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HomeMy WebLinkAboutResolution 3630 Affordable housing policy COMMISSION RESOLUTION NO. 3630 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, ESTABLISHING AN AFFORDABLE HOUSING POLICY FOR THE CITY OF BOZEMAN AND SUPERSEDING THE AFFORDABLE HOUSING POLICY PREVIOUSLY ADOPTED BY COMMISSION RESOLUTION NO. 3037. WHEREAS, the City Commission did, on the 19th of December 1994, adopt Commission Resolution No. 3037, establishing an affordable housing policy, based on the recommendations of its Bozeman Housing Task Force; and WHEREAS, the Community Affordable Housing Advisory Board identified the need to amend the affordable housing policy to more accurately reflect current needs; and WHEREAS, the City of Bozeman entered into an agreement with Bay Area Economics to conduct a study and submit recommendations for a new affordable housing policy; and WHEREAS, Bay Area Economics submitted its recommendations to the City of Bozeman in May 2003; and WHEREAS, the Community Affordable Housing Advisory Board subsequently modified those recommendations to more accurately reflect the community needs; and WHEREAS, the City Commission, at its meeting on September 8, 2003, indicated general support for the recommended policy. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that the Commission hereby adopts the Affordable Housing Strategies, dated September 22, 2003, a copy of which is attached hereto as Exhibit "A" and by this reference made a part hereof. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 22nd day of September 2003. STd~~yo: J ~ST: . R ~ut~ Clerk of the Commission Exhibit "A" AFFORDABLE HOUSING STRATEGIES September 22, 2003 Strategy I. Housing Affordability Guidelines 1. The City will use the HUD Gallatin County Area Median Income (AMI) or, if supplied, the HUD City of Bozeman Area Median Income (AMI). 2. Using HUD definitions, households shall pay no more than 30% of their gross annual income towards their housing payment. 3. Bozeman's Standard Housing Affordability Income Guidelines for homeowners are 61-100% of the AMI. 4. Bozeman's Standard Housing Affordability Income Guidelines for renters are 40% to 60% of the AMI. Strategy II. Regulatory and Process Reforms 1. Major site plans with no deviations can be approved by City planning staff. 2. Concurrent development of infrastructure and housing should be allowed for affordable housing in appropriate situations. 3. Whenever practical, all City Departments will give priority to projects that exceed affordability requirements. 4. As opportunities arise, City Staff will explore ways to reduce development costs without compromising the livability and quality of the neighborhood. 5. The City will continue to work with the legislature to revise subdivision guidelines to encourage more dense development. 6. The City will develop systems to provide details on types of units being developed. Information gathered shall include inventorying vacant land, existing housing and buildings, and tracking new subdivisions in order to provide market information. 7. The City will invite the business/building community to suggest possible additional regulatory and process reforms and streamlining that would promote construction and rehab of affordable housing. Strategy III. Restricted Size Lots (RSL) & Restricted Size Units (RSU) 1. As stated in the 2020 Plan, every residential annexation into the City of Bozeman of five acres or more, that is not zoned as Residential Suburban shall have a minimum net acreage density of 6-8 units when subdivided. 2. Every residential annexation of five acres or more that is not zoned as Residential Suburban shall have a minimum of 10% of the buildable net acreage dedicated to Restricted Size Lots (RSL) that are 4,000 to not greater than 5,000 square feet for single fam#y household detached (SF9 SHD) and 2,500 to 3,000 for single fam#y household attached (ASF SHA) units when subdivided. The RSL shall be designated designation shall be recorded with on the final subdivision plat. 3. The total floor area of the unit built on an RSL (minus the garage) shall not exceed a ratio of 1 :3.3. Units built on RSLs shall be known as Restricted Size Units (RSU). Example if the lot is 4,000 square feet the square footage of the house can not exceed 1212, or a ratio of 1 square foot of floor area per every 3.3 feet of lot. 4. In lieu of designating the required number of RSL for market sale with the final plat, the owner may provide a donation by fee-simple transfer of title of buildable donate developed RSLs to the City, or. a Ol1e donated for three required basis with 1 fee simple transfer RSL being equivalent to 3 for market sale RSLs. The City will utilize donated RSLs or the proceeds of sales only for affordable housing. 5. In lieu of designating RSLs within the subdivision being annexed, annexed land being subdivided the owner may designate off-site comparable RSLs-on A-1 a one required for one replaced basis at a ratio of 1: 1. The subdivision containing the off-site fee simple transfer RSLs cannot be comprised of more than 50% RSLs without prior City Commission approval. The off-site fee simple transfer RSL shall be established and transferred to the City not later than the time of final plat approval of the subdivision responsible for creating the fee simple transfer RSL. 6. Within multi-household zoning districts and with approval from the City Commission, the area required for RSLs may be assembled into larger lots to allow construction of affordable housing complexes. 67. At residential annexation, in lieu of supplying the required number of RSLs, the owner may pay a "cash in lieu" fee to the City. The payment shall be calculated as the appraised value per square foot of developed land within that specific subdivision at the time of final plat approval multiplied by 3,425 (the averaged size of 8 ~r A or ~rD) multiplied by the number of I equired R~L. The cost per square foot shall be multiplied by 5,000 in single household districts and by 3,000 in multi-household districts for each required RSL. The appraisal cost shall be borne by the owner of the land being subdivided. The City will use payments in lieu of RSLs only for affordable housing. :r8. City staff will give high priority to ensuring that RSURSU language is included in the Unified Development Ordinance as soon as possible in autumn 2003. This language will be subject to the sunset clause described in Strategy IX. Strategy IV. Home Ownership Program 1. The City shall cause to be developed a down payment assistance program for home purchasers whose household income meets Bozeman's Standard Housing Affordability Income Guidelines. 2. The down payment assistance program shall include components of home ownership education and counseling, information on mortgage products and affordable housing assistance programs, and referrals to developers of RSU. 3. Families who meet the City's Standard Housing Affordability Income Guidelines, have completed the down payment assistance program, and qualify for a Class A Mortgage shall be known as target income purchasers. 4. Households whose income is below Standard Housing Affordability Income Guidelines, but meet all the other criteria of a target income purchaser, may be considered for down payment assistance; however, the households must have additional financial assistance from alternate sources so that the amount of the City's down payment assistance does not exceed the amount generally supplied to target income purchasers. 5. The City shall develop a system to track RSL and building permits for RSU so that target income purchasers can be notified when units are being developed. 6. During the construction process, builders of RSU will give priority to target income purchasers who qualify to purchase the home. 7. The down payment assistance program will work with local lenders and state, federal and private affordable housing programs to develop a variety of home ownership options and information packets for interested parties. Strategy V. "Very Low-Income Units" Development Incentives 1. "Very low-income" is defined as housing that is affordable to households whose income is below the City's adopted Standard Housing Affordability Income Guidelines. Incentive developed housing is affordable to households whose gross annual income is below 60% of the AMI for for-sale-homes or 40% of the AMI for rentals. 2. Conditional upon prior City Commission approval and funding availability, an affordable housing developer may enter into an agreement with the City to receive building permit fee waivers, waiver of other City fees, impact fee reimbursement, and/or financial assistance in exchange for developing very low-income units. The impact fee reimbursements, fee waivers, and financial assistance shall collectively be referred to as "Housing Development Incentives." A-2 -.---- 3. Although Strategy V is not limited to affordable housing developments, the Housing Development Incentives will need to be combined with another subsidy program in order to achieve affordability for very low-income households. 4. The City will reim burse the developer for the agreed upon amount of Housing Development Incentives upon occupancy of the very low income units and eligibility verification of the unit and occupant. 5. The affordability period for very low-income units shall be the greater of 20 years or, if the owner is participating in another public or private entity's housing program, the guidelines of that entity's program. 6. For-sale very low-income houses shall be tracked with a deed restriction. 7. Very low-income rentals shall be tracked through the City's property inventory system recommended in Strategy II. 8. The owners of very low-income rentals will annually subm it eligibility along with a $25 fee per unit to the monitoring agency. If the information is available from another monitoring source, the owner can substitute that entity's monitoring certification and pay no fee. 9. For-sale, very low-income units shall have the subsidy forgiven at the rate of 1/2Oth annually. If the home is resold prior to the 20th year the owner shall repay a pro-ration of the subsidy to the City's affordable housing fund. 10. One and two bedroom units that are affordable to persons below 40% of the AMI shall be reimbursed at a rate of 100% of the Housing Development Incentives per qualifying unit. 11. Three and four bedroom, two bathroom units that are affordable to persons below 40% of the AMI, shall be reimbursed at a rate of 150% of the Housing Development Incentives per qualifying unit. 12. For units affordable to person below 30% of the AMI, Housing Development Incentives will be doubled. 13. No more than 50% of the units in a development may receive Housing Development Incentives. Strategy VI. Additional Financial Contributions 1. Alternative or additional financial incentives to for-profit and nonprofit affordable housing developers would be on a case by case basis as recommended by the CAHAB and approved by the City. Examples would be land grants, low-interest loans, property tax abatement, and or infrastructure assistance. 2. The City will complete legal research to determine if property tax abatement is allowed for affordable housing projects under State law. If so, the City will make any changes necessary to local laws to permit this option to be made available. 3. The City will welcome any financial data made available by for-profit and non- profit affordable housing developers that will help the City determine the amount of financial incentives/assistance needed to make it possible for the private market to respond to the City's high-priority housing needs. Strategy VI/. City Participation 1. The City of Bozeman will dedicate a minimum of $200,000 annually to the Community Affordable Housing Fund. 2. To assist with the annual affordable housing funding commitment, the City will dedicate at least 50% of economic development impact fees collected from Big Box stores to the Community Affordable Housing Fund. Strategy VII/. City Land 1. Should the City receive property of 10 acres or more not earmarked for another use, a priority for the use of the property shall be a model subdivision designed to showcase the development goals of the 2020 plan. A-3 Strategy IX. Biennial Review, Sunset Provision 1. Biennally after adoption, the CAHAB, in conjunction with City staff, shall review the City's affordable housing priorities and strategies and make recommendations to the Commission as necessary to meet the City's affordable housing needs and goals, as identified in the 2020 rlan City's adopted growth policy, the 2003 Housing Needs Assessment, and any subsequent needs assessments prepared for the City. 2. A sunset clause will be included in ordinances and code revisions adopted to implement strategies II and III to ensure mandatory review and timely revision of housing policies in response to changing housing needs. (The sunset clause should specify a five-year period or an alternate length of time to be determined through discussion among City staff, the City Commission, and the CAHAB, with public input from the building industry and other interested organizations. ) Strategy X. Business Plan, Long-term Funding Stream 1. Upon City adoption of Affordable Housing Strategies and ordinances, the CAHAB will work with City staff to complete a business plan regarding annual and five-year budget needs; funding sources (grants, big box fund, general fund, housing loan repayments, etc.); staffing; and so forth. 2. The CAHAB will work with City staff, the City Commission, and interested organizations to create a reliable long-term funding stream for the Affordable Housing Fund, to ensure a base of predictable funding for the first-time home buyers' program and for rental housing. One intent will be to strive to reduce the level of City General Fund commitment necessary to maintain the City's affordable housing programs through diversification of funding sources and, if possible, eventual endowment of the Housing Fund. 3. The City, in cooperation with other interested organizations, will aggressively pursue grants to help with affordable housing. Strategy XI. Additional Potential Actions for Research and Consideration 1. The City will review the purposes of the Design Review Board and consider the advantages and disadvantages of redefining its purposes-such as shifting its development review responsibilities to staff-or eliminating the board. If the City chooses to redefine the role of the ORB, it will not eliminate ORB development review only for affordable housing projects, which need to receive the same degree of review as all housing projects. 2. The City will consider a guaranteed timeframe for review and approval of affordable housing projects. 3. The CAHAB, in cooperation with City staff, will assess establishing a residency requirementforthe home buyers' program, and a possible provision regarding full-time students, and make a recommendation to the City Commission. 4. The City will research the legality of selling parcels of long-unused, perhaps impractically located or sized parkland, or of building affordable housing on them. 5. The City, in cooperation with any interested local organizations, will consider developing a kiosk or referral service for affordable units to make it easy for very low-income and low-income residents to find housing in their price range without developers of this housing needing to spend significant sums on marketing. A-4