Loading...
HomeMy WebLinkAbout03- Affordable Housing Needs Assessment and Strategy, City of Bozeman, 2003City of Bozeman Affordable Housing Needs Assessment and Strategy Prepared for: City of Bozeman Community Affordable Housing Advisory Board September, 2003 Table of Contents INTRODUCTION ................................................................................................ ............................... 1 BACKGROLM) ..................................................................................................... ............................... I WHAT IS AFFORDABLE HOUSING? ......................................................................... ............................... I MSUHOUSING ST JRVEY ........................................................................................ ..............................2 REPORT ORGANIZATION ........................................................................................ ..............................2 HOUSINGNEEDS ASSESSMENT ...................................................................... ............................... 3 COMMUNITY DEMOGRAPHICS, HOUSING STOCK AND MARKET TRENDS ................... ..............................3 ECONOMICTRENDS ............................................................................................... ..............................6 SPECIAL HOUSING NEEDS ..................................................................................... ............................... 7 HOUSING STOCK CHARACTERISTICS ................................................................... ............................... 10 HOUSING MARKET CONDITIONS & INCOME RELATED TO HOUSING COSTS ............ ............................... 12 AFFORDABLE HOUSING DEMAND, 2000 -2020 ........................................................ .............................16 HOUSING RESOURCES & CONSTRAINTS ................................................................. .............................21 CONCLUSIONS................................................................................................... ............................... 24 STRATEGY RECOMMENDATIONS ............................................................... ............................... 27 STRATEGY I. REVISE AFFORDABLE POLICY TO TARGET LOWER INCOME HOUSEHOLDS ................... 28 STRATEGY IL PROCESS ANI) REGULATORY REFORMS ...................................... ............................... 29 STRATEGY III. INCENTIVE -BASED AFFORDABLE HOUSING PROGRAM ................ ............................... 30 STRATEGY IV. AFFORDABLE HOUSING IMPLEMENTATION PLANS IN ANNEXATION AGREEMENTS...... 32 STRATEGY V. IDENTIFY SPECIFIC SITES ANI) RESOURCES FOR SPECIAL NEEDS HOUSING .................. 33 STRATEGY VI. INSTITUTE A FIRST -TIME HOMEBUYERS PROGRAM .................... ............................... 34 APPENDIX A: DEMOGRAPHIC AND EMPLOYMENT DATA ...................... ............................... 35 APPENDIX B: HOUSING STOCK & MARKET DATA ................................... ............................... 47 APPENDIX C: HOUSING DEVELOPMENT PRO- FORMAS .......................... ............................... 65 APPENDIX D: AFFORDABLE HOUSING CASE STUDIES ............................ ............................... 76 APPENDIX E: MODEL AFFORDABLE HOUSING ORDINANCE ................. ............................... 79 APPENDIX F: ADOPTED AFFORDABLE HOUSING STRATEGIES ............. ............................... 83 APPENDIX G: MSU HOUSING SURVEY ........................................................ ............................... 88 Introduction The Bozeman 2020 Community Plan recognizes that an adequate supply of quality affordable housing is central to the long -term health and stability of the Bozeman community. Rising real estate values and a rapidly changing housing market, however, pose a number of challenges as the Cite seeks to proactively address community housing needs. This Affordable Housing Needs Assessment and Strategy represents the culmination of a tvvo phase effort to define and systematically address the long -term affordable housing needs of the Bozeman commLUlity. Background Pursuant to its mission to encourage the development of safe, decent and affordable housing in the jurisdictional area of Bozeman, the Bozeman Community Affordable Housing Adyison- Board ( CAHAB) retained Bay Area Economics (BAE) to prepare an Affordable Housing Needs Assessment and Strategy. This document is also meant to enact Objective 2 and Implementing Policy 45 of the Bozeman 2020 Plan which provide that the City must conduct a needs assessment and prepare a housing strategy even- five years. The Draft Affordable Housing Needs Assessment vvas completed by Bay Area Economics and presented to the CAHAB and City Commission in FebrLm- in 2003. After incorporating comments from the Commission and the CAHAB, a final draft version of the Needs Assessment .vas completed in March, 2002. Subsequently, BAE prepared a Draft Housing Strategy which .vas presented to the CAHAB and City Commssion in May, 2003. Taking into account the recommendations contained in this Draft Strategy, the CAHAB drafted a revised set of housing strategies which were adopted formally by the City Commission in August, 2003. The final adopted strategies are included in this document as Appendix F. What is Affordable Housing? The City of Bozeman Zoning Code defines affordable housing as: housing for low and moderate income persons, defined as those who earn less than 50 percent or 80 percent respectively of the area's annual median income for rental housing and 70 percent to 100 percent respectively of the area's annual median income for purchased housing. A broader definition of affordable housing focuses on the relationship between household income and housing costs. Under this definition, housing is considered affordable when a household is paying no more than 30 percent of its income on housing and utilities. Affordable housing, thus, can take a variety of forms to meet the needs of families and individuals across the income spectrum. Much affordable housing is produced by homebuilders in the private market, but certain types of housing targeted to low- income households require government support and subsidy to ensure affordability. The needs assessment provided below seeks to define exactly those segments of the Bozeman population experiencing the greatest need for affordable housing so that the City of Bozeman can work in partnership with private home builders, local nonprofits, and others to address priority housing needs in the most efficient and cost effective manner possible. MSU Housing Survey In a separate but related effort, the CAHAB commissioned the Marketing Club of Montana State University to conduct a suryev of housing need to complement and add depth to the Affordable Housing Needs Assessment prepared by BAE. In particular, the CAHAB was concerned that the survey directly target lower- income households to gain additional insights into housing problems affecting this population. Using a suryev instrument provided by BAE and approved by the CAHAB, MSU students administered the su n in five locations around the Bozeman area between October 25 and November 9, 2002. Results from this su n are provided at the end of this document as Appendix G. Although BAE did not direct the implementation of the MSU Sur -ey, results from this effort are reflected throughout the Housing Needs Assessment where appropriate. Report Organization Following this introducton- section, the Needs Assessment and Strategy is divided into three major sections. The first section consists of the full Affordable Housing Needs Assessment with data and analysis relating to housing need, the Bozeman economy, and housing resources and constraints. The next major section presents the strategy recommendations prepared by BAE for the City of Bozeman in May, 2003. These are included here at the request of the City of Bozeman for informational purposes, but do not constitute the final strategies adopted by the City Commission in August, 2002. Finally, this document includes seven appendices with demographic and housing data, affordable housing case studies, real estate pro forma analysis, the MSU su n and the final housing strategies which were adopted by the City Commission in August, 2003. 2 Housing Needs Assessment Community Demographics, Housing Stock and Market Trends Bozeman is the major economic and cultural hub for much of Southiyestern Montana, and is the largest cite in Gallatin Coumv oath just over 40 percent of the county's population. The greater Bozeman area is also one of the fastest grovang regions in Montana and the entire inner- Mountain West. The follovying section of the Needs Assessment profiles Bozeman in terms of demographic and economic trends, housing stock characteristics, and housing market conditions, and special needs populations. Population and Household Trends Tables A -1 through A-4 of Appendix A provide information on demographic characteristics for the City of Bozeman in comparison to Gallatin County and the State of Montana. Data ryas collected principally from the 1990 and 2000 U.S. Decennial Census, and Claritas, Inc., a private vendor of demographic and econonuc data. Population and Household Growth. As presented in Table A -1, both Bozeman and Gallatin County greiy at a faster rate betv, 1990 and 2000 than the State of Montana as a v hole. Gallatin Couffiv shoiyed the greatest grovyth during the 1990s vyith population and households increasing at an average annual rate of 3.0 and 3.3 percent respectively. The city of Bozeman grevy slightly less, vyith average annual grovt rates of around 2 percent for both population and households. According to the US Census, the City's population grevy from 22,660 in 1990 to 27,509 in 2000. During the same period, the number of households increased from 8,751 to 10,877. By comparison, the state's population only grevy 1.2 percent annually, and households increased 1.6 percent annually. Household & Family Size. Average household size decreased across all three geographies betvyeen 1990 and 2000, v hich is consistent vyith the stronger household grovyth relative to the grovth in population. Bozeman has the smallest average household size, 2.26 in 2000, compared to 2.46 in Gallatin County and 2.45 across the state. This trend is clearly related to the presence of students attending Montana State University. Indeed, the average family size (largely excluding students) in Bozeman vyas 2.85 in 2000, compared to 2.94 in the county and 2.99 in the state. Household Type. The large student presence vyas also evident in the lovyer percentage of family households in Bozeman compared to the other geographies (see Table A -1). Family households are defined by the U.S. Census as households of related individuals. Fanulies made up only 52 percent of Bozeman households in 1990, decreasing to 46 percent in 2000. In comparison, families made up 62 percent of households in Gallatin County and 66 percent of households in Montana in 2000. The percentage of family households decreased in Gallatin County and Montana betv, 1990 and 2000 as vyell — from 65 to 62 percent in the county and from almost 70 percent to 66 percent in the state. 3 Household Tenure. Bozeman had significantly more renter households than ovyner- occupied households in 2000 - 429 percent compared to 57.1 percent. This ovyner tenure rate increase by 2.7 percent from 40.2 percent in 1990. By comparison, 62.4 percent of households in Gallatin County ovned their ovyn homes. Homeov,nership ryas even more common in the state as a v hole iyith 69.1 percent of households in 2000 ov,ning their ovyn homes, up from 67.3 percent in 1990. Figure 1: Tenure in Bozeman, Gallatin County and Montana, 2000 100% 80% 38% 31% 57% 60% 40% 69 %0 62% 20% 4 % 0% Bozeman Gallatin County Montana Owner =Renter Age Distribution. Bozeman's age distribution, as shovyn in Table A-2, differs from those of both Gallatin County and the State of Montana. The population of Bozeman is yen- young, vyith a median age of 25.4 years, compared to 30.7 in Gallatin County and 37.5 in Montana Young adults of college age (18 to 24 years old) made up the largest segment, accounting for 33.5 percent of Bozeman residents, up from 30.5 percent in 1990. The same group made up 18.5 percent of the Gallatin County population and only 9.5 percent of the state population. Bozeman had slightly fevyer children under age 18 than Gallatin County and Montana. Children accounted for only 16 percent of Bozeman residents, compared to 22 percent in the county and 25.5 percent in the state. Residents aged 65 and older represent 8 percent of Bozeman 's total population, 8.5 percent of the county population and 13.4 percent of Montana's population. Household & Family Income. According to the US Census, Bozeman had a lovyer median household income than either the county or the state in 1999. Bozeman households had a median income of $32,156, compared to $38,120 in Gallatin County and $33,024 in Montana Approximately 55 percent of households earned less than $35,000 in Bozeman, compared to 45.1 percent of Gallatin County and 52.7 percent of households in Montana. This income data, ho«eyer, is also skevyed by the City's large student population. Taking just family incomes, Bozeman has a median of $41,723 in 2000 compared to $46,639 in the county and $40,487 in the state. 4 Figure 2: Median Household Income versus Median Family Income, 1999 $50,000 $40,000 $46,639 $41,723 $38,120 $40,487 $30,000 $32,15E $33,p24 $20,000 $10,000 $0 Bozeman Gallatin County Montana ❑ Median Family Income ❑ Median Household Income Educational Attainment. Bozeman residents are, on average, relatively highly educated compared to the county and state iyith almost half of residents aged 25 or older haying a bachelor's degree or higher in 2000 (49.5 percent). Of those, 15.6 percent had graduate or professional degrees (see table A-4). Adults oath some college made up another 25 percent (either persons still in school or those v ho have stopped attending college vathout graduating). Gallatin County also had a significant number of college graduates, 41 percent oath bachelors, graduate, or professional degrees. By comparison, only 24.4 percent of Montana residents have bachelor, graduate or professional degrees. Student Population As presented in Table A 11, an estimated total of 8,681 fill- and part-time students lived in Bozeman as of the 2000 US Census. This includes students living on- and off - campus. Off -campus students both from MSU and other institutions totaled 5,377. For the purpose of housing market analysis, however, the number of individual students living in Bozeman is less important than how many households include one or more student members. Since neither the census nor MSU collect this data, it is impossible to estimate this exact figure, though it is likely to be at least 2,688 assuming that most student households include one or more student members. Student households have both a stabilizing influence on the local housing market in periods v hen the residential market is weal., as vyell as tendency to place an upiyard pressure on rent and price levels 1yhen overall demand is strong. Indeed, the presence of a large student population in Bozeman is an important factor in the scarcity of affordable rental housing for yens -logy income households competing in the open market for suitable housing. Summary. The demographic data for Bozeman suggests a city vyith households that are younger, smaller in size, and less affluent than Gallatin County. This pattern is largely set by Bozeman's college student population, v hich comprises approximately one -third of the city's residents. Bozeman is grovying at over tvyo percent a year, outpacing the state of Montana but falling behind Gallatin County as a v hole. Household incomes in Bozeman and the county have risen over the last decade, but the Cite continues to have lovyer average household and family incomes than in the county. As a complement to data provided by the US Census and other secondary data sources, Table One belovy profiles key demographic variables for residents surveyed by the MSU marketing club. As shovyn, the 5 sample of residents obtained through the su n was, on average, relatively less affluent and more heavily concentrated in fanuly households than the City s population as a v hole. Table 1: Census Data vs. MSU Survey Sample 2000 Census MSU Survey (a) Owner Households 43% 40% Renter Households 57% 60% Family Households 46% 58% Median HH Income $32,156 $25,250 Notes: (a) Data from survey conducted by MSU students in October and November, 2002. Sources: US Census, 2002; MSU Marketing Club; BAE, 2002. Economic Trends Tables A -5 through A -7 profile employment trends in Bozeman and Gallatin County based on a combination of data from the State of Montana and the US Census. Labor Force Trends. Unemployment has been extremely logy in Bozeman and Gallatin County for several years, even as the size of the labor force has increased. As shovyn in Table A-5, the Courltv's total labor force increased by 35 percent from under 29,000 in 1990 to over 44,000 by 2001, while unemployment declined from 4.7 percent in 1990 to 2.5 percent by 2001. Employment trends have not been nearly so strong stateiyide; the labor force grey by 13.8 percent from 401,000 to 465,223 between 1990 and 2001, with unemployment declining from 6.0 percent to 4.6 percent during the same period. Employed Residents by Industry. Table A-6 displays the distribution of employed residents by major industn- sector in Bozeman versus the county and state. Not surprising for a cite vyith a large research University, Bozeman's 15,796 employed residents are heavily employed in the professional, education and arts sectors. Combined, these sectors account for over 51 percent of the City's employed resident workforce. As with Gallatin County overall, Bozeman also has significant concentrations of residents employed in retail trade and constriction. Local Employment Opportunities. Table A -7 presents the distribution of jobs in Gallatin County by major industn- sector' betiyeen 1991 and 2000 based on data from the State Department of Labor & Industry. As iyith unemployment data, recent tabulations of employment by industry and place of iyork are only available from this source at the cou mvivide and state level. Table A -7 presents this information for Gallatin County from 1991 through 2000. In all years analyzed, retail trade, services, and government iyere the top three ' Data in Table A -7 represents all jobs provided by employers in Gallatin county by sector. These jobs mae or may not be filled by Gallatin County residents. Due to differences in data collection, the industn sectors presented in Table A- 7 do not match those in Table A -6. 6 employment categories for Gallatin County. Together, these three industries provided over 72 percent of jobs in the county. These three industries have remained the largest throughout the past decade, though government employment decreased 4 percent and service jobs increased 4 percent during that period. In the retail sector, average annual employment growth in Gallatin County has been over 5 percent, iyell over the population grovyth rate of 3.0 percent. In contrast, statewide retail employment has groan at only 3.0 percent per annum, compared to 1.2 percent population grov th. Jobs in the other economic sectors remained fairly constant, with the only notable increase occurring in the Mining sector. The number of people employed in Mining increased from 997 to 2,863 and iyent from 5 to 8 percent of total employment. Top Employers in the Bozeman Area. Montana State University is by far the largest single employer in the Bozeman area, with over 2,500 employees. The hospital employs approximately 600, followed by the school district iyith 579, and Anchor Gaming, oath 400. Wal -Mart is one of the top ten private- sector employers in the area, iyith a reported 260 employees. Two high -tech firms, RightNovy Technologies and ILX Lightiyaye, are also among the top 10 private- sector employers Summary. Bozeman and Gallatin County continue to enjoy a relatively robust economy vyith lovy unemployment and steady employment grovtth across economic sectors. Bozeman's employed vyorkforce is both highly educated and heavily concentrated in the professional, arts, and educational services sectors. The greater Bozeman region has also experienced strong employment grov,th in traditionally less vyell- paying sectors such as retail trade, and the vast majority of this grovth has been concentrated in the Cite due to its superior locational advantages for retailers needing access to major transportation corridors. Special Housing Needs Certain populations require non - conventional housing types that serve both as shelter and provide services to their residents. Mane special populations are on fixed incomes and have linuted ability to absorb increased housing costs. This section estimates the extent of various special housing needs populations found in the Bozeman community based on Census dtta, the MSU Housing Needs Su n and direct input from Bozeman residents. Large Families. The U.S. Department of Housing and Urban Development defines a large family as one vyith five or more members. Often, large logy- income families live in oyercrovyded conditions and, due to the presence of minor children, require affordable childcare. According to the U.S. Census, approximately five percent of Bozeman households had five or more members in 2000. In general, these families require three or more bedrooms to be adequately housed. In Bozeman, the US Census reports that 46 percent (5,333 units) of all occupied units in Bozeman contained three or more bedrooms. Considering this large supply of units oath three or more bedrooms in Bozeman and the number of large families (561 large families), there appears to be a sufficient supply of large housing units to accommodate housing demand for large families. However, certain large families may still experience some type of housing need related to excessive housing costs. Large families tend to have large numbers of minor children v, typically are not wage- earners. This leaves two parents, or in many cases a single parent, as the sole source of income for a large household. Unless these iyorkers earn disproportionately high iyages, the households' incomes vyill be lovy in comparison to smaller one- or tiyo-earner households that do not support non iyorking dependents. Elderly. The elderly population often requires special housing to accommodate part-time or fill time care and is also more likely to have loiyer incomes than the population in general. Simple requirements can 7 include modifications to doors and steps to improve accessibility, and installation of grab bars to make bathing, toileting, and other daily activities safer. Single stop- homes are often desirable because stair - climbing can be difficult for the elderly. Housing such as apartments or condominiums that do not entail high maintenance requirements can also be beneficial as the elderly continue to age and become less able to perform extensive home maintenance work on their own. The elderly are also commonly on fixed incomes vyhile expending more of their income on medical care, meaning that affordable housing is often needed. According to the U.S. Census, there are 2,200 persons 65 years and older living in Bozeman. Within this overall population, loiyer- income senior households are likely to have the greatest affordable housing need, considering their maximum affordable rents are iyell below market rents in Bozeman. In addition, approximately 51 percent of Bozeman seniors experience some form of mental or physical disability, including mobility impairments and self -care limitations. Many residents surveyed by the MSU Marketing Club pointed to a significant need for additional senior housing options in Bozeman v hich iyould alloy area seniors to age in place. This sentiment ryas also expressed by a broad cross - section of individuals interviewed by BAE in research conducted for this Needs Assessment. People With Disabilities. Disabilities can take many forms and have numerous implications for housing need. Many disabled people can live in conventional housing iyithout any modifications, or iyith only minor modifications, v hile some disabled people require substantial modifications and /or on -site care to maintain even -day living, while others may need occasional assistance but do not require even -day care. Accessible units are more expensive to build, v hich can include features such as ramps, extra iyide doors, hand rails, loiyered counters, raised toilets and a variety of other accessibility features. While costs for accessible housing are higher than for conventional housing, the disabled population tends to earn less. Disabled persons are more than three times more likely to be unemployed and the disabled persons that work full time average 20 percent less in annual earnings compared to the overall full -time working population. In addition, disabled persons are more likely to live alone. Overall, many disabled persons demand smaller units compared to the population overall and benefit from accessible and affordable units. As shovyn in Table A -8, there are an estimated 3,145 persons vyith a disability living in Bozeman. Based on 2000 Census data regarding the incidence of disabilities in the Bozeman community, the most prevalent disabilities vyere physical and mental, affecting 4.3 and 39 percent of the Bozeman population respectively (see Table A -9). Approximately 4.2 percent of persons aged 16 to 64 have a disability that prevents them from working. Single Parent - Headed Households. Single parent - headed households vyith children tend to have a higher need for affordable housing compared to family households in general. In addition, single parent - headed households vyith children are more likely to need childcare since the single parent is often the sole source of income and the sole caregiver for children iyithin the household. As shovyn in table A-10, a greater percentage of both male and female single parent households live in poverty than family households overall. In particular, more than 40 percent of female - headed households live in poverty, a rate nearly three times higher than the overall population. Altogether, there vyere 270 single - parent headed households living in poyeM- in Bozeman in 2000. 2 Tootelian, Dennis, Gaedeke, Ralph. The Impact of Hoitsing�4vailability, Accessibility, and Affordability on People with Disabilities. California State University, Sacramento. State Independent Living Council. April 1999. 8 Families and Individuals in Need of Emergency Shelter. According to a sun produced by the Montana State Department of Public Health and Human Services Department in the spring of 2000, there iyere approximately 160 individuals in Bozeman in need of some form of emergence shelter. The vast majority of these individuals iyere in families. Bozeman does not presently have a homeless shelter, and offers only limited services to individuals and families at risk of homelessness. This gap in housing services ryas identified as major housing problem by a significant proportion of respondents to the MSU Housing Survey, as well as in the Town Hall Meeting sponsored by the CAHAB in September, 2002. 9 Housing Stock Characteristics Tables B -1 through B -6 present comparative data on the existing housing stock in Bozeman compared to Gallatin County and Montana Table B-1 breaks out the total housing stock in each area by occupancy status and tenure. Table B-2 categorizes each residential stricture by the number of Louts in the stricture. Table B-3 details the stock housing by type and tenure. Table B-4 compares household size and tenure. Table B -5 assesses oyercrovyding in occupied housing units, and Table B -6 profiles housing stock by the near in v hich Louts iyere built. Unit Production Trends. According to the US Census, betiyeen 1990 and 2000, Bozeman added 2,460 housing Louts, for a net increase of 27 percent. This compares to an increase in households of 2,126 over the same period. Units in Structure and Tenure. Single - family, detached houses make up the majority of the housing stock in Montana and Gallatin County - 67 percent in Montana and 57 percent in the County. In Bozeman, single - family homes account for 42 percent of all units, folloiyed by buildings iyith 3 or 4 units, v hich make up 16 percent of the housing stock. Mobile homes are not as common in Bozeman as in the rest of Gallatin County or the state, malting up only 5 percent of Bozeman housing units, compared to 13 and 14 percent in the courity and state respectively. Vacancy Rates and Trends. Based on U.S. Census data, the vacancy rates for Gallatin County and Montana iyere ven- high, about 11 percent in Gallatin County in 1990 and 2000 and 15.2 percent in Montana in 1990, dropping to 13.1 percent in 2000. Bozeman had a lower vacancy rate of 6 percent, increasing from 4 percent in 1990. This vacancy rate, though lower than in the county and state, is typical of robust housing markets in grovying metropolitan areas. Household Size and Tenure. As presented in Table B -4, renter households in Bozeman, the county and the state are relatively small on average, oath one - person households malting up 35 percent of Bozeman renter households. Tiyo person households accounted for another 36 percent of renter households in 2000. This ryas similar to the renter household size distribution of Gallatin County, vyith 33 and 35 percent of households iyith one and t\-, persons respectively. Montana had a greater percentage (40 percent) of single - person renter households. Overcrowding. Oyercrovyding refers to a household iyith an average of 1.01 or more persons per room, iyith those rooms being bedrooms, kitchens, and dining rooms but not bathrooms. As shovm in Table B -5, Bozeman households iyere slightly more likely to be overcrovyded than Gallatin County households in 2000. Of all households in Bozeman, 29 percent iyere oyercrovyded versus 2.6 percent in Gallatin Coumv overall. Nonetheless, overcroivding in both Bozeman and Gallatin County appears to be a relatively rare and minor housing problem. Housing Stock By Year Built. As summarized in Table B-6, approximately 22.3 percent of the housing stock in Gallatin County ryas built before 1960 compared to 31.5 percent of Bozeman's housing stock and 36.4 percent of the housing stock in the state of Montana Bozeman also experienced an increase in home building betiyeen 1995 and 1998, vyith 1,513 units in the three years, accounting for 13 percent of the 10 housing stock. Gallatin County built 4,522 housing Units in that time period, accounting for 15.3 percent of the total housing Louts. Physical Housing Conditions. Tvyo useful measures of housing condition provided by the US Census are age and the presence of plumbing facilities. As summarized in Table 6, 3,644 housing Units, or 31.7 percent of the total housing stock, iyere constricted prior to 1960. This figure can seine as an indicator of the maximum potential housing rehabilitation need vyithin Bozeman. Unless maintained scrupulously, the older housing stock can pose health, safety and iyelfare problems for occupants. Even iyith normal maintenance, diyellings over 40 years of age can deteriorate, necessitating significant rehabilitation. Nonetheless, vyith the exception of some poorly maintained rental properties in residential neighborhoods, Bozeman residents contacted for this report have reported a generally high level of housing maintenance based on visual inspection. In terms of plumbing facilities, only 7 ownership and 34 rental properties lacked complete plumbing facilities in 2000. Summary of Housing Stock Characteristics. Bozeman's housing stock is, compared to the State of Montana, relatively young and heavily concentrated in multifamily strictures. Housing vacancy rates are logy, though oyercrovyding is rare due to smaller household sizes for both renter and homeowner households. Physical housing conditions are generally good, though for some units built before 1960 and some rental properties maintenance is an emerging problem. 11 Housing Market Conditions & Income Related to Housing Costs This section of the needs assessment provides information on market conditions for housing in Bozeman. This information is important because it reveals the extent to v hich the private housing market is providing for the needs of various econonuc segments of the local population. The information on housing market conditions presented here is also related to household income levels to determine the housing affordability gap for households across the econonuc spectrum. Single - Family Sales Trends. For this housing needs assessment, BAE used a variety of sources to examine home sales prices including public and private industn- sources. Consistently, these sources identify Bozeman as haying the highest average home sale prices of any major city or tovyn in Montana The Housing Board of the Montana Department of Commerce publishes an annual report on the Price of Housing in Montana; a summary of the Board's most recent sales data is presented in Table B -9. According to this research, home sale prices have increased across Montana over the past fe« years. Both Bozeman and Gallatin County experienced a spike in sale prices at the end of the 1990s, v'hich vyas reversed in the past rear. The median home sale prices in Bozeman savy a steep increase betAyeen 1999 and 2000 and then fell in 2001. The median sale price increased 20 percent betiyeen 1999 and 2000, from $133,000 to $159,950, compared to a 7 percent increase betiyeen 1998 and 1999. Betiyeen 2000 and 2001, the median sale price actually decreased 3 percent, dipping to $154,500. Figure 3: Median Sale Price, 1998 -2001 $170,000 $160,000 $150,000 $140,000 .,..,.,. t Bozeman ... �� Gallatin County $130,000 l...... Montana $ 120,000 $110,000 $100,000 1998 (a) 1999 2000 2001 Sale prices for nevy homes fluctuated more during this period than those of existing homes. The median sale price for nevy homes increased almost 80 percent betvyeen 1999 and 2000, from $116,630 to $209,235, compared to median sale prices for existing homes, v hich started out more expensive then nevy homes at $137,000, but only increased 14 percent, to $155,950. Median sale prices for nevy homes decreased 36 percent betvyeen 2000 and 2001, to $134,750. In contrast, median sale prices for existing homes increased 1 12 percent in the same period, to $156,750. There ryas no data for sale prices of neiy and existing homes for 1998. Gallatin County did not experience the same magnitude of fluctuations in home prices as the city of Bozeman. There ryas strong grovyth in sale prices betvyeen 1998 and 1999, from $121,995 to $137,000 (12 percent) and then sloiyer grovyth betiyeen 1999 and 2000 of only 2 percent. Gallatin County also experienced a2 percent decrease in sale prices betiyeen 2000 and 2001. As in Bozeman, sale prices of nevy homes in Gallatin County greiy more than those of existing homes betiyeen 1999 and 2000 and also declined betiyeen 2000 and 2001, v hile the median sale price for existing homes continued to increase during that period. Sale prices in Gallatin County iyere generally loiyer than in Bozeman. The median sale price of a home in Gallatin County in 2001 ryas $137,500 compared to $154,500 in Bozeman. Sale prices in Montana increased 20 percent betvyeen 1998 and 1999 and then greiy only 1 percent and 3 percent over the folloiying tiro years. Sale prices across Montana iyere generally loiyer than in Bozeman or Gallatin County. The 2001 median sale price in Montana ryas $119,000, compared to $137,500 in Gallatin Coumv and $154,500 in Bozeman. Sale prices for neiy homes iyere an exception. The median sale price for a new home across the state ryas $142,900 v hich is higher than the median neiy home sale price in both Gallatin County ($125,930) and Bozeman ($134,750). The median sale price for existing homes greiy more than median sale price for neiy homes betiyeen 1999 and 2000, and they both greiy about 4 percent betiyeen 2000 and 2001. For -Sale Market Conditions. Table B -10 profiles six currently selling residential subdivisions in Bozeman for the purpose of evaluating for -sale market conditions as of December, 2002. As shovm, sale prices in the five single - family areas sun range from $134,900 to $599,900. The one tovynhouse development displayed is offering three- bedroom toiyn homes for $118,900. Beyond this one multifamily for -sale development, intervieiys conducted iyith local real estate brokers for this needs assessment suggest that multi-family for -sale properties in Bozeman range in price from $80,000 to $130,000 depending on quality, size and vintage. Rental Market Conditions. Reported contract rents in the 2000 US Census indicate rental costs iyere comparable in Bozeman and Gallatin County, both of v hich were higher than the state. As reported by the US Census, median rent ryas $551 in Bozeman, $555 in Gallatin Count\ and $447 in Montana (see Table B- 11). By comparison, residents sun by MSU, reported a median contract rent of $588. Based on an analysis of currently renting market-rate properties in Bozeman (see table B -12), as iyell as intervieiys iyith property managers, this data tends to underestimate current prevailing rental rates in Bozeman. In general, rental rates for one- , t\-, and three - bedroom units tend to range, as folloiys: 1- bedroom apartments - $400 to $600 2- bedroom apartments - $600 to $800 3- bedroom apartments - $75041,200 Households Overpaying for Housing by Income. A household is considered to be overpaying for housing vyhen it spends more than 30 percent of gross income on shelter. According to the 2000 US Census, 44.4 percent of renter households in Bozeman paid more than 30 percent of their income for rent (see Table B- 13). In Gallatin County, 39.6 percent of renter households iyere overpaying for housing versus 35.4 percent 13 in Montana. These percentages represent a decline from the number of renter households overpaying for housing in 1990, from 47 percent in Bozeman, 43 percent in Gallatin County and 36 percent in Montana Information from the needs su n conducted by the MSU marketing club suggests that the percentage of households overpaying for housing rises dramatically as income levels fall. As displayed in Table B -14, 50 percent or more renter households earning less than $14,999 reported overpaying for housing. For these renter households earning 33% or less of the Gallatin County median income ($45,700 in 2002) prevailing market rents in Bozeman represent a significant housing problem. Ov,ner households questioned for the MSU su n reported median monthly housing expenditures of $899. For manv households in Bozeman, this monthly housing expense ivould represent significantly more than 30 percent of household income. Of ovner householders questioned for the MSU survey, 38 percent reported a possible overpayment (see Table B -15). The rate of overpayment ivas particularly significant for households earning less than $34,999 per year, or 77 percent of the Gallatin County Area Median Income as defined by the Department of Housing and Urban Development. To provide additional context for understanding the relationship between wages and housing costs, Table Tivo below presents average wages for the five most frequently cited occupations provided by respondents to the MSU su rvev. For each of these occupations, the maximum monthly housing expenditures are also provided assumung a one - person household. Table 2: Average Wages for Representative Bozeman Occupations Average Average Monthly Income Occupation Hourly Waae Yearly Waae for Housing a Carpenters $13.5 $28,020 $701 Bartenders $6.8 $14,460 $362 Food Servers $6.1 $12,680 $317 Retail Salespersons $8.6 $17,980 $450 Office Workers $10.3 $21,370 $534 Notes: (a) Represents 30 percent of total monthly income. Sources: US Bureau of Labor Statistics Occupational and Employment Wage Estimates for Montana, 2000; BAE, 2002. Summary of Housing Market Conditions The Bozeman housing market can be characterized as extremely robust with relatively low vacancy rates, and high levels of demand for a range of housing products. As evidence of this, the market for single family homes in Bozeman is the strongest in the state of Montana outside of resort areas and small specialized markets. The rental market is also relatively strong compared to the state as whole, in part driven by demand from Bozeman's large student population. For many segments of the Bozeman community, however, the gap between income levels and housing costs is significant. Table Three below profiles housing affordability by income level in 2002 to provide an estimate of the affordability gap facing Bozeman households earning less than 80 percent of the county median income. These households span a range of family types and occupational levels from one - person households employed in retail to large family 14 households vtith tAyo or more iyage earners in diverse occupations. As shovri in Table 3, the gap betiyeen vyhat households can reasonably afford to pay for rental housing and prevailing market rates is relatively large for most households earning less than 60% AML In addition, households earning between 60 and 80% AMI appear to face a significant gap in terms of for -sale housing. Table 3: Bozeman Housing Affordability, 2003 Notes: (a) Small family assumed to be three persons requiring a two bedroom unit (b) Large family assumed to be five persons requiring a three bedroom unit (c) Mortgage terms Annual Interest Rate (Fixed) 6.5% Term of mortgage (Years) 30 Percent of sale price as down payment 20.0% Initial property tax rate (Annual) 1.28% Annual insurance rate as a percent of sale price 0.75% Homeowner's Dues $0 PITI = Principal, Interest, Taxes and Insurance Percent of household income available for PITI 30.0% (d) Actual rental affordability is slightly lower assuming utility and insurance costs (e) Based on data from State Hosing Board as well as primary market research. Condominium sale price is used for single - person households. (f) Based on representative rental rates in Bozeman as of December, 2002. Sources: HUD, 2003; BAE, 2003. 15 Income Levels Maximum Affordable Cost Average Market Cost Income Group Affordable Annual Income Ownership (c) Rental (d) Ownership (e) Rental (f) Payment 30% AMI One Person $10,700 $268 $39,788 $268 $110,000 $500 Small Family (a) $13,750 $344 $51,129 $344 $154,500 $650 Lar e Famil b $16,500 413 $61,355 413 1154,500 825 60% AMI One Person $21,360 $534 $79,426 $534 $110,000 $500 Small Family (a) $27,480 $687 $102,183 $687 $154,500 $650 Large Family b $33,000 $825 $122,709 $825 $154,500 $825 80% AMI One Person $28,500 $713 $105,976 $713 $110,000 $500 Small Family (a) $36,650 $916 $136,282 $916 $154,500 $650 Lar e Famil b $44.000 $1_100 $163,612 $1,100 $154,500 825 100% AMI One Person $35,600 $890 $163,612 $890 $110,000 $500 Small Family (a) $45,800 $1,145 $189,270 $1,145 $154,500 $650 Large Family b $55,0001 $1,375 $0 $1,375 $154,500 $825 Notes: (a) Small family assumed to be three persons requiring a two bedroom unit (b) Large family assumed to be five persons requiring a three bedroom unit (c) Mortgage terms Annual Interest Rate (Fixed) 6.5% Term of mortgage (Years) 30 Percent of sale price as down payment 20.0% Initial property tax rate (Annual) 1.28% Annual insurance rate as a percent of sale price 0.75% Homeowner's Dues $0 PITI = Principal, Interest, Taxes and Insurance Percent of household income available for PITI 30.0% (d) Actual rental affordability is slightly lower assuming utility and insurance costs (e) Based on data from State Hosing Board as well as primary market research. Condominium sale price is used for single - person households. (f) Based on representative rental rates in Bozeman as of December, 2002. Sources: HUD, 2003; BAE, 2003. 15 Affordable Housing Demand, 2000 -2020 In order to assist the City in setting affordable housing goals and formulating strategies, this section presents an estimate of cityvyide housing demand for the tiyenty year period from 2000 to 2020. This analysis provides a long -range estimate of housing demand segmented by tenure, Lunt type and affordability. Methodology To assess market demand for housing betiyeen 2000 and 2020, gross demand for all housing types by tenure was estimated cityiyide. To forecast cityiyide demand, the follovang steps iyere taken: Synthesize existing demographic and housing supply data for ovner /renter households and types of residential units to formulate baseline assumptions. In addition to household and population trends data contained in the City Housing Needs Assessment, housing tenure by units in stricture data was compiled and analyzed for 1990 and 2000 (see Table 4 belovy). • Create household grov, projections based on 1990 and 2000 Census data These projections assume that the number of households vall continue to grovy at the same rate as betvyeen 1990 and 2000, and that this rate of change vyill remain consistent over the 2000 -2020 time frame. • Allocate nevy households across types of units (e.g. single - family, multifamily) by tenure (e.g. ov,ner and renter). Owner and renter household projections by unit type are displayed in Table 5 below. Tiyo alternative projections of cityvyide demand by tenure and unit type were formulated for this strategy. The first scenario, Moderate Ovtnership Demand, assumes that future cityiyide demand vyill follovy existing conditions for the city as a v hole vyith respect to tenure pattern (ovyner versus renter households) and type of unit (single versus multifamily). This scenario represents the lovyer bound of probable demand for ovtnership housing. It is important to note that the Moderate Demand Scenario assumes that the "nevy" households added to Bozeman vyill demand housing consistent vyith the existing base of households, rather than in accordance vyith supply trends experienced during the past decade and more. The second scenario, Strong Ovyner Demand, assumes that 1990 -2000 production trends vyill continue over the next t\-, decades, resulting in a larger concentration of ovyner households in both single family detached and multifamily housing product types. This scenario has been included to indicate the upper bound of market support for ovtnership housing. Both of these scenarios are predicated on the idea that housing units for the "nevy" households vyill be provided in a full range of prices, including units priced for lovy and moderate - income households. Demand Sumnuuy Moderate Owner Demand. Based on current trends, approximately 5,931 neiy households iyill be added to Bozeman betvyeen 2000 and 2020. Assuming that tenure patterns remain unchanged, approximately 2,550 of the nevy households vyill be ovner households and 3,381 vyill be renter households. If the proportion of single - family homes demanded continues to match 2000 levels, approximately 2,479 single - family homes, and 3,453 multifamily units (754 condominiums, and 2,699 apartments) vyill be required by the nevy households formed betvyeen 2000 and the year 2020. 16 Strong Owner Demand. Table 5 also presents an alternative projection for cityvyide housing demand, based on incorporation of the 1990s trend towards the production of proportionately large numbers of ov,nership units. The approximately 5,931 households in this scenario vyill demand ownership housing to a much greater degree than in the Moderate Demand scenario. Approximately 3,249 single - family homes and 2,682 multifamily units (1,066 condonuniu tis and 1,616 apartments) vyill be demanded. Affordability Needs The demand for housing in Bozeman betvyeen 2000 and 2020 vyill, of course, be affected by household income levels and the ability of nevy households to afford the sale prices and rent levels of nevy units. Table 6 provides an estimate of the affordable price of ovyner and rental housing for the additional households summarized in Table 5 the estimate is based on the assumption that nevy household incomes vyill be distributed similarly to the existing base for ov ners and renters. As displayed in Table 6, households earning less $38,381 in 2003 dollars (less than 80 percent of AMI for a family of four) vyill likely male up a majority of nevy households formed during the 2000 -2020 period. Approximately 3,250 nevy households, or 54.8 percent, of the grovth increment, vyill be able to afford less than $150,000 for a nevy unit in 2003 dollars. For rental households (vyith a greater concentration of household income at the lovy end of the income range), affordability is also an important issue. As shovyn in Table 6 renter household earning up to $27,370 per year can afford a maximum rental rate of $684 in current dollars. This equates to 53.8 percent of AMI for family of four. This analysis provides an oyeryiew of the need for affordable housing serving both ovyner and renter households. It should be noted that additional analysis is required to refine these estimates, since many existing households are paying a housing cost burden exceeding the 30 percent threshold deemed "affordable" by most federal and state legislation Thus, the estimates in Table 6 do not seek to provide a comprehensive assessment of all affordable housing need based on an analysis of pent -up demand; instead, they are intended to illustrate the range of house prices and rental rates v hich vyill be required to seine "nevy" households in Bozeman betvyeen novy and 2020. 17 Table 4: Housing Tenure by Units in Structure, 1990 -2000 Change % Distribution 1990 2000 % Distribution, 2000 1990 -2000 of Change Owner 1, Detached 2,573 3,447 73.4% 874 68.1% 1, Attached 160 491 10.5% 331 25.8% 2 211 160 3.4% -51 -4.0% 3 or 4 142 193 4.1% 51 4.0% 5 to 9 1 89 1.9% 88 6.9% 10 to 19 0 17 0.4% 17 1.3% 20 to 49 0 8 0.2% 8 0.6% 50 or More 0 39 0.8% 39 3.0% Mobile Home 320 254 5.4% -66 -5.1% Other 7 0 0.0% -7 -0.5% Sub -Total 3,414 4,698 100.0% 1,284 100.0% Renter 1, Detached 882 1,257 20.2% 375 37.7% 1, Attached 145 342 5.5% 197 19.8% 2 645 694 11.1% 49 4.9% 3 or 4 1,261 1,548 24.9% 287 28.8% 5 to 9 679 778 12.5% 99 9.9% 10 to 19 623 527 8.5% -96 -9.6% 20 to 49 462 397 6.4% -65 -6.5% 50 or More 203 383 6.1% 180 18.1% Mobile Home 222 302 4.8% 80 8.0% Other 110 0 0.0% -110 - 11.0% Sub -Total 5,232 6,228 100.0% 996 100.0% Sources: 1990 and 2000 US Census, STF3; BAE, 2003 CD CD CD § k § 2 CD k / 0 § \ k ) u =r m }37 ± al J ®�\ \ \ ww 3 - �N C (D \ \ � w a k�\ / 2 R \w r w ow w )\\ \ w �� m /F\ / §m* « k@E » °° \ 0 e / N N ° 3G L )m9 p k�7 G 2 »00 (1) S �ƒ 0 kz 7i ck d § CD CD § k \ CD 04 & / 0 § \ k ) u §j\ \ � ) \\ \ § ®ww 3 R \ wee \ %\ 2\\ $e ® S J R m «« k/§ 9 \§ 9R p o 0 m ) .§ §\ 7 e w k/ N d 0 \/ °gg R �k 2r= ±�a :/ 0 \ ƒ§ kk� \ /\ 0 §% #§ 2ce '1- 0-) I- LO (n «f \ k }/ - 2 \ §k as 0') 011- \\ 0 U) § 2 .§ .§ )) \ \N �21 �\/ _ § \ 2 � U) / \ co d p y y § \ N § \ § § \ § \ \ « @ / r— womoR§ /$ &$ &% / " ww ¥3 ;) ^ ^ ^ ^ ^ J S � o Z6�� m o=� w+ 7 ew=rmoe�w &Rx*pp -em� ° 9§0@000 ;2 __��mm�e=+ � _____ 2 m ® o o c o m a= m» 0 2> \q \gRR ©^ \ CD r k ) z W m e m w e w r e o 2 c ®\ \ \ \awe d \ ■ ƒ @ 9 § E / 2 g \ § R*ppxs*9R a R //233/ w 3357 \ 6 6 § a a a a a a a a £ &- R R 2 g 2 3\§ 2 /$Nmowom/ / E &&&Q&$ // 2 L d = o \ � � 3 q § \ \ - / E \ o § ] \ ® ° \ m g § \ j ) \ i \ \ E ° \ / w } E o / % [ j \ m / \ _ .§ k w 0 < - § j » 7 - U . ® S / E \ \ \ \ ± d a 0 } G { 0 E § / \ \ ®8 Q M 7 �ZE =� § § / 3 :3 ) \ / \�] U) U) - F E 3 ° G ± . \ N _ % 0 � §) ? ± f & / / \ \ E E \ R k \ § 2 » ] / .F ' o 0 ± ± S\ k/ 2/ J J 0 2 z»±6\»7± Housing Resources & Constraints This section of the Needs Assessment provides a brief overview of the major resources and constraints affecting the provision of affordable housing in Bozeman. Constraints Government Constraints. Government regulations can affect housing costs by linuting the supple of buildable land, setting standards and allowable densities for development, and exacting fees for the use of land or the constriction of homes. The increased costs associated with such requirements are, in some cases, passed on to consumers in the form of higher home prices and rents. Potential regulaton- constraints include local land use policies, zoning regulations and their accompanying development standards, subdivision regulations, grovth control ordinances or urban limit lines, and development impact and building permit fees. Lengthy approval and processing times may also be regulaton- constraints. As evidenced by the steady pace of housing development in Bozeman throughout the last decade, the Cite has made significant efforts to plan for and approve neiv residential development. Overlapping layers of administrative and regulaton- overview and sometimes cumbersome regulations, however, are perceived by manv in the Bozeman community to pose a serious constraint on the development of neiv housing. To address this, the Bozeman Department of Planning and Community Development is currently revising the City's zoning regulations and procedures to make them consistent with the 2020 Community plan, ensure a more efficient planning review process, and expand staff level review of minor development plans. Market Constraints. The major factors within the private market system that contribute to the direct sale price or rental cost of neiv housing include land costs, site improvement costs, construction costs, financing costs, sales and profit. Depending on the level of demand for neiv housing, these factors may combine to linut the development of housing in a given area, or to linut the range of housing types which builders are able to offer. In addition, constraints in the financial markets often limit the ability of housing consumers to obtain mortgage financing. Many residents questioned for the MSU Housing Surrey cited the lack of flexible mortgage financing for first -time homebuvers as a serious housing constraint in Bozeman. Public Opinion. Another constraint to housing production in Bozeman is public opinion, specifically community opposition to higher densities. As the City's character becomes more urban, pressure to downzone land or to limit heights and densities could arise. This would be particularly true if neiv housing were perceived to produce negative fiscal impacts or contribute to school capacity problems, traffic congestion, or other quality of life factors. Throughout the public process for the 2020 Community Plan, reiv and higher density forms of residential development have generally received support and acceptance, and this is also reflected in qualitative responses to the MSU housing Surrey. As new types of housing development are introduced in Bozeman, however, tie potential for community opposition means that good design and planning are essential in higher density proj ects. 21 Housing Resources Available Sites for Housing. The City of Bozeman comprises approximately 13 square miles iyithin the incorporated jurisdiction. The City's planning area extends an additional 25 square miles. Over 50 percent of the City's incorporated land area is currently zoned for residential Uses, and approximately 38 percent of that land is vacant. Land use designations for the broader planning area are not applicable until the land is annexed. Table 7 belovy provides a residential land use inyenton- and estimate of residential Unit development potential based on data from the City Department of Planning and Community Development. Given current zoning standards, Bozeman has the potential for more than 15,000 Units of neiy housing. Approximately 44 percent of this potential is on sites v here the City Zoning Code imposes no maximum limits on densities, providing favorable prospects for affordable housing projects. Table 7: Bozeman Residential Land Use Inventory and Estimated Unit Development Potential, 2001 Zone Total (acres) Vacant (acres) Unit Potential a RS Residential, Suburban 890 477 477 R -1 Residential, Low Density 263 40 160 R -2 Residential, Medium Density 1041 379 2,274 R -2a Residential, Medium Density 176 87 609 R -3a Residential Two Household, Medium Density 533 25 250 R -3 Residential, Medium Density 1322 648 7,776 R-4 Residential High Density (a) 424 67 1,005 R-O Residential /Office 290 151 2,265 RMH Residential, Mobile Home 146 78 680 5,085 1,952 15,496 Notes: (a) Represents maximum unit potential assuming all vacant acreage is developed at the top of current allowable densities for all categories except R -3, R -4 and R -0. For these three districts, maximum densities were removed by the Bozeman City Commission on September 30, 2002. Sources: City of Bozeman Department of Planning and Community Development, December, 2001; BAE, 2002. Financial Resources. The City of Bozeman has access to a variety of existing and potential funding sources available for affordable housing activities. These include programs from federal, state, local and private resources. Community Developmient Block Grunt Program Funds Through the CDBG program, the federal Department of Housing and Urban Development (HUD) provides fronds to local governments for fiinding a vyide range of housing and commLUlity development activities for logy- income persons. Bozeman is not a distinct CDBG entitlement jurisdiction, but does receive CDBG funding for housing and commLUlity development activities through the State entitlement. Low Income Housing Tux Credits (LIHTC) Created by the 1986 Tax Reform Act, the LIHTC program has been used in combination vyith City and other resources to encourage the constriction and rehabilitation of rental housing for lolyer- income households. The program alloiys investors an annual tax credit over a ten -year period, provided that the 22 housing meets the follovying minimum logy- income occupancy requirements: 20% of the Units must be affordable to households at 50% of area median income (AMI) or 40% of the Units must be affordable to those at 60% of AML The total credit over the ten -year period has a present value equal to 70% of the qualified constriction and rehabilitation expenditure. The tax credit is typically sold to large investors at a syndication value. Bozeman currently has four tax- credit projects iyith over 250 housing Units seining households earning betiyeen 40 and 60 percent of the Gallatin County AML These projects are described in Table B -16 along iyith other housing projects offering subsidized housing options in Bozeman. Community Housing Funtl In addition to Federal and State sources, the City of Bozeman has a community housing fiend and a housing revolving loan fiend to support affordable housing programs and projects. The housing fiend currently has a balance of $25,268 and the loan find a balance of $161,031, for a total of $186,299. The balances in these accounts include both monies from local sources and CDBG monies. Section 8 Assistance The Section 8 program is a federal program that provides rental assistance to yenv -lovy income persons in need of affordable housing. This program offers a voucher that pays the difference betiyeen the current fair market rent and v hat a tenant can afford to pay (e.g. 30% of their income). The voucher alloiys a tenant to choose housing that may cost above the payment standard but the tenant must pay the extra cost. Managed by the Human Resources Development Council (HRDC), there are currently 300 portable Section 8 vouchers in Bozeman. The federal government also provides rent subside payments to private property ov ners for rental units rehabilitated under the Section 8 Moderate Rehabilitation Program (Mod Rehab). These subsidies provide housing assistance for logy- income persons at 30% of median income, as iyell as debt service monies for the property oiyner. The HRDC administers this program, but the buildings are managed and leased out by the propem ovners. According to the HRDC, there are 51 Section 8 Mod Rehab units in Bozeman as of December, 2002. Summary. Consistent vyith the City's long -term commitment to supporting high- quality residential development, Bozeman continues to make resources available for housing production. These include primarily sites for housing development, and a variety finding sources. At the same time, regulator -, market and other factors impose a number of constraints on housing production v hich linut the supple of affordable housing in the Bozeman community. 23 Conclusions As evidenced by the general satisfaction expressed by a majority of residents who filled out questioners for the MSU Marketing Association Housing Needs Sun large segments of Bozeman's grovang population are currently iyell seined by the local housing market. For households earning belovy 80 percent of the area median income, hoiyeyer, this Needs Assessment has identified a variety of significant housing problems including housing overpayment and the lack of suitable housing options for special needs populations. This final section of the Needs Assessment identifies those segments of the Bozeman community experiencing the highest levels of housing need, and provides a brief set of programmatic recommendations for addressing housing need in Bozeman. Priority Housing Need Populations All Renter Households Earning Less than 30% of AMI These households include single - person households in logy - paying ($5.25 - $7.00 /hour) occupations, and family households earning less than $14,800 per year. Households earning less than 30 percent of the Area Median Income (AMI) experience the highest levels of housing overpayment in the Bozeman community and face an extremely constrained supple of affordable housing options. r Family Renter Households Earning between 30% and 60% of AMI Both small and large families earning betvyeen 30 and 60 percent of AMI face a significant gap in housing affordability for both rental and for -sale housing in Bozeman. r Potential Homeowner Households Earning between 60% to 80% AML For mane households earning betvyeen 60 and 80 percent of the Area Median Income, rental housing options in Bozeman may be affordable, but for -sale housing options are out of reach. Disabled Persons. Residents iyith disabilities often experience both high rates of housing overpayment, and a lack of adequate housing amenities. In Bozeman, housing resources for both the physically and mentally disabled are scarce. Single Parent Households. Single parent households, and particularly female headed households, experience a higher rate of povem than in the community overall, and also often require access to childcare, transit and supportive services. These households are currently underseryed in the Bozeman housing market. Elderly Households. Over 50 percent of Bozeman's elderly population experience one or more types of disability. Though Bozeman currently offers a variety of supportive services and housing options for the senior population, additional supportive housing addressing the special needs of lovy- income, disabled seniors is needed. Individuals and Families in Need of Emergency She lter. Bozeman currently offers nc emergence shelter or transitional housing options for individuals and families v ho are homeless or at risk of homelessness. 24 Progrumnuetic Recommendations Revise Affordable Policy to Target Lower Income Households. As currently written, the City's affordable housing police provides that: target guidelines for projects requesting assistance or support are 40 to 60 percent of area median income for multifamily rental property and 70 to 100 percent of area median income for single family ov ner- occupied housing. Based on the results of this Housing Needs Assessment, this police should be revised to target housing programs and resources to projects v hich seine renter households earning less than 60 percent of AMI and potential ovner households earning betvyeen 61 to 80 percent of AML Projects v hich target households earning less than 30 percent of AMI should receive priority v hen ranking requests for assistance or support. This revision should be consistently adopted in the City's zoning code and in all other police documents and programs related to affordable housing in the Citv. Prioritize Regulatory and Process Reforms to Facilitate Housing Production As the Department of Planning and Community Development moves fonyard in revising the zoning code to reflect the 2020 Community Plan, high priority should be placed on efforts v hich simplify and streamline the approval process for all types of residential projects. At the same time, political bodies from the City Commission, to the Planning Board to the Zoning Commission must take steps to eliminate unnecessarily overlapping layers of political process and regulator- oversight v hich hamper the clear and straightfonyard implementation of the City's housing goals. To this end, a greater level of staff reyievy for minor projects is highly recommended. Develop an Incentive -Based Affordable Housing Program. The City should develop a comprehensive set of housing incentives in order to ensure that all neiy residential development in Bozeman include a certain percentage of affordable units. These incentives might include a scaled density bonus, streamlined pernut processing, fee reductions, and/or other types of incentives attractive to developers in the Bozeman area. Priority should be placed on providing incentives for projects vyithin the already incorporated boundaries of the City of Bozeman. Develop Detailed Guidelines for Affordable Housing Implementation Plans in Annexation Agreements. At present, the City of Bozeman requires an affordable housing implementation plan for all neiy annexation agreements v hich include a residential component. The City enjoys broad leeway in structuring annexation agreements, and the practice of requiring an implementation plan is consistent vyith the 2020 Community Plan and Citv affordable housing policy. Nevertheless, the lack of clear guidelines for structuring these plans imposes an unfair burden on both landowners and developers. Clear and concise guidelines should be adopted for annexation agreements v hich provide developers iyith the option of (1) producing a certain percentage of affordable units in exchange for one or more incentives; (2) contributing an in -lien fee to the City's Community Housing Fund; or (3) of providing a certain portion of the annexed land to the City for future affordable housing development. Consistent vyith current practice in other communities throughout the inner- mountain iyest, these affordable housing implementation guidelines should only apply to annexations of five acre or more. Identify Specific Sites and Resources for Special Needs Housing. The City should take immediate steps to identify specific sites and funding sources to support a variety of special needs housing projects for seniors, the disabled, single parent households, and homeless persons and families. 25 Institute a First -Time Homebuyers Program. The City should provide staffing and identify finding for a first -time homebuver program which provides eligible first -time homebuvers (e.g., those earning 60 to 80 percent of AMI) with matching down payment assistance up to a certain capped amount. 26 Strategy Recommendations The following police and strategy recommendations and related appendices i ere presented for consideration to the CAHAB and the City Commission as a starting point in establishing long -term City policies for promoting the development of affordable housing. They reflect best practices in local affordable housing policy nationally, and also the distinct needs and characteristics of the Bozeman Community. The Ultimate aim of these strategies vvas to provide for a reasonable and fair partnership bete een the City, private housing developers, and the broader commLUlity to achieve the common goal of producing the right nux of housing options to meet Bozeman's needs. The strategies are presented belovt- in the form of brief narrative descriptions and recommendations for identifying an implementing agency, funding source and time -frame for implementation. Appendix E further distills the incentives and annexation agreement strategies into a concrete Affordable Housing Ordinance. 27 Strategy I. Revise Affordable Policy to Target Lower Income Households As currently itritten, the City's affordable housing police provides that: target guidelines for projects requesting assistance for support are 40 to 60 percent of area median income for multifamily rental property and 70 to 100 percent of area median income for single family owner- occupied housing. Based on the results of this Housing Needs Assessment, this police should be revised to target housing programs and resources to projects v hich seine renter households earning less than 60 percent of AMI and potential ovyner households earning betiyeen 61 to 100 percent of AML Projects v hich target households earning less than 30 percent of AMI should receive priority v hen ranking requests for assistance or support. This revision should be consistently adopted in the City's zoning code and in all other police documents and programs related to affordable housing in the Cite. Implementing Agency: City Planning Department Funding: This police change iyould have no short-term financial implications for the Cite, but over the long -nun may lead to higher levels of subsidy for affordable housing projects reaching deeper levels of affordability. Sources of funding include the City's affordable housing trust fund, as iyell as yet uncomnutted fronds from settlement agreements reached bet veen the City and big box retailers. Time Frame: Immediate 28 Strategy II. Process and Regulatory Reforms As the Department of Planning and Community Development moves fonyard in revising the zoning code to reflect the 2020 Community Plan, high priority should be placed on efforts v hich simplify and streamline the approval process for all types of residential projects. At the same time, political bodies from the City Commission, to the Planning Board to the Zoning Commission must take steps to eliminate unnecessarily overlapping layers of political process and regulator- oversight v hich hamper the clear and straightfonyard implementation of the City's housing goals. To this end, a greater level of staff reyieiy for minor projects is highly recommended as is greater authority for final approval at the level of the City Planning Board. As part of the revision of the uniform development code currently undenv ay, the City should consider providing an incentive for projects iyith affordable units v hich alloiys these projects to be placed at the top of the list for zoning, planning and other approvals. This incentive iyould be meant to complement the City's already existing policy of alloiying fast track processing for "concurrent development" projects in v hich infrastructure and residential development are being undertaken by the same development entity. Implementing Agency: City Manager's Office and Planning Department Funding: Financial impacts of this strategy iyould include increased staff time dedicated to processing applications from residential projects v hich include a certain percentage of affordable units. Funding sources include the City's general fund to coyer increased expenditures in the City Planning and Building Department. Time Frame for Implementation: Immediate 29 Strategy III. Incentive -Based Affordable Housing Program The Cite alreadv has a variety of development incentives in place, manv of which have been utilized by residential developers to bring much needed housing opportunities to the Bozeman community. To build upon these successes, the City should consider adopting the incentives described belo11v and summarized in the Affordable Housing Ordinance provided in Appendix A. The objective of this strategy is to promote the inclusion of a certain minimum percentage of affordable units in all ne11v residential projects built in Bozeman. Incentive 1: Density Bonus The economic context of incentive programs to encourage affordable housing is based on the premise that private developers will include affordable units if they receive something of economic value in exchange for this action, but otherwise 11vould not be "incentivized" to incorporate the affordable units. For example, if a parcel of land is zoned to allo11- a maximum of five residential units, and a voluntary program is implemented, the concept is that incorporation of a unit at an affordable rent or sale price 11vould decrease the developer's overall project profit, because development costs 11vould rise to constrict this affordable unit, but 11vithout compensating profit on it. The unit, depending on the relationship bet11-een its development cost and its rent or sale price level, could bring a small profit, break even, or even incur an absolute loss to the developer. Hov ever, if the incorporation of this affordable unit v ere offset by the ability to incorporate additional market rate units (i.e., density bonus), the additional profit on even market rate unit above the alloi-vable five units originally zoned could offset the incorporation of the affordable unit and its potential loss to the developer. In some jurisdictions around the countn -, incentive programs alloy for a variation of paying an "in -lien" fee, rather than actually constricting the affordable units within the project. This option is alloyed, and sometimes encouraged, in order to provide the developer 111th the option of paying money rather than impacting the perceived marketability of the project by including mixed household incomes within it. The "in -lien" fee is often set at a level necessary to seine as equity in an off -site affordable project on a per unit basis, not the entire development cost of that unit. This approach is follo11ved because affordable housing developers can utilize the equity amount to leverage debt on the units, thereby mininuzing the payments collected from the market rate developer, and maximizing the number of affordable units built elsewhere. Key to this approach to encourage affordable housing production is the need for a strong residential real estate market, where a developer desires to obtain additional market rate unit entitlements and is confident that each additional unit 11411 be marketable and contribute the expected profit to the project In many strong residential markets, land costs also tend to rise — the option of providing affordable units in exchange for additional market rate units at zero additional land cost can therefore be especially attractive in these cases. The exact percentage density bonus depends upon prevailing market conditions and affordability goals, but the typical range is bet11-een 25 and 50 percent. As demonstrated by the financial models presented in Appendix C, in Bozeman a density bonus of 25 percent for the inclusion of 10 percent affordable units is generally sufficient to leave developers and homebuilders " vvhole ", or to provide a profit in excess of 10 percent of total development costs. Indeed, in some cases the combination of affordable units and a density bonus actually leads to an increase in project profitability. Incentive 2: Development Impact Fee Waivers/Reductions In regions where development impact fees are relatively high as a proportion of total per -unit development costs, ivaiving or reducing such fees for affordable units can contribute to the overall equation. Ho11vever, this approach is not workable in areas where legal restrictions require equal treatment of all housing 30 developments to ensure that municipal costs of grovth are equitably distributed to all those developments that incur increased impacts and costs. In such cases, the local jurisdiction often subsidizes rather than iyaiyes the system development fees to provide an incentive for the inclusion of affordable units. As demonstrated in Appendix C, this approach may lead to a significant increase in returns to developers opting to include a certain percentage of affordable units in exchange for a iyaiye of development fees. Incentive 3: Fast Truck Processing Providing a preference in processing approvals and building permits for projects vyith affordable units is a common incentive used by jurisdictions across the countu��. In Bozeman this incentive iyoLUld �york in conjunction with the City's existing "fast - track" incentive for concurrent development projects by allowing projects with a designated percentage of affordable units to receive an automatic placement at the front of the line for residential permit applications under consideration by the Cite. Incentive 4: Financial Contribution Local jurisdictions occasionally provide direct financial assistance to developers producing affordable units. Typically, a local redevelopment agency will enter into a development agreements with a developer to provide a certain level of subsidy in exchange for a certain number of affordable units at specific levels of affordability. These agreements are often structured in conjunction with a land write -down, and typically involve the use of Federal CDBG and HOME funds, and /or tax increment dollars dedicated to affordable housing production. Based on recommendations from the CAHAB, a financial incentive is proposed here as one means of providing an incentive to developers to include affordable units in neiv projects. This incentive could be structured as a per unit financial contribution from the Cite, or in the form a per parcel subsidy for parcels designated as affordable in neiv subdivisions. While attractive to developers, this type of incentive is extremely costly, and the financial implications of establishing an ongoing incentive of this nature in the absence of a dedicated funding stream (e.g. tax increment from a redevelopment project area) would require further study. Implementing Agency: City Manager's Office and Planning Department Funding: City Affordable Housing Fund as well as monies from settlement agreements reached between the City and Big Box retailers. Depending on the nature of the incentive and the per unit subsidy provided, this incentive would cost the City in the range of $7,500 to $45,000 per unit provided. Time Frame: Three to six months to establish program criteria and designate funding source 3 The bottom end of the range reflects the approximate amount of system development fees currently charged for single family homes. The upper end of the range reflects an estimate of current market rates for a finished single - family lot in a new subdivision. 31 Strategy IV. Affordable Housing Implementation Plans in Annexation Agreements At present, the City of Bozeman requires an affordable housing implementation plan for all nevy annexation agreements v hich include a residential component. The City enjoys broad leeway in structuring annexation agreements, and the practice of requiring an implementation plan is consistent vyith the 2020 Community Plan and City affordable housing police. Nevertheless, the lack of clear guidelines for structuring these plans imposes an unfair burden on landowners, developers and homebuilders. Appendix A presents a set of clear and concise guidelines for annexation agreements v hich provide developers iyith the option of (1) producing a certain percentage of affordable units in exchange for one or more incentives; (2) contributing an in -lien fee to the City's Community Housing Fund, or (3) of providing a certain portion of the annexed land to the City for future affordable housing development. Consistent iyith current practice in other communities throughout the inner - mountain iyest, these affordable housing implementation guidelines should apple to annexations of five acre or more. In evaluating this draft ordinance, the CAHAB and City Commission should consider several alternatives for restructuring key components of the ordinance, as follows: • Minimum Acreage Requirement. The recommended nunimum acreage for these agreements is five acres. In many communities, however, there is no minimum acreage for this requirement, while in other the nunimum may be set as high as ten acres. Percent Affordable Target. The target of 10 percent represents the lovyer bound of vyhat is t - pically required in inclusionanv ordinances throughout the countn -. This percent target is also recommended here based on a financial analysis of hypothetical development projects in Bozeman, and an assessment of the impact on developer returns. This recommended target, hoiyeyer, should be evaluated carefully by the Commission and the CAHAB in light of concerns in the development community regarding the long -term impact of such a requirement on development profitability. In -Lieu Fees. The figures listed in Appendix A are presented as a starting point in discussions about the appropriate amount for in -lieu fees. They reflect an approximate estimate of the actual constriction cost of nevy affordable units including all land, hard and soft costs. Another approach to structuring in -lieu fees vyould be to estimate the amount of equity capital it takes a non -profit developer to leverage debt and other affordable housing funding sources to produce a nevy unit. This amount vyould likely be in the range of $40,000 to $50,000 per unit depending on building configuration and project type 4 . Implementing Agency: City Planning Department, City Attorney and City Manager's Office. Funding: City Affordable Housing Fund as vyell as monies from settlement agreements reached betvyeen the City and Big Box retailers. Time Frame: Three to six months to formalize guidelines, draft model agreements, and establish dedicated source of funding for incentives. 4 The equity contribution for a project produced using low income housing tax credits would likely van substantially from this figure. 32 Strategy V. Identify Specific Sites and Resources for Special Needs Housing The Citv should take immediate steps to identify specific sites and finding sources to support a variety of special needs housing projects for seniors, the disabled, single parent households, and homeless persons and families. Using GIS data, planning staff should identifi° key opportunity sites with appropriate residential zoning, and make efforts through the revision of the uniform development code to ensure that the development of special needs housing is permitted at appropriate locations. At minimLim, the City Planning Department should identify one or more sites vyith appropriate zoning v here a transitional or permanent supportive housing facility for homeless persons and families would be pernutted by right or vyith a conditional use pernut. Implementing Agency: City Planning Department. Funding: City General Fund to coyer staff time dedicated to this project. Time Frame: Three to six months to identify sites and ensure appropriate zoning is in place, perhaps longer to van community consensus on appropriate locations for special needs projects. 33 Strategy VI. Institute a First -Time Homebuyers Program The City should provide staffing and identify funding for a first -time homebuyer program v hich provides eligible first -time homebuyers (e.g., those earning 61 to 100 percent of AMI)1yith matching doi n payment assistance up to a certain capped amount. As an initial step in establishing this program, it is recommended that the City provide part-time staffing (20 hours or less per iyeek) and establish guidelines and a list of eligible purchasers. Program criteria for the first -time homebuyers program could be structured, as follolys: Eligibility: All Bozeman residents and employees earning less than 100 percent of the Area Median Income by household size. Downpayment: The First Time Homebuyers Program would provide one and a half times the buyer's downpayment, up to a maximum of 15% of the purchase price of the property oath the assistance structured as a deferred - payment, second mortgage at a three percent, simple interest rate. Resale Provisions: The mortgage assistance iyill require no payments, principal or interest, as long as the buyer lives in the home. The second mortgage loan iyould not be due until the property is sold, transferred, or converted to investment property. A shared appreciation provision should also be considered as a means of recapitalizing the first -time homebuyer program. Implementing Agency: City Planning Department and CommLUlity Development. Funding: City Affordable Housing Fund as iyell as monies from settlement agreements reached betvyeen the City and Big Box retailers. An initial funding commitment of $100,000 to $250,000 $ anticipated to capitalize the program and provide staffing. As the program matures, the program iyould evolve into a revolving loan frond as homes are resold. Time Frame: Three to six months to establish a program, develop a list of eligible homebuyers and provide information about the program to lenders, realtors and homebuilders. 34 Appendix A: Demographic and Employment Data 35 Table A -1: Population and Household Trends, 1990 - 2000 Average Annual Change City of Bozeman 1990 2000 1990 -2000 Population 22,660 27,509 2.0% Population in Group Quarters 2,777 2,901 Households 8,751 10,877 2.2% Average Household Size 2.27 2.26 - 0.04% Household Type Families Non - Families Tenure Owner Renter Gallatin County Population Population in Group Quarters Households Average Household Size Household Type Families Non - Families Tenure Owner Renter Montana Population Population in Group Quarters Households Average Household Size Household Type Families Non - Families Tenure Owner Renter 46.1% 53.9% 52.3% 47.7% 40.2% 59.8% 50,463 2,846 19,015 2.50 42.9% 57.1% 67,831 3,116 26,323 2.46 61.5% 38.5% 64.9% 35.1% 62.4% 37.6% 58.5% 41.5% 799,065 23,747 306,163 2.53 66.2% 33.8% 69.1% 30.9% 69.1% 30.9% 67.3% 32.7% 902,195 24,762 358,667 2.45 3.0% 3.3% -0.2% 1.2% 1.6% -0.3% Sources: 2000 U.S. Census; Bay Area Economics, 2002. IB L L O O O O o e Ln Ln N V V Lo O I- V M O O N N N E O O � O O N O N I- O r O Lo N Ca LON0 V O r m O C C09 O LO R O LO LO O O N Ln N M 00 V N N O R N N N N a) C N O R m C w O O M 0 0 0 0 0 0 e O 00 00 M O M r- 00 - 00 M O O CO O 0 00 N M O O O T rn T rn V Ca I- r LO 0:m0Ca 0 N N a) Ca rn rn o LO O 00 M V NOOO O a) O a) O Ln O N r- V LO O a) V CO I� N N N ' 0 0 0 0 0 O LO V Ca LO O e N 00 O O 00 O N - M N O O r � O O CD N O N M O r N V N H N oc O _T W L � N r O m LO O O U c R 0 0 0 0 0 0 a M I- X 0 0 00 O C9 NI-MLO O O T T 00 Lo O N O M Ca N a) 00 00 Ca # N 0 Ln V V LV 00 I� V O 0 IB MMMMO 0 e OO O M M 00 V 00 O O M N O O � O O N 1-0 m O C C09 O LO R # V O 00 O N Ln N V a) I- M N N N N O m w O MMMMM M T LO M 0 - O V o CO O 0 00 M O rn rn 0:m0Ca 0 rn rn o LO m O a) O Ln O Ca V CO I� N N N N N N O � O Q r � CD Q N V N H Table A -3: Household Income Distributions. 1999 Sources: 2000 U.S. Census; BAE, 2002 Gallatin Estimated Income Bozeman County Montana Under $10,000 11.3% 8.1% 11.3% $10,000 to $14 8.6% 6.2% 8.9% $15,000 to $24,999 18.2% 15.2% 17.1% $25,000 to $34,999 16.7% 15.6% 15.4% $35,000 to $49,999 18.6% 19.8% 18.2% $50,000 to $74,999 15.7% 19.0% 17.1% $75,000 to $99,999 6.1% 8.2% 6.4% $100,000 to $149,000 3.5% 5.3% 3.6% $150,000 to $199,999 0.9% 1.4% 0.9% $200,000 or more 0.3% 1.2% 1.0% Total 100.0% 100.0% 100.0% Median HH Income $32,156 $38,120 $33,024 Sources: 2000 U.S. Census; BAE, 2002 Table A-4: 2000 Educational Attainment for Population 25+ Years of Age Sources: 2000 U.S. Census; Bay Area Economics, 2002 City of Bozeman Gallatin County Montana Education Level # % # % # % Less than 9th Grade 295 2.1% 812 2.0% 25,200 4.3% 9th to 12th Grade, No Diploma 526 3.7% 1,879 4.6% 50,158 8.6% High School Graduate 2,186 15.3% 8,594 21.2% 183,415 31.3% Some College, No Degree 3,558 24.8% 10,500 26.0% 150,467 25.6% Associate Degree 665 4.6% 2,083 5.1% 34,420 5.9% Bachelor's Degree 4,851 33.9% 11,385 28.1% 100,758 17.2% Graduate or Prof. Degree 2,237 15.6% 5,208 12.9% 42,203 7.2% Total 14,318 100.0% 40,461 100.0% 586,621 100.0% Sources: 2000 U.S. Census; Bay Area Economics, 2002 Table A -5: Civilian Labor Force, Employment and Unemployment Trends GALLATIN COUNTY MONTANA Civilian Labor Resident Unemployment Year Force Employment Number Percent 1990 28,667 27,306 1,361 4.7% 1991 30,018 28,385 1,633 5.4% 1992 31,969 30,237 1,732 5.4% 1993 33,247 31,730 1,517 4.6% 1994 33,858 33,087 771 2.3% 1995 36,091 35,121 970 2.7% 1996 37,849 36,886 963 2.5% 1997 39,280 38,114 1,166 3.0% 1998 40,699 39,428 1,271 3.1% 1999 42,697 41,491 1,206 2.8% 2000 44,843 43,652 1,191 2.7% 2001 44,240 43,132 1,108 2.5% MONTANA Sources: Montana Department of Labor and Industry, Research & Analysis Bureau; BAE, 2002. Civilian Labor Resident Unemployment Year Force Employment Number Percent 1990 401,000 377,000 24,000 6.0% 1991 407,000 378,000 29,000 7.1% 1992 422,000 393,000 29,000 6.9% 1993 426,000 400,000 26,000 6.1% 1994 439,502 417,225 22,277 5.1% 1995 437,098 411,306 25,792 5.9% 1996 445,910 422,434 23,476 5.3% 1997 454,614 430,261 24,353 5.4% 1998 466,450 440,248 26,202 5.6% 1999 474,006 449,361 24,645 5.2% 2000 479,132 455,608 23,524 4.9% 2001 465,223 443,904 21,319 4.6% Sources: Montana Department of Labor and Industry, Research & Analysis Bureau; BAE, 2002. T � .. C C R 7 � V N r CO r 00 M CO O) U) 00 ao O V 00 O Lo CO r 00 � r V a0 o R N T 0 o C V! 0 R C Ln a0 M CO CO Ln O Ln a0 � r O a0 O E 0 0 V 0 0 w 0 r O w N N N- N M M M V N V M V V V V V le N R O d m — O N O O N W Q m N 7 N C N U O O N N N i 7 O M 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O V O O a0 V N Ln Ln r V M O O e r r CO M N Ln N Ln CO O Ln Ln O O � C R C O V 00 O M V LO LO n M M M N Ln Ln V- I� O O N M CO O n � CO I� V O V N V V N N M CO T (M - Lo N V (6 U) M I� N V N Ln M M N LO N N N 0) V N N W N le 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 T a0 CO O O N CO O O r N O o M O I- N M - U) V M O O N O U c R Ln O U) M O O I- CO 00 00 V r CO CO O Ln W N M O V M 0 O O O- 0 00 V O N r- N r co 0 M N V (6 Ln M 0 0 ' 0 0 o M o M o 0 0 0 e R o a0 O V 0 � O O � M I- � a0 N O E_ O CO N m N V O V CO V M O N N O N O m O O O r Lo N M M O I- M U) U) 00 co T �# O N O 0 O 0 N O V LO O N V O M O M M CO CO U) LO I- LO T h LV M N U a� U N N U O O O > - 6 C (6 N � O E m U N O O U 3 N U �J 6 E (6 N rn N C O �p O m � (6 E N U t - m o m � c N �i .0 t N (6 O (6 N C N .N a� .3 15 c '5; E (6 N O 6 _ Q N N � U N c C O M W H N O 0 Q C) S FL a w Q O a N O O N W Q m N 7 N C N U O O N N N i 7 O M 0000000000 0 � C O c0 N I- M c0 c0 0 M I- Ln O R O V c0 LO N M LO c0 O M c0 t � U m 0 LO c0 M M r Ln N O O O I� O O Ln N N d) W N O N LO c0 I— m M 0 N N I— O V N N N - W M O M 00 00 M M O M N O I— O V O V c0 c0 LO LO V c0 (0 O V co V N I— V N N c0 c0 0 N co N O pp o o o o c0 m o V m W LO I� 0 N N 0 V O LO (0 0 c0 O N V co LO LO c0 O) N N O M W Q 07 N '� c0 o) c0 N o) O o) Lo V N r co r m m co o co V co V co O V O V o O M O (0 U) N N I— r o o) N N O N U) W 0 c0 c0 I� W O M M � w V c0 M O c0 N M N M c0 LO O co LO O O c0 N I� r o LO W O) R N C R o V m V o N o o O 2 O o N N ( N O N N o) V c0 o) N I� O Lo (D j N O D- E W Q o O o O c0 N O m 'O I� O o o c0 N N o) N N (0 O o) O d) r co c0 N N N Lo Lo Ln N > O U R m V M N V M O o N O) (q N c0 Ln o N V c0 V N co M c0 c0 O N c0 V V C =p 0] (0 LO LO co N t/1 O O R .• C N Q N o) Ln V N o) N V I-- c0 O o m O N m O r N o m ds N M c0 I� O r c0 m L Ln V LO Xk R 2 V R O r N � o � o N I— c0 V M O c0 o O Q ry r M�2 m O V 0 I— 00 M O N o) r o) r I� (0 a) c0 Ln V O LO V LO O U N x a) O p+ U) - o m a �S a °o E O O E o) 0 7 � (6 L N W E V R d c 6 .0 a C C O7 O R j _ 7 O C C •_ F d VI 'O c r O O E c �! ._ 7 y r O N F N N a (6 R N_ R U% C 7 w C U y R to L U Q — 7 C O R R R O O N I-- R R p7 O R t y c N F ~ Z� ) t7 Q U K ii N 0 Table A -8: Age of Bozeman Residents by Disability Status, 2000 Age Range # With a Disability 5 -15 174 16 -20 444 21 -64 1781 65 -74 213 75+ 533 Total (a) 3,145 Total % of Total 2763 6.3% 4443 10.0% 17147 10.4% 870 24.5% 1046 51.0% 26,269 12.0% Notes: (a) Population total may not equal Table 1 figures due to Census sampling error. Sources: Census, STF3, 2000; BAE, 2002. Table A -9: Aae of Bozeman Residents by Tvae of Disabilitv. 2000 5 -15 Years 16 -64 Years 65+ Years Total (a) % Bozeman Pop. Sensory Disability 17 389 274 680 2.5% Physical Disability 7 705 465 1,177 4.3% Mental Disability 150 738 190 1,078 3.9% Self -care Disability - 155 103 258 0.9% Go- Outside Home Disability 452 342 794 2.9% Employment Disability 1,146 0 1,146 4.2% Notes: (a) Residents may have more than one type of disability. Sources: US Census STF3, 2000; BAE, 2002. Table A -10: Families with Related Children Under 18 by Poverty Status (a) Below Above Poverty Level Poverty Level Married Couple Families 117 1,841 Male Householder 26 99 Female Householder 244 356 Total Percent 1,958 6.0% 125 20.8% 600 40.7% Totals 387 2,296 2,683 14% Notes: (a) Poverty levels are defined by the Federal Government by family size based on a national standard. For a family of three, the poverty level was $13,290 in 2002. Sources: US Census STF3, 2000; BAE 2002. Table A -11: Bozeman Student Residential Location. 2000 MSU Students # % MSU Students in Dorms (a) 2,600 22.1% MSU Students in Family Housing (b) 704 6.0% MSU Students Off - Campus (c) 8,470 71.9% Total MSU Students 11,774 100% All University Students Living in Bozeman # % On- Campus MSU Students (d) 3,304 38.1% Students Living off - campus in Bozeman 5,377 61.9% Total University Students in Bozeman 8,681 100% Notes: (a) The student residential halls at MSU offer housing for up to 3,250 students. Occupancy rates vary at these facilities depending on year and semester, but typically range from 75% to 85 %. This analysis assumes an average occupancy rate of 80% for 2000. (b) Family and graduate student residences on- campus offer housing for up to 704 students. These units are typically fully occupied. (c) MSU students living off - campus may be either in the city of Bozeman or elsewhere in Gallatin County or other adjacent communities. (d) Represents only students living on- campus at MSU in student residence halls or family /graduate students housing. (e) Represents all full- and part -time university students living off - campus in the city of Bozeman. Sources: US Census, 2000; Montana State University; BAE, 2003. Appendix B: Housing Stock & Market Data 47 O O O O O O O C N M O r_ R C R C O 7 O U C R 0 C E G1 N O m O 0 0 0 0 O 00 (14 O e r r LO O LO N O 0) V ( Lo N V N M # r O O I- O M M N V : LO CO N V 7 O U C R 0 C E G1 N O m O 0 0 0 0 O 00 (14 O e r r LO O LO N O 0) V ( Lo O) CO O) LO 00 N G LO O V O O LO CO N — M 000 0 I- LO r O o LO M O O LO M O V O 0 0 V � 00 0 co CO O M N 0 0 0 0 orn o O O LO M O Lo O Lo O N 0 M M *k _ r N N 0001 0 \ I M r 0 O o p LO M O M OI LO # CO N I- LO V CO 0001 0 \ I M V 0 O M � O 0 N O M LO O) N N C C O OA C C . . 7 7 tll 2 2 � N N OA Q .Q c N 3 U U O O O = 00- H N G) 7 C H N 0) i 7 O M Table B -2: Residential Structures by Number of Units in Structure, 2000 Notes: (a) Total may vary slightly from Table 8 due to Census estimation based on sampling Sources: 2000 U.S. Census; Bay Area Economics, 2002. City of Bozeman Gallatin County Montana Number of Units in Structure # % # % # % 1 unit, detached 4,931 42.3% 16,930 57.4% 276,433 67.0% 1 unit, attached 901 7.7% 1,575 5.3% 11,044 2.7% 2 units 927 8.0% 1,382 4.7% 13,770 3.3% 3 or 4 units 1,861 16.0% 2,859 9.7% 19,006 4.6% 5 to 9 units 920 7.9% 1,152 3.9% 11,854 2.9% 10 to 19 units 587 5.0% 699 2.4% 7,626 1.8% 20 or more units 946 8.1% 1,104 3.7% 12,662 3.1% Mobile home 571 4.9% 3,736 12.7% 58,957 14.3% Boat, RV, van, etc. - 0.0% 52 0.2% 1,281 0.3% Total (a) 11,644 100.0% 29,489 100.0% 412,633 100.0% Notes: (a) Total may vary slightly from Table 8 due to Census estimation based on sampling Sources: 2000 U.S. Census; Bay Area Economics, 2002. Table B -3: 2000 Occupied Housing Units by Unit Type and Tenure Sources: 2000 U.S. Census; Bay Area Economics, 2002 City of Bozeman Gallatin County State of Montana Tenure by Units in Structure # % # % # % Owner - Occupied 1 unit, detached 3,447 73.4% 12,551 76.4% 198,641 80.2% 1 unit, attached 491 10.5% 782 4.8% 4,315 1.7% 2 units 160 3.4% 230 1.4% 2,130 0.9% 3 or 4 units 193 4.1% 258 1.6% 1,202 0.5% 5 to 9 units 89 1.9% 99 0.6% 716 0.3% 10 to 19 units 17 0.4% 25 0.2% 302 0.1% 20 to 49 units 8 0.2% 8 0.0% 333 0.1% 50 or more units 39 0.8% 39 0.2% 191 0.1% Mobile home or trailer 254 5.4% 2,419 14.7% 39,351 15.9% Other - 0.0% 24 0.1% 519 0.2% Total Owner - Occupied Units 4,698 100.0% 16,435 100.0% 247,700 100.0% Renter - Occupied 1 unit, detached 1,257 20.2% 2,666 27.0% 42,810 38.6% 1 unit, attached 342 5.5% 549 5.6% 4,862 4.4% 2 units 694 11.1% 997 10.1% 9,808 8.8% 3 or 4 units 1,548 24.9% 2,120 21.4% 14,625 13.2% 5 to 9 units 778 12.5% 947 9.6% 9,445 8.5% 10 to 19 units 527 8.5% 605 6.1% 6,112 5.5% 20 to 49 units 397 6.4% 520 5.3% 5,173 4.7% 50 or more units 383 6.1% 386 3.9% 5,627 5.1% Mobile home or trailer 302 4.8% 1,092 11.0% 12,399 11.2% Other - 0.0% 6 0.1% 106 0.1% Total Renter - Occupied Units 6,228 100.0% 9,888 100.0% 110,967 100.0% Total 10,926 26,323 358,667 Sources: 2000 U.S. Census; Bay Area Economics, 2002 M O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N or-7N777 O V I- N 7 I- 00 7 O 0 V 0 N- V O V -- 0 N N M O O N a 0 0 N L N M V V O M I� M O M r N M 00 W V N N M N O O O O M 00 I� O M V Q M M Ln N N E CO r 00 I- r- � O N O 0 N M M- N r V O M - 0 (V O LM Z N R C 0 0 0 0 0 0 0 0' 0 0 0 0 0 O 0 O O O O O o 0 0 0 0' 0 0 0 0 0 N � V I- � M M � O � I- M V M O O N O m I- N- V- O N- 0 N M O M N a 0 0 rn r L Ln r O V I� LO O O 0 0 N Ln O 0 N V N LO M 00 CO r r N M N M M M O V O O I� M 00 r M V M O N 0 r N M V V N M N V- Ln (V 0 V O Z N 0 0 0 0 0 0 0 0000000 O 0 O O O O O o 0 0 0 000000 0 QJ CO CO I- O M I- CO O O CO O O LO N LO O 00 M LO M O r- O M O 0 N M O M M CD 0 0 N L LO 00 00 O N O 00 N M 00 r- 0 O N M 00 V V O V 00 M M M V 00 00 V 0 - 00 T O Ll7 I� M O N N CO O M 00 E M m N N M M O Z O U c is c 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O I- N M Ln M M M O 00 M r N O O O V- O 0 N r- M O N M a 0 0 rn T M O 00 0 M r- V LO O O N I- O LO O N M N M 00 N 00 O O M M O V O M O N 00 O 00 N LO M N 00 M 00 E LV V LV LV I� 7 Z 0 0 0 0 0 0 0 0000000 0 0 0 0 0 0 0 0 0 0 0000000 0 N Ln Ln O 7 7 V CO O 00 Ln 00 CO I- V O w 0 V 0- 0 r- 00 N O O 0 N N O M M a 0 0 C C N M M O M I- M 0 00 O O N O V V N L V M r M N 0 N M m O O V M V N N N _ LO C M V LV LV M E S N z O m w O >_` � 0 0 0 0 0 0 0 0000000 0 0 0 0 0 0 0 0 0 0000000 0 0 V N M 00 O Ll7 M V M O M V CO O O O V O V m-1-0-0 O V Ln O O M O O O N N M O M M O CD a rn rn r L O M O O OD O O N N N r- LI7 M N N N M LO 00 V N LO r LO V N M M 00 M LO LO - OD 00 00 V N E Lri 7 Z In In c N c N N N Q Q N 7 Q v c c c c c c� 7 Q v c c c c c c� 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C C C C w Q Q Q Q Q Q o C c Q Q Q Q Q Q o r N M V LO M I� 6 N M V LO M I� 0 Table 13-5: Persons Der Unit. 2000 BOZEMAN All Occupied Housing Units Persons Per Room Households Percent 1.00 or less 10,605 97.1% 1.01 -1.50 256 2.3% 1.51 -2.00 65 0.6% Total 10,926 100.0% Total HH's w11.01 or more persons per room 321 Total % of HH's w11.01 or more persons per room 2.9% GALLATIN COUNTY All Occupied Housing Units Persons Per Room Households Percent 1.00 or less 25,633 97.4% 1.01 -1.50 513 1.9% 1.51 -2.00 177 0.7% Total 26,323 100.0% Total HH's w11.01 or more persons per room 690 Total % of HH's w11.01 or more persons per room 2.6% MONTANA All Occupied Housing Units Persons Per Room Households Percent 1.00 or less 347,425 96.9% 1.01 -1.50 7,566 2.1% 1.51 -2.00 3,676 1.0% Total 358,667 100.0% Total HH's w11.01 or more persons per room 11,242 Total % of HH's w11.01 or more persons per room 3.1% Sources: US Census, 2000; BAE, 2002. Table B -6: Housing Stock By Year Built Sources: 2000 U.S. Census; Bay Area Economics, 2002. City of Bozeman Gallatin County Montana Year Built # % # % # % 1999 to March 2000 537 4.6% 1,721 5.8% 10,945 2.7% 1995 to 1998 1,513 13.0% 4,522 15.3% 34,131 8.3% 1990 to 1994 855 7.3% 3,246 11.0% 27,750 6.7% 1980 to 1989 1,300 11.2% 4,511 15.3% 54,320 13.2% 1970 to 1979 2,482 21.3% 6,505 22.1% 89,740 21.7% 1960 to 1969 1,293 11.1% 2,423 8.2% 45,751 11.1% 1940 to 1959 1,730 14.9% 2,969 10.1% 77,711 18.8% 1939 or Earlier 1,934 16.6% 3,592 12.2% 72,285 17.5% Total 11,644 100.0% 29,489 100.0% 412,633 100.0% Sources: 2000 U.S. Census; Bay Area Economics, 2002. t � s d. ° d. c � a l kI 1 e e e e � r w a s w 8 n -- m -- S -° w w w w w w w w w w w �� a v %2 d. d a w w a N w w w w 8 w w 8 ' n 0 0 w w w w w w q ` w w w w ` w w w _ - o� v s s s s s v s s s s s s s s s s s s s s - aaaav aaaav aaaav� aaaav ` aaaav v o _�� N m v u� a - N m v u� a � N m t � s c r m N m$ m N o N o m o o r N a` w � fA fA fA W fA w fA w w a w w w w w w w- w w w - - - w- w `- �- " d. d.fdfdA P.$$USF $&4F $�3 ��www Wl wwww V � P 0 0 w w w w w w q ` w w w w ` w w w _ - o� v r - v s s s s s v s s s s s v s s s s s uo s s s s - a a a a v a a a a v a a a a v a a a a v a a a a v v o_l?- Table B -9: Home Sales Prices, 1998 -2001 Gallatin County Sale Price Bozeman 1998 (a) 1999 Change 2000 Change 2001 Change 1998 (a) 1999 Change 2000 Change 2001 Change Overall: Average $145,421 $171,597 18% $182,524 6% $163,427 Average $150,610 $159,195 6% $210,643 32% $174,470 -17% Median $123,952 $133,000 7% $159,950 20% $154,500 -3% New: Average n/a $184,781 n/a $173,117 -6% $149,206 Average n/a $123,748 n/a $253,278 105% $153,713 -39% Median n/a $116,630 n/a $209,235 79% $134,750 -36% Existing: Average n/a $168,128 n/a $179,096 7% $167,160 Average n/a $162,089 n/a $204,279 26% $177,840 -13% Median n/a $137,000 n/a $155,950 14% $156,750 1 % Sale Price Gallatin County 1998 (a) 1999 Change 2000 Change 2001 Change Overall: Average $145,421 $171,597 18% $182,524 6% $163,427 -10% Median $121,995 $137,000 12% $139,900 2% $137,500 -2% New: Average n/a $184,781 n/a $173,117 -6% $149,206 -14% Median n/a $137,608 n/a $141,500 3% $125,930 -11% Existing: Average n/a $168,128 n/a $179,096 7% $167,160 -7% Median n/a $137,000 n/a $139,900 2% $143,900 3% Sale Price Montana 98 -99 99 -00 00 -01 1998 1999 % Change 2000 % Change 2001 % Change Overall: Average $109,495 $122,914 12% $131,407 7% $140,596 7% Median $95,000 $113,811 20% $115,000 1% $119,000 3% New: Average n/a $163,286 n/a $164,824 1% $181,683 10% Median n/a $141,650 n/a $137,100 -3% $142,900 4% Existing: Average n/a $120,657 n/a $128,982 7% $138,134 7% Median n/a $101,300 n/a $113,000 12% $117,000 4% & C E m $ k $ 9 « L) d ) / u 2 ; 2 k k z z / / CL § § [ § k \ ] 7 / $ ® j \N [ m ] ., / k /§ 8 % » \ § / . 0 2 § � ® § 0 § E \ o EQ § + k 0 E S / « ®\ 0 § r_ / / & ./ U 3 \ \ \ \ z \ \ ) \ CO / 2 & K CL & 0 0 0 0 ; 8 \ \ \ \ M 'r � 7 + ° \ \ Q Q E E E E C') f $ $ / © m \ \ \ k CL 0 2 z 2 2 0 � j� \ \ \ \ & C \ & \ \ _ / i \ _ m \ 2 0 { £ k z @ $ ± 0 C \ + 0 ± $ \ 0 y\ E om 0 / /J £ .q ! -F 7 § § / 0 �) / \ // \ & \ \ \ , I- § � \ ; � � w 0 [ 2 0 u } / k \ E m $ k $ 9 « L) d ) / u 2 ; 2 k k z z / \ & \ \ _ / i \ _ m \ 2 0 { £ k z @ $ ± 0 C \ + 0 ± $ \ 0 y\ E om 0 / /J £ .q ! -F 7 § § / 0 �) / \ // \ & \ \ \ , I- § � \ ; � � w 0 [ 2 0 u } / k \ C N O N a O N U) U) U) U) O C N V r N " ELT 69 69 69 0 N O O O O O N O (n0 -U t7 �����z \° 0 O O Ln Ln OD Ln OD V U) 0 O O N V OD M N Ln P. \° 0 O O Ln OD Ln ER N M \° 0 O O OD M M M N � N _Y9 C R m E O O C O N 7 N C O) U U D O N C O) C O Q N N O O O W Q O m O- (M N LL N H 3 tll - 3 (6 tll C � N N U � U U 0 O O O N N N � O) rn U U) C N N O z U) O O O O O O O O O a0 O N a0 Ln O O CO O V V CO O ° aO � O O N r CD I- � M N O C N Ln I- Ln M Ln Ln 0 O N M U V N 0 R 0 0 0 0 0 0 0 V 00 00 V V O W W r 0 N O V Ln R M N O C T � R M M O Ln M C U M O LV 7 O N 7 0 M I- O ° r- w O O r 0 O N O 0 T a0 O a0 0 0 r M CO M I- O O W r V O 63 U O V r Ln Lo N N U) CO V r r M N M U) C N O N a O N U) U) U) U) O C N V r N " ELT 69 69 69 0 N O O O O O N O (n0 -U t7 �����z \° 0 O O Ln Ln OD Ln OD V U) 0 O O N V OD M N Ln P. \° 0 O O Ln OD Ln ER N M \° 0 O O OD M M M N � N _Y9 C R m E O O C O N 7 N C O) U U D O N C O) C O Q N N O O O W Q O m O- (M N LL N H 3 tll - 3 (6 tll C � N N U � U U 0 O O O N N N � O) rn U U) C N N O z U) 0 0 0 0 0 0 0 O a0 O N a0 Ln O ° N Ln Ln Ln C N M O Ln O O O N N0 M M M M M C a I- � M N O C N Ln I- Ln M Ln Ln 0 O N M U c R 0 0 0 0 0 0 0 c 00 r r- V I- N CO R C O N O O M T 0 T N r M M O Ln M I- U) Ln O N U M C N O N a O N U) U) U) U) O C N V r N " ELT 69 69 69 0 N O O O O O N O (n0 -U t7 �����z \° 0 O O Ln Ln OD Ln OD V U) 0 O O N V OD M N Ln P. \° 0 O O Ln OD Ln ER N M \° 0 O O OD M M M N � N _Y9 C R m E O O C O N 7 N C O) U U D O N C O) C O Q N N O O O W Q O m O- (M N LL N H 3 tll - 3 (6 tll C � N N U � U U 0 O O O N N N � O) rn U U) C N N O z U) 0 0 0 0 0 0 0 N CO V Ln M 0 ° O M M O N Ln O O N0 M M M M M m R V U) CO N - N E G1 N O 0 0 0 0 0 0 0 O O M 0 0 0 ° T 0 r V V r O CO N M N r U Lo LQ LV C N O N a O N U) U) U) U) O C N V r N " ELT 69 69 69 0 N O O O O O N O (n0 -U t7 �����z \° 0 O O Ln Ln OD Ln OD V U) 0 O O N V OD M N Ln P. \° 0 O O Ln OD Ln ER N M \° 0 O O OD M M M N � N _Y9 C R m E O O C O N 7 N C O) U U D O N C O) C O Q N N O O O W Q O m O- (M N LL N H 3 tll - 3 (6 tll C � N N U � U U 0 O O O N N N � O) rn U U) C N N O z U) \ E 2 j } / k \ ° ; § § § § § ^ ] / § ) / k / f � ] \ 4 ) \/ \k \\\ \j __ _& ___ 691 691 ; i i i i i / / / / \ } / q / / j \ § of § E 2 LL m m m m 2p /R/ 7 2e/ $$\ )) E U) } \k § U) E« k �� L \ / m � 2/ C / a \/ }§ m \ \ \ 4 m § 0 z k / 2 I } \ E 2 j } / k \ Table B -13: Gross Rent as a Percentaae of Income in 1999 (b) Notes: includes only specified renter - occupied housing units. Sources: 1990 & 2000 US Census, STF 3; BAE 2002. City of Bozeman Gallatin County Montana Less than 15.0 percent 859 13.8% 1,512 15.9% 19,189 18.2% 15.0 to 19.9 percent 887 14.3% 1,352 14.2% 14,216 13.5% 20.0 to 24.9 percent 901 14.5% 1,366 14.4% 12,819 12.2% 25.0 to 29.9 percent 493 7.9% 793 8.4% 10,238 9.7% 30.0 to 34.9 percent 409 6.6% 651 6.9% 7,535 7.1% 35.0 percent or more 2,352 37.8% 3,107 32.7% 29,775 28.2% Not computed 317 5.1% 707 7.5% 11,648 11.0% Total 6,218 100% 9,488 100% 105,420 100% Notes: includes only specified renter - occupied housing units. Sources: 1990 & 2000 US Census, STF 3; BAE 2002. 0 E O V 00000000000000 0 = LO M O O O) CO � CO 0 0 0 0 0 0 j� (O M LO LO N N M E 0 0 LO I— O O Ln M LO 0 0 0 0 0 0 CO C r r LO R E 0 R CO W N � �� V O F N M O O O `! N O E O N V fA fA CO I (O O O N fA fA O N N r m O � O O) LO fA 0 0 r N N <A <A C R N � r r I CO N N I co V r Lo r 61 �I O N N— N — I V Lo d N O N N O N O N O N O O O O N N f- O N w f- N f- O w 0 0 E NN M� M W W 1 M C 00 N f. O O N CO N N X fA fA fA <A <A <A 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r N N M V N W f� f- 00 00 N ) N N co M V N f0 O f0 N co co N co V V Q 0 D) D) D) D) D) D) D) D) D) D) D) y - 0 V N O O N N V D) V D) CO D) V D) E uj N N M r y y R y O) fA fA fA fA fA fA fA fA fA r r R r r r r r r r r r O r O O O d r O O O O O O O O O O O O E O O O O O O O O O O O O O O O O N O O O O O O O O O O R U � O O N N O N O N O N O N O J F N C Q E O N C R C N C O E O L C O O C U N Q O R L N O O O E O O0 O O r Q Ln � V � fl � O L (D T- 0 = L 0) Q C N � N � � R � C (6 N E C Q 0 C) C C � 6 N 6 O (� O O N 2 W E 07 Q D N E O (D 'X O E m N 0 E U � C N . C) R � m - 6 C — N N N R N (D U N Q Cr � O O ul Z U) 73 x0000000000000 oR O O O O O O M N CO LO O O O O CO Q d 0 0 LO M M V o I— M CO 0 0 0 0 C R Q d O W F O d N LO O O O E N N N r � O O y N <A C d O � O � R N r `w 0 » O G! o � r O O r N Q C d N O D) Q — O) d O N R N y d R 4; d R r � L O N O � O � C fA r � O � � � N O) N I� tlrr fA O O R N L(Y N r �T L(X Lb V co (O LO N r � N d J E N M M 10 S r ao N oo IO r c c X R r � N M N N fA fA fA fA fA fA R d 0 0 0 0 0 0 0 0 0 0 0 0 0 0 R N r M V 10 w r m v m oo oo oo N N co V Lo w r 0 f0 N co co N co V V Q 0 p V 0 O O 0 N V D) V D) V D) V D) E L N N M r y fA fA fA fA fA fA fA fA fA r r C r r r r r r r r r R y O O O r O O O O O O O O O O O O O 0 C L(i C C C C C C C 0 0 0 R O O N N O w O w O w O N O d N N N M M N r N O J fA fA fA fA <A <A <A <A <A <A <A <A <A F X N m O O 0 O C O N E O C L 0 O O U N Q O R L_ N O O E O O N O � w C O N O V O 69 L � N 0 � O L C Q E (D C �p N � N E R C m 0 .w O [) D 0 O � L N N 6 O (� O O N O O W (D Q E Q E 0 o '� 0 O O E w N Q C N D L C) C j R � � m - O C — a R Y (6 � Q N N N Q Cr Z (n 73 � - � m = = C) 0 0 0 = x = x x x E J J J J F- $2 \ _ \ \ ®\ G § /_ /_ §] m) £, x § x § 2 o G \ G j 0 \ 4 _ = j ) ƒ ƒ 2 2® ° p �) �R %R & }� \Q }o } ~ 2 \& && \ ƒ ƒ u 5 § § § § < < i § § § § § a a § § m % / m \ a e / R e =�2 2 3= m�E m =�R 4 f C) ® - U) \ . E o ; a< § \ E o 2< » k) \ \ \ k \ ) k \ \ 0 �o & § E . 2 M = E E m E § § / 0 m . ° R U) § z �� oe o= u= L) <- \ $ \ \ Table B -17: Bozeman Household Income by Tenure Owner Occupied Less than $5,000 54 1.1% $5,000- $9,999 84 1.8% $10,000 - $14,999 196 4.2% $15,000 - $19,999 255 5.4% $20,000 - $24,999 196 4.2% $25,000 - $34,999 527 11.2% $35,000 - $49,999 1,029 21.9% $50,000 - $74,999 1,339 28.5% $75,000 - $99,999 528 11.2% $100,000 - $149,999 369 7.9% $150,000 or more 121 2.6% All Owners 4,698 100.0% Renter Occupied Less than $5,000 381 6.1% $5,000- $9,999 703 11.3% $10,000- $14,999 731 11.7% $15,000- $19,999 894 14.4% $20,000 - $24,999 651 10.5% $25,000 - $34,999 1,247 20.0% $35,000 - $49,999 992 15.9% $50,000 - $74,999 415 6.7% $75,000 - $99,999 161 2.6% $100,000 - $149,999 38 0.6% $150,000 or more 15 0.2% All Renter Households 6,228 100.0% All Households Less than $5,000 435 4.0% $5,000- $9,999 787 7.2% $10,000 - $14,999 927 8.5% $15,000-$19,999 1,149 10.5% $20,000 - $24,999 847 7.8% $25,000 - $34,999 1,774 16.2% $35,000 - $49,999 2,021 18.5% $50,000 - $74,999 1,754 16.1% $75,000 - $99,999 689 6.3% $100,000 - $149,999 407 3.7% $150,000 or more 136 1.2% Total Households 10,926 100.0% Sources: Census, 2000; BAE, 2003. Appendix C: Housing Development Pro - Formas In formulating the incentives portion of this Draft Housing Strategy, BAE prepared a series of "static" pro- forma financial analyses, based on hypothetical residential projects, or phases of development in neiy sub- divisions. Four baseline prototype projects vyere formulated in order to demonstrate the costs and revenues associated iyith each type of development. These prototypes range in size, price point, tenure and density to illustrate a range of scenarios. Building upon these baseline prototypes, varying percentages of affordable units at various income levels (i.e., yen logy, logy, and moderate income) v here incorporated into the baseline projects to illustrate the effects of different affordable housing requirements on development feasibility. The feasibility analysis also focused on the impact of the density bonuses and other incentives on development economics, both for land developers and home builders. The models presented belovy are included to illustrate the relationship betAyeen incentives and varying levels of housing affordability on bottom line development profits. They are not intended as a final or definitive analysis of development economics in the City of Bozeman. 65 Appendix C -1: Baseline Residential Development Assumptions Std Lot SFR Std. Lot SFR Townhouse Multifamily For -Sale Lots For -Sale Units For -Sale Rental Number of Units /Lots 50 50 25 60 Baseline Density (DU /Acre) 6 6 12 24 Construction Type Infrastrucutre Wood Frame Wood Frame Wood Frame Type of Parking Surface Surface Surface Surface Average Unit Type NA 3 BR /2 BA 3 BR /2 BA 2BR/1 BA Unit/Parcel Size (Sq. Ft.) 7,260 1,500 1,250 750 Market Rate Rent/Sale Price $45,000 $200,000 $125,000 $850 Land Costs /Acre $40,000 $40,000 $30,000 $100,000 Hard Costs /Sq. Ft. NA $65 $50 $70 Total Development Cost/(Unit/Lot) $38,349 $157,707 $102,612 $88,207 Profit as % of Dev't Cost 17.3% 20.5% 15.7% 0.2% Source: BAE, 2003. Appendix C -2: Residential Development Projects with Affordable Units and Incentives Std Lot SFR Std. Lot SFR Townhouse Multifamily For -Sale Lots For -Sale Units For -Sale Rental Number of Units /Lots 63 0 31 75 Baseline Density (DU /Acre) 7.5 6 15 13 Construction Type Infrastrucutre Wood Frame Wood Frame Wood Frame Type of Parking Surface Surface Surface Surface Average Unit Type NA 3 BR /2 BA 3 BR /2 BA 2BR/1 BA Unit/Parcel Size (Sq. Ft.) 5,808 1,500 1,250 750 Market Rate Rent/Sale Price $45,000 $200,000 $125,000 $850 Land Costs /Acre $40,000 $40,000 $30,000 $100,000 Hard Costs /Sq. Ft. NA $65 $50 $70 Total Development Cost/(Unit/Lot) $38,349 $155,134 $102,612 $88,207 Profit as % of Dev't Cost 12.6% 19.2% 41.1% 15.3% Incentive Type Bonus Fee Waiver Bonus Bonus Source: BAE, 2003. Appendix C -3 Baseline Single - Family Subdivision Major Assumptions Characteristics of Project Base Project Size (lots) 50 Site Size (acres) 8.3 Affordable Lots 0 Bonus Lots 0 Total Lots 50 Product Mix: 3 BR /2 BA Market 50 3 BR /2 BA 80% AMI - Unit Size (Sq. Ft.) 1,500 Parking Ratio 2.0 Parking Spaces 100 Project Size (Sq. Ft.): Unit Total 75,000 Common Area - Total Residential 75,000 Project Density (DU /AC) 6 Sale Prices: $332,532 Market Lots (a) $45,000 Affordable Lots $0 Development Costs Land /Acre (b) $40,000 On and Off -Site Costs /lot (c) $25,000 Permit & Fees /lot (d) $2,500 Other Soft Costs (e) 10 Cost /Parking Space $0 Financing Assumptions Interest Rate 8.0 Land holding period (months) 24 Period of Initial Loan (months) 6 Initial Construction Loan Fee (points) 0 Average Outstanding Balance 60% Loan to Cost Ratio 70 Hard & Soft Costs, Land, Site Costs $1,833,334 Amount of Loan $1,283,334 Cost Land $333,333 On and Off -Site Development Costs $1,250,000 Parking Costs $0 Building Permits & Fees $125,000 Other Soft Costs $125,001 Finance Costs: land holding costs $53,333 Interest on Construction Loan $30,800 Points on Construction Loan $0 Total Development Costs $1,917,468 Total Development Costs /Lot $38,349 Development Feasibility Gross Sales Revenue $2,250,000 Less 5% Commissions /Marketing $0 Net Sales Revenue $2,250,000 Less Development Costs $1,917,468 Developer Profit (Net Rev - Dev Costs) $332,532 Profit as % of Development Cost 17.3 Profit Per Lot $6,651 NOTES: (a) Based on prevailing market rates for finished SFR parcels in Bozeman. (b) Reflects raw land costs per acre for residential land in Gallatin County within the City of Bozeman planning sphere of influence. Assumes that land has been neither zoned nor annexed. (c) Based on conversations with local developers and the City of Bozeman. Includes all site prep, infrastructure and off -site improvements. Does not include system development fees. (d) Estimate from City of Bozeman. (e) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Sources: BAE, 2003: RS Means Square Foot Costs, 2003. Appendix C-4 Baseline Single - Family Subdivision with 10% Affordable Lots and Density Bonus Major Assumptions Characteristics of Project Base Project Size (lots) 50 Site Size (acres) 8.3 Affordable Lots 5 Bonus Lots (25 %) 13 Total Lots 63 Product Mix: 3 BR /2 BA Market 58 3 B R/2 BA 80% AM I 5 Unit Size (Sq. Ft.) 1,500 Parking Ratio 2.0 Parking Spaces 100 Project Size (Sq. Ft.): Unit Total 75,000 Common Area - Total Residential 75,000 Project Density (DU /AC) 8 Sale Prices: $288,732 Market Lots (a) $45,000 Affordable Lots $0 Development Costs Land /Acre (b) $40,000 On and Off -Site Costs /lot (c) $25,000 Permit & Fees /lot (d) $2,500 Other Soft Costs (e) 10% Cost /Parking Space $0 Financing Assumptions Interest Rate 8.0% Land holding period (months) 24 Period of Initial Loan (months) 6 Initial Construction Loan Fee (points) 0% Average Outstanding Balance 60% Loan to Cost Ratio 70% Hard & Soft Costs, Land, Site Costs $2,208,334 Amount of Loan $1,545,834 Cost Land $333,333 On and Off -Site Development Costs $1,562,500 Parking Costs $0 Building Permits & Fees $156,250 Other Soft Costs $156,251 Finance Costs: land holding costs $53,333 Interest on Construction Loan $37,100 Points on Construction Loan $0 Total Development Costs $2,298,768 Total Development Costs /Lot $36,780 Development Feasibility Gross Sales Revenue $2,587,500 Less 5% Commissions /Marketing $0 Net Sales Revenue $2,587,500 Less Development Costs $2,298,768 Developer Profit (Net Rev - Dev Costs) $288,732 Profit as % of Development Cost 12.6% Profit Per Lot $5,775 NOTES: (a) Based on prevailing market rates for finished SFR parcels in Bozeman. (b) Reflects raw land costs per acre for residential land in Gallatin County within the City of Bozeman planning sphere of influence. Assumes that land has been neither zoned nor annexed. (c) Based on conversations with local developers and the City of Bozeman. Includes all site prep, infrastructure and off -site improvements. Does not include system development fees. (d) Estimate from City of Bozeman. (e) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Sources: BAE, 2003: RS Means Square Foot Costs, 2003. Appendix C -5: Baseline Single - Family Project Major Assumptions Characteristics of Project Base Project Size (Units) 50 Site Size (acres) 8.3 Market Rate Units 50 Below Market Rate Units 0 Product Mix: $0 3 BR /2 BA Market 50 3 BR /2 BA 60% AMI $650,000 3 BR /2 BA 80% AMI - Unit Size (Sq. Ft.) 1,500 Parking Ratio 2.0 Parking Spaces 100 Project Size (Sq. Ft.): $7,885,352 Unit Total 75,000 Common Area - Total Residential 75,000 Project Density (DU /AC) 6 Sale Prices: $9,500,000 3 BR /2 BA Market (a) $200,000 3 BR /2 BA 60% AMI $122,709 3 BR /2 BA 80% AMI $163,612 Development Costs $32,293 Land /Acre (b) $40,000 Construction Costs (Sq. Ft.) (c) $65 On and Off -Site Costs /Unit (d) $32,500 Permit & Fees /Unit (e) $2,500 Other Soft Costs (f) 10 Cost /Parking Space $0 Construction Financing Assumptions Interest Rate 8.0 Land Holding Period (months) 24 Period of Initial Loan (months) 6 Initial Construction Loan Fee (points) 2 Average Outstanding Balance 55% Loan to Cost Ratio 70 Hard & Soft Costs, Land, Site Costs $7,608,333 Amount of Loan $5,325,833 Development Cost Survey Land $333,333 Unit Construction Cost $4,875,000 On and Off -Site Cost $1,625,000 Parking Costs $0 Building Permits & Fees $125,000 Other Soft Costs $650,000 Finance Costs: Land Holding Costs $53,333 Interest on Construction Loan $117,168 Points on Construction Loan $106,517 Total Development Costs $7,885,352 Total Development Costs /Unit $157,707 Development Feasibility Gross Sales Revenue $10,000,000 Less 5% Commissions /Marketing $500,000 Net Sales Revenue $9,500,000 Less Development Costs $7,885,352 Developer Profit (Net Rev - Dev Costs) $1,614,648 Profit as % of Development Cost 20.5 Profit Per Unit $32,293 Notes: (a) Reflects typical asking price for new single family homes in currently selling or planned and proposed residential subdivisions. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means, 2003 per square foot construction costs for average wood frame single - family dwellings. (d) Includes system development fees of approximately $7,500 per unit. (e) Include planning and building permits. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Sources: BAE, 2003: RSMeans, 2003 Appendix C -6: Baseline Single - Family Project with 10% Affordable Units and Fee Waiver Major Assumptions Characteristics of Project Base Project Size (Units) 50 Site Size (acres) 8.3 Market Rate Units 45 Below Market Rate Units 5 Product Mix: $0 3 BR /2 BA Market 45 3 B R/2 BA 60% AMI 2 3 B R/2 BA 80% AMI 3 Unit Size (Sq. Ft.) 1,500 Parking Ratio 2.0 Parking Spaces 100 Project Size (Sq. Ft.): $7,756,677 Unit Total 75,000 Common Area - Total Residential 75,000 Project Density (DU /AC) 6 Sale Prices: $9,249,443 3 BR /2 BA Market (a) $200,000 3 BR /2 BA 60% AMI $122,709 3 BR /2 BA 80% AMI $163,612 Development Costs $29,855 Land /Acre (b) $40,000 Construction Costs (Sq. Ft.) (c) $65 On and Off -Site Costs /Unit (d) $32,500 Permit & Fees /Unit (e) $2,500 Other Soft Costs (f) 10% Cost /Parking Space $0 Construction Financing Assumptions Interest Rate 8.0% Land Holding Period (months) 24 Period of Initial Loan (months) 6 Initial Construction Loan Fee (points) 2% Average Outstanding Balance 55% Loan to Cost Ratio 70% Hard & Soft Costs, Land, Site Costs $7,483,333 Amount of Loan $5,238,333 Development Cost Survey Land $333,333 Unit Construction Cost $4,875,000 On and Off -Site Cost $1,625,000 Parking Costs $0 Building Permits & Fees $0 Other Soft Costs $650,000 Finance Costs: Land Holding Costs $53,333 Interest on Construction Loan $115,243 Points on Construction Loan $104,767 Total Development Costs $7,756,677 Total Development Costs /Unit $155,134 Development Feasibility Gross Sales Revenue $9,736,255 Less 5% Commissions /Marketing $486,813 Net Sales Revenue $9,249,443 Less Development Costs $7,756,677 Developer Profit (Net Rev - Dev Costs) $1,492,766 Profit as % of Development Cost 19.2% Profit Per Unit $29,855 Notes: (a) Reflects typical asking price for new single family homes in currently selling or planned and proposed residential subdivisions. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means, 2003 per square foot construction costs for average wood frame single - family dwellings. (d) Includes system development fees of approximately $7,500 per unit. (e) Include planning and building permits. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Sources: BAE, 2003: RSMeans, 2003 Appendix C -7: Baseline Townhouse Project Major Assumptions Characteristics of Project Base Project Size (Units) 25 Site Size (acres) 2.1 Market Rate Units 25 Below Market Rate Units 0 Product Mix: $50,000 3 BR /2 BA Market 25 3 BR /2 BA 60% AMI $211,250 3 BR /2 BA 80% AMI - Unit Size (Sq. Ft.) 1,250 Parking Ratio 2.0 Parking Spaces 50 Project Size (Sq. Ft.): $102,612 Unit Total 31,250 Common Area - Total Residential 31,250 Project Density (DU /AC) 12 Sale Prices: $2,565,311 3 BR /2 BA Market (a) $125,000 3 BR /2 BA 60% AMI $92,962 3 BR /2 BA 80% AMI $133,865 Development Costs Land /Acre (b) $30,000 Construction Costs (Sq. Ft.) (c) $50 On and Off -Site Costs /Unit (d) $20,000 Permit & Fees /Unit (e) $2,500 Other Soft Costs (f) 10 Cost /Parking Space $1,000 Construction Financing Assumptions Interest Rate 8.0 Period of Initial Loan (months) 12 Initial Construction Loan Fee (points) 2 Average Outstanding Balance 60% Loan to Cost Ratio 70 Hard & Soft Costs, Land, Site Costs $2,448,750 Amount of Loan $1,714,125 Development Cost Survey Land $62,500 Unit Construction Cost $1,562,500 On and Off -Site Cost $500,000 Parking Costs $50,000 Building Permits & Fees $62,500 Other Soft Costs $211,250 Finance Costs: Interest on Construction Loan $82,278 Points on Construction Loan $34,283 Total Development Costs $2,565,311 Total Development Costs /Unit $102,612 Development Feasibility Gross Sales Revenue $3,125,000 Less 5% Commissions /Marketing $156,250 Net Sales Revenue $2,968,750 Less Development Costs $2,565,311 Developer Profit (Net Rev - Dev Costs) $403,440 Profit as % of Development Cost 15.7 Profit Per Unit $16,138 NOTES: (a) Refletcs typical asking price for new townhomes or condominiums in currently selling or pallned and prposed residential projects. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means per square foot construcion costs adjusted downward based on conversations with developers. (d) Includes system development fees of approximately $4,500 per unit. (e) Include planning and building permits. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Source: BAE. 2003. Appendix C -8: Townhouse Project with 10 Percent Affordable Units and Density Bonus Major Assumptions Characteristics of Project Base Project Size (Units) 25 Site Size (acres) 2.1 Market Rate Units 22 Below Market Rate Units 3 Bonus Units 6 Total Units 31 Product Mix: $211,250 3 BR /2 BA Market 28 3 BR /2 BA 60% AMI 3 3 BR /2 BA 80% AMI - Unit Size (Sq. Ft.) 1,250 Parking Ratio 2.0 Parking Spaces 50 Project Size (Sq. Ft.): $3,810,135 Unit Total 31,250 Common Area - Total Residential 31,250 Project Density (DU /AC) 15 Sale Prices: 41.1 3 BR /2 BA Market (1) $125,000 3 BR /2 BA 60% AMI (2) $92,962 3 BR /2 BA 80% AMI (2) $133,865 Development Costs Land /Acre (3) $30,000 Construction Costs (Sq. Ft.) (4) $50 On and Off -Site Costs /Unit (5) $20,000 Permit & Fees /Unit (6) $2,500 Other Soft Costs (7) 10 Cost /Parking Space (8) $1,000 Construction Financing Assumptions Interest Rate 8.0 Period of Initial Loan (months) 12 Initial Construction Loan Fee (points) 2 Average Outstanding Balance 60% Loan to Cost Ratio 70 Hard & Soft Costs, Land, Site Costs $2,448,750 Amount of Loan $1,714,125 Development Cost Survey Land $62,500 Unit Construction Cost $1,562,500 On and Off -Site Cost $500,000 Parking Costs $50,000 Building Permits & Fees $62,500 Other Soft Costs $211,250 Finance Costs: Interest on Construction Loan $82,278 Points on Construction Loan $34,283 Total Development Costs $2,565,311 Total Development Costs /Unit $102,612 Development Feasibility Gross Sales Revenue $3,810,135 Less 5% Commissions /Marketing $190,507 Net Sales Revenue $3,619,628 Less Development Costs $2,565,311 Developer Profit (Net Rev - Dev Costs) $1,054,317 Profit as % of Development Cost 41.1 Profit Per Unit $42,173 NOTES: (a) Refletcs typical asking price for new townhomes or condominiums in currently selling or pallned and prposed residential projects. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means per square foot construcion costs adjusted downward based on conversations with developers. (d) Includes system development fees of approximately $4,500 per unit. (e) Include planning and building permits. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Source: BAE. 2003. Appendix C -9: Baseline Multifamily Rental Project Characteristics of Proje Base Project Size (Units) Site Size (acres) Market Rate Units Below Market Rate Units Product Mix: 2 BR /2 BA Market (1) 2 BR /2 BA Below Market (30% AMI) (2) 2 BR /2 BA Below Market (50% AMI) (2) 2 BR Average Unit Size (Sq. Ft.) Parking Ratio (spaces per unit) Parking Spaces Project Size (Sq. Ft.): Unit Total Common Area Total Residential Project Density (DU /AC) Rent Schedule: 2 BR /2 BA Market (a) 2 BR /2 BA Below Market (30% AMI) 2 BR /2 BA Below Market (50% AMI) Development Costs Land /acre (b) Construction Costs (Sq. Ft.) (c) On and Off -Site Costs /Unit (d) Permit & Fees /Unit (e) Other Soft Costs (f) Cost /Parking Space (Construction Financing Assumptions Interest Rate Period of Initial Loan (months) Initial Construction Loan Fee (points) Average Outstanding Balance Loan to Cost Ratio Hard & Soft Costs, Land, Site Costs Amount of Loan NOTES: (a) Reflects typical rental rates for new multifamily rental projects. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means per square foot construction costs adjusted downward based on conversations with developers. (d) Includes system development fees of approximately $4,500 per unit. (e) Include planning and building permits. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Source: BAE, 2003. 60 6.0 60 0 60 0 0 750 1.50 90 45,000 4,500 49,500 24 Development Cost Survey Land Unit Construction Cost On and Off -Site Cost Parking Costs Building Permits & Fees Other Soft Costs Finance Costs: Interest on Construction Loan Points on Construction Loan Total Development Costs Total Development Costs /Unit Gross Potential Rent (100% Occupancy) Vacancy Rate Gross Scheduled Rent Operating Expenses Net Operating Income Capitalization Rate Potential Market Value $600,000 $3,465,000 $450,000 $90,000 $60,000 $400,500 $156,017 $70,917 $5,292,434 $88,207 $612,000 5.0% $581,400 30% $397,800 7.50% $5,304,000 $850 $344 $687 Total Developer Profit Profit as % of Development Cost Profit Per Unit $11,566 0.2% $193 $100,000 $70 $7,500 $1,000 10% $1,000 8.0% 12 2% 55% 70% $5,065,500 $3,545,850 Appendix C -10: Multifamily Rental Project with 10% Affordable Units and Density Bonus major Assompfibns Characteristics of Project Base Project Size (Units) 60 Site Size (acres) 6.0 Market Rate Units 54 Below Market Rate Units 6 Bonus Units 15 Total Units 75 Product Mix: 2 BR /2 BA Market (1) 69 2 BR /2 BA Below Market (30% AMI) (2) 6 2 BR /2 BA Below Market (50% AMI) (2) 0 2 BR Average Unit Size (Sq. Ft.) 750 Parking Ratio (spaces per unit) 1.50 Parking Spaces 90 Project Size (Sq. Ft.): 5.0% Unit Total 45,000 Common Area 4,500 Total Residential 49,500 Project Density (DU /AC) 13 Rent Schedule: $6,099,600 2 BR /2 BA Market (a) $850 2 BR /2 BA Below Market (30% AMI) $344 2 BR /2 BA Below Market (50% AMI) $687 Development Costs Land /acre (b) $100,000 Construction Costs (Sq. Ft.) (c) $70 On and Off -Site Costs /Unit (d) $7,500 Permit & Fees /Unit (e) $1,000 Other Soft Costs (f) 10% Cost /Parking Space $1,000 Construction Financing Assumptions Interest Rate 8.0% Period of Initial Loan (months) 12 Initial Construction Loan Fee (points) 2% Average Outstanding Balance 55% Loan to Cost Ratio 70% Hard & Soft Costs, Land, Site Costs $5,065,500 Amount of Loan $3,545,850 NOTES: Pro Forma Analysis Development Cost Survey Land $600,000 Unit Construction Cost $3,465,000 On and Off -Site Cost $450,000 Parking Costs $90,000 Building Permits & Fees $60,000 Other Soft Costs $400,500 Finance Costs: Interest on Construction Loan $156,017 Points on Construction Loan $70,917 Total Development Costs $5,292,434 Total Development Costs /Unit $88,207 Development Feasibility Gross Potential Rent (100% Occupancy) $703,800 Vacancy Rate 5.0% Gross Scheduled Rent $668,610 Operating Expenses 30% Net Operating Income $457,470 Capitalization Rate 7.50% Potential Market Value $6,099,600 Total Developer Profit $807,166 Profit as % of Development Cost 15.3% Profit Per Unit $13,453 (a) Reflects typical rental rates for new multifamily rental projects. (b) Reflects prevailing market rates for raw unzoned and unannexed residential land in the City of Bozeman planning spehre of influence. (c) RS Means, 2003 per square foot construction costs for average wood frame single - family dwellings. (c) RS Means per square foot construction costs adjusted downward based on conversations with developers. (d) Includes system development fees of approximately $4,500 per unit. (f) Includes A &E, legal, general conditions, taxes, closing costs, contingency, portion of overhead. Percentage of hard costs, site costs. Source: BAE, 2003. Appendix D: Affordable Housing Case Studies This Appendix provides in -depth case studies of cities vyith affordable housing programs v hich promote and /or require the inclusion of affordable Units in neiy residential projects. BAE selected case study jurisdictions that share a number of similarities vyith Bozeman. Specifically, BAE chose areas Undergoing rapid grovlh and experiencing increasing pressure on the housing supply. BAE also selected case studies of jurisdictions vyhich have taken a diverse set of approaches to promoting the development of affordable housing, from mandaton- inclusionary programs to yoluntan- incentive -base programs. City of Longniont, Colorado — Requiring Affordable Units in Annexation Agreements Since 1995, the City of Longmont, Colorado has required that 10 percent of all units in annexation areas be affordable to households earning at or belovy 80 percent of the area median income for for -sale units ($74,000 for a family of four), and 60% of the area median income for rental units ($44,000 for a family of four). Each phase of the development is required to include at least 10 percent affordable units. Developers have the option of paying a housing in -lien fee, or of constricting a certain number of the affordable units off -site. There is no minimum size threshold in terms of acres or number of units for this program. As an incentive, the City provides a fee iyaiyer program for rental units to facilitate the production of affordable multi-family projects. To date, the program has resulted in the development of approximately 350 units, and has led to the contribution of hundreds of thousands of dollars in in -lien fees to City affordable housing programs. Staff at the City of Longmont have identified the provision for allovying off site units as one major problem area for this program as it runs counter to the City's goal of promoting balanced, mixed- income neighborhoods. The City Council is currently re- assessing the program in light of concerns about off -site units as iyells as the payment of in -lien fees. Pleasanton, CA — Voluntary Inclusionary Program In areas vyith strong residential markets and escalating land values, voluntary inclusionany housing programs have resulted in the production of a significant number of belovy market rate units. Among these programs, the City of Pleasanton's program stands out as particularly successful. Pleasanton is a relatively affluent suburb of the Bay Area, located 40 miles east of San Francisco. As a result, its housing market is closely tied to the real estate situation in the Bay Area, which in the last decade has experienced unprecedented grovlh and extreme upiyard price pressures. The median home sale price in Pleasanton in 1999 ryas $411,700, an increase of more than 30 percent in just three years. According to the Association of Bay Area Governments (ABAG), Pleasanton's population has groan rapidly as iyell, increasing from 52,035 in 1990 to an estimated 67,800 in 2000. The rapid grovyth and rising home prices have increased pressure on the City to provide affordable housing options for residents. Until recently, Pleasanton had a yoluntarV inclusionarV housing program aimed at developing Belovy Market Rate (BMR) units. Since program inception in 1988, 845 affordable units have been created (including 396 units targeted to seniors). The city also accepted in -lien fees of $2,088 per 76 single - family unit and $933 per multifamily unit. In October 2000, the Pleasanton City Council voted to make inclusionany zoning mandaton- for projects iyith more than fifteen units. The voluntary program carried out to date ryas based on a project by- project negotiation process, whereby the number of BMR units ryas negotiated in exchange for density bonuses through the planning reyievy process. City planners could also offer developers faster project reviews by putting them first in line to get through Pleasanton's Grovyth Management Program. In general, BMR units iyere rented for 20 percent less than comparable market rate units located in the same complex-. In September 2000, a city sun revealed a market rate rental range of $800 to $1,900 for one bedroom units and $950 to $2,400 for tiro bedroom units. As of March 2000, the maximum rent that could be charged for a BMR unit ryas $1,082 for a one bedroom apartment and $1,352 for a tiro bedroom unit. The actual rents of some BMR units iyere belovy the maximum alloiyed rent. King County, WA Programs — Afforible Housing Incentives A significant number of King County jurisdictions have enacted incentive programs in order to encourage affordable housing production in line vyith local comprehensive plan goals. These include voluntary programs in Bellevue, Kent and Renton, as vyell as mandatory programs in Redmond and Federal Way. King County has also enacted residential density incentives in order to achieve County Comprehensive Plan goals regarding affordable housing, open space protection, historic preservation, and energy conservation. For those residential projects providing a defined affordable housing public benefit, the County offers a menu of density bonuses depending on the number of affordable units provided, level of affordability, target population (senior or non - senior household), and the size of the site area In general, the maximum density bonus allovyed under the ordinance is 1.5 bonus units (e.g., 50 percent) for rental housing designed to serve households earning 50 percent or less ANIL for a maximum of 30 affordable units on sites of less than 5 acres. Senior projects are eligible for significantly higher density bonuses up to one bonus unit per benefit unit for assisted senior housing'. Despite these relatively generous King County program incentives, in the past year only three projects vyith belovy market-rate units have utilized the incentives. These projects included 35 ownership units affordable to households earning 80 percent or less of AML The average increase in density for these projects vyas 25 percent over the original permitted density. The County's program has also served as a model for similar incentive programs in Woodenyille and other smaller King Countv jurisdictions. Summary These example programs in Longmont, CO, Pleasanton, CA, and throughout King County, WA profile the range of specific arrangements that various local governments have used to encourage the production of affordable housing by using mandator- requirements as iyell as incentives designed to appeal to private, for - profit developers. These programs tend to work, and to produce affordable units, v hen market and economic conditions are aligned to create a strong demand for market rate housing. Another key ingredient for success is the appropriate mix of affordable units coupled vyith a density bonus, so that the net loss to a developer of incorporating an affordable unit can be almost or completely offset by the profit margin on each additional alloyed market rate Lunt via the density bonus. King County Code Sec. 21A.34.010, et sec. 77 Jurisdictions around the U.S. have found that in some cases, the market and economic conditions that create this voluntary opportunity are more feasible v hen applied to market rate for -sale housing, v hich offers a sufficient, predictable profit margin to incentivize private developers, than for rental housing. Furthermore, these programs tend to be Used most v hen the target affordability range is above 50 percent of Area Median Income (AMI), v hich reduces the gap bets een revenue collected for the affordable Unit and the development costs (i.e., the "loss" to the private developer for incorporating the affordable unit into the project). For market rate rental housing, v hich in some markets tends to have lov er profit margins and /or higher development risk, the incorporation of affordable units is difficult to offset with additional market rate units, v hen each market rate unit has a limited profit margin. 78 Appendix E: Model Affordable Housing Ordinance Purpose and Findings The Cite Commission, based on a reyievy of the Citv of Bozeman Affordable Housing Needs Assessment and Development Strategy, finds as folloiys: 1. The lack of affordable housing in Bozeman makes it difficult for lovy and moderate income vyage earners and their families, special needs populations, and others to find adequate housing, and contributes to an overall deterioration in the commLUlity's quality of life. The purposes of this subsection are to: a) Implement the housing objectives outlined in the Bozeman 2020 Plan, b) Promote the constriction of housing that is affordable to the community's vyorkforce; c) Retain opportunities for people that iyork in the city to also live in the city; d) Maintain a balanced community that provides housing for people of all income levels; and e) Promote the availability of housing options for lovy- and moderate- income residents, for special needs populations and for a significant proportion of those v ho both vyork and vyish to live in the cite-. Definitions Affordability shall be defined as a sale price or rental rate affordable to households earning belovy an established percentage of the Gallatin County Area Median Income (AMI) as defined annually by the U.S. Department of Housing and Urban Development (HUD). The standards for affordability shall be defined, as follolys: 1. For -sale single - family detached units, tovri -homes and condominiums shall be priced to be affordable to households earning at or belovy 100 percent of AML The maximum affordable sale price shall be adjusted quarterly to reflect changes in interest rates and other key variables using the City of Bozeman affordable housing sale price calculator 2. Multi family rental housing units shall have gross rent levels v hich are affordable to households earning belovy 60 percent of AML Maximum affordable rental rates shall be adjusted annually according to published changes in the HUD income guidelines. 6 This calculator is provided as part this affordable housing ordinance and is available in excel format from the Cite of Bozeman Planning Department. 79 Affordable Housing Implementation Plans in Annexation Agreements Applicability. Even- residential development required to provide affordable housing by an annexation Agreement shall do so by either constricting the affordable Units or by payment of an in -lieu fee. Construction of Affordable Dwelling Units. At least ten percent of the total residential diyelling units shall be constricted in each phase of the development as affordable housing, and identified as such on the concept plan and on the final plat or final plan. The development entity v hich enters into the annexation agreement iyith the Citv shall ensure that the required number of affordable units is provided in each phase of development, as specified belovy: 1. Parcels equivalent to ten (10) percent of total Louts in each phase of development shall be donated to an eligible nonprofit entity v hich the City manager has found to have demonstrated comnutment and capability to provide affordable housing in the Bozeman area. 2. The developer shall either build the units or contract iyith a professional homebuilder to have the twits built Payment of In -Lieu Fee. Before issuance of any permit for the annexation parcel, the applicant may pay the Cite a fee in lieu of constricting the affordable housing units. The applicant shall pay for the number of affordable housing diyelling units, or partial units, according to the folloiying schedule: 1. For single - family detached housing, $150,000 per unit. 2. For ovner- occupied townhomes or condonuniunis, $100,000 per unit. 3. For multi fanuly rental housing, $75,000 for each unit in a multiston1stacked flats configuration. The City shall use money received under this subsection only to provide or promote affordable housing. Incentives. For each unit of affordable housing provided, the City of Bozeman shall provide one or more incentives to the development entity v hich is entering into the annexation agreement. Additional incentives vall be provided to those developers v hich make provisions for deepening affordability levels belovy the maximum permitted sale price or rental rate. Developers shall select from among the follovang incentives: Density Bonus . Developers may elect to receive a density bonus of up to 25 percent of the maximum residential density permitted in the applicable zoning district. This incentive shall apple to all developments regardless of whether they are being approved through a PUD process. 2. Subsidized System Development Fees. In a subdivision v here the developer is concurrently developing infrastructure and also building residential units, the developer may request a subsidy of system development fees from the City for all parcels covered by the annexation agreement 7 . System development fees are adjusted annually by the Citv and are a priman- source of funding for iyater, seiyer, road and fire infrastructure. 7 This includes all annexations of five acres or more. 80 3. Financial Assistance. Depending on the balance available in the City Affordable Housing Fund, developers may elect to receive a direct financial contribution from the City for each affordable Unit provided. The amount of this contribution shall yard by year and shall be equal to no more than $7,500 per unit or ten (10) percent of total development costs for the affordable units. 4. Fast Track Permitting. Developers may elect to receive a preference in the processing of use permits, subdivision maps, building peanuts, and/or other permits required by the City of Bozeman This preference shall include an automatic placement at the top of the list of residential permit applications under consideration by the Cite, and shall also include expedited review by City planning and building staff. This incentive may be used in conjunction with the concurrent approvals process v hich is available to those developers v hich are both developing infrastructure and building residential units. Structure of Affordable Housing Implementation Plan. All developers entering into a residential annexation agreement vyith the City shall provide an affordable housing implementation plan v hich consists, at minimum, of the follovying components: 1. A proposal for the phased development of affordable residential units equal to not less than ten (10) percent of all units covered by the agreement, or for the payment of an in -lien fee. 2. In those cases v here developers are proposing to provide for the constriction of affordable units onsite rather than paying an in -lien fee, they may elect to donate the appropriate number of parcels to a qualified non - profit, or provide for the direct constriction of the units by a professional homebuilder. 3. An identification of the incentive(s) that the developer is requesting in exchange for the provision of affordable units. Additional incentives shall be provided to developers malting proposals for deeper levels of affordability than those required by this ordinance. Citywide Housing Incentive Program In order to promote the inclusion of affordable housing in all nevy residential projects developed vyithin the incorporated boundaries of the City of Bozeman, the City shall establish a housing incentives program vthich provides that builders of nevy residential projects shall be eligible for the same housing incentives provided as part of annexation agreements. Specifically, all residential projects which provide up to ten (10) percent of total units at affordable sale prices or rental levels shall be eligible to request: 1) a density bonus; 2) fast -track processing; 3) financial assistance; or 4) a waiver of system development fees. Generally Applicable Standards Duration of Affordable Housing. The time period during v hich affordability restrictions shall apple vyill vary for rental and for -sale units, as folloiys: 1. Affordable rental units must be rented for a period of not less than thim (30) years to income qualified persons, unless a different time -frame is approved by the City Commission on a case by case basis. 81 2. Affordable ovtnership Units shall be deed - restricted to ensure their affordability for a term of at least five years, Unless a different time period is approved by the Cite Commission on a case by case basis. 3. The City attorney shall approve the mechanism and instruments Used to restrict the duration of affordable housing; and the approval of the site plan, development plan, or final plat for the development shall be subject to the applicant's execution of an agreement, approved by the Cite attorney, imposing these restrictions. Eligibility for Purchasers or Renters of Affordable Housing. The city manager shall promulgate rules and regulations governing the eligibility for purchasers or renters of affordable units. Those rules and regulations shall govern household size, household composition, and household income, and shall be consistent vuth HUD income guidelines. Similar Appearance /Design Required Affordable housing shall be substantially similar in exterior appearance and design to market-rate housing in the same development. This requirement includes the use of substantially similar exterior materials. Dimensional Lot Standards. Within the overall parameters of density and dimensional standards established by the City for residential and mixed -use zoning districts, lot dimensions for affordable units may be smaller than for market-rate units provided that overall design and appearance of the diyelling unit is consistent oath City zoning and design guidelines and the exterior appearance of the unit is substantially similar to other units in the same development. 82 Appendix F: Adopted Affordable Housing Strategies August 11, 2003 submitted by Community Affordable Housing Board to City Commission August 18, 2003 revisions proposed as a result of a meeting between CAHAB, Commission, business, and building industry representatives S'trutegy I. Housing Affortkibility Guidelines 1. The Cite v,411 use the HUD Gallatin County Area Median Income (AMI) or, if supplied, the HUD Cite of Bozeman Area Median Income (AMI). 2. Using HUD definitions, households shall pay no more than 30% of their gross annual income toivards their housing payment. 3. Bozeman's Standard Housing Affordability Income Guidelines for homeowners are 61 -100% of the AMI. 4. Bozeman's Standard Housing Affordability Income Guidelines for renters are 40% to 60% of the AMI. Strategy IL Regulatory and Process Reforms 1. Maj or site plans v ith no deviations can be approved by City planning staff. 2. Concurrent development of infrastructure and housing should be alloi ed for affordable housing in appropriate situations. 3. Whenever practical, all City Departments v ill give priority to projects that exceed affordability requirements. 4. As opportunities arise, City Staff ivill explore ivays to reduce development costs it- ithout compromising the livability and quality of the neighborhood. 5. The City it4*11 continue to work with the legislature to revise subdivision guidelines to encourage more dense development. 6. The City° ivill develop systems to provide details on types of units being developed. Information gathered shall include inventors -ing vacant land, existing housing and buildings, and tracking neiy subdivisions in order to provide market information. 7. The City will invite the business /building community to suggest possible additional regalaton- and process reforms and streamlining that ivoLuld promote constriction and rehab of affordable housing. Strategy III. Restricted Size Lots (RSL) & Restricted Size Units (RSL) 1. As stated in the 2020 Plan, even- residential annexation into the City of Bozeman of flee acres or more shall have a minimum net acreage density of 6-8 units. 2. Every residential annexation of flee acres or more shall have a nunimum of 10% of the buildable net acreage dedicated to Restricted Size Lots (RSL) that are 4,000 to 5,000 square feet for single family detached (SFD) and 2,500 to 3,000 for single family attached (ASF) units. The RSL shall be designated on the subdivision plat. 3. The total floor area of the unit built on an RSL (minus the garage) shall not exceed a ratio of 1:3.3. Units built on RSLs shall be lnoivn as Restricted Size Units (RSU). Example if the lot is 4,000 square feet the square footage of the house can not exceed 1212, or a ratio of 1 square foot of floor area per even- 3.3 feet of lot. 83 4. In lien of designating the required number of RSL, the ovyner may donate developed RSLs to the Cite, on a one donated for three required basis. The City iyill utilize donated RSLs or the proceeds of sales only for affordable housing. 5. In lien of designating RSLs iyithin the subdivision being annexed, the owner may designate off -site comparable RSLs on a one required for one replaced basis. The subdivision containing the RSLs cannot be comprised of more than 50% RSLs vyithout prior Cite Commission approval. 6. At residential annexation, in lien of supplying the required number of RSLs, the ov ner may pay a "cash in lien" fee to the City. The payment shall be calculated as the appraised value per square foot of developed land iyithin that specific subdivision multiplied by 3,425 (the averaged size of a SFA or SFD) multiplied by the number of required RSL. The appraisal cost shall be born by the owner. The City will use payments in lien of RSLs only for affordable housing. 7. Cite staff vyill give high priority to ensuring that RSL /RSU language is included in the Unified Development Ordinance as soon as possible in autumn 2003. This language vyill be subject to the sunset clause described in Strategy IX. Strategy IV. Hone Ownership Program 1. The City shall cause to be developed a dovyn payment assistance program for home purchasers v,hose household income meets Bozeman's Standard Housing Affordability Income Guidelines. 2. The dovyn payment assistance program shall include components of home ovtnership education and counseling, information on mortgage products and affordable housing assistance programs, and referrals to developers of RSU. 3. Families v ho meet the City's Standard Housing Affordability Income Guidelines, have completed the dovyn payment assistance program, and qualify for a Class A Mortgage shall be l novyn as target income purchasers. 4. Households v hose income is belovy Standard Housing Affordability Income Guidelines, but meet all the other criteria of a target income purchaser, may be considered for down payment assistance; hovyeyer, the households must have additional financial assistance from alternate sources so that the amount of the City's dovyn payment assistance does not exceed the amount generally supplied to target income purchasers. 5. The City shall develop a system to track RSL and building permits for RSU so that target income purchasers can be notified v hen units are being developed. 6. During the constriction process, builders of RSU vyill give priority to target income purchasers v,ho qualify to purchase the home. 7. The dov,n payment assistance program iyill iyork with local lenders and state, federal and private affordable housing programs to develop a variety of home ov nership options and information packets for interested parties. Strategy V. "Very Low - Income Units "Development Incentives 1. "Ven logy- income" is defined as housing that is affordable to households v hose income is belovy the City's adopted Standard Housing Affordability Income Guidelines. Incentive developed housing is affordable to households v, gross annual income is belovy 60% of the AMI for for - sale -homes or 40% of the AMI for rentals. 2. Conditional upon prior City Commission approval and funding availability, an affordable housing developer may enter into an agreement iyith the Citv to receive building permit fee 84 waivers, waiver of other City fees, impact fee reimbursement, and /or financial assistance in exchange for developing yen logy- income Units. The impact fee reimbursements, fee iyaiyers, and financial assistance shall collectively be referred to as "Housing Development Incentives." 3. Although Strategy V is not limited to affordable housing developments, the Housing Development Incentives vyill need to be combined vyith another subsidy program in order to achieve affordability for yen logy- income households. 4. The City vyill reimburse the developer for the agreed upon amount of Housing Development Incentives upon occupancy of the yen- lovy income units and eligibility verification of the unit and occupant. 5. The affordability period for yen- logy- income units shall be the greater of 20 years or, if the ovtner is participating in another public or private entity's housing program, the guidelines of that entity's program. 6. For -sale yen logy- income houses shall be tracked v6th a deed restriction. 7. Ven- logy- income rentals shall be tracked through the City's property inyenton° system recommended in Strategy II. 8. The ov ners of yen- logy- income rentals vyill annually submit eligibility along vyith a $25 fee per unlit to the monitoring agency. If the information is available from another monitoring source, the ovner can substitute that entity's monitoring certification and pay no fee. 9. For -sale, yen- logy- income unfits shall have the subsidy forgiven at the rate of 1/20 annually. If the home is resold prior to the 20 year the ovner shall repay a pro - ration of the subsidy to the City's affordable housing frond. 10. One and t\-, bedroom units that are affordable to persons belovy 40% of the AMI shall be reimbursed at a rate of 100% of the Housing Development Incentives per qualifying unit. 11. Three and four bedroom, t\-, bathroom units that are affordable to persons belovy 40% of the AMI, shall be reimbursed at a rate of 150% of the Housing Development Incentives per qualifying Lunt. 12. For unfits affordable to person belovy 30% of the AMI, Housing Development Incentives vyill be doubled. 13. No more than 50% of the units in a development may receive Housing Development Incentives. Strategy VI. Ath itiouul Financial Contributions 1. Alternative or additional financial incentives to for - profit and nonprofit affordable housing developers vyould be on a case by case basis as recommended by the CAHAB and approved by the City. Examples would be land grants, logy- interest loans, property tax abatement, and or infrastructure assistance. 2. The City iyill complete legal research to determine if property tax abatement is alloiyed for affordable housing projects under State lair. If so, the City iyill make any changes necessary to local lairs to permit this option to be made available. 3. The City vyill iyelcome any financial data made available by for -profit and non - profit affordable housing developers that vyill help the City determine the amount of financial incentives /assistance needed to make it possible for the private market to respond to the City's high- priority housing needs. 85 Strategy VII. City Participation 1. The Cite of Bozeman will dedicate a minimum of $200,000 annuallv to the Community Affordable Housing Fund. 2. To assist with the annual affordable housing funding commitment, the City will dedicate at least 50% of funds collected from Big Box stores to the Community Affordable Housing Fund. Strategy VIII. City Land Should the Citv receive property of 10 acres or more, a priority for the use of the property shall be a model subdivision designed to showcase the development goals of the 2020 plan. Strategy IX. Biemiial Review, Sunset Provision 1. Biennally after adoption, the CAHAB, in conjunction with City staff, shall review the City's affordable housing priorities and strategies and make recommendations to the Commission as necessary to meet the City's affordable housing needs and goals, as identified in the 2020 Plan, the 2003 Housing Needs Assessment, and any subsequent needs assessments prepared for the Cite. 2. A sunset clause will be included in ordinances and code revisions adopted to implement strategies II and III to ensure mandaton- review and timely revision of housing policies in response to changing housing needs. (The sunset clause should specifi- a five -year period or an alternate length of time to be deternuned through discussion among City staff, the City Commission, and the CAHAB, with public input from the building industn- and other interested organizations.) Strategy X. Business Plan, Long -term Funding Stream 1. Upon City adoption of Affordable Housing Strategies and ordinances, the CAHAB will v ork with City staff to complete a business plan regarding annual and five -year budget needs; funding sources (grants, big box fluid, general fluid, housing loan repayments, etc.); staffing; and so forth. 2. The CAHAB will work with Cite staff, the City Commission, and interested organizations to create a reliable long -term funding stream for the Affordable Housing Fund, to ensure a base of predictable funding for the first -time home buyers' program and for rental housing. One intent will be to strive to reduce the level of City General Fund commitment necessary to maintain the City s affordable housing programs through diversification of funding sources and, if possible, eventual endoivi lent of the Housing Fund. 3. The Cite, in cooperation with other interested organizations, will aggressively pursue grants to help with affordable housing. Strategy XL Additional Potential Actions for Research and Consideration 1. The Citv will review the purposes of the Design Review Board and consider the advantages and disadvantages of redefining its purposes —such as shifting its development review responsibilities to staff —or eliminating the board. If the City chooses to redefine the role of the DRB, it will not eliminate DRB development review only for affordable housing projects, which need to receive the same degree of review as all housing projects. 2. The City will consider a guaranteed timeframe for review and approval of affordable housing proj ects. 86 3. The CAHAB, in cooperation vyith City staff, vyill assess establishing a residency requirement for the home buyers' program, and a possible provision regarding fill -time students, and make a recommendation to the Cite Commission. 4. The City vyill research the legality of selling parcels of long - unused, perhaps impractically located or sized parldand, or of building affordable housing on them. 5. The Cite, in cooperation iyith any interested local organizations, vyill consider developing a kiosk or referral service for affordable units to make it ease for yen logy- income and logy- income residents to find housing in their price range vyithout developers of this housing needing to spend significant sums on marketing. 87 Appendix G: MSU Housing Survey 88