HomeMy WebLinkAbout08-05-19 City Commission Packet Materials - C5. Approve the 2019 Cash-in-Lieu of Affordable Housing CalculationsCommission Memorandum
REPORT TO: Mayor & City Commission
FROM: Loren Olsen, Affordable Housing Program Manager Martin Matsen, Director of Community Development
SUBJECT: Approve the 2019 Cash-in-Lieu (CIL) of affordable housing calculations.
MEETING DATE: August 5, 2019 AGENDA ITEM TYPE: Consent
RECOMMENDATION: Approve the 2019 Cash-in-Lieu of affordable housing calculations.
BACKGROUND: The Inclusionary Zoning Ordinance (BMC Sec. 38.380.140.B.1) requires that CIL
values be adopted annually by the Commission.
The municipal code requires subdivisions with 10 or more lots for single-household homes to provide
price restricted housing. The code allows several alternatives to meet this requirement. One of those is to pay money in place of physical construction of homes. To set the value of money to be paid the City evaluates the costs of construction for qualifying homes. The City does this annually to help ensure values
are accurate and fair.
Cash-in-lieu can be used to meet some or all of the standard for the required number of homes. Cash-in-lieu is paid at the time of the review and approval of the final plat. All money paid as cash-in-lieu is used to support the provision of affordable housing in Bozeman. In looking at the CIL numbers for 2019 you
will notice that for the 1-2 bedroom and smaller homes the CIL stayed approximately the same going
from $55,453 in 2018 to $55,239 in 2019. The CIL did increase more substantially for the 3 plus bedroom
homes going from $97,889 in 2018 to $131,773 in 2019, an increase of $33,884. These changes are due to market conditions within the City limits of Bozeman where the median market sales price for 3 plus bedroom homes increased by 19.3%. This matches what is seen across the country where home prices are
increasing faster than wages.
UNRESOLVED ISSUES: None at this time. ALTERNATIVES: N/A.
FISCAL EFFECTS: There are no fiscal expense effects. Developers are given the option to pay the Affordable Housing Fund cash-in-lieu dollars instead of building affordable housing so money could be received into the affordable housing fund.
Attachments: 2019 – Affordable Housing Pricing Schedule
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Exhibit A: Area Median Income, Price Schedule, Cash-in-Lieu Rates and
Fractional Fee Scale
The current price schedule will be updated within 30 days of the annual release of Area Median
Income (AMI) data from the United States Department of Housing and Urban Development
(HUD).
2019 Area Median Income (HUD)
Number of Persons in Household:
Percentage Area
Median Income 1 2 3 4 5
70% $44,247 $50,568 $56,889 $63,210 $68,267
80% $50,568 $57,792 $65,016 $72,240 $78,019
90% $56,889 $65,016 $73,143 $81,270 $87,772
100% $63,210 $72,240 $81,270 $90,300 $97,524
2019 Affordable Homes Pricing Chart
Allowed Sales Prices
Studio
(AMI for 1-person
household)
1-2 Bedroom (AMI
for 2-person
household)
3+ Bedroom (AMI
for 4-person
household)
Lower-Priced Home at 70%
AMI
$167,741 $194,435 $243,227
Moderate-Priced Home at
90% AMI
$226,487 $262,193 $326,444
2019 Fractional Fee Scale ($)
.1 .2 .3 .4 .5 .6 .7 .8 .9
1-2 Bedroom 5,524 11,048 16,572 22,096 27,620 33,143 38,667 44,191 49,715
3+ Bedroom 13,177 26,355 39,532 52,709 65,887 79,064 92,241 105,418 118,596
2019 Cash-in-Lieu Rates
Formula 1-2 Bedroom 3+ Bedroom
(Median Market Rate Sale Price –
Lower-Priced Home Sales Price)
$249,674 - $194,435 $375,000 - $243,227
Cash-in-Lieu $55,239 $131,773
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