HomeMy WebLinkAbout2005-06-13 Housing PACKET
Ashland Housing Commission
Regular Meeting Agenda
June 13, 2005 6:30 - 8:30pm
Community Development & Engineering Services Building
51 Winburn Way, Ashland OR.
1. (6:30) Approval of Minutes
- May 25, 2005
2. (6:35) Public Forum
- items not on the agenda
3. (6:45) Subcommittee Reports
- Land Use (no meeting)
- Finance (no meeting)
- Education
4. (6:50) Other Business from Housing Commission Members
- New and miscellaneous commissioner discussion items not on the agenda
5. (7:00) Old Business
- (7:00) Lithia Parking Lot Proposal evaluation
-Commissioner discussion and recommendation to Council
6. (7:45) New Business
- (7:45) Affordable Housing Program Changes- System Development Charges
-Review Existing Program and Recommended Changes
7. (8:20) Commission Coordination
-City Council Lithia Lot proposal evaluation Î
July 19, 2005 (7:00pm 1175 East Main)
8. (8:25) July 18, 2005 Meeting Agenda Items
- Oregon Housing and Community Services
State support for affordable housing
Darcy Strahan, Regional Advisor to the Director
- SDC Deferral Program Changes
9. (8:30) Adjournment
Public Participation
Unless an Agenda Item already has been the subject of a public hearing which has been closed, members of the public
may speak upon any item on the Agenda. If such a hearing has been held this fact will be noted on the printed agenda.
The Public Forum period is provided for the public to speak on items that are not on the printed Agenda for tonight's
meeting. The time allowed each speaker may be limited by the Housing Commission Chair or presiding officer.
If you wish the speak either during Public Forum, or to a specific Agenda item, please complete the Speaker Request
Form below, and hand the form to a staff person before the beginning of the meeting if possible, or before the agenda
item is discussed.
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MAY 25, 2005
CALL TO ORDER
Chair Matt Small called the meeting to order at 4:10 p.m. at the Community Development and Engineering Services building
in the Siskiyou Room located at 51 Winburn Way, Ashland, OR 97520.
Commissioners Present: Matt Small, Chair
Faye Weisler
Don Mackin
Bill Street
Alice Hardesty
Liz Peck
Carol Voisin (arrived at 5:00 p.m.)
Absent Members: Kim Miller
Council Liaison: Cate Hartzell (arrived at 4:20 p.m.)
Staff Present: Brandon Goldman, Housing Specialist
Sue Yates, Executive Secretary
APPROVAL OF MINUTES
Weisler/Mackin m/s approval of the minutes of the April 27, 2005 meeting.
PUBLIC FORUM
rd
AARON BENJAMIN spoke at the Parks Commission meeting held on May 23, and asked the Commission if they would be
willing to sell or donate a half-acre of the one and one-half acres of land they own on North Main Street to a non-profit for
affordable housing. The Parks Department said it would not be economically feasible. In the meantime, Benjamin believes
serious consideration should be given to mixed use on publicly owned property, city, school or parks property, vacant or
unused property to further promote infill development. He believes the Housing Commission should take a more active role in
convincing the Planning Commission, Council, Mayor and Charter Review Committee of the importance of creatively using
public lands to achieve our affordable housing goals.
Small suggested an agenda item to discuss having a Housing Commission liaison present at planning commission, council and
school board meetings to make sure affordable housing is always part of the discussion.
Hartzell arrived.
John McLaughlin, Planning Director, said when the North Main property was purchased by Parks, they held some meetings
with the Ashland Community Land Trust (ACLT) about opportunities for affordable housing, specifically the small home that
is on the property. The Parks Commission used meals tax dollars to purchase the property and they decided to acquire the
property for Parks purposes. They made the decision to sell off the larger house on North Main and recovered the dollars from
that sale. The meals tax dollars can only be used for Parks purposes. If it is to be used for affordable housing, there would have
to be a purchase of the land and repayment of the meals tax dollars. He recalled Parks had to sell the North Main house at
market value. Hartzell added when ACLT was looking at the property earlier, they decided it would be difficult to get any
economy of scale.
Hartzell suggested building relationships with various public groups and resume discussions concerning employer assisted
housing. She would like to include SOU and invite their housing specialist to the Housing Commission meetings. She thought
they were included as ex-officio member of the Housing Commission.
Goldman announced there would be a Workforce Housing Summit sponsored in part by the State of Oregon in October. The
focus is how businesses, developers, affordable housing providers work together to reduce regulatory and financial barriers to
affordable housing. Hartzell asked Goldman to produce a calendar of upcoming meetings and events. She would like to start
planning for the Workforce Housing Summit now to start with our local groups making sure they know what the Summit is
about, become familiar with the vernacular that would lead into the Summit. The interest has to be awakened and the
connection made before the bigger meetings.
Weisler noted that the subcommittees need to start meeting again. Street volunteered to be on the Education subcommittee.
PROJECT UPDATE
HOME Consortium Progress
Goldman said he has met with the Jackson County group and they reviewed information sent by the State regarding past
awards. According to the data provided, it appears the Jackson County region receives more money (approximately $135,000
more) through the competitive State allocation than they would have if received funds from the HOME Consortium ($1
million). The Jackson County group cited a number of their concerns such as administration of the HOME Consortium, the
division of resources, and timing of applications. At this time, Goldman recommended that the City not enter into a signed
agreement to form a consortium with Jackson County and the City of Medford prior to June 1, 2005 for 2006. They could
watch and if at any time the State funding drops below the Consortium funding, they could revisit the issue and form a
consortium at that time.
Hartzell suggested putting this item on the calendar for a future review. Is there something we could build on that came from
these discussions that could help us move more quickly the next time? Goldman said the housing provider meeting concluded
they should continue the discussions at least toward a coordinated approach to pushing forward HOME eligible projects. They
are having monthly meetings of the Jackson County Housing Coalition.
OTHER BUSINESS
Cate asked for a change to the minutes of April 27, 2005. Page 2, Kim Miller was saying ÐThe only issue he has as a non-
profit developer is that a consortium use the same social service grant application.Ñ There was no motion to make the change.
OLD BUSINESS
Lithia Parking Lot Proposals
Small recused himself due to a conflict of interest. Street read the minutes, attended one meeting, read the materials in the
packets and would like to participate in the hearing. The Commissioners allowed Street to participate.
Included in the packet is a memo from Goldman addressing some of the points of concern. If the RFP was insufficient in
issuance or if the proposals are insufficient, the appropriate process would be to re-issue the RFP, leaving it open to any and all
respondents. With regard to housing costs, the memo recommends using the HOME program for those units that are at 50 to 60
percent income. Rents levels under the Ashland Affordable Housing Program SDC Deferral would then not exceed 30 percent
of a householdÓs income. Other items covered in the memo are income ranges, as well as parking issues and impacts on Will
Dodge Way.
There is a strong recommendation to support the commercial component within the project. Staff is recommending that the
Commission forward their support of the Kendrick Enterprises proposal with certain conditions to the Council. The conditions
would include: (1) That the rents are adjusted to be consistent with the HOME program, (2) That the subsurface parking
scenario be a condition of that selection.
Other conditions that have come up since the memo was written are:
Operating costs Î if the Commission feels that the proposals are inadequate with regard to having a reserve fund for ongoing
maintenance of the project (memo distributed at this meeting), this would be an opportunity to elaborate on that condition.
Other options:
Recommend that another proposal be selected as presented, or specific suggestions for modification of the proposal
using conditions.
Recommend a new RFP be issued with greater specificity.
The Commission could recommend to Council suggested components without recommending any individual
proposals.
Hartzell asked from where the recommendation to select Kendrick came. Goldman said he drafted the memo and it was
reviewed by John McLaughlin. It has the full support of the Planning Department. The recommendation comes from
evaluation of the proposals and ranking the proposals numerically using the criteria. Staff determined that the Kendrick
proposal met the provisions of the RFP for the affordable housing and looking at the consistency with the Downtown Design
Standards and the intent of the Commercial zone.
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MAY 25, 2005
Weisler asked how much we can go with Kendrick and how much can be negotiated? Goldman said the City can select any
proposal and provide conditions of selection and if the applicant did not want to comply with those, the application would
dissolve and we would be back to a new RFP. Hardesty wondered about KendrickÓs willingness to go along with any
conditions.
Voisin arrived.
Hardesty dealt with RFPÓs in her past career and they always followed the criteria and whoever followed the RFP would be the
one chosen to get the job. She is not used to negotiating. She would like to see more evidence that whoever gets this project is
going to be willing to do things that we find most important. What does the commercial space do for affordable housing? It
has to be very clear what the developer is going to do with the advantage of the commercial component for affordable housing
in Ashland.
Hardesty said the Housing Authority of Jackson County did not have drawings and the Commission was not excited about how
it looked. She remembered Goldman saying that we werenÓt looking at site design and aesthetics in the proposals as these can
be altered.
How much subsidy does the commercial component contribute, asked Hardesty? She believes we should have evidence of a
significant contribution by the for-profit developer to affordable housing that is agreeable to the Council and to the City. She
did not see any evidence in the proposal from Kendrick that the commercial portion would revert to the City. Goldman said
they stated under Ðperiod of affordabilityÑ that the assets would revert to the City at the conclusion. It could be written in a
lease.
Hardesty was confused about the mixed use, 65 percent of the ground floor must be permitted use. There was discussion in
GoldmanÓs memo about whether the parking would qualify as a basement or whether it would be considered ground floor. Is
residential not permitted use in this area? Goldman said 65 percent is intended for permitted use and those are listed.
Residential is a Òspecial permittedÓ use. Hardesty wondered if that should have been clear in issuing the RFP. Goldman said if
the parking is on the ground floor, public parking is a permitted use. The concern in the application is the sinking of the
parking. If they sink it too far, it becomes a basement. If they sink it just a little bit, it is considered a ground floor. It would
have an impact in terms of raising the profile of the subsurface parking. Goldman said they can expect minor changes to occur
after going through the public review process.
Hardesty felt the Housing Authority was the most responsive to the RFP. Maybe commercial is desirable, but maybe itÓs not
necessary. The rest of the area on Lithia Way will be developed commercially before too long. Why are we so concerned
about enticing a for-profit developer to develop this small area when an experienced non-profit has stepped forward?
Peck responded that the commercial aspect provides vitality to the downtown area. With people living above the commercial
at night it gives the town a more lived in rather than vacant feel.
Street asked the visual size of the commercial space along Will Dodge Way. Goldman said there is a step up from Lithia Way
and continues all the way to the alley, with entrances on Lithia Way and the alley for commercial. The housing is located on
the second story in an L-shape along the alley and then along the east property line.
Hartzell wondered if Kendrick included a funding performa. Goldman said they provided the unit cost for the residential
component. They donÓt provide how much the commercial component will cost or income. Hartzell is not willing to go with
the Kendrick proposal or to any proposal that includes commercial without understanding about the potential income over a 40
year period. It seems like the City is handing over income for valuable commercial space for a period of 40 years without even
knowing how much we are handing over. The developer is saying they need the income because they are taking the risk but
they are taking the risk with private money. What if they are going out for public money too? Goldman said public money
would go exclusively to the developer of housing units.
Hartzell corresponded with Diana Goodwin-Shavey, a former Housing Commissioner. Shavey said if you build affordable but
you donÓt have someone manage it well, the rest of the community will look at it and say they donÓt want any more affordable
housing. She would like to have weighted management experience into the proposal significantly more than we did. Who will
not only build it, but who will take care of it and what experience have they had in doing so? KendrickÓs proposal said they
will do underground parking unless it is cost prohibitive. What if it is cost prohibitive? The only way Hartzell could support
KendrickÓs proposal is if the commercial funds the affordable housing.
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MAY 25, 2005
Mackin would recommend we reject all of the proposals and start over. The RFP is not specific and thatÓs why we have the
disparity in proposals. We need to know where want to be and we clearly have two options. He would recommend to the
Council that Kendrick would have to commit to either Option A or Option B. Disregard the ACLT because they were
presenters of the proposal but they may or may not be the manager. If ACLT cannot get HOME funds, Kendrick would go
with another non-profit. He believes there is undue influence being placed by a party to one of the proposals that may or may
not be in the final selection. The LDC proposal eliminates the community parking. SandlerÓs proposal includes a buy-back at
the end. The second option is Housing Authority of Jackson County.
Mackin reminded the Commission that they took the RFP to the Council. He thinks it was their expectation that they would
get a purely housing response. Yet, they got a mixed use response and elements of it are exciting, but he doesnÓt know if it is
supportable by the Council.
Weisler thought consensus had been reached at the previous meeting that they were for mixed use and no one wants to do a
giveaway. Do we go back to Kendrick saying we will only select them if they commit to parking and reduce the rents before
they issue another RFP? She doesnÓt want to delay and if there is a way to move forward without reissuing the RFP that would
be in the best interest of the City. The 40 years could be negotiated.
Hardesty wondered if the rest of the Commissioners are committed to mixed use. She wasnÓt at the last meeting when
consensus was reached. Street felt that in looking at the two designs, mixed use is much more attractive. Goldman said the
proposals on the table have already been designed by architects. How much influence does the City want to have in putting
together a project?
Mackin said the option of moving forward without a lot of reservations involves the Housing Authority proposal going
forward. But because the mixed use proposal is so exciting in concept, he is in favor of delaying the process with another RFP.
He would rather see two viable proposals that address HartzellÓs concerns about giving away public land for private benefit.
He is less inclined to control what the return would be on the commercial. He would rather see two proposals with commercial
components and choose on the merits of the two proposals.
Weisler asked about a timeline if a new RFP is issued. Goldman said the RFP was issued February 2004. Adding a couple of
months for remaking the RFP, it would probably take around a year before a selection could be
th
Mackin asked Hartzell if we can get some consensus back from the Council on June 7 for a pure housing proposal versus a
pure mixed use proposal. Hartzell responded that it would depend on the work Staff does or the work done here. She did not
feel the RFP was ready to begin with. The Commission could get some indication if Staff prefaced the whole discussion to
look at what it is we are really talking about Î parking and management. She doesnÓt want to go through it again unless we
have an educated Council that is really looking at the questions and not deferring to Staff to put something out thatÓs quick and
dirty. She thinks it is worth delaying because the group went into this saying we canÓt have the parking garage, then letÓs do an
experiment on a small space and see how it goes. We have blundered through this experience knowing we havenÓt done what
we thought we wanted to do, and then we arenÓt that much further ahead.
Weisler is frustrated at being a year down the road and a selection hasnÓt been made. She would like to try negotiations to see
how much Kendrick would be willing to negotiate those profits back into housing. We might have something as opposed to
tabling or starting the process over again. So much energy has gone into it. LetÓs see what we can repair from here.
Goldman said the with regard to how the commercial component benefits the housing is by providing the operating expense for
the maintenance of the facility and set a dollar amount per unit. Shavey in her memo, suggested $4000 per unit as a HUD
average.
Hartzell asked why the commercial costs have not been calculated. Goldman said the memo points out that the profit cannot be
determined. That would be dependent on the type of business. The average lease amount downtown could be determined.
How much is profit is a different question. LDC Design Group assumed the commercial component would cost about $4
million for construction. Much of the calculation is speculation and that is why Staff has not provided those figures. We could
ask the applicant to provide a Performa on the commercial space.
Street suggested if we want the mixed use that we reissue the RFP so there is competition. We donÓt know what that
competition might bring because people did not know the possibilities of mixed use the first time around. If we donÓt want to
open up a new RFP, he believes we should go with the Housing Authority.
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Goldman warned there is a fine line in determining what loses the incentive for a private developer to participate in a process.
Staff is not sure we would receive any more proposals and reissuing the RFP might not generate the proposals that the
Commission is anticipating. We received two proposals with commercial components, and the development community that
received the RFP had the opportunity to call and question if commercial was acceptable. Two felt it was acceptable without a
clarification, so he is not sure weÓd receive many more proposals.
Peck said there are now the following points of negotiation: Management, profit of retail, amount of rent, median income at 60
percent and below. Is this still staying within the RFP? ItÓs a legal question.
Hardesty liked StreetÓs suggestion except if we go with the Housing Authority, we should stipulate they provide an acceptable
design. Goldman said that would ultimately go before the Historic Commission and the Planning Commission to determine
compliance with the Site Design and Use Standards as well as the Downtown and Historic Design Standards.
Mackin said if they take the Kendrick proposal as it stands, the applicant has tried to balance a free standing housing facility
offset by a private commercial investment. The commercial investment is intended to give an adequate return for that investor
to make that commitment. If the Commission now wants to negotiate with that applicant (lower rents, specific proposal on
management) in effect they are reducing the viability of the housing proposal to be free-standing. The cash flow is being
eroded. It is going to have to be subsidized by the commercial. The suggestion is to negotiate with Kendrick as much of the
housing element as possible knowing full well it is coming from the commercial until you get to the point where the applicant
says thatÓs all he is going to give. At the same time, the investor is taking all the risk on the commercial side. There is no
assured return, no grants involved, vacancies, economic downturns, and competition that is all part If the Commission thinks
there are elements of the housing proposal in Kendrick that donÓt meet the criteria and it needs fine-tuning, then letÓs try having
Staff negotiate and make the housing element 60 percent of median. It is a matter of just how far will the applicant go. The
bottom line is there is no standard. He believes all the applicants are good faith applicants. Is there a consensus to give that a
try and is Staff willing to give it a try? Ultimately, Staff will stand in front of the Council to answer if this is a fair return on
the CityÓs asset.
Mackin/Weisler m/s to defer a final recommendation until the next meeting. Between now and the next meeting, Staff will attempt to
negotiate with Kendrick in hopes they will come back to the next meeting with a negotiated proposal that we can support and the
Commission can move forward to the Council. At the same time, from now until then, keep the Housing Authority of Jackson
County alive as a back-up position.
Goldman listed the items for negotiation:
Rent levels
Operating expenses
Support of the non-profit Î maintaining the independent nature of the housing component from the commercial and
the proceeds from the lease. It seems what would be negotiated would be the front end purchase price of the affordable
housing units to ensure there is an adequate income stream from the rentals to provide the necessary money for operating
expenses, support of the non-profit and target the lower income levels. Is that requesting negotiation of lowering the
income levels that are provided? Staff is recommending they provide a mix of income levels.
Is the parking Option A or Option B?
McLaughlin said heÓll have to check with Legal on how far we can negotiate without discussing it with other applicants.
Hardesty will vote ÐnoÑ because this feels too complicated. The Housing Authority meets the criteria and if they change their
design it should be fine.
Street does not feel it would be meaningful at this point. Kendrick needs to make their proposal knowing they are competing
against other firms who know they have the option of designing commercial.
Peck is still not sure if the Council is supportive of the commercial aspect.
Weisler urged everyone to give it one more month to see if something can be carved out rather than throwing it all out. We
might not even have as good a proposal next time.
Hartzell will vote against the motion. The Housing Authority is showing 6800 square feet of housing versus the Kendrick
proposal at 6240 square feet.
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Voice Vote: Mackin and Weisler voted in favor, Hardesty, Street and Hartzell voted against, Peck abstained and Voisin recused
herself. The motion failed.
Street/Hardesty m/s to recommend to the Council that if they choose to have a mixed use development on this land that we open
up a new RFP. If they do not choose mixed use, the Commission would recommend the Housing Authority of Jackson County.
Hardesty noted that this will leave the decision up to the Council without a recommendation from the Housing Commission.
Mackin interpreted StreetÓs motion as a recommendation that the Housing Authority goes forward as a recommendation for
housing only if thatÓs the CouncilÓs preference and the KendrickÓs proposal is sent forward as an alternative.
Voice Vote: Hartzell, Street, Hardesty voted in favor, Peck, Mackin and Weisler voted against. Voisin recused herself. The motion
failed.
Mackin favored going back and negotiating with Kendrick. Take a month. Mackin/Weisler m/s that we reschedule this issue for
the next meeting of the Housing Commission in order to make a recommendation of one or more proposals to the Council. In the
meantime, we ask Staff to attempt to negotiate with Kendrick to see if they can address some of the concerns that have been
expressed by Staff and the Housing Commission.
Weisler offered a friendly amendment. Instead of it coming back to us in a month, send it to the Council with a recommendation
that if they like mixed use, they then direct the negotiation with the items the Housing Commission has identified. She dropped
her amendment for lack of a second.
Voice Vote: The motion carried with Peck, Mackin, Weisler, Hardesty voting in favor, Hartzell and Street voting against, and Voisin
recusing herself.
NEW BUSINESS
Housing Commission Meeting Time/Place Change Discussion
The Commission decided to change their meeting day to the third Monday of every month from 6:30 to 8:30 p.m. in the
Siskiyou Room of the Community Development and Engineering Services building. However, the June meeting will be held
on June 13, 2005 from 6:30 to 8:30 p.m. in the Siskiyou Room. Staff will send out a revised calendar.
ADJOURNMENT Î The meeting was adjourned at 6:55 p.m.
Respectfully submitted,
Susan Yates
Executive Secretary
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Old Business
Ashland Housing Commission Packet
June 13, 2005
Housing Commission Memo
Title: Lithia Lot housing Proposals
Dept: Planning Department
Date: June 6, 2005
Submitted By: Brandon Goldman, Housing Program Specialist
The Housing Commission continued their deliberation regarding the proposals for development of the
th
Lithia Way parking lot at the May 25 regular meeting. The final Housing Commission deliberations
th
are scheduled for their June 13 regular meeting. At the May meeting the Housing Commission directed
Staff to consult with the Legal Department regarding the permissibility of entering into non-competitive
negotiations with Kendrick Enterprises in an effort to reach a mutually satisfactory agreement on a
number of items including; management; reserve accounts; profit of retail and how it benefits the
housing component; the affordable housing rental amounts; reducing the income target for households to
be below 60 percent median income; the selection of parking scenario A or B as presented in the
Kendrick Enterprises Proposal.
Upon reviewing the RFP as issued the Legal Department stated that we can not enter into negotiations
with any single offeror, nor with the original respondents as a group. According to Mike Franell, City
Attorney:
When we put together the RFP for the housing project over the City parking lot, we were still
under the old contracting laws. They prohibited negotiations with a proposer after opening, prior
to the award. We either had to award on the proposal submitted or reject the proposals. The new
rules, in ORS 279C.410, permit negotiations with the favored proposer if such were provided for
in the RFP advertisement.
Based upon this information the City Attorney determined that since we were under the old rules when
we put the RFP together, and since we did not include language in the RFP that would permit
negotiations with the top proposer, we cannot now enter into negotiations with any offeror. In
evaluating the staff recommendations (Housing Commission Memo dated 5-25-05) to require the rents in the Kendrick
proposal be modified to comply with the limits set forth by the HOME program and condition award on
the inclusion of subsurface parking, the Legal Department opined that those conditions of selection
would not constitute negotiations. Rather they strictly aimed to clarify conflicting aspects contained in
the original proposal. Such clarifications of inconsistencies, that do not alter the original proposal, are
acceptable.
When questioned whether the City could request of Kendrick Enterprises an increase in the affordable
housing reserve account and operating and maintenance costs that were indicated in the proposal, it was
believed to do such would constitute negotiation. To request to the project performa, to effectively
increase the subsidy to the housing component at the expense of a commercial component, would
constitute a change to the proposal itself and would not be appropriate. To request a significant change
in the design proposed, such as the addition or subtraction of a commercial component, would also be
inappropriate. In the case the Commission felt the reserve or operating amounts provided in the RFP
were insufficient to maintain or manage the affordable housing, then the Commission could recommend
rejection of the proposal on those grounds.
The Housing Commission is charged in the RFP to evaluate each of the proposals received against the
criteria, and forward a recommendation to the City Council. Should the Commission determine that one
or more projects are viable, that the development teams have the capacity to undertake and manage the
development, and that the offer conforms to the Request for Proposals as issued, the Commission should
then forward an award recommendation to the City Council.
In the event the Housing Commission determines that none of the proposals are sufficient as presented
then the Commission can recommend that none be awarded the development rights for the property.
Under this alternative the Housing Commission could further recommend that a new, refined, RFP be
issued in hopes of eliciting more appropriate proposals to develop affordable housing on the property.
Given that we are almost two months past the advertised date for a decision on these proposals, it is
imperative that a recommendation from the Housing Commission be forwarded to the City Council for
their consideration on July 19, 2005. Ultimately the City Council will review the recommendation(s)
provided by the Housing Commission, hear presentations by the four original respondents, accept public
input, and make their decision.
New Business
Ashland Housing Commission Packet
June 13, 2005
Housing Commission Memo
Title: Ashland Affordable Housing Program, SDC Deferral Program
Dept: Planning Department
Date: May 25, 2005
Submitted By: Brandon Goldman, Housing Program Specialist
BACKGROUND
The City of Ashland currently defers System Development Charges (SDC) for ÐAffordable Housing
UnitsÑ for up to a 20 year period, at which time they are forgiven (waived). If a home enters the SDC
deferral program as affordable it can voluntarily exit the program and repay only the original SDC
amount plus 6% interest per year. Although this was thought to be a disincentive to exiting the program
when it was developed in 1993, given the current difference between ÐaffordableÑ and Ðmarket rateÑ
housing prices this is no longer functional to keep units in the program.
Many units enter the program due to a requirement that they be affordable due to a land use action or
City contribution of funding. These include affordable units created through annexation or zone change
applications, condominium conversion applications, large scale development requirements, or CDBG
and City funded affordable housing projects. In each of these cases the affordability period requirement
exceeds the SDC Deferral Program 20 year limit, thus units stay in the program. However, the SDC
Deferral Program is currently the only mechanism in place to define units as affordable other than this
program. This program does not distinguish between income levels but instead states an affordable
rental is one that is affordable to households earning 80% Area Median Income (AMI), and an
affordable purchase unit is one that is affordable to households earning 130%AMI.
The Affordable Housing Action Plan supports the continuation of waiving SDCs as a means of lowering
the costs of building and operating affordable housing (Strategy2) and further recommends that it be
limited to units that remain within the pool of affordability (no voluntary exit). Given the recent
ordinance amendments to the zone change and annexation criteria of the Land Use Ordinance Staff
believes it is necessary to modify the SDC program to ensure future affordable units developed are
priced, or rented, at an affordable level. Currently the ordinances and the SDC program are
incongruous. For example, currently it is possible that a 2 bedroom unit required to be affordable to
households earning 60%AMI could be sold to them for up to $146,744 , whereas their true ability to
afford would limit the purchase price to approximately $78,000. Revising the SDC program to
accommodate a range of income levels and corresponding rents or purchase prices would resolve this
disparity.
Discussion Points
The following are offered for consideration by the commission
Period of Affordability
1) Require a minimum period of affordability (30 years) to participate in the SDC Deferral Program
unless required to be longer by other ordinances or funding (IE 60 year zone change). Once
entering the program a resale restriction agreement would be recorded on the property ensuring it
remain affordable per the maximum rent/purchase price schedule set forth in the SDC Deferral
Program.
(this is the alternative proposed in the Affordable Housing Action Plan)
2) Allow voluntary entrance/exiting of the SDC Deferral program yet with greater disincentives to
exiting the program. Propose a sliding scale with significant penalties to encourage people to
voluntarily enter housing into the program, and remain in it for a longer period.
a) 0-5 year period repay all SDCs plus interest (6%) and assess a $10,000 penalty
b) 5-10 years period repay all SDCs plus interest (6%) and assess a $5,000 penalty
c) 10-15 years period repay all SDCs plus interest (6%) and assess a $3,000 penalty
d) 15-20 years period repay all SDCs plus interest (6%) and assess a $1,000 penalty
e) 20-30 years period repay all SDCs plus interest (6%)
f) 30 years or longer > all SDCs are forgiven
The legality of ÐPenaltiesÑ has not yet been investigated, should there be interest in this option
Staff can determine whether or not such an assessment is permissible.
Affordable Rents and Purchase Prices
Issue:
Currently the ÐAffordable Housing ProgramÑ is only defined by the SDC deferral resolution (93-39) that
establishes maximum rents for households earning 80%AMI, and Maximum Purchase Prices for
Households earning 130% AMI. As the zone-change ordinance and annexation ordinances provide
developers options to target a range of incomes (60%, 80%, 100%, 120% AMI) the existing resolution
does not ensure the households targeted can actually afford the units.
Options:
Establish new maximum purchase prices that are correlated to the specific income ranges, and adopt a
methodology, or standard, to establish maximum rents for the 60%, 80%, 100%, 120% levels.
Specifically rents should be consistent with the HOME Program to ensure federal Subsidy can be
directed to affordable rental projects:
RENTALS
60% AMI Rentals
Currently the Medford-Ashland HOME rental rate ranges (considered LOW and HIGH rent limits) for
units based on size (# of bedrooms) are as follows:
Studios: $440
1 Bdr: $488-$523
2 Bdr: $586-$657
3 Bdr: $677-$846
Note the HIGH-HOME rents for studio, one bedroom, and two bedroom units are equal to the Fair
Market Rents noted in the Table above as HUD establishes the HIGH-HOME rent to be the lesser of
Fair Market Rent or ability to pay without exceeding 30% of a households income.
It is appropriate that when Fair Market Rents are lower than the 30% of a households income that the
Fair Market Rent be the maximum a rental can charge. By utilizing the HOME rents they are adjusted
each year according to increases in median income.
80% AMI Rentals
The existing resolution (93-39) was developed to establish a maximum rent no greater than 23% of the
average household size depending on the number of bedrooms. This methodology assumes a 23%
housing costs to allow some money to go toward other housing costs (such as utilities). The resulting
rents are below:
Maximum Rents for 80% Median (per Res 93-39)
For rental properties covered under the Ashland Affordable Housing
Program
Studio $599
1BDR $679
2BDR $794
3BDR $895
4BDR $959
100 and 120%AMI Rentals.
Currently there is not a housing cost burden for households earning more than 100%AMI (defined as
paying more than 30% of income toward housing). Market rate rentals are currently less than their
ability to pay. However this may not be the case if market rate rents increase rapidly in the future. A
question that needs to be answered is given the burden of households earning less than 80%AMI, does
Ashland want to subsidize rental housing that targets households making more than 80% AMI with SDC
deferrals. The adoption of 93-39 indicates that at that time (1993) there was not a such a desire at that
time and it seems that providing an SDC deferral for rentals targeted to such households is not presently
appropriate either.
FOR PURCHASE HOUSING
For any Ðfor-purchaseÑ unit the City must determine what it considers a housing cost when evaluating
whether a maximum purchase price is actually 30% of a households income. To do this, the City can
choose to include only the purchase price of the home or additionally include factors such as interest on
a loan, insurance, home owners association dues and taxes. Commonly referred to as ÐPITIÑ, Principal,
Interest, Taxes, and Insurance are typically the contributing housing costs that are included when
determining the affordability of a purchase unit., This more comprehensive assessment of actual housing
cost is intended to ensure a household at a particular income range is not overburdened.
Tables are provided as an attachment to this memo to illustrate for discussion purposes what monthly
housing costs are affordable to each income range (60, 80, 100, 120%AMI) depending on number of
rooms in a purchased housing unit.
Recommendations
Staff would like to come back to the Housing Commission at the subsequent meeting with
responses to questions and incorporate comments into a draft resolution for consideration. This
Resolution would establish the period of affordability, the maximum rental and purchase price
limits based on the income ranges to be consistent with the Land Use Ordinance. The new SDC
Deferral Program Resolution, if adopted by Council, would supplant resolution 93-39 for any new
developments regulated under the Affordable Housing Program.
Updated April 25, 2005
Income Limits by Family Size: $/year
*For the Medford-Ashland Statistical Area as determined by the Department of Housing and Urban Development
2005
Income Level Number of Persons in Family
Category
1 2 3 4 5 6 7 8+
10950 12500 14050 15650 16900 18150 19400 20650
Extremely Low Income (30%)
18250 20850 23450 26050 28150 30200 32300 34400
Low Income (50%)
21900 25020 28140 31260 33780 36240 38760 41280
Income at 60% of Median
29,200 33350 37500 41700 45000 48350 51700 55000
Moderate Income (80%)
36500 41700 46900 52100 56300 60400 64600 68800
Median Income (100%)
43800 50040 56280 62520 67560 72480 77520 82560
Income at 120% of Median
47450 54210 60970 67730 73190 78520 83980 89440
Income at 130% of Median
1+2+33+4+54+5+6+75+6+7+8 1 BEDROOM2 BEDROOM3 BEDROOM4 BEDROOM Rent (23% monthly avgerage)
12345678
360360360360360360360360$32$37$41$46$50$53$57$60$63$72$81$90$98$104$111$118$17$19$22$24$26$28$30$32
$316$363$411$457$493$526$563$597$427$491$555$617$666$711$760$807$120135150165180195210225
$548$626$704$782$845$906$969$1,032$480$595$671$719
0.58%0.58%0.58%0.58%0.58%0.58%0.58%0.58%
$547$626$705$782$846$906$970$1,032
$2,500$2,875$3,250$3,613$3,900$4,163$4,450$4,725
$47,500$54,625$61,750$68,638$74,100$79,088$84,550$89,775
60% Median 2004 30% including utilities
Family Size Sale Price$50,000$57,500$65,000$72,250$78,000$83,250$89,000$94,500Down Pmt 5%PrincipleRate (7%)TermPaymentPMItaxesinsurancePITI TotalOther (util, Dues)Total Monthly CostAbility
to Pay 30% of income65707506844293781013410872116281238460% Median$21,900$25,020$28,140 $31,260 $33,780 $36,240 $38,760 $41,280
7%
1+2+33+4+54+5+6+75+6+7+8Rent (23% monthly avgerage)
1 BEDROOM2 BEDROOM3 BEDROOM4 BEDROOM
12345678
360360360360360360360360$46$52$59$66$71$76$81$86$89$103$115$128$138$148$158$168$24$27$31$34$37$40$42$45
$452$518$583$649$698$751$801$850$611$700$788$878$944$1,014$1,083$1,149$120135150165180195210225
$730$834$938$1,043$1,125$1,209$1,293$1,375$639$794$895$959
0.58%0.58%0.58%0.58%0.58%0.58%0.58%0.58%
$731$835$938$1,043$1,124$1,209$1,293$1,374
$3,575$4,100$4,613$5,138$5,525$5,938$6,338$6,725
$67,925$77,900$87,638$97,613$104,975$112,813$120,413$127,775
4
80% Median 200 Family Size 30% of income87601000511250125101350014505155101650080% Median$29,200$33,350$37,500 $41,700 $45,000 $48,350 $51,700 $55,000 30% including utilities
Sale Price$71,500$82,000$92,250$102,750$110,500$118,750$126,750$134,500Down Pmt 5%PrincipleRate (7%)TermPaymentPMItaxesinsurancePITI TotalOther (util, Dues)Total Monthly CostAbility
to Pay
7%
1+2+33+4+54+5+6+75+6+7+8 1 BEDROOM2 BEDROOM3 BEDROOM4 BEDROOM Rent (23% monthly avgerage)
12345678
360360360360360360360360$67$76$86$95$103$110$118$125$39$45$51$56$61$65$70$74
$659$753$848$941$1,018$1,090$1,165$1,242$148$169$190$211$228$244$261$278$913$1,043$1,174$1,303$1,409$1,510$1,614$1,720
$913$1,043$1,174$1,303$1,409$1,510$1,614$1,720
0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%
$8,274$9,450$10,640$11,813$12,775$13,685$14,630$15,593
$109,926$125,550$141,360$156,938$169,725$181,815$194,370$207,158
100% Median 2004 Sale Price$118,200$135,000$152,000$168,750$182,500$195,500$209,000$222,750 30% of Annual ncome$10,950$12,510$14,070$18,235$16,890$18,120$19,380$20,640100% Median$36,500$41,700$46,900
$52,100$56,300$60,400$64,600$68,800$0$0$0$0
Family Size Down Pmt 7%PrincipleRate (6%)TermPaymentPMITaxesInsurancePITI TotalOther (util, Dues)Total Monthly CostAbility to Pay$913$1,043$1,173$1,303$1,408$1,510$1,615$1,720$799$992$1,118$1,198
6%
1+2+33+4+54+5+6+75+6+7+8Rent (23% monthly avgerage)
1 BEDROOM2 BEDROOM3 BEDROOM4 BEDROOM
12345678
360360360360360360360360$84$97$109$121$131$140$150$159$50$57$64$72$77$83$89$94
$836$957$1,077$1,198$1,293$1,386$1,481$1,577$188$215$242$269$290$311$332$353$120135150165180195210225
0.50%0.50%0.50%0.50%0.50%0.50%0.50%0.50%
$1,158$1,325$1,492$1,659$1,791$1,919$2,051$2,183
$1,278$1,460$1,642$1,824$1,971$2,114$2,261$2,408
$10,500$12,012$13,524$15,036$16,233$17,395$18,592$19,793
$139,500$159,588$179,676$199,764$215,667$231,105$247,008$262,958
4
120% Median 200 Family SizeSale Price$150,000$171,600$193,200$214,800$231,900$248,500$265,600$282,750 30% of income$13,140$15,012$16,884$18,756$20,268$21,744$23,256$24,768120% Median$43,800$50,040$56
,280$62,520$67,560$72,48077,52082,560
Down Pmt 7%PrincipleRate (6%)TermPaymentPMITaxesInsurancePITI TotalOther (util, Dues)Total Monthly CostAbility to Pay$1,278$1,460$1,642$1,824$1,971$2,114$2,261$2,408$959$1,191$1,342$1,438
6%