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HomeMy WebLinkAboutPacket 03-19-2007_4-24_February 22, 2007 Special MeetingLINKED MINUTES OF THE MEETING OF THE CITY COMMISSION SPECIAL MEETING WITH THE WORKFORCE HOUSING TASK FORCE BOZEMAN, MONTANA February 22, 2007 ***************************** The Commission of the City of Bozeman met in the City Commission Meeting Room, 411 East Main, on Thursday, February 22, 2007 from 6:00-9:00 pm. Present were Mayor Jeff Krauss, Cr. Jeff Rupp, Cr. Kaaren Jacobson, Cr. Sean Becker, City Manager Chris Kukulski, Assistant City Manager Ron Brey, Assistant Planning Director Chris Saunders, City Attorney Paul Luwe, and Deputy City Clerk Cynthia Jordan Delaney. 0:08:48 A. Call to Order - 6:00-9:00 pm, City Commission Meeting Room, City Hall, 411 East Main Mayor Krauss called the meeting to order at 6:05 pm. 0:09:00 B. Pledge of Allegiance and Moment of Silence 0:09:38 C. Authorize the absence of Commissioner Kirchhoff 0:09:48 Motion and Vote to authorize the absence of Cr. Kirchhoff. It was moved by Cr. Becker, and seconded by Cr. Rupp, to authorize Cr. Kirchhoff's absence. Those voting Aye being Crs. Becker, Rupp, Jacobson, and Mayor Krauss. Those voting No being none. The motion carried. 0:10:02 Opening Comments by Mayor Krauss (Poor sound quality) Mayor Krauss explained that normally he would open the meeting to public comment, but since this is a special meeting with the Workforce Housing Task Force, he turned the agenda and facilitation duties over to Facilitator Carson Taylor. 0:11:16 Carson Taylor, Facilitator - Greeting Circle Mr. Taylor initiated a greeting circle so that all 30 people seated in the circle could greet and meet each other. 0:19:04 Mr. Taylor, Facilitator - Overview of Special Meeting's Structure and Rules of Procedure Mr. Taylor detailed the order the meeting will follow, beginning with questions 1-6 submitted by the City Commission and followed by Cr. Jacobson's questions. He also stated that he will call on people to speak, and that the entire meeting will be considered public comment. 4 0:21:37 Mr. Taylor, Facilitator - Opened Discussion of Question 1 Mr. Taylor opened discussion of Question 1 submitted by the City Commission: 'How did the task force derive the amounts it did for parkland dedication reduction and impact fee waiver and deferral?' 0:21:39 D. Public Comment 0:21:40 Brian Caldwell, Workforce Housing Task Force member Because of technical difficulties with sound, it was very difficult to hear who was speaking or what his/her comments were. 0:28:09 Chris Budeski, Workforce Housing Task Force member Mr. Budeski drew figures and numbers on a white board and explained how much land in a subdivision would be designated as workforce housing. 0:37:05 Jennifer Olson, Workforce Housing Task Force member (Sound quality improves somewhat) Ms. Olson stated that the task force did a line itemization of building costs and materials per basis, and it came down to the costs of land. 0:37:34 Marco Ferro, Workforce Housing Task Force member Mr. Ferro stated that the task force had a long discussion about park land issue because it is a valuable asset for everyone. Developers were concerned that if too much damage was done to park land, it would affect the value of the lots. He stated the importance of everyone sharing the responsibility. He represents teachers. 0:39:35 Anne Banks, Recreation and Parks Advisory Board member Ms. Banks stated that because land is so valuable it is important to acquire as much park land as possible since the development process is the only way to acquire park land (besides individual largesse). She stated that she is very reluctant to lose park land. 0:40:32 Roxanne Klingensmith, Workforce Housing Task Force member Ms. Klingensmith wanted all present to remember that 5 1/2 months were spent in lengthy discussions and that these conclusions in the ordinance were reached carefully. She stated that the task force became committed to affordable housing and to sharing the responsibility. She said that various groups are asked to give a little to make this common good happen. 0:42:25 Dab Dabney, Workforce Housing Task Force member Mr. Dabney stated that the task force wanted to make sure that the burden of price controls on land wouldn't shift to other lot buyers and home buyers in the subdivision. 0:43:16 Start Recording with New Microphone and Set Up (Sound problems fixed) 0:43:26 Connie Garrett, Workforce Housing Task Force member Ms. Garrett wanted to finish off and clarify the calculations begun earlier on the board. 2 5 0:44:10 Cr. Rupp Cr. Rupp asked what the park land reduction would be in that example on the board. It would be reduced 1.5 acres. 0:44:26 Amanda Cater, Workforce Housing Task Force member Ms. Cater stated that there should be another way for the city to gain park land beside the subdivision process--maybe a Park Improvement District. 0:45:03 Sandy Dodge, Recreation and Parks Advisory Board member Mr. Dodge talked about shared burden: the developer would have a partial share of burden at 11%, and the rest are cost offsets. He asked who else beside the public is sharing the burden. 0:45:46 Marcia Youngman, Workforce Housing Task Force member Ms. Youngman stated that the city has no authority in this ordinance to mandate that lenders and building suppliers share in the financial responsibility, but the task force proposed a sharing that she thinks the industry will pick up on (in the "Shared Responsibility" chart). In the ordinance, it is the public, the builders, the developers, and the landowners that will share cost. She stated that the task force is not recommending a net reduction in park land. She said that park land acquisition was never totally dependent on development, but there needs to be another mechanism for acquisition. She wants the next task force to be park-related. She stated that it is important to make it work for developers and builders so that they will want to build these houses at 80-120%. They could build more than required and meet a greater community need because it is affordable for the market to build. 0:52:31 Mr. Caldwell Mr. Caldwell stated that the task force felt it was critical to only address required park land but not to affect wetland areas not included in park land dedication. 0:54:21 Ms. Olson Ms. Olson pointed out the elephant in the room: without this park land dedication, this ordinance will not work. She stated that the task force also proposed to offer a fund to fund this public housing authority and maintenance, and 25% of the fund (after administrative expenses) will be given to parks. She asked what else could be done for a conclusion that works. She said the builders said they couldn't build unless land prices are reduced, so that is why they had to go to the land. 0:56:01 Cr. Jacobson Cr. Jacobson asked questions about the table, "City of Bozeman Parkland Projections, 2005-2025." 0:56:58 Ms. Banks Ms. Banks explained the table, "City of Bozeman Parkland Projections, 2005-2025." 3 6 0:57:55 Chris Saunders, Assistant Planning Director Mr. Saunders stated that this population projection in the table is an aggressive rate of growth, but it is a real number from the last few years. He explained how the 11% dedication of park land in the "Dwelling Units" column was calculated: The city has changed how it has calculated park land on multi-residential several times in the last few years to determine an equitable balance, and with higher density housing it was difficult to know how many homes would be installed. 0:59:51 Cr. Jacobson Cr. Jacobson stated that the way she reads this table is "if present trends continue, we lose ground on park acres per 1,000" people. She asked how much ground we lose if we adopt the work force proposal and cut back park land. 1:00:09 Mr. Budeski Mr. Budeski asked about the rate of growth on the table because in 20 years Bozeman will grow by 2 1/2 times the population? 1:01:30 Mr. Saunders Mr. Saunders stated that Bozeman growth has been running at 5%-6% growth per year. The Planning Dept. chose to use the higher rate of growth to plan to be prepared for the future. He understood that the effect of the proposal would be the difference between the 2005 and 2025 park acreage #'s times 89%. That would be the effect of the 11% reduction. 1:01:51 Mr. Budeski Mr. Budeski stated that a lot is being based on huge assumptions about growth. He thinks this monster growth rate is skewed for the next 20 years and that a reduction of park land by 1/3 per thousand over a short period of time isn't fair. 1:03:01 Chris Kukulski, City Manager Mr. Kukulski stated that he would be hesitant to look at the last 15 years for population growth because the number keeps going up and is spiking. He emphasized administrative planning for the worst number (90,000 people), but hope for the best (50,000-60,000). 1:05:05 Mayor Krauss Mr. Krauss stated that according to the calculations on the board, most subdivisions are 7 units per acre, which would be 12.6 acres of park land, and so the 1.5 acres given up would be less than 11%. Anything denser than the minimum results in a smaller % of park land given up. With the trend happening now, park land reduction would probably be between 9 and 11%. It could be looked at it as if we're losing park land, or that park land will be used by a wider group of people. 1:07:13 David Cook, Recreation and Parks Advisory Board member Mr. Cook stated that the Rec. and Parks Board is being asked to give up very valuable property, and that no one knows that park land will be given away for affordable housing. When he talks with his neighbors, they say they moved to Bozeman because of the parks. 4 7 What is the process to let the people in the city know about this? This has to be in the open. 1:09:31 Chris Guy, Recreation and Parks Advisory Board member Mr. Guy stated that he hears talk that this is basically a 9-11% tax on the citizens of Bozeman for what they own in order to fund affordable housing. 1:10:02 Mr. Taylor, Facilitator Mr. Taylor wanted to move on to the second part of question one: impact fees. 1:10:06 Mr. Budeski Mr. Budeski stated that he believes the group isn't ready to move on to another question. 1:10:14 Cr. Rupp Cr. Rupp stated that he didn't understand the 9% tax. 1:10:18 Mr. Guy Mr. Guy stated that the 9-11% tax is a percentage of park land, owned by the citizens of Bozeman, that is being given up (or taken away) for affordable housing. 1:10:54 Cr. Rupp Cr. Rupp stated that his expectation isn't to arrive at consensus tonight, but to understand the process. He stated that the trend he sees is that the more dense the development, the less the amount park land that goes away and the lower the percentage of units. 1:11:47 John Barco Mr. Barco stated it becomes a market decision for whoever is going to live in a neighborhood: 'Do I want to live in a neighborhood three blocks away with more parks, or live in this new neighborhood with a less expensive house I can afford with parks a little further away?' 1:12:45 Mr. Caldwell Mr. Caldwell stated that if your sole purpose is park land, it is easy to look at only one planning element on a projection chart and say that we're losing a lot of park land over time. Let's take valuable land and make active, usable spaces. The difference is 21 acres per year for the next 25 years. We have bigger problems if we can't do affordable housing--saying that the distance between me and you is more important than allowing for people to afford to stay in our community. He thinks we need to at more than just park land as the community good and need of our town. 1:14:33 Mr. Taylor, Facilitator Mr. Taylor reminded the group that the purpose of this meeting is to inform the Commission how the task force reached certain issues and not to reach consensus tonight. 5 8 1:15:07 Ms. Banks Ms. Banks stated that she feels the task force doesn't appreciate the work done by the Recreation and Parks Advisory Board. She detailed the efforts and responsibilities of the Subdivision Review Committee, and said the purpose is to provide valuable recreational opportunities for people who live in the subdivisions. She feels very strongly about this, and she has been on the board for 14 years. 1:16:29 Cr. Jacobson Cr. Jacobson stated that she wants all future discussions with the Workforce Housing Task Force televised and advertised in order to better inform the public. 1:16:57 Ms. Garrett Ms. Garrett stated that TV is a poor way to reach many people interested in parks; people come to Bozeman for the parks, not to watch TV. Please come up with a whole host of ways to spread the word. 1:17:50 Mr. Taylor, Facilitator Mr. Taylor asked the group what direction they wanted to take. He reminded them that they are still on the first part of question one, with many questions left to discuss. 1:18:17 Mayor Krauss Mayor Krauss stated that meetings are properly noticed. He said that people are interested and have been paying attention. He said public outreach includes radio, TV, computer, newspaper, and word of mouth. He thinks there is more public outreach now than ever. 1:22:29 Ms. Youngman - Presented Information about Question 1, Part 2: Impact Fees Waiver and Deferral Ms. Youngman described how the task force calculated impact fees. Using precise cost calculations, there was an enormous gap between what it would cost to build a small house and what it could be sold for as affordable housing. It was impossible for the market to build even a very small house without a great loss ($30,000-40,000). She stated that impact fee waivers make sense to help offset that difference--builders could make a living building a home and make a small profit without taking a loss. The task force kept the waiver to 80% of median income, with no impact fee waiver for homes affordable to people at 100% of median. She stated this is the most important offset for the builders to be able to participate. 1:26:45 Ms. Olson Ms. Olson stated that the mortgage was calculated to be 27% of total income (with all fees and taxes included). 1:27:44 Ted Koterwas, Recreation and Parks Advisory Board member Mr. Koterwas asked, “What type of builder was talked to (those who build 1-2 or 5-10 houses per year)? What was the range of cost per square foot?” 6 9 1:28:32 Ms. Olson Ms. Olson stated that Igengraff and John Morgan want to specialize in affordable housing. A cost offset idea is to have the School of Architecture come up with specific plans to know exactly what it will cost to build on these deed-restricted lots. The task force would like to see a builder get specialized with this. 1:30:49 Mr. Dabney Mr. Dabney stated that he does larger multi-family projects; for 48 units on Baxter last August, his costs were $94 per square foot hard cost. He calculates that he could build a single family house for $125 per square foot hard cost. 1:31:45 Ms. Olson Ms. Olson stated that in her discussions with builders, the costs were $140-$150 per square foot. 1:31:52 Mr. Caldwell Mr. Caldwell stated that the profit margin for the builder would be around $10,000, and the disparity was how to build homes substantially below current market value. The task force wanted to avoid the situation where only large wholesale contractors from Las Vegas, etc. could afford to build in Bozeman. In the local building industry, many small scale builders can build a few homes per year. If building at a loss is a prerequisite, then that would negatively affect our community. For a $150,000 home, the meat on the bone is very thin. 1:33:42 Vern Klingensmith, Community Affordable Housing Advisory Board member Mr. Klingensmith wanted to remind the group that the task force represented all types, comprised of experts in their field in this town where the rubber meets the road today. He stated that he trusts their wisdom; they closed loopholes and looked at the issue critically. Their work is critically important. 1:34:48 Ms. Banks Ms. Banks asked if it was possible for someone with an appropriate income to buy the lot and build a house him/herself, and if the affordable lots would be scattered throughout the development. 1:35:20 Ms. Olson Ms. Olson stated that the problem is putting money down for a loan. 1:35:43 Gary Vodenhal, Pedestrian/Traffic Safety Committee member Mr. Vodenhal asked what it means to keep the developer whole and what the waiver is on impact fees. 1:36:16 Ms. Youngman Ms. Youngman stated that impact fees can be waived for a community good like affordable housing. Taxpayers will be picking up what isn't paid in impact fees, but the waiver will only apply to a small number of homes. A full waiver of impact fees was 7 10 recommended for a home built at 80% median income, a 50% reduction for 90% median income, and no reduction for homes built at 100% median income. 1:37:34 Mr. Taylor, Facilitator - Opened Discussion of Questions 2 and 4 Mr. Taylor opened the discussion of Questions 2 and 4: (2.) 'What is the reduction in anticipated profits for the building and development industry resulting from compliance with the ordinance recommendations?' (4.) 'What constitutes the sacrifice from the building and development industry? Is there something clear like the 11% average reduction in parkland dedication?' 1:38:01 Mr. Budeski Mr. Budeski stated that you can't ask the builder to take a reduction in profit. It is a percent of the house; if it is a smaller house, they will make less profit, so they must build more units to make a living. 1:38:38 Mr. Dabney Mr. Dabney defined terms: a "developer" is the person or company that develops a piece of land and then sells lots. A "builder" is the person who builds the dwelling on it. The builder and developer may or may not be the same. 1:39:02 Mr. Budeski Mr. Budeski stated that around 21% made the developer whole. To make the development whole, it means no loss of profit or any moneys for an individual. By reducing it down to 11%, the task force felt that the development industry wouldn't spread it to the other lots. It's difficult to name an exact number, but everybody takes a little hit. 1:40:54 Cr. Rupp Cr. Rupp stated that he looked at the compliance section, and he asked if someone could meet compliance by building offsite. 1:41:43 Mr. Dabney Mr. Dabney stated that many higher-end subdivisions have tight covenants that preclude building an affordable dwelling on a lot there. 1:43:16 Cr. Rupp Cr. Rupp stated this concern: the result is what you're trying to accomplish in a neighborhood is to move to another location. 1:43:32 Ms. Olson Ms. Olson stated that at preliminary plat (when the subdivision is submitted) the developer has to tell where the lots/units are or where offsite lots are. It has to be approved through the review process. 8 11 1:44:13 Mr. Ferro Mr. Ferro stated that the offsite lots were a huge concern for him because he doesn't want to have a section of town where the teachers and firefighters live. 1:44:47 Ms. Banks Ms. Banks stated that the developer loses the park land reduction if he moves his lots offsite; there is a financial disincentive. 1:45:22 Mr. Vodenhal Mr. Vodenhal asked the impact on taxes over time for waiving impact fees. 1:45:45 Mayor Krauss Mayor Krauss stated that every single house built that's under $500,000 that has a child in it loses money for this community. There must be other kinds of development like commercial or industrial property to make up for that loss. There is no chance you're going to build a $130,000 house that contributes to streets or schools at a 100% level, and you can't make it up in volume. Most of it will be subsidized by the rest of us. 1:47:35 Cr. Becker Cr. Becker stated that for impact fees the consultant suggested he would investigate the rational nexus with proportionality, and what that payment would be. He thinks it is a policy decision, but everything can change in the next election. This may work through the administration with cash in lieu fees instead of second mortgages. 1:49:14 Mayor Krauss Mayor Krauss stated that if you wanted to you, you could buy existing homes, and there wouldn't be impact fees. 1:50:08 Mr. Budeski Mr. Budeski stated that everybody who owns a house in Bozeman has realized an increase in the value of their property. Everybody shares a little bit if the rest of the community pays that difference in impact fees. 1:50:52 Mr. Vodenhal Mr. Vodenhal stated that luckily he bought a house in 1989, and his income level is lower than $40,000 (lower than the bottom level for workforce housing qualification). He said that they are asking him to give up 10% of the park land in Bozeman, to subsidize housing for people who make more money than he does, and he is worried about being able to pay impact fees. He asked if he is being forced to sell his home and move away because he can't pay the taxes to subsidize housing for people who make more money than he does. 1:52:30 Ms. Youngman Ms. Youngman stated that his taxes won't go up because of this. The city does bond issues. She stated that it has to be paid for somehow, and the community as a whole should share some responsibility to have minimal impact. The task force tried to involve 9 12 everyone in this solution. There is no impact being proposed that will impact individual houses. The goal is to try to keep more of the workforce in town. 1:55:39 Tracy Menuez, The Road to Home - Homeownership Program, Human Resource Development Council Ms. Menuez stated that there are hundreds of communities doing forms of workforce housing, and it works well for providing housing for segments of the populations. She urged the group not to consider a bottom income level. Through many mechanisms, many people at lower income levels (lower than $40,000) can be served. 1:56:52 Mayor Krauss Mayor Krauss stated that people already pay (in general taxes to the city) two mills for affordable housing per year. He stated that since density is required in Bozeman (minimum of 6-7 units per acre), density can't be awarded as a way to subsidize affordable housing. His fundamental question is 'What do we do to make this work when we've already taken such a large piece off the table?' 1:58:44 Ms. Garrett Ms. Garrett asked how much two mills equals in actual cash, and what it was spent on. 1:59:01 Mayor Krauss Mayor Krauss verified that the money was spent on affordable housing. A mill is a specific amount every year (the value of a mill goes up every year). The first year it raised approx. $56,000, and the second year it will raise two times $62,000. It pays for Road to Home programs and provides loans or assistance for down payments. 1:59:52 Ms. Menuez Ms. Menuez said that from the first year's mill $30,000 was used by the Road to Home - Homeownership primarily for home buyers' education and counseling. Down payment assistance was funded through the Big Box Fund. She hopes that more money from the Big Box Fund will be given to the Road to Home. 2:00:26 Mr. Taylor, Facilitator - Opened and Closed Discussion of Question 3; Opened Discussion of Question 5 Mr. Taylor received feedback from the group that Question 3 had already been answered and didn't need to be discussed: 'What does compliance look like for parks? What is the basis for the statement that we are already losing ground?' He opened discussion of Question 5: 'Will the ordinance produce the equivalent of 10% of all units as affordable units? It appears that it will produce less than 10%. Could the task force go through their rationale for the method selected and show how it would work in typical Bozeman subdivisions of various densities (maybe one example at 6 units per acre and another at 8 or 10 units per acre)?' 2:01:08 Mr. Caldwell Mr. Caldwell discussed the numbers of building permits and dwelling units over the last 16 years and what % could be affordable housing using the formula. He stated that the 10 13 task force felt strongly that in promoting density they would create more affordable units as a side effect; that's the essence of dense, compact use of land (it costs less). The task force saw it as a balance. 2:03:21 Ms. Menuez Ms. Menuez asked what typical densities were in 1990, and how long the density of 6 units per acre has been adopted. 2:03:34 Mr. Saunders Mr. Saunders stated that the policy of 6 units per acre was adopted in 2000 or 2001. 2:04:17 Mr. Taylor, Facilitator - Opened Discussion of Question 6 Mr. Taylor opened discussion of Question 6: 'How can the City be assured that a unit will be built in a timely manner? The City will be giving up parks and money, in return, are they guaranteed a unit, or a lot? Are there builders who are coming forward to say they are interested in building on the lots? Is it possible to require the developer to wait to build on their "cost offset" - the parkland reduction until at least some affordable units are built?' 2:04:55 Mr. Budeski Mr. Budeski said that the way the ordinance is written it cannot be guaranteed that these units will be built, even though there are safeguards. He stated that he really likes this idea (the last sentence of part of the ordinance): "By not allowing the development of the additional lots until the affordable unit housing unit lots are developed." 2:07:29 Mr. Saunders Mr. Saunders asked for clarification: “Are they describing a restriction on a transfer from the subdivider to purchaser?” 2:07:49 Ms. Olson Ms. Olson stated that the subdivision developer has to come into a bank with a huge amount of money. The bank accepts buy/sell's in lieu of actual cash. If the lots don't sell, it adds more risk to the developer. It won't work if we tell the developers that they can build on lots only at this point in time. 2:08:48 Mr. Caldwell Mr. Caldwell stated its common sense that if there is a lot for $30,000, having a lot that's affordable to build a house on is the only insurance he can see in this whole equation. Since lots average $70,000-$80,000, offering a lot for $30,000 would be encouragement. 2:09:45 Mayor Krauss Mayor Krauss stated that if there is no demand for these $30,000 lots, then there is no point to meeting for this issue. 11 14 2:10:10 Mr. Dabney Mr. Dabney discussed pre-marketing a number of houses at fixed prices. He suggested building a qualified presale list, and matching pre-qualified people to builders. 2:11:24 Ms. Garrett Ms. Garrett stated that the group should take a field trip to see the house located at 611 E Lamme since it is on a 3,000 square foot lot. That is what the lot size will be for workforce housing lots. She worries that people will not want to buy a 3,000 sq. foot lot because it is too small. Her real estate clients don't want to see a lot that tiny. 2:13:18 Cr. Jacobson Cr. Jacobson wondered that if people aren't going to buy a 3,000 sq foot lot, will they buy a 2,500 square foot lot? 2:14:07 Amanda Cater, Workforce Housing Task Force member Ms. Cater stated that Habitat for Humanity would be thrilled to buy as many 3,000 square foot lots as they could get for $30,000. They haven't been able to build in Bozeman for years since the lots are so expensive. 2:14:33 Mr. Ferro Mr. Ferro stated that these will be small lots and small houses, but his people are telling him that they want to live in Bozeman and own that house. He wants people to be a part of our community. He stated that he grew up in a 900 square foot house with 6 siblings. 2:15:19 Mr. Budeski Mr. Budeski asked Cr. Rupp the size of the houses in the HRDC Land Trust (1,200 square feet). The houses are full. 2:15:43 Cr. Rupp Cr. Rupp said that it is more difficult to market deed-restricted houses. In Montana, some people like to own their land and don't want to lease. 2:16:04 Mr. Caldwell Mr. Caldwell asked the Commissioners to give the task force direct feedback to help get further along with the ordinance. He wants to get to the root of whether this is a worthwhile ordinance or not. 2:16:44 Cr. Rupp Cr. Rupp said that Question 6 is the big one for him: "It's this issue on time--that production of these units to what's being done in the other subdivision has to be included in this ordinance to go forward." Revisit compliance and building permits--how many units have you produced before you can automatically draw down the rest of those building permits? 12 15 2:18:01 Mr. Taylor, Facilitator Mr. Taylor asked if anyone on the task force objects to something that meets the needs identified by the task force to make it work but that also forces timely building of workforce housing units? 2:18:23 Cr. Rupp Cr. Rupp said that you go through a process. This is the issue. 2:18:43 Ms. Cater Ms. Cater asked Cr. Rupp if he was asking the task force to go back and look at the timing section. 2:18:49 Cr. Rupp Cr. Rupp disclosed that if he talks about it in the future and tinkers with it, they will know why. 2:18:59 Mr. Dodge Mr. Dodge asked if people are going to want to buy these small houses and live in them for 10 years. Under the deed restrictions, there is a cap of a 4.5% gain. He said they wouldn't be participating in the real estate dream in Bozeman in case they have to move. He asked if the task force is encouraging our work force to make a bad investment. 2:20:05 Ms. Menuez Ms. Menuez replied that these buyers will still be participating in the market with a 4.5% appreciation. Reasonable market appreciation isn't 8%. 2:20:59 Ms. Olson Ms. Olson added that the national average for appreciation is lower than 4% (or at 4%), so these buyers would be making better than the national average. 2:21:28 Ms. Cater Ms. Cater stated that people who work as teachers, firefighters, etc. are not going to have large salary jumps, so they will probably stay in these houses for at least 10 years. 2:21:58 Mayor Krauss Mayor Krauss stated that not only do people want to live in Bozeman, but we want them to live in Bozeman. This is consistent with the Mayor's Proclamation on Carbon Reduction: increasing the number of affordable units in town near major employers. 2:22:51 Mr. Dabney Mr. Dabney stated the math for this investment: for a 3% down payment on a $150,000 house, that's less than $5,000 down. With 4% appreciation that's $6,000 a year; the first year you own it, you double your money. 60% of households in the US have two or less people in them; they are building bigger and bigger houses for smaller households. 2:23:55 Mr. Taylor, Facilitator - Opened Discussion of Question 7: Price Point 13 16 2:24:23 Cr. Rupp Cr. Rupp stated that this is the only thing he wants to get on the table tonight: between the January graph that came out that said that the units will be built within proportionality to the rest of them to the final draft that didn't have that lead paragraph. 2:24:47 Mayor Krauss Mayor Krauss asked Cr. Rupp if he would prefer that the task force address that subject and offer a solution. 2:25:16 Mr. Taylor, Facilitator - Polled the Task Force about Timing Issue; Opened Discussion of Cr. Jacobson's Question 1 Mr. Taylor used the census method to ask the task force if they would be willing to tinker with the issue of timing for speedy construction. By a show of thumbs-up, they agreed to address it. He opened discussion of Cr. Jacobson's Question 1: 'An affordable supply of housing sufficient to meet the need cannot be built up if the affordability status is no longer than 10 years. To make this simple let's say that 90 units come on the market each year. At the end of the 10 year period that would be 900 units. But after that they begin to drop out of the affordability status. It is possible we would never have more than 900 units available. This cannot take care of the demand if the community keeps growing as anticipated. Other communities have begun with 10 years and finally gone to 30 years or perpetuity. We can learn something from these communities.' 2:26:40 Cr. Jacobson Cr. Jacobson stated that the Commission had voted 3-2 to make the period 30 years. 2:26:51 Mr. Ferro Mr. Ferro stated that if someone in the initial 10 year period decides to move or sell, the 10 year deed restriction starts again so the house will stay in the affordable realm. 2:27:15 Cr. Jacobson Cr. Jacobson stated that since employers are crying for workers, the number of units we can produce is crucial. 2:27:43 Mr. Caldwell Mr. Caldwell stated that the national average for moving is every 7 years, and especially when looking at starter homes, 7 years is a realistic number. Maintenance and upkeep could be an issue if the deeds continue for perpetuity. 2:28:53 Cr. Jacobson Cr. Jacobson stated that other communities have extended the deeds from 10 to 20 years because they can't keep the houses. 14 17 2:29:23 Ms. Olson Ms. Olson stated that 10 years is a starting point, and through a review process it could be changed. 2:30:05 Mr. Budeski Mr. Budeski stated that if the market does go flat, the market will naturally adjust, and prices will come down. He asked if the long-term appreciation rate for Bozeman is 4%. 2:31:03 Mayor Krauss Mayor Krauss stated that with a 10 year recess after each sale, you will gain units over time in the system. 2:31:38 Cr. Rupp Cr. Rupp stated that he thinks communities are struggling with how long to protect their housing stock. Boulder, Chicago, and Austin are not making land trusts. At 10 years your fear would be that you'd be losing stock if they keep it and sell when the deed restriction expired, but if they are selling every 5 years, it wouldn't be a problem. 2:32:23 Mr. Budeski Mr. Budeski stated that the task force should leave it to the Commission to decide. 2:32:58 Cr. Jacobson Cr. Jacobson stated that she would prefer to start with 30 years, and if that doesn't work, the review process could adjust it. 2:33:06 Ms. Menuez Ms. Menuez stated that an inclusionary zoning consultant gave feedback that this is one of the most difficult parts of the ordinance to set: the relationship between appreciation and the timing of deed restrictions. If you go too far with the deed restriction, you will not sell units. The consultant was an advocate of starting low and going high--15 years would be okay, but 30 years is too high. 2:34:41 Ms. Olson Ms. Olson stated that the task force agreed on a 10 year deed restriction because that amount of time is perceivable. 2:35:25 Mr. Taylor, Facilitator - Reviewing Cr. Jacobson's Questions Mr. Taylor verified that the task force will take back and work on Question 2: 'When will the workforce housing units be constructed in relation to the market units?' Question 3 (reducing parkland dedication) had been discussed, and Cr. Jacobson is against it. 2:35:48 Cr. Jacobson Cr. Jacobson stated that nobody mentioned that when it comes to attracting economic development, businesses don't look at taxes, but at quality of life. Parks and trails are a livability issue. 15 18 2:36:20 Ms. Klingensmith Ms. Klingensmith stated that the task force is convinced that this is a community project, and they are asking various elements of the community to join in on this effort. They are not destroying park land, they are just asking for a reduction. She asked the park group to understand that we all need to give in this community. 2:37:12 Mr. Ferro Mr. Ferro said that what he hears the most from people he represents (teachers) is 'I can't afford to buy a house.' He's never heard anyone say that they can't recreate or can't find a place to ride a bike or walk a dog. He hears almost daily that people can't afford to live in Bozeman. The question asked by people thinking of moving here is 'How can I enjoy the benefits of living in Bozeman when I can't buy a roof over my head?' People aren't even applying to jobs here because they can't afford to live here. It's all about balance. 2:38:21 Ms. Olson Ms. Olson stated that most businesses (before they come to Bozeman) look at whether they can afford to be here and employ people here. 2:39:08 Cr. Jacobson Cr. Jacobson stated that there are national studies that show that what people want in communities are parks and trails. 2:39:20 Cr. Rupp Cr. Rupp stated that the City surveyed citizens, and parks and recreation was number one on the list. 2:39:44 [20:22:55] Mr. Dodge Mr. Dodge stated that he doesn't want the Commission to lose sight of the fact that as lot size decreases, and the density increases, the demand on parks will increase. 2:40:07 Joanne Jennings, Recreation and Parks Advisory Board member Ms. Jennings stated that she is waiting to see the ad in the paper with the "Heavenly Garden Community" that says "11% less parks." 2:40:18 Ms. Menuez Ms. Menuez reminded the group that in the citizen survey, people were very satisfied with park land, but affordable housing ranked dead last. 2:40:38 Chris Kukulski, City Manager Mr. Kukulski stated that it was the National Citizen Survey from Boulder, CO; it asks the same questions to citizens in communities around the country. He confirmed that Bozeman parks and recreation scored the best (very high above norm). The worst score was access to affordable housing; it was an extremely small number (the 3rd lowest out of all communities that asked that question). 16 19 2:42:45 Ms. Menuez Ms. Menuez stated that most of the communities provided density bonuses. 2:42:58 Mr. Ferro Mr. Ferro stated that maybe the score was so favorable because there is so much access to recreation that goes beyond city parks (Bridger Canyon and the “M”). 2:43:15 Mr. Vodenhal Mr. Vodenhal asked if there can be another mechanism created to acquire critical land for parks. He stated that there is no way to acquire important parcels of land other than writing grants or begging other organizations for help. It is important for the community to have a pot of money to fund acquisition over time. 2:44:12 Mr. Guy Mr. Guy stated that park land is different than Bridger Canyon and the "M." 2:44:32 Mr. Budeski Mr. Budeski stated that there are two large parks (Babcock and Valley Unit) within four blocks of where he lives, and there is hardly anybody there on Saturday afternoon. There is a lot of park land in this town, and there still will be plenty of room even with a 10% reduction. He is frustrated because he hasn't heard any other solution offered from the Recreation and Parks Advisory Board. 2:46:27 Craig Rolloff, Workforce Housing Task Force member Mr. Rolloff shared the story of stone soup; before you know it, everybody has a little something to add to the soup. He is really proud of the members of the task force and all the little pieces they brought to this to make it work. 2:48:33 Ms. Banks Ms. Banks expressed anger that the Recreation and Parks Advisory Board was not involved in this process until the very end. She stated that the Rec. and Parks Board doesn't feel it is their responsibility to come up with other methods, and that some parks are loved to death. She stated that it bothers her that the Recreation and Parks Board is being looked at as personally selfish. She believes the board is looking out for the needs of people living on tiny lots. 2:50:04 Mr. Taylor, Facilitator - Consensus-building Exercise Mr. Taylor asked one member of the Workforce Housing Task Force to articulate the point of view of the Recreation and Parks Advisory Board (and vice versa), and then ask each other if their own point of view was represented accurately. 2:50:47 Ms. Klingensmith Ms. Klingensmith stated that she hears a group of people who are very dedicated to one area--parks and recreation and the land devoted to that. It is her understanding that the Rec. and Parks Board flat out said no to the ordinance. She doesn't hear much give and take in term of their willingness to see the task force's point of view. 17 20 2:51:25 Mr. Taylor, Facilitator - Clarification of Consensus-building Exercise Mr. Taylor stated that he wants someone to sit in the shoes of the other side, and be the other side. 2:51:38 Ms. Cater, Articulating the Point of View of the Recreation and Parks Advisory Board Ms. Cater stated that this is the point of view in their shoes: we struggle very hard to obtain park land, and the only ongoing way is through subdivision dedication. Our concern is that we'll have less and less when we need more than ever. 2:52:31 Ms. Banks, Articulating the Point of View of the Workforce Housing Task Force Ms. Banks stated that there is a very strong feeling that there is a segment of the work force not being served by the supply of housing that exists here. It is a public good for these people to afford to purchase houses. Park land appeared as the possible trade off of land for land. They looked upon this as the easiest and most practical way to make this work for developers, and they are frustrated that the Recreation and Parks Advisory Board thinks this isn't the optimum way to accomplish this. 2:53:52 Ms. Olson Ms. Olson objected that it wasn't for the developers, or that it was the easiest way possible. This is for everybody; it's the shared responsibility. 2:54:38 Mr. Taylor, Facilitator - Ended Discussion and Asked Mayor about Next Step 2:55:05 Mayor Krauss Mayor Krauss asked Cr. Jacobson if she wanted to continue with her questions. 2:55:41 Mr. Budeski Mr. Budeski apologized to the members of the Recreation and Parks Advisory Board, and said he has a lot of respect for them. 2:56:08 Cr. Jacobson Cr. Jacobson wondered about the rationale for including a 1 for 1 density bonus in the proposal. 2:56:31 Ms. Youngman Ms. Youngman stated that now a density bonus is real. You don't have to provide more affordable housing if you provide a higher density subdivision. If you want to build a denser development, you don't have to fulfill the affordable housing requirement for extra density. 2:57:25 Cr. Jacobson Cr. Jacobson asked if there is no density bonus, could more park land be given back? 18 21 2:57:47 Mr. Ferro Mr. Ferro stated that if you choose to provide more density than the norm, you won't be responsible to build affordable housing units on the part that is denser than the norm. 2:58:17 Mr. Budeski Mr. Budeski stated that based on area, if you increase the density you provide more park land, but you provide the same number of affordable housing units in the same area, but the density is higher. There really isn't a density bonus. 2:59:01 Cr. Jacobson Cr. Jacobson asked Mr. Caldwell if the $10,000 profit per housing unit related to affordable units. 2:59:15 Mr. Caldwell Mr. Caldwell replied that he was speaking specifically to the builder profits (between 10- 17% cost of construction). When there is no potential for gain on real estate, when it is just specific to construction of an affordable dwelling unit, the most left for profit and overhead will be between $10,000 and $12,000. 3:01:31 Cr. Jacobson Cr. Jacobson asked why you can't ask a developer to take less in profit and if this proposal does that. 3:01:48 Mr. Caldwell Mr. Caldwell said the ordinance was written this way so that there is still a chance for someone to make some money on affordable units, and that way they will happen. 3:02:16 Mr. Dabney Mr. Dabney stated that if builders figure out they can make money on affordable housing, a whole bunch of people will be building affordable housing. If there is no money in it, nobody will do it. 3:02:58 Mr. Kukulski Mr. Kukulski asked that if we don't deal with the issue of land and market, wouldn't the development part of this community just broaden the spread between the wealthy and the poor? If there isn't some other mechanism to offset these prices, then the other dollars will go to those units. It seems the market will bears more than we thought it could. That is what could happen if we don't address the land issue. 3:04:37 Mr. Klingensmith Mr. Klingensmith reminded the group that what is good for the community (the common good) is good for all of us. 3:05:24 Ron Brey, Assistant City Manager Mr. Brey wanted to bring up three things that haven't been directly addressed: 19 22 1. Public knowledge and public process--the task force's main objective is that we all have the same understanding of what is proposed and how it will work. Everything we have done is to get public understanding in place. 2. Problem with waiver of impact fees--a shift in recommendation from consultant. 3. Our definition of household size is unconstitutional--because of the Fair Housing Act, we need to change our Unified Development Ordinance. 3:11:53 Mr. Taylor, Facilitator Mr. Taylor thanked all in the group for their attention and excellent behavior. We need to remember we're all in the same community. 3:12:24 Mayor Krauss Mayor Krauss thanked the group for spending three hours of service to the community. 3:12:38 E. Adjournment Mayor Krauss adjourned the meeting at 9:10 pm. ____________________________________ Jeffrey K. Krauss, Mayor ATTEST: ______________________________________ Brit Fontenot, City Clerk PREPARED BY: ______________________________________ Cynthia Jordan Delaney, Deputy City Clerk Approved on ___________________________ 20 23