HomeMy WebLinkAboutMemo - Mail Packet - 1/17/2023 - Memorandum From Meaghan Overton And Ingrid Decker Re: Eligibility For Funding From Proposition 123 In Light Of The Reconsideration Of Ordinance No. 114, 2022, Repealing And Reenacting Section 29-1 Of
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222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522
970.221.6758
MEMORANDUM
DATE: January 10, 2023
TO: Mayor Arndt and City Council Members
THRU: Kelly DiMartino, City Manager
Tyler Marr, Deputy City Manager
Carrie Daggett, City Attorney
FROM: Meaghan Overton, Housing Manager
Ingrid Decker, Senior City Attorney
RE: Eligibility for funding from Proposition 123 in light of the reconsideration of
Ordinance No. 114, 2022, Repealing and Reenacting Section 29-1 of the Code of
the City of Fort Collins
The following is in response to a request for information about how uncertainty around the adoption
of the Land Development Code (LDC) might affect the City’s ability to apply for funding from the
state under Colorado Proposition 123.
Bottom Line: If the City hopes to receive Proposition 123 funding in 2024, the City must first file a
“commitment” by November 1, 2023. The City’s ability to make that commitment depends in part on
whether the City will be operating under land use regulations that meet the requirements of
Proposition 123; so resolution of that issue in a timely manner makes it more likely that the City will
be able to file a commitment. The Council memorandum sent under separate cover on January 9
regarding a proposed 6-month process for the potential repeal and replacement of the LDC will
allow the City to maintain eligibility for Proposition 123 funds. If Ordinance No. 114, 2022 is
referred, whether the land use provisions it includes will enable the commitment as of November 1 ,
2023 would be dependent on the timing of the vote and follow up action.
Background:
Colorado Proposition 123 was approved by voters in November 2022. This proposition dedicates a
portion of income tax revenue to create the Affordable Housing Support Fund administered by the
State Division of Housing, and the Affordable Housing Financing Fund administered by the State
Office of Economic Development.
These two funds can be used for various housing projects including, per the ballot language,
"affordable housing financing programs that will reduce rents, purchase land for affordable housing
development, build assets for renters, support affordable homeownership, serve persons
experiencing homelessness, and support local planning capacity."
Any local governments (other than housing authorities) that want to access funds set aside by
Proposition 123 starting in 2024 must file a “commitment” by November 1, 2023, explaining how
they intend to increase their affordable housing stock by 3% per year compared to a baseline that
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will reset every three years, and must also create a “fast track” process to approve affordable
housing developments within 90 days.
Changes that were incorporated into the LDC to help Fort Collins meet the requirements of
Proposition 123 included:
Creating capacity for more than 4,500 affordable homes, a nearly 200% increase in
affordable housing stock;
Allowing a faster review process for housing developments through a Basic Development
Review (BDR) process;
Increasing incentives like reduced parking, additional height, or more density for affordable
housing to encourage the development of more deed-restricted units; and
Requiring 99 years of affordability so multiple generations can benefit from affordable,
stable housing.
It is currently uncertain what land use regulations will apply to future development in Fort Collins. If
this uncertainty is resolved prior to November 1, 2023, the City may be able to file the commitment
required to apply for state funding in 2024. If not, the City’s next deadline for filing would be
November 1, 2024, for possible funding in 2025. While some of these changes could be made
fairly simply (such as the change to the length of time of affordability required), to address the
broader requirements will require more comprehensive change that would be difficult to separate
from the more cross-cutting changes that were included in the Land Development Code and would
be part of that ongoing discussion.
City staff considered whether to accelerate adoption of certain components of the Draft LUC (for
example, the provisions specific to affordable housing listed above) and bring remaining sections
for adoption for a second action. This would add complexity to drafting and would add time to this
process. Staff understands the importance of ensuring the City is poised for indicating our eligibility
for receiving funds from Proposition 123 by November 2023. With the proposed timeline of 6
months for an LDC repeal and replacement process, staff can meet that expectation and will be
mindful of this goal during the process. It is possible to adjust this approach if necessary during
Stage 3 (Prepare the new LUC Draft, March-June 2023) as described in the separate January 9
Council memorandum.
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