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HomeMy WebLinkAboutNorton East Ranch Workforce Housing Waiver Request_16 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brian Krueger, Development Review Manager Wendy Thomas, Director of Community Development SUBJECT: Norton East Ranch Phase IIA Subdivision Final Plat Workforce Housing Waiver Request Application, P14007 MEETING DATE: May 5, 2014 AGENDA ITEM TYPE: Action RECOMMENDATION: That the City Commission grant a waiver from all the requirements of the Workforce Housing Program, while allowing the applicant to utilize the reduced size lot standards allowed for workforce housing and authorize the City Manager to execute the agreement with the subdivider to allow the Human Resource Defense Council (HRDC) a 90-day pre-sale opportunity to identify qualified purchasers for the Road to Home project for the reduced size lots. MOTION: I hereby move to grant a waiver from the requirements of the Workforce Housing Program for Application P14007 and authorize the City Manager to execute the workforce housing agreement with Norton Properties, LLC. BACKGROUND: On January 22, 2008 the City Commission granted preliminary plat approval to subdivide 47.77 acres and create one hundred and twenty eight residential lots including restricted size lots and workforce housing lots as the Norton East Ranch Subdivision located west of Cottonwood Road between Fallon Street and West Babcock Street. At the time of preliminary plat approval, the City had an effective workforce housing ordinance that required a subdivision design to include lots designated for compliance with the Workforce Housing Program (WHP) requirements (income restrictions, sales price restrictions, and home design requirements for workforce lots). Following the filing of the final plat for Phase I of the Norton East Ranch Subdivision, the City approved Ordinance 1814 that deferred the effective date of the workforce housing requirements to September 2012. Ordinance 1866 was subsequently approved in June 2013 that deferred the effective date of the workforce housing requirements to December 2014. While mandatory compliance with workforce housing requirements has been deferred, the programs and ordinance still exist in code. The WHP is included as Chapter 10, Article 8 of the Bozeman Municipal Code. Section 10.08.050.B.6 of the WHP includes a provision that allows a waiver from program requirements with the affirmative recommendation of the Community Affordable Housing Advisory Board (CAHAB) and the approval of the City Commission. Norton Properties, LLC submitted a request in January 2014 to CAHAB to allow a subdivision design for the Norton East Ranch Subdivision Phase IIA with 18 reduced size workforce housing lots for single household detached dwellings and to allow a waiver from the requirements of the 173 WHP. CAHAB reviewed the request at their January 8, 2014 meeting and after consideration recommended that the City Commission grant the waiver as requested. CAHAB further recommended that Norton Properties, LLC be directed to work with the HRDC’s Road to Home program for a 90 day pre-sale period to identify qualified low to moderate income purchasers for the subject lots. The findings, minutes, and discussion from that meeting are attached. Norton Properties, LLC has submitted a final plat application for Phase IIA of the Norton East Ranch Major Subdivision. The application included a formal WHP waiver request to the City Commission and a signed agreement from Norton Properties, LLC that complies with CAHAB’s recommended condition. If the waiver is not granted, the Norton Ranch Phase 2A subdivision could be filed, but the zoning code would only allow attached townhouse construction on the subject lots. Phase IIA will be the final phase of the plat filed, as the preliminary plat expired on March 3, 2014. UNRESOLVED ISSUES: None identified ALTERNATIVES: 1) Approve the waiver as presented and recommended. 2) Deny the waiver. 3) As directed by the City Commission. FISCAL EFFECTS: This request does not affect the City Budget or General Fund Expenditures. Attachments: Aerial Map; Waiver Request and Agreement, CAHAB findings, CAHAB Minutes, Plat exhibit Report compiled on: April 24, 2014 174 FALLON ST W BABCOCK ST S COTTONWOOD RD STAFFORD AVE WATER LILY DR DRAGON FLY ST N COTTONWOOD RD POND LILY DR STONE FLY DR BULL FROG DR Aerial ImageNorton East RanchRevised: February 6, 2014 This map was created by theCity of Bozeman Department ofCommunity Development ¯ 1 inch = 459 feet Intended for Planning purposes onlysome layers may not line up properly. Phase IIAWorkforce Lots Phase IWorkforce Lots Phase I Phase IIA Phase II 175 176 177 TO: Brian Krueger, City of Bozeman Planning Department FROM: Tracy Menuez, CAHAB staff CC: Chris Kukulski, City Manager Brian LaMeres, CAHAB Chair DATE: January 31, 2014 RE: Norton East Ranch Phase IIB At the January 8, 2014 meeting of the Community Affordable Housing Advisory Board, Kevin Spencer, representing Norton East Ranch, and Bob Lee of Morrison Maierle, presented information regarding their request for a waiver of minimum lot sizes for 18 lots in Phase IIB of the development. The developer wishes to utilize the dimensional incentives provided in the suspended Workforce Housing Ordinance, but requested that the restrictions of the ordinance not be enforced. They presented information regarding earlier built units in the same development on smaller lots. After consideration of the request and discussion (see attached minutes), the CAHAB recommends that the City Commission provide a waiver to allow for smaller lot sizes and other dimensional relaxations requested by the developer. We also ask that the developer be directed to work with the HRDC’s Road to Home program for a 90-day pre-sale period to identify a qualified low to moderate income purchaser. If a purchaser cannot be secured, the home may be released for sale to whomever the developer selects. The CAHAB is supportive of the proposed project and hope that the Commission will support this type of incentive affordable housing development as well. Please contact our staff, Tracy Menuez or our Chair, Brian LaMeres, with any questions. Thank you. 178 City of Bozeman Community Affordable Housing Advisory Board (CAHAB) January 8, 2014 8:00 – 9:00 am City Commission Room, City Hall Attending: Brian LaMeres, Mary Martin, Kyle Terrio, Melvin Howe, Anders Lewendal, Ann Kesting, Kris Keller, Dave Magistrelli; Commissioner Chris Mehl Absent: None Staff: Tracy Menuez, HRDC; Wendy Thomas, Community Development Director; Brian Krueger, City Planner Public: SharlaRae Stuber, Big Sky Western Bank; Bob Lee, Morrison Maierle; Kevin Spencer, Norton Homes; Greg Stratton The meeting was called to order at 8:00 am by Chair Brian LaMeres. Public Comment: None Staff/Board reports Ann Kesting reported that year-end sales figures have been released. Condos/townhomes in the Bozeman city limits increased in price by 14% from year-end 2012; detached housing has increased by 9%. Mary reported that the rental market continues to see low to no vacancy, adding that this is a time of year where you don’t see people moving as much. Action Items 1) Approval of minutes from 12-11-13. Dave Magistrelli moved to approve the minutes; second by Melvin Howe. Kris Keller asked about the protocol for voting on minutes for a meeting when one was not present. Commissioner Mehl responded that members vote on the approval of minutes regardless of attendance. Motion approved. 2) Norton East Subdivision Phase IIB waiver request Bob Lee from Morrison Maierle presented information to the board regarding a request by Norton East subdivision (see attached letter). Earlier phases of Norton East had included smaller lots allowed by the Workforce Housing ordinance, however; with the ordinance now suspended, there is not a mechanism in the City code that allows for lots smaller than 5000 sq ft. The developer is requesting the CAHAB’s support for 18 smaller lots. Kevin Spencer of Norton Ranch added that Norton would like to continue to provide the smaller, less expensive product that was allowed previously and that has been successful in the Bozeman market. Mary Martin asked what the expected price point would be for the proposed units. Kevin replied that the market is moving rapidly, however; to date the smaller homes sold have been for less 179 than $200,000. They expect as the market moves upward that their prices will likely do the same, but their target is the $200,000 range. Brian LaMeres asked how large the homes will be. Kevin replied that the homes are 3 bedroom, 2 bath with a garage. Brian LaMeres asked to clarify what concession(s) the developer is requesting. Wendy Thomas replied that the developer is asking to use the dimensional incentives allowed by the Workforce Housing Ordinance (smaller lots, smaller garages, narrower setbacks), however; they do not want to incur the restrictions of the ordinance in relation to pricing, timing, long-term affordability and income restrictions. Kevin added that many of the restrictions in the original ordinance made the properties more costly to finance. However, they have been committed to providing a product within the pricing targets of the ordinance that could be financed easily. Kris Keller asked what restrictions made financing more difficult. Kevin replied that he did not remember the specific requirements, just that lenders were not willing to finance the product as they were unable to sell it on the secondary market. Commissioner Mehl asked Brian Krueger, City Planner, if there was any additional context we needed. Brian replied that there is a larger interest in the development community for smaller lots, much reminiscent of the Restricted Size Lots (RSLs) used in the City, which ended up quite marketable. Brian added that smaller lots (down to 4500 square feet) are currently allowed in Residential Mixed Use zoning. There is a likelihood that Valley West will also be replatting some of their multi-family lots for small single-family detached homes. Kris Keller asked how far the houses are from each other. Kevin replied that they are 5 feet from eave to eave, however; he pointed out to the board that the City has expressed a desire to build attached units on these lots, which would result in a distance of zero. Kris asked how large the homes are; Kevin replied that they range from 1400 to 2100 square feet. Anders asked if the homes will meet the 2012 International Energy Conservation Code (IECC). Kevin replied that they are monitoring energy costs in the already built units, as they utilize electric heat and they want to be sure that is the best long-term choice. Anders asked if they blower-door test the units. Kevin replied that they would be willing to do so, adding that they try to meet a balance between tightness and air quality. Wendy Thomas asked if there would be occupancy or income requirements, to which Kevin replied that they are requesting a waiver of those components. Anders asked the board if there was a market for this, and, if so, why wouldn’t we support the building of smaller, more affordable homes. Kris commented that this home is not affordable to a person with a minimum wage job. Kevin replied that was likely true, but, for the right purchaser, the proposed homes are cheaper than renting in Bozeman. Bob Lee commented that the RSLs have reset the idea of what a lot size needs to be in Bozeman, and have created a demand for smaller lots. Mary Martin commented that she thought narrower, smaller lots were helpful in achieving more affordable homes, and were more characteristic of neighborhoods developed in earlier years with more variation in lot sizes and home types. Kris expressed that the homes being developed are really only targeted to nuclear family types, with limited emphasis on single households who could benefit from much smaller homes on a small lot. Kevin replied that they have to consider density requirements, along with the market, which is stronger in family housing. Anders commented that if the market demand shifted to 900 square foot homes that the development community would provide them. Kevin replied that they do, in fact, provide 900 square foot homes in communities where the market has embraced them. Mary asked if there was a way to keep the home affordable past the first purchaser. Ann replied that while you could restrict purchaser #1, you cannot restrict beyond that without creating financing difficulties. Anders asked why a smaller product on a smaller lot would not always be more affordable compared to larger properties in the market. Wendy commented that the board 180 could ask the developer to work with the Road to Home program to secure a low to moderate income customer for the first purchase. Commissioner Mehl asked Kevin if they would be open to this; Kevin responded that they would be. Mary commented that the intent of the workforce housing ordinance was to create some long-term affordability, but, if that’s not possible in this situation, we need to help find the next best option. Kevin commented that when they partner with the City of Bend, the City has 90 days to find a buyer and can assist them with down- payment assistance when available and necessary. The homes are only provided as a base model (no upgrades allowed) at the base price. After the 90 day sales period, they are allowed to sell the home to any qualified buyer. Anders Lewendal moved to recommend that the City Commission approve the request by Norton East to build smaller houses on smaller lots with the recommendation that the developer work with the HRDC for a 90-day period to sell units to low to moderate income qualified buyers. Dave Magistrelli provided a second. Motion passed. Non-action items 1) Preparation for joint session with City Commission Tracy reviewed the draft memo for the commission work session, adding that she would send the meeting agenda to the board along with an expected start time. FYI/Discussion The CAHAB will meet with the Commission for a joint session on January 13th at 6 pm. The membership application of SharlaRae Stuber will also be considered at this meeting. The next regular meeting will be held on February 12, 2014 at 8:00 am in the City Commission room. Adjourn – Meeting was adjourned at 9:10 am. 181 182