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Home My WebLink About08-20-24 Public Comment - S. Boyd - Comments for 8_20 working session (AHO)From:Scott and Frances Boyd To:Terry Cunningham; Emma Bode; Joey Morrison; Douglas Fischer; Jennifer Madgic; Bozeman Public Comment Subject:[EXTERNAL]Comments for 8/20 working session Date:Tuesday, August 20, 2024 1:32:44 AM Attachments:Working Session 20240820 comments.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Please see attached my comments for the 8/20 working session. Thanks, Scott Boyd Dear Bozeman City Commissioners, For input to the August 21, working session I am writing to ask that the commission immediately repeal the deep incentives of the AAordable Housing Ordinance (AHO) and impose a moratorium on all unapproved developments using the shallow incentives until further research can be done and additional input can be given by the public, ideally through the UDC rewrite eAort. Such wholesale modifications that are now being oAered by staA to amend the deep incentives less than two years after passage and prior to any development making use of them are a definitive sign that this ordinance is not on the right track. We need to use a data driven approach in addressing this problem and this current approach, to mix metaphors, feels more like we’re shooting from the hip and seeing what sticks. For example, in 2021 when Root Policy Research created their feasibility model for multifamily rental units for Bozeman’s expected rewrite of the AHO, they only modeled 850 square-foot apartments, with a maximum of 8% of aAordable units rented at 100% of AMI, and with reduced parking at 1 space per unit (let’s ignore the 12-story version for reality and argument’s sake). With that model as a base, how in the world can we justify the deep and shallow incentives that were passed, not to mention the gold/silver/bronze versions now proposed? Root concluded that adoption would be low for the shallow incentives and suggested that the city “develop additional incentives for aAordable housing developers whose projects are 100% a&ordable (emphasis added)”, which presumably is what morphed into the deep incentives as we know them. How is it though that thus far all of the aAordable units built and under construction through LiHTC developments have only made use of the shallow incentives? With over 1,600 in the pipeline and 387 under construction the adoption rate is far from low. Why are the LiHTC developers, which nationwide generally oAer 100% aAordable units in order to maximize their tax credits, oAered a lower bar for creating aAordable units by Bozeman’s AHO deep incentives? Do we need the deep incentives at all? I submit to you that we do not. Additionally, the Institute of Transportation Engineers utilizes reduced factors for both trip generation and parking estimates when analyzing aAordable housing. Further, there is a correlation between the level of AMI associated with aAordability and vehicle ownership, which makes perfect sense. As the levels of AMI increase so too do the traAic and parking loads. Denver conducted a parking study and found that across twenty aAordable properties, 29% of residents owned a vehicle. Ten properties served 0-30% of AMI and ten served 30-60% of AMI. Presumably a traAic engineer could make realistic suggestions that Bozeman could use in crafting parking requirements for aAordable housing based on the AMI level served. Why do we not oAer reduced parking as incentives across the board? Why is it left to the developer to determine how much parking to oAer for aAordable housing if city code otherwise dictates it? We should eliminate silly and antiquated parking requirements such as for bowling alleys and other businesses frequently oAered as examples, but why would we ever forgo eliminating all parking requirements where people lay their heads down? They will have to park somewhere when they go home and sleep. Utilizing a parking district to mitigate anticipated congestion caused by the deep incentives doesn’t solve the problem and will only push it onto other, adjacent neighbors. Why do we currently eliminate parking requirements for an entire project when 50% of the units are market-rate, as is the case with the deep incentives? Instead, why wouldn’t we have normal parking requirements for the market-rate units and oAer relief for the incremental aAordable units? Moreover, there is a mismatch between the value of the incentives currently oAered with the deep incentives and the costs borne by the neighboring residents. The figure most often cited when estimating the cost of parking appears to be $30,000. Using the recently proposed Guthrie as an example, that would translate into a roughly $2,400,000 benefit for the developer. The additional 50 units the deep incentives allowed through an additional two stories would be worth a minimum of $3,500,000 utilizing per-unit transaction over the past three years. That’s nearly $6,000,000 in value for a benefit that goes away in 30 years. It is also one that permanently and irrevocably changes the character of a neighborhood, particularly when dealing with infill development. That is too large of a cost for too little of a gain. There is an inherent conflict of interest when the city relies upon private, for-profit developers to provide aAordable housing in conjunction with market-rate housing. Large, for-profit developers target an IRR of 12-18%. Contrast that with the city’s profit margin of zero and our housing dollars will go further. Perhaps it is time to revisit the community housing levy that failed in 2021 since the conditions have gotten so much worse? Regardless the city should report on its progress on the seventeen housing strategies outlined in the 2020 Community Housing Action Plan. Plans are more meaningful and responsive when we measure results and adjust. In March of 2020, when Denver drafted their AAordable Housing Zoning Incentive interim background report (very similar to Bozeman’s aAordable housing assessment), they devoted a significant portion to outlining peer city best practices, which is something that would benefit our eAorts in addressing our aAordable housing issues. What works for Denver, Seattle, Austin, or Portland will not necessarily be the right response for Bozeman. We should take stock of what other Rocky Mountain communities with heavy resort and tourism influences have found to work. We should look to communities with small but growing populations rather than large metropolitan, transportation hubs as influences. Places like Whitefish, Ft. Collins, Jackson, or Crested Butte could oAer us insights. We should look to make the creation of aAordable housing through the utilization of public benefits permanent, rather than one that vanishes in thirty years. We should look to mimic Whitefish, which sets the initial term to 90 years, but resets the clock after each sale so that the benefit is essentially in perpetuity. We should require zone edge transitions for R-3 and R-4 properties in addition to R-2, R-1, and RS districts. There are no meaningful distinctions between these districts. Presumably this will be corrected when the zoning districts are consolidated but there currently exist omissions and gaps in the zone edge transition section of the AHO. Because the previous AHO was eliminated by the legislature, the city hastily adopted a well-intentioned but poorly considered ordinance as a result of the extraordinary, temporary shocks brought to the housing market by Covid-19 and the federal government’s printing vast sums of money. Previous Commissioners’ comments provided during the adoption of the current AHO reflect the desperate nature of the eAort stating, “It’s worth trying” and that “any benefit from the incentives will be ‘relatively modest’.” This current ordinance is not robust and is clearly deficient in meeting community objectives in providing aAordable housing. Undoubtedly there is an aAordability issue and we as a community need to take diligent eAorts to address it. However, the commission must recognize that the sense of urgency that existed during the extreme imbalances of Covid-19 no longer exists and that we have time to write a code that works under many diAerent assumptions and serves the community’s needs, ideally as part of the eAort to rewrite the UDC. The panic we all understandably felt has dissipated and we now have time to pause, reflect, and correct. Indeed, Eres Companies, a Bozeman real estate broker, just published a research article stating that the Bozeman multifamily market faces high vacancy rates of 15.6% as of August, 2024. They add that “high vacancy rates are anticipated to stabilize over the next few years (emphasis added) as Bozeman absorbs the largest multifamily housing boom in its history.” In short, while we all want lower rents for those that need help, we are at a place and time that will allow us to craft a response that serves us all. While I appreciate the speed with which the Commission has moved on this issue, and while I also agree that it is warranted and urgent, I would be remiss if I did not point out that these circumstances have given rise to the exact same issue that caused our problems in the first place…namely there has been a lack of public participation. Because this has moved so quickly, we are in no position to be drafting new or updated ordinances. Repeal and issuance of a moratorium is the only practical and fair outcome until such time as we can solicit public feedback and craft something that reflects the will of the community, as we will do with the UDC rewrite. Lastly, I believe that the existence of the current AHO and specifically the deep incentives within it are so poorly considered that the development of even one property using those incentives gives rise to an emergency condition that would endanger the public health, safety, and welfare of any adjacent neighborhood. As such I believe the commission should declare an emergency and repeal the deep incentives post haste, similar to the emergency declaration issued just two years ago to repair the swim center. Respectfully, Scott Boyd Bozeman