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HomeMy WebLinkAboutG.1 Action Plan CC Memo 1.13.20 FINAL1 Commission Memorandum REPORT TO: Mayor and City Commission FROM: Dennis M. Taylor, Interim City Manager Martin Matsen, Director of Community Development SUBJECT: Presentation of City Manager’s recommendation regarding Objectives, Action Strategies, and Action Items from the adopted Community Housing Action Plan. MEETING DATE: January 13, 2020 AGENDA ITEM TYPE: Action RECOMMENDATION: A recommendation for each Action Strategy is outlined below. SUGGESTED MOTION: Having reviewed and considered the City Manager’s recommendations, public comment and all other information presented, I hereby move to accept the recommendations as outlined. STRATEGIC PLAN: Initiative 4. A Well-Planned City, states “We consistently improve our community's quality of life as it grows and changes, honoring our sense of place and the "Bozeman feel" as we plan for a livable, affordable, more connected city.” Within this initiative in section 4.5.b) it reads “Develop a Comprehensive Affordable Housing Action Plan that includes, but is not limited to: • Mandates the creation of affordable housing across all dwelling unit types. • Provides prescribed flexibility in the manner in which the mandate can be accomplished. • Provides a substantial, broad-based and reliable source of funding for the construction of affordable housing and for affordable housing loans. • Actively encourages Bozeman's major employers to develop workforce housing programs for their employees.” Speaking directly to this planning effort the City Commission has identified Affordable Housing as one of its five priorities for 2019. 2 BACKGROUND: The Community Housing Action Plan presents a set of actions that address a range of community housing needs. This plan was developed to begin addressing identified community housing needs and to create a lasting framework for implementation that will evolve as the community and its housing needs continue to evolve. The partnership framework for accelerating community housing in Bozeman is based on the recognition that no one entity can solve the local housing challenges by itself. Utilizing the 2019 City of Bozeman Community Housing Needs Assessment as a base to understand the housing needs of residents and employees in Bozeman, a local Housing Working Group, comprised of Bozeman community stakeholders, with input from the public and technical assistance from consultants, created this Plan. A timeline for achieving priority strategies has been established, recognizing that this Plan will have life beyond this timeline and will continue to evolve and meet changing community housing needs over the long term. By including various community members in its implementation (employers, institutions, community organizations, and stakeholders), the Plan acknowledges that community involvement is necessary for the Plan’s success. PROCESS TO DATE: The Community Housing Working Group met with the consultants to learn about the various tools/strategies used in the inter-mountain west. Tools that might be used to relieve the stress of increasing home prices and monthly rental rates were explored. The project began in the spring of this year (2019) and followed the schedule below: April 30 Outreach to Housing Working Group May 8 CAHAB Regular Meeting May 13 City Commission Regular Meeting May 14 Action Plan Outreach May 22 Kick-off Meeting – Session 1: Housing Working Group and CAHAB May 23 Public Workshops – Inform Public and Gather Information June 11 Housing Working Group - Session 2: Tool Prioritization June 12 CAHAB Regular Meeting July 24 Housing Working Group – Session 3: Strategy Refinement of Prioritized Tools July 25 Housing Working Group - Session 4: Strategy Refinement of Prioritized Tools Aug 20 Public Open Houses – Community Involvement Sept 10 Housing Working Group - Session 5: Strategy Refinement; Financing; Timeline; Responsibilities (part 1) Sept 11 Housing Working Group - Session 6: Strategy Refinement; Financing; Timeline; Responsibilities (part 2) Sept 27 Draft Action Plan to City Staff for review Oct 3 Draft Action Plan to Housing Working Group for review Oct 10 Meeting/Conference call – Draft Action Plan Review Oct 14 Final Action Plan (with revisions) to City Staff for review Oct 18 Final Action Plan Release to public (for 30 day comment period) Oct 22 Public Open Houses – Community Involvement Nov 18 City Commission Regular Meeting, Presentation and Adoption 3 Jan 13, 2020 City Commission Regular Meeting, Action Item Prioritization DOCUMENT REVIEW: A completed plan was released for public review in October 2019. The document is available on the City’s website, at City Hall, the Planning office and the Library. Additionally, staff held two public open houses on October 22 in an attempt to educate and inform the public regarding the completed plan. The Plan was presented, discussed and adopted at the regular City Commission meeting on November 18, 2019. PLAN OBJECTIVES: The three main objectives that form the foundation of the Plan are as follows: 1. Income Levels. Community housing should serve the full range of incomes without losing sight of safety net programs. The primary focus should be on: • Ownership housing from 80% to 120% AMI, while also incentivizing the production of missing middle housing up to 150% AMI; • Additional resident and employee rentals up to 80% AMI; and • Safety net rentals below 30% AMI 2. Jobs-Housing Relationship. Produce community housing at a rate that exceeds, or at least matches, job growth at income levels and ratios being earned by Bozeman employees. 3. Community Housing Built and Preserved. Strive to produce community housing at a rate that matches the spectrum of community housing needs, while also preserving what we have through a target of no net loss of existing community housing stock. With the help of the City’s Strategic Services Department, staff is working on gathering the appropriate data and creating methods for accurately measuring and presenting success as it relates to the Plan’s Objectives moving forward. ACTION STRATEGIES: The Plan identified 17 Action Strategies with 71 underlying Action Items. In the adoption process, the City Commission adopted 2 additional Action Strategies and staff has subsequently created 7 additional Action Items related to these Strategies. This memo will briefly discuss the resulting 19 Action Strategies and some related action items. Please see Appendix A for more detailed information regarding all 78 underlying Action Items. In order to provide meaningful recommendations, staff has evaluated each of the 78 action items using a number of criteria. First, is the action item something that City Management feels is already part of the daily work of the Community Development Department, the Community Housing Program Manager or other City Staff? Second, does the Action item need policy direction from the Commission before additional efforts are undertaken? Third, are additional 4 resources needed in terms of additional staff resources, additional legal review or additional money in order to accomplish the action item? Additional resource needs were looked at from both a one-time need and from an ongoing or programmatic need once completed or established. Specific references to each criteria for all action items can be found within Appendix A. After evaluation of all 78 action items, 26 action items are being considered as part of the normal daily work of staff (noted in green rows within Appendix A). All of these items are being recommended to continue and only 2 of these items would need additional funding or resources. 34 action items are thought to need additional policy direction from the commission (noted in yellow rows within Appendix A), all of which would have either one-time or ongoing resource needs. Staff is recommending that the commission give specific direction regarding some of the action items that are viewed as needing both policy direction and additional resources. The specific recommendations are listed below each Strategy area below and will be restated at the end of this memo. In some cases the individual action item recommendations may be grouped together in the final recommendations section when efforts done individually would overlap or when efficiencies have been identified. Presented below is a discussion of the main issues associated with each of the Plan’s 19 Action Strategies. 1) General Funds - This strategy has two associated action items and the Plan has identified the City as the lead agency for implementation. The General Fund has many funding obligations and considerable stress on its limited resources. Each year, it is the City Manager’s obligation to recommend a balanced budget to the Commission for adoption. As is suggested in the action items, staff is currently planning on submitting a budget request for 3 mills (~$340,000) for the fiscal year 2021. The plan discusses the need to secure a reliable funding source and staff is actively exploring options in the area. This Strategy includes an additional action item regarding the establishment of allocation criteria for monies directed to the City’s workforce Housing Fund. This effort is underway. Staff proposed draft allocation criteria to the Community Affordable Housing Advisory Board (CAHAB) at their December 2019 regular meeting. That discussion will continue at the Board’s January meeting with the goal of bringing recommended allocation criteria to the Commission later this spring. Recommendation: Continue ongoing efforts regarding this Action Strategy. 2) Tax Increment Financing (TIF) This strategy has two associated action items and the Plan has identified the City as The lead agency for implementation. Community Development staff are currently working with staff from the City’s Economic Development Department on new and creative ways the 5 Urban Renewal District (URD) and TIF funds could be used to leverage money for good projects that include housing at all income levels. While not a TIF district, the Downtown Business Improvement District has already started a pilot project hoping to incentivize the creation of more small dwelling units in the downtown core. Recommendation: Continue ongoing efforts regarding this Action Strategy. 3) Community Land Trust This strategy has two associated action items and the Plan has identified Habitat for Humanity as the lead agency for implementation. Community Development staff is actively involved in discussions regarding the creation of a Community Land Trust. Currently an organized effort is underway revolving around the Bridger View development. While not identified as the lead on this strategy, the City is supportive of our community partners in this area. Recommendation: Continue ongoing efforts regarding this Action Strategy. 4) Deed Restricted Housing (permanent) This strategy has six associated action items and the Plan has identified the City as the lead agency for implementation. Action items in this area are centered on creating a stock of permanently deed restricted housing units. This would be a new program area for the City and is therefore listed as a policy issue. New efforts in this area would need additional resources, both to research and set-up the program, but also ongoing resources would be needed to manage the program in perpetuity. Recommendation: Revisit this strategy in coming months. Staff will research the pros and cons of permanent deed restriction programs, provide examples and report back to the Commission in memo format with associated recommendations in six months (July 2020). 5) Inclusionary Zoning This strategy has six associated action items and the Plan has identified the City as the lead agency for implementation. The first of the Action Items states, ‘revisit affordable housing ordinance: evaluate what has worked and not’. It is important to note that staff is constantly evaluating the inclusionary zoning ordinance. The current ordinance is limited to mandating that a percentage of homes in new subdivisions be sold at less than market rate. The ordinance is working well under this limited scope. Action items 2 through 5 in this strategy seek to increase the scope of the ordinance by mandating the inclusion of affordable units in rental and multifamily projects and by adding the requirement that permanent deed restrictions be placed on affordable units. The action items also call for the consideration of mandating the creation of units for sale at up to 120% of the area median income. The inclusion of rental projects in the ordinance needs to be researched by legal staff in order to fully explore the City’s authority under State Statutes. The fiscal effects of increased requirements on multifamily and rental projects needs to be further researched. 6 Moving to a permanent deed restricted program would have significant impacts on staffing and would do away with the current non-cash subsidy funding for the program’s future. Recommendation: Staff will continue to monitor the inclusionary zoning ordinance and will suggest improvements when needed either through policy or ordinance revisions. Included in the recommendation above staff will produce information regarding deed restriction programs for the Commission’s consideration. The inclusion of rental and multifamily projects in the inclusionary zoning ordinance is not being recommended at this time. The recommendation is that both fiscal and legal analysis be undertaken with a report to the Commission in memo format with associated recommendations in ten months (October 2020). 6) Public / Private / Institutional Partnerships This strategy has five associated action items and the Plan has identified the School District as the lead agency for implementation. While the city is not identified as the lead for actions within this strategy Community Development staff is actively working with community partners to identify possible land and project partners. City staff will be taking an active role in facilitating the due diligence process with community partners. Recommendation: Funds from the Workforce Housing fund may be requested to facilitate parcel appraisals and project feasibility studies as City staff identify available land. 7) Home Buyer Assistance This strategy has four associated action items and the Plan has identified the City as the lead agency for implementation. The City, in contractual relationship with the Human Resources Development Council (HRDC), is currently working on first time home-buyer education. With the recent hire of the Community Housing Program Manager, these efforts will be increased. Policy direction is needed should there be the desire to increase efforts to potential buyers beyond the 80% of area median income as suggested by the plan. Recommendation: Continue ongoing efforts regarding this Action Strategy. 8) Permanent Supportive Housing (PSH) and Transitional Housing This strategy has four associated action items and the Plan has identified HRDC as the lead agency for implementation. City staff and elected officials have been actively engaged in efforts regarding the FUSE project and other supportive and transitional housing projects. Recommendation: Continue ongoing efforts regarding this Action Strategy. 9) Fee Waiver / Deferral This strategy has five associated action items and the Plan has identified the City as the lead agency for implementation. The City’s inclusionary zoning ordinance includes an impact fee reimbursement incentive and the Community Development Director is writing a policy to better explain the process for reimbursement. This policy will be updated in the Affordable Housing Manual. All fees can currently be calculated prior to project approval and better 7 educational materials are being developed and will be placed within the Affordable Housing Manual and on the City’s website. Efforts to increase fee reimbursement or to defer fees on projects beyond the scope of those dwelling units provided through the inclusionary zoning ordinance would be a policy decision of the Commission. Some legal questions remain regarding the City’s ability to defer certain fees and more work needs to be done to fully explore all options. Additionally, the question remains of how efforts in this area would be funded. Action item 5 in this strategy again refers to deed restricting of projects receiving a fee reimbursement, reduction or deferral. This will be addressed in the research and reporting mentioned above. Recommendation: Continue ongoing efforts regarding this Action Strategy including legal review of statutory ability and research and reporting regarding deed restriction. 10) Co-op Housing (mobile home parks) This strategy has four associated action items and the Plan has identified HRDC as the lead agency for implementation. Currently the City’s Unified Development Code allows Co-op housing and mobile home parks in a number of ways. Staff is supportive of efforts in this strategic area and will continue to work with community partners on these action items. Recommendation: Continue ongoing efforts regarding this Action Strategy. 11) Land Banking This strategy has four associated action items and the Plan has identified the City as the lead agency for implementation. While Community Development staff has a good understanding of vacant and underutilized land in the City, a formal process for identifying and tracking these parcels does not exist. Staff capacity does not currently exist to stand-up a system in this strategic area. Resources in terms of additional staffing or consultant fees would be needed in order to both identify all possible land and outline a process for the next steps included in a Land Banking program. Policy direction is needed should the Commission desire to move forward in this strategic area. Recommendation: Additional efforts in this area are not being considered at this time. 12) Employer Assisted Housing This strategy has four associated action items and the Plan has identified Prospera as the lead agency for implementation. All action items in this strategic area are focused on outreach and education. Staff is actively involved as opportunities present themselves. Recommendation: Continue ongoing efforts regarding this Action Strategy. 13) Removal of Regulatory Barriers This strategy has six associated action items and the Plan has identified the City as the lead agency for implementation. The first action item in this strategic area has been implemented and the online process for submitting code revisions is live on the City’s website. The first round of these revisions is slated for April of this year. Ongoing efforts to 8 improve the development review process and ensure it is predictable are transparent or ongoing. Action items 3, 4 and 5 represent a significant amount of work and would need Commission approved funding to ensure timely completion. An RFP is currently being written and the expected funding needed would be approximately $80,000 to $120,000 to fully complete. Action item 6, relating to the creation of new regulations for movable tiny homes is a policy decision for the Commission and is not being recommended at this time. Recommendation: Move forward with an RFP for a consultant led project regarding City code analysis, audit and suggested revisions. 14) Accessory Dwelling Units (ADU) This strategy has four associated action items and the Plan has identified the City as the lead agency for implementation. Significant efforts in this area have been made over the past 18 months. City Staff has worked with MSU architecture students on a pilot project with success in educational and outreach efforts. Action item 1 is slated to come before the Commission for action in April of this year and educational efforts are ongoing. Action item 3 could be accomplished in short order but would likely take some funding as architectural plans may need to be purchased and initial building plan review would need to be paid for. Action item 4 would be part of the research and reporting discussed in previous strategies. Recommendation: Continue ongoing efforts regarding this Action Strategy. 15) Low Income Housing Tax Credits (LIHTC) This strategy has three associated action items and the Plan has identified HRDC as the lead agency for implementation. In concert with our community partners, staff is currently working to ensure the upcoming Census 2020 data is as accurate as possible. Staff is not currently making any efforts to secure local representation on the Montana Housing Board. Action item 3 is a worthwhile effort but would take some additional capacity to have the biggest impact. City Community Development staff with help from the City GIS Specialists could accomplish the initial analysis fairly easily. Once the analysis is done it could be a heavier lift to ensure alignment of all zoning. This effort may need additional resources in term of consultant funding. Recommendation: Continue ongoing efforts regarding action item 1. Using consultant funding when needed, Staff should move forward with action item 3 at this time. 16) Taxes Dedicated to Housing This strategy has six associated action items and the Plan has identified the City as the lead agency for implementation. Action items in the strategic area are categorized by the plan as longer term efforts. All action items would need policy direction from the Commission and are not being actively worked on at this time. Should the Commission choose, additional resources would be needed in terms of staff time or consultant funding. Educational and outreach costs may also be incurred. Recommendation: Additional efforts in this area are not being considered at this time. 9 17) Commercial Linkage This strategy has four associated action items and the Plan has identified the City as the lead agency for implementation. Three of the four action items in this strategic area call for consultant led work resulting in a nexus study and peer community evaluation. These action items would need policy direction from the Commission and are not being actively worked on at this time. Should the Commission choose, additional resources would be needed in terms of staff time or consultant funding. Action item 4 states that staff should continue to encourage employers to build housing and encourage housing to be built over commercial projects when feasible. Recommendation: Continue ongoing encouragement regarding residential development. Additional efforts in this area are not being considered at this time. 18) Pre-Approved Planned Unit Development (PUD) The City Commission added this Action Strategy to the Plan at the time of adoption. Staff has proposed three associated action items and has identified the City as the lead agency for implementation. Staff is looking for Commission agreement on the three action items as listed below; 1. Evaluate past PUD relaxation approvals 2. Explore changes in the UDC and other City standards to minimize the need for PUD relaxations 3. Develop a pattern book and template for PUD approval when providing Affordable Units Staff has done some work on action item number 1, no work has been done on items 2 and 3. These action items would require policy direction from the Commission and associated resources in terms of staff capacity of consultant dollars. Recommendation: Continue ongoing efforts regarding action item 1. Using consultant funding when needed, Staff should move forward with action items 2 and 3 at this time. 19) Up-Zoning The City Commission added this Action Strategy to the Plan at the time of adoption. Staff has proposed four associated action items and has identified the City as the lead agency for implementation. Staff is looking for Commission agreement on the four action items as listed below; 1. Align growth policy recommendations with the density goals supporting up-zoning. 2. Develop expanded criteria to be used for evaluation of up-zoning applications. 3. Develop appropriate transition standards when up-zoning existing parcels. 4. Identify areas ripe for up-zoning. While staff has done some work on action item number 1, no work has been done on items 2 – 4. All of these action items would require policy direction from the Commission and associated resources in terms of staff capacity or consultant dollars. Educational and outreach costs may also be incurred. 10 Recommendation: Using consultant funding when needed, Staff should move forward with action items 1 – 3 at this time. Action Item 4 should be tabled until such time as criteria and transition standards have been adopted. RECOMMENDATION RECAP AND DIRECTION REQUESTED: Completing all of recommendations below would represent significant staff effort. It is reasonable to expect that some of the action items may take longer than a year to complete. Input from the Commission regarding priorities is appreciated. 1. Shall Staff move forward to engage third party to edit, reorganize and reformat the UDC to be more streamlined, functional and user friendly and remove duplicative language and inconsistencies? (strategy 13, item 3) a. Related action item would seek to engage third party to review all city codes, regulations and policies to identify disconnects and recommend methods to resolve. (strategy 13, item 4) b. Related action item to revisit Engineering Design Standards and Specifications Policy to allow more compact development standards. (strategy 13, item 5) c. Related action item aimed at exploring changes in the UDC and other City standards to minimize the need for PUD relaxations. (strategy 18, item 2) This would be a large and expensive project and would need to have an appropriate scope of work and be well managed in order to ensure the most cost effective results. The expected price tag on such an effort could be as much as $200,000 but could be broken into appropriate pieces of multiple years depending on the direction from the Commission. 2. Shall Staff move forward to procure and make available to the public for free, pre- approved and plan reviewed ADU construction document sets? (strategy 14, item 3) General inquiries to local design professionals would indicate that this could cost as much as $5,000 per design. Staff would look for partners interested in helping keep these costs to a minimum. 3. Shall Staff move forward to identify and suggest changes that would align regulations and zoning with Qualified Census Tracts to encourage LIHTC development? (strategy 15, item 3) Minimal consulting funding may be needed to accomplish this task (<$7,000) 4. Shall Staff move forward to engage third party to develop a pattern book and template for PUD approval when providing Affordable Units? (strategy 18, item 3) 11 This item would best be done after a full review of the UDC as recommended above. Staff would explore the possibility of MSU student help and other creative approaches to accomplish this task. 5. Shall Staff move forward to suggest ways to align growth policy recommendations with the density goals supporting up-zoning? (strategy 19, item 1) This could be done through staff analysis and reporting during the Community Plan (Growth Policy) adoption process. 6. Shall Staff move forward to develop expanded criteria to be used for evaluation of up- zoning applications? (strategy 19, item 2) This would be done by current staff to be brought before the Zoning Commission for recommendation and to the City Commission for approval. 7. Shall Staff move forward to develop appropriate transition standards when up-zoning existing parcels? (strategy 19, item 3) Minimal consulting funding may be needed to accomplish this task (<$7,000) ACTION ITEMS NOT RECOMMENDED AT THIS TIME: The following is a list of action items with associated strategy areas that are not currently being worked on by City Staff and are not being recommended to move forward at this time. All items listed below would require both policy direction from the Commission as well as additional one- time and/or ongoing resources. 4) Deed Restricted Housing (permanent) 1. Transition to a permanent restriction when publicly subsidized community housing units are created. 2. Align with other policies: fee waivers and incentives. 3. Transition to a permanent restriction when publicly subsidized community housing units are created. 4. Structure the eligibility and occupancy criteria to ensure “fairness.” 5. 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. 5) Inclusionary Zoning 2. Apply to multi-family development, as well as single family: ownership and rental. 12 4. Consider addressing up to 120% AMI for ownership 5. Require deed restrictions to be permanent. 7) Home Buyer Assistance 2. Seek local funding to serve households up to 120% AMI. 3. Community education program – financial literacy and assistance options. 4. Work with employers to assist employees. Technical assistance, loan/grant options, administration, etc. 9) Fee Waiver / Deferral 2. Structure fees to incentivize desired development (e.g. lower fees for smaller ownership and for-rent units. 3. Explore options to cover the cost of reduced fees – General Fund, Tax Increment Financing (TIF), etc. 5. Ensure homes benefit the community (deed restricted) if get reduced fees 11) Land Banking 1. Establish criteria to prioritize site(s). 2. Inventory potential opportunities. 3. Understand constraints. 4. Include vacant, underutilized, redevelopment. 13) Removal of Regulatory Barriers 6. Explore adding code section for Moveable Tiny Homes. Coordinate at the State level. 14) Accessory Dwelling Units (ADU) 4. Deed-restrict units that receive an incentive/public subsidy to build to ensure community benefit – e.g., require long term rental, resident/employee occupancy 16) Taxes Dedicated to Housing 1. Pursue either a mill levy or bond issue. 2. Coordinate with a comprehensive education campaign. 3. Consider citywide Special District. 4. Evaluate what entity should hold funds collected (City, new Housing Trust fund, etc.). 5. Evaluate who should administer allocation of funds, taking into consideration accountability requirements with the use public funds. 6. Establish allocation criteria that considers: scoring system, leverages funds, aligns with income targets, requires permanent affordability. 17) Commercial Linkage 13 1. Conduct Nexus Study to evaluate the potential impact of linkage on community housing and businesses 2. Consider the impact on business growth and the impact on the community of doing nothing (status quo). 3. Identify peer communities and evaluate what has worked and not worked: learn from others 19) Up-Zoning 4. Identify areas ripe for up-zoning. ATTACHMENTS: - Appendix A – Action Item Detail (SmartSheet) - Resolution 5081 (Adopted November 18, 2019) - Community Housing Action Plan