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Home My WebLink About2020-10-27 Planning PACKET ASHLAND PLANNING COMMISSION SPECIAL MEETING October 27, 2020 AGENDA I. CALL TO ORDER: 7:00 PM, Civic Center Council Chambers, 1175 E. Main Street II. ANNOUNCEMENTS III. PUBLIC FORUM IV.LEGISLATIVE PUBLIC HEARING A. PLANNING ACTION: #PA-L-2020-00009 APPLICANT: City of Ashland DESCRIPTION: Amendments to the Ashland Municipal Code regarding the affordable housing program. Referencing AMC 18.2.3.200, 18.2.5.050, 18.5.8.050, add 18.5.9.020. V. ADJOURNMENT In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Community Development office at 541-488-5305 (TTY phone is 1-800-735-2900). Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (28 CFR 35.102-35.104 ADA Title 1). ASHLAND PLANNING DIVISION STAFF REPORT October 27, 2020 PLANNING ACTION: PA-L-2020-00009 APPLICANT: City of Ashland ORDINANCE REFERENCES: AMC 18.2.3.200 Multiple-Family Rental Unit Conversion to For-Purchase Units AMC 18.2.5.050 Affordable Housing Standards AMC 18.5.8.050 \[Annexation\] Approval Criteria and Standards AMC 18.5.9.020 Applicability and Review Procedures REQUEST: I. Relevant Facts A. Background Beginning in 2018, Planning staff began the process of evaluating the affordable housing program. The primary goal of the evaluation was to improve administrative efficiency of the affordable housing program for the many entities involved in the Affordable Housing process. These entities included homeowners, homebuyers, members of the development community and real- estate professionals. The changes proposed address specific concerns raised over the last several years from the wide range of entities involved in the affordable housing process. The proposed amendments to the Land Use Ordinance relate specifically to units covered under the Ashland Affordable Housing Program which are required to be affordable due to a land use approval including annexations, zone changes, density bonuses for affordable housing, and conversion of apartments into condominiums. The Affordable Housing Program aims to balance long-term affordability while allowing a reasonable rate of return for homeowners and developers. Several of the proposed ordinance revisions aim to increase the changes were made to address regulatory barriers or to help simplify existing processes. All of the proposed changes are expected to help to make the program more readily understood by affordable housing and private market developers, as well as to increase the coordination between affordable and private market developers. Lastly the proposed changes to simplify resale restrictions are designed to make the transfer of homes easier for participating households. The Planning Commission held a study session to review the identifies issues on March 10, 2020.The Housing and Human Services Commission held a meeting on July 23, 2020 and the City Council held a Study Session on July 20, 2020. Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 1 of 11 Staff presented the potential revisions to the Planning Commission, the Housing Commission and the City Council (at the meeting dates listed above) as well as to groups of private market and affordable housing developers, and real-estate thth professionals at two stakeholder meetings held on August 11 and August 14, 2020. The feedback provided by the stakeholders and from the elected and appointed officials allowed staff to draft an ordinance that addressed concerns that were raised. The Housing and Human Services Commission (HHSC) reviewed the proposed ordinance at their regular meeting on September 24, 2020 and unanimously recommended approval of the ordinance as presented. Commissioners noted that the contributions from the participants at the stakeholder meeting were valuable and helped address the concerns that members of the HHSC had raised during the initial study sessions. The Planning Commission public hearing on October 27, 2020, and the upcoming City Council public hearing on November 17, 2020, have both been publicly noticed in accordance with 18.5.1.070.D of the Ashland Land Use Ordinance, and the Department of Land Conservation and Developments requirements for legislative ordinance changes. B. Policies, Plans and Goals Supported: The amendments to the Affordable Housing Standards are necessary in order to address changes in market conditions, inconsistencies in the land use code, and update affordable housing program requirements to better enable low- and moderate-income families to afford quality housing. Oregon Statewide Planning Goals - Goal 10 Housing To provide for the housing needs of citizens of the state. Buildable lands for residential use shall be inventoried and plans shall o encourage the availability of adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density. elate to the Affordable Housing Standards include: Support and promote, through policy, programs that make the City affordable to live in. Pursue affordable housing opportunities, especially workforce housing. Identify specific incentives for developers to build more affordable housing. (high priority for 2015-2017) Support land-use plans and policies that encourage family-friendly neighborhoods. Draft pocket neighborhood code that allows for the construction of small scale, cottage housing projects. The Housing Element of the Ashland Comprehensive Plan was amended in 2019 and includes the following goals and policies which are applicable to the ordinance amendments proposed: Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 2 of 11 Goal 1: Ensure a range of different dwelling types that provide living Policy 1: Provide for a mix of housing types that are attractive and affordable to a diversity of ages, incomes, household sizes, and household types Policy 4 Housing opportunities should be available to all residents without discrimination and consistent with local, state, and federally recognized protected classes under fair housing law. Policy 9: Support the retention and development of rental housing. Goal 2 : Support the creation and preservation of housing that is affordable to low and moderate income households and that is commensurate with the Policy 10: Encourage the preservation of affordable housing, including housing that is subject to a term of affordability, to avoid the net loss of safe, healthy, affordable housing. Policy 12: Cooperate with for-profit and non-profit affordable housing providers in locating low and moderate income units in Ashland. Goal 3: Encourage the development of housing in ways that protect the natural environment and encourage development patterns that reduce the effects of climate change. Policy 18: Development standards shall be used to fit development to topography, generally following the concept that density should decrease on physically and environmentally constrained lands. Policy 19: Promote infill and compact development patterns to encourage housing affordability, maximize existing land resources, and conserve habitat and environmentally sensitive areas. Goal 4: Forecast and plan for changing housing needs over time in relation to land supply and housing production. Policy 23: Encourage development of vacant land within the City Limits, while looking to the lands within the Urban Growth Boundary to provide sufficient land for future housing needs. C. Ordinance Amendments The following provides a summary of proposed revisions to the Affordable to be considered in order to address changes in market conditions, inconsistencies in the land use code, and housing program adjustments intended to better enable low- and moderate-income families to afford quality housing. Changes the method by which the maximum sale price is calculated from the formula referenced in Resolution 2006-13 to a fixed rate formula. Staff is suggesting a fixed rate formula calculation for establishing the maximum resale price at a monthly increase of 0.125% calculated for each full month of appreciation rate of 1.5%. The current variable calculation method which incorporates lending interest rates, taxes, and homeowner association (HOA) dues would still be utilized to calculate the initial sale price when an affordable Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 3 of 11 unit enters the program. Thereafter the 1.5% annual increase in the maximum purchase price would provide for a more predictable resale price for homeowners within the affordable housing program. Further this new method of calculating resale price would ensure homeowners are not faced with a stagnant home value due to increasing HOA dues or increasing interest rates. During the stakeholder meeting a concern was raised regarding taxes increasing at a rate faster than the rate of increase based on the proposed formula. The City of Ashland has an agreement in place with the Jackson of units deed res affordable housing formula. This assures that the assessed value for the purpose of determining the annual tax rate is commensurate with the Establishing a fixed rate method of valuation increase for the purposes of o establishing the allowable resale price will allow homeowners to calculate their future return on investment in a predicable manner. Currently determining the resale price of a covered unit employs the use of a complex formula which considers current interest rates, median incomes by household size, changes in HOA dues, and ultimately requires consultation with City Housing Program Staff to derive the resulting maximum purchase price on an annual basis. A fixed-rate formula increase eliminates such complexity and will thus increase the efficiency Amends the provisions of the Ashland Land Use Ordinance relating to the monthly rental amounts used in the affordable housing program (18.2.5.050.B.1). Instead of utilizing the existing table outlining rental charges for affordable rental housing (Table 18.2.5.050.B) feedback from stakeholders suggest referencing the maximum rents established by U.S. Department of Housing and Urban Development (HUD) for the HOME program for the corresponding bedroom size and for Low Income Housing Tax Credit (LIHTC) program for the corresponding bedroom size for those units financed with that funding source. As These rents are adjusted annually by HUD based on the median incomes in the Medford-Ashland Metropolitan Service area. D Low-rent o and High-rent limits and the LIHTC programs for our area will allow our program to better align with affordable housing proposals that utilize state or federal funding for their projects. As many affordable housing providers are already subject to the HUD established HOME and LIHTC program rent limits due to their sources of funding, making our program consistent with those limits will simplify the application processes for affordable housing providers seeking State grant funding. Further, as the State of Oregon maintain and adjust these program limits each year, the City of Ashland will no longer be responsible to annually calculate and maintain a Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 4 of 11 unique maximum rental amount table for use only for covered units within the City of Ashland. Amends the provisions within the Ashland Land Use Ordinance relating to the base density calculation used for determining the number of required affordable housing units (18.5.8.050.G.1). Amending this section would clarify that the base density of the property shall be calculated using the area to be developed, excluding any portions of the property containing undevelopable areas such as wetlands, floodplain corridor lands, slopes greater than 35 percent, or land dedicated as a public park. Presently the affordable housing requirements are based on the entire lot o size, indiscriminate of any reductions of buildable area due to natural areas to be preserved. The way this standard is presently written differs from other Land Use provisions which otherwise allow the density of a development to be reduced in consideration of the unbuildable natural areas to be preserved. Not providing for a corresponding reduction in the density of affordable housing required can have the unintended consequence of effectively increasing the proportion of required affordable housing as a proportion of the housing units actually developed. This discrepancy can result in a scenario where the number of affordable housing units required for an annexation or zone change could exceed the number of market rate units that could otherwise be developed, thereby making a residential housing project no longer financially viable without substantial governmental subsidy. Amends the provisions within the Ashland Land Use Ordinance establishing equivalence values for affordable housing to newly allow rentals to households earning 80% Area Median Income (AMI) to qualify as 1.25 units for the purposes of calculating the affordable housing unit requirement (18.5.8.050.G.1.c). Rental units affordable to households earning 80% AMI or less are not o currently being provided by the market at the rates needed, allowing such to qualify as part of an annexation/zone change request could incentivize the creation of more rental units. Presently the market rents in Ashland exceed what households earning 80%AMI can afford without being cost burdened. Amending this standard for annexations and zone changes would help address this disparity and allow developers to provide units benefiting households earning up to 80% AMI while providing rental units that satisfy the affordable housing requirements. Removes the provisions within the Ashland Land Use Ordinance that allow newly constructed affordable homeownership and rental units to be targeted to households earning 60% AMI (18.5.8.050.G.1.d) for required affordable housing in annexation, zone changes, and condo-conversions. Removing the 60% AMI target for ownership households, and instead o focusing on households earning 80% AMI, 100% AMI, or 120% AMI, is Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 5 of 11 for the 60% AMI income bracket and units are therefore difficult to finance at change of ownership. Affordable housing providers (e.g. Habitat for Humanity) have indicated that households earning 60% AMI and below often do not qualify for loans (either subsidized and conventional) and thus such units can be difficult to develop, or resale once completed. Raising the qualifying incomes to 80% AMI or below for the lowest income bracket would not preclude a household earing 60% AMI from purchasing a qualified ownership unit, but it would enable households earning up to 80% AMI to qualify. Allowing for rental units targeted to households earning 80% AMI will help o ensure rentals developed by the private market are financially viable. Due to the existing availability of the 60% AMI rental option, private developers select the 60% rental option simply to provide fewer affordable units, however the difficulty of developing and administering affordable units at this income level is often not fully considered. Non-Profit affordable housing providers (e.g. Housing Authority of Jackson County) will still be able to develop rental units reserved for households earning 60% AMI as Table 18.2.5.050.C of the Land Use Ordinance. Potential changes include removing the 4-bedroom /7-person option; revising the 3-bedroom unit occupancy basis from 6 to 5 persons; revising the and 2-bedroom units occupancy basis from 4 to 2 persons. Households with a greater or lesser number of occupants shall remain eligible for covered units but the sale price shall not be adjusted based on the median incomes of the larger household sizes. Table 18.2.5.050.C. Occupancy Basis for Affordable Rental Housing Unit Type Occupancy Studio = 1 person household income for the designated income level 1 Bedroom = 2 person household income for the designated income level 4 person3 person 2 Bedroom = household income for the designated income level 6 person5 person 3 Bedroom = household income for the designated income level 4 Bedroom = 7 person household income for the designated income level Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 6 of 11 o household), the larger household sizes indicated in the table are not typically realized in covered affordable units. As the maximum sale price of a unit is based on household incomes, these large household sizes setting the occupancy basis within the existing table have the unintended effect of increasing the purchase price beyond the means of the more typical, smaller, household sizes. Amend the provisions within the Ashland Land Use Ordinance that establish the timing of the development of affordable units (18.2.5.050.G.4) to clarify that dedication of land through transfer of title to a non-profit affordable housing provider will satisfy these requirements and there would be no further timing obligation for the market rate units. There has been concern raised by private developers that they have no control over the timing of the development of affordable units after the property is transferred to an affordable housing partner. The Planning Commission had expressed concerns about the timing of the development of the affordable housing component of the overall development as well as ensuring that the units would be built as affordable. To address this concern language was added regarding the timing of the transfer of title and granting certificate of occupancy for the market rate units. Removes the provision within the Ashland Land Use Ordinance that requires affordable units be distributed throughout the project (18.2.5.050.G.5). The City has approved numerous exceptions to this standard in finding o that the efficient development of affordable housing often necessitates clustering the units together. Further, given the small scale of developments within Ashland, the concern intended to be addressed by this standard, that affordable units would be segregated and stigmatized within an area, has not been evident in recent developments. Given the requirement for annexations and zone changes to include affordable housing, such needed housing will ultimately be distributed widely around the community as a whole as individual proposals are developed over time. Removing this requirement would provide developers more flexibility o regarding the location of affordable housing units within a project. This is often requested as a condition of partnering with non-profit housing developers to complete the affordable housing units. Affordable housing providers can benefit from consolidating their affordable housing units into a contiguous area as it provides for efficiency in the initial building process, and further simplifies management of the affordable units over time. Both private and affordable housing developers were in favor of this o change. And while there were concerns raised regarding social justice issues and issues of stigmatism at the Housing and Human Services Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 7 of 11 Commission as well as at the stakeholder meeting. The evaluation and changes currently being proposed are in response to the barrier removal and issues that have been identified over the past several years. Social justice issues in affordable housing developments have not been identified as an issue, while the uncertainty of the development process when asking for exceptions to approval criteria has been brought up as a barrier to the development of affordable housing. Consequently, staff is recommending the removal of this requirement. Amends the provisions of the Ashland Land Use Ordinance relating to the comparable building materials used for required affordable housing units (18.2.5.050.G.6) to newly allow different housing types. By adding allowances affordable units which are of a different housing type than the market rate units. For example, in a new subdivision of detached single-family homes, the affordable units could be attached-SFR, cottages, or apartments and still comply with this standard provided they retain a comparable number of bedrooms to the market rate units. Essentially if a proposal included an affordable housing provider or private developer that wanted to provide apartments or cottages, of a compatible bedroom mix, that could be newly allowable. The Affordable Housing Standards as established do presently require o affordable units to be comparable in bedroom size, if all the market rate units are 3 bedrooms, then so to should be the affordable units. Staff believes the City could consider allowing different housing types that still provide the commensurate number of bedrooms required. The City has identified a need for rental housing, and for smaller ownership units (e.g cottages/townhomes). By clarifying within the ordinance that alternative housing types are permissible, proposals for annexation and zone changes could more readily provide for a mix of housing needs by providing apartments, cottages, or townhomes within what is otherwise proposed as a detached single-family subdivision. Amends the provisions of the Ashland Land Use Ordinance relating to the maximum net assets for households in the affordable housing program (18.2.5.050.C.1.c) to adjust the limits for consumer price index changes since 2005. The current $20,000 asset limitation, or $130,000 for retired households purchasing an affordable unit has been unchanged since Resolution 2006-13 was approved. Adjusting these figures to $25,000 and $175,000 respectively at this time will update the amounts to the 2020 equivalents. Furthermore, staff would suggest an annual CPI adjustment be included in the final ordinance and resolution language to account for changes over time. Amends the provisions of the Ashland Land Use Ordinance requiring a 60- year term of affordability for covered affordable units through annexation or zone changes (18.2.5.050.G.8). Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 8 of 11 Although 60 years of affordability is of benefit to the City in providing o affordable housing for longer, there have been concerns raised regarding issues with lenders, conventional lenders can be reluctant to loan on a property where a deed restriction has a term of affordability that extends beyond the typical 30-year term of a mortgage, and with affordable housing developers. Similarly, there were concerns about homeowners feeling like renters under such long deed restrictions. For these reasons Staff suggests deed restricting affordable housing units for 30 years for ownership units or 60 years for rental units as part of this update of the affordable housing standards. Both the Planning and Housing Commissions discussed concerns o regarding the reduction of the term of affordability from 60 years to 30 years and wished to further examine potential equity recapture opportunities that could be considered through resale restrictions imposed on covered affordable housing units. To address this concern staff is proposing a recapture of the original SDC subsidy to be as follows: At year thirty the homeowner can sell the unit at market rate and pay back the full interest rate at the time of sale. For owners of the affordable housing units maintaining ownership beyond the 30-year term of affordability, the deferred system development charges will be reduced every year thereafter proportionately for a period of 30 years. Removes the provision of the Ashland Land Use Ordinance that limit the density bonus allowable for affordable housing provided as part of an annexation to 25% (18.2.5.050.G.8). This limit is less than is otherwise allowable through Performance Standards ordinance provisions which allow for 35% maximum density bonus for affordable housing (18.3.9.050.B.4) and a cumulative bonus of up to 60%, and as such is inconsistent with other density bonus allowances. Amending this section of the ordinance is a good example of eliminating o inconsistencies within different sections of the Land Use Ordinance, and therefore simplify the application and approval process for annexations. Specifically, this change will enable affordable housing developers to provide as many affordable housing units on a development requiring annexation as could otherwise be achieved upon a property already within the City limits. This promotes the creation of more needed affordable housing within the community. Amend the provisions of the Ashland Land Use Ordinance that relate to residential annexations requiring there be less than a five-year supply of vacant or redevelopable land in the current City Limits (18.2.5.050.H.1). Removal of this requirement was a recommendation of the Ashland o Housing Strategy Implementation Plan which was presented to the City Council in May of 2019: Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 9 of 11 demonstrate less than a five-year supply of land. Existing policies were intended to help ensure orderly growth; Creating obstacles to annexing land within the UGB for housing contributes to higher land costs and makes it difficult to find land for II. Procedural 18.5.9.020 Applicability and Review Procedure Applications for Plan Amendments and Zone Changes are as follows: B. Type III. It may be necessary from time to time to make legislative amendments in order to conform with the Comprehensive Plan or to meet other changes in circumstances or conditions. The Type III procedure applies to the creation, revision, or large-scale implementation of public policy requiring City Council approval and enactment of an ordinance; this includes adoption of regulations, zone changes for large areas, zone changes requiring comprehensive plan amendment, comprehensive plan map or text amendment, annexations (see chapter 18.5.8 for annexation information), and urban growth boundary amendments. The following planning actions shall be subject to the Type III procedure. 1. Zone changes or amendments to the Zoning Map or other official maps, except where minor amendments or corrections may be processed through the Type II procedure pursuant to subsection 18.5.9.020.A, above. 2. Comprehensive Plan changes, including text and map changes or changes to other official maps. 3. Land Use Ordinance amendments. 4. Urban Growth Boundary amendments. III. Conclusions and Recommendations Staff recommends approval of the ordinance. The Housing and Human Services Commission (HHSC) reviewed the proposed ordinance at their regular meeting on September 24, 2020 and unanimously recommended approval of the ordinance as presented. Commissioners Echo Fields / Chris Mahan m/s to recommend the Amendments to the Land Use Ordinance, regarding conversion of Multi-family rental housing into for purchase, Affordable Housing Standards, and Approval standards for Zone changes and Annexation changes. Voice Vote: All Ayes. Motion passed The Planning Commissio recommendations regarding the attached ordinance amendments will be presented to the City Council for consideration at the public hearing and First Reading scheduled on November 17, 2020. Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 10 of 11 Attachments : Draft Ordinance Stakeholder Meeting Feedback Memo Sample SDC payback schedule Council Minutes December 17, 2018 Planning Commission Minutes March 10, 2020 Housing and Human Services Commission Minutes July 23, 2020 Housing and Human Services Commission Minutes Sept 24, 2020 Planning Action PA-L-2020-00009 Ashland Planning Division Staff Report Applicant: City of Ashland Page 11 of 11 ORDINANCE NO. \[2020-xxxx\] AN ORDINANCE AMENDING CHAPTERS 18.2.3, 18.2.5, 18.5.8 AND 18.5.9 OF THE ASHLAND LAND USE ORDINACE REGARDING CONVERSION OF MULTI-FAMILY RENTAL UNITS INTO FOR-PURCHASE HOUSING, AFFORDABLE HOUSING STANDARDS, AND APPROVAL STANDARDS FOR ZONE CHANGES AND ANNEXATIONS. additions Annotated to show deletions and to the code sections being modified. Deletions are boldlined throughbold underline and additions are in . WHEREAS , Article 2. Section 1 of the Ashland City Charter provides: Powers of the City The City shall have all powers which the constitutions, statutes, and common law of the United States and of this State expressly or impliedly grant or allow municipalities, as fully as though this Charter specifically enumerated each of those powers, as well as all powers not inconsistent with the foregoing; and, in addition thereto, shall possess all powers hereinafter specifically granted. All the authority thereof shall have perpetual succession. WHEREAS, the above referenced grant of power has been interpreted as affording all legislative powers home rule constitutional provisions reserved to Oregon Cities. City of Beaverton v. 20 Or. App. 293; 531 P 2d 730, 734 (1975); and WHEREAS th Goals & Guidelines (OAR 660-015-0000(10)) that jurisdictions shall encourage the availability of adequate numbers of needed housing units at price ranges and rent levels which are commensurate with the financial capabilities of Oregon households and allow for flexibility of housing location, type and density; and WHEREAS, the Housing Element of the City of Ashland Comprehensive Plan establishes the goal of supporting the creation and preservation of housing that is affordable to low- and moderate- workforce; and WHEREAS the City of Ashland City Council recognizes that for a healthy community the provision of a range of affordable housing is a top priority for the City of Ashland; and WHEREAS, the City Council of the City of Ashland has determined that neither the private market, nor the public sector, has yet provided the levels of housing affordability necessary to maintain a balanced community, local government must take an active lead to ensure an adequate supply of housing for residents and working people of all income levels; Page 1 of 15 WHEREAS, the City of Ashland Housing and Human Services Commission conducted on th September 24, 2020 a duly advertised public meeting on amendments to the Ashland Land Use Ordinance concerning the standards relating to affordable housing, and standards for zone changes and annexations, and following deliberations recommended __________ of the amendments; WHEREAS , the City of Ashland Planning Commission conducted on ____ a duly advertised public hearing on amendments to the Ashland Land Use Ordinance concerning the standards relating to affordable housing, and standards for zone changes and annexations, and following deliberations recommended __________ of the amendments; WHEREAS , the City Council of the City of Ashland conducted a duly advertised public hearing on the above-referenced amendments _________; and WHEREAS , the City Council of the City of Ashland, following the close of the public hearing and record, deliberated and conducted first and second readings approving adoption of the Ordinance in accordance with Article 10 of the Ashland City Charter. WHEREAS , the City Council of the City of Ashland has determined that in order to protect and benefit the health, safety and welfare of existing and future residents of the City, it is necessary to amend the Ashland Municipal Code and Land Use Ordinance in manner proposed, that an adequate factual base exists for the amendments, the amendments are consistent with the comprehensive plan and that such amendments are fully supported by the record of this proceeding. THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS: SECTION 1. The above recitations are true and correct and are incorporated herein by this reference. SECTION 2. The Special Use Standards Chapter of Ashland Land Use Ordinance, sub-section 18.2.3.200.C.5 is hereby amended as follows: 18.2.3.200 Multiple-Family Rental Unit Conversion to For-Purchase Units 18.2.3.200.C 5. Affordable Housing Units provided under 18.2.3.200.C.2 and 18.2.3.200.C.3 shall meet the following affordability standards: a. Affordable Rental Units shall be affordable for rent by households earning at or 6080 below percent of the AMI in accordance with the standards established by (Resolution 2006-13) section 18.2.5.050 . b. Affordable Ownership Units shall be affordable for purchase by households earning at or below 80 percent of the AMI in accordance with the standards established by (Resolution 2006-13) section 18.2.5.050 .. Page 2 of 15 SECTION 3. The Standards for Residential Zones Chapter of Ashland Land Use Ordinance sub- section 18.2.5.050, Affordable Housing Standards, is hereby amended as follows: 18.2.5.050 Affordable Housing Standards A. General Eligibility Rental and Purchased Housing. 1. All qualifying ownership or rental units required to be affordable through density bonuses, annexation, zone change, condominium conversion, or other land use approval under this ordinance shall not be eligible to receive a waiver of the Community Development and Engineering Services fees associated with the development of said affordable units unless a waiver is approved by the City Council. 2. All qualifying ownership or rental units required to be affordable through density bonuses, annexation, zone change, condominium conversion, or other land use approval under this ordinance shall be eligible to receive a deferral of the System Development Charges associated with the development of said affordable units. 3. All qualifying ownership or rental units voluntarily provided as affordable to low income households, consistent with subsections 18.2.5.050.A.1 and 18.2.5.050.A.2, above, shall be eligible for a System Development Charge, Engineering Service, and Community Development Fee deferral or waiver without obtaining approval from the Council. 4. Affordable Housing Units covered under this section can only be sold or rented to occupant households from the same income category as the original purchasers or renters for a period of not less than 30 years, or as required through the condition of approval for a unit required to be affordable through a land use approval. 5. System Development Charges, Engineering Services, and Community Development Fees may be deferred or waived when units are sold or rented to low-income persons. For purposes of this subsection, "low-income persons" means: a. With regard to rental housing, persons with an income at or below 60 percent of the area median income (AMI) as determined by the State Housing Council based on information from the United States Department of Housing and Urban Development (HUD); and b. With regard to home ownership housing and lease to purchase home ownership housing, persons with an income at or below 80 percent of the AMI as determined by the State Housing Council based on information from HUD. B. Rental Housing. Units designated for affordable rental housing in developments which have qualified for density bonuses, annexation, zone change, condominium conversion, or other land use approval under this ordinance shall be rented to individuals or households whose annual income is consistent with the target income identified in the planning approval. Incomes Page 3 of 15 as being equal to or less than either at shall be qualified the 60 percent or 80 percent median smaximums annually established income level for households in the Medford-Ashland Metropolitan Statistical Area (MSA). This figure shall be known as the "qualifying household each year from the annual family incomes published by HUD for the Medford-Ashland MSA. 60 and 1. Area MedianIncome 80 percent. The rent charged for such affordable rental 60 percent Area Median Income or less,and housing benefiting households earning 80 AMI of Area Median Incomegreater less percent or , including any home-owners not exceed 23 percent of the qualifying monthly association or maintenance fees, shall income (qualifying family income divided by twelve) as provided in the following formulas: not exceed 23 percent of the qualifying monthly income (qualifying family income divided by twelve) as provided in the following formulas: comply with the maximum rents established by U.S. Department of Housing and Urban Development (HUD) for the HOME program for the corresponding bedroom size. Table 18.2.5.050.B. Rent Charges for Affordable Rental Housing Unit Type Maximum Rent Charges Studio Apartment 23% of the average of 1 & 2 person qualifying monthly incomes 1 Bedroom 23% of the average of 2 & 3 person qualifying monthly incomes 2 Bedroom 23% of the average of 3, 4, & 5 person qualifying monthly incomes 3 Bedroom 23% of the average of 4, 5, 6, & 7 person qualifying monthly incomes 4 Bedroom 23% of the average of 5, 6, 7, & 8 person qualifying monthly incomes a. The City's Community Development Department shall maintain a table of maximum permitted pursuant to the formulas of Table 18.2.5.050.B rent levels established by U.S. Department of Housing and Urban Development (HUD) for the HOME program and shall annually update the table in May of each year. b. earning 60% of Area Median Income or less. Page 4 of 15 T c. earning greater than 60% Area Median Income up to and including 80% of Area Median Income. d. Low-Income Housing Tax Credit (LIHTC) assisted affordable rental housing units, subject to rent control through the LIHTC program, may utilize the rent limits established by the LIHTC program as an alternative to the rent levels established by U.S. Department of Housing and Urban Development (HUD) for the HOME program. Upon completion of the LIHTC compliance period the maximum rent levels established in 18.2.5.050.B.1.a-c shall apply through the remaining term of affordability. 2. Area Median Income 60 percent or lower. The rent charged for such affordable rental housing benefiting households earning 60 percent AMI or less, including any home-owners association or maintenance fees, shall comply with the maximum rents established by the State of Oregon HOME Program based on the target income qualification as adjusted annually by HUD for the Medford-Ashland MSA. The HOME program indexed allowable rents are adjusted annually by the State of Oregon Housing and Community Services Department (OHCS). 3. The owner of the affordable rental housing shall sign a 30-year this agreement, or longer depending on the period of affordability established through legislative land use decision ordinancea planning action approval or, with the City that guarantees these rent levels will not be exceeded and that the owner will rent only to households meeting the income limits. The agreement shall bind subsequent owners who purchase the rental housing during the established period of affordability. The agreement shall also require the owner to allow the unit to be rented to HUD Section 8 qualified applicants and agree to accept rent vouchers for all of the affordable units when applicable. The City shall file the agreement for recordation in the County Clerk deed records, Jackson County, Oregon. 4. Certification of qualifying occupants. The owner of record, or the designated agent of the record, owner, shall annually file with the City a signed certificate stating the occupants of the reco household that qualified at its initial occupancy, within the meaning of this resolution, and any amendment made to it. The City shall provide the record owner or the record owne agent with access to a form to complete and sign to comply with this provision. C. Purchased Houses Qualifying. Units designated for affordable housing available for affordable housing, purchase in developments which have qualified for density bonuses annexation, zone change, condominium conversion, or other land use approval under this ordinance must satisfy the criteria in subsections 18.2.5.050.C.1 and 18.2.5.050.C.2, below: Page 5 of 15 1. They shall only be sold to occupant households whose: a. Annual income is consistent with the target income identified in the planning 60 percent, approval for the development. Incomes shall be qualified at the applicable 80 percent, 100 percent, or 120 percent median income levels for households based on number of people per household as adjusted annually by HUD for the Medford-Ashland MSAMetropolitan Service Area (MSA) . b. The maximum initial purchase price shall be determined on the date the designated affordable unit enters the affordable housing program. The maximum initial purchase price is based on a formula that accounts for what a qualifying household can afford to pay as a maximum monthly housing payment. The formula used to calculate the maximum monthly housing payment incorporates the following: i. The maximum monthly housing payment shall not exceed 30% of the monthly income for the target income level indicated in subsection 18.2.5.050.C.1.a. ii. The formula used to calculate the monthly housing payment shall include Principal, Interest, Taxes, and Insurance (PITI) and any homeowners or regular maintenance fees. iii. The formula used to calculate the monthly housing payment will assume a down payment equal to 10% of the purchase price. iv. The formula used to calculate monthly housing payment will assume a 30- year fixed-rate mortgage with an interest rate of 5%. b. c.housing The maximum monthly payment for a covered unit shall be established the paragraph above this section to not exceed the affordability limits, established in , and pursuant to the occupancy number indicated in Table 18.2.5.050.C. Table 18.2.5.050.C. Occupancy Basis for Affordable Rental Ownership Housing Unit Type Occupancy Households with a greater or lesser number of occupants shall remain eligible for covered units but the sale price shall not be adjusted due to household size above the limits established above. Studio = 1 person household income for the designated income level 1 Bedroom = 2 person household income for the designated income level Page 6 of 15 Unit Type Occupancy 43 2 Bedroom = person household income for the designated income level or greater65 3 Bedroom = person household income for the designated income level 4 Bedroom = 7 person household income for the designated income level c. Net assets, excluding pension plans and IRAs and excluding the down payment $20,000$25,000 $130,000 and closing costs, do not exceed for a household or $175,000 if one household member is 65 years or older. d. Mortgage payment does not exceed more than 30 percent of the monthly income for the target income level indicated in subsection 18.2.5.050.C.1.a, above on total housing costs which includes principal, interest, taxes, insurance, and any homeowners or regular maintenance fees. e. The maximum monthly payment for a covered unit shall be calculated by utilizing the interest rate for the Oregon Bond Loan Rate Advantage as updated by the OHCS. 2. They shall remain affordable as follows: a. The purchasers of the affordable housing units shall agree to the City of Ashland Affordable Housing Resale Restriction Agreement establishing a period of affordability In no event will a purchaser be required to sell the unit of not less than 30 years. subject to the aforementioned Agreement for less than his or her original purchase price, plus any applicable closing costs and realtor fees. b. The m purchase price plus an additional 0.125% of said initial purchase price for each full month the current seller has owned the home. c. In no event will a purchaser be required to sell the unit subject to the Affordable Housing Resale Restriction Agreement for less than his or her original purchase price, plus any applicable closing costs and realtor fees. b. require sellers to repay FHA for all the subsidies accrued during the period the sellers resided in the housing unit. Page 7 of 15 SECTION 4. The Annexations Chapter of Ashland Land Use Ordinance, sub-sections 18.5.8.050.C, 18.5.8.050.G and 18.5.8.050.H are hereby amended as follows: Annexation 18.5.8.050 Approval Criteria and Standards An annexation may be approved if the proposed request for annexation conforms, or can be made to conform through the imposition of conditions, with all of the following approval criteria. A. The land i B. The proposed zoning for the annexed area is in conformance with the designation indicated on the Comprehensive Plan Map, and the project, if proposed concurrently with the annexation, is an allowed use within the proposed zoning. C. The land is currently contiguous with the present city limits. D. Adequate City facilities for the provision of water to the site as determined by the Public Works Department; the transport of sewage from the site to the waste water treatment plant as determined by the Public Works Department; the provision of electricity to the site as determined by the Electric Department; urban storm drainage as determined by the Public Works Department can and will be provided to and through the subject property. Unless the City has declared a moratorium based upon a shortage of water, sewer, or electricity, it is recognized that adequate capacity exists system-wide for these facilities. E. Adequate transportation can and will be provided to and through the subject property. For the purposes of this section "adequate transportation" for annexations consists of vehicular, bicycle, pedestrian, and transit transportation meeting the following standards. 1. For vehicular transportation a 20-foot wide paved access exists, or can and will be constructed, along the full frontage of the project site to the nearest fully improved collector or arterial street. All streets adjacent to the annexed area shall be improved, at a minimum, to a half-street standard with a minimum 20-foot wide driving surface. The City may, after assessing the impact of the development, require the full improvement of streets adjacent to the annexed area. All streets located within annexed areas shall be fully improved to City standards. Where future street dedications are indicated on the Street Dedication Map or required by the City, provisions shall be made for the dedication and improvement of these streets and included with the application for annexation. 2. For bicycle transportation safe and accessible bicycle facilities exist, or can and will be constructed. Should the annexation be adjacent to an arterial street, bike lanes shall be provided on or adjacent to the arterial street. Likely bicycle destinations from the project site shall be determined and safe and accessible bicycle facilities serving those destinations shall be indicated. Page 8 of 15 3. For pedestrian transportation safe and accessible pedestrian facilities exist, or can and will be constructed. Full sidewalk improvements shall be provided on one side adjacent to the annexation for all streets adjacent to the proposed annexed area. Sidewalks shall be provided as required by ordinance on all streets within the annexed area. Where the project site is within a quarter of a mile of an existing sidewalk system, the sidewalks from the project site shall be constructed to extend and connect to the existing system. Likely pedestrian destinations from the project site shall be determined and the safe and accessible pedestrian facilities serving those destinations shall be indicated. 4. For transit transportation, should transit service be available to the site, or be likely to be extended to the site in the future based on information from the local public transit provider, provisions shall be made for the construction of adequate transit facilities, such as bus shelters and bus turn-out lanes. All required transportation improvements shall be constructed and installed prior to the issuance of a certificate of occupancy for any new structures on the annexed property. F. For all residential annexations, a plan shall be provided demonstrating that the development of the entire property will ultimately occur at a minimum density of 90 percent of the base density for the zone, unless reductions in the total number of units is necessary to accommodate significant natural features, topography, access limitations, or similar physical constraints. The owner or owners of the property shall sign an agreement, to be recorded with the county clerk after approval of the annexation, ensuring that future development will occur in accord with the minimum density indicated in the development plan. For purposes of computing maximum density, portions of the annexed area containing undevelopable areas such as . wetlands, floodplain corridor lands, or slopes greater than 35 percent, shall not be included G. Except as provided in 18.5.8.050.G.7, below, annexations with a density or potential density of four residential units or greater and involving residential zoned lands, or commercial, employment or industrial lands with a Residential Overlay (R-Overlay) shall meet the following requirements. 1. The total number of affordable units provided to qualifying buyers, or to qualifying renters, shall be equal to or exceed 25 percent of the base density as calculated using the The base density of the property for the unit equivalency values set forth herein. purposes of this calculation shall exclude any undevelopable portions of the property such as wetlands, floodplain corridor lands, water resource areas, slopes greater than 35 percent, or land area dedicated as a public park. a. Ownership units restricted to households earning at or below 120 percent the area median income shall have an equivalency value of 0.75 unit. b. Ownership units restricted to households earning at or below 100 percent the area median income shall have an equivalency value of 1.0 unit. Page 9 of 15 or rental c. Ownership units restricted to households earning at or below 80 percent the area median income shall have an equivalency value of 1.25 unit. d. Ownership or Rental units restricted to households earning at or below 60 percent the area median income shall have an equivalency value of 1.5 unit. 2. As alternative to providing affordable units per section 18.5.8.050.G.1, above, the applicant may provide title to a sufficient amount of buildable land for development complying with subsection 18.5.8.050.G.1.b, above, through transfer to a non-profit (IRC 501(3)(c) affordable housing developer or public corporation created under ORS 456.055 to 456.235. a. The land to be transferred shall be located within the project meeting the standards set forth in 18.5.8.050.G, subsections 4 - 6. b. All needed public facilities shall be extended to the area or areas proposed for transfer. c. Prior to commencement of the project, title to the land shall be transferred to the City, an affordable housing developer which must either be a unit of government, a nonprofit 501(C)(3) organization, or public corporation created under ORS 456.055 to 456.235. d. The land to be transferred shall be deed restricte affordable housing program requirements. and housing type 3. The affordable units shall be comparable in bedroom mix with the market rate units in the development. a. The number of bedrooms per dwelling unit in the affordable units within the residential development shall be in equal proportion to the number of bedrooms per dwelling unit in the market-rate units within the residential development. This provision is not intended to require the same floor area in affordable units as compared to market-rate units. The minimum square footage of each affordable unit shall comply , or as with the minimum required floor based as set forth in Table 18.5.8.050.G.3 established by the U.S. Department of Housing and Urban Development (HUD) for dwelling units developed under the HOME program. Table 18.5.8.050.G.3. Minimum Required Unit Floor Area Unit Type (Square Feet) Studio 350 1 Bedroom 500 2 Bedroom 800 Page 10 of 15 Minimum Required Unit Floor Area Unit Type (Square Feet) 3 Bedroom 1,000 4Bedroom 1,250 b. The required on-site affordable units shall be comprised of the different unit types in the same proportion as the market dwelling units within the development. 4. A development schedule shall be provided that demonstrates that that the affordable housing units per subsection 18.5.8.050.G shall be developed, and made available for occupancy, as follows. a. That 50 percent of the affordable units shall have been issued building permits prior to issuance of a certificate of occupancy for the last of the first 50 percent of the market rate units. b. Prior to issuance of a building permit for the final ten percent of the market rate units, the final 50 percent of the affordable units shall have been issued certificates of occupancy. c. Transfer of title of buildable land to a non-profit (IRC 501(3)(c) affordable housing developer, or public corporation, shall be considered a demonstration that 18.5.8.050G.4(a) and 18.5.8.050G.4(b) are satisfied, provided the transferred land is deed restricted to be developed as affordable housing in compliance with subsection 18.5.8.050.G.2 and the transfer of title is completed prior to the issuance of a certificate of occupancy for the last of the first 25% of the market rate units. 5. That affordable housing units shall be distributed throughout the project. 6. 5. That affordable housing units shall be constructed using comparable building materials and include equivalent amenities as the market rate units. a. The exterior appearance of the affordable units in any residential development shall be visually compatible with the market-rate units in the development. External building materials and finishes shall be substantially the same in type and quality for affordable . units as for market-rate units floor area, b. Affordable units may differ from market-rate units with regard to interior and housing type finishes and materials, provided that the affordable housing units are provided with comparable features to the market rate units, and shall have generally comparable improvements related to energy efficiency, including plumbing, insulation, windows, appliances, and heating and cooling systems. Page 11 of 15 7. 6. Exceptions to the requirements of 18.5.8.050, subsections G.2 G.5, above, may be approved by the City Council upon consideration of one or more of the following. a. That an alternative land dedication as proposed would accomplish additional benefits for the City, consistent with the purposes of this chapter, than would development meeting the on-site dedication requirement of subsection 18.5.8.050.G.2. b. That an alternative mix of housing types not meeting the requirements of subsection 18.5.8.050.G.3.b would accomplish additional benefits to the City consistent with this chapter, than would the development providing a proportional mix of unit types. c b. . That the alternative phasing proposal not meeting subsection 18.5.8.050.G.4 provided by the applicant provides adequate assurance that the affordable housing units will be provided in a timely fashion. d That the distribution of affordable units within the development not meeting subsection 18.5.8.050.G.5 is necessary for development of an affordable housing project that provides onsite staff with supportive services. e. That the distribution of affordable units within the development as proposed would accomplish additional benefits for the city, consistent with the purposes of this chapter, than would development meeting the distribution requirement of subsection 18.5.8.050.G.5. f. c. That the materials and amenities applied to the affordable units within the development, that are not equivalent to the market rate units per subsection 18.5.8.050.G.6, are necessary due to local, State, or Federal Affordable Housing standards or financing limitations. 8. 7 . The total number of affordable units described in this section 18.5.8.050.G shall be determined by rounding down fractional answers to the nearest whole unit. A deed restriction or similar legal instrument shall be used to guarantee compliance with affordable for units qualified as affordable rental criteria for a period of not less than 60 years housing, or 30 years for units qualified as affordable for-purchase housing . Properties providing affordable units as part of the annexation process shall qualify for a maximum density bonus of 25 percent. H. One or more of the following standards are met. and there is less than a 1. The proposed area for annexation is to be residentially zoned, five-year supply of vacant and redevelopable land in the proposed land use for residential use on which development has already occurred but on which, due to present or expected market forces, there exists the likelihood that existing development will be converted to more intensive residential uses during the planning period. The five-year supply shall be determined from vacant and redevelopable land Page 12 of 15 inventories and by the methodology for land need projections from the Housing Element of the Comprehensive Plan. under the Comprehensive Plan, and that the applicant will obtain planning action approval for an outright permitted use, special permitted use, or conditional use in conformance with the annexation request. M-1, 2. The proposed lot or lots will be zoned CM, E-1, or C-1 under the Comprehensive Plan, and that the applicant will obtain Site Design Review approval for an outright permitted use, or special permitted use concurrent with the annexation request. 3. A current or probable public health hazard exists due to lack of full City sanitary sewer or water services. 4. Existing development in the proposed annexation has inadequate water or sanitary sewer service, or the service will become inadequate within one year. 5. The area proposed for annexation has existing City water or sanitary sewer service extended, connected, and in use, and a signed consent to annexation agreement has been filed and accepted by the City. 6. The lot or lots proposed for annexation are an island completely surrounded by lands within the city limits. SECTION 5. The Application Review Procedures and Approval Criteria Chapter of Ashland Land Use Ordinance, subsection 18.5.9.020.A is hereby amended as follows: 18.5.9.020 Applicability and Review Procedure Applications for Plan Amendments and Zone Changes are as follows: A. Type II. The Type II procedure is used for applications involving zoning map amendments consistent with the Comprehensive Plan map, and minor map amendments or corrections. Amendments under this section may be approved if in compliance with the Comprehensive Plan and the application demonstrates that one or more of the following. , other than the provision of affordable 1. The change implements a public need housing, supported by the Comprehensive Plan. 2. A substantial change in circumstances has occurred since the existing zoning or Plan designation was proposed, necessitating the need to adjust to the changed circumstances. 3. Circumstances relating to the general public welfare exist that require such an action. 4. Proposed increases in residential zoning density resulting from a change from one zoning district to another zoning district, will provide 25 percent of the proposed base densityas affordable housing consistent with the approval standards set forth in subsection 18.5.8.050.G. Page 13 of 15 5. Increases in residential zoning density of four units or greater on commercial, employment, or industrial zoned lands (i.e., Residential Overlay), will not negatively impact and will provide 25 percent of the proposed base density as affordable housing consistent with the approval standards set forth in subsection 18.5.8.050.G. 6. The total number of affordable units described in 18.5.9.020.A, subsections 4 or 5, above, shall be determined by rounding down fractional answers to the nearest whole unit. 7. A deed restriction, or similar legal instrument, shall be used to guarantee compliance for units qualified as with affordable criteria for a period of not less than 60 years affordable rental housing, or 30 years for units qualified as affordable for-purchase housing . . 18.5.9.020.A subsections 4 and 5 do not apply to Council initiated actions. SECTION 6. Severability. The sections, subsections, paragraphs and clauses of this ordinance are severable. The invalidity of one section, subsection, paragraph, or clause shall not affect the validity of the remaining sections, subsections, paragraphs and clauses. SECTION 7Codification. . Provisions of this Ordinance shall be incorporated in the City or another word, and the sections of this Ordinance may be renumbered, or re-lettered, provided however that any Whereas clauses and boilerplate provisions (i.e. Sections 1, 6-7) need not be codified. the City Recorder In preparing this ordinance for publication and distribution, shall not alter the sense, meaning, effect, or substance of the ordinance, but within such limitations, may: (a) Renumber sections and parts of sections of the ordinance; (b) Rearrange sections; (c) Change reference numbers to agree with renumbered chapters, sections or other parts; (d) Delete references to repealed sections; (e) Substitute the proper subsection, section, or chapter numbers; (f) Change capitalization and spelling for the purpose of uniformity; (g) Add headings for purposes of grouping like sections together for ease of reference; and (h) Correct manifest clerical, grammatical, or typographical errors. The foregoing ordinance was first read by title only in accordance with Ashland Municipal Code on the _____ day of ________________, 2020, §2.04.090 and duly PASSED and ADOPTED this _____ day of ________________, 2020. _______________________________ Melissa Huhtala, City Recorder SIGNED and APPROVED this day of , 2020. Page 14 of 15 ____________________________________ John Stromberg, Mayor Reviewed as to form: _________________________ David Lohman, City Attorney Page 15 of 15 Memo DATE: 9/24/2020 TO: Ashland Housing and Human Services Commission Ashland Planning Commission Ashland City Council FROM: Brandon Goldman, Senior Planner Linda Reid, Housing Program Specialist RE: Affordable Housing Standards Stakeholder meeting thth On August 11 and August 14, 2020 meetings were convened consisting of City Staff, Elected and Appointed officials, and members of the development communities representing both affordable housing providers and market-rate housing developers. Those in attendance at one or both meetings included: Elected and Appointed Officials Affordable Housing Providers Dennis Slattery, City Council Cindy Dyer, Columbia Care Alan Harper, Planning Commission Denise James. Habitat for Humanity Rich Rohde, Housing & Human Services Ryan Haynes, Housing Authority of Commission Jackson County Brian Shelton-Kelley, NeighborWorks Umpqua City of Ashland Staff Bill Molnar, Community Dev. Director Market Rate Developers Brandon Goldman, Senior Planner Kyle Taylor, Taylored Elements Linda Reid, Housing Specialist Mark Knox, KDA Homes Laz Ayala, KDA Homes Rick Harris, Realtor During the stakeholder meeting(s) open discussion among the participants explored the intended and potentially unintended consequences of the draft revisions to the affordable housing standards. The group explored being considered would help or hinder the production of affordable housing. Through these discussions it was evident that the production of affordable housing benefiting households earning less than 80% the area median income could best be achieved by coordination between market-rate developers and affordable housing providers. Below is a summary of various issues discussed by the meeting DEPT. OF COMMUNITY DEVELOPMENT Tel: 541-488-5305 20 E. Main Street Fax: 541-488-6006 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us participants. Staff was able to take these discussions into consideration and incorporate changes into the draft ordinance being presented to the Commissions and Council for consideration. 60-year versus a 30-year term of affordability: Annexations and Zone Change standards within the Ashland Land Use Ordinance currently require the affordable units remain affordable for 60 years. Both market-rate developers and Affordable Housing Developers expressed that the standard applying equally to both rentals and ownership did not afford buyers of affordable housing units to realize equity returns. Specifically, Habitat for Humanity noted that the 60-year restriction was too long and did not work with Habitats equity share model where they sell the finished home to the homeowner for the appraised cost, then recapture a portion of the equity upon resale. Affordable housing providers further noted that a 60-year term for affordable rental housing did align with other restrictions from primary funding sources such as the Low-Income Housing Tax Program. It was further expressed that a 30-year cap for affordable ownership units would be better for lenders and homeowners. Additionally, it was stated that ownership housing is a tiered system that provides for upward mobility, and as such affordable housing can provide the entry tier for homeownership, and a 30-year term would better address this mobility objective. The Housing Authority of Jackson County noted that to be competitive in obtaining state or federal funding for an affordable rental housing project, a 60-year term is standard. This discussion raised the issue that instead of changing the existing 60-year requirement to 30 years for all affordable units, perhaps the final ordinance could provide differing periods of affordability for affordable rental housing and affordable ownership housing. Distribution of affordable housing throughout the Development: Annexations and Zone Change standards within the Ashland Land Use Ordinance currently require that the affordable units provided shall be distributed throughout the project. The stakeholders did discuss existing ordinances underlying intent to not cluster all the affordable units together and create a separate neighborhood of low- low-income housing has not been evident. Noting that as such small developments are not impacted by the social justice issue the ordinance intended to address, a market rate developer explained that needing to provide some of the the highest value land to the affordable units due to the distribution requirement The participants in the meeting(s) were in general agreement that removal of the distribution requirement would help facilitate the development of affordable housing. Transfer of land to a non-profit affordable housing provider: Annexations and Zone Change standards within the Ashland Land Use Ordinance currently provide an option that a market rate developer can transfer land to an affordable housing provider or public corporation to satisfy the affordable housing requirement. However, this standard is presently unclear as to whether this also satisfies the timing requirements for affordable housing to be developed concurrent with the market rate homes. In discussing this potential clarification regarding transfer of land, the participants expressed that the creation of affordable housing has historically been accomplished through a transfer to an affordable housing provider. Private market developers explained that the same access to affordable housing financing programs that the non-profits have and such partnership with an affordable housing provider is key. Further it was noted that holding costs of the property to the private market developer were a barrier and if they could transfer it to the affordable housing developer early in the process that would assist in their financial project pro formas. It was also noted DEPT. OF COMMUNITY DEVELOPMENT Tel: 541-488-5305 20 E. Main Street Fax: 541-488-6006 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us that upon receipt of transferred land, an affordable housing provider would seek development financing and that competitive process and award cycle is out of the control of the market rate development. As there was general agreement that the transfer of land to an affordable housing provider was advantageous to creating affordable housing, and that the market rate development should be able to move forward independent of the development of the affordable housing once the transfer is complete. Maximum Resale and Maximum Rental Formulas. The proposed changes to the affordable housing standards include revisions to how the resale value of ownership units is calculated, as well as changing the formula calculation for affordable rents. Stakeholder participants were favorable to moving the ownership calculation from the current variable formula to a fixed rate formula as it was noted that having such clarity in the resale formula is really helpful for homeowners and is beneficial in application with a land trust model. It was further supported in that a fixed rate formula provides some predictable equity return for the homeowner. There was concern that the 1.5% rate may be insufficient to keep up with market rate appreciation. Affordable rental providers were favorable to changing the rental rate formula to be indexed using the HOME program as proposed, but further questioned whether the formula could also consider the maximum rents per the Low Income Housing Tax Credit program for projects that receive LIHTC funding. In consideration of these differing indexes, and in acknowledging that LIHTC is a significant funding source for larger rental developments, Staff has modified the draft ordinance to address this issue. Conclusion Overall, the stakeholder meetings allowed members of the development community to review the proposals being considered and provide early input to help shape the final ordinance. In addition to providing direct feedback early in the process, the meetings also functioned to inform the participants of the potential changes, so they are better able to provide informed testimony at the future public hearings. Attendees voiced that workforce housing (moderate income/ownership) programs should be supported through the jurisdiction and Affordable housing (low-income/rentals) are best accomplished through transfer of land to affordable housing providers who are better equipped to undertake and manage such developments. The opportunity for market-rate developers and non-profit affordable housing developers to meet and discuss the program together further clarified that their efforts to develop affordable housing in Ashland is best accomplished through partnerships. The changes proposed to the Affordable Housing Standards within the Ashland Land Use Ordinance should function to facilitate such coordination. DEPT. OF COMMUNITY DEVELOPMENT Tel: 541-488-5305 20 E. Main Street Fax: 541-488-6006 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us SDC Affordable Housing Payoff Estimate - Proration for staying in program up to 60 years SDC Plus 1.5% SDC Plus 1.5% Year in Payback year 1-Year in Payback after annual increase annual increase Program30Programyear 30 (ENR avg))(ENR avg)) Year 0$14,000.00 Not EligibleYear 31$22,211$21,471 Year 1$14,210Not EligibleYear 32$22,545$21,042 Year 2$14,423Not EligibleYear 33$22,883$20,594 Year 3$14,640Not EligibleYear 34$23,226$20,129 Year 4$14,859Not EligibleYear 35$23,574$19,645 Year 5$15,082Not EligibleYear 36$23,928$19,142 Year 6$15,308Not EligibleYear 37$24,287$18,620 Year 7$15,538Not EligibleYear 38$24,651$18,078 Year 8$15,771Not EligibleYear 39$25,021$17,515 Year 9$16,007Not EligibleYear 40$25,396$16,931 Year 10$16,248Not EligibleYear 41$25,777$16,326 Year 11$16,491Not EligibleYear 42$26,164$15,698 Year 12$16,739Not EligibleYear 43$26,556$15,049 Year 13$16,990Not EligibleYear 44$26,955$14,376 Year 14$17,245Not EligibleYear 45$27,359$13,679 Year 15$17,503Not EligibleYear 46$27,769$12,959 Year 16$17,766Not EligibleYear 47$28,186$12,214 Year 17$18,032Not EligibleYear 48$28,609$11,443 Year 18$18,303Not EligibleYear 49$29,038$10,647 Year 19$18,577Not EligibleYear 50$29,473$9,824 Year 20$18,856Not EligibleYear 51$29,915$8,975 Year 21$19,139Not EligibleYear 52$30,364$8,097 Year 22$19,426Not EligibleYear 53$30,820$7,191 Year 23$19,717Not EligibleYear 54$31,282$6,256 Year 24$20,013Not EligibleYear 55$31,751$5,292 Year 25$20,313Not EligibleYear 56$32,227$4,297 Year 26$20,618Not EligibleYear 57$32,711$3,271 Year 27$20,927Not EligibleYear 58$33,202$2,213 Year 28$21,241Not EligibleYear 59$33,700$1,123 Year 29$21,560Not EligibleYear 60$34,205$0 Year 30$21,833Not Eligible DOCUMENTS SUBMITTED INTO THE RECORD