern
Pre Application None
Technical Assistance Helpful meeting
Staff helps applicants make presentable application
Staff is not biased
Staff is able to communicate to applicants the information that will
be helpful to CDBG Commission
Fair process since everyone has to go through it and has the
opportunity to benefit from staff’s knowledge of the Commission
and the process
Application Zoom Grants is a good system
Presentation/Deliberation Having applicants prepare a video presentation for CDBG
Commission to view before the meetings will hopefully allow for
more targeting and effective Q&A at the CDBG Commission meeting
Affordable Housing Board reviews the applications and makes
recommendations regarding affordable housing projects to the
CDBG Commission before the agencies present
At deliberation, each Commissioner comes to meeting with their
own ideas/priorities; by motion, each application is reviewed and
voted on; develop a balanced set of recommendations by end of
meeting
Agencies receive feedback about their presentation/application at
the deliberation meeting and through Q&A via staff prior to the
meeting
Public Comment/City
Council Decision
CDBG Commission member present at City Council to answer
questions if needed
There is a need to balance transparency and Commissioner’s need
for information about the agencies
Contract/Monitoring Changes to projects/funding are presented to the CDBG Commission
as needed
5. Any other comments or suggestions regarding the Competitive Process?
A glossary of City terms would be helpful
More money for projects
Agencies should watch/attend the deliberation meetings to better understand the process, and
the thought that goes into our recommendations
Defining the Council Liaison role would be helpful
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Affordable Housing Board
1. List 3 words to describe your experience with the Competitive Process.
RFP Council insight Priorities Outcomes
Proposals Process Process Competitive advantage
Not enough funds Scarcity Big firms Non-competitive small projects
Cheapest/lowest bidder Disagreement
2. What are you most appreciative of, regarding the Competitive Process?
Streamlined, efficient process
Only twice per year
Allows for good decisions
Face-to-face discussion
3. What frustrates you about the Competitive Process?
Lack of Q&A dialogue
Variety in quality of applications
In a perfect world all applications are polished, quality variance
Can be a disconnect with Council because of level of detail they receive
4. Describe your experience (comments or concerns) with each phase of the Competitive Process?
Phase Comment/Concern
Pre Application No comments
Technical Assistance Surprised there is a Technical Assistance program, with the quality
of some of the applications
Application Difference between frequent applicants and first-time applicants
Awkward questions that don’t always apply to every project
Presentation/Deliberation Review applications on ZoomGrants
Board has special meeting to develop ranking based on City’s four
priorities
Make recommendations to CDBG Commission
Seeing presentations will be helpful.
Visuals in ZoomGrants would be helpful
Public Comment/City
Council Decision
No comments
Contract/Monitoring Applicants that return for additional assistance
5. Any other comments or suggestions regarding the Competitive Process?
A one-page overview of the process would be helpful for new Board members
DRAFT
City of Fort Collins
Office of Social Sustainability
Affordable Housing Program
& Underwriting Guidelines
September 2014
City of Fort Collins (logo)
September 2014 2
Affordable Housing Program & Underwriting
Guidelines
Table of Contents
MISSION STATEMENT …………………………………………………………………………………………………….……….3
INTRODUCTION ………………………………………………………………………………………………………….…………….3
DEFINITIONS ……………………………………………………………………………………………………………….………..….4
DISCLAIMERS ……………………………………………………………………………………………………………….……….….8
FEDERAL AND OTHER REGULATIONS ………………………………………………………………….………………...…9
ELIGIBILITY .................................................................................................................................. 144
GENERAL PROJECT REQUIREMENTS .......................................................................................... 156
AFFORDABILITY REQUIREMENTS ................................................................................................. 18
UNDERWRITING GUIDELINES..................................................................................................... 201
SITE SELECTION AND NEIGHBORHOOD COMPATIBILITY .......................................................... 227
DEVELOPMENT REQUIREMENTS ................................................................................................. 30
CONSTRUCTION REQUIREMENTS …………………………………………………………………………………..………32
MONITORING …………………………………………………………………………………………………………………………33
APPLICATION SUBMISSION AND REQUIREMENTS ……………………………………………………..………….34
FY2014-2015 HOUSING FUNDING PRIORITIES .......................................................................... 346
City of Fort Collins (logo)
September 2014 3
Affordable Housing Program & Underwriting
Guidelines
MISSION STATEMENT (?)
INTRODUCTION
The City of Fort Collins Office of Social Sustainability (“City”) administers federal funds
received from the US Department of Housing and Urban Development (HUD),
supplemented by locally-generated financial resources. Through HUD the City receives
funding under the Community Development Block Grant Program (CDBG) and the HOME
Investment Partnerships Program (HOME). Through the City’s General Fund, the Affordable
Housing Fund (AHF) may be available as resources allow. The City utilizes the funds to
preserve neighborhoods, create and preserve affordable housing and stimulate economic
revitalization in accordance with its 5-year Consolidated Plan.
Purpose
The purpose of the Affordable Housing Program & Underwriting Guidelines is to identify the
City’s affordable housing policy objectives, describe the activities available to advance the
objectives and the manner in which the activities will be evaluated, selected for funding and
underwritten. The guidelines are intended to achieve compliance with federal, state and
local regulations and set the standards for all affordable housing projects funded by the
City, regardless of funding source.
The City strives to provide excellent customer service and support to non-profit, for-profit
and quasi-public entities to identify housing needs within the community, deliver critical
resources that promote vibrant and diverse economic conditions, and evaluate the
effectiveness of public investment in residential development that targets extremely low to
low-income households.
Policy Objectives
The City’s 2010-2014 Consolidated Housing & Community Development Plan, Affordable
Housing Plan, and associated Annual Action Plans establish the policy objectives for the
Housing Program. To receive federal funding under the abovementioned programs, HUD
requires the City submit a five-year Consolidated Plan, which describes the City’s priorities
and objectives for each funding source. Additionally, the City must submit an Annual Action
Plan for each year of the Consolidated Plan. The Annual Action Plan identifies the activities
City of Fort Collins (logo)
September 2014 4
Affordable Housing Program & Underwriting
Guidelines
that will be funded during each fiscal year and the amount of funding allocated to each
activity.
As further described within the 2010-2014 Consolidated Plan, City’s housing policy
objectives include:
1. Increase the inventory of affordable rental units through the production of new
rental units, or the acquisition and rehabilitation of former market rate units,
converting them to affordable housing.
2. Preserve affordable housing units by monitoring the status of existing affordable
units to maintain or add to the inventory.
3. Increase housing and facilities for people with special needs.
4. Provide financial assistance for first-time homebuyers.
5. Provide support and assistance to agencies and organizations that provide
permanent supportive housing.
6. Provide funding to projects that address housing and supportive service needs for
the elderly, persons with disabilities, at-risk/endangered teens and young adults,
victims of domestic violence, persons with mental illness and/or substance abuse
issues, and persons with HIV/AIDS and their families.
DEFINITIONS
The following terms are defined for the purpose of this document:
Accessible – as defined by Section 504 of the Rehabilitation Act of 1973, accessible dwelling
units or facilities are located on an accessible route and can be approached, entered and
used by individuals with physical disabilities.
Adaptable units – certain elements of a dwelling unit or facility can be added to, raised,
lowered or altered to accommodate the needs of individuals with disabilities, or to
accommodate the needs of persons with different types or degrees of disability.
Adjusted Income –Gross household income limit that has been modified according to the
number of persons residing within a dwelling unit.
Affordable Housing – In general, housing for which the occupant(s) is/are paying no more
than 30 percent of his or her income for gross housing costs, including utilities.
[http://www.huduser.org/portal/glossary/glossary_a.html]
AMI – Area Median Income
City of Fort Collins (logo)
September 2014 5
Affordable Housing Program & Underwriting
Guidelines
Community Housing and Development Organization (CHDO) - A type of non-profit,
community based service organization that has, as part of its mission, the development of
affordable housing for low- and moderate-income households. HUD requires the
organization to meet certain requirements to be classified as a CHDO. See CHDO application
for more information.
Capital Needs Assessment – rehabilitation activities required to bring a building(s) up to
date with Property Rehabilitation Standards (PRS) or Uniform Physical Condition
Standards and other standards as required by HUD.
City – City of Fort Collins, Colorado
Debt Coverage Ratio (DCR) – the ratio of net operating income (NOI) to total debt service
(DS) during a given time period (DCR = NOI ÷ DS).
Debt Service – Required minimum monthly loan payment of principal and interest.
Department – City of Fort Collins Department of Social Sustainability
Disability –Any person who has a physical or mental impairment that substantially limits one
or more major life activities; has a record of such impairment; or is regarded as
having such an impairment.
Eligible Costs – projects costs that can be paid with program funds. Costs include, but are
not limited to, costs or partial costs of acquisition, verifiable hard construction costs,
reasonable soft costs, architectural and engineering fees, surveys, market studies,
legal fee and materials testing.
Extremely Low Income – Households whose income is less than 30% of the median income
for Larimer County, as determined by HUD, with adjustments for smaller or larger
families.
Fair Market Rents – Rental rates established by HUD as fair, affordable and appropriate
rents for a geographical area. Fair Market Rents apply to CDBG funded projects and
are revised periodically.
HOME Rent – Rental rates established by HUD as fair, affordable and appropriate rents for a
geographical area. HOME Rents apply to HOME funded projects and are revised
periodically by HUD.
Homeless and Chronically Homeless – as defined in The Homeless Emergency Assistance
and Rapid Transition to Housing Act of 2009 (HEARTH Act) (24 CFR 578.3).
City of Fort Collins (logo)
September 2014 6
Affordable Housing Program & Underwriting
Guidelines
Household – All persons who occupy a housing unit. The occupants may be a single family,
one person living alone, two or more families living together, or any other group of
related or unrelated persons who share living arrangements (24 CFR 570.3).
HUD – U.S. Department of Housing and Urban Development
Income – All reference to “Income” shall mean the “Part 5” HUD definition of income.
Low Income – Households whose incomes are between 51% and 80% of the median income
for Larimer County, as determined by HUD, with adjustments for smaller or larger
families..
LMI – Low- and moderate-income. Generally defined as a household whose income does
not exceed 80% of the median income for Larimer County, as determined by HUD,
with adjustments for smaller or larger families..
Moderate Income –Households whose incomes are between 81% and 95% of the median
income for Larimer County, as determined by HUD, with adjustments for smaller or
larger families.
Net Operating Income (NOI) – income stream generated by the operation of the property,
independent of external factors such as financing and income taxes. A property's
yearly gross income less operating expenses. Gross income includes both rental
income and other income such as parking fees, laundry and vending receipts, etc.
Operating expenses are costs incurred during the operation and maintenance of a
property. They include repairs and maintenance, as well as insurance, management
fees, utilities, supplies, property taxes, etc. The following are not operating expenses:
principal and interest, capital expenditures, depreciation, income taxes, and
amortization of loan points.
Non-profit organization – a not-for-profit, non-sectarian organization which is designated by
the Internal Revenue Service (IRS) under Section 501(c)(3), as a tax-exempt
organization.
Permanent Housing –housing in which the program participant must be the tenant on a
lease for a term of at least one year, which is renewable for terms that are a
minimum of one month long and is terminable only for cause.
Permanent Supportive Housing – permanent housing in which supportive services are
provided to assist special needs populations to live independently.
Program Income – gross income received by the subrecipient directly generated from the
use of CDBG or HOME funds with some exceptions. (24 CFR 570.500 and 24 CFR
92.2))
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Program – Financial assistance offered by the City utilizing one or more federal or local
funding sources
Single Family Housing – a one - to four-family residence, condominium unit, cooperative
unit, combination of manufactured housing (including a mobile home) and lot, or
manufactured housing lot. (24 CFR 92.2 & Building HOME 4-1)
Special Needs Housing – supportive housing that is designed to meet the housing and
service needs of a target special needs population and provides supportive services
for residents.
Special Needs Populations – homeless persons, larger families (requiring 3 and 4 bedrooms)
victims of domestic violence, persons recovering from mental and/or substance
abuse, seniors, veterans, persons with disabilities, and persons with HIV/AIDS and
their families.
Supportive Services – services provided to individuals with special needs which enable
individuals to achieve a greater level of independence and/or self-sufficiency such as
health services, housing counseling, employment counseling and referral and other
services as defined at 24 CFR Section 882.802.
Transitional Housing – housing where all program participants have signed a lease or
occupancy agreement, the purpose of which is to facilitate the movement of
homeless individuals and families into permanent housing within 24 months and
includes supportive services. The program participant must have a lease or occupancy
agreement for a term of at least one month that ends in 24 months and cannot be
extended.
Very Low Income – households whose income is greater than 30% and less than 50% of
median income for Larimer County, as determined by HUD, with adjustments for
smaller or larger families.
UFAS – Uniform Federal Accessibility Standards
DISCLAIMERS
The City of Fort Collins reserves the right to fund projects at a lower amount than
requested, and the right to deny applications that do not coincide with prevailing Action
Plan goals and policy direction. The City is under no obligation to consider or fund any
proposed project that does not demonstrate compliance with national objectives and
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eligible activities, local program requirements and assist in meeting the City’s affordable
housing policy goals and/or objectives.
The City reserves the right to determine project eligibility and fund the project source to be
used for any proposed project. Funding decisions will be based on a variety of factors, not
just application scores. Other factors considered are:
1. Operational and management capacity of the applicant
2. Financial capacity
3. The projects potential for transformative impact on the residents and surrounding
community
4. Ability to repay funds borrowed from the City
5. Performance on past awards from the City
6. Whether the request for funding is for a project that has been previously awarded
City funds
7. Leveraging of other public and private investment
8. Maximizing the effect of available funding
The Affordable Rental Housing Program and Underwriting Guidelines are not intended to
address every circumstance that may be encountered in the development process, nor are
they a verbatim restatement of all regulatory requirements. Omission of any federal or local
regulatory requirements does not relieve the City or the applicant of program funds from
their respective obligations that may be required by the funding source.
Once a funding agreement has been executed between the City and applicant, any conflict
between the program guidelines and the funding agreement, the terms of the funding
agreement shall prevail.
Program guideline changes as a result of federal, state or local regulatory or legal
requirements may be implemented immediately by the Department.
Revision of the program guidelines usually takes place annually; however, additional
revisions can be initiated by the Department Manager at any time. Such revisions may occur
without notice and are applicable to all pending and future applications. Applicants are
responsible for complying with any changes.
FEDERAL AND OTHER REGULATIONS
Applicants must comply with all federal regulations below. The regulations include, but are
not limited to:
Community Development Block Grant – CDBG
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(24 CFR Part 570)
The CDBG Program funds the development of viable communities by providing decent
housing, a suitable living environment and opportunities to expand economic opportunities,
primarily for low- and moderate-income persons. A project must meet one of the following
national objectives to be eligible for CDBG funding:
1. Benefit to LMI persons or households – in structures with 3 or more units at least
51% of the units must be occupied by LMI households.
2. Elimination of slums and blight
3. Urgent Need (not applicable for housing)
CDBG funds can be used for acquisition and/or rehabilitation of physical structures,
installation and/or upgrade of public utilities, and off-site infrastructure improvements.
New construction is not eligible.
Home Investment Partnerships Program – HOME
(24 CFR Part 92)
The HOME Program is designed to create affordable housing for low-income households
through public-private partnerships. The City is required to match 25 cents of every dollar
received through the HOME Program. The City is required to set aside 15% of its annual
HOME allocation for CHDO housing development.
HOME funds can be used for new construction, acquisition (for the purpose of rehabilitation
or new construction) and/or rehabilitation.
Accessibility Regulations
These regulations prohibit disability discrimination in programs receiving HUD funds.
All properties receiving City funds must be in compliance with the regulations in this
section.
Title III of the Americans with Disabilities Act (ADA) of 1990
(42 U.S.C. 12181–89) (28 CFR part 36)
ADA generally does not apply to residential housing. However, it does cover public and
common areas of a housing development that are open to the general public or made
available to the general public. ADA regulations must be applied to a rental office, day care
center or community room if it is made available to the general public.
Section 504 of the Rehabilitation Act of 1973
(29 U.S.C. Section 794) (24 CFR parts 8-9)
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Section 504 requires that for new construction of 5 or more units or substantial alterations
(cost of alterations is 75% or more of replacement cost of completed structure):
5% of the units (or at least one unit) must be accessible for mobility
impairments
An additional 2% of units (at least one) must be accessible for hearing/vision
impairment
Entrance/exit routes and public/common areas must be accessible
Other alternations, not considered substantial:
Must be accessible to the maximum extent feasible
Make the entire unit accessible if
o Kitchen renovated/cabinets replaced
o Bathroom – replacing tub/shower or toilet
o Replacing entrance door jams
o Up to 5%/2% requirement
o Make routes and common areas accessible
o Use UFAS standards for rehabbed elements
The accessibility improvements must meet Uniform Federal Accessibility Standards (UFAS).
Architectural Barriers Act of 1968 – ABA
(42 U.S.C. 4151-4157) (24 CFR Part 570.614)
The ABA requires that covered buildings comply with the Uniform Federal Accessibility
Standards (UFAS) when financed in part or in whole with federal parts. Buildings
constructed to meet Section 504 and Title II of the ADA will conform to the requirements of
ABA.
Fair Housing Act
(24 CFR Part 100.201-205)
The Fair Housing Act prohibits discrimination in housing practices on the basis of race, color,
religion, sex nation origin, familial status and disability. The Act requires that housing
providers make reasonable accommodations in rules, policies, practices or services when
such accommodations may be necessary to afford such person(s) equal opportunity to use
and enjoy a dwelling. Additionally, the Act requires that housing providers allow tenants to
make reasonable modifications to units and common spaces in a dwelling. The Fair Housing
Act applies to nearly all private and publically funded housing.
Davis-Bacon and Related Acts
(40 U.S.C 276(a)-7) (24 CFR Part 92 (92.354)) (24 CFR Part 5)
The Davis-Bacon and Related Acts require that prevailing wage rates are paid to all
construction laborers and mechanics under the following circumstances:
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Construction of 12 or more units with HOME funds
Rehabilitation of 8 or more units with CDBG funds
Copeland Anti-Kickback Act of 1934
(40 U.S.C. 276 (c))
The Act generally prohibits contractors or subcontractors engaged in building construction
or repair of federally-financed or federally assisted projects from inducing an employee to
give up any part of the compensation to which he or she is entitled under his or her
employment contract and requires contractors and subcontractors to submit weekly
statements of compliance.
Fair Housing
(24 CFR Parts 100-115)
In addition to the requirements stated above under the Accessibility Regulations, a
developer is required to affirmatively further fair housing as well as conduct and administer
its project in conformity with the equal opportunity requirements of Title V1 of the Civil
Rights Act of 1964.
Conflict of Interest Requirements
(24 CFR 570.611) (24 CFR 92.356(f))
CDBG and HOME regulations provide that no owner, developer, or sponsor of a project (or
officer, employee, agent, elected or appointed official, or consultant of the owner,
developer, or sponsor or immediate family member or immediate family member of an
officer, employee, agent, elected or appointed official, or consultant of the owner,
developer or sponsor) whether private, for-profit or nonprofit (including a community
housing development organization (CHDO) when acting as an owner, developer or sponsor)
that are receiving CDBG or HOME funds and (1) who exercises or has exercised any
functions or responsibilities with respect to activities assisted with CDBG funds or (2) who is
in a position to participate in a decision-making process or gain inside information with
regard to these activities, may obtain a financial interest from a CDBG or HOME assisted
project, or have any interest in any contract, subcontract or agreement with respect
thereto, or the proceeds there under, either for themselves or those with whom they have
family or business ties during their tenure or one (1) year after. Any such conflicted
individual also may not occupy a HOME-assisted affordable housing unit in a project during
the required period of affordability. This provision does not apply to an employee or agent
of the owner or developer of a rental housing project who occupies a housing unit as the
project manager or maintenance worker. Exceptions may apply on a case-by-case basis.
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Identity of Interest Transactions
Identity of interest refers to situations where the owner, developer or project sponsor
control or own the services to be provided in a project, including, but not limited to the
general contractor, subcontractor, property manager or other service provider. A
declaration of subcontractors or suppliers for which there is an identity of interest through
joint ownership with the owner or developer must be declared in the application for
funding to the City. Failure to declare an identity of interest situation may deem a project
ineligible.
Environmental Requirements
(24 CFR Part 58)
Projects that utilize any federal funding must undergo an environmental review per the
National Environmental Policy Act of 1969 (NEPA). Funds will not be legally obligated to any
project or activity until the City has completed the required environmental review. The City
is responsible for the environmental review of the project; however, the applicant is
required to assemble and make available all information required for the City to complete
the review. The NEPA required environmental review is extensive and different than a
Phase I Environmental Site Assessment (ESA); however, a Phase I ESA is utilized to complete
the environmental review. A Phase I ESA should be included with all applications. Additional
information required to complete the environmental review is listed in the application.
The environmental review process can take from 60 to 120 days to complete. The City will
identify the environmental review process required and the approximate time frame for
completion. The applicant will be notified within 60 days of any environmental concerns.
Unfortunately, we cannot guarantee that new issues will not arise while the project is
undergoing a formal environmental review and cause delays.
Rehabilitation of any buildings built prior to 1978 must comply with the lead-based paint
laws described below.
If a contaminant/hazardous substance is suspected, testing must be conducted by a
certified inspector for that contaminant/hazardous substance. This includes, but is not
limited to lead, methamphetamine, mold and asbestos. If a contaminant/hazardous
substance is identified, the approved mitigation or abatement procedures required by local,
state or federal regulations must be followed.
PLEASE BE AWARE: Once an application has been received by the Department, the project
must be in compliance with all federal environmental regulations. During the review
period, neither an applicant nor any participant in the development process, including
public or private non-profit or for-profit entities or any of their contractors may commit or
expend any funds, including non-HUD funds, or undertake any activities having either an
adverse environmental impact or limitation on the choice of reasonable alternative. If any
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funds (public or private) are spent or committed to a development prior to the
completion of the environmental process, the City cannot provide federal funding for the
project.
DO NOT MOVE ANY DIRT ON THE SITE OR BEGIN ANY CONSTRUCTION UNTIL YOU HAVE
RECEIVED AN OFFICIAL AWARD LETTER!
The Lead-Based Paint Poisoning Prevention Act and Lead Safe Housing Rule
(42 U.S.C. 4821) (24 CFR Part 92(92.355) (24 CFR Part 35 982, 401(j), except paragraph
982.401(j)(1)(i))
The regulations prohibits the use of lead-based paint in residential structures constructed or
rehabilitated with federal assistance and requiring notification to purchasers and tenants of
such housing of the hazards of lead-based paint and of the symptoms and treatment of
lead-based paint poisoning.
OMB Circulars
OMB Circulars A-87, A-102, A-133
The Office of Management and Budget issues circulars for managing grants that apply to all
HUD programs. Many times these directives become HUD regulation. The circulars include
administrative requirements, cost principles and audits. Applicable OMB circulars include A-
87, A-102 and A-133.
Section 3 - Economic Opportunities for Low and Very Low Income Persons
(12 U.S.C. 1701 (u) as amended) (24 CFR Part 135)
Section 3 states that to the greatest extent feasible, opportunities for training and
employment that arise through projects receiving HUD assistance, will be directed to low or
very-low income persons of the project area and that contracts be awarded to Section 3
businesses located in the project area. The Section 3 status of all contracts must be certified
and the Section 3 clause must be included in all applicable project contracts.
Uniform Relocation Act - URA
(42 U.S.C. 4201-4665) (49 CFR Part 24) (24 CFR Part 42 (subpart B) and Section 140(d)
“Barney Frank Amendments”) (24 CFR 92.353)
URA provides for uniform and equitable treatment of persons displaced from their homes,
businesses, or farms by federal or federally –assisted programs and establishes uniform and
equitable land acquisition policies for federally assisted programs. Requirements include
bona fide land appraisals as a basis for land acquisition, specific procedures for selecting
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contract appraisers and contract negotiations, furnishing to owners of property to be
acquired a written summary of the acquisition price offer based on the fair market price,
and specified procedures connected with condemnation.
If developers are acquiring property, acquiring and rehabilitating property, demolishing
property or only rehabilitating a property, compliance with URA regulations is required. The
URA requires that the owner of the property receiving federal funding provide notices and
assistance to impacted tenants. Department staff will provide assistance with this
requirement.
PLEASE BE AWARE: Any applicant requesting CDBG/HOME funds for the acquisition of
housing or public facilities must comply with the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (URA). It is a violation of the URA for a property
owner to displace residents in order to propose a vacant building for HUD assistance.
ELIGIBILITY
Eligible Activities & Costs
Acquisition*
New construction*
Rehabilitation
To include essential repairs or improvements to meet local code and Uniform
Physical Conditions Standards, major systems repair or replacement,
accessibility improvements (ADA, Section 504), abatement of hazardous
materials, energy efficiency improvements. Homeless shelters are not
eligible.
Soft Costs: architectural and engineering fees, financing costs, credit reports, title
insurance, recording costs, transaction taxes, appraisals, environmental reviews and
builder or developer fees. Project-related soft costs may be awarded on a limited
basis and will be at the recommendation of staff and based on need determined
during the underwriting review.
Operating deficit reserve, up to 18-month, for rental and new construction projects
for the initial rent-up period. The reserve may be used to pay for project operating
expenses, scheduled payments to a replacement reserve and debt service.
*One for One Replacement – If the applicant proposes to demolish units that are assisted
with either HOME or CDBG funds, these units must be replaced at the development site or at
another Department- approved site.
Eligible Applicants
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Non-profit and quasi-public developers with a documented capacity to construct (or
rehabilitate) and operate multifamily housing that benefit extremely low to low-
income households; or, construct (or rehabilitate) owner-occupied housing that
benefit LMI households.
Applicants and applicant’s team members must be in good standing with the City on
all previous grants, loans or loan commitments
Applicants must affirm that there are no defaults or negative collection actions
relating to any financial obligation, either to the City of Fort Collins or to any other
public agency or private lender
Applicant cannot be on any local, state or federal debarment list
No applicant, developer or contractor with compliance issues outstanding with the
City or other public agencies can participate
The applicant cannot have any outstanding tax liens on any properties on properties
owned and operated by the applicant
The City may seek references from other lenders, partners, or public agencies with
which the applicant has done business.
Minimum Project Requirements
Located within the jurisdictional boundary of City of Fort Collins
Project must consist of 1 or more residential units
Acquisition ONLY projects must meet prevailing City building code requirements and
have amenities that will allow it to compete effectively in the local market area as
determined by the Department
Acquisition and rehabilitation or rehabilitation projects must
Prevailing City building code standards.
Have amenities that will allow it to compete effectively in the local market
area as determined by the Department
Upon completion pass the Uniform Physical Conditions Standards
Complete a third party Capital Needs Assessment (CNA)
Project must meet HUD environmental review requirements
Ineligible Costs
Project components may be deemed non-essential elements by the Department and
therefore removed from the total project cost. Such items may include, but limited to:
Carpeting for kitchens, bathrooms or patios; window treatments; dumbwaiters;
greenhouses, hot tubs or whirlpool baths; mobile homes; outdoor fireplaces or
hearths; swimming pools or swimming pool decks (except repair of existing);
television antennae; tennis courts; or items deemed to be a luxury.
GENERAL PROJECT REQUIREMENTS
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The following are general project requirements for all applicants seeking funding from the
City for housing related projects.
Site Control
Project applicants must have control of any site that will receive City funding for acquisition,
rehabilitation and new construction activities. Site control must be documented at the time
of application. To document site control one of the following must be submitted: a deed or
other proof of ownership; an executed lease agreement; or an executed option to purchase
or lease. Sales contracts cannot be executed until after the project has complied with URA
and received Environmental Clearance from HUD. Please keep in mind URA regulations
apply and must be followed or applications cannot be considered for funding. Please refer
to the City’s Redevelopment Displacement Mitigation Strategy
(http://www.fcgov.com/socialsustainability/documents.php)
Appraisal
A property appraisal is required for projects that will receive City funding for acquisition,
rehabilitation and new construction. The appraisal must be provided during the application
process, preferably at the time of application submittal, though must be provided prior to
release of funds if the project is so awarded. An appraisal cannot be more than 6 months
old. The appraiser must be a Colorado Certified General Appraiser. The Department
reserves the right to require an appraisal on completed activities.
Reasonable Costs
The City is responsible for ensuring that the costs are reasonable by examining the sources
and uses for each project. Assessment may include comparison to similar projects within
the local market, market trend analysis, survey of industry participants, Department
experience and other third party sources.
Work Write-Ups
For acquisition of existing buildings (not slated for demolition) and rehabilitation, the
Department must approve work write-ups (i.e., plans and specifications) to determine
compliance with the Uniform Physical Conditions Standards and prevailing City building
code standards. The project cannot be bid and work cannot begin until approval from the
City is received.
Cost Estimate
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For acquisition of existing buildings (not slated for demolition) and rehabilitation, the
Department must approve written cost estimates to ensure that the costs are reasonable.
The project cannot be bid and work cannot begin until approval from the City is received.
Procurement
Applicants must comply with all applicable federal, state and City procurement
requirements. The Department requires that applicants selected to receive federal funds
comply with the award of the construction contract to the lowest and most responsive
proposal that incorporates all essential project elements. The developer shall ensure that all
contracts let in the performance of an agreement are awarded in a fair, open and
competitive manner. Executed copies of all contracts shall be forwarded to the Department
along with documentation concerning the selection process. If the lowest, responsive
bidder is not selected, an explanation must be provided to the Department in writing to
substantiate the decision.
Debarment and Suspension
Developers, contractors or subcontractors working on a City funded project cannot be
located on a federal, state or local debarment or suspended list. Prior to awarding a
contract, the developer must secure approval from the Department to ensure that the
proposed contractor is eligible.
Davis Bacon Weekly Payrolls
If applicable, Davis Bacon payrolls must be submitted weekly on the most current
Department of Labor form.
Affirmative Marketing
Developers must create an affirmative market plan to further the City’s commitment to
non-discrimination and equal opportunity housing. Affirmative marketing steps consist of
actions to provide information and otherwise attract eligible persons in the housing market
area to the available housing without regard to race, color, national origin, gender, religion,
familial status, disability, sexual orientation, gender identity, or marital status. Records
should be maintained describing actions taken by the developer to affirmatively market
units. Documentation is required by the Fair Housing Act and the City will review the
documentation at each monitoring visit, but may request to review the documentation
annually. Applicants are required to use the most current version of HUD form 935.2a –
Affirmative Fair Housing Market Plan – Multifamily Housing.
Waiver Requests
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The Department acknowledges that each project may face unique site, design, financing,
population or market constraints for which full compliance may be difficult or impossible. It
is intended that such unique constraints are identified during the design process and that
the applicant may request a modification or waiver to specific standards and requirements,
which will be reviewed on a case-by-case basis to determine whether specific standards
should be modified or waived for reasons and purposes acceptable to the City. Requests for
modification or waiver to specific standards must be in writing and document the
applicant’s need and unique situation. When such modifications or waivers are granted,
additional requirements may be imposed by the Department.
AFFORDABILITY REQUIREMENTS
Assisted Units
Projects may have a mix of City-assisted units and non-City assisted units. Assisted units
may be fixed or floating. Assisted units shall not be isolated within a specific area or areas
of the development. Assisted units shall be scattered throughout the development and be
of the same quality and have the same proportional mix of square footage and bedroom
size as non-assisted units.
Affordability Period
Income and rent restrictions are required for all City-assisted units for period of time known
as the “affordability period.” The affordability period is enforced using a legally binding
restrictive covenant that assures that a specified number of units meet certain affordability
restrictions for the specified period of affordability. All debt on the property must be
subordinate to the City’s Agreement of Restrictive Covenent
CDBG & HOME Required Affordability Periods for the
City of Fort Collins
Activity Average Per Unit
Minimum
Affordability
Period
Rehabilitation
$1,000 - $15,000 5 Years
$15,000 - $40,000 10 Years
> $40,000 15 years
New Construction,
Acquisition of Existing
Housing
Any $ amount 20 years
Down Payment Assistance <= $15,000 5 years
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The affordability period begins at the date the project is reported as completed to HUD.,
The affordability period will remain in effect per the grant agreement, term of the loan or
affordability period, whichever is greater.
Income Determination Method
An applicant must determine income eligibility of each household using 24 CFR Part 5,
commonly referred to as the “Section 8” method or “Part 5” method. Please contact the
Department for questions concerning income calculations.
Income Recertification Schedule
The applicant must adopt a schedule for annual recertification of income and a copy
must be provided to the Department. Income can be recertified on the anniversary
of the original income evaluation, at lease renewal or on an annual schedule
whereby all tenants are recertified during the same month.
Recertification of income eligibility must be conducted by collecting source
documentation annually or by obtaining a completed Tenant Information and
Income Certification form approved by the Department.
Occupancy & Rent Restrictions
General Restrictions:
Income limits for housing projects are calculated according to the actual number of
household members as residents are identified. To impute the income level served,
applicants may estimate household size based upon the number of bedrooms within a
dwelling unit according to the following chart.
Unit Type Studio 1-bedroom 2-
bedroom
3-bedroom 4-
bedroom
Income
Threshold
1 Person
1.5 Person
(1-Person +
2-Person) / 2
3 Person 3.5 Person
(3-Person +
4-Person) / 2
6 Person
Rent restrictions are strictly enforced during the affordability period
All new tenants must meet the income limits established by the Department
At least 20% of the City-assisted units must be reserved for households whose
income does not exceed 50% AMI
The remaining City-assisted units must be served for households whose income does
not exceed 80% AMI
If a tenant pays utilities, the maximum allowable rents must be reduced by the
amount of the applicable utility allowance established by HUD
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HOME Assisted Units:
For households at 50% AMI or less, tenant rent must be the lowest of 30% of
adjusted income, Low HOME rent or Fair Market Rent (FMR)
For households between 51% and 60% AMI, tenant rent must be the lowest of 30%
adjusted income, High Home rent or FMR.
CDBG Assisted Property and Units:
51% of all units on the property must be restricted to households at 60% AMI or
less, of which 20% must be restricted to households at 50% AMI or less
The maximum rent charged must be the lowest of High HOME rents or FMR for
CDBG restricted units.
Temporary Exceptions to Rent Limitations
The following are exceptions to the rent restrictions stated above:
If the project is occupied at the time City assistance is awarded to the project,
existing tenants who earn more than the income limits stated above must pay no
more than 30% of their adjusted income in rent and utilities
If a tenant is residing in a designated City-assisted unit and the tenant’s income
increases to more than the unit’s income restriction (50% or 60% AMI) during the
term of the lease, the tenant must pay no more than 30% of their adjusted gross
income in rent and utilities. The rent must be adjusted at the annual recertification.
Only when the tenant chooses to leave or not renew the lease, the unit must then
be rented to a new tenant who meets the income limits. City policy is that tenants
should not be displaced if their income increases to a level higher than the eligible
household income during the lease term.
UNDERWRITING GUIDELINES
General
Applicants must demonstrate that rent proceeds or other funding sources will allow
for adequate reserves to meet capital needs for the length of the affordability
period.
Project pro forma projections must demonstrate likelihood of financial sustainability
for a period not less than 20 years utilizing prudent assumptions, as determined by
the Department.
Additional funding will not be awarded to a project once the Certificate of
Completion has been issued.
Types of Development and Limits
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Acquisition Only
Acquisition can include existing units or vacant land.
If the property does not meet Uniform Physical Condition Standards (UPCS) it cannot
be acquired unless it is rehabilitated to meet the UPCS. A property inspection must
be completed no earlier than 90 days before the contract is signed. Once the
rehabilitation is complete, the Department must conduct an inspection of the
property to ensure compliance with rehabilitation standards. Non-compliance will
be deemed a violation of the loan agreement.
Acquisition of land must be for the purpose of new construction that will begin
within 6 months
The acquisition must be equal to or less than the fair market value of the property
The project maximum is limited to funding availability, and the amount of funding
necessary to make the project feasible
Acquisition and Rehabilitation
Property acquisition is described above
Minimum rehabilitation cost is $1,000 per unit
The project maximum is limited to funding availability, and the amount of funding
necessary to make the project feasible
New Construction
The project maximum is limited to funding availability, and the amount of funding
necessary to make the project feasible
The Department at its discretion can deviate from the project limits.
Financing
The City reserves the right to determine the form of financial assistance according to
demonstrated need and reasonable capacity of the proposed project.
Deferred Payment Loans
Loan terms t the sale or transfer of the property
Interest rates5% simple interest at the time of sale or transfer
A Deed of Trust will be secured against the property for the length of the
affordability period or the term of the loan, whichever is longer
Grants
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Affordable Housing Program & Underwriting
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Provided with no requirement or expectation for repayment
Most commonly used for projects serving special needs populations.
A Deed of Trust will be secure against the property for the length of the affordability
period or as specified in the grant agreement
Market Analysis
A market analysis or study is required for projects that will receive City funding for
acquisition, rehabilitation and new construction. A market analysis is an evaluation of the
economic conditions of supply, demand and rental rates for the type of low-income housing
development being proposed as well as the rent levels proposed for the project. The
analysis must determine the feasibility of the subject property rental rates and state
conclusions as to the impact of the property with respect to the determined housing needs.
All data presented should reflect the most current information available and the report
must provide source data. All steps leading to the calculated figures must be presented in
the report. A professional market analyst with demonstrated professional experience with
the type of housing proposed must prepare the analysis and have no affiliation with the
applicant, developer, lender and/or syndicator. The qualifications of the individual or
company providing the analysis must be provided.
Subsidy Layering
HUD establishes limits on the amount of HOME funds that may be invested in affordable
housing on a per-unit basis. Before committing funds to a project that combines any other
sources of financing (local, state, federal, private, etc.), The Department must evaluate the
project to ensure that the City does not invest any more funds than necessary to provide
affordable housing. Applicants must demonstrate that they have structured projects to
maximize other available financing sources thereby limiting City funding to the lowest
amount necessary to assure project feasibility.
Developer Capacity
The developer must have the organizational capacity to implement the project. Developer
capacity will be evaluated on information demonstrating experience and skills as provided
in the funding application.
1. Experience: Considerations include, but may not be limited to, the following skills of
the developer and development team.
Recent, similar, successful experience
Similar project location, size and scope
Years of experience developing affordable housing
Managing affordable rental projects
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Affordable Housing Program & Underwriting
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Using multiple funding sources
Staffing
Previous working history with the Department
2. Skills: Considerations include, but may not be limited to, the following skills of a
developer and the development team:
Project management
Market analysis
Site selection and control
Property management
Planning and construction
Design, architecture, engineering
Legal and accounting
Federal funding rules
Other funding source rules
3. Fiscal Soundness: The applicant will be asked to provide evidence of financial ability
to implement the project. Applicants will be required to provide proof of
commitments from other funding sources, current financial statements and proof of
sufficient reserves or a line of credit available, if necessary, to complete the project.
Developer Fee
A developer fee is compensation to the developer for the time and risk involved to develop
the project. The fee is based on the size of the project, the total development cost and the
risk associated with the project. Developer fees include all amounts received by the applicant
whether characterized as project management, overhead or developer fee. Consultants are
commonly utilized to assist the developer/owner by providing specific expertise in
completing the project. The maximum aggregate allowable developer and consultant fees
are calculated as a percentage of Total Project Costs, less land, project reserves, other cost
category adjustments, and the Developer/Consultant Fee category.
12.0% for projects consisting of 51 units or more
15.0% for projects consisting of 50 units or less
Developer fees that are not deferred may be distributed as follows, subject to the approval
of other project lenders, tax credit equity investor, etc.:
1/3 at the close of all construction loans
1/3 in progress payments during construction
1/3 at 90% occupancy and receipt of all tenant certifications for restricted units.
Reserves and Operating Expenses
The amount of required reserves must be specifically approved by the Department in the
final funding agreement or through the annual budget review and approval process and will
typically match reserve requirements by the state housing programs when those programs
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Affordable Housing Program & Underwriting
Guidelines
are utilized. Operating expenses shall be determined on a GAAP accounting basis and shall
not include any payments to parties affiliated with the borrower, to the extent that such
payment exceeds the typical cost of procuring equivalent services from an unrelated third
party.
Loan Position: Subordination to Senior Debt
The City’s loan may be subordinated to another lender’s mortgage lien if subordination is
required as a condition of that lender’s loan approval; however all debt on the property
must be subordinate to the City’s Agreement of Restrictive Covenant. Senior debt must be
provided on a fully amortizing basis, without a balloon payment, for at least 20 years.
Loan-to-Value Limits
The loan amount awarded by the City, plus the principal amount of all loans with a senior
claim to the subject property shall not exceed 100% of the acquisition cost or appraised
value, whichever is lower.
Debt Service Coverage Ratio (DSCR)
The minimum debt service coverage ratio shall not be less than 1.15:1, including all
amortized project debt, throughout the initial 15-year pro forma period. Projects with a
ratio that exceeds 1.50:1 may be subject to lower subsidy limitations.
Inter-Creditor Agreement
Within thirty (30) days of the execution of an funding agreement, the developer shall secure
the execution, by creditors with a senior claim to the subject property, of an Inter-Creditor
Agreement or Declaration which at a minimum shall: (1) require the senior lender(s) to
notify the Department in the event the lender learns of a default under their loan to the
project and (2) requires the senior lender(s) to give the Department written notice of and
reasonable opportunity to cure any default by the developer under the affected loan
(provided, however, the Department shall have no obligation to cure any such default).
Following execution, the Inter-Creditor Agreement shall be attached to the final agreement.
Funding Conditions - Pre-Development Phase:
Funds are not available for pre-development loans. However, the City may allow
reimbursement of certain pre-development expense items from an award of funds under
certain conditions.
Funding Conditions - Acquisition Phase
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Affordable Housing Program & Underwriting
Guidelines
Loans for site acquisition will not be funded unless all pre-conditions of the construction
phase funding have also been achieved. Acquisition loans must be recorded in first lien
position.
Funding Conditions - Construction Phase
Prior to or concurrently with construction phase funding, the borrower must provide
evidence that all other necessary construction funding sources have been committed and
closed, that binding commitments are in place for all sources of permanent financing.
Assignment
Loans or loan commitments are not assignable without the prior written approval of the
Department. If the assignment is approved, the assignee must assume all funding
obligations including, but not limited to, the affordability requirements.
Material Changes
Any material changes to the project during underwriting or construction must be reporting
in writing to the Department. Failure to do so may constitute an event of default under
terms and conditions of the funding agreement.
Recourse
Acquisition, construction and permanent loans are provided on a non-recourse basis and
are secured by collateral as noted above. Loans may be cross-collateralized against
properties included in the same financing transaction.
SITE SELECTION AND NEIGHBORHOOD COMPATIBILITY
Site Design Principles
The determination of the site location is a very important part of the project preparation
process and should not be overlooked. A well-chosen site location can significantly increase
the success of the project. Issues to consider include orientation, storm-water
management, access to transit, and proximity to community amenities (commercial, social
services, education, parks, and healthcare facilities).
Affordable Multi-Unit Family and Senior Housing Concentration Policy
Formatted: Not Highlight
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Guidelines
Affordable housing opportunities should be available to residents across the City of Fort
Collins. The City strongly discourages the concentration of LMI populations within
neighborhoods and promotes housing choice throughout the City.
Proximity to Site Amenities
Developments must be located on sites within a 2-mile radius of social, recreational,
commercial, educational and health facilities and services.
A map identifying the development site and the location of supporting services is required.
The service must be identified by name on the map. All services must exist or be under
construction.
Connectivity Requirements and Proximity to Transportation
A site should be located within 1/2 mile of a transit stop or park and ride lot. A map showing
the walkable route to the transit stop is required. The applicant must also identify if the
route is accessible (curb ramps at the corners and no sidewalk trip hazards). If the route is
not accessible, the City may be able to install the infrastructure improvements. For senior
developments, if transportation is provided by the developer, the development may not be
required to be located within 1/2 mile of a transit stop or park and ride lot.
Proximity to Negative Site Features
Sites with the below mentioned negative characteristics will be ineligible. The distances are
to be measured from all boundaries of the development site. Applicants must indicate on a
map, the location of any negative site features. Negative site features include developments
located :
Adjacent to or within 300 feet of salvage yards
Adjacent to or within 1,000 feet of an interstate highway including frontage and
service roads
Adjacent to or within 300 feet of heavy industrial uses such as manufacturing plants
Adjacent to or within 300 feet of a solid waste or sanitary landfill
Adjacent to or within 100 feet of high voltage transmission power lines
Zoning
City Zoning and development plan requirements should be the first consideration when
finding a suitable location. Contact the City Development Review Center to determine the
correct zoning for multi-family, duplex, or single-family homes. Pre-application meeting
request forms to set up a meeting to discuss a site are located here on the City website
(http://www.fcgov.com/developmentreview/ ). Questions on land uses can also be
answered by calling 970-221-6750.
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Guidelines
Building Placement
There are many considerations to think about when placing a building on the site. The
building location allows for spaces in between buildings to become positive space.
Consideration for shade and heat gain or loss should be a part of the site planning for
sidewalks, open space, and drive lanes.
Open Space
Public and private open space shall be provided onsite. Private open space can be in the
form of patio spaces for each unit. Public open space should be useable and serve the entire
complex. A minimum of 200 square feet per bedroom shall be provided. The open space
can include play areas for kids, an area without steep grades for outdoor activities (Frisbee,
walking dogs, etc.), barbeque spaces, benches, pools, workout rooms, plazas, courtyards,
etc. Proximity to a neighborhood park can be used in conjunction with the open space on-
site if the park is less than ¼ mile away and is a minimum of ¾ of an acre. Consideration for
summer shade, winter sun, and protection from wind should be taken into account when
placing outdoor space.
Sidewalks & Bike Facilities
Pedestrian and bicycle connections on-site and off-site should be a part of the development
of the property. Sidewalk circulation should ensure access to all parts of the site as well as
nearby trails, transit stops, and parks. Bicycle parking shall be provided that is conveniently
accessed by each building.
Parking
Adequate parking to meet City Code requirements must be included on site. Ensure
consideration for household number and the potential number of cars needed, as well as
guest parking is considered, in addition to meeting City Code requirements. Accessible
parking spaces should be strategically placed to ensure they are able to be used effectively.
Landscaping
Landscaping requirements within City Code must be met on site. Placement of landscaping
should be strategic to ensure the landscaping is benefiting open spaces, protecting from
heat gain or loss, and lowering parking lot heat island effect. Minimize the use of turf and
only use turf in active locations. Irrigation systems shall be provided to ensure the
landscape thrives in the dry climate.
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DEVELOPMENT REQUIREMENTS
Minimum Units
The minimum unit size for a multi-family development is 2 units. Projects that include less
than 2 units are considered to be single family developments.
Code Compliance
Upon completion of construction the property must comply will local building and zoning
codes and the Uniform Physical Condition Standards.
Capital Needs Assessment
For the acquisition of existing structures (not slated for demolition) and rehabilitation
projects, a Capital Needs Assessment (CNA) per the Uniform Physical Condition Standards
(UPCS) must be completed. The CNA must identify the useful life of major systems to
include: structural support, roofing, classing, weatherproofing (windows, doors, siding,
gutters), plumbing, electrical, heating, ventilation and air conditioning. If the remaining
useful life is less than the affordability period, a replacement reserve is required to ensure
the items can be adequately maintained and addressed throughout the affordability period.
Sustainability and Energy Efficiency
Designing and locating affordable housing with sustainable design and green building in
mind will ensure efficient land use, reduce energy costs and add to the appeal of the
property. It is important to the City that housing positively contributes to environmental
health of our residents and neighborhoods by decreasing energy and water usage, reducing
operating and maintenance costs and improving the efficiency and longevity to the building
system. Construction projects of new and existing buildings must be designed and
constructed to be energy and water efficient, reducing tenant costs while improving the
structure’s sustainability.
Appliances, mechanical systems, windows, doors, insulation must meet Energy Star
standards.
Toilets, faucets, shower heads the must meet the Water Sense low volume
standards.
Rebates may be available from utility service providers and other sources.
Accessible and Adaptable Units
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Assistance may not be provided for the acquisition of multi-family units that will not allow a
portion of the units to be made accessible to persons with disabilities. Projects must
contribute to increasing the number of accessible and/or adaptable through the following
minimum requirements:
Acquisition of Existing Units (not slated for Demolition) and Rehabilitation Projects
At least one (1) or 10%, whichever is greater, of all units rehabilitated must be made
accessible for persons with mobility disabilities.
Additionally, at least (1) unit or 2%, whichever is greater, of all units rehabilitated
must be made adaptable for persons with hearing and/or visual disabilities
New Construction
At least one (1) or 10%, whichever is greater, of all new units must be made
accessible for persons with mobility disabilities.
Additionally, at least (1) unit or 2% of all new units must be made accessible to
accommodate the needs of persons with hearing and/or visual disabilities.
Distribution of Accessible Units
To the greatest extent possible, accessible dwelling units should be distributed
throughout the project and should be available in a sufficient range of sizes and
amenities.
The choice of an individual with a disability should be comparable to that of other
prospective tenants
Accessible dwelling units should not be concentrated in one area of the property.
An elevator does not have to be installed for the sole purpose of allowing accessible
units to be located above the ground flood.
Occupancy of Accessible Dwelling Units Policy
Owners/managers of projects that have accessible units should ensure that information
regarding the accessible units reaches individuals with disabilities. Additionally,
owners/managers should take non-discriminatory steps to maximize the utilization of
accessible units by qualified individuals with disabilities. This can be done by maintaining
a waiting list for accessible units and offering vacant accessible units to applicants in the
following order:
1. To a current occupant of another unit in the same property or other comparable
property within the owner/manager’s control, who has a disability requiring the
accessibility of the vacant unit and who currently occupies a unit that does not have
the accessibility features.
2. To a qualified applicant on the waiting list who has a disability requiring the
accessibility features of the vacant unit.
3. To a qualified applicant who does not have a disability requiring the accessibility
features of the unit; however, the owner/manager may incorporate language in the
lease that the applicant will agree to move to a non-accessible unit when one
becomes available.
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Development in the Floodplain
Affordable housing development will not be allowed within any local or federally-
designated 100-year floodplain.
CONSTRUCTION REQUIREMENTS
Construction Start Approval
Housing or site construction may only begin upon the issuance and formal acceptance of an
award commitment.
Inspections
Department staff will conduct inspections of the property throughout the construction
process.
An inspection will be conducted for each draw.
If applicable, Davis Bacon employee interviews will be conducted through the
construction process.
A final inspection will be conducted to ensure that work has been completed in
accordance with the work write-up or plans.
Construction Draws
Developers will certify that each draw request is for actual costs expended and must
provide documentation to support such costs, including sub-contractor invoices. The City
will ONLY pay for completed work.
Change Orders
Any change in scope during construction must be approved in advance by the Department.
Retainage
The Department may withhold 10 percent of each draw until satisfactory completion of the
project. Retainage will be held at least thirty (30) days after completion of construction; a
final inspection is completed and clearance is issued by the Department; labor standards
and final wage compliance report is completed; and certificates of occupancy are issued for
new construction.
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Guidelines
Monitoring
Prior to the draw of any funds, City-required legal documents must be executed and the
awardee must demonstrate that all funding conditions have been satisfied. During the period
of open project activities, quarterly progress reports must be submitted by the awardee. After
a project has been completed and all funds have been drawn, the awardee will submit annual
reports in compliance with the funding agreement or loan covenants. Delinquent reporting
will result in the suspension of further disbursement of awarded funds.
Periodic site reviews will be conducted by appointment. During the review the general physical
condition of any funded property will be inspected along with an analysis of randomly selected
client files. A written summary will be sent to the awardee within thirty days of the site review.
A determination of noncompliance will be communicated to the awardee in writing with the
required corrective actions and the cure period. Non-compliance will result in the suspension
of further disbursement of awarded funds and ineligibility for future funding.
Application Process
The Department administers the Program and solicits applications through a request for
proposals process. The Department will contact those agencies which have shown interest in
or are known to do business relevant to the program. In addition, notification to the public is
made through advertisement in local print media. However, all interested parties are invited to
submit a proposal for consideration.
The most current application forms may be accessed through the Department website. Please
refer to the application checklist to ensure that a proposal is complete and please follow the
submission requirements. Note that any commitments entered into by the applicant prior to
an award of funds do not constitute a rationale for an award. Applicants are therefore
advised to ensure any and all agreements dependent on an award of city funding contain
adequate escape mechanisms to minimize adverse consequences in the event funding is not
available or the proposal is not awarded funds.
Please check the Department website (http://www.fcgov.com/socialsustainability/) for
the most current funds availability and other valuable information.
Application Review Process
Funding rounds are very competitive as total requested funds typically exceed the amount
available during a given year. Therefore applicants are encouraged to carefully review and seek
guidance from Department staff prior to submittal. Voluntary technical assistance is provided
following release of the Program application but prior to the submission deadline. Upon
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Affordable Housing Program & Underwriting
Guidelines
submission, Department staff will review all applications for completeness and eligibility,
rejecting all deficient applications without further analysis.
1. Initial review. Department staff ensures the application is complete and the basic
mandatory evaluation criteria are met. The mandatory criteria are designed to meet
local, state and federal compliance requirements and Department mission
statement. Incomplete applications and proposals that do not meet the criteria are
not eligible for further consideration. In addition to the funding process, projects
seeking Planning Department approvals are subject to the provisions of the land use
review process.
2. Staff analysis. Department staff reviews the application, ask clarifying questions of
the applicants and prepare a staff analysis.
3. Review. Staff prepares a project summary and analysis and presents relevant
material to the City of Fort Collins Affordable Housing Board for further input. Staff
will respond to the applicant with any questions or concerns identified by the Board.
4. Presentation. Department staff will update its summary and analysis based upon
outcomes of the review process. A staff recommendation will be completed and
distributed to the City of Fort Collins CDBG Commission. Staff will coordinate a
formal applicant presentation to the Commission. The Commission’ role is to make
funding recommendations to the Fort Collins City Council. The committee may
request additional detail from the applicant, conduct a tour of the subject site or
property, obtain additional information from outside sources, and consult with other
departments within the City.
5. Preliminary recommendation. Following presentations and tours, if any, the
Commission evaluates all proposals to determine the extent to which each fulfills
community goals. As part of the deliberation, the respective Commission members
discuss the applications and develop funding recommendations. All meetings of the
Commission are open to the public, though testimony is not permitted aside from
the scheduled Applicant presentation. Applicants are notified of the preliminary
funding recommendation by electronic means or by telephone.
6. Final decision. Commission recommendations are forwarded to the Fort Collins City
Council for final determination. Public testimony is permitted prior to formal action
of the Council. Applicants are notified of the funding determination by written
notice.
Application Submission and Requirements
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Guidelines
The most current program information is maintained on the Department website at
http://www.fcgov.com/socialsustainability/competitiveprocess.php. Please refer to this
information early in the planning process and contact Department staff with any questions.
1. Applications that do not follow the submission requirements will not be considered.
Applicants will be given a single, time-limited opportunity to rectify any deficiencies in a
submitted application.
2. Applications received after the posted deadline will not be considered without prior
approval from the Department Manager. Such approval shall be granted only upon
demonstration of extraordinary circumstances beyond the control of the applicant. The
decision regarding whether to extend the deadline for an application may not be
appealed.
3. Applications must be submitted according to the instructions.
Presubmittal Conference
A presubmittal conference is required prior to submitting an application to the Department
to ensure compliance with all federal, state and local regulations. Applicants are
encouraged to review these guidelines and meet with staff at early as possible in project
process.
Neighborhood Meetings
To the extent practical, applicants are encouraged to schedule informational meetings with
surrounding neighborhoods to build awareness of community needs to be served while
gathering valuable input prior to the formal development review process.
Construction Timeliness
All construction projects receiving funding must begin construction within 6 months of the
date of contract signing.
Additional Items
Department staff reserves the right to request additional documentation to substantiate
the funding request, confirm eligibility and assess capacity to achieve desired outcomes.
Applicants will be provided a limited timeframe in which to respond.
Additional documentation that may be necessary include, but not limited to, the following:
Environmental Site Assessment, which may include Phase I, Phase II, asbestos, lead,
and/or methamphetamine reports
Construction Plans and Specifications, including site and/or landscape plans and
building elevations
Capital Needs Assessment and Scope of Work
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Affordable Housing Program & Underwriting
Guidelines
Relocation Plan
Planning and Zoning Preliminary Review
FUNDING PRIORITIES
For FY2014-2015 the funding priorities include:
1. Increase the inventory of affordable rental units through the production of new
rental units or the acquisition and rehabilitation of former market rate units,
converting them to affordable housing.
2. Preserve affordable housing units by monitoring the status of existing affordable
unit to maintain or add to the inventory.
3. Increase housing and facilities for people with special needs.
4. Provide financial assistance for first-time homebuyers.
Draft 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
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
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
Joe Rowan, Funding Partners
Mike Salza, FCBR/Coldwell Banker
Jeff Schneider, Armstead Construction, Inc.
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
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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
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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.
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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.
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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
Marginal Fee Structure
Fee Waivers for
Affordable Projects
Public Financing
Based Incentive Policy
Affordable
Housing Easements
Reduction of
Minimum House Size
Disposition of City's
Land Bank Properties
Support Const.
Defect Claim Reform
Code‐Based
Incentive Policy
Modifications to
3‐Unrelated Rule
Revenue‐Generating
Funding Mechanisms
Inclusionary
Housing Ordinance
Commercial
Linkage
HOUSING IN OTHER COMMUNITIES IS MEETING AFFORDABILITY
NEEDS FOR CITY'S WORKFORCE; I.E. IN‐COMMUTING IS UP
NEED FOR AFFORDABLE OWNERSHIP HOUSING
ISSUE RECOMMENDATION
NEED FOR AFFORDABLE RENTAL HOUSING
WAGES NOT KEEPING PACE WITH HOUSING COSTS
IMPACT
Recommended
Not Recommended
High Med Low
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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.
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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
Inclusionary Housing
Ordinance
Incentive Zoning
Ordinances Commercial Linkage Residential Linkage
What is it?
● Addresses housing gaps from
inflated housing prices
● Requires a percent of housing be
provided at affordable levels
● Responds to development and
redevelopment pressure requesting
special permits
● Requires residenƟal / commercial
development to provide affordable
housing and/or public amenities
● Addresses housing need by
commercial growth
● Requires commercial development
to provide housing units (or pay a
fee) based on new employees
generated
● Addresses housing need from
market for large second‐homes
● Developer provides employee
housing units or pays fee in‐lieu
What is a typical affordable
housing build requirement?
10% to 30% 10% to 20% 20% to 100% of employee generation
by land use
10% to 20%
What incentives are used?
Bonus density, fee waivers, expedited
review, parking reduction, unit
equivalency; public funding
assistance
Density bonus, reduced parking
requirement, reduced open space, or
any variance to zoning
Bonus density; fee waivers
Bonus density, fee waivers, expedited
review, parking reduction, unit
equivalency
Are there alternative
satisfaction options?
Payment of fee in‐lieu; offsite units;
housing certificates; combination
IH/RO units and voluntary adoption
of RETA
Payment of fee in‐lieu
Payment of fee in‐lieu; land
dedication; offsite units; deed‐
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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
Excise Tax
Dedicated
Sales Tax
Occupational
Privilege Tax
(Head Tax)
Use Tax (on
Construction
Materials)
Dedicated
Lodging Tax
Document
Recording Fee RETT / RETA
Dedicated
Property Tax
What is it?
Residential and
commercial
development pay a
fee per sqft of new
floor area
Additional
assessment on
taxable goods
Tax assessed per
worker per month
Additional
assessment on
construction
materials
Additional
assessment on
lodging
Additional fee per
document
Ad valorem tax
(RETT) or voluntary
assessment on
sale of home
(RETA)
Additional mill
levy
What is a typical
assessment?
$0.50 to $13.00
per sqft
0.25% to 0.50% $4 to $10 per
month per worker
0.35% to 3.00% 2% to 4% $3 per document 0.1% to 2.0% 0.17 to 0.80 mills
How is it administered?
Need collection
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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
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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
‐50%
0%
50%
100%
150%
200%
250%
300%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Population Growth as % of 2000 Levels
Berthoud
Greeley
Johnstown
Longmont
Loveland
Timnath
Wellington
Windsor
Fort Collins
Source: U.S. Census; Colorado Department of Local Affairs; Economic & Planning Systems
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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%
Under 5
years
5 to 9
years
10 to 14
years
15 to 19
years
20 to 24
years
25 to 34
years
35 to 44
years
45 to 54
years
55 to 59
years
60 to 64
years
65 to 74
years
75 to 84
years
85 years
and over
Fort Collins Population Distribution by Age Category
2000
2010
2012
Source: U.S. Census; Colorado Department of Local Affairs; Economic & Planning Systems
57.1%
42.9%
55.8%
44.2%
55.7%
44.3%
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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
Employment Trends as a Percent of 2000 Levels
Recessions
Fort Collins / Loveland MSA
State of Colorado
Nation
Source: BLS; Colorado Department of Labor & Employment; National Bureau of Economic Research; Economic & Planning Systems
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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
Inflation‐Adjusted Income Median Household Income (2.5‐persons)
Source: U.S. Department of Housing and Urban Development; Economic & Planning Systems
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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
‐0.7% ‐0.8%
‐0.6%
0.2%
‐0.5%
0.9%
‐1.2%
‐0.7%
3.4%
0.9% 1.0%
‐2.0%
‐1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Source: U.S. Census; BLS; Economic & Planning Systems
Annual CPI‐Adjused Median Income
Changes, 2000‐2012
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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
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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
New Residential Unit Construction
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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
Owner‐Occupied
Renter‐Occupied
Vacant
Source: U.S. Census; Economic & Planning Systems
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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
Overall Sales Price as % of 2000 Sales Price
Fort Collins (42.8%)
Berthoud (35.6%)
Greeley (24.0%)
Johnstown (42.2%)
Longmont (30.3%)
Loveland (32.5%)
Wellington (27.0%)
Windsor (60.9%)
Source: Elevation Real Estate; Economic & Planning Systems
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September 5, 2014
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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%
‐0.6%
0.5%
‐0.2% 0.0%
‐0.4%
1.5%
‐1.0%
‐0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Fort Collins Berthoud Greeley Johnstown Longmont Loveland Wellington Windsor
Source: Elevations Real Estate; Economic & Planning Systems
Annual CPI‐Adjused Sales Price
Changes, 2000‐2013
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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:
How big is the CSU student population, and how much is it growing?
What the impact of CSU’s student body on rental housing demand?
What is the impact on the rental housing gaps analysis?
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
Average Monthly Rent
Vacancy Rate
Source: CDOH; Economic & Planning Systems
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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, Institutional Research; Economic & Planning Systems
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014
$25,000 or higher
Below $25,000 / Year
Source: CSU, Institutional Research Dept.; Economic & Planning Systems
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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
2011‐12
2012‐13
2013‐14
2014‐15
2015‐16
2016‐17
2017‐18
2018‐19
2019‐20
CSU Student Housing Program Capacity
1st Year
Student Unit
Demand
Total
Program
Capacity
Source: CSU Student Housing Action Plan, 2013; Economic & Planning Systems
Lory Site:
+600 beds
‐400 offline
4th Floors: +200 net
+240 beds
North Aggie:
+1,000 beds
‐150 offline
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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.
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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
Student‐Oriented
Other
Student‐Oriented
Other
Student‐Oriented
Other
Student‐Oriented
Other
Approved / Under
Construction / Recently
Completed
Approved PDP / Submitted Under Review Conceptual / Preliminary
Beds
Units
Source: City of Fort Collins, Department of Community Development & Neighborhood Services; Economic & Planning Systems
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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
Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor
Affordable Purchase Price Gap Median Sales Price
Source: U.S. Census; Economic & Planning Systems
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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
Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor
Affordable Price Gap Median Sales Price
Source: U.S. Census; Economic & Planning Systems
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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
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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
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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.
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.
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.
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.
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.
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).
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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:
What are the components of housing cost escalation?
What causes housing costs to escalate?
How much have each of the components contributed to housing cost increase?
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:
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
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.
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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.
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
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.
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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).
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.
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.
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
Average Housing Costs by Component
City Fees & Taxes [Note 4]
Other Soft Costs & Profit (Floating Amount) [Note 3]
Hard Costs [Note 2]
Land [Note 1]
Source: City of Fort Collins; Larimer County Assessor; Elevations Real Estate; Economic & Planning Systems
[Note 1]: Land values are based on data compiled from the Larimer County Assessor's office. They represent the cost of a finished lot
including infrastructure and water (as a portion of total housing sales prices). They accurately represent the portion (i.e. percentage)
of land to housing sales price, but presented here, they have been calibrated down to fit the housing price data available. Actual lot
sales prices, as with new unit sales prices are higher than depicted by these numbers.
[Note 2]: This includes the cost of materials and labor.
[Note 3]: This includes other soft costs, such as architeture and engineering, legal, and insurance. Developer profit is estimated as a
floating amount, i.e. the difference between the other three components and the overall housing price data points.
[Note 4]: These fees and taxes were estimated with the assistance of City of Fort Collins staff, including Development Review Services,
Engineering, and the Building Department.
[Note 5]: These totals represent the average of new and existing home sales throughout Fort Collins. They also represent detached
(i.e. single‐family) and attached (i.e. condominiums, townhomes, duplexes) housing and do not include rental.
[Note 6]: This component analysis and trends were created for the purposes of discussing various cost components using best
available data. Given the limitations and availability of new sales data trends, overall trends were used. As a result, the depicted
overall costs will be noticeably lower than actual "costs to build". That is, these trends do not depict precise costs to build in Fort
Collins ‐ they are a representation. Such actual costs to build would be higher.
Economic & Planning Systems, Inc. 32 133074-DR_09-05-14.docx
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.
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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.
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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
Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor
Affordable Price Gap Median Sales Price
Source: Economic & Planning Systems
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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.
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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.
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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.
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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:
Housing Costs - The sales price of locally available housing exceeds what a permanent-
resident household can afford.
Housing Availability – The development community is clearly oriented to building more
expensive housing than is affordable to the local workforce.
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.
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.
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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.
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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.
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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
Inclusionary Housing
Ordinance
Incentive Zoning
Ordinances Commercial Linkage Residential Linkage
What is it?
● Addresses housing gaps from
inflated housing prices
● Requires a percent of housing be
provided at affordable levels
● Responds to development and
redevelopment pressure requesting
special permits
● Requires residenƟal / commercial
development to provide affordable
housing and/or public amenities
● Addresses housing need by
commercial growth
● Requires commercial development
to provide housing units (or pay a
fee) based on new employees
generated
● Addresses housing need from
market for large second‐homes
● Developer provides employee
housing units or pays fee in‐lieu
What is a typical affordable
housing build requirement?
10% to 30% 10% to 20% 20% to 100% of employee generation
by land use
10% to 20%
What incentives are used?
Bonus density, fee waivers, expedited
review, parking reduction, unit
equivalency; public funding
assistance
Density bonus, reduced parking
requirement, reduced open space, or
any variance to zoning
Bonus density; fee waivers
Bonus density, fee waivers, expedited
review, parking reduction, unit
equivalency
Are there alternative
satisfaction options?
Payment of fee in‐lieu; offsite units;
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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
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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.
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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.
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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
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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.
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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.
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.
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.
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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:
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
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
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
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.
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Figure 26
Revenue-Generating Tools
Excise Tax
Dedicated
Sales Tax
Occupational
Privilege Tax
(Head Tax)
Use Tax (on
Construction
Materials)
Dedicated
Lodging Tax
Document
Recording Fee RETT / RETA
Dedicated
Property Tax
What is it?
Residential and
commercial
development pay a
fee per sqft of new
floor area
Additional
assessment on
taxable goods
Tax assessed per
worker per month
Additional
assessment on
construction
materials
Additional
assessment on
lodging
Additional fee per
document
Ad valorem tax
(RETT) or voluntary
assessment on
sale of home
(RETA)
Additional mill
levy
What is a typical
assessment?
$0.50 to $13.00
per sqft
0.25% to 0.50% $4 to $10 per
month per worker
0.35% to 3.00% 2% to 4% $3 per document 0.1% to 2.0% 0.17 to 0.80 mills
How is it administered?
Need collection
system
Existing sales tax
structure
Need collection
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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.
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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.
Prioritize regenerative, or ongoing, rather than one-time fixes
Emphasize tools with the greatest potential impact
Ensure that any recommended code changes are compatible with existing code
Pinpoint recommended programs to address the issue where the greatest burden exists
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
Marginal Fee Structure
Fee Waivers for
Affordable Projects
Public Financing
Based Incentive Policy
Affordable
Housing Easements
Reduction of
Minimum House Size
Disposition of City's
Land Bank Properties
Support Const.
Defect Claim Reform
Code‐Based
Incentive Policy
Modifications to
3‐Unrelated Rule
Revenue‐Generating
Funding Mechanisms
Inclusionary
Housing Ordinance
Commercial
Linkage
HOUSING IN OTHER COMMUNITIES IS MEETING AFFORDABILITY
NEEDS FOR CITY'S WORKFORCE; I.E. IN‐COMMUTING IS UP
NEED FOR AFFORDABLE OWNERSHIP HOUSING
ISSUE RECOMMENDATION
NEED FOR AFFORDABLE RENTAL HOUSING
WAGES NOT KEEPING PACE WITH HOUSING COSTS
IMPACT
Recommended
Not Recommended
High Med Low
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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
Average Housing Costs by Component
City Fees & Taxes [Note 4]
Other Soft Costs & Profit (Floating Amount) [Note 3]
Hard Costs [Note 2]
Land [Note 1]
Source: City of Fort Collins; Larimer County Assessor; Elevations Real Estate; Economic & Planning Systems
[Note 1]: Land values are based on data compiled from the Larimer County Assessor's office. They represent the cost of a finished lot
including infrastructure and water (as a portion of total housing sales prices). They accurately represent the portion (i.e. percentage)
of land to housing sales price, but presented here, they have been calibrated down to fit the housing price data available. Actual lot
sales prices, as with new unit sales prices are higher than depicted by these numbers.
[Note 2]: This includes the cost of materials and labor.
[Note 3]: This includes other soft costs, such as architeture and engineering, legal, and insurance. Developer profit is estimated as a
floating amount, i.e. the difference between the other three components and the overall housing price data points.
[Note 4]: These fees and taxes were estimated with the assistance of City of Fort Collins staff, including Development Review Services,
Engineering, and the Building Department.
[Note 5]: These totals represent the average of new and existing home sales throughout Fort Collins. They also represent detached
(i.e. single‐family) and attached (i.e. condominiums, townhomes, duplexes) housing and do not include rental.
[Note 6]: This component analysis and trends were created for the purposes of discussing various cost components using best
available data. Given the limitations and availability of new sales data trends, overall trends were used. As a result, the depicted
overall costs will be noticeably lower than actual "costs to build". That is, these trends do not depict precise costs to build in Fort
Collins ‐ they are a representation. Such actual costs to build would be higher.
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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.
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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
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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.
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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.
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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:
Sale of a site would generate immediate revenue for acquiring other properties for the
current land bank program
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:
Gives the City greatest direct control over the long-term affordability of its properties
Generate ongoing revenues through land rents to support the trust’s administrative
operations
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.
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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 couple of the more pertinent recommendations 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.
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.
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.
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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
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.
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.
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.
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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.
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.
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.
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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.
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-
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.
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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:
An IHO directed at Fort Collins’ greatest housing need, i.e. rental housing, would face legal
and logistical challenges;43
IHOs are effective where the supply of housing product affordable to low AMI levels is scarce;
IHOs are effective in markets saturated by high-end home sales, such as resort markets;
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.
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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
Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor
Affordable Price Gap Median Sales Price
Source: U.S. Census; Economic & Planning Systems
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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%
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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:
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,
because most of the burden is placed on non-residential development;
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
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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
Overall Sales Prices
Fort Collins (2.8%)
Berthoud (2.4%)
Greeley (1.7%)
Johnstown (2.7%)
Longmont (2.1%)
Loveland (2.2%)
Wellington (1.9%)
Windsor (3.7%)
Source: Elevation Real Estate; Economic & Planning Systems
Appendix B:
Impact of Minimum Wage Increase
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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
State of Colorado Minimum Wage
Source: Colorado Department of Labor & Employment; Economic & Planning Systems
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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.
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.
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.
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
Less than
$10,000
$10,000 to
$14,999
$15,000 to
$19,999
$20,000 to
$24,999
$25,000 to
$34,999
$35,000 to
$49,999
$50,000 to
$74,999
$75,000 to
$99,999
$100,000 to
$149,999
$150,000 or
more
Estimated Hourly Wage for Working Households
[Note 1]: For all households, these calculations assume that there are 1.5 jobs per households, and that jobs are typically paid for 2,080 hours per year.
[Note 2]: This analysis also assumes that for working households with incomes below $25,000, jobs may be part‐time but paid minimum wage.
Housing Affordability Policy Study
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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:
Column 1: This is the maximum household income relevant to the respective income range.
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.
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
)
Column 4: These are the estimate hourly rates per job-holder.
Column 5: New $10.00 minimum wage is applied to the relevant household income
categories.48
Column 6: The new per-job minimum wage is factored up by the respective number of hours
worked
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
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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.
Column 1: Existing distribution of households by income (2012), according to the U.S.
Census.
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
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.
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
Column 5: This is the distribution of other (current) employed households.
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
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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
Less than
$10,000
$10,000 to
$14,999
$15,000 to
$19,999
$20,000 to
$24,999
$25,000 to
$34,999
$35,000 to
$49,999
$50,000 to
$74,999
$75,000 to
$99,999
$100,000 to
$149,999
$150,000 or
more
Estimated Distribution of Working Households
Existing
Distribution
Estimated
Redistribution Based
on $10.00 / hour
Distribution of
Remaining
Households
[Note 1]: All data presented in this graphic represent 2012 conditions. The minimum wage, as shown, was $7.64 in 2012.
Source: U.S. Census; Colorado Department of Labor & Employment; Economic & Planning Systems
0
2,000
4,000
6,000
8,000
10,000
12,000
Less than
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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
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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
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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:
Clarifies that the rent control statute applies only to private residential property or private
residential housing units.
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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.
Precludes the denial of an application for a development permit if the applicant declines to
enter into such an agreement.
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.
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
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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
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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.
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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.
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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/
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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.
Projects totaling between 5 and 75 units are also required to provide units on-site.
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.
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.
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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:
Projects with 26 to 35 units are required to provide 10 percent middle income units;
Projects with 35 to 49 units are required to provide 15 percent middle income units; and
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.
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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.
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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
Unintended consequences?
Longitudinal studies?
Data sources
Mechanisms that increase cost of housing, i.e., design standards
Land supply impact on price?
Overall housing cost
Consensus: Drivers – other policy solutions (broad-based approach)
Utilities as percent of income
Manufactured housing flex in zoning, city should be a part
How do you maintain affordable housing?
How did communities define their issues, and did it make a difference?
And should it be a community solution?
Service workforce and student housing influence
BPs and code and impact fees that are differentiated by types of housing
Zoning ≤3 unrelated issue – affects students
Understanding exactly where the burden falls
Criteria for defining geography
What is CSU doing?
Look at transportation proximity
Control development standards costs (e.g., Thornton)
Ensure comments/concerns are reported in study
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Comment Cards
Table D1
Comment Card Question 1
Table D2
Comment Card Question 2
What advantage do you see in: Comments
No – None, regressive (burdens low income people)
None
Would support
Broad base
Housing and transportation
This would spread the burden of costs across the entire
population
No – Regressive unless affordable housing is excepted
None
Adds to unaffordability – don’t like
More widely spread
Broad base
Affordability index
Same as “a”
Ok – Not regressive
None
Acceptable though lacks nexus
None
Include analysis of land that has transit access
Not sure exactly how this would work
No ‐ Regressive unless affordable housing is excepted
None
Favor this most
None
A&B do the best job at sharing the burden
a. dedicated sales tax
b. dedicated property tax
c. dedicated lodging tax
d. excise tax
What advantages do you see in: Comments
For a, b and c – Only okay if minimal amount per item
For a, b and c ‐ None Zoning should be a static map and
not change for extended periods of time (10+ up)
$162m $54m
Those could really work
Manipulative
Add CSU to stakeholders
I like using carrots better than sticks
The city gives incentives to Foothills Mall, Woodward (?)
gov., etc.
None
None
Disadvantage – doesn’t spread the burden well
Bring in workers – no housing
None
None
Disadvantage – doesn’t spread the burden well either
b. commercial linkage
c. inclusionary housing
a. incentive zoning
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Table D3
Comment Card Question 3
Table D4
Comment Card Question 4
Table D5
Comment Card Question 5
Table D6
Comment Card Question 6
Which incentives would be effective in Fort Collins? Support
Density increases 5
Height increases 4
Parking reductions 4
Lot coverage increases 5
Open space reductions 4
Exemptions from some building design requirements 4
Comment: Limit size of housing, encourage smaller
A condition of incentives could be provided residents
with annual passes to MAX transit, to reduce the need for
a second car for families, thereby increasing the amount
of the household income available for housing
Incentives for very small units (Soho including in unit
bike storage 500‐6000 sf 2‐BR units). Trigger incentives.
The more regulatory (builders?)
Zoning restored for many of housing‐delete commercial.
Energy efficiency rewards for certifications beyond code
or even energy star.
Can we do small group stakeholder meetings?
On a level playing field, no one is required to pay an
affordable housing fee; when a developer gets a special
concession or URA money, then they have to pay the fee.
Do you have out‐of‐the‐box ideas for incentives?
How to supplement (?) continued affordability after
subsequent resales.
Do not increase the cost of housing for all to subsidise
for a few.
Low interest rates exist, money to be made, city incentives
growth, more people more need, commercial links and
excise fees.
Energy costs, as they rise, of “junk” code built housing,
look at net zero or passive house.
Another way to provide additional affordable units would
be to relax the impact fees required to build Accessory
Dwelling Units.
What might we have missed?
None – no exceptions – Remove the barrier for all.
High density
If a developer gets a special concession or URA grant
money.
What type of development should “trigger” an incentive
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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. All exemptions for one development should be
applied to all units.
Limit size of housing; allow greater height get only certain
zone.
Of course. Question is too broad.
Accessory Dwelling Units (ADUs) in infill areas have less
impact than new construction on the edge of town, and
therefore should charge less for water and sewer tap fees,
thereby making the units more affordable to create.
Should there be exemptions or limitations?
Provide Incentives for small SF units and let market price
accordingly.
If one development needs the lessening of zoning, fees,
and etc., all developments need the lessening of zoning,
fees and etc.
Manufactured housing parks should be protected, small
housing zoned with no garages and common open area.
You can’t only burden development community for this
solution.
Presentation was focused on workforce (service/detail)
as definition of affordability. Policy and studies need to
include low and very‐low income populations as well.
Additional comments/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
Need a mix of housing for renters and owners
Johnstown is the only area left to build in / attracting higher incomes
Job growth is greater than housing availability
Interesting to see comparison to national trends
Dramatic difference in affordability between Fort Collins and Greeley
2000-2009 recession, prices are down less than we thought
AMI has gone down, housing prices have gone up = hardship
Focus on loss of competitive edge
Affordability gaps were bigger in 2000
Where can we change the trend lines
How much of this is where we are in the economic cycle
Policy implementation always lags
Commuting data is difficult to interpret
What about two spouses commuting to different communities
Trends will ripple into surrounding communities
42%? Artificial increase?
Trends are not sustainable
Market forces and fees push towards bigger homes
Incomes are not increasing enough as housing costs
Need down payment assistance and financial education
If trends continue there will be a lack of diversity
Gentrification
Trading off housing cost for transportation costs
Need more manufactured housing
Rental and Student Housing
How to get enough subsidies to meet the lowest income need group
New student housing is displacing land that could be used by non-student renters
New student housing tends to be top end and not affordable to many students
CSU isn’t taking responsibility for housing students
Students demand houses more than apartments
Concern we are headed towards a bubble in the rental market – Construction defect
People who could otherwise buy are being forced into the rental market
Foreclosure victims are now in the rental market
Students shouldn’t be separated from other cost burdened populations --- no they are
temporarily poor, not the same
Interest in affordable housing is not reflected in City’s policies
Manufactured housing is a significant component of non-subsidized rental stock
Boarding houses present challenges like parking and need at least 5 units to be viable to a
developer
U + 2 hurts rentals overall but is good for owner occupancy housing market
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Hard for homeowners to break into market with the U + 2 because investors acquire property
faster
Investors like the predictability of U + 2
Consider U + 3 in certain parts of town
Should students and multifamily housing be considered same in terms of code?
Extra restrictions on multifamily because of issues with student housing
Student housing issues are management and behavioral issues not land use code
Is there data on if the U + 2 reduces nuisances? Would U + 3 increase nuisances?
Make policy based on long term goals and trends
Housing Cost Components
Land availability and GMA
Code isn’t allowing for growth in GMA
Payback on environmental efficiency is too long and codes are getting stricter
Raw water costs could escalate quickly
No condo development at all – Construction defect
Street standards drive up costs
Sprinkler systems drive up costs
Need more incentives for deed restricted affordable housing
Values of deed restrictions increases over time
If fees waived, has to be made up elsewhere
Permit fees encourage larger units – no break for small units
More expensive to get approval from and P and Z because of legal fees to avoid appeals
Land costs rising where we want affordable housing
Fire codes require access on all codes of the building
Land costs are too high to support single family, must be multi family
Developers should be allowed at the table when the fees are being determined by the City of
Fort Collins
All costs have increased over the years
Should affordable housing have to pay the same fees as non-affordable housing
Distressed Populations
The number on the FCHA waitlist is too long and the percentage of low income people on it is
too high
Not sure first time homebuyers are distressed, but they are putting pressure on rental
market
It’s going to get worse – senior populations are growing
Need housing for single women with low incomes
Mobile home parks are being closed and redeveloped
Section 8 voucher units may not pass inspection
HUD payments aren’t keeping up with rental costs
Fewer FCHA SROs are actually owned by FCHA, many are not suited to multi family
Half in public housing are disabled, moving is hard and they need a stable place to live
Two year waitlist is unacceptable
Lack of down payment is a barrier to move up
Increased demand for affordable 1 BR and 3 BR
City should waive 12-15% of fees for affordable housing in trade for permanent deed
restrictions 6%
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Need housing combined with services
Rental bubble may exceed need but not for the lowest income
Need more data showing unfilled gap and demand above 30% AMI
Developers can’t go this low under current system
As a community we don’t have the obligation to take care of students
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
What kind of zoning incentives would have real value that enable builders to build at lower
rental/sales rates
How much $$ would a tax have to raise, what would it be used for, and how much difference
in affordability would it make
How do we explain high support for city fee waivers with low support for a separate
(presumably lower) fee structure for affordable housing
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
Reduce barriers against tiny houses and cottage housing projects
Explore creative financing issues
Community Reinvestment Act investments in affordable housing
City guarantees (partial?) of AH-related land and construction loans
Explore use of metro districts for AH purposes
Get creative about reducing water costs
Distressed groups category should include the homeless
Lobby/preserve/strengthen LIHTC programs at state and federal level
Find ways to create ownership housing deed-restricted in perpetuity
Buying land for the Land Trust could reduce supply for other AH builders
Strengthen incentives to preserve/renovate/enhance existing AH stock
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%
Fort Collins fee
structure discourages
the production of
small units
Fort Collins should
have a separate fee
structure for
affordable housing
Fort Collins should
have a streamlined
process for
affordable housing
similar to the City’s
small project
program
None of the above /
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%
Sell the land to
developers for the
production of
affordable housing
and buy more land
Put the land into a
community trust and
use for affordable
housing
Hold onto the
properties until there
are no other available
lots
None of the above /
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%
Mobile Home
Parks offer
affordable
housing and
must be
protected
A Mobile Home
Park District is a
good way to
preserve these
units
A voluntary
affordable
housing
easement
program should
be explored to
preserve mobile
home parks
Mobile home
parks are not the
best land use
and should be
redeveloped
None of the
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%
Excise Tax Dedicated Sales
Tax
Time‐limited
Property Tax
A community
land trust
None of the
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%
Excise Tax Dedicated Sales
Tax
Time‐limited
Property Tax
A community
land trust
None of the
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
Non‐profit
developers
Private
developers
The type of
project, not the
developer,
should trigger
waivers
None of the
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
Relax to four unrelated citywide 9138
Relax to four unrelated in certain zones 4168
Relax to four unrelated for seniors aged 55 and up 3 0 11 3
Streamline exemption process for owner‐occupied homes2025
Streamline exemption process for seniors aged 55 and up4075
Landlord Licensing Program 1081
Open House 1Open House 2
Landlords do not seem to take ownership in the upkeep of their rental properties.
Rental apartments in owner‐occupied homes (basements, etc.) should not be illegal based only on zoning
density. Also should look at separate heating and entrance.
Comments POH #2:
More specific regulations.
Absolutely not! It’s working too well!
Very against relaxing 3‐unrelated and changing to 4.
Properties rented by students are very easy to identify—parking, trash, condition of yard, etc.
REGULATORY: Relax the 3‐Unrelated Rule
Comments POH #1:
Fort Collins cannot afford overly conservative housing policies like You+2. Allow four unrelated individuals to
cohabitate like other college towns and have consequences/protections in place for rowdy
households/landlords to address problem cases.
Don’t remove 3‐unrelated rule for single family zones. It would result in warehousing residents in over‐priced
homes. 3‐unrelated has made starter homes affordable for families.
Remove 3‐unrelated rule. Landlord permit program with funding from increased occupancy going to affordable
housing fund.
Consider exemptions for the “2
nd
Range” restriction for multi‐generational families.
Economic & Planning Systems, Inc. 102 Appendix
Table D10
Public Open House, Poster 2
Table D12
Public Open House, Poster 3
Support Oppose Support Oppose
Fix Construction Defects law 6042
Approve the State Low Income Tax Credit Program 3071
Pass state‐wide funding measure for affordable housing 6 0 12 1
Open House 1Open House 2
Comments POH #2:
None
Legislative: Lobby State Legislature
Comments POH #1:
Can we get a clear definition of what is being defined as “affordable”?
Trim current inefficiencies in current system to reduce admin.
Adopt real estate transfer tax or similar fees to create state housing trust fund. this may require voter approval.
Support Oppose Support Oppose
Fee Waivers for Affordable Housing 3050
Streamline Process for Affordable Housing 2090
Adjust Marginal Cost Structure of Fees (reduce fees for smaller
units)
5091
Reduce or Remove Minimum Size for Homes 9 0 13 3
Open House 1
Comments POH #2:
Okay to reduce depending on neighborhood (house minimum).
I support reduced size.
Allow for “Tiny House” neighborhoods—or 3 bedrooms less than 1000 square feet.
Cost Reduction:
Comments POH #1:
Reduce the numbers who have housing that do not qualify and abuses
Very important to review/act on this—Old requirements no longer apply with our environment.
Open House 2
Economic & Planning Systems, Inc. 103 Appendix
Table D13
Public Open House, Poster 4
Table D14
Public Open House, Poster 5
Support Oppose Support Oppose
Non‐Subsidy Triggered 3 0 5 0
Subsidy Variety 2030
Part of Negotiation 0000
Triggered by Public Financing 0 0 0 0
Don’t see Housing Authority’s existing single family homes. Improve them through practical construction
Retail price per square foot matrix—including ongoing increase percentage.
Taxing will not solve this. Bring back FCHA—help to buy program.
Use TIF financing for affordable housing.
Comments POH #2:
Affordable “student” housing?
REGULATORY: Incentive Policy Ordinance
Comments POH #1:
Open House 1Open House 2
Support Oppose Support Oppose
Growth Management Area 0032
Remove Impediments on Available Land 1041
Provide Infrastructure Improvements in Northeast 3061
North College is urban sprawl.
GMA increases smart.
Well thought out infill.
REGULATORY: Evaluate Land Constraints
Comments POH #1:
Be cautious here—avoid sprawl when possible.
We need sidewalks.
This is a regional issue—Is Timnath contributing?
Comments POH #2:
Open House 1Open House 2
Economic & Planning Systems, Inc. 104 Appendix
Table D15
Public Open House, Poster 6
Table D16
Public Open House, Poster 7
Support Oppose Support Oppose
Affordable Housing Easement Option 8060
Preserve Existing Mobile Home Parks 13 0 10 0
Create New Manufactured Housing Communities 11 0 6 2
Consider other value engineering approaches—system‐built, modular, pre‐assembled, etc.
Nice (create manufactured housing)
Create new manufactured housing communities with transportation in mind!
Comments POH #2:
Why mobile homes? Apartments are more efficient.
Look into recycled home movement.
REGULATORY: Address Manufactured
Housing
Comments POH #1:
Programs for upgrades
Open House 1Open House 2
Support Oppose Support Oppose
Excise Tax 6425
Dedicated Sales Tax 6252
Time Limited Property Tax 1131
None
ALTERNATIVE FUNDING SOURCES
Comments POH #1:
Review and assess current budget.
Taxing will not solve this—let’s see data on #s of folks needing affordable housing.
Ask Congressional reps to urge U.S. Housing Secretary Mel Watt to create Housing Trust Fund. Also, create
Comments POH #2:
Open House 1Open House 2
Economic & Planning Systems, Inc. 105 Appendix
Table D17
Public Open House, Poster 8
Table D18
Public Open House, Poster 9
Support Oppose Support Oppose
Community Land Trust 3060
Create Endowed Foundation 3 0 2 1
Sell for Affordable Housing 7042
Maintain for Future Use 0010
Affordable houses so people can own home and property.
1st buyer back to city
Or sell back to non‐profit builder/lender
Comments POH #2:
This sounds like selling a car for gas money.
ALTERNATIVE FUNDING SOURCES: Land Bank
Program
Comments POH #1:
Create endowment for affordable housing, perhaps similar to Sand Springs Home Village through public
Create an inter‐church housing corporation similar to that created by Jim Geller (Rev. Bob Geller’s son) among
Undocumented pay taxes, but aren’t eligible.
Open House 1Open House 2
Support Oppose Support Oppose
Housing Authority 3 0 5 0
Not‐for‐Profit Developers 5 0 11 0
For‐Profit Developers 1138
All Affordable Housing Projects 11090
Comments POH #1:
Yes on Not‐for‐Profit developer fee waivers under specific and targeted guidelines (public/private partnerships)
Create gap funding to offset difference of voucher and market rent. Increase accountability within the agency.
Comments POH #2:
None
COST REDUCTION OPTION: Who Should Be
Eligible for Fee Waivers?
Open House 1Open House 2
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%
Construction defect
litigation
State version of Low
Income Housing Tax
Credit program
Increasing state
funding for
affordable housing
None of the above /
other
35%
40%
Tax increment
financing is
provided
Any non‐housing
public subsidy is
provided
A zoning
variance is
granted
Any land code
provision is
adjusted at
developer’s
request
None of the
above / other
10%
15%
20%
25%
30%
35%
40%
$10,000
$10,000 to
$14,999
$15,000 to
$19,999
$20,000 to
$24,999
$25,000 to
$34,999
$35,000 to
$49,999
$50,000 to
$74,999
$75,000 to
$99,999
$100,000 to
$149,999
$150,000 or
more
New Distribution of All Households
Existing
Distribution
Source: Economic & Planning Systems
New
Distribution
[Note 3]: Minimum wage for the state of Colorado in 2012 was $7.64 per hour.
Source: Colorado Department of Labor & Employment; Economic & Planning Systems
202%
218%
237%
265%
312%
Existing and New Home Sales Price Distribution, 2013
Distribution of Sales Affordable by Fort Collins Area Median Income
Sales of Market‐Rate
Housing Available at
100% AMI or Below
(22% of All Sales)
Sales Price Range for
Deed‐Restricted
AFFORDABLE Housing
(at 80% to 100% AMI)
Sales Price Range for
Deed‐Restricted
WORKFORCE Housing
(at 100% to 120% AMI)
system; need to
educate
businesses
Existing tax
structure
Existing tax
structure
If collected,
existing system
(typically County
in CO)
State, county, or
city
Existing structure
Who is affected?
● New
development
● Residents
● Businesses
● Visitors
● Employers
● Employees
● Developers
● Contractors
● Visitors
● Legal
● Business
● Real estate
● Real estate ● Real estate
What are its advantages /
disadvantages?
● Burden on new
residential and
commercial
development
● Generates
revenue at pace of
development
● Voter approval
required
● Could generate
high revenues
● Voter approval
required
● Broadest
distribution of
burden
● Would have to be
employer‐paid
● Addresses both
existing and new
needs
● Voter approval
required
● Strong nexus to
new residential
development
● Voter approval
required
● Reasonable
nexus exists
● Lodging industry
expects to use
funds for tourism
● Voter approval
required
● Applies to
broader types of
documents
● Weak nexus to
housing
● Can be imposed
voluntarily
● Applies to new
sales subject to
developer
agreement
● Could generate
high revenues
● Voter approval
required
Who uses it?
Cambridge, MA
San Francisco, CA
Berkeley, CA
Boulder, CO
Parker, CO
Aspen/Pitkin
County, CO
St. Paul, MN
Dayton, OH
Denver, CO
Aurora, CO
Greenwood Village,
CO
St. Louis, MO
San Miguel County,
CO
San Francisco, CA
Columbus, OH
Snowmass Village,
CO
Indianapolis, IN
Jackson County,
MO
Bucks County, PA
Philadelphia, PA
Aspen, CO;
Snowmass Village,
CO
Vail, CO
Breckenridge, CO
Telluride, CO
Winter Park, CO
Pitkin County, CO
Boulder, CO
Cambridge, MA
Seattle, WA
Source: Economic & Planning Systems
H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Funding Options
Alternative Funding Options
housing certificates; combination
IH/RO units and voluntary adoption
of RETA
Payment of fee in‐lieu
Payment of fee in‐lieu; land
dedication; offsite units; deed‐
restricted commercial space
Payment of fee in‐lieu; land
dedication; offsite units
What are the legal / nexus
issues?
Does not require voter approval, no
nexus study required
No nexus study required Requires nexus study and
documentation
Requires nexus study and
documentation
Who is affected? ● New residenƟal development
● New residental development
● Businesses
● Visitors
New commercial development New residential development
What are its advantages /
disadvantages?
● Addresses community workforce
housing needs (i.e. ownership or
rental)
● Limits the burden to new
residential development
● Most common among the
programs identified
● Value of incenƟves is relaƟve to the
market
● Success is dependent on the value
of respective incentives within the
market
● Addresses workforce housing
needs
● Broadens the burden to wide
variety of land uses
● Requires nexus analysis
● Addresses seasonal/service
worker housing needs (i.e. rental)
● Limits the burden on market to
large 2nd homes
● Requires complicated nexus
analysis
Who uses it?
Boulder, CO
Denver, CO
Burlington, VT
Cambridge, MA
Davis, CA
Cambridge, MA
Seattle, WA
Chicago, IL
Boston, MA
Vail, CO
Aspen/Pitkin County, CO
Telluride, CO
Park City, UT
Telluride, CO
Jackson/Teton County, WY
Source: Economic & Planning Systems
H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Housing Programs w Res Linkage
Affordable Housing Programs
+850 net Newsom/
Aylesworth:
+900 net
2013‐14 Program
Capacity = 5,600 beds
2017‐18 Program
Capacity = 7,550 beds
Multi‐Family / Mixed‐Use
Single‐Family
Source: City of Fort Collins; Economic & Planning Systems
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Owner‐Occupied Renter‐Occupied
2000
2010
2012
Source: U.S. Census; Economic & Planning Systems
system
Existing sales tax
structure
Need collection
system; need to
educate
businesses
Existing tax
structure
Existing tax
structure
If collected,
existing system
(typically County
in CO)
State, county, or
city
Existing structure
Who is affected?
● New
development
● Residents
● Businesses
● Visitors
● Employers
● Employees
● Developers
● Contractors
● Visitors
● Legal
● Business
● Real estate
● Real estate ● Real estate
What are its advantages /
disadvantages?
● Burden on new
residential and
commercial
development
● Generates
revenue at pace of
development
● Voter approval
required
● Could generate
high revenues
● Voter approval
required
● Broadest
distribution of
burden
● Would have to be
employer‐paid
● Addresses both
existing and new
needs
● Voter approval
required
● Strong nexus to
new residential
development
● Voter approval
required
● Reasonable
nexus exists
● Lodging industry
expects to use
funds for tourism
● Voter approval
required
● Applies to
broader types of
documents
● Weak nexus to
housing
● Can be imposed
voluntarily
● Applies to new
sales subject to
developer
agreement
● Could generate
high revenues
● Voter approval
required
Who uses it?
Cambridge, MA
San Francisco, CA
Berkeley, CA
Boulder, CO
Parker, CO
Aspen/Pitkin
County, CO
St. Paul, MN
Dayton, OH
Denver, CO
Aurora, CO
Greenwood Village,
CO
St. Louis, MO
San Miguel County,
CO
San Francisco, CA
Columbus, OH
Snowmass Village,
CO
Indianapolis, IN
Jackson County,
MO
Bucks County, PA
Philadelphia, PA
Aspen, CO;
Snowmass Village,
CO
Vail, CO
Breckenridge, CO
Telluride, CO
Winter Park, CO
Pitkin County, CO
Boulder, CO
Cambridge, MA
Seattle, WA
Source: Economic & Planning Systems
H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Funding Options
Alternative Funding Options
restricted commercial space
Payment of fee in‐lieu; land
dedication; offsite units
What are the legal / nexus
issues?
Does not require voter approval, no
nexus study required
No nexus study required Requires nexus study and
documentation
Requires nexus study and
documentation
Who is affected? ● New residenƟal development
● New residental development
● Businesses
● Visitors
New commercial development New residential development
What are its advantages /
disadvantages?
● Addresses community workforce
housing needs (i.e. ownership or
rental)
● Limits the burden to new
residential development
● Most common among the
programs identified
● Value of incenƟves is relaƟve to the
market
● Success is dependent on the value
of respective incentives within the
market
● Addresses workforce housing
needs
● Broadens the burden to wide
variety of land uses
● Requires nexus analysis
● Addresses seasonal/service
worker housing needs (i.e. rental)
● Limits the burden on market to
large 2nd homes
● Requires complicated nexus
analysis
Who uses it?
Boulder, CO
Denver, CO
Burlington, VT
Cambridge, MA
Davis, CA
Cambridge, MA
Seattle, WA
Chicago, IL
Boston, MA
Vail, CO
Aspen/Pitkin County, CO
Telluride, CO
Park City, UT
Telluride, CO
Jackson/Teton County, WY
Source: Economic & Planning Systems
H:\133074-Fort Collins Housing Study\Data\[133074-Housing Program Matrix.xlsx]Housing Programs w Res Linkage
Affordable Housing Programs
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
Office of Economic Development
Executive Director submits
recommendation to the Mayor
HUD Risk
Assessment
City of
Lakewood
N/A N/A N/A N/A N/A N/A
City of
Loveland
1 cycle (spring) - Letter of intent
- Only Housing
applications
thoroughly vetted
- Distributes Grant
Guide in advance
- 2 Public Service
and 1 Housing
workshops
- Staff evaluate first
- Ranking matrix
used
- Affordable Housing Commission
submits Housing recommendations
to City Council
- Human Services Commission
submits Public Service
recommendations to City Council
Survey agencies
Douglas
County
- 1 cycle (fall) Letter of intent CDBG
Application
Workshop
- Advisory Board
evaluates first,
then gets staff’s
scores
- Ranking tool used
CDBG Advisory Board submits
recommendations to Board of
Commissioners
- Project
Management
Workshop
- Reporting
Template
Jefferson
County
1 cycle (fall) Pre-application CDBG Q&A
Session
- Staff evaluate first
- Evaluation criteria
used
Community Development Advisory
Board makes recommendations to
Board of Commissioners
HUD Risk
Assessment