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Home My WebLink About2005-08-15 Housing PACKET Ashland Housing Commission Regular Meeting Agenda August 15, 2005 6:30 - 8:30pm Community Development & Engineering Services Building 51 Winburn Way, Ashland OR. 1. (6:30) Approval of Minutes - July 18, 2005 Regular Meeting - July 23, 2005 Study Session 2. (6:35) Public Forum - items not on the agenda 3. (6:45) Other Business from Housing Commission Members - New and miscellaneous commissioner discussion items not on the agenda 4. (6:55) New Business - Interfaith Care Community of Ashland update - Discussion on recommendation to Council regarding additional Housing Staff 5. (7:20) Old Business -SDC Deferral Program Changes 6. (8:00) Commission Coordination - Liaison Reports - Parks - Schools - Planning - Conservation - Council - Subcommittee Reports - Land Use (no meeting) - Finance (no meeting) - Education Next Quarterly Study Session proposed dates: Saturday October 15, or 22, 2005 City Council Lithia Lot proposal evaluation and decision th or 30th, 2005 (7:00pm 1175 East Main)) TBA (August 29 7. (8:25) September 19, 2005 Meeting Agenda Items - Update; Buildable Lands Inventory, Multifamily Housing Unit counts, vulnerable properties -SDC Deferral Program Changes continued 8. (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. ASHLAND HOUSING COMMISSION MINUTES JULY 18, 2005 CALL TO ORDER Chair Matt Small called the meeting to order at 6:35 p.m. on July 18, 2005 at the Community Development and Engineering Services Building at 51 Winburn Way, Ashland, OR. Commissioners Present: Matt Small, Chair Carol Voisin Liz Peck Faye Weisler Alice Hardesty Don Mackin Bill Street Absent Members: None Council Liaison: Cate Hartzell, present Staff Present: Brandon Goldman, Housing Specialist Sue Yates, Executive Secretary APPROVAL OF MINUTES Voisin said on page 3, ÐAfter the Committee,Ñ should read, ÐAfter the Commission.Ñ Voisin/Hardesty m/s to approve the minutes as amended, including correction of typographic errors. Voice Vote: The minutes were approved. PUBLIC FORUM PHILIP LANG, 758 B Street, respectfully told the Commission that he will be going to the Council to request that they place on their agenda in the immediate future the topic of abolition, replacement or reform of the Housing Commission and the way they do business. Small asked Lang to elaborate. Lang distributed a memo and asked ÐWhat can be done?Ñ Commit or not commit to affordable housing. Have a workable and accountable structure. Have an accountable staff. A commitment to learning, applying and advocating viable affordable housing programs with proven successes. . 1) At the local level plan, devise, advocate, support and insist on local initiatives and ordinances Organize it in 3 ways that promote affordable housing, 2) Learn about federal and state programs for affordable housing. 3) Learn about and advocate for implementation of local creative ideas for affordable housing. Lang added without providing housing for those who work in Ashland, we have a major livability issue for the entire community. He believes the Commission has failed to meet their avowed purpose of creating affordable housing. Commissioners admitted to being frustrated too, however, Small argued the Housing Commission has accomplished many things. He offered Lang the opportunity to apply for a position on the Housing Commission. AGENDA ITEM CHANGES Goldman said the 15 minutes allotted for the SOU intern can be removed from the agenda as the intern did not complete the SOU multi-family unit count. Hardesty asked to bring up the agenda for the study session on Saturday. NEW BUSINESS OREGON HOUSING AND COMMUNITY SERVICES Goldman introduced Darcy Strahan, Regional Advisor to the Director. DARCY STRAHAN said she serves five southwestern counties. Her purpose is to: 1) work with the GovernorÓs Economic Revitalization Teams, 2)work with developers (non-profit, CDC, CAP, for profit, housing authority, etc.) who want to build affordable housing, and 3) work with local jurisdictions and find out what ÐaffordableÑ means to them and their community. Strahan said they are a funding agency. She handed out several brochures and written materials explaining some of the various home purchase programs. The programs include: First Time Home Buyer, Residential Loan Program, Home Purchase Assistance Program, and Purchase Assistance Loan (PAL). She said they are trying to get away from the term Ðaffordable housingÑ but instead calling it Ðwork force housing.Ñ The bulk of their resources goes toward the development of multi-family housing. They do that through a low interest rate loan and bond program (60 to 80 percent of area median income). They have not figured out how to do those programs outside the Portland Metropolitan Area because Portland Development Commission has a lot of dollars they put toward their affordable housing. Unless a community has cash they can put toward a project, it is hard to do development while having debt service. With regard to the low income housing tax credit, it is difficult to get funding for projects less than 25 units and a developer needs more equity. The low income housing tax credit is also used to fund acquisition rehab housing. Goldman mentioned there are two HUD projects that are due to expire in 2008 because the owners have met their term of affordability. Strahan said if the owners wait until the end of their affordability period, they can sell it to whoever they want. It isnÓt too early to start talking to the owners in order to assist or remind them to start looking for a non-profit to take over their project so it will remain affordable. Sometimes it takes two to three years to get a project funded. The closer the owner is to meeting their term of affordability, the higher they get on HUD and Rural DevelopmentÓs radar screen (moves up on the priority list). Smaller projects (25 units or less) are funded with the grants. The grants include the HOME program, HELP, Housing Trust Fund, weatherization dollars and alcohol and drug funding, and Oregon Lenders Tax Credit. Hartzell thought it would be helpful if Strahan could look at the CityÓs Housing Needs Assessment and see how it can tie into the stateÓs programs. She would like to have Strahan meet with the Commission to focus on the following: What is the CommissionÓs highest priority as it relates to the stateÓs programs? How do we anchor the relationship with her agency? What should we be assessing that we havenÓt assessed? How do we interface and optimize these programs? Strahan said it would be helpful if the Commission members could attend the Housing Summit in February for Jackson, Josephine and Curry counties to be held in Medford. Strahan explained that a housing authority contracts with HUD to administer Section 8. Ashland is currently served by the Housing Authority of Jackson County. A housing authority isnÓt just formed. Goldman said the next quarterly Housing Commission study session will be held in October. Strahan could be scheduled for that meeting. OLD BUSINESS LITHIA PARKING LOT PROPOSAL EVALUATION Small stepped down. Weisler chaired this part of the meeting. Goldman said at the last meeting, discussion was postponed because there wasnÓt a quorum present. In the last packet there was a determination from the City Attorney that negotiations could not take place with select applicants to modify their proposals. Further, recommendation from Staff was to support the Kendrick proposal for consistency with the downtown and the Historic District as a commercial use. Referencing a prior Staff memo, they had also voiced confidence in the Housing Authority of Jackson County (HAJC) to develop housing above the downtown parking lot. Street asked for an explanation of each projectÓs relationship to Will Dodge Way. Goldman said 1) LDC Î ten head-in parking spaces, 2) HAJC Î one space plus some common area and landscaping will face the alley, 3) Kendrick Î all the way back to the alley on Alternative A with parking underneath. Commercial to face the alley all the way up to Lithia Way, and 4) Sandler Î common area is internal with housing on north and south up to the alley. Goldman referenced a memo from Colin Swales asking for consideration of the 1988 Downtown Plan text with reference to downtown alleys. ASHLAND HOUSING COMMISSION 2 MINUTES JULY 18, 2005 Since we canÓt negotiate with Kendrick, Weisler asked for the timeline for issuing a new RFP. Goldman said it would take a minimum of three to four months to be ready to issue a new RFP. Hartzell thought it possible to have a draft RFP to the Council by mid-September. Goldman felt with HartzellÓs timeline, a proposal could be selected by February, 2006. The next application round for HOME dollars is due the middle of February. The next round would be in August. Hardesty believes the above timeline would be optimistic with all the Council has to deal with. Hardesty would favor selecting the Housing Authority of Jackson County. Peck said her main reservation with the Kendrick proposal is whether or not it would provide work force housing. Goldman said Kendrick would apply for HOME funds and rents have to be consistent with the HOME program. That, however, doesnÓt address unit size. Peck felt KendrickÓs proposal left her with too many open-ended, unanswered options. Mackin said the HAJC made reference in their proposal that if the cost of relocation of the underground utilities is prohibitive, they will be forced to reduce the parking to nine spaces. Mackin said one of the main parts of the RFP was to maintain as much parking as possible so to go from 13 spaces to nine, is significant. Hardesty/Street m/s to recommend to the Council the Housing CommissionÓs support of the proposal by the Housing Authority of Jackson County. StreetÓs influenced by HAJCÓs past experience in management and they can do a project that will meet the need for work force housing in the downtown. Goldman noted that any project that might be accepted will go before the Historic Commission and for a review of the detailed design standards. Strahan added the Housing Authority has to go through a process with the state too. Hartzell handed out her notes from a conversation with Diana Shavey, former Housing Commissioner. With regard to design, Hartzell asked the Commissioners to think about the cost for design changes. It seems the Housing Authority is not maximizing the square footage. Is it correct they are meeting the number of units per acre but the Kendrick proposal or other proposals might have more square footage? Goldman said the Housing AuthorityÓs units are slightly larger than the others. Hartzell is concerned we are taking a high end asset and putting it into a low end product. She wants to maximize the asset. She is afraid we are diluting our downtown with residential and displacing housing on either side of the downtown (B Street and Hargadine). Peck believes the nine units are slightly larger and would be more livable and will better meet the needs of our work force. Mackin offered an amendment to the motion to condition the recommendation that the reduction of two parking spaces not be allowed. He is prepared to make a future motion to support the Kendrick proposal subject to the complying with the HOME standards. Hardesty accepted the amendment and Street seconded it. Voice Vote: Peck, Street, Mackin, Hardesty and Weisler voted ÐyesÑ and Hartzell voted Ðno.Ñ Voisin abstained. Mackin moved to recommend to the Council for consideration the Kendrick proposal because it is innovative in nature and was responsive to the flexibility offer in the RFP. It gives a mixed use option. The rents would be adjusted according to the HOME requirements. He supports Option A for the parking. There was no second to the motion. The motion died. AGENDA FOR STUDY SESSION There will be a study session on Saturday, July 23, 2005 from 8:30 to 2:30 p.m. The topic will be provided by the Education Committee. Peck will be unable to attend. ADJOURNMENT Î The meeting was adjourned at 8:45 p.m. ASHLAND HOUSING COMMISSION 3 MINUTES JULY 18, 2005 ASHLAND HOUSING COMMISSION STUDY SESSION MINUTES JULY 23, 2005 CALL TO ORDER Chair Matt Small called the meeting to order at 8:35 a.m. on July 238, 2005 at the Community Development and Engineering Services Building at 51 Winburn Way, Ashland, OR. Commissioners Present: Matt Small, Chair Carol Voisin Faye Weisler Alice Hardesty Don Mackin Bill Street Absent Members: Liz Peck Council Liaison: Cate Hartzell, present Staff Present: Brandon Goldman, Housing Specialist Public Present: Aaron Benjamin AGENDA ITEM CHANGES Brandon Goldman introduced the agenda as presented as an all inclusive list of items that could be addressed by the Commission. Matt Small questioned whether there was a single goal for the day. Bill Street saw the issues list as overwhelming and wanted to use the Study session to articulate a goal for a 6 month Î year period to come. Carol Voison agreed with Streets stated goal for the outcome of the Study Session. Weisler suggested we look at significant activities for the coming year, not just the Òlow hanging fruitÓ, stating Ðwe need to focus on getting housing on the groundÑ. GNERAL DISCUSSION Commissioners discussed the role of the Commission in implementing strategies. Voison suggested creating a development plan, including the purchase of land. Small stated that he did not see development as the role or ÐjobÑ of the Commission. He elaborated that it is his impression that it is the role of the Commission to establish policies and regulations in support of affordable housing. Street was concerned that focusing on housing development, at the exclusion of other activities, would not necessarily create a more affordable community. Cate Hartzell said that sometimes you do things by creating the political will, and that you cant necessarily build yourself out of the problem. ÐWe have the orientation from Council to create unitsÑ stated Hartzell. Aaron Benjamin spoke to having a structure to support non-profits, or other entities, to achieve the goals of developing units. He said the commission should Ðmeasure success by creation of policies, and meeting the objectives of creating a climate facilitating entities out in the communityÑ. He feels the Commission has been successful and listed a number of recent land use changes and other activities that are attributable to the Commissions work. Small saw it as a creative tension between different strategies. Hardesty explained that regardless of Committee accomplishments the City is becoming increasingly gentrified, which is displacing people. She understands the desire to have more tangible results. Benjamin stated that the economic force creating gentrification of Ashland canÓt be stopped entirely but that Ðwe can provide incentives to make it easier for affordable housing developmentÑ. Hardesty voiced the need to persuade the School Board, Parks Department, and other land owners of the magnitude of the problem, and the need to have property dedicated for affordable housing. She further recommended researching other communities, such as Basalt Colorado, as models. She also suggested the Commission members write letters to the editor in a systematic way to keep housing issues in the forefront. The commission spoke generally about outreach and the potential of having a rotating responsibility to write such letters. .Hardesty indicated that she could write such a letter to the Editor of the Daily Tidings to initiate the ÒcampaignÓ. Benjamin suggested Commissioners also should appear regularly at public meeting to raise the level of consciousness and public awareness about the issues the Housing Commission is dealing with. Weisler expressed her frustration about not knowing enough about State programs and other funding sources. Further she noted that when we were able to have the StateÓs (OHCS) regional representative present the time was too limited (15 minutes). In response to the need for information about financing (from the State) Goldman explained that although the Commissioners may not be very familiar with existing Programs, affordable housing developers are familiar and are typically in attendance at conferences where sessions describe such programs in detail. He questioned the extent to which the Commission needed to understand the details of financing programs given they are not actively developing housing. Weisler was pleased to hear the non-profit housing developers are in attendance at such conferences, but felt the Commission needed more information to advise and understand projects that come before the Commission. Hartzell concurred that it was important for the Commission to have a more comprehensive understanding of all the tools available to finance and develop housing and suggested further education with Darcy Strahan (OHCS) at a study session, and Diana Shavey as another housing expert the Commission could learn from. Hardesty recommended we also look at Section 108 and other resources to develop larger, potentially scattered site, ÐworkforceÑ housing projects. Goldman suggested that Darcy Strahan could potentially be available for a Housing Commission Study Session in October, Hartzel indicated Diana Shavey may be available in August. Goldman stated that although a face-to-face meeting with the HUD specialist on Section 108 loans may not be likely , a conference call likely could be arranged. Hartzell discussed the loss of existing affordable housing units (HUD housing). Strategically she questioned what we would want to do to address these ÐvulnerableÑ properties. Hartzell noted also the vulnerability of trailer parks as existing affordable housing that could be eliminated. Goldman explained that you would likely need to identify such HUD properties at least 2-3 years before they are set to be available at market rates in order to get the funding in place to purchase them. He also brought up condominium conversions as the Planning Commission was set to discuss the loss of rental housing through such th ÒconversionsÓ on their July 26 Study Session. Goldman explained the condominium conversion process and required affordability criteria within the ordinance. Small stated the discussion was leading to establishing new priorities and listed 1) Letter writing campaign, 2) Vulnerable areas, 3) focus of affordable housing development. Voision stated that the primary goal is to increase the amount of affordable housing, and focusing on acquisition is a means to achieve it. Hartzell explained that she had pushed for acquisition and in speaking with Gino Grimaldi, heÓd stated that staff could focus on this now. Goldman explained that he had been given such direction by Grimaldi as a priority. Don Mackin stated that the Commission should start with the understanding that Philip Lang should not be the individual that th defines the commissions successes (referring to LangÓs testimony on July 18. Mackin explained BenjaminÓs definition of success has merit, elaborating that focusing on a specific grant versus City regulations is irrelevant in measuring affordable housing accomplishments. He stated that awareness and recognition of the need for affordable housing is increasing noting Planning Commission discussions on recent proposals and the condominium conversion discussion set for the Planning Commission Study Session. He recalled that a year ago the Housing Commission talked about creating a land acquisition task force, and the Commission as a whole chose not to do so at that time. Mackin discussed that the affordable housing development of 20 years ago used incentives \[3% loans\] to develop units. He further stated that Ðwe need to look at developer incentives to develop workforce housingÑ noting that such incentives are not likely to happen at the federal level. Mackin stated he saw merit in both AaronÓs and CarolÓs perspectives, and thinks we should move forward with both strategies. He concluded by circulating an article regarding the Tri-vest, OnTrack, and Living Opportunities project and suggest Ashland seek feedback from the developer in order to understand their perceptions of the obstacles in Ashland. Essentially asking whether they looked at Ashland for such a project And if so why they chose Medford instead. Weisler mentioned that the Commission wanted to have such (developer meetings) a year ago and stated she thinks we need to be explicit about assigning responsibility to ensure follow through. Small and Harzell went over the existing and new priorities that have come out of the discussion in order to revise the agenda for the second half of the meeting. The new priorities noted includedÑ - Get actively involved with other City Agencies and other players in the housing arena o Tactics to include liaison positions, letters to the editors, developer meetings, meet with State and individual experts (OHCS) - Study other ÐmodelÑ communities - Investigate Section 108 HUD loans to use on a project - Address vulnerable areas - Employee/workforce Housing (City, Parks, Schools, major employers) ASHLAND HOUSING COMMISSION 2 STUDY SESSION MINUTES JULY 23, 2005 - Land acquisition - Housing Trust fund Development Weisler questioned how each agenda is normally established. She took issue with Staff creating the agenda and suggested that the Chair and Vice-Chair take the lead role in creating the agendas for the CommissionÓs meetings. Street asked Goldman about his role, and job duties. Goldman explained that although he is liasion to the Housing Commission his directives come from his Department Head not the Housing Commission. He elaborated that his Department Head (Director of Community Development) gets direction from the City Administrator, who is responding to established Council goals and direction. Goldman stated he is responsible to support the Housing Commission but ultimately as the Commission makes recommendations to Council, and those become Council directives, it comes to the Housing Specialist in this Ðtop-downÑ way . He also spoke to his general responsibilities. Hartzel asked how much of GoldmanÓs time is spent on region activities and whether CDBG duties have been reduced. Goldman explained that Regional Housing issues are something he is focused on and as such regularly spends 10-15% of his time on such in working on the Workforce Housing Summit, the Homeless Task Force, the Jackson County Housing Coalition or other regional efforts. Goldman explained that he remains largely responsible for the administration of the CDBG program although Derek Severson , Assistant Planner, is involved in completing environmental reviews and other administrative CDBG responsibilities. Hardesty requested we examine terminology used to describe affordable housing (ie ÐworkforceÑ, Ðlow incomeÑ, affordableÑ) during the second part of the session. Doing such would be useful in developing campaign materials and consistency in speaking to other bodies (Planning Commission, Council, Parks, Schools, etc). Benjamin requested an update from staff on the status of the Croman Property, the North Mountain area, and the Clay Street annexation. Hartzell suggested the sub-committees express their priorities and examine obstacles. Street stated that he would like to discuss the priority of rental or ownership. Mackin, noting that he had to leave before lunch due to other commitments, reviewed the Land Use CommitteeÓs priorities. He noted that vulnerable properties and land acquisition were new and thus had not been discussed. He stated past priorities of identifying land for rezoning and land use changes have a Planning Commission relationship. Lunch . 12:00 lunch was delivered and it was decided to continue the meeting through lunch following a short break Small relayed the Finance CommitteeÓs priorities as being primarily the development of a Housing Trust Fund. A timeline matrix was distributed to the Commission. He noted the need to get the development of a platform ÐunstuckÑ an to move it forward. Commissioners discussed the need for more information regarding financing methods and suggested a workshop on methods for the benefit of developers and non-profits. Small also noted the finance committee will continue to look at city fees, SDCs \[which is before the full commission\]. Hardesty, speaking as a member of the Education Committee, expressed issue with the Statewide issues of Real Estate Transfer Fees, Inclusionary Zoning prohibition, and the need to lobby the State Legislature. Hardesty explained that the outreach and education needs to focus on multiple avenues to remain in the forefront. Letter writing campaigns so that the Tidings is publishing weekly letters \[or forums\] on Housing would be valuable. Further the use of other media outlets \[ public TV Î City Talk\] and presentations to the City Council are vital according to Hardesty. She suggested development of Campaign materials that speak a consistent message. Goldman suggested contacting the Neighborhood Partnership Fund for the focus group messaging information they had assembled as a good starting point, noting they had created ads with tested messages for the Real Estate Transfer Tax Campaign two years ago. Street initiated the Rental vs Housing Conversation and elaborated that what he questioned was whether the concept of renting, instead of owning, could be more acceptable. He stated that high quality schools, a high quality of life, and a desirable community could make young families choose to reside in Ashland even if they could not afford to buy a home. He stated the importance of fostering the family friendly image of Ashland to retain and attract young families. The discussion transitioned to an examination of a Ðpreferred renter programÑ as a means of partnering qualified residents with vacant housing. The assurances landlords would have that their tenants were responsible may help reduce turnover and be beneficial to both the tenant and landlord There was general discussion over vacancies and specifically the impact of vacation homes. Goldman stated that the Planning Commission recently reviewed a B&B application and concern was raised over the amount of travelers accommodations. He explained that the conversion of housing to travelers accommodations can, under certain circumstances, reduce the amount of available rental housing available. Goldman noted that in other circumstances , where a owner/occupant rents out a room in their home to a traveler, there may not be such a reduction. Concern was raised regarding Vacation Homes, second homes that remain vacant for a considerable period of the year. ASHLAND HOUSING COMMISSION 3 STUDY SESSION MINUTES JULY 23, 2005 Hardesty mentioned that the Chamber of Commerce should promote the communities family friendliness as a condition of their acceptance of City Funds. She explained that it is important to state the positives to inquiries from people \[or businesses\] considering relocation as opposed to talking about school closures and exorbitant housing costs. Goldman updated the Commission regarding the recent development on North Mountain noting that there is no affordable housing in those subdivisions as they were within the City Limits and thus not subject to annexation or zone change requirements for affordability. He stated that no new development plans have been submitted for the Croman site. He explained that the Council has requested an Ðissues paperÑ regarding the former mill site and that planning staff will be providing that back to the Council in an effort to provide some guidance to the developers as to what the City is expecting. Goldman stated that it was his understanding that the Clay Street 10-acre annexation is moving forward and he believed they would be submitting for a September hearing. Due to annexation requirements the 100 unit proposal would have to have between 15-35 units as affordable. Goldman understood that the developers were intending to provide the minimum number (15%) all targeted to 60%AMI and they would be rentals and regulated as affordable for 60 years. Small stated that the review of priorities should be done at the subcommittee level and come back to the full commission. Street asked the other Commissioners about the expectations for time commitment to the Housing Commission. Hardesty explained that for her, 2-5 hours per week was reasonable although her style creates a rush the week before the regular committee meeting. Other Commissions stated that 2 hours per week seemed to be a reasonable expectation. There was discussion that the subcommittees would likely be best to have midway between regular meetings. Goldman suggested the first Monday, Tuesday and Wednesday be reserved for regular subcommittee meetings. In this way the regular meeting, on the third Monday of the month, will be two weeks after the subcommittees. Goldman stated he would provide the commissioners with potential dates for a study session in October. Action items discussed by the Commission during this Study Session included: -Creating a list of vulnerable Properties (HUD, Trailer parks) -Inform the Downtown Plan Committee that Public Lots should be available for workforce housing -Review information regarding Density Bonuses and Condominium Conversions for affordable housing provisions. -Have a conference call with Fannie Mae regarding Employer Assisted Housing -Have a conference call with HUD regarding section 108 loan program. -Request that other public bodies establish a liaison to the Housing Commission \[ Parks, Schools, Planning Commission, Conservation Commission\]. -Housing Commission members to be Liaisons to public bodies Parks = Bill Street Schools =Alice Hardesty Planning Commission = (Don Mackin, Liz Peck, or new Commissioner; none present to volunteer) Conservation Commission = Faye Weisler -Draft letter for Housing Commission to send to ICCA regarding future use of 144 Second Street Homeless services center. -Determine legality of restricting housing to families (with children) only. Determine Fair Housing implications. ADJOURNMENT Î The meeting was adjourned at 2:30 p.m. ASHLAND HOUSING COMMISSION 4 STUDY SESSION MINUTES JULY 23, 2005 Old Business - SDC Deferral Ashland Housing Commission Packet August 15, 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%