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HomeMy WebLinkAbout10.d Community Housing Plan 10-01-2019Bridger View Redevelopment Preliminary Plat and PUD Application Section 10.d Community Housing Plan Bridger View Community Housing Plan 10.01.2019 10.d Community Housing Plan Introduction Bridger View’s Community Housing Plan is submitted as a supplement to the Affordable Housing Plan, which specifically addresses units required by the City of Bozeman’s Affordable Housing Ordinance (AHO). This Community Housing Plan addresses the voluntary investment in “missing middle” homes and permanence of affordability through the establishment of a Community Land Trust entity. Missing Middle Homes The Bridger View development partners are committed to investing in making 26 homes available and affordable to households earning between 80 and 120% of AMI, representing Bozeman’s “missing middle.” These households make too much to qualify for AHO homes and too little to purchase a suitable home in the market. The 26 homes provided through the Community Housing Plan are fully voluntary by the development partners to assist in meeting a well-identified community need, and are provided in addition to the 5 Lower-priced Homes required by the AHO. This voluntary investment results in a total of 31 subsidized homes, or 50% of the homes in the Bridger View neighborhood. Community Land Trust - Permanence of Affordability The development partners are also committed to keeping the Lower-priced and “missing middle” homes permanently affordable through the establishment of a community land trust entity, ensuring that the investments necessary to achieve affordability endure for generations. A community land trust (CLT) is a community-based organization established to act as the long- term steward of land and to permanently preserve long-term affordability and access to housing located on that land. After the homes at Bridger View are constructed, the new CLT will receive the donated land and private investment to make these homes affordable for sale to qualified households otherwise unable to afford these homes. Rather than structuring the affordability assistance as a grant or a loan to the homebuyer, the CLT uses these resources to write down the initial purchase price to an affordable level. To keep the home affordable from one homebuyer to the next, the CLT limits the price at which the home may be resold, allowing the homeowner to keep all of the equity they earn through paying down the principal balance on their mortgage plus a limited share of the home’s increase in value during their ownership. Effectively, the CLT homeowners are given the opportunity to purchase and own a home they can afford and upon sale leave this affordability with the home, so this same opportunity is available to the next income qualified homebuyer. As a result, CLT homes remain affordable from one income qualified homeowner to the next without requiring additional resources to be invested each time the home resells. Bridger View Community Housing Plan 10.01.2019 The mechanism for ensuring this permanent housing affordability is separating the ownership of the land parcel from the ownership of the home. At closing, a CLT homebuyer purchases the home at the affordable price and leases the land parcel from the CLT by means of a lease agreement that has an initial term of 75 years, is renewable at each sale, and can be renewed for a second 75-year term. This lease agreement provides the homeowner with a durable, legally enforceable, exclusive right to use and occupy the leased land parcel for the term of the lease. The lease agreement also details specific expectations and requirements regarding the homeowner’s use and occupancy of the property – e.g., requiring the home to be their primary residence; prohibiting subletting the home except in special circumstances; requiring the homeowner to maintain the home, pay all real estate taxes, keep the home fully insured, etc. All of this is situated within an organization that is committed to preserving the condition, quality, affordability and availability of these homes forever. Governed by a board of directors that is broadly representative of the community served, the community land trust commits itself to ongoing stewardship of CLT homeowners, monitoring and enforcing each homeowner’s compliance with the lease agreements they signed and providing or arranging for ongoing support and assistance, as needed, to help homeowners in their efforts to remain successful as homeowners and as neighbors. And, each time a home sells, the CLT arranges the purchase of the home by another income qualified household – and begins the process all over again over the useful life of the home.