HomeMy WebLinkAboutTab 2•
LJ
Commission Memorandum
REPORT TO: I iun(rrablc Mavor and (.try C)mmissiorl
FROM: \ridrew Epple, Planning D.Lrectnr
Claris Kukulskr, (-rty Manager
SlJBJECT: Bozeman Deaconess Ilealth :.e.rvices Subarea Affordable Fl((using Plan
MEETING DATE: Actiuri Item for Munday, August 21, 2006, at 6-00 pin
BACKGROUND: liuzetnari Deaconess Health Services (BI)HS) has proposed an Affordable
Flousrnf= Plan a,, a conip(ment of that- Subarea Plan vvhich was approved by the Commission on
February 27, 2006. With this plan, 13I_)HS wishes to def-tne a prograrn whereby the development
Within the 510-acre subarea imy assist un mitigating the City-wide need for affordable housing.
BDWS is nIle ((f the largest employers ill t-he region, and a Supply of quality affordable hullsirig
located conveniently to the BDI-IS work forces' place of employ.tnent would he a pc>sitiv(, asset for
BDHS
BDIIS is seeking fc)rmal (ndorsennerit and approval of this plan by the City Cntnmission, much the
same way as the ( :,,mission reviews and approves park plans
UNRESOLVFI) ISSUES: "There are no unresolved issues at this time.
RECOMMENDATION: Staff recom rriends that this plan be approved with the revisions
recon)-mended by C;AI1AI3 (see Items 1-3 iin the attached menio dated July 12, 2006) and the
revisions reconllriended by Planning staff (see Items 1-6 in the attached rnen7o dated August 16,
2006).
FISCAL I?FFECTS: Fiscal impacts are undetermined at thus trine.
ALTER.NXfIVES: As uLrggL'StCd by tl7e (-iry (.(,tnt7,Isston.
CONTACT: Please feel free to email Jody SanfoOrd at Isanforcl(albozeman.nct if you have any
questions prior to the public hearing
Respectfully subilutted,
i G, U----
A
Andrew Epple, Planting hidlecror
Attachments CAIIAB rnetno dated July 12, 2006
Planning staff memo dated August 16, 2000
BF)HS Subarea Affordable I Inusing flan
Chris Kukulski,,,GiIanager
Report compiled on August 16, 2006
E
L
•
11
0
0
II W Cal
TAU N �2, 11 y 0 c
DEPARTMENT OF PLANNING
AND COMMUNITY DEVELOPMENT
BOZEMAN DEACONESS"
HEALTH SERVICES
d _C m w
AFFORDABLE HOUSING PLAN
June 2006
No Text
Bozeman Deaconess Health Services Sub -Area Affordable Houshig Plan
Section 1. Executive Summary
The Bozeman Deaconess Health Services (BE)HS) long-range land use Master.Plan sets lorth a land
development process l.rtilizing rraultillie. phases within the BDiiS Sllb-Area. Beforc applications for
developnaerll entitlements on the vacant lands east of highland are broug}lt forward to the City,
BDHS wishes to define a program whereby the development within the Subarea may assist in
lllitigating the city wide deed for affordable housing. BDHS is one of the largest employers in the
region and a supply of'guality affordable }lotlSing located conveniently to the BDIIS work lorces'
place ofemployment is a positive asset for both BDHS ail(] the City ofBozemarl.
The purpose of the Bozeman Deaconess I lea.lth Services affordable housing plan described herein
is to detail flow the Sub -Area will produce and maintain housing within the City of Bozeman at
prices lower than current fair -market conditions dictate. The land provided through this plan will
meet the goal of aiding in creation of affordable housing through the use of reduced setbacks,
increased floor area ratios, restricted land costs and smaller lots. Deed restrictions that will be placed
oil the land will establish restricted home prices, restricted value appreciation, and will allow only
grr,:lllfyirlg indiviclt.►als to ptu-chase tl-le property. Effective architectural guidelines will ensure duality
constnrctiorl. The plan is designed to produce land for both for -scale and for -rent affordable housing,
in detached single -household as well as attached multi -household confitnlrations which will be
generally matched to household income levels as related to the 2006 area median income (AMI), or
`f;56,600, in order to reach as imany qualifying households as possible.
This affordable housing plan is based on realistic premises which are intended to create a practical
and effective contribution in mitigating Bozeman's high housing costs through a relatively
free-market solution. The BDI-IS affordable housing contributions are not to be considered the sole
resolution to Bozeman's affordable housing need; instead, the BDI-IS affordable housing
contributions are commensurate with the overall densities established i.n the 1. D-HS Sub -Area plan.
The need for affordable housing exists city-wide, as does the solution. The plan defined below does
pose a practical process for development of affordable housing within the BDIIS Sub -Area which
will have the potential to benefit many of the hundreds of employees that work within the Subarea.
The basis of the BDIIS affordable housing plan is predicated upon the following fundamentals:
I Of all dwelling units to be built within the BDI iS Sub -Area, ten percent (10%) shall be deed -
restricted as affordable (age -restricted, senior citizen, or assisted living units are excluded
from this calculation) .
2 The affordable lots within the Sub -Area are grouped into three categories as follows: 1) 40`%n
of all affordable lots shall be in the forrn of for -sale, single -household detached lots, 2) 30%
shall be dedicated to for -sale attached (multi -family) lots, and lastly, 3) 30% of all affordable
lots shall be design
. ated as for -rent, attached (multi -family) lots.
'7
•
0
3 Horne builders approved by and/or partnered with BDHS will purchase the affordable
IRhousing land in order to construct the affordable units. Dependent upon individual deed
restrictions as outlined later in the plan, the lots for detached homes are expected to range
between $21,000 and $30,000. Land for attached housing (for -rent or for -sale housing) will
be (iced restricted to $8-10 per square foot (2006 dollars).
4 To be eligible to purchase all affordable detached household, a buyers household income
lutist fall between 75%, and 1 15% of AMI, or $42,450 to $65,090. Based upon this plan,
these buyers qualify for affordable detached homes initially priced between $159,787 and
1�9 $254,282. (2006 dollars-36% of gross income is assumed available for housing costs).
p�G �% tas r�ficls-with an incoli�e between 60% and 85% of AMI ($33,960 to $48,109) will be
��/� targeted to purchase attached for -sale housing. Dependent u ion buyers income relative to the
g" I g.1
AMI, initial prices of such dwelling units shall range between $124,3.50 and $183,416.
5 Households with an income between 40% and 60% of AMI ($22,640 to $33,959) shall be
targeted predominantly to multi -household, for -rent: housing. Again, based upon the tenants
income relative to AM1, monthly rents for these properties will range between $566 and
$ 849.
6 In order to ensure long-term affordability, value appreciation on all affordable lots and homes
shall be deed -restricted to 4.5% per annum, for it ten year period commencing upon the sale
to the initial full time resident. "Thereafter, the hornes value shall be established by the open
market-
7 As a safegtaard against unfavorable and uncontrollable housing market conditions such as
interest rates the .following stipt.Ilation is proposed: In the event. that any affordable lot is not
purchased or leased within a period of`one year oCi:ictivc marketing from the elate of platting,
then the deed restrictions establishing the land status as affordable shall be automatically
extinguished, and the status of the land shall change to Eair-market value.
What follows is a more detailed explanation of the proposed BDHS affordable housing plan.
_Section 11. Affor(lability _ )cfined
With respect to affordable land available forpur.-chase in the BDIfS Sub -Area, the tenri "affordable"
will apply only to attached and detached housing targeted for sale to households with incomes
ranging between 60% and 1 15% of area median annual income, which for Gallatin County in 2006
is $33,960-$65,090. Affordable homes will be; defined as homes priced such that one of' the
above -referenced households with good credit can purchase a home in 2006 employing the following
mortgage underwriting assuml)tions: a. down payment of 5%; a 30-year, fixed-rate mortgage at 6.5%
interest; a mortgage gi.ialifying ratio of 36%; property taxes equal to 1% of value; insurance
premiums equal to .35% of' value; and monthly homeowners association dues of ,$125. These
affordable bottle prices are set forth in the Affordable Housing Calculations (see''able 1)_
•
0
1 icrusellol(Is earning less than 60% of'AMl. are generally not capable ol'supporting the costs of home
. ownership, and therefore, rental dwellings become this groups best housing option. With respect
to affordable homes available for rent in the BDIIS Sub -Area, the term "affordable" will apply orfly
to attached, or multi -family rental }lousing targeted to 11ouscholds earning between 40% and 601%
of annual AM i, which for Gallatin County in 2006 is $22,640 to $33,959. Tlic for -rent honks will
be financed via the federal Low Incon)e Housing Tax Credit. Program, and consequently, monthly
rents cazunot exceed 30",i, of a tenants' monthly gross income.
Section Ht. Description of BDI:IS Affordable fflousin J Cort-monerats
Through the use of reduced setbacks, increased floor area ratios, restricted lined costs, smaller lots,
restricted bonne prices, restricted value appreciation, and effective ,architectural Lnlidelines, the prices
ofaffordable single -household and 111111t1-110Uschold dwelIIng units made availablethrough this p]an
will be subst.,,intially lower than current fair -market conditions dictate,
in order forany affordable housing plan to actually produce homes, there rrrust be reasonable profit
potential fir the builder- of the horrre. As demonstrated in Table 4, due to the lowered lot prices,
builders will have an opportunity to receive industry accepted profit margins if they are able to keep
costs under control and experience sorne relaxation of'subdivision design standards. "I'hcrefore, these
undeveloped desigllat.ed affordable lots will be initially purchased by qualified general contractors
who will construct the homes, but the sale prices and eligible prospective buyers of the completed
homes will be dictated by specific deed -restrictions, so as to endue that the home meets affordable,
standards and contributes to the rnitigation of Bozeman's high housing costs over the long term.
In order to reach the broadest s ectrurn of qualifying residents as possible, the BDHS Sub -Area
p
affordable housing plan is to include both attached and detached, for -sale and rental .housing which
will generally be matched to households of the following incorne levels:
A. Households with incomes between 40% and 60% of AMI will be targeted
for attached, multi -household rental housing:
B. Households with incomes of between 60% and 75% of AMI will generally be targeted with
inLitt i-househol(1, for -sale housing;
C. Household-, whose Incomes arebetween 75% and 85% of area median inconic will generally
he targeted to both attached and detached (single -household) for -sale housing;
D_ Ilouseholds whose incomes are between 85',co and 115% of area median income will be
targeted with detached for -sale housing.
I'r irrci des axacl llefinitions of the BDI-IS Affordable Bousi_ng Plait.
I . Designated Affordable Lot: shall include any specific lot designated on a preliminary plat
which will be deed -restricted to the development of a specific type of affordable attached or detached
home, selling at a specific price as set forth in the Affordable Horne Price Index. Threc types of
affordable lots have been established within the BDIIS Sub -Area affordable plan. These are: 1)
detached, single -household lots of 3,000 square feet each; 2) attached, or multi -household lots, of
2,500 square feet per residence; and, 3) attached, rental housing lots of' 2,000 square feet pet -
residence.
rI
•
0
2. Affordable Lot Price Index: shall determine the maximum lot prices per square foot (based
on finished lot. area) which may be charged for each ofthe three types of Designated Affordable Lots.
Animal lot prices may change based on market forces, but in order to ensure long-term affordability
price appreciation shall be restricted to not more than 4.5% per calendar year on any Designated
Affordable Lot.
a. Sale prices of the detached affordable lots are determined by the buyer's household income
as related to the AM], and for 2006 will range from S7.00 to $10.00 per square foot in five price
categories (see Affordability Levels described below). At 3,000 square feet in size, lot sale prices
will range between $21,000 and $30,000. The current local marketplace offers no bt.iilding lots even
remotely close to such pricing_ .Forty percent (40( �)) of the total number of affordable lots within the
BDHS Sub -Area will be of this lot type.
b. For 2006, lots designated for attached dwellings (at. 2,500 S.I~. per residence) will be $8.00-
$10.00 per square foot, creating affordable lot sale prices designated for attached dwellings of
$20,000425,000 per lot. Thirty percent (30%) of the total number of affordable lots within the
13DfIS Sub -Area will be of this lot type.
C. Attached rental housing lot sale prices are at. $10.00 per square foot for 2006. The economic
conditions related to the constniction and long -terra maintenance and management for such rental
units dictate that this type of development is most efficient when done in a minimum of thirty (30)
units. if each unit is allocated approximately 2,000 square feet of land, a typical (30) unit rental
project would entail approximately 1.38 acres. Household incomes of qualifying tenants for such
rental dwellings will range. between 40% and 60% of AMI, or $22,640 to $33,959_ As this housing
type will be financed via the :I,ow income Housing Tax Credit Program, all such housing must rent
for 30% of any given tenant's gross monthly income. Consequently, monthly rents for 2006 shall
range between $566 and $849. Thirty percent (30%) of the total number of affordable lots within
the BDHS Sub -Area will be of this lot type.
In order to ensure harrnon.ira ous architecture and long-termaintenance of the community, the
community association(s) established within the BDHS Sub -Area will require compliance with
architectural guidelines defining the appearance of the improvements, among many other elements.
However, these guidelines will allow the free-market to affect variables such as number of
bedrooms, baths, and square footages of each dwelling type, which is expected to result in irriproved
values of the affordable dwellings within the Sub -Area.
3. Affordable Home Price Index: Is defined as the range of nraximurn prices for attached and
detached dwelling lots with completed dwellings that will be built and offered for sale to households
with incomes ranging between 75% and 115% of AMI, Sale prices of completed single -household
homes shall range from $159,787 and $254,282. Maximum sale prices formulti-householdhomes
shall range from $124,350 to $183,416. Using household income relative to the AMI, and based
upon rnortgage underwriting assumptions described in Table 1, each income category has been
assigned a maxirnurn sale price of a completed dwelling.
LJ
No Text
4. Affordability Levels: Based on hotiscliold income relative to AMI, four affordability levels have
. been established within the category of detached dwelling lots, two have been established for the
attached dwelling lots, and one for rental housing. Using the 2006 AMI ($56,600) and the
underwriting guidelines set forth in Section 11 above, the six levels of sales pricing for completed
dwellings are affordable to cacti of six income ranges as follows:
Level I - Kent range of $566 to $849 per morit.h; affordable to households earning
$22,640 to $33,959 in 2006 (40% to 60% of.AMI); Targeted with rental housing
- Level 2 - $124,350 to $159,786: affordable to households carving $33,960 to $42,449
in 2006 (60% to 75% of AMI); `I'argetcd with attached single .household
— bevel 3 - $159,787 to $183,416: affordable to households earning $42,450 to $48,109
in 2006 (75% to 85% of AMI); Targeted with attached or detached single houschold
— Level 4 - $183,417 to 207,041: affordable to households Earning $48,1 10 to $53,769
in 2006 (85% to 95% of AMI); 'Targeted with detached single household
— Level 5 - $207,042 to $230,666: affordable to households earning $53,770 to $.59,429
in 2006 (95% to 105% of AMI); Targeted with detached single household
— Level 6 - $230,667 to $254,282: affordable to households earning $59,430 to $65,090
in 2006 (.105% to H 5% of AMI) Targeted with detached single household
Please refer t.o Tables 1, 2, and 3 for additonal detail concerning these definitions and indexes.
Table 2 includes an example of how many of each type of these affordable housing components will
be provided throuO, i the plan. The example on Table 2 assumes a 200lot subdivision (excluding any
age restricted or elderly assisted living units). in total, 20 units would be provided through the plan.
'l-'he 20 total units would be further broken down as follows:
Detached Single Ilousehold Lots see D 1 thru D4 on Table 2)1;
Of the 20 total units needed, 8 will be detached single household units spread evenly among the 4
different detached household affordability levels. The plan allocates 3,000 square feet for each
detached single household unit. BD.I IS will plat ground for these lots in "groupings". A "grouping"
must always be 3 or more units. Therefore of the 8 units required in our theoretical example, I3DIIS
may plat one 24,000 square foot lot, or two 12,000 square foot lots, or any combination where no
grouping is less than 3 units. BDHS will also place deed restrictions on the large' grouping" lots that
will require a certain number of homes be placed on the lot and sold for a certain price point, with
a preference to BDTIS employees. With this specific i.nfbrmation available to the builders, the large
"grouping" lots will then be sold (see table 2 for 2006 sale prices) to a qualified builder that will
design the individual units. With the approval of BDHS, the builder will apply for relaxations to
further divide the "grouping" lots according to that specific builders' needs on that specific site, such
as reduced setbacks, reduced minimum lot sizes, increased floor area ratios, and possibly other
relaxations that will be dictated by the site constraints. The City should provide for an expedited
review of these subsequent requests.
The attached Figures IA, 1 B, and I C illustrate examples of houses that can be built on these
detached single household lots created through this plan,
Figure 1 A shows a plan view and elevation of a narrow lot and home configuration that g can utilize
an alley or a street for garage access. Figure l B shows a plan view and elevation of a clustered
layout that also utilizes both alleyway and street access for the driveway. In addition there is a
•
•
11
conlrrion walkway/courtyard in this example that allows access to the public street .forthe 2 tin Its that
• are located adjacent to the alleyway. In both of these examples the initial platting for these homes
would only Include the exterior lot line labeled as "BDHS Platted i,ot. Line" on the figures.
Subsequent to the specific lionles being designed for the specific lot and site, further subdivision
would occur to create the internal lot litres at which tame site and honle specific relaxations front
Subdivision standards would also be requested.
Figure l C shows more detailed conceptual floor- plans and elevations of "real world" lion-les that
could be placed on the lots as shown in -Figures IA and I B. While some of the finishes as shown
oil the elevations inay exceed what is feasible in this current construction market, the examples are
intended to show house shapes and sizes that are feasible under this plan. The examples shown on
these figures would all fit nicely into a standard non -price restricted neighborhood as this plan will
intersperse the "affordable" lots arnongst. standard single fancily lots.
Attached Shiite Household Lots see Al and A2 on Table 2):
Of the 20 total units needed, 6 will he attached single household units spread evenly arliong the 2
different attached single household affordability levels. `ehe plan allocates 2,500 square feet for each
of the attached units. Much like the detached -units above, BDHS will plat large "grouping" lots for
these units, and again no grouping rnay be have fewer than 3 units placed on it. In our theoretical
example BDI1S would have to plat two 7,500 square foot lots or one 15,000 square foot lot. BDIIS
will also place deed restrictions oil the large "grouping" lots that will require a certain number of
homes be placed on the lot and sold for a certain price point, with a preference to BDHS employees.
With this specific information available to the builders, the large "grouping" lots will then be sold
. (see table 2 for 2006 sale prices) to a qualified builder that will design the individual units. With the
approval of` BDHS, the builder will apply .for relaxations to ftirther divide the "grouping;" lots
according to that specific builders' needs on that specific site, such as reduced setbacks, reduced
nlrniniurn lot Sizes, increased floor area ratios, and forthis specific component, zero lot lines. Other
relaxations maybe needed due to specific site constraints. The City should provide for an expedited
review of' these subsequent requests.
The attached 1'ignurcs 2A, and 2B illustrate examples of attached housing that can be built on these
attached single: household lots created through this plan.
Figure 2A shows a plan view and elevation of a "tri-plex" that utilizes an alley .for garage access.
As discussed above, the initial platting for these homes will only include the exterior lot line.
Following specific site and .horne design the lot will be further divided with the inclusion of interior
zero lot lines between the individual units achieving true home ownership in an attached or common
wall building. This series o.f buildings could be expanded for additional units, but not to exceed a
total of 6 attached dwelling units.
Figure 2B shows more detailed conceptual floor plans and elevations of "real world" attached homes
that could be placed on the lots as shown oil Figure 2A. While some of the finishes as shown on the
elevations may exceed what is feasible in this current construction market, the exarples are intended
to show House shapes and sizes that are feasible under this plan. The examples shown on these
figures would all fit nicely into a standard non -price restricted neighborhood as this plan will
intersperse the "affordable" attached lots amongst standard single family and/or attached lots.
No Text
Attached Multi -Household Rental Lots see Attached Rental oil Table 2):
Ofthe 20 total units needed, 6 would need to be rental units. Since it is not feasible to constrict and
operate a 6 unit rental operation utilizing the Low Income Housing Tax Credit Program, the flan
requires that. this particular affordable housing component be developed in 30 unit increments
resulting In a Surplus of this component at all times. III the theoretical example 6 units are required
for the 200lot application. Sincc the minimum "grouping" ofthis component is 30 units, 24 Surplus
rental units will be able to he carried forward to future applications.
The plan allows for 2,000 square feet for each rental unit. In order to meet the minimum
requirements for this coiiiponent BDHS will need to plat one 60,000 square foot lot. Again the price
for this land will he restricted to $ 10.00 per square foot. Additional restrictions will require that the
Low Income Housing Tax Credit Program be utilized to develop the property and that 30 units must
be constructed on it. Much like the for -sale components, additional submittals to the City of
Bozeman may be required to in order to develop the site. If this is necessary the City should develop
an expedited review for this affordable Housing component.
Figures 3A and 3B show plan and elevation views of a 32 unit rental facility. This component has
been successfully constructed in other areas of Bozeman and one of the existing projects is pictured
in the examples. The intent behind this plan is to create this type of rental housing for this
component of the plan.
0
U
C7
•
•
®ET CHED SINGLE FAMILY
Narrow Lot (30'xl oo') $30oo sF
_i ..... 120'-0„
6LE1/�T1/1,1 I The IAND DEtiIUN STUDIC7
1 1 1 V 1�1 Z,m elnnd,Colorndo
Affordable Housing -Detached Single Family
BDHS SUBAREA PLAN
Bozeman, Montana
XA
June2006
No Text
1
'•� f �� I � � � �,� � Idle � �� �. .
No Text
0
DINING f SHOP
1-7774
ZAGI
Z�j
DEN
Cluster Housing Type
CAL d Kvi
. Ir,
-1 8R. 2v 1 . r
Cluster Housing Type
I"
Affordable Housing -Detached Single Family
BDRS SUBAREA PLAN
Bozeman, Montana
1102B
'j
Floor 1 plan Floor 2 plan
Narrow Lot Type
NarroNv Lot Type
T BR i
OEAT
.4
in Floor Man
Upper Floor plan
prepar�'L bv: DM I -AND DESIGN SnjDjo I
Loce',ind, Colorado June 2006
No Text
•
TTAORD SOLF FAMILY
Attach 2 to 4 Uni-ts ITthPr
W3 2500 SF (2.5'x4 o0'1
I
ELEVATION Tl)r LAND rat stc * SJuvrO
Affordable Housiri.a-Attaclied :Single Family
BDHS SUBAREA PLAN 2A
Ro"'moll. A owono Dime 1000
•
C7
•
•
Y +d
+ a •q w
• i
�'�rutul l Tvur Nall
t�irstl'?t+arl'!u»
v.
.,_.=f�.,,,,r..a-- �-:gym-3� -� •
1 '41
4�
Ltirt� e LlttpleY-3 BerIII)O $
Im
�.�taclie
Affordable- T4o��g' d Single FamilY
REA PLAN
RESIGN IUDIC LB
b': IE AND telanc�, Coioradc June. 2c
No Text
ill Dl>9 ! "IM"f OR .IFs\
E
•
�1
L_J
14
v�
1p
r^� L
min4,
Bridger Apartments, Bogie
Atfordable Housing -Attached Multi -Family
BDHS SUBAREA PLAN
Bozeman, Montana
prepared by: THE LAND DESIGN STUDIO
Loveland,, Colorado
3B
7
JmW06
0
Conversion cif-D��ated Aflorciable Lots to�Fair Market Value.
• Should allydcsi it ited affordable lot w � Rhin the T3llI-iS Sub -Area remain available for sale after
having been actively marketed for a period of one, year front the plat elate, then the designation of
said lot shall automatically convert from affordable to open market value, and all deed restrictions
relating to the affordable designation shall be automatically extinguished. if an affordable
designation on any given lot or horde is extinguished, the BDI-IS Sub -Area shall retain the credit of
having produced and initially offered the property as affordable. The intent behind this stipulation
is to allow BD.FIS to have a safeguard against uncontrollable market conditions that rnayrender this
or any affordable housing pl,,in un-workable, such as interest rates. The intent of the plan is to create
affordable houses thru the extensive and talented housing contractor stock that exists in Bozeman.
I lowever, even the most talented builders and designers irii.ist have a favorable market in which to
create housiilg as is coriternplated ill this plaIl.
Loilk-Teni_i Affordability_
Once an affordable home iias been purchased, its affordability will be assured for a period of 10
Years by a deed restriction, which sliall restrict any lot or completed home to a maximum annual rate
of value appreciation of 4.5%- In addition to the 4.5% alunlal appreciation factor, a seller may
recover- the cost of major improvements and repairs upon sale an amount not more than 20% of the
home's original index price, provided that the home owner can document that they have spent at
least that rrruch ill both major improvements and .repairs. Sce "Table 3 attached for further details.
Section -„IV. Area Demographics
The primary resources used for ibis analysis were the City of Bozeman Affordable I1ousing Needs
Assessment and Strategy (the. BAE Study), commissioned by the City of Bozeman Conununity
Affordable Housing Advisory Board, the Bozeman Chamber of Commerce and U.S. Census Data
from the 2000 Census. Ilnforlunatcly, the most current census data misses the most dramatic growth
in both Bosema.n's median .household income and population.
Bozeman experienced an aiuival growth rate of approximately 3% between 2000-2005 (source:
Bozeman ChaIlaber of -Commerce). Assuming an ongoing 3% growth rate, the City of Bozeman will
add about 1,000 new .residents a year .for the next five years, which equates to approximately 350
new households per year for the next five years. Current household income distribution statistics
were taken from the BAFi Study, which were taken from the 2000 Census (source: City of Bozeman
Affordable Housing Needs Assessment and Strategy, Sept., 2003). At the time the information was
collected, Ciallatiil County had a median household income of $38,120. Gallatin County currently
has a median household income $56,600, a 48.48% increase (source: Department of Housing and
Urban Development).
uanti . ing tl�e Demand 1pr Affgrdable Housing
I Iousehold income distribution is the "lost important statistic when calculating the current demand
• for affordable housing and anticipating future housing needs. For the purpose of quantifying housing
demand, BDIIS plan identifies three household income brackets:
No Text
Households earning roughly 40',%--60% of ANTI, 60%-85% of AMI, and those earning roughly
75°/,- 120`% of AMI. According to population growtli estimates, f3ozeinaj) can expect approximately
60 new households annually c�lrnirrg between 40%-60% of AM!, approximately 55 new households
earning hetween 60`%,-75°/, of' AMI, and approximately 90 new households earning between
75°1n-120% o f'A M I.
Section V. Conclusion.
The BDIIS affordable housing plan described Herein effectivelyproduces and maintains a spectrurx]
of housing types made available to qualifying buyers and tenants on a long term basis, at sale prices
and rent costs significantly below current market values. The plan is practical and realistic, and
specitically targets local households with incomes most irr need of affordable housing. As proposed,
the plan is "frCC-st IldIng", and does not rely on federal, state, nor local subsidies to be effective.
I lowever, housing market conditions clo change constantly and the plan will be effected by such
changes and adjustment will be required in the firhlre. To the extent possible, the affordable housing
plan minimizes regulation while till entionallyrrraintaining asmany free-market elements aspossible.
('hough riot intended to be a city-wide solution to the need of affordable housing in Bozeman, this
plan as proposed will produce a significant quantity of affordable housing commensurate with the
(level olmetit densities of the BDI IS Sub -Area plan.
•
0
No Text
TABLE I- AFFORDABLE HOUSE PRICE CALCULATIONS
AFFORDABILITY DEFINITIONS
2006 Area Median Income: $56,600
Annual
Home
Mortgage
Purchase
Loan
Payment
Annual
Annual
Total
Price
Amount
(6.5% int.,
Taxes
Insur.
Ann, HOA
Annual
% of 2006
Annual
Affordability
(Qualifi'ing
(95% of
30-year
(1% of
(.35% of
Dues (S125
Housing
Median Income
Income
Level
Ratio - 36%)
value)
amort.)
Value)
Value)
per Month)
Cost
--------------------
40% - 60%
-------------------------
$22,640 - $33,960
----------------
Level 1
--------------------------------
$124,350
$118,133
--------------------------------
$9,047
----------------
$1,244
$435
---------------- ----------------
$1,500
$12,225
75.00%
$42,450
Level 2
$159,787
$151,.798
$11,625
$1,598
$559
$1,500
$15,282
85.00%
$48,110
Leve13
$183,417
$174,246
$13,344
$1,834
$642
$1,.500
$17,320
95.00%
$53,770
Level 4
$207,042
$196,690
$15,063
$2,070
$725
$1,500
$19,358
105,00%
$59,430
Level 5
$230T667
$219.134
$16,781
$2,307
$807
$1,500
$212395
115.00%
$65,090
Leve16
$254,282
$241,568
$18,499
$2,543
$890
$1,500
$23,432
No Text
•
TABLE 2: AFFORDABLE HOUSING TYPES/ PRICE RANGES AND LOT CONFIGURATIONS
The mix of affordable housing types and price or rent ranges in the BE)HS' Sub -Area will consist of the following:
Minimum Lot
% of 2006
Housing Type
Requirement
Restricted
Annual
Area Median
as a % of all
in a Subdivision
Price Range
Lot Selling Price
Lot Size
Housing Type:
Income Level
Income
Affordable Units
of 200 Units
(Initial)
(S per Sq. Ft.-)
(Sq. Ft. j
------------------------
Detached - D1
------------------------------------------------
$42,450- $48,109
75% - 85%
------------------------
10.00%
----------------------------------------------------
2
S159,787 - $183,416
------------------------ -----------------
$7.00
3,000
Detached - D2
$48,110- $53,769
85% - 95%
10,00%
2
$183,417 - $207.041
$8.00
3,000
Detached - D3
$53,770- $59,429
95% - 105%
10.00%
2
$207,042 - S230,666
$9.00
3,000
Detached - D4
$59,430- $65,090
105% - 115%
10,00%
2
$230,667 - $254,282
$10.00
3,000
Sub -Totals
40.00% 8
$207,035 $8.50 3,000
Attached - AI $33,960- $42,449 60% - 75%
15.00%
3
$124,350 - $159,786
$8.00
2,500
Attached - A2 $42,450- $48,109 75% - 85%
15.00%
3
$159,787 - $183,416
S10.00
2.500
Sub -Totals
30.00%
6
$142, 069
$9.00
2,500
i
Attached Rental $22,640- $33,959 40% - 60%
------------------------
30.00%
6
$566 - $849 per month
$10.00
2,000
------------------------------------------------
Totals
---------------------
100.00%
20
-------------------------------------------------------
-----------------
$9.10
21550
I,
•
C:
TABLE 3 - MAXIMUM AFFORDABLE LOT AND HOUSE PRICES BY YEAR
MAXII<'ILM [VACANT AFFORDABLE LOT PRICE PER SQUARE FOOT BY YEAR
Annual Price Increase: 4.50%
2006
2001
2008
2009
2010
2011
2012
2013
2014
2015
----------------
Detached Home Lots:
----------------
----------------
----------------
----------------
----------------
----------------
----------------
----------------
----------------
D1
$7.00
$7.32
$7.64
$T99
$8.35
$8.72
$9.12
$9.53
$9.95
$10.40
D2
$8.00
$8.36
$8.74
$9.13
$9.54
$9.97
$10.42
$10.89
$11.38
$11.89
D3
$9.00
$9.41
$9.83
$10.27
$10.73
$11.22
$11.72
$12.25
$12.80
$13.37
D4
$10.00
$10.45
$10.92
$11.41
$11.93
$12.46
$13.02
$13.61
$14.22
$14.86
Attached Horne Lots
$10.00
$10.45
$10.92
$11.41
$11.93
$12.46
$13.02
$13.61
$14.22
$14.86
HOME APPRECIATION EXAMPLES
(based on a home occupied in 2006)
Annual price increase:
4.50%
Affordability Level
2006
2007
2008
2009
2010
2011
20I2
2OI3
2014
2015
-----------------------------------------------
Level 1
----------------
$124,350
----------------
$129,946
----------------
$135,793
----------------
$141,904
----------------
$148,290
----------------
$154,963
----------------
$161.936
----------------
$169.223
----------------
$176,838
$184,796
Level
$159,787
$166,977
$174,491
$182,344
$190,549
$199:124
$208,084
$217,448
$227,233
$237,459
Level
$183,417
$191,671
$200,296
$209,309
$218,728
$228,571
$238,857
$249,605
$260,837
$272,575
Level 4
$207,042
$216,359
$226,095
$236,269
$2462901
$258,012
$269,623
$281,756
$294,435
$307,684
Level
$230,667
$241,047
$251,894
$263,229
$275,075
$287,453
$300,388
$313,906
$328.032
$342,793
Level
$254,282
$265,725
$277,682
$290,178
$303,236
$316.882
$331,141
$346,043
$361,615
$377,887
171
•
11
•
•
TABLE 4 - EXAMPLE OF BUILDING ECONOMICS
House Selling Price (Level 4, 1,400 s.f. Douse) $207,042
Less Costs:
Lot Cost $27,000
Sitework & Landscape 8,000
Construction Cost @ $100 psf 140,000
Selling Commissions 12,423
Total Costs $187,423
130der Profit
Profit Percentage
9.5%
•
C.
•
From: Caren Roberty [crobertyoq hrdc9.org]
Sent: Wednesday, July 12, 2006 4:16 PM
To: Jody Sanford
Subject: Bozeman Deaconess Health Services (BDHS)' Sub -Area Affordable Housing
Plan
On July 12, 2006, Jason Leep presented the Bozeman Deaconess Health. Services
(BDHS)' Sub -Area Affordable Housing Plan to the CAHAB.
Mary Martin made a motion, Carol Townsend seconded, and the following motion passed
unanimously. "1The CAHAB recommends the City Commission approve the Bozeman
Deaconess Health Services (BDHS)' Sub -Area Affordable Housing Plan with the
following comments:
1. House payments and the corresponding house price would be based on 30% of the
household's monthly gross income for PITI and homeowners association dues rather than
the 36% proposed in summation point number 4.
2. Summation point number 7 would be amended to include, "prior to the lot being
sold open market the City of Bozeman would receive a right of first refusal to purchase
the lot at the affordable value."
. In summation point number 7, the words unfavorable and uncontrollable would be
defined as they relate to the market conditions that trigger the lot being sold at the open
market price.
3. Prior to approval of the sub -division, covenants would be submitted that required
a single car garage, front porch and modern durable attractive exterior materials. The
subdivision plan would include a landscaping plan.
The CAHAB commends the Bozeman Deaconess Hospital for voluntarily taking the step to
include affordable housing in their subdivision and thereby showing other developers that the
draft housing ordinance was workable.
Caren Roberty, Community Development Director
IIRI)C
32 South Tracy
Bozeman, MT 59111)
406-585--4866
ctoberty@hrdc9.org
0
No Text
CITY OF BOZEMAN
DEPARTMENT OF PLANNING AND COMMUNITY DEVELOPMENT
Alfred M. Stiff Professional Building
20 East Olive Street
P.O. Box 1230
Bozeman, Montana 59771-1230
MEMORANDUM
TO: Bozeman City Commission
FROM: Jody Sanford, Senior Planner
phone 406-582-2260
fax 406-582-2263
planning@bozeman.net
www.bozeman.net
RE: Bozeman Deaconess Health Services - Subarea Affordable Housing Plan
DACE: August 16, 2006
Bozeman Deaconess Health Services (BDHS) has proposed an Affordable Housing Plan
as a component of their Subarea Plan which was approved by the Commission on
February 27, 2006. With this plan, BDHS wishes to define a program whereby the
development within the 510-acre subarea may assist in mitigating the City-wide need
for affordable housing. BDHS is one of the largest employers in the region, and a
supply of quality affordable housing located conveniently to the BDHS work forces'
place of employment would be a positive asset for BDHS.
This plan was reviewed by the Community Affordable Housing Advisory Board
(CAHAB) on July 12, 2006. At that time, CAHAB voted to recommend approval of the
plan with the 3 revisions recommended in the attached memo dated July 12, 2006.
Planning staff is also supportive of this plan, but would recommend that the following
revisions be made to the document:
Include Page numbers in the document.
2. Page 5, Detached Single Household Lots, Paragraph 1 - Sentence 7 should be
amended to read as follows: "With the approval of BDHS, the builder will apply
for relaxations, through the planned unit development (PUD) process, to further
divide..."
3. Page 5, Detached Single Household Lots, Paragraph 1 - Sentence 8 should be
amended to read as follows: "The City should provide for an expedited review
of these subsequent requests as allowed for in Section 18.34.060.E of the
. Bozeman Unified Development Ordinance."
4. Page 6, Detached Single Household Lots, Paragraph 3 - Sentence 5 should be
amended as follows: "Subsequent to specific homes being designed for the
planning • zoning . subdivision review • annexation • historic preservation • housing . grant administration . neighborhood
coordination
No Text
specific lot and site, further subdivision would occur to create the infernal lot
lines at which time site and home specific relaxations from subdiViSieR zoning
standards would also be requested through the PUDprocess."
5. Page 6, Attached Single Household Lots, Paragraph 1 Sentence 7 should be
amended as follows: "With the approval of BDHS, the builder will apply to
further subdivide the "grouping" lot. The builder will also apply for relaxations
through the PUD process, according to that specific builder's needs on that
specific lot, such as reduced setbacks, reduced minimum lot sizes, increased
floor area ratios and zero lot lines."
6. Page 6, Attached Single Household Lots, Paragraph 1 - Sentenace 9 should be
amended as follows: "The City should provide for an expedited review of these
subsequent requests as allowed for in Section 18.34.060.E of the Bozeman Unified
❑evelo ment Ordinance."
7.
Page 2
No Text