Loading...
HomeMy WebLinkAboutSept Working Group Packet 9.5.19Navigate; WSW Consulting; Fresh Tracks Bozeman Community Housing Action Plan September Working Group Packet 09/10/2019 Navigate; WSW Consulting; Fresh Tracks Overview of Public + Working Group Process To-Date Summary of Public Input To-Date • Public Open House: August’s Open House was the second public session for the Bozeman Community Housing Action Plan. • Public Workshop: In the first public session, held in May, participants were asked to provide feedback on draft objectives for the Bozeman Community Housing Action Plan (i.e., own/rent ratio, rate of building vs. job growth, metrics for plan (% or # of units), income targets to prioritize). Housing Working Group Process To-Date • The Bozeman Community Housing Action plan has been stewarded by a group of 22 diverse community leaders since May 2019 called the Bozeman Community Housing Action Plan Working Group • In June and July the Working Group focused on: o Tools: that could be implemented, such as funding, programs, regulations, incentives, land/partnership, preservation, to help address the housing needs in the community. Along with technical support from the consultant team, the group prioritized the tools they felt were most appropriate for the community; o Strategies: developed prioritized tools into housing strategies by identifying specific actions that the community could take to implement each of the preferred tools. Navigate; WSW Consulting; Fresh Tracks 3 How to Use this Packet – Instructions for September Sessions This packet contains information on the draft Action Plan progress to-date. The summary of strategies contained in this document reflect what was presented to the public at the August open houses. We will use this information, along with the summary of input received from the open house provided to the working group in a separate document, to work with the working group to adjust plan strategies and develop a schedule for implementation and identify roles/responsibilities for each strategy at the September work sessions. More specifically, at the September 10th and 11th working group sessions, we will be working through the following: 1- Review the top-tier and lower-tier strategies for refinements; 2- Identify partners that will take lead and supporting roles for identified strategies; 3- Create a 5-year timeline with detailed strategies identified and longer term implementation needs; 4- Revisit the Draft Plan Objectives in light of open house comments and refined strategies; and 5- Identify additional plan capacity and implementation needs and a schedule for tracking progress. Please review this packet prior to the first Worksession and be ready to dive in, discuss and finalize. Please review, as well, the Open House packet shared separately. This contains a brief overview of the open house process; a brief summary of comments received; and detailed scribe of all comments received by topic area. Navigate; WSW Consulting; Fresh Tracks 4 Draft Action Plan Components Table of Contents COMMUNITY ACTION PLAN DRAFT OBJECTIVES ............................................................................................................... 5 REGULATIONS STRATEGIES SUMMARY ................................................................................................................................ 6 INCENTIVES STRATEGIES SUMMARY .................................................................................................................................... 8 PRESERVATION STRATEGIES SUMMARY ............................................................................................................................. 11 FUNDING STRATEGIES SUMMARY ...................................................................................................................................... 14 PARTNERSHIPS STRATEGIES SUMMARY .............................................................................................................................. 18 PROGRAMS STRATEGIES SUMMARY .................................................................................................................................. 21 Navigate; WSW Consulting; Fresh Tracks 5 Draft Objectives Navigate; WSW Consulting; Fresh Tracks 6 Regulations Strategies Summary Requires new commercial development to provide housing or pay fees for a portion of employees needed to fill the new jobs generated by the development. Nexus study is required to determine the mitigation requirement. Fluctuates with building activity. • Conduct Nexus Study to evaluate the potential impact of linkage on community housing and businesses. • Consider the impact on business growth and the impact on the community of doing nothing (status quo). • Identify peer communities and evaluate what has worked and not worked: learn from others. • Make it easy for employers to build housing today if they want to: e.g. residential above commercial or on same lot. Requires that new residential subdivisions and PUD’s include/build homes that are deed restricted for community housing. • Revisit Affordable Housing Ordinance: evaluate what has worked and not. • Apply to multi-family development, as well as single-family: ownership and rental. • Incorporate incentives along with housing development requirement. • Consider addressing up to 120% AMI for ownership. • Require deed restrictions to be permanent. • Ensure consistency with other development codes. * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 7 ANNEXATION POLICIES: Negotiating restricted community housing as part of annexation agreements. Policy based. Entities have discretion in negotiations. This is a widespread practice among communities with community housing programs. Strategy session comments: • Could apply to County “donuts” within the City. RESIDENTIAL LINKAGE: Requires new residential development to provide housing or pay fees for a portion of employees needed to fill the new jobs generated by the development. Nexus Study required. Mitigation rate often increases with house size. Fluctuates with building activity. Strategy session comments: • Consider residential linkage if commercial linkage is applied. Ensures all contribute to community housing impacts, not just one group. Navigate; WSW Consulting; Fresh Tracks 8 Incentives Strategies Summary Updating/modifying code provisions and procedures that impair community housing development. For example, removing dual approval processes, ensuring codes are consistent, simplifying applications. Complete code review and rewrite might be required. • Make process more predictable, transparent, useful and ensure codes produce what we want. • Form committee to explore code inconsistencies and disconnects. • Include UBC code and all codes in review (cottage housing ordinance, ADU, PUD, etc.). • Use list of recent Planned Unit Development (PUD) relaxations as a starting point. Water/sewer, building permit or other fees waived in part or whole or deferred until occupancy/sale to reduce upfront cost to build. General funds or other source need to cover cost if fees waived or reduced and/or for the deferral period. • Current fee deferral for 65% to 80% inclusionary zoning units imposes the payment of the fee on homebuyers that we are trying to help – revisit. • Structure fees to incentivize desired development (e.g. lower fees for smaller ownership and for-rent units, etc.). • Explore options to cover the cost of reduced fees – general fund, tax increment financing (TIF), etc. • Create an upfront schedule of all fees for developments – predictability. • Ensure homes benefit the community (deed restricted) if get reduced fees. * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 9 FLEXIBLE DEVELOPMENT STANDARDS*: Modified land use regulations in exchange for community residents at prices they can afford. May include reductions in parking, setbacks, open space, height limits, road widths, etc. Specific bonuses, overlay zones, incentive zones, and performance zoning can be used. Quality, compatibility, safety and neighborhood impacts are concerns. Strategy session comments: • Create predictable list of incentives that are by-right (approved by staff) in exchange for providing community housing benefit • Create tiny home ordinance – permit tiny home villages • Restore mobile home code section DENSITY BONUS: Providing additional density in exchange for community housing. Must be large enough to entice development yet small enough for livability and compatibility. Not effective if existing zoned densities are high (e.g. when zoned at a level where developers have trouble building to existing densities). Strategy session comments: • Parking will be of concern if more density allowed in some areas • May need to modify existing densities for bonuses to be effective Navigate; WSW Consulting; Fresh Tracks 10 ACCESSORY (SECONDARY) DWELLING UNITS (ADUs)*: An ADU is a second smaller home sharing a lot with a single-family or townhome residence. Some examples of ADUs include an apartment over a garage, a tiny house in the backyard, or a basement apartment. Accessory dwellings that may be restricted for use by residents and employees are appropriate in many neighborhoods, yet compliance monitoring is needed. Strategy session comments: • Explore removing special use permit requirement for a detached ADU in R-1 zone (ministerial review only) • Decrease the cost of ADUs (i.e. permitting, impact fees, parking regulations). • Make pre-engineered ADU designs available for free – only a building permit needed to construct. • Deed restrict units that receive an incentive/public break to build to ensure community benefit – e.g. long term rental, resident/employee occupancy. SHORT TERM RENTAL (STR) RESTRICTIONS*: Prohibitions in zones where employees and residents reside, limiting the number in defined areas, requirements that dwelling units be occupied as primary residences part time, prohibiting STR of restricted community housing. Strategy session comments: • Appropriate to prohibit STR of ADUs that receive public incentives/breaks to build. FAST TRACK PROCESSING: Gives priority to developments that include community housing. May include expedited approval; help navigating entitlements (ombudsman approach). Strategy session comments: • Need more staff capacity in order to fast track applications. • Potential for discontent among market rate developers if other projects move ahead. Navigate; WSW Consulting; Fresh Tracks 11 Preservation Strategies Summary Dwelling units permanently restricted by occupancy (local employee/resident), income level, and with rent/resale restrictions to retain affordability in rising and high cost housing markets. • Transition to a permanent restriction when publicly subsidized community housing units are created. • Align with other policies: fee waivers and incentives. • Create a permanent deed restriction that balances long- term affordability with wealth creation. • Structure the eligibility and occupancy criteria to ensure “fairness.” • Increase management capacity - begin by evaluating existing capacity, considering adjustments, and/or establishing a new entity, such as a Housing Authority or Community Land Trust. • Emphasize customer service, such as one point of contact. Community nonprofit owns land, develops housing and provides long-term stewardship for permanent affordability through long- term ground leases. Typically, single family or townhomes for moderate and middle-income households. • Consider establishing a Community Land Trust (CLT) organization that has the capability to take on management responsibilities of permanent restrictions. • Coordinate with existing housing providers with CLT homes to increase efficacy and avoid redundancy. * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 12 HOUSING REHABILITATION AND WEATHERIZATION*: Repairing, updating, enlarging, improving energy efficiency, and providing handicapped accessibility, typically with Federal or State grants with strict limitation on who can be served. Staff/time intensive. Does not increase inventory of Community Housing; rather improves the quality of the existing housing inventory. Strategy session comments: • Separate Housing Rehabilitation (e.g., The Boulevards) and current weatherization program. • Enables people to stay in their homes. • Weatherization serves households earning <60% AMI. • Low interest loans to rehab homes. • Keep – it’s a good thing. NO NET LOSS: Requires replacement of below-market dwellings occupied by residents when redevelopment occurs. Similarly-priced units should be replaced on site or another site, or a fee-in-lieu of replacement could be allowed. Demolition tax used to fund replacement. Strategy session comments: • A demolition fee was discussed in the ”Funding” strategy session (Station #5) • Homes transition from serving lower incomes to higher incomes – red to green on the bridge. • Some demolition and redevelopment is good. • Provide similar plan for displaced individuals as TIF regulations. • Disincentivizes rehabilitation and redevelopment. • Must define substandard/unsafe housing that is best removed/redeveloped Navigate; WSW Consulting; Fresh Tracks 13 CONDOMINIUM CONVERSION POLICY: Limiting or prohibiting conversion of apartments to condominiums to retain rental housing. May require some portion of converted units to be restricted community housing or provide first right of refusal of sales to apartment occupants, among other conditions. Some impose a conversion fee that goes into a housing fund. Strategy session comments: • A conversion fee was discussed in the “Funding” strategy session. • Converted apartments to condominiums can create an entry level homeownership opportunity. • Conversions from apartments to condominiums are overseen by the state – would need to establish a city tracking system. DEED RESTRICTION - LOCAL PREFERENCE (NEW): A deed restriction can be structured to give occupancy preference or priority to certain households, as long as the preference does not discriminate against protected classes (race, color, religion, sex, handicap, familial status, national origin) in violation of the Fair Housing Act. Common preferences include employees that are working a certain number of hours in the community, employees that have worked a certain number of years in the community, and critical employees such as emergency service providers. Strategy session comments: • Big Sky requires 1590 hours of employment in community. • Discrimination of “new locals.” Navigate; WSW Consulting; Fresh Tracks 14 Funding Strategies Summary An annual or occasional budget allocation primarily to support staffing, pre- development and gap financing for community housing. • Maintain in the short-term until broad-based, reliable funding source is secured. • Establish allocation criteria to inform use of the City’s Affordable Housing Fund. Sales, property, lodging, short-term rental fee, real estate transfer, excise tax, vacancy tax, unit demolition or conversion fees. Voter approval required in most states. Revenue stream can be used for most housing- related activities. Approval requires extensive public education. • Pursue either a mill levy or bond issue. • Coordinate with a comprehensive education campaign. • Consider citywide Special Improvement District • Evaluate what entity should hold funds collected (City, new Housing Trust fund, etc.). • Evaluate who should administer allocation of funds, taking into consideration accountability requirements with the use public funds. • Establish allocation criteria that considers: scoring system, leverages funds, aligns with income targets, requires permanent affordability. A federal program that creates an incentive to finance rental housing for households below 60% AMI. • Work with the “Complete Count Committee” to assist with the 2020 census count. An “Entitlement Community”, or city with a population of 50,000, receives increased and direct tax credit allocations. • Get Bozeman representation on the Montana Board of Housing. * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 15 OPPORTUNITY ZONES: The Opportunity Zones investment incentive was established in 2017 to encourage long-term private investments in low-income communities. Opportunity Zones are eligible to receive private investments through opportunity funds in the Bozeman area. The program does not explicitly address below-market community housing but may be designed to do so. Strategy session comments: • Not recommended for immediate use – new, untested, and complex • Need education • Economic Development tool, does not have any affordability incentives or controls • City’s AHO could require some community housing in opportunity zones • Tax credit projects get an equity boost in Opportunity Zones FEDERAL AND STATE GRANTS/LOANS: Federal and State grants/loans for affordable housing, generally for construction of units. These include CDBG, HOME, and USDA/Rural Development. Major federal funding cuts proposed. Can only serve low income households (<50%, 60% or 80% AMI). Competitive and complicated grant application and administration process. Strategy session comments: • Utilized to the max right now. • Allocation process skewed toward smaller communities. Takes longer to pull required information together in larger population communities such as Bozeman. • Highly competitive. • A population >50,000 would push Bozeman to an “Entitlement Community” status, which would increase availability and provide direct access to funding sources. Navigate; WSW Consulting; Fresh Tracks 16 SPECIAL IMPROVEMENT DISTRICT: Special Improvement Districts (SIDs) are typically formed to fund public improvements, typically infrastructure (roads, sewer, etc.) or maintenance of City facilities or services. Costs are distributed across the properties within the SID that benefit from the improvements. Use specifically for housing is not common. Strategy session comments: • Consider a city wide special improvement district. • Requires approval by 60% of the property owners in the proposed district. • System in place. • State regulations may be a challenge. TAX INCREMENT FINANCING (TIF): Allocation of new property and/or sales tax in urban renewal districts (URD). Usually supports economic development projects; use for community housing is not common. Authorized to improve economic conditions without connecting to an URD in MT. (see §7-15-4288 MRA) Strategy session comments: • Takes increased tax money away from schools. • Change TIF criteria to consider community housing. • Potential challenges with state regulations and use for housing. • Vulnerable at the state. • Downtown District – considering use to incentivize ADUs and 1-bedroom units. • Indirectly supports community housing. Navigate; WSW Consulting; Fresh Tracks 17 DEBT FINANCING WITH FAVORABLE TERMS: Low interest loans, tax exempt bonds, certificates of participation and other forms of development financing available to housing authorities, cities, counties and some non profits. Strategy session comments: • Favorable terms include 100% LTV (loan to value) and 30-40 year amortization. • Create a pot of money to use and leverage. PRIVATE DONATIONS/ GRANTS*: Tax deductible contributions to a non-profit organization, which purchases or develops housing. Competes with other charitable causes. Strategy session comments: • Donations to non-profit builders • Philanthropic grants Navigate; WSW Consulting; Fresh Tracks 18 Partnerships Strategies Summary Public/institutional organizations partnering with the private sector for development expertise to build community housing on publicly owned site. May be vacant or under- utilized land. May also include institutional properties. • Establish criteria to prioritize site(s). • Understand partner and site constraints. • Facilitate partnerships. • Issue Request for Proposals with desired community housing outcomes. • Keep prioritized list for future housing opportunities. Acquiring land for eventual community housing development. Acquisition may occur through purchase, trades, life estates, donation (non- profits), in-lieu requirements. • Establish criteria to prioritize sites(s). • Inventory potential opportunities. • Understand constraints. • Include vacant, underutilized, redevelopment. • Idaho Pole Site – current potential, private site (see map). * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 19 • Location – transit, near work, walkability • Ready for development • Near services (medical, stores, etc) • Political support in place • Infrastructure in place • Zoning – suitable for housing • Neighbor acceptance • Legal issues • Price • Partnership potential • Ease of purchase (multiple owners, etc) School District – cannot use for non-school housing; only school employees MSU – constrained by University Regents mission: student and research focus City and County – competing needs/uses, political/resident support, topography, changing uses (e.g. undeveloped space to housing) Bozeman Health – not housers, health providers Navigate; WSW Consulting; Fresh Tracks 20 A – County E – 1-acre next to rest home Opportunity to help subsidize rest home operations B – City E – Fowlers Ave Stream and street issues C – School district E/M – Bus barn (18 acres) Would need new bus barn location (3 acres) D - School district M – Chief Joseph Site Corner piece undeveloped/open E – School district M – all other parcels Potential competing school needs F – County M – Park Would need park site replacement G – Bozeman Health M – East Highland Site Land is for community benefit uses: CONSTRAINT: important open space Potential Addition: already discussing potential for housing in north Bozeman Navigate; WSW Consulting; Fresh Tracks 21 Programs Strategies Summary PSH pairs housing with supportive services to transition chronically homeless into home security. Transitional housing provides temporary assistance to bridge the gap from homelessness to permanent housing. • Inform developers of PSH incentives/opportunities. • Identify needs (HRDC). • Form housing group to advocate for more state funds. • Implement FUSE model to more efficiently and effectively provide services (HRDC). Down payment assistance of grants or second mortgages for qualified buyers. Can be used for restricted or market units. • Build upon existing program through the city, HRDC, Habitat for Humanity. • Seek local funding to serve households up to 120% AMI. • Community education program – financial literacy and assistance options. • Work with employers to assist employees. Technical assistance, loan/grant options, administration, etc. * Indicates that Bozeman has implemented at least part of the tool listed; alterations may be available to better meet community housing needs. Navigate; WSW Consulting; Fresh Tracks 22 SENIOR HOUSING*: High density, smaller, low maintenance units designed for retiring residents Strategy session comments: • Research full range of senior housing and service needs • Understand what is working well and not. • Expand reach of needs to more than low-income renters. • Identify partners – a leader for this program. EMPLOYER ASSISTED HOUSING (EAH): Providing housing support to employees. May be direct employee support (help with housing search, down payment, rent/mortgage, relocation) or master lease/buy/construct units Strategy session comments: • Education outreach to employers – options and tools available. • Symposium/education session led by Chamber, employers with programs, or other (TBD). • Next step: gauge interest in options, find leaders to carry forward. CONSTRUCTION EDUCATION EXTENSION (NEW): Work with local education system (high school technical extension, community colleges, post-secondary education) to provide training in the construction trades industry. Strategy session comments: • Shortage of construction labor – program can help build local labor/expertise. • High school and MSU as potential partners. Navigate; WSW Consulting; Fresh Tracks 23 CO-OP or CO-HOUSING: Common ownership and management of purpose-built communities. Strategy session comments: • Explore as a means to preserve mobile home parks. • Reach out to NeighborWorks/HRDC – how does the program work, can it work here. HABITAT FOR HUMANITY*: International organization with local chapters that use volunteers and donations to build modest homes. Affordability may not be permanent. Strategy session comments: • Active in the area; keep doing it. • Limited by scaling ability – modest production. • Land costs a challenge in Bozeman. SELF HELP BUILD*: Homebuyers receive low interest loans and technical assistance for their construction of homes. Requires large time commitment. Strategy session comments: • Active in the area; keep doing it. • Scalability a problem. PUBLIC SECTOR DEVELOPMENT: Initiating, designing, financing and constructing dwelling units by municipalities, counties and/or housing authorities. Similar to developing other public infrastructure. Strategy session comments: • Requires public sector capacity and specific expertise. • Has financial risk.