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Home My WebLink AboutH2 Workforce.housing.Z-06152 14 4 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Andrew Epple, Planning Director Chris Kukulski, City Manager SUBJECT: Workforce Housing Text Amendment, #Z-06152 MEETING DATE: Monday, July 31, 2006 BACKGROUND: The City Commission directed staff to draft an ordinance to show how the CAHAB proposal from spring 2006 for affordable housing might be implemented. The draft has been considered at public hearing by the Planning Board and Zoning Commission. Two primary elements must be addressed in any development of a regulation by the City. Can the regulation be done and should it be done. Public testimony has been received primarily on the question of should the draft proposal be carried out. Neither the Planning Board nor the Zoning Commission recommended adoption of the proposal as originally presented. Ten material changes to the draft were recommended. The Board and Commission also recommended that further consideration of the topic is necessary after inclusion of the recommendations. The possibility of utilizing a task force for this process was discussed. The draft minutes and resolutions reflecting the Board and Commission discussion are attached. The public hearing for this item has been advertised to occur on August 7th. Depending on the direction given by the City Commission additional revisions may be necessary to adequately integrate the proposal with existing regulations. UNRESOLVED ISSUES: 1) Legal adequacy of the proposal—currently under review by the City Attorney's office 2) Is the draft proposal an appropriate means to address issues of workforce housing? 3) How would the success of this program be determined? i) Number of dwellings constructed ii) Percentage of housing available iii) number of persons served 4) Who administers the on-going responsibilities over the long run? 5) Recommended revisions from Planning Board and Zoning Commission: a) Reduce percentage of required cost limited units from 25% to 10% b) Raise threshold of participation from 5 dwellings to 10 dwellings c) Provisions for sustained affordability to allow full recovery of appreciation for that portion of the home which the person has individually paid for and recoupment of the subsidized portion back into the workforce housing program Report compiled on June 21, 2006 Commission Memorandum d) Construction of workforce units to be proportional to that of market rate homes, i.e. nine market rate per one workforce unit e) Review of proposed workforce housing implementation plans to stay within existing subdivision review process, eliminate additional review requirements f) Minimum construction standards should focus on safety and adequacy, not replication of the market rate housing g) A review of the program should be required 4 years after adoption and periodically thereafter h) Options for alternate compliance should be provided to enable creativity in addressing housing issues, including cash-in-lieu i) Cost of screening potential purchasers should not be borne by developer j) Retain the existing Restricted Size Lot and Restricted Size Unit requirements, Sections 3&4 of the draft proposal. RECOMMENDATION: Include recommended revisions and reconsider the proposal. FISCAL EFFECTS: Costs can not be quantified until the Commission gives additional direction on policy. ALTERNATIVES: As suggested by the City Commission. Respectfully submitted, Andrew Epple, Planning Director Chris Kukulski, City Manager Attachments: Planning Board and Zoning Commission minutes and resolutions Staff Report Existing affordable housing supportive policies, programs, and regulations Draft proposal Commission Resolution 3630—Affordable Housing Strategies Report compiled on June 21, 2006 Workforce Housing Planning Board Resolution RESOLUTION NO. Z-06152 RESOLUTION OF THE CITY OF BOZEMAN PLANNING BOARD NOT RECOMMENDING APPROVAL AND RECOMMENDING CHANGES TO A PROPOSED AMENDMENT TO TITLE 18, UNIFIED DEVELOPMENT ORDINANCE, CITY OF BOZEMAN MUNICIPAL CODE. WHEREAS, the City of Bozeman has adopted a growth policy pursuant to 76-1-604, MCA; and WHEREAS, the City of Bozeman Planning Board has been created by Resolution of the Bozeman City Commission as provided for in Title 76-1-101, M.C.A.; and WHEREAS, a proposal regarding workforce housing was submitted as to the City Commission; and WHEREAS, the City Commission desired to have a focused community discussion on the matter of workforce housing; and WHEREAS, the City Commission directed the submitted proposal to be placed into a form which would enable public discussion of it merits and flaws; and WHEREAS,the drafted form creates a new Title 16 in the Bozeman Municipal Code and revises Title 18; and WHEREAS, because the proposal would affect the Unified Development Ordinance, Title 18 BMC, which regulates subdivisions it was necessary for it to be properly submitted, reviewed, and advertised in accordance with the procedures set forth in Chapter 18.68 of the Bozeman Unified Development Ordinance; and WHEREAS, the proposal has been properly submitted, reviewed, and advertised in accordance with the procedures set forth in Chapter 18.68 of the Bozeman Unified Development Ordinance; and WHEREAS, the City of Bozeman Zoning Commission and Planning Board held a joint public hearing on Tuesday, July 18, 2006, to receive and review all written and oral testimony on the request for a text amendment; and WHEREAS, no written testimony was received prior to or at the public hearing; and WHEREAS, 14 persons spoke at the public hearing with one in support, two neutral with questions on the proposal, and 11 in opposition; and WHEREAS, a motion to recommend approval of the proposed text amendment failed on a vote of 4-5; and WHEREAS, the City of Bozeman Planning Board after additional consideration of the proposed amendment identified deficiencies in the proposed text amendment; and NOW, THEREFORE, BE IT RESOLVED, that the City of Bozeman Planning Board, on a vote of 6-2, recommends to the Bozeman City Commission that text amendment,application Z-06152 be revised and then given additional public consideration. Specific revisions suggested. are: 1) Reduce percentage of required cost limited units from 25% to 10% 2) Raise threshold of participation from 5 dwellings to 10 dwellings 3) Provisions for sustained affordability to allow full recovery ofappreciation for that portion of the home which the person has individually paid for and recoupment of the subsidized portion back into the workforce housing program 4) Construction of workforce units to be proportional to that of market rate Moines, i.e. nine market rate per one workforce unit 5) Review of proposed workforce housing implementation plans to stay within existing subdivision review process, eliminate additional review requirements 6) Minimum construction standards should focus on safety and adequacy, not replication of the market rate housing 7) A review of the program should be required 4 years after adoption and periodically thereafter DATED THIS 18`h DAY OF JULY 2006 Resolution No. Z-06152 Andrew C.Epple, Director JP Pornmehowski, President City of Bozeman Department of City of Bozeman Planning Board Planning and Community Development Workforce Housing Zoning Commission Resolution RESOLUTION NO. Z-06152 RESOLUTION OF THE CITY OF BOZEMAN ZONING COMMISSION NOT RECOMMENDING APPROVAL AND RECOMMENDING CHANGES TO A PROPOSED AMENDMENT TO TITLE 18, UNIFIED DEVELOPMENT ORDINANCE, CITY OF BOZEMAN MUNICIPAL CODE. WHEREAS, the City of Bozeman has adopted a growth policy pursuant to 76-1-604, MCA; and WHEREAS, the Bozeman City Zoning Commission has been created by Ordinance 1604 and Resolution No. 3312 of the City of Bozeman, pursuant to Title 76-2-307,MCA; and WHEREAS, the City of Bozeman has provided through Chapter 118.68, BMC a mechanism by which possible revisions to Title 18, Unified Development Ordinance, Bozeman Municipal Code may be suggested; and WHEREAS, a proposal regarding workforce housing was submitted as to the City Commission; and WHEREAS, the City Commission desired to have a focused community discussion on the matter of workforce housing;and WHEREAS, the City Commission directed the submitted proposal to be placed into a form which would enable public discussion of it merits and flaws; and WHEREAS,the drafted form creates a new Title 16 in the Bozeman Municipal Code and revises°Title 18; and WHEREAS, because the proposal would affect the Unified Development Ordinance, Title 18 BMC, which regulates zoning it was necessary for it to be properly submitted, reviewed, and advertised in accordance with the procedures set forth in Chapter 18.68 of the Bozeman Unified Development Ordinance; and WHEREAS, the proposal has been properly submitted, reviewed, and advertised in accordance with the procedures set forth in Chapter 18.68 of the Bozeman Unified Development Ordinance; and WHEREAS, the City of Bozeman Zoning Commission and Planning Board held a joint public hearing on Tuesday, July 18, 2006, to receive and review all written and oral testimony on the request for a text amendment; and WHEREAS, no written testimony was received prior to or at the public hearing; and WHEREAS, 14 persons spoke at the public hearing with one in support, two neutral with questions on the proposal, and 11 in opposition; and WHEREAS, the City of Bozeman Zoning Commission after additional consideration of the proposed amendment identified deficiencies in the proposed text amendment; and NOW, THEREFORE, BE IT RESOLVED, that the City of Bozeman":Zoning Commission, on a unanimous vote of 4-0, recommends to the Bozeman City Commission that text amendment application Z-06152 be revised and then given additional public consideration. Specific revisions suggested are: 1) Reduce percentage of required cost limited units from 25%to 10% 2) Raise threshold of participation from 5 dwellings to 1 O dwellings 3) Provisions for sustained affordability to allow full recovery of appreciation for that portion of the home which the person has individually paid for and recoupment of the subsidized portion back into the workforce housing program 4) Construction of workforce units to be proportional to that of market rate homes, i.e. nine market rate per one workforce unit 5) Review of proposed workforce housing implementation plans to stay within existing subdivision review process, eliminate additional review requirements 6) Minimum construction standards should focus on safely and adequacy, not replication of the market rate housing 7) A review of the program should be required 4 years after adoption and periodically thereafter 8) Options for alternate compliance should be provided to enable creativity in addressing housing issues, including cash-in-lieu 9) Cost of screening potential purchasers should not be borne by developer 10)Retain the existing Restricted Siz&Lot and Restricted Size Unit requirements, Sections 3&4 of the draft proposal. DATED THIS 18''DAY OF JULY 2006 Resolution No. Z-06152 Andrew C. Epple, Director JP Pomnichowski, Chairperson City of Bozeman Department of City of Bozeman Zoning Commission Planning and Community Development DRAFT MINUTES THE CITY OF BOZEMAN ZONING COMMISSION TUESDAY, JULY 18, 2006 7:00 P.M. ITEM 1. CALL TO ORDER AND ATTENDANCE Planning Board President JP Pomnichowski called the meeting to order at 7:00 p.m. and directed the recording secretary to note attendance. Zoning Commission Members Present Staff Members Present JP Pomnichowski Andrew Epple, Director, Planning and Community Nicholas Lieb Development Nathan Minnick Chris Saunders, Assistant Director, Planning and Peter Harried Development Jody Sanford, Senior Planner Visitors Present Kelly Marple, Recording Secretary Lyle Happel Allan Lien Tom Henesh ITEM 2. PUBLIC COMMENT (0-15 MINUTES) {Limited to any public matter within the jurisdiction of the Zoning Commission and not scheduled on this agenda. Three-minute time limit per speaker.} There was no public comment. ITEM 3. MINUTES OF JULY 5TI 2006 President JP Pomnichowski asked for any changes or additions to the minutes of July 5, 2006. None were offered, the minutes will stand as written. ITEM 4. PROJECT REVIEW A. Zone Map Amendment Application,#Z-06121 — (Norton East Ranch). A Zone Map Amendment requested by the owner ,Norton Ranch Inc., and applicant, Freund-Spencer LLC, represented by Thomas Henesh at Morrison Maierle Inc., to establish a Mixed Use municipal zoning designation of R-2 (Residential Two-Household, Medium Density District), R-4 (Residential High Density District), R-O (Residential Office District), and B- P (Business Park District) to241 acres. The Legal Description of this property is SEI/4 NWl/4, SW1/4 NE1/4, El/2 SWl/4, WI/2 SE1/4, T2S, R5E, Section 9, Gallatin County, Montana and is located on the current West Border of the City of Bozeman on Northwest side of Huffine Lane(Sanford). 1 DRAFT Planner Jody Sanford went over some of the details of this project, described the zoning surrounding the property, and listed some of the uses of the adjacent properties. Planner Sanford said staff found that zoning complies, therefore staff is recommending approval with contingencies listed on pages 8 and 9 of staff report. Planner Sanford stated that this project will include the annexation and if property to the south is annexed to the city, then zoning will be adjusted. Contingency 2 is recommending that logic is shown in how zoning is proposed. Staff received one public comment letter which addresses zoning and questions the city commission's ability to make educated decision regarding zoning. President JP Pomnichowski asked for questions for staff at this time. Nathan Minnick asked if they will have to show how buffer is used, to which Planner Sanford answered that Applicant will be required to supply an exhibit showing that the zoning makes sense. President JP Pomnichowski stated that the 12 criteria are being met, but in regards to granting a zone map amendment, facilities sewer and water, what is your opinion about extending that, will there be a greater cost to be borne by the city. Jody Sanford replied that the sewage drainage zone does not exist, and the developer will have to develop it up to the plant, expenses are to be borne by the developer, that issue is addressed in their terms of annexation. Tom Henesh with Morrison Maierle, Inc. stated that he appreciates working with engineering and planning staff and in regards to wetlands, they are concerned with neighbors to west and north and want to work with them and they will listen to neighbor's concerns. Mr. Henesh added that they will be meeting with neighbors to look at some concepts closer in detail. As far as the trunk main, Mr. Henesh assured Ms. Pomnichowski that she was correct, it is in Cottonwood right now, and it is the Valley West trunk main. Mr. Henesh added that they are out of that area and will be doing the trunk main to the north. President and Chairwoman JP Pomnichowski OPENED THE MEETING FOR PUBLIC COMMENT. Lyle Happel, 4700 Gooch Hill Road North, Bozeman, Montana, 59718 stated that he owns one of the conservation easements bordering the Norton East property. Mr. Happel handed out pictures of the property to show how it currently borders the easements, as well as pictures showing the property boundary of Laurel Glen. Mr. Happel stated that Laurel Glen is an example of where this has already occurred, and something different should have been done, some kind of buffer between agriculture easement land and conservation easement land. Mr. Happel stated that it should be some kind of buffer strip to alleviate problems between residential, office building and agricultural land, and the buffer strip should be a high consideration. Al Lien, 8507 Huffine Lane stated that he is the other conservation easement on the same strip, just a different corner facing the other way, and he concurs with Mr. Happel regarding finding better alternatives. Hearing no other comment, President JP Pomnichowski CLOSED THE PUBLIC COMMENT PORTION OF THE MEETING. President JP Pomnichowski returned discussion to the board. 2 DRAFT Nicholas Lieb asked if a buffer zone had been considered. Jody Sanford stated that she had tacked on an extra provision for a need to buffer the conservation easements to the west, and that it was hard to do anything with zoning. She added that they could maybe have a strip of zoning for parks and even though zoning wouldn't show it as a park, it could be. President JP Pomnichowski stated that in regards to the 12 criteria that must be met, she finds that Applicant has met them, and she is encouraged to see that there is sensitivity to the conservation easements. She stated as her main concerns the wetlands, the conservation easements to the west, and the water and sewer extensions. Ms. Po=ichowski stated that she likes the treatment along Huffine Lane, it is a nice transition from busy to mildly used homes. Nathan Minnick said that he feels the same, likes the transition into the surrounding areas. Mr. Minnick added that showing logical boundaries will help the commission decide on zoning, and he found that it looks good. Peter Harried asked staff as far as the R&H is concerned, what is the density to which Planner Sanford answered that that part of Valley West is not in place yet, she does not know the density, and there is no proposal for staff at this time. MOTION: Nathan Minnick made motion to approve BP with staff-recommended contingencies. Peter Harried seconded the motion. Motion passed unanimously 4-0. B. Zone Code/Text Amendment Application, #Z-06152—(Workforce Housing). A Text Amendment Application to revise local development regulations to remove requirements from Title 18 for restricted size lots and units and to create requirements in a new Title 16, Housing for provision of workforce housing (Saunders). Nathan Minnick asked how this would prevent overcrowding. President JP Pomnichowski said that in terms of providing health and general welfare, a lot of these things will come when we see zoning applications and can apply policy then, she added that she believes the policy does not meet the 12 criteria, but does not fail them either. Nicholas Lieb asked if they were voting for some kind of change to the zoning, to which Chris Saunders answered that the most direct impact on the zoning board is that if we remove restricted sized lots, that existing language will be supplanted by housing language. Nicholas Lieb asked where RSL is being seen currently, to which Chris Saunders pointed out Meadow Creek on South 19`}', Flanders Creek, and others, and stated that several are coming online in the next 3-4 months. Director Epple added that there were probably around one hundred RSLs. Chris Saunders said that RSL provisions were from the Bay Area, and were part of 12 major strategies in dealing with affordable housing. Peter Harried said that from a zoning standpoint, he did not feel there is much the Zoning Commission can do, and that he believes RSLs will create more affordable housing; it is the cost of land that is driving the cost. Mr. Harried added that as a Bozeman resident and real estate agent, he sees a need for affordable housing here because he sees people come in to buy a house, and find a better deal elsewhere and move there. He believes that the developers who take a lot of the risk are going to take the brunt of the payment, and there are better alternatives. Mr. Harried added that he thinks this will be overturned in two years, and agrees that a group of eight people stuck in a room to determine the best route would be a great idea, and that the document from the commission could have negative effects. 3 DRAFT President JP Pomnichowski asked if there were any changes to the ordinance, and stated that the joint meeting covered a lot of aspects that did not need to be repeated here. Nathan Minnick queried staff on how someone would receive a housing subsidy, to which Planner Saunders answered that there was currently a commission with HRDC which based their decisions on income, duration of residency in the city, bonus points for family size, and said that it was a lottery type of deal. Director of Planning and Community Development Andrew Epple stated that typically it was people who have been through a first time homebuyer course and other programs who were eligible. Nathan Minnick asked for direction on how to shape a motion following what was discussed earlier that gave the developer a chance to do his own thing and tied into a waiver. President JP Pomnichowski stated that Brian Caldwell had made a motion to forward recommendations to be considered for the policy, therefore that's what she would recommend. Director Andrew Epple agreed and stated that it would give them advice and guidance, but would allow the Planning Board to make the call. MOTION: Nathan Minnick made a motion to forward recommendations, the consensus of the planning board, developers to have the freedom to do their own thing, and it should not be the builder's responsibility to pay for screening. Nicholas Lieb seconded the motion. President JP Pornmehowski asked for discussion on the motion, and said that the Zoning Commission's scope is limited, and she finds that it meets the 12 criteria. MOTION: Nicholas Lich made a motion to retain Sections 3 and 4 regarding RSI,s. Nathan Minnick seconded the motion. President JP Pomnichowski asked for discussion on amendment to RSLs. Peter Harried stated that in his evaluation of the market,he thinks there will be a flood of affordable houses, therefore RSLs will not be needed. President JP Pomnichowski then asked for a vote on the motion. The motion passed unanimously 4-0. President JP Pomnichowski then called for a vote on the motion on the table regarding builder creativity. Nathan Minnick asked that they amend the language to read developer, not builder, language was agreed upon. The motion passed unanimously 4-0. C. Zone Code/Text Amendment Application, #Z-06161 — (Board of Adjustment). A Text Amendment Application to revise local development regulations to include an independent Board of Adjustment with defined duties and integrate them into the regulatory program. Also to add prevention of nuisances to purposes of Title 18, and to make newspaper noticing for initial zoning in conjunction with annexation conform to State law (Saunders). Planner Chris Saunders went over the elements of the proposal, including the prevention of nuisances, and modifying noticing requirements for initial zoning with annexation. He stated that current state law states one notice in newspaper,but they are currently running three ads in the newspaper as well as posting a sign. Staff believes it meets criteria. 4 DRAFT President JP Pomnichowski asked for questions for staff at this time. JP Pomnichowski asked if the newspaper notice is the only thing changing, to which Planner Saunders affirmed. Nathan Minnick stated that the commission would not have to spend time on smaller projects and would be able to focus on the bigger ones because items will go to the board of adjustment instead. President Pomnichowski addressed Shawn Becker and stated that he has represented staff and applicant, to which Mr. Becker replied that yes, he was a member of the city commission, but was the applicant in this case. He added that there will be a need to have oversight of this board because they will have a tremendous amount of authority, and that this could be a divisive issue in the community, i.e., quorums not being met and conflict of resolution not being resolved. Peter Harped asked for clarification on whether it would be similar to this committee. Mr. Becker stated that it would be judicial, would have a legal obligation as long as they are not arbitrary and capricious, and that the board would make recommendations. Nicholas Lieb asked on what basis would these board members base their decisions on, to which Mr. Becker answered that they would be representing the public as a whole. MOTION: Peter Harped made a motion to recommend approval of file number Z-06161, Nathan Minnick seconded the motion. JP Pomnichowski called for a vote on the),notion at this time, motion passed unanimously 4-0. ITEM 5. ADJOURNMENT There being no further business to come before the City of Bozeman Zoning Commission, President and Chairwoman JP Pomnichowski called for adjournment at 11:37 p.m. JP Pomnichowski, President, Andrew C. Epple, Director, City of Bozeman Planning Board and City of Bozeman, Department of Planning & Zoning Commission Community Development *City of Bozeman Planning Board meetings are open to all members of the public. If you have a special need or disability,please contact our ADA Coordinator, Ron Brey,at 582-2306(voice)or 582-2301 (TDD). 5 DRAFT MINUTES THE CITY OF BOZEMAN PLANNING BOARD TUESDAY, JULY 18, 2006 7:30 P.M. ITEM 1. CALL TO ORDER AND ATTENDANCE Planning Board President and Zoning Commission Chairman JP Pomnichowski called the meeting to order at 7:30 p.m. and directed the secretary to record the attendance. Board Members Present Staff Present Visitors Registered JP Pomnichowski Andrew Epple, Planning and Community Tom Henesh Erik Henyon Development Kanako Vance Nathan Minnick Chris Saunders, Assistant Director, Mike Jarrett Peter Harned Planning and Community Development Mary Martin Randy Carpenter Kelly Marple, Recording Secretary Heidi Graf Nicholas Lieb Julie Langaker Dave Jarrett Gwenn Stokoe Brian Caldwell Richard Reid Carol Roberty Mare Boustead Steve Kirchhoff Dani Kamp Mike Hope Dennis Rowe Edward Sypinski Jeremy Shea Lyle Happel Vicki DeBoer Allan Lien Rick Klein Evan Schoepke Marcia Youngman ITEM 2. PUBLIC COMMENT (0-15 MINUTES) {Limited to any public matter within the jurisdiction of the Planning Board and not scheduled on this agenda. Three-minute time limit per speaker.} Evan Schoepke, 1711 South 1 Ith Avenue, distributed information to the Planning Board and stated that he was a student at MSU who recently visited several cities in Europe as well as the city of Los Angeles. Mr. Schoepke stated that from his travels he had learned some lessons on cities and observed what worked and what didn't work. Mr. Schoepke went on to say that after a trip to Olympia, Washington, he was impressed that they have bio-diesel buses, a diverse culture, a high level of activism, and a sense of community and pedestrian culture. In regards to city planning, Mr. Schoepke stated that he had found a book entitled "BcoCities"which he encouraged the Bozeman Planning Board members to read because the book contained ideas on how to avoid sprawl, how to make more efficient communities so less cars are used, and how to create thriving pedestrian communities. 1 DRAFT ITEM 3. MINUTES OF JULY 5TH, 2006 President Pomnichowski called for corrections or additions to the minutes of July 5, 2006. The minutes were approved and will stand as written. ITEM 4. PROJECT REVIEW Workforce Housing Text Amendment,#Z-06152—(Workforce Housing ZCA). A Text Amendment Application to revise local development regulations to remove requirements from Title 18 for restricted size lots and units and to create requirements in a new Title 16, Housing for provision of workforce housing(Saunders). Chris Saunders presented the application and went over some of the stages the application has been through. Planner Saunders described state laws which applied to this amendment, and stated that the recommendation from staff is that a public hearing be held where the public could weigh in on this issue. Applicant Mary Martin,member of Community Affordable Housing Board came forward and stated that she was there to provide education regarding a workforce housing ordinance hearing being reviewed this evening. Ms. Martin then did an introduction and history of affordable housing. Theresa Martin went over the draft highlights as previously handed out to members of the board. Another member of CAHAB, Vicki DeBoer,then presented the benefits of homeownership and stated that she is also with AWARE, an organization which assists people with disabilities. Ms. DeBoer stated that acquiring a home was a wealth- building mechanism,then went over some of the alleged social benefits of homeownership. President JP Pomnichowski then asked for questions of applicant from board members,hearing none, she OPENED THE MEETING FOR PUBLIC COMMENT. Mike Jarrett, 845 W. Arnold stepped up and stated that he was a homebuilder in Bozeman. Mr. Jarrett continued by saying that he thinks this amendment is a bad decision because it stated that 25%of lots in any subdivision need to be constructed before commercial lots,therefore the houses that he builds are too expensive because he has to subordinate 25%. Mr. Jarrett then gave the example of Montgomery County, where inclusionary houses were built,which resulted in having no more land to develop. Mr. Jarrett ended by saying that he would probably build in areas other than Bozeman if this were to pass. Mara Boustead, 4239 E. Baseline Road, stated that she was a homeowner in this valley for 16 years, she can't afford health insurance because taxes have tripled and can't afford to do maintenance on her house. Ms. Boustead asked what would the procedure be if someone moves into these "affordable houses" and then can't afford the maintenance,who will pay for the maintenance when they move out, and how can we ensure that our taxes won't have to pay for this. Ms.Boustead also posed the question of why the government should be responsible for people who cannot afford a house, and went on to say that the statement by a CAHAB member stating that there is less teen pregnancy because of homeownership is ridiculous. Ms. Boustead is planning on moving away from Bozeman because she cannot afford to live here anymore, and ended by saying that when she got out of college, she had to work, save money, and buy her own home, and if this amendment passes it will be enhancing entitlement by giving people homes. Jeremy Shea, 176 Blue Roan Lane,stated that he was against inclusionary zoning because he believes it is another form of subsidized housing, and will cause housing costs to go up across the board. He 2 DRAFT added that it will force developers(if they choose to develop here)to increase lot costs, builders will increase their costs, supply will dry up,prices will go up, and Bozeman will end up with more expensive houses. He ended by saying that this will increase costs for everyone just to benefit a few, and that is basically a lottery system that won't work. Terry Jones,residing at 22"d and 24"'Avenue located in HRDC Land Trust, stated that when he moved to Bozeman he noted that the wages are low and cost of living is higher, and he had to take a cut in pay. Mr. Jones stated that he had bought a home through the HRDC in 1998, and if it were not for affordable housing through the HRDC,he would not have been able to buy the home. He ended by stating that this program is for people who work at wages well below the median. Mr. Andrews,4202 Graf Street,stated that affordable housing is a noble cause which should empower people to get a home using down payment matching programs or other methods, and that inclusionary zoning is not the way to do it. Mr. Andrews encouraged tonight's presenters to do their homework and see if this program is feasible. Mr. Andrews posed the question of whether it is right for a small group of workers to pay for this, when it is a citywide need. Mr. Andrews suggested that big retailers contribute to a fund to make a down payment matching fund, and raised the question of who is on the list to receive this benefit, and how do we ensure that these people are working hard to earn what they receive. Mr. Andrews stated that his wife is a realtor and he asked her to research how many homes are under currently for sale in Bozeman for under$200,000, and she found 36 homes. Mr. Andrews asked if the percentage of affordable homes for sale meet the existing need, and if we do determine we need affordable housing-this is not the way to go about it Rick Klein,Bozeman, started by agreeing with what the mayor said earlier that day,this is subsidized housing,not affordable housing. Mr.Klein would like to know what would happen if a homeowner had a catastrophic happenstance, who pays for the housing then? He would also like to know what happened to the money from big box stores, and asked if partnering with Habitat for Humanity had been considered. Mr.Klein ended by stating that he is not opposed to affordable housing,be he does not believe in having housing subsidies be on the backs of taxpayers. Eric Rosette, 2200 W. Dickerson, #67, stated that he is a homebuilder in Bozeman, and if inclusionary zoning does pass and the costs are passed down and lots become more expensive,he and his company will not build here anymore and will go where affordable housing will be feasible,therefore,the number of building permits in Bozeman will go down. Jennifer Owens, 35 W. Clara Court, stated that she was a realtor with ERA Landmark and has worked with large numbers of people eligible for affordable housing. Ms. Owens asked if the programs available are being used, she believes that supply and demand will be raised, and that we should look at programs already in place and use them instead of creating new bureaucracy. Scott Teal, lives in Moab Utah, said that he would like to iterate what he has learned,he met a foreign shoowner who told him that this country has invested in him, and these are not subsidies or entitlements,but investments in people. He added that if people question the social value of home ownership, they are deluded and he encourages this program to happen. Dan Kamp, 24 Riverside Drive, stated that he was on two affordable housing task forces in the late eighties and studied many of the same issues and concerns here tonight. Mr. Kamp said that he would like to reiterate what he has learned, especially regarding affordable housing he has done for Dab Dabney,the Comstock Apartments, and MSU. Mr. Kamp said that there are ways to maximize efficiency of construction and supply affordable housing, and that he was a housing designer and two ways to create affordable 3 DRAFT housing were to lower costs of materials, lessen designing, zoning, and planning requirements, and to subsidize the units themselves. He stated that both of these avenues need to be explored completely, and if we require the developer to subsidize part of the project, the project will be sold to higher income anyway because they will be able to afford it. Mr. Kamp said that he is not opposed to subsidizing housing,but there needs to be an equitable subsidy,you cant ask homebuilders to bear the cost,need the whole community to sign on for it and pay for it. Mr. Kamp continued by saying that we should not take one part of the industry and make them pay for it, and that his cant be driven by one small group or a political entity, we need a way that is equitable for everyone involved. Richard Reid, 1802 W. Lincoln, stated that you should work for what you get, and if someone stands around with their hand out,they are nothing but a beggar. Shouldn't ask City of Bozeman to pay for your home, should go somewhere else where it is feasible to own a home. Paul Bussey, lives elsewhere but his mail comes to Four Corners. Mr.Bussey said he would like to know if cost offsets are in the proposed regulations, and if for each affordable unit that they provide, what is the likelihood that given the current trends in density,those will be realized, and how much of a price reduction will there be when there is increased density. Kay Embry, 5 W. Belleview Circle, asked if we have an affordability housing issue, and said that we are talking about subsidized housing. She added that the HRDC showed 99 units under$200,000, and if people can't afford to live in the City Of Bozeman, there are options elsewhere such as Belgrade, Gallatin, Four Corners, and Manhattan. Ms. Emery stated that she bought a house here after coming up with a creative way to afford it, and that there are ways to improve wealth, it just takes time and work. She added that home ownership is a privilege,not a right and she would like to define if we have an affordable housing issue here. Ms. Emery added that to improve supply, developers will have to sell lots, and that the cost of land is what is driving up price of housing. She stated that since the affordable housing has to be built first on the lot, she is not sure what lending institution will lend money for that kind of set up. She would also like other options to be explored, such as manufactured homes, incentives to builders to create whatever affordable housing is,to lessen the burdens on the developers. Hearing no more comment, President and Chairwoman JP Pomnichowski then CLOSED THE PUBLIC COMMENT PORTION OF THE MEETING and returned discussion to board. Ms. Pomnichowski invited staff or applicant to address the questions posed. Tracy stated that regarding sprawl, according to studies,this program does not increase sprawl and the programmatic questions that came up such as income guidelines and following a board of guidelines, the hope is that through the use of this program we will be able to provide assistance at a deeper level. Tracy stated that she teaches a homebuyer instruction course which teaches how to get down payment assistance and how to manage money, and it is getting tighter to find a family earning less than the 20%median. She added that if these homeowners miss a payment or can't maintain their house,they are a homeowner and if they don't take care of it, they don't build equity, it is not a situation where the community is taxed. In regards to what happened with the big box money, it was split, $100,000 to Mr. Dabney, the remainder was split between the downtown connectivity,multi-family housing, %for homeownership and down payment assistance. Addressing the Habitat for Humanity question,because of costs they haven't been able to build here since 1996. Addressing the question asking what is an affordable house, there is a range of prices to build a strong community, the communities we compete with(Missoula)are more attractive because house prices are higher here, so people make the choice to move there. There has been houses provided,but unfortunately their prices increase because supply is low and demand is high. 4 DRAFT President JP Pomnichowski asked Staff to address public questions. Director Andrew Epple stated that he has worked with this issue for 15 years, as well as Mr.Kamp,and some of the strategies included trying to reduce development costs, sidewalk setbacks were changed to build on smaller lots, 25 feet to 15 feet for same reason,to build more efficiently. Street standards have changed, instead of 37 feet, can be as little as 31, less asphalt, less street construction, all should reduce house costs. Director Epple described the "Top of Pile Policy", where affordable housing projects go first. Park land can now be dedicated,higher density projects were being penalized, and could not build out, once you achieve 12 units per acre, do not have to provide park land. Some of these issues they have been able to implement, and as Kate Embry mentioned, the real issue is the price of land. The City Of Bozeman reduced its impact fees,but this did not reflect a reduction in housing costs. The forces driving up the costs are numerous, and the steps they have taken have not made an effect. Chris Saunders described some of the tools to be used, such as the existing programs in place, regulatory funds, subsidy-type funds, we act as a sponsor-type agency, so some tools are on the table. In regards to the question of manufactured housing, the City Of Bozeman allows manufactured housing in any and all districts,but there has not been a strong demand for those, from the subdivision side, there have been a few in last few years,but not a lot. That is from the public side,question of density bonus, language as presented in draft ordinance is essentially same in CAHAB proposal,unable to answer questions Mr. Bussey asked. Mr. Saunders remarked that the questions were good ones, and in regards to the market result of increased density question,he does not have an answer,market side would be able to answer. Steve Kirchhoff stated that as City Commission liaison,in his view, as the commission stands, the majority on the commission is in favor of moving some of this program forward. The goals of the commission are not to establish a government handout system,just to acknowledge what is happening in the City Of Bozeman. The university is looking at what people can afford and what is available, the belief of commission is that people who make community work should have a decent shot. Fear in the industry that this will cause sprawl, and people just barely in the market will have to absorb cost. We don't know for certain what is going to happen. Brian Caldwell stated that is an important community-wide issue, and the burden associated with providing assistance should be paid for every member of community,not just one specific group. His personal belief is that a real estate transfer tax(could be as low as a t/4 point)would be beneficial, and if a fund of 20 million dollars was generated, it would be borne by everyone and would limit the exaggerated prices. The important part is that it needs to be equitable, it is an assistance to get affordable housing,but the gain at any given period is that there is a payback into the program, if there is a desire in this community to have affordable housing,he thinks its feasible. The way the current draft is written, the number is 10%, 25%of workforce housing is a realistic number, the term should be either in perpetuity or 30 years, in regards to the gain on the sale of the home—he doesn't believe that it should involve the subsidy,the notion of the windfall takes away from the pride in ownership that was talked about tonight. The issues of the offsetting of the costs, densities are getting increasingly dense and there are incentives for this,need to address that we have given the incentives away. The most important thing is the timing of the adoption of the affordable housing units, size and scale should be established, if the neighborhood has a mix of units, reasonable expectations of sizes should be met. The current mechanism for affordable housing is unjust, should be borne of entire community. Dave Jarrett stated emphatically that we do not have an affordable housing problem in Bozeman Montana now to date,period. From January 1 st until today,he pulled the numbers, and 160 were sold at an average price of$163,000,the median was$172,000. That's 156 that have sold this year. We are doing 300 per year. There are 30 on the market right now with a median price of$175,000, average$163,000,at least 20-30% are 3 bedroom 2 bath units. Something that is driving this, maybe HRDC, is pushing this for a 5 DRAFT reason or another. Mr. Jarrett would recommend that everybody on this board make a comment tonight, think about the input from the public, look at history of inclusionary zoning in other states that have had this and where it has worked and see what has truly happened in other communities. This will create a tremendous problems for the city to make work. Let's go back and get some concrete comments regarding this, such as what happens if someone misses a payment and defaults, what happens to that deed restriction, who is going to buy it, is the bank going to take it back? There are many legal problems inside this document that need to be considered. Erik Henyon stated that he has a problem with the information from the Bay Area Economics presentation last night. Who pays for inclusionary units,builder may see an increase in lot price and small returns, it is simple economics—price goes up, gets passed on to consumer, will be absorbed by homeowner. In regards to the landowner bearing most of the cost, they are not economists,how do they know. Mr. Henyon stated that they used California in many models, and California has the lowest home ownership in the U.S.with 48%. Inclusionary zoning causes fewer homes to be built,Mr. Henyon went over several slides presented the previous night and indicated where he found them to be factually incorrect. Mr. Henyon stated that the UDO should be enough, it is unneeded to add another mandate. He stated that the numbers look good on the slides,but facts show that they are incorrect. Mr.Henyon stated that this should not come at the expense of the community, if building permits go down,how much tax revenue are we going to lose in the city, won't have the tax support to provide health and wellbeing. If we don't create revenue, it is obvious that building permits are going to drop, and revenues will drop. Caren Roberty stated that she would like to focus on the ordinance that Mr.Kirchhoff suggested. Mike Hope asked what will happen if housing market goes in the other direction and prices start to fall. He brought up the interest rate equation that is going on right now, and what happens if you can get enough low interest, or a better source for down payments. Mr. Hope stated that he employs 100 people in town,there is 2%unemployment, which has nothing to do with prices of homes in Bozeman. Mr. Hope said that if someone wants to build a million dollar house and doesn't want to live around anybody, he should be able to,he doesn't think you can force anyone to live in a multi-unit complex. He said that if you get people into home ownership,but then cap it,then you are holding them back,not allowing people to get an appreciation cycle and it is a huge hindrance,keeping people where they are at. Shouldn't tell people what they are going to make,not the American way. Could start having losses,pent up demand and not enough supply,'can point fingers all over,huge amount of lots are becoming available,have to look into down payment assistance programs,not opposed to 1%transfer tax, sprawl is a legitimate concern. Steve Kirchhoff made the comment that they are going to pass this, and he doesn't think the city commission is going to listen to a word we say here. Edward Sypinski stated that we are responding to a real housing need here,what kind of character of community are we trying to form here, and who do we want living in our community. Not sure this is a slam dunk for city commission to pass this, and is it appropriate for city to have a affordable housing ordinance. Maybe can do this on an ad hoc basis. He questioned what our charge/responsibility is as an advisory board. Erik Henyon stated that the solutions are not in creating more regulations and mandates, what are the real issues, affordability issues,wages are not commensurate, can we look at increasing wages, looking at tax abatement for companies,but not this policy. Carol Roberty asked how that can be done and flailed her arms around vigorously. 6 DRAFT Mike Hope stated the thing that has increased the fastest in the hospitality industry is employee cost, can't hire anybody at$8.00 per hour, can't raise prices fast enough to keep up with costs. Our profits as a percentage have shrunk in last four years. Salaries have been driven up, we have created tons of service industry jobs,need to figure out how to better drive people on the bottom side so they want to make more money. 10% of his employees don't care if they work or not. How do you negotiate with a flawed policy, need to throw this policy out and come up with better ideas by sitting down and coming up with a better plan. Think we can agree on some ideas outside this policy. Randy Carpenter thinks there are some problems, as Chris Saunders and Andrew Epple were describing earlier, there is an inequality of income that creates a problem, which will always be there. San Francisco study should be thrown out because methodology is so flawed. Pass on cost to the other 75%,if we could do that, we would already be, flipping will be less attractive,this won't solve the problem,just one more tool, this will have an impact on land values. If return of 3%is too low, people are not forced to do it. One concern Mr. Carpenter has, if the builder has equivalency that is required,hopes that could be relaxed somewhat. Mr. Carpenter has some questions about what happens in case of foreclosure, dedication of land in the case of foreclosure. Real estate tax would raise a lot of money, don't think it will have a lot of impact on sellers. Brian Caldwell said that the issue of sustained affordability, the cap of what someone could gain from selling their property,there should be no limit, they shouldn't financially gain from this program, should go to other modes of affordable housing. If the home provided through this policy is a$300,000 home, and 50% of home is financed/paid for, as a recommendation to CAHAB,the way to maintain sustainability, limit the gain made by homeowner. Major concern is section C -subject to the whims of nonprofits, to make it more equitable, take to heart that you profit from the part you participate in, and not the community's investment in you. President JP Pomnichowski began by saying that she agrees with a lot of what's been said,we need a four-pronged approach to affordability. Mortgage assistance, qualification, equitability, a lot of aspects not in the jurisdiction of the planning board. Board can help shape the policy that must work with the rest of this, once a policy is passed, it won't be the end all be all,more participants will be involved. Struck by who is not in attendance tonight. I don't know anyone who hasn't rented first,then ought a shoebox house,one bedroom, or studio units. If someone needs a leg up in this market to get into something, there are some tangible numbers we can toss around. Her suggestions would be—the city requires 10% of each development be put into restrictive-sized lots, that has been done,no restricted-sized units put on restricted- sized lots. Chris Saunders said that there has been a couple in the last couple of months, and in a year to 18 months,building permits are starting to be issued. President JP Pomnichowski stated that she doesn't think we should demand of one industry 25%,if feasible,we should stay at 10%. She stated that there should be a review of this policy on a periodic basis, at least a four year review, so if the market corrects itself and this is no longer needed, a review can be made. 3% cap not enough to gain equity,President JP Pomnichowski said that she likes what other board members have said to solve that. Dave Jarrett then suggested we go item by item and vote on each. President JP Pomnichowski asked if there were any objections to that suggestion. 7 DRAFT Mike Hope said that he would like to make a motion that the city commission can do what they want to do. We were a unified board last time and the commission threw out everything agreed upon. Thinks affordable housing is valuable,but doesn't think we will agree. Whether commission agrees with UDO or not, it's a game of who can stall the most. Mike Hope made a motion to approve Z-06152, Erik Henyon seconded. Brian Caldwell stated that he thinks it would be sloughing off responsibility of the board if this isn't given full purview of their time. The value of their opinion relative to the commission, if we think the current document is amiss,we should try and come up with alternatives. Dave Jarrett stated that he doesn't think we have an affordable housing problem, it is irrefutable that there is no problem. Erik Henyon said that there are alternatives out there, this is not the solution,and he can't stand behind this at all. Would like to see more community involvement behind this,this is a subsidy that will enable people and not let them grow as much as they can. Nathan Minnick stated that this was trapping builders, and we are not addressing their freedom,. President JP Pomnichowski asked for further discussion from the board. Brian Caldwell stated that our task as board is to review this proposal, even with the best edits it is not worthy of approval. Some form or shape of this will adopted on August 7. Mike Hope stated that the city commission's elected officials are elected by public,if they make right decisions,they will get reelected, if not,they won't. Thinks that if this passes,people will get more involved in voting. Won't be on a board that is a rubber stamp. Mr. Hope offered the solution of getting diverse officials in one room, with a representative from each industry to be a part of it. Carol Roberty stated that this is a complex issue, and when you make one change, it will affect a lot more things,it is difficult tonight to give rationales of why they arrived on their decisions,difficult to explain why they reached their decisions. MOTION: President JP Pomnichowski asked for further discussion, hearing none she asked that the Planning Board members only vote on a motion to approve. In favor were Steve Kirchhoff, Carol Roberty,Randy Carpenter, Edward Sypinsky, opposed were Brian Caldwell,Dave Jarrett, Erik Henyon, JP Pomnichowski, and Mike Hope. President JP Pomnichowski asked for discussion on the second motion. Brian Caldwell described the forwarded motion—Part one is that 25% shall go to 10%,threshold shall go to five, sustained affordability is achieved by not capping the potential return-but mortgage, timing of the construction of affordable housing shall be concurrent with marketplace homes, the issue of the review of an individual plan shall remove the sentence that a nonprofit can weigh in. The size of the unit should be specific to what is considered a safe home to provide adequate housing. President JP Pomnichowski would like to offer an amendment to Erik Henyon's motion—a provision for a policy review every four years and changes to the policy based on that review, and a consideration for one bedroom and studio. 8 DRAFT Erik Henyon stated that he would like to withdraw his motion at this time. President JP Pomnichowski stated that she will withdraw reference to one bed and studio. Randy Carpenter stated that he would like to ask staff if they believe the market is cooling off, as well as the feasibility of studying this every two years,not a full blown study,just some review of this every two years. Dave Jarrett thinks two years is equitable because of market changes. Chris Saunders stated that the point is well taken that there is a certain lag time before it takes effect, four years would be enough on initial implementation period, and added that there could there be a program to monitor this. Director Epple stated that reporting to the commission is going to happen regardless. President JP Pomnichowski called for a vote,those in favor were Edward Sypinski, Steve Kirchhoff, Carol Roberty,Brian Caldwell,Randy Carpenter, and JP Pomnichowski, those opposed were Dave Jarrett, Mike Hope, and Erik Henyon. MOTION: Carol Roberty made a motion stating that as homes sell, the funds will be recaptured. Edward Sypinski seconded the motion. Brian Caldwell stated that those donations to affordable housing should go to affordable housing, and it should go toward down payment assistance plans and programs already on the books,he would not support this motion. Chris Saunders asked for clarification from Ms. Roberty in regards to the intention for the repayment, would those funds go back to the original development or a subsequent unit. Carol Roberty responded that a reimbursement for the 10 homes they built,they would get back their money when the homes sells. Chris Saunders then asked about the monies which are spent from dollars in hand today to reduce amount of subsidy from builder, city recoups a portion of that,then that money would help reduce the amount of subsidy on a home being built at that time. Carol Roberty stated that after houses are built,they will reimburse the builder. Brian Caldwell said that that defeats the purpose of perpetuity. Steve Kirchhoff said that he is not sure he follows it, and not sure why it is better than doing what Brian Caldwell said earlier(putting money back in programs). Carol Roberty said that it was widely suggested to her by builders that contacted her, that this will help recoup quite a bit of money,no sources to building fees and impact fees. Dave Jarrett asked stated that they would have difficulty tracking down the developer at a later date. Caren Roberty stated that when the homeowner sells the house,they will have a kitty built up. Carol Roberty then withdrew her motion. Edward Sypinski seconded. President JP Porn ichowski described the motion on the table, to forward the recommended changes to the policy as described by Brian Caldwell. 9 DRAFT Erik Henyon stated that he has a problem with the fact that Ms. Roberty works with CAHAB, and believes there is a conflict of interest. He added that it is inappropriate for Ms. Roberty to be voting on this and she should step back from making motions and commenting. President JP Pomnichowski stated that she had previously asked for the city attorney's opinion on this, and no conflict exists. President JP Pomnichowski then asked for discussion on the motion. Director Epple recommended approval of the workforce housing ordinance. Mike Hope stated that this whole process was written to move it down to where you want it to be, it was purposefully inflated, and he believes that is dishonest and he refuses to participate in this process. President JP Pomnichowski asked him to remain and participate, to which Mr. Hope stated that he would not because it is a sham,numbers were overwritten on purpose, and he will watch from outside and not participate. Mr. Hope then left the board table at that time. President and Chairwoman JP Pomnichowski called for order at that time. Steve Kirchhoff said to call Jeff Campbell of MSU and the CEO of Deaconness Hospital and the City Commission to get their opinions on workforce housing. If people are going to say we need a task force, or if you want to propose an alternative,you should. Brian Caldwell doesn't like this ordinance,but he is trying to get people to agree. Erik Henyon stated the he will personally bring an alternative proposal tomorrow. Dave Jarrett mentioned that as he stated earlier,he must leave at 10:30 p.m. and he is not dropping out. Brian Caldwell stated that he believes their feelings have clearly been heard, and the majority does not want to recommend this plan, don't need to be sold down the river on all the things, but input is our duty, so we should vote. President JP Pomnichowski called for a vote at this time,those in favor were Edward Sypinski, Steve Kirchhoff, Carol Roberty, Brian Caldwell,Randy Carpenter, and JP Pomnichowski,those opposed were Dave Jarrett and Erik Henyon. ITEM S. OLD BUSINESS None ITEM 6. NEW BUSINESS None ITEM 7. ADJOURNMENT President JP Pomnichowski stated that the Planning Board will adjourn at this time, Zoning Board will remain. There being no further business to come before the City Of Bozeman Planning Board, the meeting was adjourned at 10:37 p.m. 10 DRAFT JP Pomnichowski, President, Andrew C. Epple, Director, City of Bozeman Planning Board & City of Bozeman, Department of Planning & Zoning Commission Community Development *City of Bozeman Planning Board meetings are open to all members ofthe public. If you have a special need or disability,please contact our ADA Coordinator,Ron Brey,at 582-2306(voice)or 582-2301 (TDD). 11 STAFF REPORT WORKFORCE HOUSING TEXT AMENDMENT FILE NO. Z-0 152 Item: Text Amendment Application #Z-06152. To revise local development regulations to remove requirements from Title 18 for restricted size lots and units and to create requirements in a new Title 16, Housing for the provision of workforce housing. Applicant: Bozeman City Commission. PO Box 1230 Bozeman, MT 59771 Date: Before the Bozeman Zoning Commission and Planning Board on Tuesday, July 18, 2006, at 7 p.m. in the City Commission Meeting Room, City Hall, 411 E. Main St; and before the Bozeman City Commission on Monday, August 7, 2006 at 7 p.m., in the Community Room, Gallatin County Courthouse, 311 W. Main St. Report By: Chris Saunders,Assistant Director Recommendation: Conduct public hearing and receive public comment PROJECT LOCATION The proposed edits are applicable throughout the legal boundaries of the City of Bozeman as a modification to the overall development regulations. Primary applicability would be to areas zoned for residential uses. In the case of protest against these changes signed by the owners of 25% or more of either of the area of the lots included in the proposed change; or those lots 150 feet from a lot included in a proposed change, such amendment may not become effective except upon a favorable vote of two- thirds of the present and voting members of the City Commission. PROPOSAL The Community Affordable Housing Advisory Board (CAHAB) advises the Bozeman City Commission regarding affordable housing issues. In early 2006 the CAHAB addressed the City Commission on the issue of workforce housing and presented a proposal. After discussion over several weeks, the City Commission directed the preparation of an ordinance which reflected the CAHAB proposal. The proposal has been brought forward for public comment and discussion through the ordinance review process. The text is attached to this report. The proposal has several components and affects two different titles in the municipal code. As portions of the proposal affect Title 18, Unified Development Ordinance, the proposal has been directed to the Planning Board and Zoning Commission for review and comment. #Z-06152 Workforce Housing Text Amendment Staff Report 1 Sections One and Two of the draft proposal create the new Title 16, Housing. The proposal includes a requirement for the provision of a defined percentage of homes for purchase in new development to be made available to households meeting defined income limits, sets applicability of the new regulation to development, provides alternate means to comply with the requirement, allows for individualized plans to comply with the standards, creates density bonuses for compliance with the regulations, establishes construction and character of dwelling unit standards, requires owner occupancy of the affected dwellings, establishes limits for appreciation to retain affordability, establishes requirements for buyer selection and screening, requires construction of affordable units prior to other units in a subdivision, requires an affordable housing plan, and requires disclosure of the location of affordable units to all purchasers. Sections Three and Four revise Title 18, Unified Development Ordinance, to remove some existing regulations and incorporate the requirements of Title 16 by reference. The revisions would delete Section 18.42.180, BMC and requirements for a percentage of subdivided area to be provided as minimum sized lots or defined alternatives, and remove a mandatory minimum density requirement. The revisions would further delete Section 18.16.030.C, BMC which establishes maximum area requirements for homes subject to Section 18.42.180,BMC. REVIEW CRITERIA Changes to zoning standards require evaluation of the proposed amendment with respect to the required criteria set forth in state statute in Section 76-2-304, MCA, presented as follows. A summary of staffs evaluation follows in the discussion below. A positive response for all criteria is not required for approval. 1. Is the new zoning designed in accordance with the growth policy? The Bozeman 2020 Community Plan was developed over the period of 1999-2001, and was adopted in October 2001. Chapter Five of the growth policy addresses housing. It summarizes the number of housing units, construction by number and types, value, and other descriptive information. Section 5.1 specifically discusses housing affordability. The section notes that cost of housing increases since 1990 had materially outpaced increases in household income for both rental and for purchase housing. The chapter includes goals, objectives, and policies to be pursued to address housing issues. These are listed on pages 5-13 through 5-16. Not all are specifically intended to address income-qualified affordable housing but rather apply to all housing. The City has taken several actions to help ensure an adequate supply of housing such as being active in annexation, facility planning, and continuing a diverse zoning program with emphasis on providing for attached housing. These have advanced the goals and objectives. Some policies call for specific actions. Policy 45) Conduct an affordable housing needs assessment at least every five years, and prepare and implement an affordable housing strategic plan. Policy 47) Ensure that the zoning ordinance includes both minimum and maximum residential densities. #Z-06152 Workforce Housing Text Amendment Staff Report 2 Policy 45 contains two parts. The City contracted with Bay Area Economics to conduct an assessment in 2002. The City Commission adopted a resulting affordable housing policy covering multiple aspects of housing in 2003 as Resolution 3630. Policy 47 has been implemented. The proposed revisions to Title 18 would remove the existing minimum density requirement for most of the community. A minimum density requirement would remain for the R-4 Residential High Density District. 2. Is the new zoning designed to lessen congestion in the streets? The proposed edits do not address items that would impact this criteria such as street standards or parking requirements. 3. Will the new zoning promote health and general welfare? Health is advanced by having adequate housing. The proposed edits have to do primarily with how housing for certain income ranges is provided. 4. Will the new zoning secure safety from fire,panic and other dangers? The proposed edits do not address items that would impact this criteria such as setbacks, or availability of emergency services. 5. Will the new zoning provide adequate light and air? The edits do not alter required compliance with building codes, setbacks, or other requirements that address this criteria. 6. Will the new zoning prevent overcrowding of land? The proposed edits remain in keeping with standards previously found acceptable for density. 7. Will the new zoning avoid the undue concentration of population? Opinions of what constitutes "undue" concentration of population are highly individualized. Building codes and similar development standards will ensure that the negative effects of concentrated population are mitigated. 8. Will the new zoning facilitate the adequate provisions of transportation, water, sewer, schools, parks, fire, police, and other public requirements? The proposed zoning does not alter the requirements to provide for these services. 9. Does the new zoning give reasonable consideration to the character of the district? The proposed regulations specifically call for housing of similar type to be provided as is already allowed in the district. #Z-06152 Workforce Housing Text Amendment Staff Report 3 10. Does the new zoning give reasonable consideration to the peculiar suitability of the district for particular uses? The proposed changes do not amend individual zoning district uses and therefore will not affect this criteria. The edits are primarily applicable to residential zoning districts. 11. Was the new zoning adopted with a view of conserving the value of buildings? The proposed regulatory language will apply to areas where new development is proposed. Existing buildings are not expected to be impacted. Development standards for compatibility are not proposed to be altered. 12. Does the new zoning encourage the most appropriate use of land throughout the municipality? The decision that a property is appropriate for residential use will be made on the basis of the growth policy designation. Choice of an individual zoning district will be made through the zone map amendment process. This amendment will not change the individual districts and therefore will not affect this criteria. The edits are primarily applicable to residential zoning districts. PUBLIC COMMENT No public comment has been received as of this writing. Any written comment will be forwarded at the public hearings. Conclusion Pursuant to Section 76-2-304, Montana Codes Annotated, the Zoning Commission and Planning Board shall review the Unified Development Ordinance text amendment application to determine if the proposed zoning change meets the requirements of the Adopted Growth Policy, state statute, and other adopted state laws and local ordinances. The Zoning Commission and Planning Board shall act to recommend approval or denial of the Unified Development Ordinance text amendment. The recommendation of the Bozeman Zoning Commission and Planning Board will be forwarded to the Bozeman City Commission for consideration at its public hearing on August 7, 2006. The City Commission will make the final decision on the application. Attachments: Attachment A —Draft ordinance revisions Report Sent To: Community Affordable Housing Advisory Board #Z-06152 Workforce Housing Text Amendment Staff Report 4 Affordable Housing Support Currently in Place in the City of Bozeman June 1, 2006 i Ci i of i i CAHAB —Advocacy and information Small minimum lot sizes and setbacks clearinghouse, public entity in support of private efforts such as ASI on Oak Street Community Housing Fund—Commission Removed numerical dwelling unit density caps discretion to financially support housing Affordable Housing Revolving Fund - Annual Allow mixed uses to enable additional housing financial support for matching funds, grants, and areas and options with transportation efficiency loans—federal seed funds Funding for HRDC Road to Home—Homeowner No minimum dwelling size beyond that required training and down payment assistance by building code Galavan/New Transit—Annual financial support Established reduced parking standards for for transit services, relieves burdens of affordable housing transportation Community Needs Assessment for housing Allow manufactured housing within all residential zoning districts Efficient infrastructure planning and funding Allow modular housing within all residential zoning districts Fiscally responsible operation of the City Enabled Accessory Dwelling Units in all residential districts Limited bonding and other debt reduces tax load Allowed increased lot coverage in R-4 districts for interest payments Advance land use planning for greater surety in the Affordable housing projects given priority in development process to reduce risk, cost, and review scheduling delay Option to pay impact fees for affordable housing Affordable housing is community benefit for projects meeting performance standards for PUDs otho,NOWROK014toky of residential areas are zoned to allow multi- home development Montana Board of Housing—Reduced interest rate Park dedication requirements are capped so that loans and reduced closing costs higher densities are less costly CDBG— grant funds Alternative transportation options are a required essential part of all street design and development Section 8 —Cost support for housing expenses Allowed building heights have been increased Six dwelling per acre minimum Restricted size lots and dwellings Community residential facilities allowed as individual households in all districts when meet standards Community residential facilities allowed as in all residential districts as either principal or conditional use Page 1 of 2 Exclusionary Zoning Elements* o Minimum floor area for dwellings (usually far in excess of actual need) o Exclusion of multiple household dwellings o Restrictions on the number of bedrooms o Prohibition on manufactured homes o Large lot frontage requirements o Large minimum lot size requirements *pp.40-41, The Legal Guide to Affordable Housing Development, American Bar Association, Chicago, IL 2005 Page 2 of 2 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language This text represents the placement into ordinance format of the proposal given to the Bozeman City Commission by the Community Affordable Housing Advisory Board (CAHAB) in early 2006. The ordinance reflects the creation of a new title in the Bozeman Municipal Code, which is titled Housing. This placement enables related programs and requirements to be located in a common location within the City's legal structure. The draft ordinance presented here has four sections. Sections 1 and 2 implement the CAHAB proposal. Sections 3 and 4 remove elements of the existing affordable housing program from Title 18, Unified Development Ordinance, Bozeman Municipal Code. Section 1 Title 16, Hous .g Chapter 2, Workforce Housing 16.02.010. Purpose The purposes of this chapter are to: A. Require the construction of for-purchase workforce housing as a portion of new residential development; B. Create offsets for t4 sultant costs tO development for the provision of workforce housing; C. Create an on-going supply of affordable homes for purchase by the low and moderate income workforce. 16.02.020. Applicability A. A"developer of a residential subdivision which will result in construction of five or more dwelling units shall provide, or shall cause to be provided, to the extent feasible, twenty five percent (25%) of the total dwelling units for the workforce housing program, as outlined below..; B. Project Size: 1. Projects with fewer than five dwelling units - No workforce housing requirements 2. Projects with five to twenty-five dwelling units (5-25). Twenty-five percent of the units in the subdivision must be dedicated to workforce housing requirements (including any additional dwelling units approved through a density bonus). 3. Projects with more than twenty-five dwelling units (25+). Twenty-five percent of the units in the subdivision must be dedicated to workforce housing requirements (including any additional dwelling units approved through a density bonus), subject to the provisions of Section 16.02.040. Page 1 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language 16.02.030. Affordable Housing Plan Required The developer of a subdivision shall submit, prior to or concurrently with their application for preliminary plat approval, an application describing their affordable housing plan in accordance with this and other applicable ordinances. The developer's affordable housing plan must, in addition to items listed above, include a marketing plan and estimated project timeline. 16.02.040. Methods of Compliance A subdivision required to provide workforce housing according to this chapter may meet its obligations according to one or a combination of the methods established below. Rounding: Where the calculated required total workforce housing dwelling units includes one-half or greater portion of a dwelling, it shall require the provision of one full dwelling unit. A. Projects with five to twenty-five units (5-25) 1. Twenty-five percent (25%) of the dwelling units in the subdivision must be dedicated to workforce housing, including any additional dwelling units approved through a density bonus. 2. All dwelling units must be constructed within the boundaries of the subdivision. B. Projects with twenty-five Units or more (25 - 1. Twenty-five percent (25%) of the units in the;subdivision must be dedicated to workforce housing, including any additional dwelling units approved through a density bonus. 2. Alternative Option: a. Rather than providing, or causing to be,,zpf6vided, the full number of required work force dwelling'units, the requirement for up to half of the number of required dwellin, units(41'5% of the total dwellings) may insteae satisfied through the dedication of one (1) parcel of land to the cky:The land must be suitable to the construction of the required number of dwelling units if constructed at the same density as in the subdivision for which the land is proposed as a replacement. The land dedicated must be without abnormalities and with complete environmental review. The v .ite of the, and dedicated must be equal to or greater in value (as determined by independent appraisal) than the total value of the finished lots which would have been utilized for the up to 12.5% of the total dwellings,for which the land is offered. The site must be economically feasible to develop the required number of dwelling units, be appropriately zoned, and be fully improved with infrastructure. b nder option 2, at least half of the required dwelling units (12.5% of the total dwellings) must be constructed in the subdivision. C. Individualized program: 1. 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 meeting shall review: Page 2 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language a. Project feasibility, b. Community need for project, C. Overall benefits and drawbacks of project d. Compliance with all applicable affordable housing and workforce housing regulations. 2. The CAHAB will make a recommendation to the City Commission on each individualized program, which will make a final decision. D. Waiver. A developer may request a waiver from the requirements of this chapter. A waiver request must be submitted to the Community Affordable Housing Advisory Board simultaneously with application for preliminary plat subdivision review. The CAHAB will make a recommendation to the City Commission on each��diver request, which will make a final decision. 16.02.050 Cost of Housing A. Price of Dwelling Units: The units will be of oidable'to moderate income households paying 30% of their monthly income toward Principle, Interest, Tapes, and Insurance. 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 10"On at the Montana Board of Housing rate plus 1/2% as of January 1 of each year. Prices will be determined January 15 of each year and approved by the City comet lion. The maximuni sales price shall be published on the City's website and available at the 4,planning office:-, 1. Two bedroom units will be affordable,to a household of 2 earning less than 80% of the Area Median Income (AMI); , 2. Three bedrood-ur is will be affordable to a household of 4 earning less than 80% of the AMI; and 3. Four bedroom homes (when allowed): will be affordable to a household of 6 earning less than 80°/o,,of the AMI. B. Owner occupancy: All Workforce housing units must be owner occupied and must remain as the principal residences o f,the occupant for the duration of their ownership. C. Baer 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. D. Sustained affordability: The following measure will be applied to ensure that sustained affordability is achieved in the workforce housing: 1. 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. 2. The City of Bozeman will be granted a first right of refusal on the property. 3. 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 Page 3 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language be subject to the workforce housing eligibility requirements and a new 10 year affordability period will commence. 4. In the event of the sale of the property before ten years, appreciation of the property is calculated. If the actual appreciation of the property is less than the maximum appreciation, the owner receives the actual 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. 16.02.060. Cost Off-Sets A one-to-one density bonus will be provided for each dwelling unit meeting the workforce housing requirements, whether on-site or through land dedication. Density of development must be such that the density bonus does not cause the individual lots to have dimensions or constructed dwellings to have characteristics which are less i'llian minimum standards established by Title 18, BMC. 16.02.070 Additional Requirements A. 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 bathrooms. All homes must have at least a single car garage. One bedroom homes will not be allowed to meet workforce housing requirements. While,Accessory Dwelling Units are encouraged to increase density within a subdivision ADUs can not be used to meet workforce housing reg Cements. B. Unit type: Unit'ge of the Workforce housing units must be of the same type as the units in the subdivision. In the ease of a mixed-use development (such as single-family detached Sand attached'`housing);the workforce housing units must be of type in the same proportidnas the units that=ire not constructed as part of the workforce housing program. C. Livabiiity: 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. Non-regulatory 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 Conran 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. D. 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. Page 4 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language 16.02.080. Criteria for Location,Integration, Character of Affordable Housing Units A development subject to this chapter shall comply with the following criteria: A. 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. B. 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 dwelling units until all workforce housing units in the development are completed. Section 2 Chapter 4, Definitions 16.04.010. Affordable Housing Housing for persons earning less than 65 percent of the area's annual median income for rental housing and 100 percent of the area's annual riedianincome for purchased housing. Further, affordable housing does not require greater than 30 percent of the household gross annual median income for housing. Annual median income is domed by the Department of Housing and Urban Development. Affordable hou6g is subject to the" ty's affordable housing policy. 16.04.020. Workforce Housing Dwelling Unit Affordable housing subject to covenants or restrictions requiring such dwelling units to be sold at prices that will preserve their as affordable housing for a period of at least 10 years. 16.04.030. Affordable;Housing Development Plan That plan prepared by an applicant under this ordinance that outlines and specifies the development's c --il a ce with the applicable requirements of this title. 16.04.040. Affordable Housing ui nd The funds)created by the City of Bozeman to support the provision of affordable housing. Section 3 18.42.180 Provision of Affordable Housing Development shall be evaluated against the requirements of Title 16. When gp lip cable, the development shall comply with the requirements of Title 16. 2. The 2003 Hatisifig Needs Assessment established the jaeed fei! additional low Page 5 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language 5. Develepffient of the rn��urn sized lets shall !argely depend en the aetiens o to aid qufthfying parties to ebtffifi heidsiiig. These prograffis are separate fieffi the r-e"fferneiits ef this title, eaaeted prior to the date of this efdinanee that re(��e the previsiee of aff-efdabi-e lous B. App4eabihtv. Lands subdivided aftef! the effeetive dart of thi4`1�ot&aaiaee shall rneet the ef this seetioii aiid shall have not less than a fftin riet density of si�t Units per aere when subdivided I. The total area of stteh lftiids befrig s I purposes ia a14 phases is &e acres-or ffiare ift s" 2. The lafid being subdivided is not inten-ded 'for final developinent under t of the R S, �T , �� BMG. G. Nufnbef! of Restrieted Size Lots Reetiir!td. E-eery residential stibdivislon 1-ftft-Rifig the- square feet for,,mngle hatt", hold detaehed &wellings and 3,000 square feet for single reappreval of the subdivis4on by the Gity. Afte'! atioti of lots through the subdivision proeess and reeording of the RS restrie-a-efts w4th the fiaal plat, offering for- sale to affy vARifig btlyer the RSL lets developm piat, the owner may provide a fee sirriple transfer- of title of bt�ldable RShs to th-e Givy. For the purpose of deterrttii-Ang the nidffiber of RSJ=s required by this RShs for market sale. The Gity wi]4,dtili�!e donated RShs or the proeeeds of sales of 15 �Ubdiv4ded et ffiffy be pre-i4ded eff site as allowed by t;..rz � i .., Page 6 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language qFriisfen!ed to the City not later- than the time of fiiiai plat appi!oval of mity pay it "eftsh in lieu" fee te the Gity. The paytnent shall be ealeulated as the appraised value per- squai!e feet of developed land withio that speeifie subdi-vision a 9quar-e feet shall be multiplied by 5,000 in single he4sehoid distr-iets atid by 3,000 ifi subdiv4ded. The City will use pay tits ig,+`ett ef kSLs only f6f affei!dable housing. amendtnent to this .. rr AK 6ii ie establis .. . .ante. Section A,' 18.16.434 LOT OVERAGE AID FLOOR"EA A. Maximum lot coverage by principal and accessory buildings shall be: 1: For newly created lots,in'" the R-S district, determined through the PUD review procedures set forth in Chapter 18.36, BMC, in compliance with the adopted Bozeman growth policy. a. For existing lots in the R-S district, not more than 25 percent of the lot area shall,b.,e'covered by principal and accessory buildings. 2. Not more;;than 40 percent of the lot area in the R-1,R-2,R-3 and RMH districts. 3. Not more than 50 percent in the R-4 district. 4. Not more than 40 percent for residential uses or 60 percent for nonresidential or mixed uses in the R-O district. B. Minimum floor area requirements for each dwelling in all districts shall be that area required by the City's adopted International Building Code. , Page 7 of 8 CAHAB Proposal Public Hearing Draft Workforce Housing text amendment implementing language ors Page 8 of 8 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. ATT ST: L- STEVEN R. KIRC HO , , yor a r R INL. SI II NAN Clerk of the Commission tAPPD A M: City Attorne Exhibit "A" AFFORDABLE HOUSING STRATEGIES September 22, 2003 Strategy 1. 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 11. 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 regulatoryand process reforms and streamlining thatwould promote construction and rehab of affordable housing, Strategy Ill. 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-,ee6-to not greater than 5,000 square feet for single family household detached (SFD SHD)and 27500-to 3,000 for single family household attached (A&F SHA) units when subdivided. The RSL shall be des,gmated 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 RSLfor market sale with the final plat, the owner may provide a donation by fee-simple transfer of title of buildable donate develope-d RSLs to the City, on a one 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-tm A-1 a one required for o -repla-ed 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 a SFA or SFD) rmultiplied by the nurnbeT of required RSE. 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. -78. 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 reimburse 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 11. 8. The owners of very low-income rentals will annually submit 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 1/20th 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 AM[ 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 V1. 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 Vil. 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 M. City Land I 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 Plan 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 11 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.) StrategyX 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 X1. Additional Potential Actions for Research and Consideration I 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 DRB, it will not eliminate DRB 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 requirementfor the 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