HomeMy WebLinkAbout19- Affordable Housing Agreement - Human Resources Development Council, District IX (HRDC) - Willow Springs Subdivision 1
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City of Bozeman PLATTED
City Clerk
PO Box 1230
Bozeman MT 59771-1230
2654871
Page: 1 of 11 08/19/2019 11:32:27 AM Fee: $77.00
Eric Semerad — Gallatin County MT MISC
11111111�11111 III 11111,,111111111111111 IN 11111111111111111111111111 III 11111111111111111111111
AFFORDABLE HOUSING AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this day of
�-t UC-,00 2019, by and between the CITY OF BOZEMAN, a self-governing municipal
corporation organized and existing under its Charter and the laws of the State of Montana with offices
at 121 N. Rouse Avenue,Bozeman,Montana 59771-0640,hereinafter referred to as "City", and Human
Resources Development Council of District IX,32 S Tracy Avenue,BOZEMAN MT 59715,hereinafter
referred to as "Landowner."
WITNESSETH:
WHEREAS, Landowner is owner in fee of a tract of real property, hereinafter referred to as the
WILLOW SPRINGS SUBDIVISION situated in Gallatin County, Montana, and more particularly
described as follows:
The East Half(E1/2)of the West Half(W 1/2)of the Southeast Quarter(SE1/4)of the Southwest
Quarter (SW1/4) of Section 35, Township One South (TO1S), Range Five East (ROSE), Less a
Portion of the Baxter Square Subdivision Phase 1 and 2,P.M.M., City of Bozeman, Montana.
WHEREAS,it is the intent and purpose of the Subdivider to meet the conditions of preliminary
plat approval, Planning Application No. 17117, for the Final Plat application of WILLOW SPRINGS
i
Willow Springs Subdivision Affordable Housing Agreement Page I of 6
SUBDIVISION (application 19229), to subdivide 2.72 acres and create twenty-four (24) single
household residential townhome lots, three (3) common open space lots, and the remaining areas as
public streets and alleys; and
WHEREAS, paragraph 38.380.100.E of the Bozeman Municipal Code requires recordation of
the affordable housing plan in conjunction with final plat; and
WHEREAS,the parties have determined that it is in the best interests of the City and Landowner,
and in furtherance of the public health, safety and welfare of the community to enter into and implement
this Agreement.
WITNESSETH:
IN CONSIDERATION of the mutual covenants and agreements herein contained, the parties
hereto agree as follows:
1. Recitals
The above recitals are true and correct.
2. Agreement
The Landowner has proposed and the City has approved an affordable housing plan which is
attached as Exhibit A to this Agreement and by this reference is hereby incorporated herein. Recording
of this Agreement including Exhibit A satisfies the requirements of 38.380.100.E of the Bozeman
Municipal Code. Landowner agrees the affordable housing plan is a binding agreement between the City
and the City may enforce the affordable housing plan against the Landowner or its successors in interest
to any parcel subject to the affordable housing plan. Landowner agrees the affordable housing plan is
Willow Springs Subdivision Affordable Housing Agreement Page 2 of 6
binding on Landowner's successors. The Landowner is required pursuant to 38.380.100.13, BMC to
implement the affordable housing plan.
3. Additional Terms
The parties recognize these documents must be filed and of record with the Gallatin County Clerk
and Recorder prior to the sale of any townhomes or other improvements within the WILLOW SPRINGS
SUBDIVISION and concurrent with recording of the final plat for the WILLOW SPRINGS
SUBDIVISION.
4. Governing Law and Venue
This Agreement shall be construed under and governed by the laws of the state of Montana. In
the event of litigation, venue is in the Eighteenth Judicial District Court, in and for County of Gallatin,
State of Montana.
5. Attorney's Fees
In the event it becomes necessary for either party to this Agreement to retain an attorney to
enforce any of the terms or conditions of this Agreement, then the prevailing party shall be entitled to
reasonable attorney's fees and costs, to include the salary and costs of in-house counsel including City
Attorney.
6. Waiver
No waiver by either party of any breach of any term, covenant or agreement shall be deemed a
waiver of the same or any subsequent breach of this same or any other term, covenant or agreement. No
covenant, term or agreement shall be deemed waived by either party unless waived in writing.
Willow Springs Subdivision Affordable Housing Agreement Page 3 of 6
7. Invalid Provision
The invalidity or unenforceability of any provision of this agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
8. Modifications or Alterations
No modifications or amendment of this Agreement shall be valid unless evidenced by a writing
signed by the parties hereto.
8. No Assignment
It is expressly agreed that the Landowner shall not assign this Agreement in whole or in part
without prior written consent of the City.
9. Successors
This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, successors and assigns and specifically to any subsequent purchaser of
the WILLOW SPRINGS SUBDIVISION.
10. Covenants to Run with the Land
The parties intend that the terms of this Agreement shall benefit the WILLOW SPRINGS
SUBDIVISION and shall be covenants running with the land.
The undersigned Landowner affirms that they have authority to enter into this Agreement and to
bind themselves to this Agreement.
**End of Agreement except for Signatures**
Willow Springs Subdivision Affordable Housing Agreement Page 4 of 6
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and
year first above written.
LANDOWNER
H
By: Heather Grenier, resident/CEO
STATE OF MONTANA )
:ss
COUNTY OF GALLATIN )
On this [b day of August, 2019, before me, the undersigned, a Notary Public for the State
of Montana,personally appeared Heather Grenier known to me to be the President of Human Resources
Development Council of District IX, and acknowledged to me that she executed the same for and on
behalf of HRDC.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year first above written.
(SEAL)
N jojyN;; MARTIN JOHNSON
s ' Notary Public
o7AR/ °2=for the State of Montana
N q<'• _ (Printed Name Here Pl n r-4 ,11
,5 —A *` Residing at: Notary Public for the State of T
;,.SEAL Q_ Bozeman, Montana rY
_' My Commission Expires: Residing at
.,,,�oF�M�,,,.�• February 03,2022
My Commission Expires: Fey • O'S Z o Z 2—
(Use 4 digits for expiration year)
Willow Springs Subdivision Affordable Housing Agreement Page 5 of 6
THE CITY OF BOZEMAN
az
B :`MARTR41MATSEN,
DIRECTOR OF COMMUNITY DEVELOPMENT
CITY OF BOZEMAN
STATE OF MONTANA )
:ss
County of Gallatin )
On this�day of �J�q ''� 2019, before me, a Notary Public for the State
of Montana, personally appeared Martin Matsen, known to me to be the person described in and
who executed the foregoing instrument as Director of Community Development for the City of
Bozeman, whose name is subscribed to the within instrument and acknowledged to me that he
executed the same for and on behalf of said City.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal on the day and
year first written above.
0Qsr,, SI�$ l KLOOSTERHOF (1
Fy Notary Public ���� 1 `� � e.n_.�
NOTA qj,t :for the State of Montana 1� it U��J� a 1(�
Residing at: (Printed Name Here)
SEAI.,�,e Bozeman, Montana Notary Public for the State of Montana
'.;9JF •µp Q;' My Commission Expires: RI�X��
March 17,2021 Residing at
My Commission Expires: •��•16-2,
(Use 4 digits for expiration year)
Willow Springs Affordable Housing Agreement Page 6 of 6
0269Willow Springs Way Affordable Housing Plan
Development Name: Willow Springs Major Subdivision
Project Location: Sartain Street and Hoover Way
Legal Description: E1/2, W1/2, SW%, SW%, Section 35,T.1S, R5E, of PMM
Current Zoning: R-3
Current Use: Vacant
Community Plan Designation: Residential
Property Owner and Applicant:
Human Resources Development Council of District IX 32 S Tracy Ave., Bozeman, MT 59715
Contact: Heather Grenier, President/CEO
406-585-4840
hgrenier@hrdc9.org
Introduction:
HRDC seeks the use of affordable housing incentives for the Willow Springs Way development.
The development is 100%affordable.The development will consist of 24 townhomes, with a
mix of 2 and 3 bedroom homes provided. All 24 units will be affordable to families and
individuals making 70%of the area median income. HRDC intends to place the subject property
into their Community Land Trust in order to maintain the affordability of the units in perpetuity.
HRDC has requested $20,000 per unit to act as a permanent subsidy that will remain with the
home in perpetuity and require no subsidies from the City in the future. Because the units will
be affordable in perpetuity, HRDC requests the City not record a non-cash subsidy on each unit
as provided in the Affordable Housing Ordinance. Instead, HRDC requests the City rely on the
covenants to meet the intent of the non-cash subsidy.
As discussed further in this plan the requested one time grant from the City would result in the
following.
• None of the 24 units would be eligible for City funded down payment assistance
• None of the homes would be eligible for impact fee reimbursement
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• None of the homes would require a non-cash subsidy lien at the time of closing
1. Number of affordable homes proposed in each affordable home category and number
of market-rate homes
Willow Springs Way townhomes
Total number of homes for development 24
Total Number of market-rate homes 0
Total Number of affordable homes 24
*It is the developer's intent to make these homes perpetually affordable by inclusion in a
community land trust(CLT).
2. The number of bedrooms in each affordable home
Willow Springs Way Subdivision Project- Home Type and
bedroom mix of Lower-Priced Homes
Studio and/or 1 bedroom homes 0
2 bedroom homes 10
3 bedroom homes 14
�otal Units 24
3. Anticipated Pricing and deed restrictions; HRDC will follow the pricing requirements of
the Neighborhood Stabilization Program (NSP), which requires that all homes be sold for
the appraised value. As the home's affordability will be preserved in perpetuity via a
combination of restrictive covenants and a ground lease while the land will be held in a
Community Land Trust(CLT),the home's purchase price will only reflect the appraised
value of the home itself, not the value of the lot and infrastructure improvements. NSP
further allows for up to 50%of the home's price to be subsidized via a deferred second
mortgage.Through this combination of the CLT and project down-payment assistance,
100%of the homes in the development will be permanently affordable and necessitate
buyers to take on mortgages far below the maximum prices outlined in the City's
affordable housing ordinance.An anticipated pricing and down-payment schedule is
included below.All homes will have ground leases limiting appreciation utilizing a
formula that allows for a reasonable return while preserving affordability in perpetuity
and requiring no future subsidization.
2
4. Sample pricing schedule (for discussion purposes only—actual prices will be
determined via appraisal)
Appraised value: $220,000
Less site value: ($45,000)
Appraised value of home and improvements: $175,000 =Sales price to the buyer
Down payment assistance: $30,000
(Can be up to 50%of sales price, $30,000 represents a likely average)
First mortgage to purchaser: $145,000
*Please note that this example, for the purposes of simplicity, does not take into account any
down-payment funds contributed by the buyer(NSP requires a minimum of$1,500), nor does
it take into account any closing costs.
5. Location of affordable homes in the development (lots in the plat or units within a site
plan);All 24 units in Willow Springs will be affordable to individuals and families making
70%of the area median income. Please see attached exhibit.
6. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development;The entire project is considered affordable;therefore, no market-rate
homes will be provided.
7. Marketing plan describing how affordable homes will be offered to the public; HRDC
will market the homes in the same manner as our previous affordable housing
developments. Our most valuable marketing tool is our homeownership education
program,The Road to Home.
Through RTH, HRDC annually meets with hundreds of households seeking affordable
homeownership options. In previous developments, HRDC has contracted with a realtor
to list the properties via MLS. In the event that HRDC elects not to list the properties via
MLS, HRDC will provide a 2.5%fee to the purchaser's agent to encourage realtor
participation.As the purchasing structure is different than the standard process, HRDC
will produce a FAQ sheet to help buyers and their representatives understand the
unique financing and ownership structure for the Community Land Trust.
3
8. Plan for construction of affordable homes in phased developments. Willow Springs will
be constructed in two 12-unit phases.
9. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article; As noted,the use of
Neighborhood Stabilization funds to purchase the property, which will be committed to
a CLT, provides HRDC the opportunity to create a development that exceeds the City's
affordable housing ordinance by providing 100%affordability in perpetuity.The land
trust model supports the family to attain and sustain homeownership by taking land and
site development costs out of the sales price. In return, the homeowner agrees to sell
the home at an affordable price to another lower-income homebuyer in the future.
Consequently, the family is able to successfully own a home and build wealth, while the
land trust is able to preserve the investment in the home permanently to help family
after family and requires no future re-subsidization of the homes.
While HRDC is the developer of the Willow Springs it is understood that the request for
a lump sum, per unit,that will remain with the home in perpetuity will preclude the
Willow Springs from impact fee reimbursement. It is also understood that down
payment assistance (DPA)through the City of Bozeman will not be permitted for first
time or subsequent sales of Willow Springs units.
The ground lease governing the property and home includes language that addresses
the situation in which HRDC were to sell the land to an institution or individual resulting
in the ground lease being lifted. That language reads as follows:
3.3 CLT SALE. If the CLT transfers its interest in the Land, this Lease continues and
the Homeowner becomes the tenant of the transferee under this Lease. If the CLT
wants to transfer the Land to anyone other than a similar institution that shares
the Goal, a nonprofit organization, charitable trust or government agency, the
CLT hereby grants the Homeowner a right of first refusal to purchase the Leased
Land Interest, the details of which are in the attached Exhibit:First Refusal.Any
transfer of the Leased Land Interest contrary to this section is void.
This Affordable Housing Plan proposes that the non-cash subsidy required by the
ordinance would not apply to any of the proposed units.A PUD relaxation would make
this clear.The issue will also be addressed in the grant agreement between HRDC and
the City. It is understood that the city may want to further protect the municipal
investment in the homes. HRDC would agree to a deed restriction,grant agreement or
4
covenant which would grant the city the right to intervene and arrange a new
owner/leaseholder agreement and further ensure that municipal funds invested in the
home, meant to stay with the home in perpetuity,would be returned to the city in the
event of a land sale resulting in the home no longer being affordable.
10. List of Approved Relaxations—Willow Springs
Nu+n6" `, : ,U 5"4 eference: enetaf Descciptio». :. Applicafile`;R laxatioii ,
Lot Area:2500 sf minimum(averaging of lot 2350 sf average lot size for three unit
areas allowed for townhome clusters for townhome clusters and 2300 sf average
1 38.320.030.A affordable housing developments) lot size for four unit townhome clusters
Watercourse Setbacks: A 50'setback must The connected wetlands setback may be
2 38.410.100.A.2.c(4)(d) include connected wetlands reduced
Watercourse Setback Zone Widths:
Setbacks are to be divided into Zone 1(60%
closest to watercourse)and Zone 2(40% The watercourse setback zones widths
3 38.410.100.A.2.e farthest from watercourse) may be altered
Trails in Zone 1:Limited,non-looping
developed spur trails to the water's edge A non-spur trail is allowed in Zone 1
4 38.410.100.A.2.e(2)(b) may cross all zones (Open Space Lot 3)
R.O.W.Width: 60'dedication required for
5 38.400.050 local streets Reduced width of 50'for Hoover Way
Front Yard Setback:IS'front yard setback
6 38.320.030.0 adjacent to local street Reduced front yard setback for Lot 6
Reduced garage entry setback for Lot 6,
7 38.320.030.0 Garage Entry Setback:Minimum of 20' Block 2
Minimum Parking Space Length: 18' Reduced minimum parking space length
8 38.540.020.A minimum length for Lot 6,Block 2
Alternate method and points achieved
are as follows:5 via an alternate
Minimum Landscape Performance Points: method through preservation of existing'
15 points are required,Willow Springs mature and established vegetation,10
proposes a combination of alternate and points achieved through standard
9 38.050.060.A.1 standard methods to achieve these points methods
5