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HomeMy WebLinkAbout10-08-25 Public Comment - M. Kaveney - Sustainability Committee and InterNeigborhood Council_ Ward presentation,From:Marcia Kaveney To:Bozeman Public Comment Subject:[EXTERNAL]Sustainability Committee and InterNeigborhood Council: Ward presentation, Date:Wednesday, October 8, 2025 10:57:20 AM Attachments:LivableBozeman_Updated_Sept._23.pdf Livable Bozeman PPT comments.Marcia Kaveney. 2025.10.8..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 add this letter and attachments to the Ward Presentation folder for both theSustainability Advisory Board and also the INC folder for their meetings this week. Thank you, Marcia Dear Advisory Board members and INC members- Thank you for your participation on the City’s Sustainability Board and the Inter- neighborhood Council. I am writing you about the City’s educational presentation you will be receiving this week on the WARD Ballot Initiative. This presentation will include the “Livable Bozeman” PowerPoint presented by City of Bozeman staJ, David Fine and Shawn Kohtz, and is attached below for your convenience. After reading through the Livable Bozeman PowerPoint, listening to some of the City’s other WARD presentations, attending the WARD group open house, and attending the Dr. McClure lecture on Bozeman’s AJordable Housing shortage, my observation is that the City is spinning the facts of WARD to advocate voting No on WARD this November, rather than presenting both sides of the issue to truly educate the public. Besides being unfair to the public, it is also unfair to the City’s advisory boards to be on the receiving end of biased information. As a taxpayer whose tax dollars are being spent to actively oppose a citizen’s initiative that over 15% of the registered voters (taxpayers) signed, I am concerned. I think you should be too. While receiving the City’s presentation tonight, please use critical listening and thinking. In your post presentation discussions, please ask about and discuss some of the potential positive impacts of the WARD initiative? For example, can the City assist developers following WARD requirements in obtaining subsidies through City, County, State, or Federal opportunities? Developers are using subsidies now to provide aJordable housing, why wouldn’t this continue? The City’s current approach to allocating community held natural resources such as water is backwards. Instead of facilitating easy access to water or CILWR, the City should be requiring developers to demonstrate that their plans will benefit Bozeman’s citizens before oJering any access to our water supply. WARD is a first attempt to make this needed change. Another related concern that I learned about at an early 2025 City Commission meeting on WARD is the City’s dependence on growth when City Manager Winn stated they need property growth to pay for existing infrastructure. Is this true? Or can the City learn to live within its means with slower growth? It’s obviously unsustainable to be continually dependent on new growth. Some of my additional concerns about the presentation you will be receiving by PowerPoint page number follow below. I have referenced the slides and attached the PowerPoint below so you can follow the comments alongside the slides. Slide 2. “enough” signatures seeks to minimize the fact that the WARD initiative gathered more signatures than were needed. They gathered 5,800 signatures- 444 more than were required. Slide 4. How many of the 1,777 aJordable units included “in the pipeline” are not yet under construction? Please ask for the breakdown between built, under construction, and not yet built. This is important to know because some of the developers that promised aJordable units are waiting to build until the market rebounds. One such example is HomeBase and their approved “Truman Flats” in the Canyon Gate parcel, as relayed to the BCAN neighborhood during their 2024 annual meeting. If HomeBase delays their final plat approval, they do not have to begin building Truman Flats which was to include approximately 175 aJordable units. How many more units are not now and may never be under construction? Slide 4. The City’s vacancy rate is deliberately misleading. Vacancy rates have also been quoted at over 20% by other reliable organizations. Please dig into this. Why isn’t the City quoting the higher vacancy rate as well? My understanding from the recent Dr. Kirk McClure talk at the Bozeman Public Library, is that the vacancy rate is very low at the lower aJordability rates (30-60%), and high at the middle-income level and multi-family housing (80%+). But the multi-family housing is what gets built because it is the most financially rewarding for the developers. Unfortunately, we don’t need more of the same type of housing that gives us a 20% vacancy rate. It’s well understood that corporate owned housing will not drop below a certain price point because the investors have a bottom line that is still higher than the needed aJordability. The two months free programs used by some properties are not permanent lower rental rates. We don’t need more multi-family units. We need actual aJordable units (WARD) and possibly a housing authority. Slide 10. Water Adequacy Facts. a. “Bozeman proactively manages water usage through our conservation program.” All residents are under permanent water restrictions and fined (added surcharge) if they use over a certain amount. Yet, the water that we “save” seems to be allocated to new market rate and luxury housing developments that many current residents don’t want or need and are for people who don’t live here yet or maybe never will, and whose apartments might sit empty (possibly unrented) and unavailable for those who do live and work here. This is nutty policy and clearly biased towards market rate housing. b. “Bozeman continues to develop and implement new water conservation measures and water supplies according to our long-term water supply plan (Integrated Water Resources Plan.” What new water supplies? A pipeline to Yellowstone? Canyon Gate? More wells? c. It’s well known that Bozeman’s surface water rights are over allocated, and the ground water aquifer is taxed. Instead, how about we slow the addition of market rate and luxury housing until the vacancy at the much-needed aJordable rate of 60% AMI or less is in the healthy vacancy range of 5-8%? WARD aims to do just that. Slide 11. Interesting, but incomplete information, therefore irrelevant. a. Comparisons. Without knowing the water sources for the cities listed, it’s not a fair comparison. Are they all in closed basins too? Do they draw from surface or groundwater? What percentage of their supply do they use in any given year? b. The City has the experts to stay in front of development demands for our water supply. The City is not telling us how long they think they can do this with our finite water supply. And they are not talking about the reserve of water that should be left in the reservoirs and streams for fish and ecosystems health. Drying rivers have been in the news recently and Bozeman is not exempt. At what population will the City once again look at piping water from the Yellowstone or Canyon Ferry at taxpayers expense? Slide 13. Subsidies will be needed. WARD doesn’t deny that. Subsidies are already in use by many developers in addition to the City’s AHO such as those used by the Aspen and N.7th developers. Under the AJordable Housing Ordinance, we already subsidize developers by relaxing certain codes and use giveaways of neighborhood amenities such as air, space, and parking, to help them make a good financial return on their investment (ROI). We don’t get a lot in return for giving away our resources and amenities- promised but unbuilt units such as Truman Flats/Canyon Gate, or a very small percentage of 5% or less aJordable units. In other words, with our current AHO freebies, we might get only 5 aJordable units for every 100 market rate or luxury units. This is not a fair trade for our City’s residents and the use of our finite water supply. Slide 14. EPS Study. Yes, under WARD, developers must receive significant subsidies. So what? Many developers already do. Slide 15. WARD’s Impact on Housing. Again, we already have an unhealthy high rate of vacancy in what developers can aJord to build without subsidies- multi-family rental units- we don’t need more of them. And WARD, if approved, can be re-evaluated after 2 years like any other ordinance and be adjusted in response to its impact, or lack thereof. Slide 15. The county may not even allow wells for multi-family housing projects. Also, many people that can aJord acreage prefer to live in the county and that will likely continue until the county disallows additional wells. Also keep in mind that every annexation for large development projects is also an encroachment into the county. Slide 17. All Hands. I’m skeptical. The City already passed on the two earlier opportunities to work out a compromise with WARD or come up with a similar city ordinance eJectively negating the need for the WARD initiative. I don’t think they will do anything diJerent now. And I would ask who does the City mean by “bringing everyone to the table”? Will the WARD working group be invited? If the City means to facilitate hundreds of hours of “public engagement” then we will be wasting valuable time. Slide 18. What about the potential positive impacts of the WARD initiative? Dr. McClure, a former developer himself, said developers will always take the path of least resistance. Take away that path and we might be able to get what we want. Thank you for your consideration of my comments and for your service to the City. Marcia Kaveney Bozeman Resident A LIVABLE BOZEMAN FOR ALL Smart Solutions, Sustainable Futures The WARD Initiative A citizen special interest group initiative that received enough signatures to appear on the 2025 November ballot. This is not a policy created by the City. It seeks to change the city code to require developers who seek to use cash-in- lieu of water rights for development to provide affordable housing. Today, in Bozeman ●Since 2022, we have 1777 affordable units built, under construction or in the pipeline ●Over $120M has been spent in subsidies on those projects ●Vacancy rates have been quoted at 12%; rent increases have slowed Growth has slowed to 1.4% after an average of 3.7% from 2013-2023 Background: Current Water Adequacy Policy ●Current Policy went into effect in 1984 ●Requires that projected water demand of new development be offset by one or more of these options: ○Reduce demand with water conservation systems and techniques ○Pay cash-in-lieu of water rights and City acquires the water rights ○Bring useable water rights to the City ●99% of development utilizes cash-in-lieu and is highly efficient due to being able to connect to existing city infrastructure WARD’s Ballot Language The Bozeman Water Adequacy Initiative amends 38.410.130.D of the Bozeman Municipal Code to allow development to pay cash-in-lieu of water rights only if the development provides 33% or more of the dwelling units as restricted by deed for 99 years or as long as the law allows and sold at 120% or less of area median income (AMI) or rented at 60% or less of AMI. This applies to all residential development of three units or more. The initiative also repeals the ability of residential development to satisfy its water adequacy requirements by implementing offsite water efficiency or conservation measures. Ballot language does not include the ordinance. View the ordinance by scanning the code. Alternatives if proposed ballot initiative is approved by voters 1.Access to cash-in-lieu of water rights tool becomes restricted requiring 33% of housing product be provided as affordable housing 2.Developers work to secure their own water rights,which can take anywhere from 5 to 8 years. 3.Developers can implement only on-site water efficiency or conservation measures to limit impact, with the remaining water demand coming from #1 or 2.Off-site water conservation measures option would be removed under WARD. Water Facts Current Water Supply Snapshot Hyalite Creek Watershed 40%Bozeman CreekWatershed 40% Lyman Spring 20% Facts about Water Adequacy in Bozeman, Montana ●Bozeman is not at risk of running out of water.When a developer proposes new housing,the city must ensure there is adequate water. ●In a normal water year, Bozeman only uses 43% of its current watersupply, in a significant drought year, it increases to 60%. ●Bozeman proactively manages water usage through our conservation program. ●Bozeman continues to develop and implement new water conservation measures and water supplies according to our long-term water supplyplan(Integrated Water Resources Plan) Development within Bozeman is Most Water Sustainable Gallons per Capita Day Water Use Bozeman = 114 GPCD Others in Montana = 163 GPCD (average) Comparable Cities = Boulder, CO: 133 GPCD Denver, CO: 140 GPCD Bend, OR: 157 GPCD Gallons per Household Day Water Use Bozeman: 188 GPHD National average: 254 GPHD Arid Western states: 314 GPHD City has the experts to efficiently develop water supply, water rights, and conservation to stay in front of development demands Housing Facts Facts About Affordable Housing in Bozeman ●Area Median Income (AMI) Definitions ●Past affordable housing projects required subsidies. The lower the AMI thresholds, the more subsidies are necessary ○Under WARD’s levels, ZERO new units have been developed over the past 5 years without subsidy ●Affordable housing is expensive to build due to rising costs of land, labor, materials, and lending ●The city is working with public, private, and nonprofit partners to make affordable housing a reality ●Policies are based on local data and community input, with the goal of balancing affordability,smart growth, and neighborhood character ●A study we have done through the Affordable Housing Ordinance showed that developers couldonly designate 5% of their units as affordable –anything beyond that does not pencil out. EPS Study ●Economic & Planning Systems Inc. (EPS), a third-party consultant, analyzed costs and revenues to calculate profit margins for housing projects ●Under current market with WARD’s affordability requirement, NO developments are feasible ●In order for development to occur under WARD, developer must secure their own water rights or receive significant subsidies Multifamily Development (90-unit Apartment Complex): SFD SFD Description Baseline 33% Set Aside Profit Margin per Unit Sale Revenues $783,815 $676,754 Land cost -$150,000 -$150,000 Construction costs -$528,000 -$528,000 Cost of sale -$27,434 -$23,686 Profit/Loss $78,382 -$24,933 Profit Margin 10.0%-3.7% Total Units 30 30 Total Profit/Loss $2,351,445 -$747,975 Source: Economic & Planning Systems Single Family Home Developments (30-unit development): Description Baseline 33% Set Aside Difference Total Development Costs $26,820,000 $26,820,000 $0 Net Operating Income $1,344,600 $1,175,652 -$168,948 Yield on Cost Target 6.5% 6.5%-- Feasible Development Cost $20,686,154 $18,086,954 -$2,599,200 Value/Profit or Gap -$6,133,846 -$8,733,046 -$2,599,200 per Unit -$68,154 -$97,034 -$28,880 Source: Economic & Planning Systems WARD’s Impact on Housing The requirement that 33% of housing units in new developments must be affordable to have access to the city’s cash-in-lieu of water rights could limit housing supply because: ○Housing developers rely on a mix of market-rate units and affordable housing units to cover the cost of building. Requiring a high number of affordable housing units will make it difficult for projects to secure financing or cover construction costs. ■Developers may try to make non-affordable units subsidize affordable ones, increasing costs for 2/3rds of the homeowners in their projects. ○If developers are not coming to Bozeman to build additional housing, the demand for housing will increase, causing prices to increase. ○Developers may look to other areas to build instead, such as the County, which may increase commuting and negatively impact the environment. What We Can Do Together All Hands A collective solution to a sustainable future. A true partnership to address the various pressure points of housing in the city means bringing everyone to the table. Join us as we work on the Community Housing Action Plan and Integrated Water Resources Plan to plan for our future water supply and affordable housing. The November 4 election Considerations Remember to Vote by November 4 ●Ballots will be mailed by Oct. 17 ●Ballots should be returned by mail or dropped off at an official drop- off location ●Residents can check their registration status by visiting voterportal.mt.gov Remember to Get the Facts on the WARD Initiative ●It is unlikely that this initiative will result in more affordable housing due to the high costs and 33% requirement. ●At this time, Bozeman is not at risk for running out of water, we proactively plan our water supply and emphasize water conservation to ensure current and future resident have access to water. ●There is no “silver bullet”to make housing more affordable. Another regulatory barrier creates barriers to comprehensive solutions. Questions? For more information, go to engage.bozeman.net/ward