Loading...
HomeMy WebLinkAboutH2 AGENDA CAHAB/CITY COMMISSION WORK SESSION 1. History of Bozeman's Affordable Housing • 1992 - First Housing and Public Facilities Study Top 2 Needs Were Affordable Rentals and Affordable Homeownership Opportunities. • 1993- City Commission appoints CAHAB (City Ordinances) • J994-City Commission adopts Affordable Housing Policy (City Ordinances) • 1994 -City's Affordable Housing Task Force Recommendations - Regulatory Reform and Inclusionary Zoning- (A vailable Upon Request) • 1995 First Tax Credit and Non profit Projects -currently over 400 units of affordable rental housing in Bozeman all serving 60% of AMI and below. • 1996- Governor Racicot Affordable Housing Task Force - • 1998 - MT Legislative changes increases profitability of Tax Credit rental units. (Available Upon Request) • 1998 AFFORDABLE HOUSING RESEARCH - Regulatory Reform and Program Options- Density Bonus, Fee Waiver, Infrastructure Relaxation, Infill, Homes Owners Assistance Program, and Inclusionary Zoning (Available upon request) • 2003 BAE Study recommends Inclusionary Zoning and Minimal Number of Units-- Compromise Leads to RSL/RSU - 5 year sunset & Biennial Review (Copies Available) • 2004 Commission adopts Affordable Housing Strategies into UDO (In Commissions copy of UDO) • 2004 Gallatin County Needs Assessment (42% of respondents lived in Bozeman) - Supply of Affordable Housing's Impact on Living Conditions— 48% rated conditions as worse due to lack of affordable housing. (A vailable Upon Request) • 2005 - The National Citizen Survey for Bozeman, MT a) Access to affordable quality housing —worst rating of all questions and in all categories—60% rated "POOR". b) Ranked 40th of 41 cities with populations under 40,000 c) Ranked 131st out of 136 cities (Commission Has Copy) 2. Bay Area Economics Study (Available Upon Request) Conclusions and Recommendations Priority Populations • Renters Earning less than 30% of AMI • Family renters between 30% and 60% for rentals and homeownership • Potential Homeowners 60% to 80% • Persons with Disabilities especially mental illness • Single Parent Households- Higher rate of poverty • Very low-income seniors • Emergency Shelter Recommendations • Revise Affordable Housing Policy-Target Incomes done • Prioritize Regulatory Reform and Process Reforms to Facilitate Housing Production on going • Develop Incentive Based Affordable Housing Program 1. Density Bonus; Streamline Permits; Fee reductions; Direct Financial Assistance on going • Develop Detailed Guidelines For Affordable Housing 1. Produce a certain percentage of affordable units in exchange for incentives; RSL./RSU-5 Year Sunset-Biennial Review-First Review is this work session. 2. Contribute an in-lieu fee to housing fund 3. Provide land for future housing development • Identify Sites and Resources for Special Needs Housing - not done • Institute a First Time Home Buyer Plan- done 3. CAHAB Work Force Housing Handout 4. CAHAB Regulatory Reform and Incentives Ideas 5. CAHAB'S PROJECTS 1. Affordable Housing Publicity Campaign 2. CAHAB On-going Funding Stream 3. Design Contests/Plans Library 4. Model Project from Land put in Housing Fund 5. County Participation 6. Board Maintenance and Expansion 7. Multifamily Strategies for Very Low-income CAHAB Review • Introduction • History • Study recommendations • Progress and challenges , • Work Force Housing • Suggested UDO revisions • CAHAB's projects • Next steps 1312 History ®CI • 1992:Bozeman's first housing study • 1993:CAHAB is formed • 1994:City adopts first affordable housing policy • 1995:First tax credit and non-profit units built • 1998:City task force research suggests regulatory reforms including: density bonuses • fee waivers infrastructure relaxation • homeownership assistance program • inclusionary zoning History • 2003:City hires Bay Area Economics for a housing needs assessment.The study's recommendations include inclusionary zoning and increased density. • The public input process produces a compromise: Restricted Size Lots/Restricted Size Units(RSL/RSU). 2004:Affordable Housing strategies(RSL/RSU)are adopted into the UDO. 1 History MCI • 2004: Gallatin County Needs Assessment •48%of households surveyed rated conditions worse due to a lack of affordable housing • 2005: National Citizen's Survey •60%of surveyed residents rated City's access to affordable housing as"Poor" • Bozeman's affordable housing was ranked 40th of 41 participating cities with populations under 40,000.Bozeman ranked 1311'of all 136 cities surveyed regarding affordable housing_ BAE's recommendations mo • Select Priority Populations •Renters earning less than 30%Area Median Income(AMI) • Family renters earning 30-60%AMI • Persons with disabilities and mental illness •Single parent households •Very low income elderly • Persons in need of emergency shelter • Potential homeowners earning between 60-80% AMI BAE recommendations mu • Recommendations completed: Target Incomes:City targets renters earning less than 60% AMI and potential owners earning less than 100%AMI • First time homebuyer program: The City has contributed $200,000 to the HRDC's homeownership initiative The Road to Home 2 o BAE recommendations ®p • on-going Recommendations: • Regulatory and process reforms • Affordable housing incentives •oensity bonus •Streamline permits •Fee reductions •Direct flnancialassistance • Production of affordable housing '. units(RSURSU) • Biennial review of affordable housing policy Challenges MO - Lack of affordable homeownership units - Rental units for 30% AMI and lower - Identification of long- term funding sources Al - Identification of land for affordable housing development Workforce Housing No • Addresses need to provide units for ownership by working class households • Provides for a percentage of a development's units to be affordable to low and moderate income households • Requires all developments to contain some affordable homes • Creates wealth for working families 3 What can our workforce affordlI® 0011100� School Custodian(5 years) 26,478.00 90,744.45 Teacher,5 years w/Masters 35,854.00 122,877,55 Teacher,10 years w/Masters 42,101,00 144,287.04 2nd Year firefighter 43.281,00 148,331.09 City Planner 1 38,640.00 132,425.62 City Patrol Officer 40.296,00 138,101.01 WFH Considerations ®p • Mandatory vs Voluntary • Unit threshold - Income targeting • Percentage of units to be delivered WFH Considerations ®p • Unit type and mix • Incentives • Control mechanism and period Soy° 4 What is affordable? ®p • Household pays no more than 30%gross monthly income for: • Principle • Interest •Taxes • Insurance And when applicable: • HOA dues •Mortgage Insurance <0 -Condo Dues What is affordable? EM 2 BR units affordable to a HH of 2 earning less than 80%AN (as determined by HUD) •Annual Gross Income for HH of 2 at 80%AMI=$35,840 •Affordable home=$123,254 • 3 BR units affordable to a HH of 4 earning less than 80%AMI • Annual Gross Income for HH of 4 at 80%AN=$44,800 Affordable home=$154,067 UDO revisions ®® • Maximize net buildable area • Decrease minimum lot size/minimum unit size • Reduce parking requirements •Allow for smaller front yard set-backs •Revise parkland formula to encourage density • Amend RSL requirements • Restrict to owner-occupancy • Revise in-lieu formulas •Require at least 50%of RSLs be built in the development 5 7 , UDO revisions ®p • Reduce development costs •Provide density bonuses for RSLs •Waive city fees 1 W •Link affordable homes to eligible households UDO revisions • Amend PUD section of the UDO •Allow constructed RSURSUs as an option to complete PUD point requirement • Require all PUDs to meet some performance points through affordable housing •Require a percentage of RSLJRSUs to be affordable to households earning less than 80% AMI CAHAB Projects ®p • Affordable Housing Publicity Campaign g aa �tiplll�ph • Identify on-going funding streams • Design Contest and Model development 6 CAHAB projects ®p • Coordinate with Gallatin County • Board Maintenance and Expansion • Develop strategies for very low income rentals(30%AMI and IN below) CAHAB work session ma The CAHAB thanks you for your time. 7 Workforce Housing Draft 01/08/2006 Recommendations: Based upon the review of recent housing studies and community input, it is clear that our community is in need of diverse housing to better serve working households. The employees essential to our continued economic growth and community success should have the opportunity to live in our community if they choose while building wealth through homeownership. The inability of such persons to purchase a home within our city negatively affects our sense of community and has detrimental transportation and environmental impacts. The primary objective of these recommendations is to create an on-going supply of affordable homes for purchase by our low and moderate income workforce. Affordable Housing Plan: The developer shall submit,prior to or concurrently with their application for preliminary approval, an application describing their affordable housing plan in accordance with this and other applicable ordinances. Standard Workforce housing requirements: A developer of a residential subdivision consisting of five or more units shall provide, to the extent feasible, twenty five percent (25%) of the total units for the workforce housing program, as outlined below. Project Size: 1) Projects with fewer than five units—No workforce housing requirements 2) Projects with five to twenty five units (5-25)— a) Twenty-five percent of the units in the subdivision must be dedicated to workforce housing requirements (after density bonus) b) All units must be constructed on-site 3) Projects with tw ty-fi u is or +) a) Twenty- ve per n e u ' e Fnsit, isi must be dedicated to workfor g qu is (a b us) b) Option: Up to half(12.5%) of the required units may be satisfied through the dedication of one (1)parcel of land to the city on which the required number of units could be constructed at the same density as in the subdivision for which the land is proposed as a replacement. The land must be without abnormalities and with complete environmental review. The value of the land dedicated must be equal to or greater in value (as determined by independent appraisal) that the total value of the lots for which the land is offered. The site must be economically feasible to develop the required number of units,be appropriately zoned, and be fully improved with infrastructure. Workl0rce.l.lousing Draft t c) Under option(b), at least half(12.5%) of the required units must be constructed in the subdivision. Rounding: Where the total workforce housing units required by this ordinance call for one-half or greater portion, it shall require the provision of one full unit. Individualized program: A developer may meet the city's workforce housing requirements through an individualized program. To be eligible,the proposed program must provide a level of affordability equal to or greater than the amount that would be generated under the standard guidelines. The individualized program is subject to all standard city staff, board, commission, and public review. In addition the project will be subject to one additional public meeting in front of the Community Affordable Housing Advisory Board for review and comment by community-based non-profits. The hearing shall review: i. Project feasibility, ii. Community need for project, iii. Overall benefits and drawbacks of project iv. Compliance with all applicable affordable housing and workforce housing regulations. The CAHAB will make a recommendation to the City Commission on each individualized program, which will make a final decision. Incentives: A one-to-one density bonus will be provided for each unit meeting the workforce housing requirements, whether on-site or through land dedication. On-site construction requirements: All on-site constructed units shall meet the following requirements: 1) Housing Mix: Developer must provide a mix of two and three bedroom homes. Four bedroom homes may be allowed by exception. A minimum of half(50%) of the homes must be three bedroom homes. All homes must provide a minimum of two bathroomsDgU Rumeet ve at ast a age. One bedroom homes will notwo ce h ruirements. While Accessory Dw a aForkforclhousing iease density within a subdivision, A requirements. 2) Unit type: Unit type of the workforce housing units must be of the same type as the units in the subdivision. In the case of a mixed-use development (such as single-family detached and attached housing), the workforce housing units must be of type in the same proportion as the units that are not constructed as part of the workforce housing program. 3) Price of Units: The units will be affordable to moderate income households paying 30%of their monthly income toward Principle, Interest, Taxes, and Insurance. Two bedroom units will be affordable to a household of 2 earning less than 80% of the Area Median Income (AMI); three bedroom units will be affordable to a household of 4 earning less than 80%of the AMI; and 4 bedroom homes (when allowed)will be affordable to a household of 6 earning less than ��`<�rk{orce .i�t>t� ialg I:)r.tli. i 80%of the AMI. AMI will be determined by HUD and verified and (if necessary) adjusted annually. The price will be set based on a 30 year, fixed rate loan at the Montana Board of Housing rate plus %z% as of January 1 of each year. Prices will be determined January 15 of each year and approved by the City commission. The maximum sales price shall be published on the City's website and available at the City planning office. 4) Livability: The workforce housing units shall be functionally equivalent to market rate units in the same subdivision. Features included in market rate units must be included in workforce housing units, however; the type of features need not be identical.Note: The spirit of this regulation is to allow for flexibility on the part of the developer. For example, while market rate homes may have Corian countertops, workforce housing units could use laminate. Quality of the unit is a concern here—some cities have been forced to write regulations regarding the necessity for closets and kitchen cabinets due to inadequate quality of workforce units. S) Owner-occupancy: All workforce housing units must be owner occupied and must remain as the principal residence of the occupant for the duration of their ownership. 6) Sustained affordability: The following measure will be applied to ensure that sustained affordability is achieved in the workforce housing: a) Appreciation on the unit will be capped at 3%per year, maximum. A person purchasing a workforce housing unit will only be eligible to receive a maximum of 3% appreciation each year. This is the maximum appreciation allowed, not the guaranteed rate of appreciation. Purchasers will receive a maximum appreciation schedule at closing. b) The City of Bozeman will be granted a first right of refusal on the property. c) The maximum rate of appreciation will apply for the first 10 years of ownership. After 10 years of ownership, any workforce housing deed restriction on the property will be removed. If the house is sold before 10 years, the new buyer will be subject to the workforce housing eligibility requirenVRF,ftQd a year fordaqn will commence. d) In the ev t of t s e o e p y bars, appreciation of the property calc t theMel r ie property is less than the maxi pr at1 r ectual appreciation (less costs). If the maximum rate of appreciation is equal to the rate of appreciation, the owner receives the maximum rate (less costs). If the actual appreciation of the property is greater than the maximum rate(3%), the owner receives the maximum rate(3%) and the difference will be allocated to the City's Affordable Housing fund. 7) Buyer selection and screening: Units produced through the Workforce Housing Program are available for purchase by households earning less than 120% of the Area Median income for their corresponding household size as determined annually by HUD. Screening shall be carried out by the City at the expense of the developer. The developer's affordable housing plan must, in addition to items listed above, include a marketing plan and estimated project timeline Workfoi,cc f�ilt i.n 1)r:ft. i S) Timing of Units: The workforce housing units must be constructed before any other units in the subdivision. Building permits will not be issued for remaining lots until the workforce housing units have received Certificate of Occupancy. 9) The location and type of the proposed workforce housing must be identified on the developer's affordable housing plan. The workforce housing lots must be dispersed throughout the subdivision. 10)The location and type of proposed workforce housing in a development must be disclosed in writing by each seller to each subsequent purchaser of the lots or units until all workforce housing units in the development are completed. DRAFT Workforce l lousing Draft 4 HOUSING COST ANALYSIS 1200 SQ. FT. 2000 SQ. FT. 3 BR, 2 BA, 2-car garage 3 BR, 2 BA, 2-car garage Cost/ %of Cost/ %of Cost Sq. Ft. Total Cost Sq. Ft. Total Hard Costs: Excavation: $3,600 $3.00 1.6% $6,000 $3.00 2.0% Footings/Foundations/Slabs: $8,400 $7.00 3.7% $14,000 $7.00 4.6% Framing: $15,600 $13.00 6.9% $26,000 $13.00 8.5% Roof System: $10,800 $9.00 4.8% $18,000 $9.00 5.9% Siding/Soffit/Trim/ Ext, Paint: $7,200 $6.00 3.2% $12,000 $6.00 3.9% Exterior Decks, Railings: $1,980 $1.65 0.9% $2,000 $1.00 0.7% Drywall: $6,000 $5.00 2.7% $10,000 $5.00 3.3% Interior Trim: $3,000 $2.50 1.3% $5,000 $2.50 1.6% Interior Painting: $3,600 $3.00 1.6% $6,000 $3.00 2.0% Floor Coverings: $4,500 $3.75 2.0% $7,500 $3.75 2.5% Appliances: $1,800 $1.50 0.8% $1,800 $0.90 0.6% Cabinets/Tops/ Bath Accessories: $1,400 $1.17 0.6% $1,400 $0.70 0.5% Doors and Hardware: $1,200 $1.00 0.5% $2,000 $1.00 0.7% Windows: $2,100 $1.75 0.9% $3,500 $1.75 1.1% Plumbing/HVAC: $12,600 $10.50 5.6% $13,500 $6.75 4.4% Electrical: $6,000 $5.00 2.7% $10,000 $5.00 3.3% Insulation: $1,800 $1.50 0.8% $3,000 $1.50 1.0% Temp.Heat/ Final Clean: $1,200 $1.00 0.5% $2,000 $1.00 0.7% Dump Fees/ Fasteners/ Hdwe $1,200 $1.00 0.5% $2,000 $1.00 0.7% Equipment Rental: $1,800 $1.50 0.8% $2,000 $1.00 0.7% Contractor's Profit and Overhd.: $16,800 $14.00 7.5% $26,000 $13.00 8.5% Sub-Total Hard Costs: $112,580 $93.82 49.9% $173,700 $86.85 57.0% Soft Costs: Impact Fees: $6,876 $5.73 3.0% $6,876 $3.44 2.3% Gas Hook-up $675 $0.56 0.3% $675 $0.34 0.2% Electric Hookup $675 $0.56 0.3% $675 $0.34 0.2% Builder's Risk Policy: $275 $0.23 0.1% $350 $0.18 0.1% Building Permit, Plan Review: $900 $0.75 0.4% $1,100 $0.55 0.4% Architecture and Engineering: $5,000 $4.17 2.2% $5,000 $2.50 1.6% Construction Loan Interest: $8,505 $7.09 3.8% $11,340 $5.67 3.7% Sub-Total Soft Costs: $22,906 $19.09 10.2% $26,016 $13.01 8.5% Landscaping: $5,000 $4.17 2.2% $5,000 $2.50 1.6% Lot Cost: $85,000 $70.83 37.7% $100,000 $50.00 32.8% Total Cost to Produce: $225,486 $187.91 /sq.ft. $304,716 $152.36 /sq. ft. HOUSING SALE ANALYSIS 1200 SQ. FT, 2000 SQ. FT. 3 BR, 2 BA, 2-car garage 3 BR, 2 BA, 2-car garage Sales Price: $270,000 $225.00 /sq.ft. $360,000 $180.00 /sq.ft. less: 6% commission -$16,200 -$21,600 less: total costs to produce -$225,486 -$304,716 Net Profit before Taxes: $28,314 Net Profit before Taxes: $33,684 LOT COST ANALYSIS ASSUMPTIONS: 1. Purchase 20 acres at$85,000/acre 2. Land Uses: equal parts R-2, R-3, R-4 Parkland 3. Land Area used for Streets and Detention Ponds:2.75 acres Dedication Total Requirement Parkland 4. Parkland Dedication: Zoning Acres Units/acre (acres/unit) Dedication R-2 4.49 6 0.03 0.81 R-3 4.49 10 0.03 1.35 R-4 4.49 12 0.03 1.62 3.77 5. Net Acreage Calculation: Gross Acres: 20 less: streets and detention ponds -2.75 less: parkland dedication -3.77 Net Acreage: 13.48 acres Cost/ Linear Feet Linear Foot Total Cost 6. Streets (33'width): 4,000 $ 148.60 $ 594,000 7. Water Mains 2,500 $ 95.00 $ 237,500 8. Sewer Mains 2,500 $ 52.00 $ 130,000 9. Sidewalks 8,000 $ 32.50 $ 260,000 10. Curbs and Gutters 8,000 $ 10.00 $ 80,000 11. Park Landscaping $ 250,000 $ 1,551,500 LAND COST ANALYSIS: Initial Lot Cost: $ 1,700,000 Legal: $ 15,000 Engineering and Surveying: $ 120,000 Infrastructure: $ 1,551,500 Finance Costs: $ 350,000 $ 3,736,500 Finished Land Cost/Net Acre: $ 277,221 Finished Land Cost/Net Sq. Ft.: $ 6.36 LOT SALE ANALYSIS: Aver. Lot S . Ft. Price/S . Ft. Aver. Lot Price Total Sales R-2 Lots-4.49 acres 9,000 $ 12.00 $ 108,000 $ 2,347,013 R-3 Lots-4.49 acres 12,000 $ 11.00 $ 132,000 $ 2,151,428 R-4 Lots-4.49 acres 43,560 $ 10.00 $ 435,600 $ 1,955,844 $ 6,454,285 Sales value: $ 6,454,285 less: 6%commission $ (387,257) less:total costs $ (3,736,500) Net Profit before Taxes: $ 2,330,528 The public is invited to attend a meeting with the Bozeman City Commission to discuss affordable housing policy and strategy. The Bozeman Community Affordable Housing Advisory Board (CAHAB) will give a brief presentation and then open up the meeting for discussion with the City Commissioners. Date: Monday, January 30, 2006 Time: 6:00 PM Place: Community Meeting Room Gallatin County Courthouse 311 West Main Street Any and all are welcome and encouraged to attend! For more information,please contact Jami Morris at 582-2260. The Gallatin County Courthouse is accessible. For those who require accommodations for disabilities, please contact Ron Brey at 582- 2306 (voice) or 582-2301 (TDD). Aka*ut SUBMITTED 01/26/06 FOR SUNDAY, 01/29/06 DISPLAY AD PUBLICATION. PLEASE SEND AFFIDAVIT TO BOZEMAN DEPARTMENT OF PLANNING & COMMUNITY DEVELOPMENT.