HomeMy WebLinkAboutE- Packet 07-16-2007_Finally adopt Ordinance No_ 1710, amending the Boz_13
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Ron Brey, Assistant City Manager
Chris Kukulski, City Manager
SUBJECT: Workforce Housing Ordinance No. 1710 - second reading
MEETING DATE: July 16, 2007
BACKGROUND: On June 18th, the Commission provisionally adopted the Workforce
Housing Ordinance by a vote of 3-2. Included in the motion was a revision noted in item
number four, below.
The first three revisions are modifications suggested by staff to correct mistakes in the ordinance,
to better reflect the intention of the task force, or to acknowledge incompatibility with other
statute. The three proposed modifications are 1 through 3 below, 4 reflects the commission
direction on first reading.
A task force member will also be present at the meeting on July 16th to present a case specific
example of the effect of the ordinance on a recently approved subdivision.
1. There are two places in the Ordinance where the UDO is described as the Uniform
Development Ordinance. These should be revised to use the correct term, Unified Development
Ordinance (UDO).
2. The minimum lot size for single household dwelling units is increased from 2500 to 2700
square feet. As explained in the memo for the UDO ordinance: “The housing type table in
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Section 17.02.050 calls for a range of smaller allowed lot size, however Ordinance 1710 also
requires compliance with all standards of Title 18. These standards include those for block sizing
and others where a lot of 2,500 square feet may not be achievable. The 2,700 foot lot size is
approximately the mid-point in the suggested range of lot sizes and also allows for a 200 foot
deep block, 20 foot alley, and 90 foot deep lots. The Commission may direct the use of a smaller
lot size at this time and the design of subdivision blocks would have to change to accommodate,
likely with “end cap” lots on blocks a practice which has been discouraged by the Commission in
the past.”
3. A Commissioner questioned the amount of parkland reduction provided if a developer chose
to place the WHU’s on large lots. After discussion with several task force members, it was
determined that the intent was to provide offsets only for the minimum required number of lots at
the minimum lot size.
It is likely and the task force assumed that the proposed reduction in parkland dedication would
still fall within the requirements of State Statute. In the event that the reduction might extend
beyond the statutory minimum, the ordinance should be revised to confirm that the statutory
minimum must be maintained.
To accomplish these revisions, the following changes are necessary in Section 17.02.060
(changes in bold italics):
17.02.060. Cost Offsets
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 than minimum standards established
by Title 18, BMC.
A. Developers and builders may choose to take advantage of as many of the following cost
offsets as are appropriate for their project, subject to any limitations listed with specific offsets:
The reduction of parkland for WHU shall be a 1:1 ratio based on the minimum required square
footage of the lot area of the minimum required number of lots. For example, if 50,000 square
feet of WHU lots are required then there shall be a reduction in the required parkland area of
50,000 square feet. If the developer chooses to develop more than the required WHU lots the
additional lot area square footage, above the minimum required, shall not reduce the parkland
area in excess of the minimum required. If the developer chooses to develop the required WHU
lots on lots larger than the minimum required lot area, the additional lot area square footage,
above the minimum required, shall not reduce the parkland area in excess of the required.
The reduction of parkland shall be allowed for WHUs and/or lots provided offsite but only to the
extent of the minimum required WHU lot area for the development applying for this parkland
offset and only applied on the site of the development applying for the parkland offset. The
work force housing park dedication reductions can not cause a subdivision to provide less
than the minimum amount of parkland required by Section 76-3-621 of state law.
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4. The numbering at the end of the ordinance should be standardized with 17.02.085 becoming
17.02.090 and 17.02.090 becoming 17.02.100 and 17.02.095 becoming 17.02.110.
5. In the motion provisionally adopting the ordinance, the Commission removed the last
sentence from 17.02.080 F.1.
17.02.080 Occupancy Requirements:
F. Sustained affordability: The following measures will be applied to ensure that
sustained affordability is achieved in the workforce housing:
1. Appreciation on the unit will be capped at 4.5% per year, maximum. A person
purchasing a WHU will only be eligible to receive a maximum of 4.5% appreciation each
year. This is the maximum appreciation allowed, not the guaranteed rate of appreciation.
Purchasers will receive a maximum appreciation schedule at closing. In addition, the
documented costs of major improvements necessary to maintain the good condition of the
house shall be reimbursed at closing.
RECOMMENDATION: Finally adopt the Workforce Housing Ordinance with any
modifications endorsed by the Commission.
FISCAL EFFECTS: The administration of the provisions in this ordinance will require a staff
person, perhaps as much as full time as the program matures. An unknown amount of cash-in-
lieu revenue will be generated.
The ordinance provides that: “WHUs priced for sale to households making 70% or less of AMI
qualify for 100% waived impact fee. Units priced for sale to households making 71–80% AMI
qualify for 50% waived impact fee and 50% impact fee payment deferred until certificate of
occupancy. Units priced for sale to households making 81% to 90% AMI qualify for 25%
waived impact fee…” A waiver of impact fees will require replacement by the City. As of today
the fiscal impact is $7,160.01 per detached home and $6,346.60 per attached home. This cost is
likely to increase in the near future.
ALTERNATIVES: As suggested by the City Commission.
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Respectfully submitted,
_________________________________ ____________________________
Ron Brey, Assistant City Manager Chris A. Kukulski, City Manager
Attachments: Workforce Housing
Ordinance
Report compiled on: July 11, 2007
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ORDINANCE NO. 1710
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, PROVIDING THAT THE BOZEMAN MUNICIPAL CODE BE
AMENDED BY REVISING TITLE 17 AND ADDING A NEW CHAPTER TO BE
NUMBERED CHAPTER 17.02; PROVIDING FOR A NEW TITLE FOR HOUSING
AND A NEW CHAPTER FOR WORKFORCE HOUSING.
WHEREAS, Bozeman has had a shortage of affordable housing for very low to
moderate income households for some time; and,
WHEREAS, Bozeman is the only major community in the State of Montana without a
Housing Authority; and,
WHEREAS, start up funding for Housing Authorities has not been available for many
years making innovative program and regulatory approaches, with public and private
cooperation, necessary to address the shortage of affordable housing; and,
WHEREAS, Bozeman has attempted innovative approaches to address this shortage
over the years, including:
• 1979-1982 - a VISTA project to organize low income tenants of Legion Housing;
• 1985-1986 - establishment of the City’s first Low-Income Housing committee
and employment of a part-time housing consultant to staff it;
• 1985-1986 - establishment of the first rental rehabilitation Community
Development Block Grant program in Montana;
• 1993-1994 - establishment of an Affordable Housing Task Force;
• 1993-1994 - implementation of two Affordable Housing Task Force
recommendations - committing $200,000 from the General fund to establish an
Affordable Housing Fund and adopting an Accessory Dwelling Unit Ordinance;
played a role in the Human Resources Development Council Land Trust from
support letters to grant applications to commitment of City funds through loans or
grants;
• 1994 on - adoption of regulatory and process reforms including the allowance of
accessory dwelling units, restricted size lot requirements, reduced size street
standards, reduced setbacks, reduction in minimum apartment size, reduction in
affordable housing parking requirement, and other process streamlining measures
designed to reduce the cost of supplying affordable housing;
• 2000 on - used a portion of Big Box economic impact mitigation fees for
assistance with the provision of affordable housing;
• 2002 - authorized the Community Affordable Housing Advisory board to work
with a housing consultant and the MSU marketing department to document
housing needs and recommend strategies for meeting those needs on an ongoing
basis;
• 2003 - adopted broad affordable housing strategies recommended by CAHAB and
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community panels.
• 2005 - committed a mill to the Affordable Housing Fund;
• 2006 - committed two mills to the Affordable Housing fund; and,
Whereas, these efforts have not succeeded in providing an adequate amount of
affordable housing in the community; and,
Whereas, this shortage of affordable housing impacts households making from 80% to
120% of the Area Median Income.
NOW, THEREFORE, BE IT ORDAINED BY THE BOZEMAN CITY
COMMISSION:
Section 1
That Title 17 of the Bozeman Municipal Code be amended so that Title 17 reads:
“Title 17 (Reserved)
HOUSING”
Section 2
That the Bozeman Municipal Code be amended by adding a chapter to be numbered 17.02,
to read:
“Chapter 17.02
WORKFORCE HOUSING
17.02.010. Purpose
The purpose of this chapter is to enhance the public welfare by ensuring that the workforce
housing needs of the city of Bozeman are addressed. The City Commission finds that there
is a critical shortage of workforce housing, making home acquisition by many city of
Bozeman resident workers extremely difficult. The resident workforce is leaving the city in
search of housing, and new employees are being deterred by the high cost of for-purchase
housing. To maintain a sufficient resident workforce in all fields of employment, and to
ensure the public safety and general welfare of the residents of the city of Bozeman, resident
workforce housing needs must be addressed. It is the intent of this chapter to require the
provision, for purchase, of workforce housing units to meet the needs of income-qualified
households in the workforce and other households within the specified income range.
171.02.020 Definition of Terms
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Actively Marketed – Active marketing includes, but is not limited to, City of Bozeman
website listing and available print advertisement, including, but not limited to, local
newspapers and other available print media. Active marketing includes continuous
promotion of property concurrent with market rate homes.
Affordable Housing – Housing for persons earning less than 65 percent of the area’s
median income for rental housing and less than 100 percent of the area’s annual median
income 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 defined by the Department of Housing and Urban Development. Affordable
housing is subject to the City’s affordable housing policy.
Area Median Income (AMI) – Defined by the Department of Housing and Urban
Development, AMI is the median income for a family of four within a specific
geographical area, such as Gallatin County.
Attached Single Family Home (ASFH) – A dwelling attached by one or more common
walls with another dwelling. Multiple homes on a single lot can be deeded separately,
such as condominiums.
Banking Units – Workforce Housing Units (WHU)s can be pre-built and/or lots can be
set aside for future construction of WHUs, which will count towards the required number
of WHUs for a future subdivision and/or development by a particular developer and/or
builder.
Detached Single Household Home ((DSHH) – A freestanding dwelling built without
any shared walls.
Dwelling – A building or portion thereof, meeting the requirements of the City’s adopted
International Building Code and used by one household, as defined by Chapter 18.80 of
the Uniform Development Ordinance, BMC, for residential purposes. Dwelling
occupancy duration is typically longer than thirty continuous days. Dwellings may exist
in many configurations, including single-household, two-household, multiple household
dwellings, and group homes. Dwellings do not include hotels, motels, extended stay
lodgings, or tourist homes.
Household – A person living alone or any of the following groups living together as a
single nonprofit housekeeping unit and sharing common living, sleeping, cooking, and
eating facilities. Any number of people related by blood, marriage, adoption,
guardianship, or other duly-authorized custodial relationship;
A. Not more than four unrelated people, including persons enrolled in an
institution of higher learning. Two unrelated people and any children related
to either of them; or
B. Not more than four people who are:
1. Residents of a “Community Residential Facility” as defined in § 76-411
et. Seq., MCA and this title; or
2. Handicapped” as defined in the Fair Housing Act, 42 USC § 3602 (h).
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This definition does not include those persons currently illegally using or
addicted to a “controlled substance” as defined in the Controlled Substances
Act, 21 USC §802 (6).
C. “Household” does not include:
1. Any Society, club, fraternity, sorority, association, lodge, combine,
federation, coterie, cooperative housing, or like organization;
2. Any group of individuals whose association is temporary or seasonal in
nature; or
3. Any group of individuals who are in a group living arrangement as a result
of criminal offenses.
Housing & Urban Development (HUD) – The federal agency responsible for setting
Area Median Income limits.
Uniform Development Ordinance (UDO) – City of Bozeman’s code providing rules
and regulations for city development.
Workforce – Households earning less than 120% of AMI for the City of Bozeman or, for
households larger than four, households with a current average income at or less than
120% AMI for a household of that size.
Workforce Housing Plan – each development meeting the applicability criteria defined
in 17.02.030 shall have an affordable housing plan under this ordinance. The affordable
housing plan shall be consistent with the provisions set forth in the Workforce Housing
Ordinance.
Workforce Housing Program – This program is established under the Workforce
Housing Ordinance. The Workforce Housing Program is administered by the City of
Bozeman, the Commission and/or agency directed by the Commission.
Workforce Housing Unit (WHU) – Housing for persons earning less than 120 percent
of the area’s median income for purchased housing. Further, workforce housing does not
require greater than 30 percent of the household gross annual median income for housing.
Annual median income is defined by the Department of Housing and Urban
Development.
17.02.030. Applicability
A.
1. A developer of a subdivision that includes residential lots, for which
preliminary plat is submitted on or after August 2, 2007 and which will result
in development of ten or more residential lots shall provide a lot or lots for
the construction of 0.4 dwelling units per net acre of development for the
workforce housing program. Multiple developments or projects by the same
applicant or responsible party within any consecutive 12-month period on
parcels held in contiguous ownership at the time of the initial development
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that in the aggregate equal or exceed ten residential lots shall be subject to
this section.
2. Any site plan including residential condominiums on lots created or annexed
on or after August 2, 2007, with a gross project area of more than 5 acres
shall provide, or shall cause to be provided 0.4 dwelling units per net acre of
development for the workforce housing program. Multiple site plans by the
same applicant or responsible party within any consecutive 12-month period
that in the aggregate exceed a gross project area of 5 acres shall be subject to
this section.
B. Project Size:
1. Subdivisions with fewer than ten lots, or condominium site plans with a gross
project area of 5 acres or less: No workforce housing requirements.
2. Subdivisions with ten or more lots, or condominium site plans on lots created
or annexed on or after August 2, 2007, with a gross project area of more than
5 acres: 0.4 dwelling units per net acre of development in the subdivision
must be dedicated to workforce housing requirements (excluding any
additional dwelling units approved through a density bonus), subject to the
provisions of Section 17.02.040.
17.02.030. Workforce Housing Plan Required
The developer of a project meeting the applicability criteria defined in 17.02.030 shall
submit, prior to or concurrently with their application for preliminary plat or condominium
site plan approval, an application describing their workforce housing plan in accordance with
this and other applicable ordinances. The developer's workforce housing plan must, in
addition to items listed above, include a marketing plan and estimated project timeline.
17.02.040. Compliance
A development meeting the applicability criteria defined in 17.02.030 is required to
provide lots and/or building areas for construction of Workforce Housing Units (WHUs)
for homeownership according to this chapter and may meet its obligations according to
one or a combination of the methods established below.
Workforce Housing Detached Single Household Home (DSHH) lots and Workforce
Housing Attached Single Housing Unit (ASHU) lots shall be sized according to the
matrix found in 17.02.050 and shall be priced at $12/sf in 2007 and increase annually at
the lesser of 4% or the increase in the AMI for that year. Periodic review of the annual
increase shall be completed by the City and shall not be greater than the lesser of 4%
annually or the increase in the AMI over that time period.
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A. Density Calculations
1. The required number of for sale WHUs is calculated at 0.4 units per net lot
area of development in acres.
2. Where the fractional calculated required WHU lots are greater than one-
half, the developer shall be required to provide the next full lot.
B. Specified Use Calculations
1. A minimum of 30% of the required WHUs must be DSFHs.
2. The remaining required WHUs may be either DSFHs or ASFUs
3. Rounding of units will be in favor of DSFH.
C. Deed Restriction
1. The WHUs shall be deed-restricted to meet UDO and Workforce Housing
Unit program requirements.
2. If the actively marketed DSF lot is not sold within one year of final plat
approval, the deed restriction shall be removed.
3. If the actively marketed DSFH or ASFU is not sold within 6 months of
receiving an occupancy permit from the City Building Department, the
deed restriction will be removed.
D. Marketing
1. All lots and WHUs shall be actively marketed by the developer and/or
builder in the appropriate print media and on the City of Bozeman’s website.
2. WHU lots shall be actively marketed concurrently with the market rate
lots.
E. Methods of Compliance
1. The developer shall provide the required number of lots for construction
of DSFH and ASFU. The lots shall be actively marketed at the same time
as the other lots are marketed and not later than commencing at final plat
approval.
2. Off-site workforce dwelling unit lots
a. The developer of a subdivision may provide WHU lots off-site for the
production of the same number and type of affordable units required for
the development of his/her subdivision. The land must be suitable for
construction, without abnormalities and with complete environmental
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review accepted by the City of Bozeman. It must be economically
feasible to develop the required number of units on the site. The site must
be appropriately zoned and improved with infrastructure (including curbs,
gutters, water, sewer, and storm drainage) to City of Bozeman standards.
Excessive aggregation of WHUs shall be discouraged.
b. The developer may opt to build WHUs in another location within the
City of Bozeman. When developed in excess of required WHUs or in
advance of the development for which the WHUs will be required, such
WHUs will be accepted as credit toward required units in a future
application(s). This process is known as “banking units”. The banked
units must be pre-approved by the workforce housing program
administrator.
c. Existing housing may be used to fulfill the requirements defined in
Option #1 above. Such housing must be located within the City, be zoned
for residential use, have clear title, be in good repair and available for
immediate habitation. The conversion to condominiums of existing rental
multifamily housing will not be considered for compliance with the
requirements of Option #1, unless such conversions were completed on or
before December 31, 2006.
d. “Bonus lots” gained from reduced parkland may not be sold until WHU
construction commences.
e. 80% of the WHUs in any phase of a multiphase development must be
built before the next phase may be commenced excepting infrastructure
installation common to both phases.
3. Individualized Program
A developer may opt for an individualized program which must provide,
at a minimum, the same number of units required under option number 1.
An individualized program will be subject to standard review by city staff,
boards, the Commission, and the public. There will be one additional
public meeting with the City Affordable Housing Advisory Board
(CAHAB). This meeting will review:
a. project feasibility
b. overall benefits and drawbacks of the project
c. compliance with the affordable housing policy priority needs
The CAHAB will make a recommendation to the City Commission on
each individualized program. The Commission will make the final
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decision in conjunction with preliminary plat review.
4. Cash in Lieu
The developer may pay a fee to the City of three times the value per lot of
the lots required to be provided at reduced prices in option #1 above.
Money received through the Cash in Lieu option shall be used to provide
down payment assistance and dwelling units for the priority populations
identified in the City’s periodic housing needs assessment and to cover
administrative costs. 25% of any cash in lieu collected through this
ordinance will be set aside for parkland acquisition; maintenance and
enforcement of parkland development requirements after adequate
administrative costs are withdrawn.
F. 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 waiver request, which will make a final
decision.
17.02.050. Cost of Housing
Determining the price of a unit:
The maximum sales price of a for-purchase Workforce Housing Unit will be determined
annually by the Workforce Housing Administrator using the assumptions listed below.
The maximum price of a house built on a workforce housing lot will be provided to the
developer of the subdivision at final plat.
The price of each WHU is the total price, and will include all taxes, fees, SIDs and
commissions accrued in bringing the house to the point of sale. The purchaser of the
WHU is responsible for payment of closing costs to secure their financing and is also
responsible for payment of any SIDs created after point of sale.
Pricing assumptions:
In setting the maximum price of a WHU, the plan administrator will use the following
assumptions:
1) The Area Median Income (AMI), as of January 1st of each year, as set
annually by HUD will be used to define annual income for households of 2, 3,
and 4 earning 80% and 100% of AMI.
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9
2) Gross monthly income will be calculated as annual income divided by 12.
3) The household’s monthly payment will not exceed 30% of their gross monthly
income for payment of Principal, Interest, Taxes, Insurance, and
Homeowner’s Association Dues.
4) 27% of the household’s monthly housing payment will be allocated toward
payment of escrows for taxes, insurance, and homeowner’s association dues.
5) The interest rate will be calculated using the rate of the Montana Board of
Housing’s regular bond program plus ¼% as of January 1st of each year.
6) The loan will be a 30 year, fixed rate loan.
7) Loan to value is 97%.
The following table depicts the mix of dwelling unit types and the associated maximum
price for units used to comply with the provisions of this chapter. Houses must be built
to minimum construction standards specified by the workforce housing program
administrator. Developments using condominium housing to meet the requirements of
this section shall take the necessary steps during construction and shall provide the
necessary covenants concerning owner occupancy requirements to assure that
condominium purchases will be eligible for Fannie Mae or FHA financing.
Mix and Price of Dwelling Units
Total
units
req'd 1 2 3 4 5 6 7 8 9 10
Detach
ed
units
require
d .3 = 1 .6 = 1 .9 = 1 1.2 = 2 1.5 = 2 1.8 = 2 2.1 = 3 2.4 = 3 2.7 = 3 3 = 3
Unit #
1
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
D,
HH4
2
A,
HH4
A,
HH4
D,
HH3
D,
HH3
D,
HH3
D,
HH3
D,
HH3
D,
HH3
D,
HH3
3
A,
HH3
A,
HH4
A,
HH4
A,
HH4
D,
HH2
D,
HH2
D,
HH2
D,
HH2
4
A,
HH3
A,
HH3
A,
HH3
A,
HH4
A,
HH4
A,
HH4
A,
HH4
5
A,
HH2
A,
HH3
A,
HH3
A,
HH3
A,
HH4
A,
HH4
6
A,
HH2
A,
HH3
A,
HH3
A,
HH3
A,
HH3
7
*when
only
two
units
are
require
d, the
develo
per
may
opt to
A,
HH2
A,
HH2
A,
HH3
A,
HH3
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- 10 -
8
A,
HH2
A,
HH2
A,
HH3
9
create
the two
units
above,
or may
choose
, as an
alterna
tive, to
create
two (2)
A,
HH4
units
A,
HH2
A,
HH2
10
A,
HH2
Key:
Unit
Code
Unit
Type AMI
HH
pricing
size
Minim
um #
bedroo
ms
Minim
um of
baths
Garage
req'd
Min.
Lot
size
(sq. ft)
max
price
D,
HH4
Detach
ed 100% 4 3 1+.5 1 stall
2751-
3000
D,
HH3
Detach
ed 100% 3 3 1+.5 1 stall
2500-
2750
D,
HH2
Detach
ed 100% 2 2 1+.5 1 stall
2500-
2750
A,
HH4
Attach
ed 80% 4 3 1+.5 1 stall 2500
A,
HH3
Attach
ed 80% 3 3 1+.5 1 stall 2500
A,
HH2
Attach
ed 80% 2 2 .75+.5 1 stall 2500
Set
annuall
y by
WFH
admini
strator
using
the
assum
ptions
listed
in
Sectio
n
17.02.
050
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Units required in excess of 10 will be determined using the above chart. For example, 15 units will be
determined by combining the requirements for 10 and 5 units. Thirty five (35) units will be calculated
using three times the ten unit requirement plus the five unit requirement.
17.02.060. Cost Offsets
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 than minimum standards established by Title 18, BMC.
A. Developers and builders may choose to take advantage of as many of the following cost offsets
as are appropriate for their project, subject to any limitations listed with specific offsets:
1. The reduction of parkland for WHU shall be a 1:1 ratio based on the required square footage of
the lot area. For example, if 50,000 square feet of WHU lots are required then there shall be a
reduction in the required parkland area of 50,000 square feet. If the developer chooses to
develop more than the required WHU lots the additional lot area square footage, above the
required, shall not reduce the parkland area in excess of the required. The reduction of
parkland shall be allowed for WHUs and/or lots provided offsite but only to the extent of the
required WHU lot area for the development applying for this parkland offset and only applied
on the site of the development applying for the parkland offset.
2. Significantly smaller minimum lot sizes are allowed for workforce dwelling units
(WHUs), both detached and attached.
3. A one-to-one density bonus is available for each lot meeting the requirements of this
ordinance, whether onsite or through offsite land dedication. Additional parkland does not
have to be provided for housing created through this density bonus provision.
4. Builders paying WHU impact fees qualify for deferral of payment until certificate of
occupancy.
5. A sliding scale of fully waived, reduced and deferred impact fees will be used for WHUs.
WHUs priced for sale to households making 70% or less of AMI qualify for 100% waived
impact fee. Units priced for sale to households making 71–80% AMI qualify for 50% waived
impact fee and 50% impact fee payment deferred until certificate of occupancy. Units priced
for sale to households making 81% to 90% AMI qualify for 25% waived impact fee and 75%
impact fee payment deferred until certificate of occupancy. Units priced for sale to households
at 91–100% AMI qualify for 100% impact fee payment deferred until certificate of occupancy.
6. Reduction or waiver of other City fees may be available for housing projects that are 100%
affordable, according to the city definition of affordability and that are approved through the
individualized program.
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7. Fast-track site plan review is allowed through use of contract planners.
8. Expedited review by all departments (planning, engineering, building, etc.) will be arranged
upon request for site plans with 100% affordable housing.
9. Simultaneous infrastructure and housing construction will be permitted upon request for
projects building on-site affordable housing units as specified by this ordinance, in line with
UDO requirements.
10. Projects will be rewarded with optimal review time if project submittals are complete and fully
meet code standards so planners/engineers/building department do not have to send the project
back to applicant for more work
11. Low-interest construction loans possible for construction of workforce housing units on an as-
available basis through the City’s Economic Development and Housing Revolving Loan Funds
and/or through participating private lenders.
12. Zero lot line is allowed in all residential zoning districts for creation of paired town homes on
two lots. This permits combination of two workforce housing units or one workforce unit and
one market-rate unit. In R-1 zoning, duplexes must be comparable in size to market-rate single
family homes in the subdivision and designed to look like single-family homes in regard to
placement of doors, garages, and driveway.
13. WHU architectural plans available through the City will be exempt from Design Review.
17.02.070 Requirements for Workforce Housing Units (for the Builder/Developer)
A. Mix. Workforce housing units (WHU) shall be a mix of two and three bedrooms, both
detached and attached. There shall be a minimum of 30% detached units, with the remainder as
attached units. The units shall be located throughout the subdivision. All homes must have at
least one bath and a single car garage at minimum. One bedroom units and four bedroom units
will be considered as WHUs as part of an individualized project. (See section in Methods of
Compliance).
B. Unit type The units must be similar (compatible, consistent) in exterior finish and design to
other market rate units within the subdivision. (Concept is that WHUs should not be easily
identifiable by someone driving through the area).
C. Livability WHUs should be functionally equivalent to other market rate units, i.e. closets,
patios or decks or porches, kitchens. The materials used on the interior finish may be of
different quality, e.g. laminate countertops instead of tile, linoleum entry instead of tile, but
durable.
D. Location The location of the WHU must be identified on the preliminary and final plats. The
units must be located throughout the subdivision, either individually or in small clusters.
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(Concept is that units may be in small clusters, but not located in one corner/area of the
subdivision).
E. Timing
Regarding Lots:
1) Workforce Housing Lots must be actively marketed (refer to Section 17.02.040.D) during the
same period as market rate lots in the subdivision.
2) Workforce Housing Lots must provide the City of Bozeman with First Right of Refusal to
purchase in the event that an actively marketed lot is not sold within 12 months of
availability.
3) In the event that a lot has been actively marketed (as determined by the Workforce Housing
Administrative Authority) for a period of not less than 1 year and remains unsold the City
will do the following:
a) Determine if the City will elect to exercise their First Right of Refusal to purchase the
lot at its affordable price;
b) If the City chooses not to purchase the property, the developer may sell the lot as a
market rate lot. The difference between the lot’s sales price and the affordable price
plus interest paid on the lot will be paid to the City’s Affordable Housing Fund when
the lot closes by the title company. The deed restriction on the lot will be removed at
closing as well.
4) Lots that are not actively marketed and for which building permits are not drawn within 4
years of commencement of construction of market rate units will be subject to purchase by
the City at ½ the workforce housing lot price in the year final plat was received.
Regarding Building on the Lots:
1) Workforce Housing Lots purchased must draw building permits within 3 years of the initial
sale of the lot.
2) Workforce Housing Lots not drawing a building permit within 3 years of the initial transfer
of the lot will be subject to purchase by the City of Bozeman for ½ the workforce housing lot
price in the year final plat for the subdivision was received.
3) Owners of a Workforce Housing Lot unable to draw a building permit in the prescribed time
may appeal to Workforce Housing Administrative Authority for a waiver to prevent sale of
the lot to the City and allow for additional time to construct a Workforce Housing Unit. The
request will be reviewed by the Workforce Housing Administrative Authority, who will
make a recommendation to the City Commission. Final decision will be that of the City
Commission. Requests for waivers must include:
a) Reason for the request
b) Lot owner’s proposal to build workforce housing unit and timeline
F. Disclosure In addition to being designated on the plat, the location and type of WHU in a
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development must be disclosed in writing by each seller of a WHU to each subsequent
purchaser.
17.02.080 Occupancy Requirements:
A. Owner Occupancy: WHUs must be the primary residence of the owner. A property may not be
vacant for more than 30 days.
B. Proof of Primary Residency: Homeowners are required to supply proof of full-time residence on
an annual basis to the City. Proof must consist of bills from utility companies or any personal
government mailings. If it is determined that the WHU is not being used as a primary residence, the
lender will be notified. The Mortgage Lender and or its assigns, will handle this conflict according to a
Rider that is attached to the Mortgage Note, which is signed by the mortgagor (applicant) at settlement
of the loan.
C. Allowance for Periodic Absences: Absences are allowed for sabbaticals, yearlong job transfers,
military responsibilities, etc. Periodic absences are not to exceed one year or as established by Federal
law. Proof of valid absence shall be required
D. Renting During Periodic Absences: WHUs may be rented by the owner during an acceptable
periodic absence. The homeowner may rent their home for one full year for every five years of
residency. If the WHU homeowner rents their home for more than one consecutive year, this is not
considered owner occupancy and the loan will be called due in full within 30 days. The homeowner
must notify the city when such rentals are commenced and terminated.
E. Purchase of Another Property During Residency: A homeowner is allowed to purchase other
property while living in their WHU but must notify the city.
F. Sustained affordability: The following measures will be applied to ensure that sustained
affordability is achieved in the workforce housing:
1. Appreciation on the unit will be capped at 4.5% per year, maximum. A person purchasing a WHU
will only be eligible to receive a maximum of 4.5% appreciation each year. This is the maximum
appreciation allowed, not the guaranteed rate of appreciation. Purchasers will receive a maximum
appreciation schedule at closing. In addition, the documented costs of major improvements
necessary to maintain the good condition of the house shall be reimbursed at closing.
2. In the case of foreclosure or sale, the City of Bozeman will be granted a First Right of Refusal on
the property. Any net income the City earns from the resale of the property will be dedicated to
down payment assistance. Should the City not exercise this right, the lender may liquidate the
property at market rate.
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 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
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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 (4.5%), the owner receives the
maximum rate (4.5%) and the difference will be allocated to the City's Workforce Housing fund
17.02.085 Buyer Qualification:
Before a household may register in the lottery for the opportunity to purchase a WHU, they must meet
the following requirements:
A. Buyer Loan Pre-Qualification: All Program applicants must be pre-qualified upon credit
evaluation (credit scores from all three credit bureaus or acceptable non-traditional scores) by a
City approved lender. The applicant(s) must obtain a letter of pre-qualification from the City
approved lender that is no more than 90 days old. Once the applicant is pre-approved by the
Workforce Housing Program Authority and a City approved lender, they will be placed into the
lottery. The applicant(s) will remain pre-qualified until selected in the lottery. Once selected, if
the applicant’s pre-qualification letter is older than 90 days, the applicant will be given one week
to obtain pre-qualification again. After one week, the selection lapses and new buyers are
selected. If the applicant(s) letter is less than 90 days old at time of selection, the applicant(s) do
not have to obtain re-qualification from a City approved lender. The city shall cooperate with
the Road To Home program and local lenders to assist in maintaining the prequalified list.
B. Household Income: The current total household income for the household may not exceed 120%
of Area Median Income for a household or 4. For households larger than four, the income cap will be
120% for the size of that household.
C. Asset Limits: The applicant must verify that they have sufficient liquidity to bridge the gap
between the loan amount and the home’s purchase price; however, total liquid household assets are
limited to $100,000 and non-liquid assets are limited to $150,000. Applicants are not allowed to own
any other homes or residential property anywhere. This provision eliminates any applicants who own
rental or investment property.
D. Household Size: There will be no minimum or maximum household size limits for the Program
except as defined by Local, State or Federal law.
E. Residency Requirement: All applicants must be residents of or employees working in Gallatin
County or demonstrate that they are moving to the area for a specific job when they apply for the
Program.
F. Homebuyer’s Education: Applicants must complete a homebuyer’s education program of the
city’s choice.
17.02.090 Buyer Selection Process (the Lottery):
A lottery system will be established by the City and/or Workforce Housing Program agency to
determine a homebuyer whenever multiple qualified applicants wish to purchase the same workforce lot
or home.
17.02.095 Program Review
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The Workforce Housing Program established herein shall be reviewed two years after its inception and
annually thereafter to determine its effectiveness and to determine if the mechanics of the program are
found to impose an unreasonable burden on either the parties producing the housing or the on the parties
purchasing it. “
Section 3
Repealer. All resolutions, ordinances and sections of the Bozeman Municipal Code and parts
thereof in conflict herewith are hereby repealed.
Section 4
Savings Provision. This ordinance does not affect the rights and duties that matured, penalties
that were incurred or proceedings that were begun before the effective date of this ordinance.
Section 5
Severability. If any portion of this ordinance or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect other provisions of this ordinance which may be
given effect without the invalid provisions or application and, to this end, the provisions of this ordinance
are declared to be severable.
Section 6
Effective Date. This ordinance shall be in full force and effect on August 2, 2007.
PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a
regular session thereof held on the 18th day of June 2007.
__________________________________________
JEFF KRAUSS, Mayor
ATTEST:
_____________________________________
BRIT FONTENOT
City Clerk
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PASSED, ADOPTED AND FINALLY APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 16th day of July 2007.
__________________________________________
JEFF KRAUSS, Mayor
ATTEST:
_____________________________________
BRIT FONTENOT
City Clerk
APPROVED AS TO FORM:
__________________________________________
PAUL J. LUWE
City Attorney
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