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Home My WebLink About10-16-17 City Commission Packet Materials - C8. Ordinance 1980 Final Adoption, Condos in Affordable Housing1 REPORT TO: Mayor and City Commission FROM: Martin Matsen, Director of Community Development Karen Stambaugh, Deputy City Attorney SUBJECT: Final Adoption of Ordinance 1980, Revisions to Article 38.43, Affordable Housing to Address Condominiums Text Amendment, Application 17381. MEETING DATE: October 16, 2017 AGENDA ITEM TYPE: Consent RECOMMENDATION: That the City Commission grant final approval to Ordinance 1980 which was provisionally adopted on October 2, 2017. BACKGROUND: The City Commission directed staff to prepare a text amendment to Article 38.43, Affordable Housing to remove condominiums as a trigger for compliance with the article. Staff has prepared the requested ordinance and advertised public hearings. The City Commission conducted a public hearing on the amendment to October 2, 2017. After considering all public comments, staff report, and discussion, the Commission amended the draft as shown in the video recording of the meeting. After amending the draft the Commission provisionally adopted Ordinance 1980. UNRESOLVED ISSUES: None determined at this time. ALTERNATIVES: 1) Approved Ordinance 1980 2) Revise the ordinance 3) As identified by the Commission FISCAL EFFECTS: The Commission has budgeted funds for administration of the affordable housing program. The ordinance adoption does not change the amount budgeted. Attachments: Ordinance 1980 Report compiled on October 4, 2017 Commission Memorandum 175 Page 1 of 6 ORDINANCE NO. 1980 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA AMENDING THE UNIFIED DEVELOPMENT CODE, CHAPTER 38 OF THE BOZEMAN MUNICIPAL CODE, TO REMOVE CONDOMINIUMS FROM THE APPLICABILITY OF ARTICLE 43, AFFORDABLE HOUSING WHEREAS, on February 5, 2016, the Bozeman City Commission adopted Ordinance 1922, which added a new Article 43 regarding affordable housing; and WHEREAS, Article 43 requires certain development projects proposing ten or more market-rate homes to include a certain percentage of affordable homes at prices affordable to households with incomes at or below a percentage of area mean income (AMI); and WHEREAS, the definition of “market-rate home” in Article 43 includes condominiums, so that condominiums in a development must be counted toward the ten or more dwelling units that will cause the development to be subject to Article 43; and WHEREAS, the definition of “affordable home” in Article 43 does not include condominiums, so that the sale of condominiums does not satisfy the requirements of Article 43. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: 176 Ordinance 1980, Revising Affordable Housing to Address Condominiums Text Amendment Page 2 of 6 Section 1 That Article 43, Affordable Housing, is amended to remove condominium units from the application of Article 43, and to clarify certain language, as follows: Sec. 38.43.030. – Applicability. . . . E. Exemptions. Developments comprised exclusively of rental housing units are exempt from these requirements this article. Sec. 38.43.040. – Definitions. 1. Affordable housing or affordable homes. A dwelling for purchase by an owner-occupant that requires no more than 33 percent of a household’s income for housing payments and meets the definition of a lower-priced home or moderate-priced home. For purposes of this article, “affordable housing” or “affordable home” does not include condominium units. . . . 7. Market-rate home. Any dwelling for purchase subject to this article which is not an affordable home, including detached dwellings, attached town houses, and condominium units but not including housing units that are developed for exclusive use as a rental. The number of market-rate homes in a development is used to determine the required number of affordable homes, as described in this article. For purposes of this article, “market rate home” does not include condominium units. . . . Sec. 38.43.060. – Number of affordable homes required. The number of affordable homes a developer is required to build is a percentage of the total dwellings market-rate homes proposed in the development plan. 177 Ordinance 1980, Revising Affordable Housing to Address Condominiums Text Amendment Page 3 of 6 A. The developer may: 1. Build and sell lower-priced homes. Ten percent of the total dwellings constructed within the subdivision or site plan must be lower-priced homes built and sold at price targets as established by the city pursuant to section 38.43.070 to households with incomes at or below 80 percent of AMI; or 2. Build and sell moderate-priced homes. 30 percent of the total dwellings proposed must be moderate-priced homes sold at price targets as established by the city pursuant to section 38.43.070 to households with incomes from 81 percent to 100 percent of AMI; or 3. Build and sell a mix of both types of affordable homes. If a developer proposes a mix of both lower-priced and moderate-priced homes, the developer starts with the ten percent calculation for lower-priced homes. For each lower-priced home eliminated from the resulting number, the developer may substitute three moderate-priced homes. The distribution of homes between the two categories of affordable homes will be identified in the affordable housing plan required by section 38.43.100. . . . Sec. 38.43.070. – Pricing of affordable homes. . . . B. Affordable home sales price schedule. . . . 3. Considerations. The following factors will be considered by the city in calculating the sales price schedule. The director of community development may make de minimis exceptions to application of these factors: . . . c. The maximum monthly payment will be 33 percent of gross monthly income. The maximum monthly payment will include costs directly applicable to a mortgage such as payment of principal, interest, as well as assumptions for typical costs of 178 Ordinance 1980, Revising Affordable Housing to Address Condominiums Text Amendment Page 4 of 6 taxes, public assessments, property insurance premiums, mortgage insurance premiums (assuming the higher of either government or private mortgage insurance), and homeowner/condominium association fees; . . . Section 2 Repealer. All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 3 Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. All other provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect. Section 4 Severability. That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so 179 Ordinance 1980, Revising Affordable Housing to Address Condominiums Text Amendment Page 5 of 6 decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole. Section 5 Codification. This Ordinance shall be codified as indicated in Section 1. Section 6 Effective Date. This ordinance shall be in full force and effect thirty (30) days after final adoption. PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the 2nd day of October, 2017. ____________________________________ CARSON TAYLOR Mayor ATTEST: ____________________________________ ROBIN CROUGH City Clerk 180 Ordinance 1980, Revising Affordable Housing to Address Condominiums Text Amendment Page 6 of 6 FINALLY PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the 16th of October, 2017. The effective date of this ordinance is November 15, 2017. _________________________________ CARSON TAYLOR Mayor ATTEST: _______________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney 181