HomeMy WebLinkAboutAmendment to AHO - Ordinance 2012 - draft 9-17-18
Ordinance 2012
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ORDINANCE NO. 2012
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA AMENDING CERTAIN AFFORDABLE HOUSING PROVISIONS OF
CHAPTER 38, ARTICLE 380 OF THE BOZEMAN MUNICIPAL CODE
WHEREAS, the City adopted Ordinance 1922 adding a new article to Chapter 38, Unified
Development Code (“UDC”), regarding affordable housing (“Affordable Housing Ordinance” or
“AHO”) on December 7, 2015; and
WHEREAS, since the adoption of Ordinance 1922 homes have been built and sold
pursuant to the AHO, and the builder has suggested amendments to the AHO to improve its
workability; and
WHEREAS, since the adoption of Ordinance 1922 the Community Affordable Housing
Advisory Board (“CAHAB”) has suggested amendments to the AHO; and
WHEREAS, in 2018 the City hired an Affordable Housing Program Manager who has
suggested amendments to the AHO; and
WHEREAS, the Commission’s legislative findings in Ordinance 1922 still apply in the
City and adjustments to the AHO are necessary to ensure that article 38.380 of the UDC fulfills its
purposes as stated in section 38.380.020; and
WHEREAS, the amendments to the AHO were reviewed by CAHAB on July 11, 2018
and August 8, 2018, and CAHAB recommended adoption of the amendments on August 8, 2018;
and
WHEREAS, the amendments to the AHO were reviewed by the Zoning Commission and
Planning Board at a joint meeting on October 16, 2018. The Zoning Commission recommended
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[summary from ZC]. The Planning Board recommended [summary from PB].
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF BOZEMAN, MONTANA:
Section 1
That Section 38.380.040 of the Bozeman Municipal Code be amended as follows:
Sec. 38.380.040. – Definitions.
. . .
F. Lower-priced home. Newly created dwelling for purchase, priced at or below 70 percent
of Area Median Income (AMI) as determined by the city in accordance with section 38.380.070
of this article to be affordable to a household with an income between 65 percent and 80 percent
of AMI.
. . .
FH. Moderate-priced home. Newly created dwelling for purchase, priced from 70.1 percent to
a maximum of 90 percent of AMI as determined by the city in accordance with section 38.380.070
of this article affordable to a household with an income between 81 percent and 100 percent of
AMI.
Section 2
That Section 38.380.070 of the Bozeman Municipal Code be amended as follows:
38.380.070. – Pricing of affordable homes.
A. The city will calculate on an annual basis the maximum sales price a developer may charge
for each category of affordable home required by this article as follows:
1. Lower-priced homes. The sales price for lower-priced homes affordable to buyer-
households with incomes from 65 percent to at or below 80 percent of AMI will be
calculated based on a household income of 70 percent of AMI.
. . .
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C. Household occupancy assumptions. To determine the maximum sales price of affordable
homes with different numbers of bedrooms, the city will base its calculation on the AMIs for
households of different sizes, as follows:
1. Zero bedroom or studio unit – AMI for a one person household;
2. One bedroom unit – AMI for a two-person household;
3. Two bedroom unit – AMI for a two three-person household; and
4. Three bedroom unit or larger – AMI for a four-person household.
Section 3
That Section 38.380.130 of the Bozeman Municipal Code be amended as follows:
Sec. 38.380.130. – Incentives Procedural adjustments and subsidies available for affordable
housing.
Developers may apply for incentives procedural adjustments and subsidies in conjunction with a
development application by submitting an affordable housing plan pursuant to section 38.380.100.
Incentives
Procedural
adjustments and
subsidies
Description
Lower-priced
Homes
Moderate-
priced
homes
70%
AMI
80%
AMI 90% AMI
Impact fee
subsidy
Full or partial subsidization of impact fees, paid
from municipal funds if such funds are available;
such subsidization must be secured with a lien
instrument due upon sale, transfer or non-rate/term
refinance of the home.
X X
Down payment
assistance
Subject to the availability of funds, the city will
provide on a first-come first-served basis, down
payment assistance not to exceed $10,000.00 per
home benefiting households. Down-payment
assistance will only be provided directly to the
X X
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Incentives
Procedural
adjustments and
subsidies
Description
Lower-priced
Homes
Moderate-
priced
homes
70%
AMI
80%
AMI 90% AMI
qualifying homebuyer. This assistance shall be
secured with a lien instrument due upon sale,
transfer or non-rate/term refinance of the home.
Waiver of
subdivision pre-
application
Waive pre-application for subdivision when 10% of
units are designated for lower price homes. X X
Reduction of
parkland 1
Allow a 1:1 square foot reduction in the amount of
parkland dedication required per square foot of lot
size for lower homes. If a developer provides more
than the required number of lower priced homes, the
lot area square footage of the additional lower
priced homes shall not further reduce the required
parkland dedication.
X
Reduced
minimum lot
sizes
Per the provisions in this chapter, affordable homes
may utilize reduced setback requirements and
reduced sized lots. The reduction in lot size shall be
allowed to create an increase in maximum unit
density beyond the maximum currently allowed in a
given zoning district. A subdivision satisfying the
requirements of this article 38.380 through the
construction of affordable homes (not by cash in
lieu or land donation) may use any of the minimum
lot area, lot width, and floor area reductions as
described in article 38.320 Form and Intensity
Standards for lots for qualifying homes.
X X X
Concurrent
infrastructure
housing
construction
Concurrent construction of infrastructure and
housing development at the installation of gravel-
base roads, provided the developer has provided
assurance through a performance bond, letter of
credit or other financial security acceptable to the
City Attorney ensuring the completion of
X X
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Incentives
Procedural
adjustments and
subsidies
Description
Lower-priced
Homes
Moderate-
priced
homes
70%
AMI
80%
AMI 90% AMI
infrastructure and meets all applicable criteria in
38.270.030.D.
Expedited review
for affordable
housing 1+1
Detached homes and attached homes in groups of
less than 6 units will receive expedited (3 business
day) building permit review for affordable housing.
For each building permit for an affordable home, a
market rate unit will receive the same expedited
review.
X X X
Reduced parking
requirements
Reduced parking requirement of two spaces per
three-bedroom dwelling. X X
1 This incentive is available only until the city has approved affordable housing plan(s) that include the
number of lower-priced homes at 70 percent AMI as established by commission resolution. In
addition, a developer seeking to use this incentive may only do so if the affordable homes at 70
percent AMI constitute no more than ten percent of the total units in a development or the unit is to be
constructed on a single lot wherein the parkland dedication requirement has not previously been
provided.
Section 4
That Section 38.380.140 of the Bozeman Municipal Code be amended as follows:
Sec. 38.380.140. – Alternative means of compliance; payments of fees-in-lieu.
. . .
B. Allowable alternative means of compliance. If approved by the city, a developer may satisfy
the affordable housing requirements of this article by providing (i) a cash or in-kind payment
in lieu or (ii) a donation of land.
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1. Payment of cash in lieu. Payment shall be made to the city of a payment of cash-in-lieu
per a fee schedule adopted annually by the city commission. For each required
affordable home not built, the cash-in-lieu amount will be the difference between the
sales price of a lower-priced home according to the then-current schedule of affordable
home prices and the sales price of a market-rate home average of the median sales price
of homes within the city with the same number of bedrooms over the two years prior to
the adoption of the schedule. The sale price for the market-rate home will be based on a
median sale price of dwellings of a similar type, location and square footage for the prior
two years. Cash-in-lieu payments shall be paid prior to issuance of a certificate of
occupancy for any dwelling or building in the development subject to this article.
. . .
Section 5
That Section 38.380.150 of the Bozeman Municipal Code be amended as follows:
Sec. 38.380.150. – Qualification of buyers of affordable homes.
A. Lower-priced homes. To qualify for purchase of a lower-priced home, a buyer must meet all
the following criteria:
1. A household income in the 65 percent to at or below 80 percent AMI range, as verified
and certified by the city; such certification must have been provided n more than one year
prior to the closing date of the purchase. Income verification will be performed using
HUD’s online income certification tool or a similar method that meets Code of Federal
Regulations (CFR) 24 part 5, as amended, which adjusts gross incomes based on
extraordinary expenses and imputation of assets to income.
. . .
4. The buyer must meet one of the following definitions of “first-time homebuyer”:
. . .
c. An affected individual who is, defined by HUD as a displaced homemaker, who and
has only owned with a spouse; or
. . .
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Section 6
That Section 38.380.160 of the Bozeman Municipal Code be amended as follows:
Sec. 38.380.160. – Subsidy recapture for lower-priced homes.
. . .
B. Requirement for repayment of non-cash subsidy. Because most or all lower-priced homes
will be sold at a discount from market value, defined as the difference between 98% of the
nonsubsidized fair market the appraised value of the lower-priced home and the maximum allowed
price of a lower-priced home at the time of the initial sale to a qualified buyer, the city commission
finds that it gives a subsidy with cash value to the initial buyer which may be recaptured under certain
circumstances. Therefore, upon resale or transfer of a lower-priced home, the city aims to further its
housing affordability goals by recapturing the principal amount of the subsidy by use of a lien in
favor of the city in that amount, which will be due and payable to the city, at zero percent interest,
when the home is sold or transferred or when the initial buyer who qualified for the affordable home
has failed to abide by the terms of this article.
C. Determination of non-cash subsidy amount. The community development director determines the
amount of non-cash subsidy based on the difference between 98% of the fair market value of the
lower-priced home and the sales price of the home. To determine the fair market value the director
may rely on market data or analysis or one or more professional appraisals provided The appraisal
used to calculate the amount of subsidy may be the appraisal obtained by the buyer's mortgage lender
or, if that is not available, a professional appraisal provided by the purchaser, or such other
professional appraisal as may be obtained by the director for this purpose. An appraisal report used
for purposes of this section must provide the fair market value of the lower-priced home. The
commitment letter instructions provided to the appraiser must include a requirement that the appraiser
not use as comparables other homes that have received subsid(ies) pursuant to this article 380, or
through any affordable housing assistance from the city, State of Montana or federal program. If such
property must be used as a comparable in the appraisal report, the appraiser must clearly indicate and
adjust for the value of such subsidy in determining the fair market value of such property.
D. Reconsideration of director’s determination of fair market value. Any party involved in the lower-
priced home sale transaction, including buyer, seller, or the city’s agent may request reconsideration
of the director’s determination of fair market value of a lower-priced home. In the event of such a
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request, the requesting party may provide the city with an appraisal that meets the requirements of
subsection C of this section and/or any other written evidence the requesting party believes the
director should consider in his determination.
Section 7
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 8
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 9
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
decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 10
Codification.
This Ordinance shall be codified as indicated in Sections 1-6.
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Section 11
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 _____ day of ________ ___, 2018.
____________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
____________________________________
ROBIN CROUGH
City Clerk
Ordinance 2012
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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 ___ day of
_________________, 2018. The effective date of this ordinance is __________ __, 2018.
_________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_______________________________
ROBIN CROUGH
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney