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Home My WebLink About08-12-24 CDB Special Meeting Agenda and Packet MaterialsA. Call Special Meeting to Order - 6:00 pm B. Disclosures C. Changes to the Agenda D. Public Comments on Non-agenda Items Falling within the Purview and Jurisdiction of the Board THE COMMUNITY DEVELOPMENT BOARD OF BOZEMAN, MONTANA CDB AGENDA Monday, August 12, 2024 General information about the Community Development Board is available in our Laserfiche repository. If you are interested in commenting in writing on items on the agenda please send an email to comments@bozeman.net or by visiting the Public Comment Page prior to 12:00pm on the day of the meeting. At the direction of the City Commission, anonymous public comments are not distributed to the Board or staff. Public comments will also be accepted in-person and through video conference during the appropriate agenda items. As always, the meeting will be streamed through the Commission's video page and available in the City on cable channel 190. For more information please contact Chris Saunders, csaunders@bozeman.net This meeting will be held both in-person and also using an online video conferencing system. You can join this meeting: Via Video Conference: Click the Register link, enter the required information, and click submit. Click Join Now to enter the meeting. Via Phone: This is for listening only if you cannot watch the stream, channel 190, or attend in- person United States Toll +1 346 248 7799 Access code: 954 6079 2484 This is the time to comment on any non-agenda matter falling within the scope of the Community Development Board. There will also be time in conjunction with each agenda item for public comment relating to that item but you may only speak once per topic. Please note, the Community Development Board cannot take action on any item which does not appear on the agenda. All persons addressing the Community Development Board shall speak in a civil and courteous manner and members of the audience shall be respectful of others. Please state your name, and state whether you are a resident of the city or a property owner within the city in an audible tone of voice for the record and limit your comments to three minutes. General public comments to the Board can be found in their Laserfiche repository folder. 1 E. Action Items E.1 Affordable Housing Ordinance (AHO) Work Session(Fine) F. FYI/Discussions F.1 Upcoming Items for the August 19, 2024, Community Development Board Meeting.(Saunders) G. Adjournment This board generally meets the first and third Monday of the month from 6:00 pm to 8:00 pm. City Board meetings are open to all members of the public. If you have a disability that requires assistance, please contact our Acting ADA Coordinator, Max Ziegler, at 406.582.2439 2 Memorandum REPORT TO:Community Development Board FROM:David Fine, Economic Development Manager Brit Fontenot, Economic Development Director SUBJECT:Affordable Housing Ordinance (AHO) Work Session MEETING DATE:August 12, 2024 AGENDA ITEM TYPE:Policy Discussion RECOMMENDATION:Provide feedback on recommendations prior to the City Commission Work Session on revisions to the AHO. STRATEGIC PLAN:4.5 Housing and Transportation Choices: Vigorously encourage, through a wide variety of actions, the development of sustainable and lasting housing options for underserved individuals and families and improve mobility options that accommodate all travel modes. BACKGROUND: The City Commission completed adoption of the current Affordable Housing Ordinance (AHO) codified in Division 38.380 [external link] of the municipal code on September 27, 2022. The City Commission adopted the replacement of the AHO in response to legislative action. The 2021 Montana Legislature passed House Bill 259, which barred the City from requiring affordable housing in new development. As most of the other commonly used tools for creating affordable housing are also prohibited in Montana, the City could only turn to voluntary incentives to create affordable housing. The current AHO is a response to this policy context. In creating the current AHO, the City conducted an extensive public review of the then existing code, identified alternatives, and choose those considered most likely to result in construction of new affordable housing. The current AHO has been effective. There are 387 units of affordable housing that utilized the AHO currently under construction and 1079 affordable units in the project pipeline across 15 projects. In July 2024, the City Commission requested that city staff suggest proposed revisions to the AHO. The policies contemplated by these revisions fall in three categories: 1. Administrative changes to the ordinance to provide necessary clarity in applying the ordinance. 2. Staff recommendations to enhance the ordinance and its policy 3 objective of creating encouraging the voluntary creation of new affordable housing units. 3. Recommendations to amend the deep incentives of the affordable housing ordinance in response to current market conditions and significant public comment requesting revision. Housing and economic development staff will present on affordable housing market conditions. Staff will also propose recommended revisions to the AHO in order to receive feedback from the board and the public. The Economic Vitality Board will also hold a work session on potential changes to the AHO on August 7. Finally, staff will hold work session with the City Commission on August 20th informed by this engagement with the advisory boards and the public. Based on direction from the City Commission following that work session, staff will draft an Ordinance incorporating the revisions requested by the City Commission, which will have additional opportunities for engagement with the relevant advisory boards and the public on specific revisions. Since the Community Development Board is responsible for providing recommendations regarding changes to zoning standards, we wished to let you know of these upcoming events. Formal presentations and public hearings will occur before any revision is adopted. Linked Documents: Policy Discussion - Community Housing Unified Development Code Incentives for Affordability March 1, 2022 Ordinance 2105 Provisional Adoption, Repeal Division 38.380, Affordable Housing, and Amend Associated Standards and Replace With a New Division 38.380 Affordable Housing Text Amendment, Application 22133 – August 23, 2022 Unified Development Code Affordable Housing Assessment, Clarion Associates, December 2021 UNRESOLVED ISSUES:None at this time. ALTERNATIVES:As suggested by the Community Development Board. 4 FISCAL EFFECTS:None at this time. Attachments: AHO Boards Presentation 8-2024 v2.pdf Report compiled on: July 31, 2024 5 Affordable Housing Ordinance Revision Work Session| David Fine | August 2024 Affordable Housing Ordinance Work Session 6 Bozeman Community Plan 2020 •Goal N-3: Promote a diverse supply of quality housing units. •NN-3.3 Encourage distribution of affordable housing units throughout the City with priority given to locations near commercial, recreational, and transit assets. •N-3.4 Require development of affordable housing through coordination of funding for affordable housing and infrastructure. •N-3.7 Support compact neighborhoods, small lot sizes, and small floor plans, especially through mechanisms such as density bonuses. •N-3.8 Promote the development of "Missing Middle" housing (side by side or stacked duplex, triplex, live-work, cottage housing, group living, rowhouses/ townhouses, etc.) as one of the most critical components of affordable housing. •N-3.9 Ensure an adequate supply of appropriately designated land to accommodate Low Income Housing Tax Credit development in qualifying census tracts. •Goal DCD-2: Encourage growth throughout the City, while enhancing the pattern of community development oriented on centers of employment and activity. Support an increase in development intensity within developed areas. 7 Bozeman AHO History •2007 Ord. 1709 – Mandatory Inclusionary Zoning •On hold until 2012 •2015 Ord. 1922 – Repeal and replace inclusionary zoning •Voluntary until 2017 •2016 Ord. 1930 – Update references to implement Ord. 1922 •2016 Ord. 1952 – Cottage Housing Ordinance •2017 Ord. 1980 – Remove condominiums from IZ requirements •2019 Ord. 2012 – Revise Standards •2022 Ord. 2104 – Planned Development Zones replace Planned Unit Developments •2022 Ord. 2105 – AHO with voluntary code incentives 8 Area Median Income (AMI) / (MFI) 2024: $109,000 9 Home Ownership Income Gap 10 Home Ownership Income Gap 11 Average Monthly Rent 12 Average Monthly Rent 13 Affordable Housing Needs •55.4% of Bozeman households rent •Bozeman / Belgrade Census County Divisions •16,600 total renter households •7,400 Renter households at or below 60% area median income (AMI) •1,517 units of income restricted housing •20.4% of qualifying population served by current supply Source: “Multifamily Market Conditions”; Economic and Planning Systems, Inc. #233073, February 22, 2024 60% AMI Rents 1 person HH Studio/ Efficiency $1,145 2 person HH 1 bedroom $1,309 3 person HH 2 bedroom $1,473 4 person HH 3 bedroom $1,635 14 HUD AMI and MFI Comparison 60% AMI Income and Rents Year Unit Size MFI (AMI)Income Limit Rent 2021 2 bedroom $88,900 $48,060 $1,202 2022 2 bedroom $104,700 $53,700 $1,343 2023 2 bedroom $126,250 $56,800 $1,420 2024 2 bedroom $109,000 $58,900 $1,473 80% AMI Income and Rents Year Unit Size MFI (AMI)Income Limit Rent 2021 2 bedroom $88,900 $64,000 $1,600 2022 2 bedroom $104,700 $71,500 $1,590 2023 2 bedroom $126,250 $75,750 $1,894 2024 2 bedroom $109,000 $78,500 $1,963 15 AHO Incentives •Reduced parking requirements •Additional Height •Reduced minimum lot sizes •Expanded uses in lower density districts •Concurrent construction •Reduced required right-of-way (yield streets) •Relaxed design standards. 16 AHO Administrative Staff Recommended Revisions •Definition of Efficiency (Studio) •Definition of Bedroom • Allow similar mix of Bedrooms OR Similar Gross Floor Area dedicated to Affordable and Market Rate Units 17 AHO Administrative Staff Recommended Revisions •Clarify Definition of Affordability to align with HUD MFI and AMI Income limits •Allow Income Averaging •E.g. 50% AMI and 70% AMI mix = 60% AMI •Annual Income Verification •Clarify income verification language to prevent unnecessary evictions. •Clarify income verification to allow a qualification range to prevent cost burdening •Allow qualification up to 20% above the income limit 18 AHO Administrative Staff Recommended Revisions •Clarify Third Party Monitoring Language •Clarify When in the Process Covenants are Recorded •Separate the Rental and Ownership Sections for clarity 19 AHO Administrative Staff Recommended Revisions •Clarify Third Party Monitoring Language •Clarify When in the Process Covenants are Recorded •Separate the Rental and Ownership Sections for clarity 20 AHO Administrative Staff Recommended Cash-in-Lieu Alternative •Applies to commercial, mixed-use, and residential projects •Alternative to land donation •Cash can fund •Land acquisition •Gap financing on low-income housing tax credit projects 21 AHO Incentives •Reduced parking requirements •Additional Height •Reduced minimum lot sizes •Expanded uses in lower density districts •Concurrent construction •Reduced required right-of-way (yield streets) •Relaxed design standards. 22 Shallow Incentive Staff Recommended Revisions •AMI Income Limit Market Adjustment •60 % AMI for 5% of units •Or 80% AMI for 10% of units •Increase affordability term to 50 years. 23 Shallow Incentive Policy Addition 1 Staff Recommended A.100% of private open space can be provided on private balconies B.Shared roof deck support structures are exempt from maximum building height restrictions C.Allow off-site parking 1000 ft from entrance D.Allow concurrent construction of infrastructure 24 Shallow Incentive Policy Addition 2 4 plex / Townhome / Rowhome | Shallow Incentive •Any townhouse, rowhouse, or 4 plex with units that are 1500 SF or smaller is exempt from: •minimum lot size, •lot coverage •floor area ratio •lot area per dwelling unit •lot width •minimum parking requirement Daybreak Micro-townhomes, West Jordan Utah 25 AHO Incentives •Reduced parking requirements •Additional Height •Reduced minimum lot sizes •Expanded uses in lower density districts •Concurrent construction •Reduced required right-of-way (yield streets) •Relaxed design standards. 26 Deep Incentive Staff Recommended Revisions •AMI Income Limit Market Adjustment •60% AMI •Increase affordability term to 50 years. 27 Deep Incentive Staff Recommended Revisions •Delete Yield Street Incentive •Delete Building Detail Standards Incentive •Delete Building Material Standards Incentive 28 Deep Incentive Gold Option •50% of units must be affordable at 60% AMI •No minimum parking requirement •Allows existing deep incentive height bonuses 29 Deep Incentive Silver Option •50% of units must be affordable at 60% AMI •No minimum parking requirement •Height is limited to allowance for the base zoning district or 4 stories, whichever is less. 30 Deep Incentive Bronze Option •20% of units must be affordable at 60% AMI •Required parking is 80% of the number of units •Allows existing deep incentive height bonuses 31 Summary •Administrative Revisions Staff Recommendation •Shallow Incentive Staff Recommendation: AMI Market Adjustment, Term Adjustment •Cash-in-Lieu Alternative •Shallow Policy Addition 1: Incentive Additions, A-D •Shallow Policy Addition 2: 4 Plex, Townhome, Rowhome Incentive •Deep Incentive Staff Recommendation: AMI Market Adjustment, Term Adjustment •Deep Incentive Gold Option •Deep Incentive Silver Option •Deep Incentive Bronze Option 32 Discussion 33 Memorandum REPORT TO:Community Development Board FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Upcoming Items for the August 19, 2024, Community Development Board Meeting. MEETING DATE:August 12, 2024 AGENDA ITEM TYPE:Citizen Advisory Board/Commission RECOMMENDATION:Information only, no action required. STRATEGIC PLAN:4.2 High Quality Urban Approach: Continue to support high-quality planning, ranging from building design to neighborhood layouts, while pursuing urban approaches to issues such as multimodal transportation, infill, density, connected trails and parks, and walkable neighborhoods. BACKGROUND:The following development review items are presently scheduled for the August 19, 2024, Community Development Board meeting: 1. Rest Stop Zone Map Amendment, considered in capacity as zoning commission, Application 24185 [external link]. The following information and training items are presently scheduled for the August 19, 2024, Community Development Board meeting: 1. Training and review on the impact fee process in preparation for review and recommendations regarding impact fee service area reports and capital improvement plans this fall. 2. Discussion with Director of Transportation and Engineering regarding preparation of the Transportation capital improvement plan. Scheduling Note: Please be aware that Sept 2nd, the first regular meeting date in September is a holiday. Therefore, as set in policy, the Community Development Board's first meeting in September will occur on September 9th. 34 UNRESOLVED ISSUES:None. ALTERNATIVES:None. FISCAL EFFECTS:None. Report compiled on: August 6, 2024 35