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HomeMy WebLinkAboutEconomic Development Staff Report - 23354 5th and Villard CCOA 20240520 To: Director of Community Development Fr: Brit Fontenot, Director of Economic Development Date: May 22, 2024 RE: Approval of Affordable Housing Plan for Community Development Project 23354 The Guthrie at 5th and Villard Site Plan Pursuant to Sec. 38.200.010.H, BMC, as the duly appointed Director of Economic Development, I am the review authority for an affordable housing plan submitted pursuant to 38.380.040. I hereby approve the attached Affordable Housing Plan for The Guthrie at 5th and Villard Site Plan (the “Project”). If you determine the application is appropriate for approval, I request you include in your approval of The Guthrie at 5th and Villard Site Plan the following conditions: 1. BMC 38.380.040.E. The applicant and owner, if different, must consent to the City recording a summary of the affordable housing plan immediately following conditional approval of The Guthrie at 5th and Villard Site Plan. 2. BMC 38.380.060.D. The applicant and owner, if different, must record and provide to the City of Bozeman a Notice of Restrictions for the Affordable Housing Plan and a Declaration of Restrictive Covenants that implements the affordable housing plan immediately following conditional approval of The Guthrie at 5th and Villard Site Plan. The summary of the Affordable Housing plan and the restrictive covenant must be recorded prior to issuance of a building permit for The Guthrie at 5th and Villard Site Plan. The proposal is utilizing the Deep Incentives allowed pursuant to BMC 38.380.030.B, which were created to incentivize the increased production of affordable housing to meet the goals of the adopted Bozeman Community Plan and the Community Housing Action Plan. Deep Incentives are available to projects for which the minimum percentage of homes meeting the criteria for affordability is 50 percent. Pursuant to 38.380.030, “Applications for development of affordable homes that comply with the requirements of this division qualify for and must be awarded the incentives applicable to the type and tenancy of affordable housing being provided and requested by the developer. Staff reviewed the Affordable Housing Plan for The Guthrie at 5th and Villard for compliance with every requirement of the Affordable Housing division of the code and found that it complies with all code requirements. Therefore, the requested incentives must be awarded. A compliant Affordable Housing Plan must include the following information. a. The total number of affordable homes, and market rate homes in the proposed development. • The Guthrie’s Affordable Housing Plan includes 56 affordable homes priced for rent at 80% of the area median income (AMI). The project includes 111 total units, which means at least 50% of the units meet the affordability criteria for the use of the Deep Incentives pursuant to Table 38.380.020-1. The provision of 56 units meets this requirement. b. The table in 38.380.020-1 to be applied to the affordable housing plan. • The Guthrie’s Affordable Housing Plan references Table 38.380.020-1 – Affordable Homes Required for Deep Incentives. To be eligible for Deep Incentives, the requirements of Table 38.380.020-1, including providing at least 50% of the homes within the multi-household dwelling for sale or rent at particular percentages of AMI. This proposal meets the requirements because the development proposes slightly more than 50% of its multi-household dwellings (apartment building) to be priced at 80% of AMI, in accordance with requirements found in the table. c. The number of bedrooms in each proposed low-income affordable home, and market rate home in the development. • The Guthrie’s Affordable Housing Plan stipulates that the project will have 111 units: 55 of those units are proposed as market rate units and 56 of those units are proposed as affordable units. The market rate unit mix includes 51 one-bedroom units and 4 two- bedroom units. The affordable unit mix includes 51 one-bedroom units and 5 two- bedroom units. BMC 38.380.040.A.2.b. "The mix of bedrooms per unit in affordable homes must be as similar as possible to the mix of bedrooms per unit of the market rate homes in the development.” The proposed project meets the code requirement because there are an equal number of one-bedroom units and the number of two-bedroom affordable units exceeds the number of one-bedroom market rate units. d. Whether each affordable home will be offered for rental or for sale. • The Guthrie’s Affordable Housing Plan provides that all affordable units will be offered for rent. e. The location of affordable lots or units in the development. • The Guthrie’s Affordable Housing Plan provides an exhibit (006 – A0.14) showing the locations of the 56 affordable units. The units are primarily located on Level 2 and Level 3 with an additional 5 units on Level 4, and 3 units on Level 5. Market rate units are primarily located on Level 1, Level 4 and Level 5. f. The applicable AMI and maximum rental or sales price applicable to each low-income affordable home. • Because each of the affordable units will be offered for rent, the maximum rental price allowed is 80% of Area Median Income (AMI). The Department of Housing and Urban Development (HUD) is required by law to set income limits that determine eligibility for assisted housing programs. These income limits are set at certain percentages of an area’s median family income (MFI). MFIs are also often referred to as area median incomes (AMI). • The current 80% AMI income limit for a 4 person household, as published by HUD is $84,150. o The Guthrie’s Affordable Housing Plan correctly provides that a 1 bedroom unit will be offered for rent for $1,684, given the current AMI. Economic and Planning Systems, Inc. developed a calculator for the City to use HUD’s methodology to apply the MFI to a two-person household, which corresponds with a one-bedroom unit, which results in a yearly income limit of $67,350 at 80% AMI for a two-person household. Monthly rent is derived from this number by dividing by the number of months in the year and multiplying by 0.3 to reflect 30% of monthly income ($67,350 / 12 x 0.3 = $1683.75). Therefore, as rounded, $1684 is the maximum monthly rent allowed for a one-bedroom unit. The MFI of $75,750 for a three-person household corresponds with a two-bedroom unit. Monthly rent for a two-bedroom unit is currently $1,894 at 80% AMI. As MFI is published by HUD on an annual basis, the maximum price of rent will vary from year to year based on the AMI as determined by HUD each year. o Most of the units in the project are proposed as one-bedroom units. The BMC does not contain a definition of the term, “bedroom.” Pursuant to BMC 38.700.010, where the BMC does not define a term, it must be defined as found in the latest edition of "The Illustrated Book of Development Definitions" by Harvey S. Moskowitz and Carl G. Lindbloom. The "The Illustrated Book of Development Definitions" (2015) provides a definition of a “bedroom”: A private room planned and intended for sleeping, separated from other rooms by a door, and accessible to a bathroom without crossing another bedroom. Staff finds that all the units in The Guthrie meet the definition of a one-bedroom unit for the purposes of assigning rental rates pursuant to 38.380.020.D.2., because sleeping areas may be separated from other rooms by a door, and these sleeping areas are accessible to a bathroom without crossing another bedroom. Doors provide privacy to the sleeping area from other parts of the apartments. g. A description of the requested incentives from section 38.380.040. • The Guthrie’s Affordable Housing Plan includes a description of the requested incentives from section 38.380.040. These incentives include an additional story of height beyond what is already allowed in R-5 zoning, no required on-site parking, a modification to block frontage standards related to the location of parking lots, and exemptions from building material and building detail standards. h. Any other information that is reasonably necessary to evaluate the compliance of the affordable housing plan with the requirements of this division, as determined by the review authority. • The information provided with The Guthrie’s Affordable Housing Plan satisfies the requirements of 38.380.040.A.1 and is adequate to evaluate the compliance of the affordable housing plan with the requirements of this division as explained by this staff report. i. This subsection is inapplicable because the proposed development is not proposed to be constructed in phases. BMC 38.380.040.A.2. requires that the Applicant meet the following development standards for affordable homes. a. The number of affordable homes must meet or exceed the minimum standards needed to qualify for the applicable incentive in section 38.380.030. • This application proposes to utilize deep incentives. Minimum standards for deep incentives are found in Table 38.380.020-1 and require that a multi-household dwelling supply at least 50% of the total homes as affordable homes at a price no greater than 80% of AMI for a duration of at least 30 years. The Guthrie’s Affordable Housing Plan shows 56 units, or more than 50% of the project’s 111 units will be priced at or below a rent that is affordable for households making at or below 80% of the area median income. The duration of the affordability of the units will be satisfied by recording a deed restriction requiring the affordable units to remain affordable at rents of no greater than 80% AMI for a period of 30 years. b. The mix of bedrooms per unit in affordable homes must be as similar as possible to the mix of bedrooms per unit of the market-rate homes in the development. The Guthrie’s Affordable Housing Plan stipulates that the project will have 111 units with 55 of those units proposed as market rate units and 56 of those units proposed as affordable units. BMC 38.380.040.A.2.b. There are an equal number of one-bedroom units, fifty-one and fifty-one respectively. The number of affordable two-bedroom units exceeds the number of market rate one-bedroom units by a single unit. The proposal meets the requirement that the mix of bedrooms in the affordable homes is as similar as possible to the mix of bedrooms in the market-rate homes. c. Access to shared amenities and services by residents of the affordable homes must be the same as to those in market rate homes in the development. • Affordable homes are distributed throughout the building and nothing in the Site Plan Application or Affordable Housing Plan indicates that any shared facilities will not be available to all residents. The Applicant confirmed in writing that, “Access to project amenities and services are available for ALL residents.” d. If the development is to be constructed in phases, and the developer has requested affordable housing incentives, at least 75 percent of the dwelling units in each phase must be affordable homes, unless the city has received adequate legal or financial assurance that any shortfall during earlier phases will be constructed before approval of the final phase of development. • The requirements of this subsection are inapplicable because the development will not be constructed in phases. The review authority has approved the Affordable Housing Plan for The Guthrie at 5th and Villard Site Plan and finds that the plan includes all information required for the City to confirm compliance with the standards and criteria in BMC 38.380, including the standards in 38.380.030.B – Incentives Available. The Applicant requests the following incentives from BMC 38.380.030.B – Incentives Available: • Two additional stories of height (maximum 15 feet per story) beyond that allowed in the R-4, R-5, R-O, NEHMU, and B-1 zoning districts. • No minimum on-site vehicle parking requirement, but bicycle parking standards and requirements of 38.540.050 still apply. • An exemption from the requirements of section 38.510.030.E to J block frontage standards, provided that vehicle parking is prohibited between the front or side of a principal building and a public or private street; • An exemption from the requirements of section 38.530.050 building detail standards; and • An exemption from the requirements of section 38.530.060 building material standards. The Affordable Housing Plan has been incorporated by reference in the Site Plan documents. Please include a copy of this memorandum and the approved affordable housing plan in the file for the Project.