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HomeMy WebLinkAboutInformation Regarding the Workforce Housing Program Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Saunders Andrew C. Epple Chris Kukulski SUBJECT: Scheduled review of the effectiveness of the Workforce Housing ordinance. MEETING DATE: August 31, 2009 AGENDA ITEM TYPE: Consent. RECOMMENDATION: Receive information for consideration and set next review for 1 year. BACKGROUND: In 2007 the City Commission adopted various ordinances to support construction of housing within defined price ranges. The Commission had been advised in the matter by several advisory boards and a specifically created a 12 member ad hoc task force. A review of the program and its effectiveness two years after its adoption was one of the components of the ordinances. “17.02.110 Program Review The Workforce Housing Program established herein shall be reviewed two years after its inception and annually thereafter to determine its effectiveness and to determine if the mechanics of the program are found to impose an unreasonable burden on either the parties producing the housing or the on the parties purchasing it.” In initial conversations with the City Commission to schedule the review, the Commission recognized that the recent rapid slow down in the pace of land development makes an in-depth review of limited value at this time. Staff contacted the members of the original task force regarding their interest in continuing to be involved in the City’s workforce housing discussion. Four of the original 12 members expressed interest in continuing to participate. Comments on this matter were provided by the Recreation and Parks Advisory Board (see attached). These were the only comments provided to date. Staff has conducted a cursory review of the program results to date and provides this update. Since the adoption of the ordinances the economy has significantly changed and this has greatly affected the outcome of the program. A subsequent review is recommended after the housing market improves. 34 Administrative actions: The responsibility for this program is assigned to the Department of Planning and Community Development. A procedures manual has been developed to describe how the City will undertake each part of the program. Items such as tracking of lots and homes, marketing of properties in the program, selection of qualified purchasers, and other essential program actions are included. This was the work of the Workforce Housing Coordinator. That position is currently vacant. The general structure and functions needed to operate the program have been created. Homes and Lots: The workforce housing program of the City has specific thresholds which must be reached before the program applies to an individual project. The program requirements apply to both subdivision and zoning based developments. Since the adoption of the program, there have been three subdivisions subject to the program requirements. No zoning site plan (apartment/condominium) projects have been subject to workforce housing requirements. None of the subdivisions which must comply with the workforce housing program have reached the final plat stage yet. Therefore, no lots have yet been created for the program, nor have homes been constructed. The three subdivisions and the number of lots/homes they are expected to provide are: Subdivision Name Number of workforce units Status Norton East 8 Preliminary Plat approved, utility installation underway Story Mill Neighborhood 34 Preliminary plat approved, no action to finalize underway at this time Laurel Glen Phases 3&4 12 Preliminary Plat approved, no action to finalize underway at this time. Staff’s conclusion is that the program has not had adequate time or progressed far enough through actual sale of homes to truly understand whether it will perform as intended. A subsequent review should be conducted next year. FISCAL EFFECTS: No fiscal effects are anticipated from this report. ALTERNATIVES: As suggested by the City Commission. Attachments: RPAB Comments Report compiled on: August 26, 2009 35 Bozeman Recreation & Parks Advisory Board P.O. Box 1230 · Bozeman, MT · 59771 Much has changed since the City Commission enacted the Workforce Housing Ordinance in 2007. The entire nation got a huge unwelcome dose of reality and the Bozeman housing market was certainly not immune. Now that the time to review the effectiveness of this program has arrived, the Recreation and Parks Advisory Board would like to offer its opinion. Here are the current market conditions as we see them: · The HUD income figures to which the Workforce Housing Ordinance is keyed are up 5.6% from 20071. · There is a very large inventory of affordable residential units on the market now. As of June 21, 2009 there were 259 units on the market at $250,000 or less; 130 units priced at $189,000 or less.2 · The First Time Homebuyer’s Tax Credit adds another $8,000 of affordability to the Workforce Housing Ordinance target market. The City itself no longer supports the day-to-day costs of the Workforce Housing Ordinance program. The position of Workforce Housing Administrator has been eliminated, and the budget environment seems unlikely to return to its previously robust state any time soon. Yet it appears that there is no way this program can succeed without a fulltime administrator. Financing the Workforce Housing Ordinance comes at the expense of other valued programs. Along with the administration expense there is the “cost offset” expense that will be borne by the citizens of Bozeman in the form of lost parkland and impact fees. Given these factors we conclude that the City can no longer afford to give away parkland to finance this unneeded and unsupported program. It is estimated that the loss of park acreage to the City under this program will be 11% of all future parkland. The value of parkland to a cityscape goes far beyond the temporary and transitory whims of the marketplace and the continued forfeiture of parkland, well meaning as it may be, is a shortsighted and ineffectual strategy. In this economic climate it is wrong for the people of Bozeman to subsidize development of properties for which there is no need and ownership of which needs to be rationed and controlled. Therefore the Recreation and Parks Advisory Board recommends the City abandon this program and repeal the Workforce Housing Ordinance. 1 US Department of Housing and Urban Development [http://www.huduser.org/datasets/il/il2009/2009MedCalc.odn?INPUTNAME=NCNTY30031N30 031*3003199999%5EGallatin+County&selection_type=county&stname=Montana&statefp=30.0& wherefrom=mfi&year=2009] 2 Bozeman MSL 6/21/09 36