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HomeMy WebLinkAbout1996-04-24 Housing MIN ASHLAND HOUSING COMMISSION MINUTES APRIL 24, 1996 CALL TO ORDER The meeting was called to order at 4:07 p.m. by Chairman Jack Ware. Other Commissioners present were Vaughn, Mahanay, Sea, Hauck, Medinger, Hill, and Kenefick. Staff present were Madding and Yates. APPROVAL OF MINUTES The Minutes of the March 21, 1996 meeting and March 27, 1996 meeting were approved. ANNEXATION CRITERIA Hauck reported the Council is discussing annexation criteria and the Mayor had the idea of dropping the deferral of Systems Development Charges for housing that is within the affordable housing program if it is an annexation. Madding further explained that there have been three annexations requested; two successful and one unsuccessful. Madding mentioned the issues she raised in her memo: making affordable housing mandatory in all annexations so public need would have to proven and defining what is affordable for annexations. McLaughlin discussed Systems Development Charges with the Mayor today. She is interested in evaluating SDC's for infill, particularly accessory residential units. Also, she wondered if we want to give deferral of SDC's to projects associated with annexations. McLaughlin explained that the SDC ordinance has two sections regarding deferments and annexations. If a project is affordable under the City's guidelines, the SDC's can be deferred at long as the unit stays occupied or owned by someone who qualifies. Once the property is occupied or sold to a non-qualifier, the charges are no longer deferred but payable to the City at six percent interest. Also, the elderly and low income that are exempt from property taxes are exempt from SDC's. Adding in the annexation component changes things. Property acquired by a developer is cheaper than property within the city limits. Medinger said the deferral of SDC's could be eliminated on annexations, but density bonuses could still be given for affordable housing. Hauck recalled the original intent of the Council, in order to encourage affordable housing because it was seen as a public need, was to add the criteria that a developer would be required to provide 25 percent of the units as residential. Medinger thought this method gives away annexations because a developer is not required to produce any other need for annexation. Hauck thought by making affordable housing mandatory, that tightened up the criteria. Medinger agreed. McLaughlin said the need for land for annexations comes down to inventories. However, looking at it from the standpoint of affordable housing will affordable housing be encouraged or are opportunities being lost by not putting enough of a carrot out for annexation? Hauck agreed with Medinger that the language under 18.106.030(E)1 should be standard (F) that stands by itself. McLaughlin wondered if the Commission was interested mandating affordable housing for projects of more than four to five units. Sea suggested since it is not feasible to build affordable housing in the upper hills, if a developer annexed land in that type of location, he could put money in a fund to pay for affordable housing. McLaughlin imagined an equitable way to pay for affordable housing could be worked out if someone were to annex land in a certain area. Kenefick thought it could be very expensive for a four unit development if the developer is required to give 25 percent to affordable housing. Medinger thought it would be important to look at the math--there are many fees to consider. It is McLaughlin's belief that it is best whenever possible to encourage a mix of housing types in a development and different income levels in a residential neighborhood. He would prefer this method over paying a fee into a housing fund. McLaughlin noted that Medinger knows what numbers can work. The City tends to get criticized for 130 percent of median income level. People don't understand this methodology. Could the amount be lowered for annexations, for example 80 percent? Then the homes would have to sell at an affordable level which means they would be truly subsidized by the developer. Medinger added that the developer be given the same bonus but allow a lower percentage of median income. Hill said at that point a guarantee on the sale would have to be worked out. Ware distributed a chart showing median income levels. Madding posed the example, if a family of four made 80 percent of median, how much house could someone afford at nine percent? They could afford a $70,000, three bedroom home. (The lower the percentage rate, the more house someone could afford.) Is the benefit to annex great enough to require that 20 percent of the houses meet the 80 percent of median income? One of things the Commission has discussed is how affordable housing is criticized when annexations are proposed because even though affordable housing is proposed, it is for those whose income is $45,000 a year. Madding continued that there are very few places in Oregon where someone can make 80 percent of median income, and buy a new house. She believes the Council is looking to this Commission for some sort of resolution and that is, would an annexation give something to the developer and would the City get something in return? Is the return providing housing at 80 percent of median or 100 percent of median or something reasonable? One hundred percent of median would be looking at housing around $90,000. Hill thought 100 percent sounded more reasonable but she also did not want the Commission to abandon the idea of rentals. Medinger said it will take some time to work with the numbers. McLaughlin said the language to be worked out will state that all residential annexations must divide 'x' percent of the total residential units to be developed on the property in accord with the affordable housing resolution. Hill said the Housing Commission could develop options that the developer can choose. ASHLAND HOUSING COMMISSION 2 MINUTES APRIL 24, 1996 The Commissioners came up with some ideas to be considered: work out a flexible formula, mixed uses such as a rental unit mixed with residential use, integrated housing, work out wording of the ordinance that will stop what is in the criteria now, instead of putting percentage in the ordinance, use language that a percentage will be used as defined by the affordable housing resolution. McLaughlin wondered, in terms of working out affordable levels, if the opportunity to defer SDC's is pulled from the ordinance, would a buyer still be able to make it work. Medinger did not see the SDC's as being lost if they are deferred because the houses will eventually be sold anyway and then the money will be paid to the City with interest. Perhaps the percentage of affordable housing required can be lowered. McLaughlin said the ACCESS annexation is an example of where SDC's are not collected because they are an exempt agency. Madding noted that some buyers have wanted to pay their deferred SDC's off early. This will take an affordable unit out of the program, but at this point, there is probably no way to stop it. McLaughlin, in his discussion with the Mayor, asked if there was a way through the SDC deferral to encourage affordable housing that does not pertain to annexations. The Mayor is hoping that whatever the Commission comes up with that it will be a greater incentive than to annex. Hauck thought the idea of extending the deferral to accessory units is appealing. Further comments regarding non-profit were made. Hill believes if a project comes up, the City needs to look at how the investment is set up and what happens if they refinance. Medinger added that the underlying capital can refinance and pull out a large profit. McLaughlin said the Council should be reviewing annexations at a May study session (May 22). He will put a packet together showing the change in the annexation criteria so that "need" does not include affordable housing and there is mandatory affordable housing in all residential annexations of ___ units or more (number to be worked out). The Housing Commission will need to revisit this for more detail. A subcommittee was formed with Medinger, Ware, Hill and Sea to work on the numbers. They will meet Monday, May 6, at 4:00 p.m. Since the next meeting of the Housing Commission is scheduled for the same date as the Council study session, there may be a joint meeting. Sea said Bob Smith, Crime Prevention Officer asked to speak to the Housing Commission in May. It was requested his talk be postponed until June. Kenefick gave a report from Aspen. The average cost of a home in Aspen is $500,000, the average age is 34 years old, the percentage of work force that lives in Aspen and works in Aspen is 33 percent. ADJOURNMENT The meeting was adjourned at 5:30 p.m. ASHLAND HOUSING COMMISSION 3 MINUTES APRIL 24, 1996