BOARD OF SUPERVISORS PUBLIC HEARING

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1 DEPARTMENT OF PLANNING Date of Hearing: October 12, 2016 AND ZONING STAFF REPORT # 15 BOARD OF SUPERVISORS PUBLIC HEARING SUBJECT: ZOAM , Affordable Dwelling Unit Regulations ELECTION DISTRICT: CRITICAL ACTION DATE: STAFF CONTACTS: Countywide At the Pleasure of the Board Kate McConnell, AICP, Project Manager, Zoning Administration Ricky Barker, AICP, Director, Planning & Zoning PURPOSE: The purpose of Zoning Ordinance Amendment (ZOAM) is to amend regulations of the Revised 1993 Loudoun County Zoning Ordinance (Zoning Ordinance) applicable to the Loudoun County Affordable Dwelling Unit (ADU) Program that may conflict with the affordable housing funding assistance requirements of certain Virginia Housing Development Authority (VHDA) and U.S. Department of Housing and Urban Development (HUD) housing programs. The objective of ZOAM is to increase opportunities for providing affordable housing to assist with addressing this significant issue in the County. RECOMMENDATIONS: At its September 8, 2016 work session, the Planning Commission voted (9-0) to forward ZOAM to the Board of Supervisors (Board) with a recommendation of approval, as provided in Attachment 1. Department of Planning and Zoning Staff supports the Planning Commission s recommendation and Board approval of the draft text as provided in Attachment 1, finding the proposed amendment is consistent with the adopted comprehensive plan and the purpose and intent of the Zoning Ordinance. CONTENTS OFTHIS STAFF REPORT Section Page Section Page Motions 2 Applicability 10 Executive Summary 2 Agency Referrals 10 PC Recommendation 3 Items for Consideration 10 Criteria for Approval 3 Fiscal Impact 12 Background 5 Attachments 13 Summary of Proposed Text Changes 7

2 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 2 SUGGESTED MOTIONS: 1. I move that the Board of Supervisors forward ZOAM , Affordable Dwelling Unit Regulations, to the November 1, 2016, Board Business Meeting for action. OR 2. I move that the Board of Supervisors forward ZOAM , Affordable Dwelling Unit Regulations, to the Transportation and Land Use Committee for further discussion. OR 3a. I move that the Board of Supervisors suspend the rules. AND 3b. I move that the Board of Supervisors approve ZOAM , Affordable Dwelling Unit Regulations, as provided in Attachment 1 of the October 12, 2016, Board of Supervisors Public Hearing Staff Report. OR 4. I move an alternate motion. I. EXECUTIVE SUMMARY On June 23, 2016, the Board adopted a Resolution of Intent to Amend (ROIA) the Zoning Ordinance to initiate ZOAM to revise, clarify, and/or delete existing regulations in regard to the Loudoun County ADU Program that may conflict with the affordable housing funding assistance requirements of certain VHDA and HUD housing programs (see Attachment 2). To implement the adopted ROIA, amendments are proposed to the following sections of the Zoning Ordinance: A. Article 7, Administration and Regulation of Affordable Dwelling Unit Developments 1. Section 7-101, Affordable Dwelling Unit Developments, Purpose 2. Section 7-102, Affordable Dwelling Unit Developments, Applicability 3. Section 7-109, Affordable Dwelling Unit Developments, Compliance with State/Federal/ Local Laws B. Article 8, Definitions The draft text for ZOAM is included as Attachment 1.

3 II. PLANNING COMMISSION RECOMMENDATION Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 3 The Planning Commission held a public hearing on the proposed ZOAM on July 26, Two members of the public spoke in support of the application. At the conclusion of the public hearing, the Planning Commission voted to forward ZOAM to a work session for further discussion (8-0-1, Lloyd absent). At the September 8, 2016 Work Session, the Planning Commission asked the following questions: 1. How would an approved project be able to use the affordable housing option proposed with this ZOAM? (Answer If multifamily residential units were not approved with a rezoning, then a Zoning Concept Plan Amendment would be required to include this unit type to accommodate the affordable housing units; if an approved site plan included multifamily residential units, then it would need to be amended to demonstrate conformance with Section of the Zoning Ordinance.), 2. What are the number of households waiting to purchase or rent County ADUs? (Answer Department of Family Services responded that nearly 400 families are on the ADU purchase program waiting list and approximately 76 on the ADU rental waiting list.), 3. Would the number of affordable housing units required by the proposed ZOAM serve the same number of households as the County ADU program? (Answer Yes, the same number of affordable units would be required; however, the type of unit required may be different.), and 4. Would the Zoning Ordinance requirements proposed for affordable housing units affect the viability of the State or Federal programs proposed as substitutes for the County s ADU program? (Answer No, the requirements would not affect State or Federal program approval.). Additionally, Staff and the Planning Commission discussed revising the proposed ZOAM language to more clearly indicate that an applicant could revise a site plan, construction plans and profiles, or subdivision plat to demonstrate the project would meet the requirements of Article 7 by providing affordable housing units in a previously approved multifamily building. This revision is included in the draft Zoning Ordinance text. Upon conclusion of the discussion, the Planning Commission voted 9-0 to forward ZOAM to the Board with a recommendation of approval based on the Zoning Ordinance Criteria for Approval provided below. III. ZONING ORDINANCE CRITERIA FOR APPROVAL Section (D) of the Zoning Ordinance requires the Planning Commission to consider the following matters when evaluating a request for a Zoning Ordinance amendment:

4 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 4 Section (D)(1), Whether the proposed text amendment is consistent with the Comprehensive Plan. Analysis The proposed text amendment is consistent with the overarching goals of the Plan. The County s Housing Policies of the Revised General Plan (Plan) generally support the creation of an option to substitute certain Federal affordable housing programs for the County s ADU program. Permitting affordable units provided by the Low Income Housing Tax Credit (LIHTC) and U.S. Housing and Urban Development (HUD) 221(d)(4) Affordable programs to substitute for units provided pursuant to the County s ADU Program creates another method for providing needed affordable rental housing in the County. Additionally, use of these substitute programs creates the opportunity to more fully address unmet housing needs in the County by permitting development of rental units for households below 30% of the area median income (AMI) and above 50% AMI, which is currently not permitted by Article 7. Staff acknowledges the use of substitute affordable programs will result in delivery of affordable units primarily in a multifamily rental building or complex, causing the reduction of affordable for sale units and interspersion of such units, despite County s Housing Policy support for these outcomes. Nonetheless, this change will achieve other relevant Housing Policy goals by expanding affordable housing options that more fully address unmet housing needs, integrating LIHTC and HUD 221(d)(4) Affordable units into planned communities, and likely promoting the availability of affordable housing earlier in the development process. Section (D)(2), Whether the proposed text amendment is consistent with the intent and purpose of this Ordinance. Analysis The intent of the Zoning Ordinance is defined under Section 1-102, and states: This Ordinance is enacted in order to promote the health, safety and welfare of the residents of Loudoun County and to implement the Loudoun County Comprehensive Plan. Section 1-102(N) specifically states the Ordinance is designed to Provide for and promote affordable housing for the County residents to meet the intent of the Zoning Ordinance. The purpose of Article 7 is to promote the development of a full range of housing choices to persons of moderate income (Section 7-101). The proposed amendments permitting affordable units provided by the LIHTC and HUD 221(d)(4) Affordable programs to substitute for units provided pursuant to the County s ADU Program will achieve this basic purpose, as well as satisfy the applicable provisions of Section 102 of the Zoning Ordinance. The proposed amendment could result in the quicker delivery of affordable housing units and ensures that the units are compatible with the surrounding development, which will also further the intent specified in the applicable sections of the Zoning Ordinance.

5 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 5 IV. BACKGROUND On June 23, 2016, the Board unanimously adopted a ROIA to implement ZOAM to revise, clarify, and/or delete existing regulations in regard to the Loudoun County ADU Program that may conflict with the affordable housing funding assistance requirements of VHDA, HUD and other State and Federal housing programs (Attachment 2). Specifically, Sections 7-109(A) and (C) of the Zoning Ordinance require affordable housing developed under a State, Federal, or local program to meet the terms and restrictions of the County s ADU Program required by Article 7 of the Zoning Ordinance and the Codified Ordinances. However, the regulatory requirements of the State, Federal, or local programs often conflict with the County s ADU requirements. The LIHTC and HUD 221(d)(4) Affordable programs, are the two most frequently identified State and Federal affordable housing funding programs that have limited use in the County because of conflicts with the County s ADU Program requirements. These programs also provide affordable rental housing to households of moderate income, and are more specifically described as follows: LIHTC The LIHTC program provides financing for the construction of affordable multifamily rental housing. A LIHTC project is required to provide either: 1) a minimum of 20% of the multifamily units as affordable to families earning up to 50% of the AMI; or 2) a minimum of 40% of the multifamily units as affordable to families earning up to 60% AMI. In most LIHTC projects 100% of the units provided meet this affordability requirement. LIHTC has both competitive and non-competitive programs, although the competitive program is more popular. VHDA serves as the state agency awarding LIHTCs for qualified projects, with the Northern Virginia/Planning District 8 (Inner Washington MSA) Pool competing for 18.02% of the LIHTC credits available in Virginia in VHDA identifies this pool as having an increasing rent burdened population. HUD 221(d)(4) Affordable The National Housing Act HUD 221(d)(4) Affordable program provides loan assistance for new construction or substantial rehabilitation of apartments. A borrower may elect to provide affordable housing to secure better loan conditions (e.g. loan amount based on replacement cost and/or debt service ratio). Such projects must adhere to the MAP (Multifamily Accelerated Processing) 1 Definition of Affordable Housing. The MAP Definition of Affordable Housing is a project meeting both of the following requirements: 1. Rent and income restrictions must be imposed, monitored and enforced by a governmental agency for at least 15 years after Final Endorsement, and 2. Either a. a recorded Regulatory Agreement requiring the project to meet at least the minimum LIHTC restrictions of 20% of units at 50% of area median income 1 MAP is designed to establish national standards for approved lenders to prepare, process and submit loan applications for Federal Housing Administration (FHA) multifamily mortgage insurance.

6 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 6 (AMI), or 40% of units at 60% of AMI, with economic rents (i.e. the portion paid by the residents) on those units no greater than LIHTC rents, 2 or b. a Project-Based Section 8 contract for 90% of the units. Critical conflicts between the LIHTC and HUD 221(d)(4) Affordable programs and the County s ADU Program resolved by this ZOAM include: Qualifying Household AMI LIHTC and HUD 221(d)(4) Affordable projects may provide a minimum of 40% of the units as affordable for households earning 60% AMI, whereas the County s ADU Program only allows units to be rented to households with incomes between 30% and 50% AMI. Therefore, a LIHTC or HUD 221(d)(4) Affordable project that provides a minimum of 40% of the units affordable to households earning 60% AMI would not meet the requirements of Article 7 unless they also provide 20% of the affordable units for households earning less than 50% AMI. Interspersion Requirement LIHTC and HUD 221(d)(4) Affordable projects generally require affordable rental units to be provided in a multifamily rental building subject to the program. Article 7 requires affordable units to be interspersed throughout a development in proportion to the unit types in the development, e.g. 12.5% of single family attached or detached units and 6.25% of multifamily units must be affordable. This results in a combination of for sale single family units and rental multifamily units in a development that has a mix of unit types. If a LIHTC or HUD 221(d)(4) Affordable project (100% rental units clustered in multi-family buildings) were used to provide affordable units in a development with a required mix of unit types it would not meet the requirements of Article 7, as it would not provide a range of unit types and they would not be interspersed throughout a development. Staff is currently reviewing Chapter 1450 of the Codified Ordinances to identify conflicts between the LIHTC and HUD 221(d)(4) Affordable programs and the County s ADU Program, and anticipates proposing necessary amendments at the November Board Public Hearing. County ADU Program and Housing Needs Assessment Status When considering the proposed amendment, it is important to understand the status of the County s ADU Program and the Housing Needs Assessment currently under preparation. The Department of Family Services (DFS) reported that the County s ADU Program has a high demand for both for sale and rental units. At the end of August 2016, the County had 383 households on a waiting list for for sale ADUs; in August DFS received 46 applications for the for sale program. The main objective of the for sale program is to provide affordable housing to first time homebuyers in Loudoun County. 2 Projects need not use LIHTCs to qualify for affordable underwriting so long as they meet the income requirements of LIHTC.

7 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 7 Currently, 76 households are on the rental ADU waiting list; in August, DFS received 40 applications for the rental program. The County s rental ADU Program has 336 available units, including 16 units received in The program has a very low vacancy rate. It has served approximately 1,750 households since Rental ADU units are permitted to float in a multifamily building, meaning that as long as the same number of units of the same size, floorplan and number of bedrooms are available for rental ADUs, the multifamily building is in compliance with the rental ADU Program. In addition, George Mason University Center for Regional Analysis is currently preparing a Housing Needs Assessment for the County with completion anticipated by December The assessment s findings will clarify, and may identify additional, affordable housing needs in the County. This information will assist in guiding additional amendments to Article 7 scheduled to begin in the fourth quarter of Staff received no public comment on LOLA. As discussed below, Staff received comments on the proposed amendment via from affordable housing providers in the County. V. SUMMARY OF PROPOSED TEXT CHANGES Based on the ROIA approved by the Board on June 23, 2016, and input received from the referral agencies, Staff revised the Zoning Ordinance text of Articles 7 and 8 (see Attachment 1). A summary of the proposed amendments, as well as the rationale for the proposed amendments, follows: 1. Article 8, Definitions. Definitions have been added to Article 8 of the Zoning Ordinance to differentiate between the affordable units provided through the County s ADU Program and units provided through LIHTC and HUD 221(d)(4) Affordable Programs for the purpose of administering Article 7. An ADU is a rental or for sale unit regulated pursuant to the provisions contained in Article 7 of the Zoning Ordinance. An affordable housing unit is a rental or for sale unit provided pursuant to LIHTC or HUD 221(d)(4) Affordable Programs in lieu of an ADU. The definition of ADU was also revised and moved from Section to Article 8. Staff Rationale: The identification of two specific programs narrows the application of the substitute Federal, State, or local programs. Due to the expedited timeline of this ZOAM, Staff was unable to fully evaluate the effects of permitting affordable housing units provided by Federal, State, or local programs to substitute for the units provided pursuant to County s ADU Program other than the LIHTC and HUD 221(d)(4) Affordable programs. These programs address rental housing affordability for households with moderate incomes consistent with the purpose of Article 7. Staff will explore expanding the substitute affordable housing option with the next scheduled ZOAM to Article 7, which is scheduled to begin in the fourth quarter of 2016.

8 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 8 A benefit of substituting units provided through LIHTC or HUD 221(D)(4) Affordable programs for County ADUs is the elimination of the 30% AMI limitation on the lower end of income limits for rental affordable housing units. Currently, Section of the Zoning Ordinance limits the County s ADU program to households earning greater than 30% AMI and less than 50% AMI. Thus, this alternative creates the opportunity to address the largest segment of unmet housing needs (households earning 30% AMI or less) as identified in the County s Housing Policies, Guiding Principle 14, and increases rental housing options for households earning more than 50% AMI. 2. Section 7-102(F), Applicability. This section clarifies that an applicant may provide affordable housing units in accordance with Section rather than Article 7 in general. Staff Rationale: This section is for clarification purposes only. 3. Sections 7-109(A), (B), and (C), Compliance with State/Federal/Local Laws. The heading has been revised to Affordable Housing Programs. These sections have been revised to permit affordable housing units (as defined by Article 8) to substitute for ADUs without being subject to the terms and restrictions specified elsewhere in Article 7, including rent and sale prices. Draft Section 7-109(A) requires the same number of affordable housing units to be provided as the number of ADUs required by Section 7-103(A) (12.5% of single family units), and Section 7-103(B) (6.25% of multifamily units). Thus, in a development with a mix of unit types, the applicant would calculate the required number of single family units and multifamily units and add the results to derive the total number of required affordable housing units, which could then be provided in whole or in part via LIHTC or HUD 221(d)(4) Affordable projects. Table 1 demonstrates the calculation. Table 1: Example of Calculation for Required Affordable Housing Units Unit Type Units Provided % Required ADUs ADUs Required Affordable Housing Units Required* Multi-Family % = 29 Single Family % 13 *Affordable Housing Units provided as a substitute for required ADUs. Staff Rationale: The revisions to Sections 7-109(A), (B), and (C) address the intent of the ROIA adopted by the Board on June 23, 2016, and establish a consistent reference to affordable housing units.

9 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 9 4. Section 7-109(D). The addition of this section applies certain limitations and requirements for affordable housing units that may be provided as a substitute to the ADUs. These requirements are included as 7-109(A), (B), (C), and (D). Staff Rationale: By removing the requirement from Sections 7-109(A) and (C) that affordable housing units must be developed consistently with Article 7, affordable housing units would not have to meet the income, dispersion, size, timing, and architectural compatibility requirements of the County s ADU Program. Therefore, Staff included certain similar requirements to ensure the County will achieve satisfactory substitute affordable housing units. a. Section 7-109(D)(1) is a requirement to identify the location and number of affordable housing units, including tabulations of ADUs required and affordable housing units provided, and on all plans and plats. Rationale: Demonstrating and tabulating the provision of affordable housing units on all site plans and/or record subdivision plats ensures County Staff can track the provision of affordable housing units throughout the development process. b. Section 7-109(D)(2) is a timing and construction requirement that ensures affordable housing units are provided in conjunction with market rate units, wherein occupancy permits for no more than fifty percent (50%) of the market rate dwelling units shall be issued prior to the issuance of occupancy permits for fifty percent (50%) of the affordable housing units, and occupancy permits for no more than seventy-five percent (75%) of the market rate dwelling units shall be issued until occupancy permits have been issued for one hundred percent (100%) of the affordable housing units for the development. Staff Rationale: The timing and construction restriction is the same as the County s ADU Program. This requirement ensures that affordable housing units are not delayed until the end of a project, at which point there is a greater risk the development may stall or be abandoned. c. Section 7-109(D)(3) is a requirement to develop pursuant to the Article 7 regulations until documentation of the applicable affordable housing program approval is received by the County. Staff Rationale: This requirement ensures the County that affordable units will be provided regardless of the funding mechanism. It is in the County s best interest to continue applying the Article 7 regulations until a substitute affordable housing unit proposal is ensured. d. Section 7-109(D)(4) is a requirement to provide buildings containing affordable housing units that are compatible in design and similar in

10 VI. APPLICABILITY Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 10 materials to market rate residential buildings in the same development. Written documentation and/or plans demonstrating that the affordable housing units are in conformance with this requirement shall be provided to the Zoning Administrator. Staff Rationale: This compatibility requirement is similar to the ADU requirements and will ensure physical disparities between the affordable housing units and market rate units are diminished. This provision also mitigates the loss of interspersion, as it will require the LIHTC or HUD 221(d)(4) Affordable projects to be compatible in style and similar in materials to market rate units in the development, and further assist in reducing negative perceptions of affordable housing. ZOAM will apply to properties zoned under the Revised 1993 Loudoun County Zoning Ordinance. This ZOAM would not apply to properties that are subject to earlier versions of the Zoning Ordinance, e.g. properties in the Route 28 Tax District, or projects that include specific ADU development requirements in the approved proffers. VII. AGENCY REFERRALS The Board of Supervisors directed Staff to process ZOAM with the understanding that adoption of the amendments occur by December 31, Due to this expedited timeline Staff undertook an alternative referral process to receive more immediate feedback. Specifically, rather than solicit written referral comments on the draft text amendment, Staff conducted a meeting on July 11, 2016 with representatives from the Department of Planning and Zoning Community Planning Division (Community Planning), the Department of Family Services (DFS), the Zoning Ordinance Action Group (ZOAG), and the County Attorney s Office to collectively review the proposed text. Upon conclusion of the meeting, Community Planning and the Affordable Dwelling Unit Advisory Board (ADUAB, who did not attend the July 11 meeting) provided formal written comments. Staff summarized the verbal referral meeting comments from DFS and ZOAG. The referral comments are included as Attachment 3. In addition to agency referrals, Staff received comments on the proposed amendment from affordable housing providers in the County. Staff met with affordable housing providers upon completion of the draft ZOAM and determined the revisions included in the current draft ordinance address these comments. VIII. ITEMS FOR CONSIDERATION Based on the referral agency comments, Staff made revisions to the draft ZOAM text as described in the Summary of Proposed Text Changes above. However, the following items for consideration identified in the referral comments were not addressed in the proposed ZOAM. Therefore, Staff is providing additional information on these items for

11 the Board s consideration. Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page Lack of an Interspersion Requirement for Affordable Units: Community Planning, DFS, and ADUAB identified a concern with the loss of the unit interspersion requirement of Article 7 (Section 7-104(C)) for residential projects complying with substitute affordable housing programs. Currently, Article 7 requires County ADUs to be interspersed throughout a community and indiscernible from market rate units. The Article 7 affordable dwelling unit interspersion requirement is consistent with the County s Housing Policies and is in compliance with Federal Fair Housing Laws. This loss of interspersion is more likely to occur when a project with a mix of unit types, e.g. single family attached and multifamily, is being developed. Due to the financing structure, unit type, and building management requirements of LIHTC and HUD 221(D)(4) Affordable programs, these units would almost exclusively be provided in multifamily rental apartment buildings. Therefore, development projects using this substitute option would not be providing for-sale single family attached or detached units in a community. Additionally, in a large multifamily project, the affordable units will be consolidated in one or a few of the buildings in the project, with up to 100% of the units in said building(s) being provided as Affordable Housing Units. This would be different than the County s ADU Program, which requires 6.25% of the multifamily units to meet the affordability requirements of Article 7 and reasonably distributed throughout a building or complex. Analysis: Staff acknowledges the loss of interspersion of affordable units within a project using LIHTC or HUD 221(d)(4) Affordable programs will be a consequence of the draft ordinance amendment. However, the ability to substitute certain affordable housing programs for the County s ADU program provides another method for addressing the need for affordable rental housing in the County. It will also create opportunities to incorporate LIHTC or HUD 221(d)(4) Affordable units into larger planned communities instead of developing as isolated, standalone projects. Since these projects will be developed at one time, it is also likely these affordable rental housing units will be delivered early in a development. Additionally, competitive LIHTC projects incentivize the development of units with 3 or more bedrooms and discourage more than 20% of the units being 1 bedroom or less, thus helping to ensure a range of unit sizes. It is also important to note, the competitive and economic nature of the LIHTC and HUD 221(d)(4) Affordable programs will limit the instances this substitution for County ADUs will occur. As such, the text amendment proposes permitting the substitution of LIHTC and HUD 221(d)(4) Affordable housing units in place of the units required by the County s ADU Program. The ability to employ substitute programs also addresses certain County Housing Policies not addressed through the County s ADU program. It will create an opportunity to provide rental housing options for household earning less than 30% AMI, the largest portion of the County s unmet housing needs, and rental housing options for households earning more than 50% AMI. Also, LIHTC developments may use energy

12 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 12 efficient design and construction principles to improve their competitive applications. Energy efficient design is consistent with County Housing Guiding Principle Policy 12. Lastly, the loss of interspersion is partly addressed with the proposed text of Section 7-109(D)(4) requiring that buildings containing affordable housing units be compatible in design and similar in materials to market rate units in a community. 2. Potential Loss of Affordable For Sale Units and a Mix of Unit Types: Community Planning, DFS, ZOAG, and ADUAB identified a concern that the proposed amendment could result in the loss of affordable for sale units, which are important in addressing the County s affordable housing needs. This would occur in developments with single family attached or detached dwellings, as well as multifamily dwellings. It could also incentivize revisions to approved single family developments, particularly in the R-8 ADU Zoning District, to include a multifamily component to the development with the purpose of providing all required affordable units in this multifamily rental component. One of the purposes of the ADU requirements identified in Section is promoting the development of a full range of housing choices for persons of moderate income. IV. Analysis: The loss of new affordable for sale units in developments substituting LIHTC or HUD 221(d)(4) Affordable housing units will be a consequence of this Zoning Ordinance amendment. Again, the competitive and economic nature of the LIHTC and HUD 221(d)(4) Affordable programs will limit the instances when this substitution for County ADUs will occur. Nonetheless, and as noted above, Staff has identified certain benefits created by this opportunity. First, it creates another method for providing needed affordable housing in the County, as well as opportunities to incorporate LIHTC or HUD 221(d)(4) Affordable units into larger planned communities, perhaps earlier than County ADUs. Additionally, the permitted substitute affordable programs creates an opportunity to provide housing options for households earning less than 30% AMI, the largest portion of the County s unmet housing needs in accordance with County Housing Policies, and rental housing options for households earning more than 50% AMI. As such, the text amendment proposes permitting the substitution of LIHTC and HUD 221(d)(4) Affordable housing units in place of the units required by the County s ADU Program. FISCAL IMPACT The goal of ZOAM is to permit the use of certain State or Federal affordable housing funding programs to be used in the County as a substitute for providing affordable housing under the County ADU program. The ability to utilize other programs will provide the opportunity for developers to partner with affordable housing providers in the County to provide affordable multifamily rental housing. It will also expand opportunities for affordable housing providers in the County to more easily access State and Federal funding for affordable housing. Expanding the methods to provide affordable housing is important to economic development in Loudoun County, as employers seek locations that are affordable for employees to live and work. As noted in the County s Housing Policies,

13 Item #15, ZOAM , Affordable Dwelling Unit Regulations Board of Supervisors Public Hearing October 12, 2016 Page 13 The lack of affordably priced housing also has an impact on the continued ability to attract and retain a diversified employment base. V. ATTACHMENTS 1 ZOAM Draft Text 2 Copy Teste/Resolution of Intent to Amend dated June 23, Referral Comments 3a 3b 3c 3d Department of Planning and Zoning, Community Planning Affordable Dwelling Unit Advisory Board Department of Family Services Zoning Ordinance Action Group * This Staff Report with attachments (BOS PH Staff Report pdf) and additional information can be viewed online at under the application ZOAM Copies are also available in the Department of Planning and Zoning.

14 FINAL ARTICLE 7 ADMINISTRATION AND REGULATION OF AFFORDABLE DWELLING UNIT DEVELOPMENTS Section Affordable Dwelling Unit Developments Purpose. The Affordable Dwelling Unit Program is established to assist in the provision of housing to persons of moderate income by (a) promoting the development of a full range of housing choices, and (b) requiring the construction and continued existence of dwelling units which are affordable for purchase by households whose income is greater than thirty percent (30%) and less than seventy percent (70%) and affordable for rental by households whose income is greater than thirty percent (30%) and less than fifty percent (50%) of the median income for the Washington Primary Metropolitan Statistical Area (PMSA). "Affordable Dwelling Units" shall be defined as those units for which the rental and/or sales price is regulated pursuant to the provisions contained in this Article, as adopted by the Board of Supervisors. All affordable dwelling units shall comply with the following provisions and the urban residential district regulations for Affordable Dwelling Unit Developments contained in Sections through of this Ordinance and Chapter 1450 of the Loudoun County Codified Ordinance Applicability. (A) The requirements of the Affordable Dwelling Unit Program shall apply to any site, or portion thereof, at one location which is (a) served by public water and sewer, and (b) the subject of an application for rezoning, special exception, site plan or preliminary subdivision which yields, as submitted by the applicant, fifty (50) or more dwelling units at an equivalent density greater than one unit per forty thousand (40,000) square feet. (1) For the purposes of this Ordinance, "site or portion thereof, at one location" shall include all adjacent undeveloped land of the property owner and/or applicant, under common ownership and/or control of the owner and/or applicant, including, but not limited to, land owned and/or controlled by separate partnerships, land trusts, or corporations in which the owner and/or applicant (to include members of the owner's and/or applicant's immediate family) is an owner of one (1) percent or more of the stock, and other such forms of business entities. Adjacent parcels of undeveloped land owned by separate members of the same family shall be exempt from the provisions of this section when such separate ownership has existed for a period of no less than five (5) years. Attachment 1 Section Revision Date: June 17, 1998September 22, 2016

15 (2) Immediate family members shall include the owner's and/or applicant's spouse, children, parents and siblings. (3) In instances where a lending institution, such as pension fund, bank, savings and loan, insurance company or similar entity has acquired, or acquires, an equity interest solely by virtue of its agreement to provide financing, such equity interest shall not constitute ownership and shall not be considered in making determinations of applicability. However, the acquisition of a fee interest by such lending institution due to foreclosure or project participation shall be considered as ownership in making determinations of applicability. (B) (C) (D) Any request for a Concept Development Plan (CDP) Amendment involving the rezoning of land within a mixed use planned development district, or zoning amendment which requires a rezoning plat, that results in an increase in the total number of residential units shall be subject to this Ordinance. However, application of the provisions of this Article shall be limited to the increase in the total number of residential units, provided that the overall density of the project results in fifty (50) or more units at a density of greater than one (1) unit per acre. An owner and/or applicant shall not be exempt from the requirements of this Ordinance by submitting phased applications for rezoning, special exception, site plan or preliminary subdivision for less than fifty (50) dwelling units at any one time. An owner and/or applicant may submit an application for rezoning, special exception, or preliminary subdivision for less than fifty (50) units if the applicant agrees, in writing, that the next application or submission for the subject site, or portion thereof, shall meet the requirements of this Ordinance when the total number of dwelling units in the subject development has reached fifty (50) units or more. This statement shall be included on the approved concept development plan, rezoning plat, special exception, site plan, or preliminary subdivision plat. Such statement shall be recorded among the Loudoun County land records and shall be indexed in the names of all owners of the site, or portion thereof, as such terms are defined above. The requirements of this Article shall not apply to the following: (1) Any multiple family dwelling unit structure with four (4) stories or more and having an elevator. Section Revision Date: June 17, 1998September 22, 2016

16 (2) Special exception, site plan or preliminary subdivision applications filed in accordance with an approved Rezoning which has proffered the provision of affordable dwelling units or other contributions toward the provision of affordable dwelling units prior to the effective date of this Ordinance. (3) Proffer amendment, concept development plan amendment, preliminary subdivision amendment, site plan amendment and special exception amendment applications filed after the effective date of this Ordinance which deal exclusively with issues of building relocation, site access, stormwater drainage, or other engineering or public facility issues, or the preservation of historic structures, wetlands, child care facilities, or changes in the size of units, a reduction in the number of units, or which request the addition of a nonresidential special exception use. (4) Properties subject to proffers accepted by the Board of Supervisors, pursuant to Section of the Code of Virginia, prior to June 16, (5) Any request for a Concept Development Plan (CDP) Amendment or zoning amendment which involves the rezoning of land within a mixed use planned development district in order to redistribute existing units to the newly zoned property within the same development, but which does not result in an increase in the total number of residential units. (6) Any request for a rezoning plat amendment or zoning amendment which involves the rezoning of land within a non-planned development district in order to redistribute existing units to the newly zoned property within the same development, but which does not result in an increase in the total number of residential units. (7) Land zoned R-1, CR-1, TR-1, and JLMA-1. (E) At the applicant's discretion, the provisions of this Article and individual district regulations for affordable dwelling unit developments may be applied to developments which are exempt from these provisions, as stated in Section 7-102(D). In the event that an applicant proposes to provide affordable dwelling units in a development which is otherwise exempt, the County shall waive any application fee associated with a Concept Development Plan Amendment proposing to change the Concept Development Plan Section Revision Date: June 17, 1998September 22, 2016

17 only in order to provide affordable dwelling units. County review of such applications shall not exceed 180 days. (E)(F) An applicant may provide affordable housing units in lieu of the affordable dwelling units required by this Ordinance in accordance with Section Affordable Dwelling Unit Density Adjustments. (A) Single Family Detached and Single Family Attached Units. (1) For active rezoning applications that have not yet complied with Section (D)(1) of this Ordinance as of December 16, 2003, and for rezoning, special exception, site plan and preliminary subdivision applications officially accepted after December 16, 2003 which request approval of single family detached dwelling units or single family attached dwelling units, the proposed density shall reflect an increase of twenty percent (20%), including the required number of affordable dwelling units, unless such figure is modified pursuant to the provisions of Section or the applicant provides cash in lieu of providing the single family detached units pursuant to Section 7-108(A)(3). In the event such increase exceeds the upper density limit set forth in the Comprehensive Plan, then the upper density limit set forth in the Comprehensive Plan applicable to the subject property shall be increased up to twenty percent (20%) for the purposes of calculating the potential density which may be approved by the Board of Supervisors. (2) In the event that a twenty percent (20%) density increase is approved pursuant to Section 7-103(A)(1) above, not less than twelve and one half percent (12.5%) of the total number of dwelling units approved for the subject development shall be affordable dwelling units, for which the rental and/or sales price will be controlled pursuant to this Article. (B) Multi-Family Units. (1) For rezoning, special exception, site plan and preliminary subdivision applications officially accepted after the effective date of this Ordinance which request approval of non-elevator, multi-family dwelling unit structures, the proposed density shall reflect an increase of ten percent (10%), including the required number of affordable units, unless such figure is modified pursuant to the provisions of Section In the event such increase exceeds the upper Section Revision Date: June 17, 1998September 22, 2016

18 density limit set forth in the Comprehensive Plan, then the upper density limit set forth in the Comprehensive Plan applicable to the subject property shall be increased up to ten percent (10%) for the purposes of calculating the potential density which may be approved by the Board of Supervisors. (2) In the event that a ten percent (10%) density increase is approved pursuant to Section 7-103(B)(1) above, not less than six and one-quarter percent (6.25%) of the total number of dwelling units approved for the subject development shall be affordable dwelling units, for which the rental and/or sales price will be controlled pursuant to this Article. (3) An applicant may, at his discretion, request approval from the Board of Supervisors, or its designee, of a twenty percent (20%) increase in the density on a subject parcel, provided that at least twelve and one half percent (12.5%) of the total number of units approved are affordable dwelling units, for which the rental and/or sales price is controlled pursuant to the provisions of this Article. (C) In the case where affordable dwelling units are provided pursuant to Section 7-102(E) above, the affordable dwelling unit to bonus density increase ratio required by Sections 7-103(A) and (B) does not apply. The density of a development subject to voluntary provision of affordable dwelling units which is otherwise exempt, may be increased up to twenty percent (20%). In the event that a twenty percent (20%) density increase is approved pursuant this Section, not less than twelve and one half percent (12.5%) of the total density bonus units approved for the subject development shall be affordable dwelling units, for which the rental and/or sales price will be controlled pursuant to this Article Designation of Affordable Units on Plats. (A) Approved site plans and/or record subdivision plats shall identify the specific number of for-sale units and/or percentage of units for rent which are to be regulated as affordable units pursuant to this Article. (1) All plans or plats for developments containing affordable dwelling for-sale units shall identify specific units which are for sale or the percentage of units for rent under the affordable guidelines in this Article. (2) All site plans for developments containing affordable dwelling rental units shall include information concerning Section Revision Date: June 17, 1998September 22, 2016

19 the number of each type of unit, by bedroom count, which shall be maintained as affordable. (B) (C) Specifications regarding dwelling dimensions and the number of bedrooms in all affordable units shall meet the requirements established by the Affordable Dwelling Unit Advisory Board pursuant to the Codified Ordinance. In general, dwelling dimensions and the number of bedrooms in an affordable multifamily unit shall be comparable to equivalent market rate units on the subject parcel. Affordable dwelling units shall be of a building type and of an architectural style compatible with residential units permitted within the zoning district in which they are located and interspersed among market rate units in the proposed development Review of site or subdivision plans within 90 days. The County shall process final site plans, preliminary subdivisions or record subdivision plats proposing the development or construction of affordable dwelling units within ninety (90) days from the receipt thereof, provided that such plans and plats substantially comply with all ordinance requirements when submitted. The calculation of the review period shall include only that time the plans or plats are under County review and shall not include such time as may be required for revisions or modifications in order to comply with ordinance requirements Timing of Construction/Availability of Affordable Units. In a development which contains single family detached, single family attached, or multi-family lots or units, occupancy permits for no more than fifty percent (50%) of the market rate dwelling units shall be issued prior to the issuance of occupancy permits for fifty percent (50%) of the affordable dwelling units. Occupancy permits for no more than seventy-five percent (75%) of the market rate dwelling units shall be issued until occupancy permits have been issued for one hundred percent (100%) of the affordable dwelling units for the development Administration and Regulation. The administration and regulation, establishment of unit prices, price controls, eligibility requirements, and the structure and operation of the Affordable Dwelling Unit Advisory Board are governed by the Codified Ordinance of Loudoun County Modifications. (A) Modifications to the requirements of Sections and of the Affordable Dwelling Unit Program shall be allowed concurrently with applications for a rezoning, special exception, site plan or preliminary subdivision, upon a finding by the Board of Section Revision Date: June 17, 1998September 22, 2016

20 Supervisors, upon recommendation of the Planning Commission, that the proposed alternative will achieve the objective of providing a broad range of housing opportunities throughout Loudoun County. In the event that a modification to Section is requested: (1) The ratio of affordable units proposed to the total density increase approved shall be no less than 12.5:20% for single family detached and single family attached developments, and 6.25:10% for multi-family unit developments; and (2) The total affordable units proposed shall be no less than five percent (5%) of the total number of residential units within the project. (3) Notwithstanding paragraphs (1) and (2) above, any request for rezoning, special exception, or preliminary subdivision (by right) which contain only single family detached units, a modification may be requested to provide cash in lieu of the units. Such cash must be paid prior to the first zoning permit. In the event that an applicant requests a modification to make such cash payment, the following criteria shall apply: (a) (b) (c) (d) The cash formula of Section 7-108(E) shall apply. The decision to pay cash in lieu of providing the units has to be made at the time of approval of rezoning, special exception or preliminary subdivision (by right), as applicable. No bonus density is to be granted for a development, when an applicant opts to provide cash in lieu of units. The district regulations of Article VII shall not apply to a development when an applicant opts to provide cash in lieu of units. (B) In reviewing a request for modification to Section 7-103, consideration shall be given to the following: (1) The number of affordable units, low-cost housing, manufactured housing and other similar type housing that exists, or are to be provided, within two (2) miles of the site and within Loudoun County. (2) Public facilities and services already developed for the overall development capacity to accommodate the Section Revision Date: June 17, 1998September 22, 2016

21 maximum density increase permitted for provision of affordable dwelling units. (3) Existing unique, or unusual site constraints including, but not limited to, potential adverse impacts on environmental resources and features on the subject parcel and adjacent parcels, and difficult soil conditions. (4) Unusual costs associated with development of the subject property. (5) Overriding public needs, health issues, public safety issues, or public welfare issues which are better served by not providing the maximum number of affordable units otherwise required. (6) In the case of a request for a Concept Development Plan Amendment, consideration shall also be given to whether the amendment would result in a reduction in the previously approved rezoning's impact on public facilities and whether the existing proffer commitments for the previously approved rezoning exceed current adopted capital facility guidelines established in the County's comprehensive plan. (C) (D) (E) In conjunction with Section 7-108(A) above requesting such modifications, the Board of Supervisors may permit an applicant to request a modification to this ordinance so as to allow them to provide any combination of affordable dwelling units, land or contributions to Loudoun County equivalent to providing the required number of affordable dwelling units. Requests for modifications to the requirements of the Affordable Dwelling Unit Program, as applied to a given development, shall be submitted in conjunction with the application for rezoning, concept development plan amendment, proffer amendment, special exception, site plan, or preliminary subdivision, as applicable. The applicant shall provide a justification for such request. The Affordable Dwelling Unit Advisory Board shall review requests for modifications and make its recommendation within sixty (60) days of receipt of a complete application. Cash contributions made pursuant to Section 7-108(C) and 7-103(A) shall be calculated according to the following formula: Construction Price Uof Prototypical ADU x.25 x # of ADU lots required = cash contribution.75 Section Revision Date: June 17, 1998September 22, 2016

22 (F) (G) All cash, or the value of land contributions made pursuant to Sections 7-103(A) and 7-108(C) shall be calculated in terms of current dollars, adjusted by the CPI, at the time the actual contribution is officially transferred to the County, and paid prior to the issuance of the first zoning permit unless another time is approved by the Board of Supervisors at the time the modification is approved. Funds collected shall be placed in the Loudoun County Housing Trust Fund. The time limits set forth in Section and of the Virginia Code shall be suspended during the pendency of an application filed pursuant to Section Compliance with State/Federal/Local Laws Affordable Housing Programs. (A) (B) (C) (D) A development that provides the same number or more affordable dwelling housing units as the number of affordable dwelling units required under Section 7-103(A) and (B) above, subject to terms and restrictions equivalent to the requirements of this Article, shall satisfy the requirements of the Affordable Dwelling Unit Program. A development which providesfederal, State, or other local programs a fewer number of affordable dwelling housing units than the number of affordable dwelling units required under Section 7-103(A) and (B) above, subject to terms and restrictions equivalent to the requirements of this Article, shall provide the additional number of affordable dwelling units necessary to make up the shortage. The rents and sales prices for affordable dwelling housing units provided Federal, State, or other local programs shall be in accordance with the rules and regulations governing such programs and these units shall be marketed in accordance with such rules and regulations, provided rents and sale prices shall not exceed those set pursuant to this Article. The following requirements shall apply to any development that provides affordable housing units pursuant to this Section: (1) Approved site plans and/or record subdivision plats shall identify the specific number and location of buildings which are to contain affordable housing units and include a tabulation that demonstrates that the number of affordable housing units and affordable dwelling units provided satisfies the number of affordable dwelling units required by Section 7-103(A) and (B) above. Section Revision Date: June 17, 1998September 22, 2016

23 (2) In a development which contains single family detached, single family attached, or multi-family lots or units, occupancy permits for no more than fifty percent (50%) of the market rate dwelling units shall be issued prior to the issuance of occupancy permits for fifty percent (50%) of the affordable housing units. Occupancy permits for no more than seventy-five percent (75%) of the market rate dwelling units shall be issued until occupancy permits have been issued for one hundred percent (100%) of the affordable housing units for the development. (3) The applicant shall provide written verification to the Zoning Administrator from the applicable affordable housing program of the approval of funding to provide affordable housing units. Until such written verification is provided by the applicant, only affordable dwelling units shall be provided to meet the requirements of this Ordinance. (4) Buildings containing affordable housing units shall utilize exterior building materials similar to and be of an architectural style compatible with the market rate dwelling units within the development in which they are located. Written documentation and/or plans demonstrating that the affordable housing units are in conformance with this requirement shall be provided to the Zoning Administrator prior to approval of the first Site Plan, Construction Plans and Profiles, and/or Subdivision Plat for the affordable housing units Violations and Penalties. In addition to the provisions set forth in Section 6-500, the following shall apply whenever any person, whether owner, lessee, principal, agent, employee or otherwise, violates any provision of this Article, or permits any such violation, or fails to comply with any of the requirements hereof: (A) (B) Owners of affordable dwelling units who shall fail to submit executed affidavits or certifications, as required by this Article, shall be fined fifty (50) dollars per day per unit, up to a maximum of three thousand (3000) dollars per unit, until such affidavit or certificate is filed, but only after written notice and a ten-day compliance period is provided. Fines levied pursuant to this paragraph shall become liens upon the real property and shall accumulate interest at the judgment rate of interest. Tenants of affordable dwelling units who shall fail to submit executed affidavits or certifications, as required by this Article, shall Section Revision Date: June 17, 1998September 22, 2016

24 be subject to lease termination and eviction procedures, as provided in the Codified Ordinance. (C) Owners and tenants of affordable dwelling units who shall falsely swear or who shall execute an affidavit or certification required by this Article knowing the statements contained therein to be false shall be guilty of a Class II misdemeanor and shall be subject to a fine up to one thousand (1000) dollars. (1) Fines levied against owners pursuant to this paragraph shall become liens upon the real property and shall accumulate interest at the judgment rate of interest. (2) Tenants of affordable dwelling units who shall falsely swear or who shall execute an affidavit or certification required by this Article knowing the statements contained therein to be false shall also be subject to lease termination and eviction procedures, as provided in the Codified Ordinance. (3) Owners of individual affordable dwelling units who shall falsely swear that they continue to occupy their respective affordable dwelling unit as their primary domicile shall be subject to injunction or other suit, action or proceeding to require such owner to either sell the unit to someone who meets the eligibility requirements established pursuant to this Article or to occupy such affordable dwelling unit as a domicile Enforcement and Court Appeals. (A) (B) (C) The Zoning Administrator shall administer and enforce the provisions of the Affordable Dwelling Unit Program. Notwithstanding the provisions of Section of the Virginia Code, any person aggrieved by a decision of the Zoning Administrator or by the Affordable Dwelling Unit Advisory Board, in the case of a decision made by the latter regarding an appeal of affordable dwelling unit for-sale or rental prices, or by any decision made by an administrative officer in the administration or enforcement of the Affordable Dwelling Unit Program, may appeal such decision to the Loudoun County Board of Zoning Appeals by filing a petition of appeal which specifies the grounds upon which aggrieved within thirty (30) days from the date of the decision. Any petition of appeal properly filed pursuant to Paragraph B above shall not constitute a de novo proceeding and shall be considered by the Circuit Court in a manner similar to petitions filed pursuant to Section of the Virginia Code. Section Revision Date: June 17, 1998September 22, 2016

25 ARTICLE 8 - DEFINITIONS Words and terms set forth below shall have the meanings ascribed to them. Any word, term, or phrase used in this Ordinance not defined below shall have the meaning ascribed to such word, term or phrase in the most recent edition of UWebster's Unabridged DictionaryU, unless in the opinion of the Zoning Administrator, established customs or practices in Loudoun County, Virginia justify a different or additional meaning. For the purpose of this Ordinance, certain words and terms are herein defined as follows: UA Abattoir: A commercial slaughterhouse. Access: A means of approach or admission. Accessory Building: A non-habitable building located on a lot, the use of which is associated with the principal building and which is located upon the same lot as the principal building. The maximum size of an accessory building is based on the size of the lot on which it is located as follows: up to 5 acres: 2,500 sq. ft., more than 5 acres up to 10 acres: 5,000 sq. ft., more than 10 acres up to 20 acres: 7,500 sq. ft., more than 20 acres: 10,000 sq. ft. Active channel: The area of the stream channel that is subject to frequent flows (approximately once per one and one-half years), and that includes the portion of the channel below where the floodplain flattens. Active recreational uses: Recreational uses requiring constructed facilities for organized activities, such as playing fields, ball courts, and playgrounds. Adult Day Care Center: A licensed facility for four or more aged, infirmed, or disabled adults which is operated during a part of the day only, which provides supplementary care and protection of individuals who reside elsewhere, except a facility or portion of a facility licensed by the State Board of Health or the Department of Mental Health, Mental Retardation and Substance Abuse Service, and the home or residence of an individual who cares for only persons related to him by blood or marriage. Adult Entertainment: Adult entertainment is any medium used for presenting material or performances distinguished or characterized by an emphasis on matter depicting, describing, or relating to Specified Sexual Activities or Specified Anatomical Areas for observation by patrons therein; or limits the presentation of such materials to persons over 18 years of age. This definition shall not apply to a legitimate theatrical performance where nudity is only incidental to the primary purpose of the performance. For the purposes of this definition, Specified Sexual Activities is defined as: 1. Human genitals in a state of sexual stimulation or arousal; 2. Acts of human masturbation, sexual intercourse or sodomy; 3. Fondling or other erotic touching of human genitals, pubic region, buttock or female breast. And, Specified Anatomical Areas is defined as: 1. Less than completely and opaquely covered: (a) human genitals, pubic region, (b) buttock, and (c) female breast below a point immediately above the top of the areola; and Article 8 - Definitions Revision Date: December 16, 2015August 31, 2016

26 2. Human male genitals in a discernibly turgid state, even if completely and opaquely covered. Adverse Impact: An impact that creates, imposes, aggravates, or leads to inadequate, impractical, unsafe, unhealthy conditions on a site or degrades or damages environmental or cultural resources on a site proposed for development or on off-site property or facilities. Affordable Dwelling Unit A dwelling unit for rent or for sale regulated pursuant to the provisions contained in Article 7, as adopted by the Board of Supervisors. Affordable Housing Unit A dwelling unit for rent or for sale developed pursuant to a Virginia Housing Development Authority (VHDA) Low Income Housing Tax Credit (LIHTC) program or a U.S. Department of Housing and Urban Development (HUD) 221(d)(4) program that meets the Definition of Affordable Housing included in the HUD Multifamily Accelerated Processing (MAP) Guide, Revised January 29, 2016, as amended, from the Office of the Assistant Secretary for Housing FHA Commissioner ( HUD 221(d)(4) Affordable ). Agricultural cultural center: A facility established for the purpose of educating the public about agricultural activities, and/or the heritage and culture of agricultural activities. Agricultural Processing: The processing, preparation, and/or manufacturing of agricultural products, including but not limited to changes to the physical state or form of the agricultural product, as an accessory use to an agricultural use. A minimum of 51% of the agricultural products used for the processing, preparation, and/or manufacturing shall be derived from the agricultural use. Agricultural research facility: A facility for the investigation, testing, and demonstration of agricultural products and processes, including biotechnical agriculture, veterinary, soil, plant and animal sciences. Agriculture: Uses characterized by general active and on-going agricultural activities, including agronomy, aquaculture, biotechnical agriculture (including education parks for biotechnical agriculture or a demonstration farm), forestry, fisheries, honey production, silviculture (including the harvesting of timber), and similar uses. Agriculture does not include a grocery store or the retail or wholesale sale of products remotely related to the production of agricultural products. Agriculture does not include preparatory functions such as grading or creation of planting beds through stockpiling of dirt or other means when such preparations do not result in an active and on-going agricultural activity within 30 days. Accessory uses may include offices, storage areas and repair facilities related to agriculture uses. Agriculture Support and Services Directly Associated with On-going Agricultural Activity, On- Site: Uses that provide support and services to agricultural, horticultural and animal husbandry activities, which are limited to and that operate in conjunction with and on the site of on-going agricultural, horticultural or animal husbandry uses. These uses include: agricultural processing; agrieducation; animal care businesses; commercial wineries; custom operators (haymaking, brush hogging, crop storage, hauling, fencing, barn construction); direct market businesses for the sale of products produced on-site, including but not limited to PYO (pick-your-own); equestrian facilities; farm co-ops; farm based tourism events; farm markets; farm machinery repair; feedlot (for on-going, on-site, animal husbandry activities); nurseries, commercial; pet farms; products combining recreation with consumption of agricultural products; portable sawmills; small business uses; stables; wayside stands; wetlands mitigation banks; and similar uses. Article 8 - Definitions Revision Date: December 16, 2015August 31, 2016

27 Agriculture Support and Services Not Directly Associated with On-Site Agricultural Activity: Uses and activities that provide support and services to agricultural, horticultural and animal husbandry activities, either on the site of the agricultural, horticultural or animal husbandry activity, or off-site. These uses include: agricultural research facility; animal care businesses; central farm distribution hub for agricultural products; equestrian facilities; equestrian facilities and infrastructure, public (horse trail networks, show rings, cross country course, etc.); farm machinery repair; farm machinery sales, rental and service; mill feed and farm supply centers; nurseries, commercial; stables, neighborhood, on lots of 25 acres or more, or frontage on state maintained road; stable, private; and similar uses. Agritainment: Events and activities such as corn mazes, hay rides and petting zoos, that allow for recreation, entertainment and tourism in conjunction with agriculture support and services directly associated with on-going agricultural activity on-site. Air conditioner condenser: An outdoor appliance or device, including the outdoor component of a heat pump system, that is designed to increase or decrease the thermal temperature of air for building spaces, typically to improve thermal comfort. An air conditioner condenser generally comprises a compressor, cooling fins and tubes, coolant tubes, and a fan, and its performance is dependent on air-flow. The appliance may or may not be a component of a heat pump system. Airport/landing strip: Any area designed and used for the takeoff and landing of small private aircraft, having no more than one air strip. Airport: (Including Air Park, Flight Strip, Airfield and Heliport): A place where aircraft may take off or land, discharge or receive cargoes and/or passengers, be repaired, take on fuel, and be stored. Alley: A right-of-way which provides secondary and/or service access for vehicles to the side or rear of abutting properties whose principal frontage is on another street. All-terrain vehicle (ATV): A small motor vehicle with three or four wheels designed for recreational use on various types of terrain. Amend or Amendment: Any repeal, modification, or addition to a regulation; any new regulation; any change in the number, shape, boundary, or area of a district; or any repeal or abolition of any map, part thereof, or addition thereto. Amusement or Theme Park: A facility, indoor or outdoor, designed for entertainment purposes which may include structures or buildings, motorized or non-motorized rides, games, booths for the conduct of sporting events or games, and constructed land features such as lakes, hills, or trails. Office, retail and other commercial uses commonly established in such facilities and related parking structures shall be allowed as accessory appurtenances. Animal care business: An enterprise that provides care and services for livestock or other farm animals, such as animal grooming or training, but which is not a kennel, a veterinary service, or an animal hospital. Animal Hospital: A place for the medical care of animals; a veterinary hospital. The boarding of animals at an animal hospital is limited to that incidental to the hospital use. Article 8 - Definitions Revision Date: December 16, 2015August 31, 2016

28 Animal Husbandry: The active and on-going propagation, rearing, exercising, feeding, milking, housing, controlling, handling, or general care of living animals, including the raising and production of bison, cattle (beef and dairy), pigs, mules, ducks, emus, horses, goats, llama, alpaca, poultry, pigeons, sheep, and similar animal husbandry uses, but not including miniature horses or pot-belly pigs. The conduct of the foregoing activities with respect to animals meeting the definition of Pet or non domesticated (wild) animals shall not be considered Animal husbandry. Animal Services: Animal service uses related to the provision of medical services and treatment to animals, including veterinary services, animal hospitals and the boarding of animals related to the provision of these services. Antique shop: An establishment that sells items such as furniture, household wares and decorations, and related articles, which have value and significance because of factors such as age, rarity, historical significance, design, and sentiment. Application, Active: Any Zoning Map Amendment application, Zoning Modification application, Concept Plan Amendment application, Special Exception application, Preliminary or Record Subdivision application, or Site Plan application, which has been officially accepted by the County and which is not an inactive application or has not been withdrawn or has not received a final decision. Application, Inactive: Any Zoning Map Amendment application, Zoning Modification application, Concept Plan Amendment application, Special Exception or Minor Special Exception application, Site Plan application, or Preliminary or Record Subdivision application officially accepted by the County for processing but which has had processing suspended either by request of the applicant or by having no contact or activity occur in regard to the application by the applicant and has been placed on inactive status pursuant to Section of this Ordinance or deemed inactive pursuant to the Land Subdivision and Development Ordinance. Application, Reactivated: Any Zoning Map Amendment application, Zoning Modification application, Concept Plan Amendment application, Special Exception application, Minor Special Exception, Preliminary or Record Subdivision application, or Site Plan application which was classified as inactive and which the applicant subsequently notifies the County in writing of their desire to have the application brought to final decision. Arboretum: A place where trees, shrubs, or other woody plants are grown, exhibited or labeled for scientific, educational, or passive recreational purposes, not including the harvest of plants or their produce. Arborist or Urban Forester: A person trained in arborculture, forestry, landscape architecture, horticulture, or related fields and experienced in the conservation and preservation of native and ornamental trees. Art gallery: A room or series of rooms where works of art are exhibited for display or sale. Art studio: The workshop of an artist, writer, craftsperson, or photographer, but not a place where members of the public come to receive instruction on a more than incidental basis or to sit for photographic portraits. Article 8 - Definitions Revision Date: December 16, 2015August 31, 2016

29 Auction house: A place where the property of others, such as objects of art, furniture, and other goods (except livestock), are offered by a broker or auctioneer for sale to persons who bid on the items in competition with each other at scheduled sales periods or events. Automobile Car Sharing Agency: A motor vehicle sales and accessory service lot use that provides vehicles shared by its members as a means to supplement mass transit facilities. Automobile Service Station/Automotive Service Station: Buildings and premises where gasoline and/or oil, grease, batteries, tires and automobile accessories are dispensed at retail as a principal use and where, in addition, the following services may be rendered and sales made, and no other. a. Sale and servicing of spark plugs, batteries, and distributor parts. b. Tire sales, servicing and repair, but not recapping or regrooving. c. Replacement or adjustment of mufflers and tail pipes, water hoses, fan belts, brake fluid, light bulbs, fuses, floor mats, seat covers, windshield wipers and wiper blades, grease retainers, wheel bearings, mirrors and the like. d. Radiator cleaning and flushing, provision of water, anti-freeze and the like. e. Washing and polishing, and sale of automotive washing and polishing materials. f. Greasing and lubrication. g. Providing and repairing fuel pumps, oil pumps and lines. h. Servicing and repair of carburetors. i. Emergency wiring repairs. j. Adjusting and repairing brakes. k. Minor motor adjustments not involving removal of the head or crankcase or racing the motor. l. Provision of convenience goods for gasoline supply station customers. m. Provision of road maps and other information material to customers; provision of restroom facilities. n. Performing State vehicle inspections. o. Car wash. Uses permissible at an automobile service station do not include major mechanical and body work, straightening of frames of body parts, steam cleaning, painting, welding, storage of automobiles not in operating condition, or any activity involving noise, glare, fumes, smoke or other characteristics to an extent greater than normally found in automobile service stations. Automobile Sales Lots: A lot arranged, designed, or used for the storage and display for sale and/or lease of any motor vehicle or any type of trailer, provided the trailer is unoccupied, and where no repair work is done except minor and incidental repair of automobiles or trailers displayed and sold on the premises. Aviary: A place used for keeping birds for the purposes of commercial breeding or propagation or for display to the public, but not including facilities within and incidental to the operation of a retail pet store. Aviation: Uses characterized by facilities for the operation and maintenance of aircraft, including airports, hangars, runways and landing strips, flight schools, and fueling facilities. Article 8 - Definitions Revision Date: December 16, 2015August 31, 2016

30 Attachment 2

31 FINAL BOARD OF SUPERVISORS OF LOUDOUN COUNTY RESOLUTION OF INTENT TO AMEND THE REVISED 1993 LOUDOUN COUNTY ZONING ORDINANCE TO AMEND ARTICLE 7 (ADMINISTRATION AND REGULATION OF AFFORDABLE DWELLING UNIT DEVELOPMENTS) AND ARTICLE 8 (DEFINITIONS) WHEREAS, the Board of Supervisors wishes to initiate amendments to the Revised 1993 Loudoun County Zoning Ordinance ("Zoning Ordinance") in furtherance of the purposes of zoning as set out in of the Code of Virginia and to further implement the comprehensive plan; and WHEREAS, the Board of Supervisors has identified the lack of affordable housing as a significant issue in the County; and WHEREAS, the Board of Supervisors has identified certain regulations applicable to the County's Affordable Dwelling Unit Program in the Zoning Ordinance and in the Codified Ordinances of Loudoun County ("Codified Ordinances") that may conflict with affordable housing funding assistance offered by the Virginia Housing Development Authority (VHDA), the U.S. Department of Housing and Urban Development (HUD), and other State and Federal housing programs; and WHEREAS, the Board of Supervisors, at its May 3, 2016, Business Meeting, unanimously approved a Board member initiative to direct Staff to prepare a Resolution of Intent to Amend Article 7 of the Zoning Ordinance, as well as amendments to Chapter 1450 the Codified Ordinances, for the purpose of amending the current regulations applicable to the County's Affordable Dwelling Unit (ADU) Program to facilitate the process for providers of affordable housing in the County to obtain funding assistance from the VHDA, HUD, and other State and Federal Programs. NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors states its intention to amend the Revised 1993 Loudoun County Zoning Ordinance as follows: I. Amend Article 7, Administration and Regu.lation of Affordable Dwelling Unit Developments, of the Zoning Ordinance, to establish new, and clarify, revise, and/or delete existing, regulations to facilitate the process for providers of affordable housing in the County to obtain funding assistance from the Virginia Housing Development Authority (VHDA), the U.S. Department of Housing and Urban Development (HUD), and other State and Federal Programs.. 2. Amend Article 8, Definitions, of the Zoning Ordinance to establish new, and clarify, revise, and/or delete existing, definitions as may be necessary to fully implement and to maintain consistency with the foregoing amendments. 3. Amend such other sections of the Zoning Ordinance as may be necessary to fully implement and to maintain consistency with the foregoing amendments, to correct typos and update references, and to achieve the full intent of this Resolution. 1

32

33 BOARD OF SUPERVISORS BUSINESS MEETING ACTION ITEM Date of Meeting: June 23, 2016 # 7 SUBJECT: ELECTION DISTRICT: CRITICAL ACTION DATE: STAFF CONTACTS: Initiation of Amendments to Article 7 of the Revised 1993 Loudoun County Zoning Ordinance and Chapter 1450 of the Codified Ordinances of Loudoun County to Amend the Regulations Applicable to the Loudoun County Affordable Dwelling Unit Program That Conflict With Affordable Housing Funding Assistance Requirements of the VHDA, HUD and Other State and Federal Housing Programs Countywide At the pleasure of the Board Mark Stultz, Zoning Administrator, Planning & Zoning Ricky Barker, Director, Planning & Zoning Sarah Coyle Etro, Assistant Director, Family Services Kelly Marrocco, Housing Development Program Manager, Family Services PURPOSE: Initiate amendments to the Revised 1993 Loudoun County Zoning Ordinance and the Codified Ordinances of Loudoun County to amend the regulations applicable to the Loudoun County Affordable Dwelling Unit Program that conflict with affordable housing funding assistance requirements of the Virginia Housing Development Authority (VHDA), the U.S. Department of Housing and Urban Development (HUD) and other State and Federal housing programs. RECOMMENDATION: Staff recommends that the Board of Supervisors (Board) adopt the Resolution of Intent to Amend the Revised 1993 Loudoun County Zoning Ordinance provided in Attachment 1 and initiate amendments to the Codified Ordinances of Loudoun County to amend to the regulations applicable to the Loudoun County Affordable Dwelling Unit (ADU) Program to facilitate the process for providers of affordable housing in the County to obtain funding assistance from VHDA, HUD and other State and Federal housing programs. In addition, in order to achieve this amendment within the Board s stated timeline with available resources, Staff recommends that the Covered Decks and Porches Zoning Ordinance amendment be delayed until the completion of the amendments proposed with this Action Item.

34 Item 7, Resolution of Intent to Amend the Zoning Ordinance and Codified Ordinances Regulations Applicable to the Loudoun County Affordable Dwelling Unit Program Board of Supervisors Business Meeting June 23, 2016 Page 2 BACKGROUND: At its May 3, 2016 Business Meeting, the Board unanimously approved a Board member initiative to direct Staff to prepare a Resolution of Intent to Amend Article 7, Administration and Regulation of Affordable Dwelling Unit Developments, of the Revised 1993 Loudoun County Zoning Ordinance (Zoning Ordinance) and Chapter 1450, Affordable Dwelling Units, of the Codified Ordinances of Loudoun County (Codified Ordinances) for the purpose of amending the current regulations applicable to the County s ADU Program to facilitate the process for providers of affordable housing in the County to obtain funding assistance from VHDA, HUD, and other State and Federal Programs. The overall objective of the amendments is to increase opportunities for providing affordable housing, which is a significant issue in the County. Based on the current Zoning Ordinance regulations in Section 7-109(A), [a] development which provides, pursuant to Federal, State or other local programs, the same number or more affordable dwelling units as the number of affordable dwelling units required under Section (of the Zoning Ordinance), subject to terms and restrictions equivalent to the requirements of this Article (Article 7 in the Zoning Ordinance), shall satisfy the requirements of the Affordable Dwelling Unit Program (emphasis added). In addition, the current regulations in Section 7-109(C) of the Zoning Ordinance states that [t]he rents and sales prices for affordable dwelling units provided pursuant to Federal, State, or other local programs shall be in accordance with the rules and regulations governing such programs and these units shall be marketed in accordance with such rules and regulations, provided rents and sale prices shall not exceed those set pursuant to this Article (emphasis added). In essence, these Zoning Ordinance Sections have been determined to mean that if affordable housing is being developed under a State or Federal Program and the developer wishes to have the dwelling units count towards meeting the affordable dwelling units required by the Zoning Ordinance and the Codified Ordinances, then such units must meet the terms and restrictions of the adopted regulations applicable to the County s ADU Program. This Board initiative proposes to revise the current regulations governing the County s ADU Program that conflict with the requirements of the State and Federal housing programs and impact the ability of affordable housing providers from obtaining funding assistance from such programs. Among the inconsistencies identified between the County s ADU Program and the VHDA program is the disparity in the qualifying criteria of household Area Median Income (AMI). VHDA allows units to be rented to households with incomes up to 60 percent of AMI, whereas the current Loudoun County ordinance only allows households with incomes between 30 and 50 percent AMI for rental units. Likewise, the current Codified Ordinance regulations found in (Administration of Program) and in preclude financing from such entities as VHDA and HUD because they require a 60 day period for the County to cure a loan default and do not provide for the covenants that secure affordability overtime to be released upon foreclosure. These sections of Chapter 1450 say The covenant shall state that any and all financing documents shall require the lender to provide to the County or its designee written notice of any delinquency or other

35 Item 7, Resolution of Intent to Amend the Zoning Ordinance and Codified Ordinances Regulations Applicable to the Loudoun County Affordable Dwelling Unit Program Board of Supervisors Business Meeting June 23, 2016 Page 3 default under the mortgage. The County or its designee shall have the right for a sixty day period to cure such a default, although the County shall have no obligation to cure the default and Any and all financing documents shall provide that, in the event of default and foreclosure of projects with units subject to the requirements of this chapter that are comprised of affordable units, the lender shall give written notice to the County or its designee of the foreclosure sale at least thirty days prior (emphasis added). These required notice provisions in the Codified Ordinance preclude financing from such entities as VHDA and HUD because their rules do not allow such a process. Another area of inconsistency in Chapter 1450 is in section (b)(1) which states The prices for subsequent re-rentals shall be controlled for a period of twenty years. The VHDA guidelines require a 15 year compliance period and a 15 year Extended Use Agreement. A comparison chart of the differences between the programs is included in Attachment 2. This Board Action Item contains the Resolution of Intent to Amend the Zoning Ordinance in Attachment 1 and, if approved, will initiate the preparation of the draft amendments. The draft amendments to the Zoning Ordinance will be presented and discussed at a future public hearing with the Planning Commission, followed by a public hearing with the Board. This Board Action Item also contains a motion to initiate amendments to the Codified Ordinances. Amendments to the Codified Ordinances do not require the adoption of a Resolution of Intent to Amend. If approved, the amendments to the Codified Ordinances will be presented and discussed at a future Board public hearing, concurrently with the proposed Zoning Ordinance amendments. The proposed action date on the proposed amendments is November 1, ISSUES: 1. The Timeline for the Amendments. In the previous May 3, 2016 Board Action Item regarding this matter, it was stated that the subject amendments need to be before the Board for action in November 2016 in order for the amendments to apply to current affordable housing proposals applying for VHDA funding. In considering the amendments to the Zoning Ordinance and Codified Ordinances, the degree of revision may pose broader policy questions that may benefit from information and public discussion that will occur after November, For example, the results of the Housing Needs Assessment currently being developed by the George Mason University Center for Regional Analysis may provide specific information about the households that need affordable rental housing that may inform revised rental ADU income ranges. Land use discussions during the development of the Comprehensive Plan may inform the distribution of and types of affordable units desired throughout the County. 2. Impact to the Timeline of Previously Directed Zoning Ordinance Amendment: In order to meet the Board s stated November 2016 timeline with available resources, this Action Item also seeks the Board s direction for delaying one of the Zoning Ordinance Amendments that was identified in the Process for Zoning Ordinance Amendments and Priority List for

36 Item 7, Resolution of Intent to Amend the Zoning Ordinance and Codified Ordinances Regulations Applicable to the Loudoun County Affordable Dwelling Unit Program Board of Supervisors Business Meeting June 23, 2016 Page Proposed Amendments, that the Board unanimously approved at the its April 7, 2016 Business Meeting. Staff recommends that the Covered Decks and Porches amendment be delayed until the completion of the amendments proposed with this Action Item. Staff believes this amendment is the least critical of the amendments in the queue and is intended to allow covered decks and porches to encroach into the minimum required rear yard in certain zoning districts throughout the County. The impetus for the amendment comes from multiple Zoning Ordinance Modifications (ZMOD s) being requested by individual property owners. This amendment was shown as starting in the second quarter of 2016, with the proposed completion in the fourth quarter of If delayed, the amendment is proposed to begin in the fourth quarter of 2016 with the proposed completion in the second quarter of 2017 (Attachment 3). The Process for Zoning Ordinance Amendments and Priority List for 2016 Proposed Amendments includes a comprehensive review of the Affordable Dwelling Unit Advisory Board (ADUAB)-proposed revisions to Article 7 and Chapter 1450 to begin in the 3rd quarter of This proposed amendment is not intended to replace the more comprehensive review of Article 7 and Chapter 1450 as recommended by the ADUAB. FISCAL IMPACT: The preparation of proposed amendments can be accommodated with existing staff resources in the Department of Planning and Zoning and the Department of Family Services. ALTERNATIVES: 1. The Board may adopt the Resolution of Intent to Amend the Revised 1993 Loudoun County Zoning Ordinance provided as Attachment 1 to the Action Item for the Board of Supervisors June 23, 2016, Business Meeting, and initiate amendments to the Codified Ordinances of Loudoun County. 2. The Board may create and adopt an alternative Resolution of Intent to Amend. 3. The Board may choose not to adopt a Resolution of Intent to Amend the Revised 1993 Loudoun County Zoning Ordinance and initiate amendments to the Codified Ordinances of Loudoun County at this time. DRAFT MOTIONS: 1. I move that the Board of Supervisors adopt the Resolution of Intent to Amend the Revised 1993 Loudoun County Zoning Ordinance provided as Attachment 1 to the Action Item for the Board of Supervisors June 23, 2016, Business Meeting.

37 Item 7, Resolution of Intent to Amend the Zoning Ordinance and Codified Ordinances Regulations Applicable to the Loudoun County Affordable Dwelling Unit Program Board of Supervisors Business Meeting June 23, 2016 Page 5 AND I further move that the Board of Supervisors direct staff to prepare the amendments to Chapter 1450 of the Codified Ordinances necessary to facilitate the process for providers of affordable housing in the County to obtain funding assistance from the Virginia Housing Development Authority, the U.S. Department of Housing and Urban Development, and other State and Federal Programs, as discussed in this Action Item, and when such amendments have been prepared, provide notice of a public hearing in regard to such amendments and the Board of Supervisors intention to propose such amendments for passage. AND I further move that the Board of Supervisors delay the Zoning Ordinance Amendment regarding Covered Decks and Porches to begin following the completion of the amendments initiated with the Resolution of Intent to Amend provided as Attachment 1 to the Action Item for the Board of Supervisors June 23, 2016 Business Meeting. OR 2. I move an alternate motion. ATTACHMENTS: 1. Resolution of Intent to Amend the Revised 1993 Loudoun County Zoning Ordinance to amend to amend Article 7 (Administration and Regulation of Affordable Dwelling Unit Developments) and Article 8 (Definitions). 2. Comparison chart of the differences between the County ADU Program and the VHDA program Zoning Ordinance Amendment (ZOAM) Work Program, Revised June 23, 2016

38 FINAL BOARD OF SUPERVISORS OF LOUDOUN COUNTY RESOLUTION OF INTENT TO AMEND THE REVISED 1993 LOUDOUN COUNTY ZONING ORDINANCE TO AMEND ARTICLE 7 (ADMINISTRATION AND REGULATION OF AFFORDABLE DWELLING UNIT DEVELOPMENTS) AND ARTICLE 8 (DEFINITIONS) WHEREAS, the Board of Supervisors wishes to initiate amendments to the Revised 1993 Loudoun County Zoning Ordinance ( Zoning Ordinance ) in furtherance of the purposes of zoning as set out in of the Code of Virginia and to further implement the comprehensive plan; and WHEREAS, the Board of Supervisors has identified the lack of affordable housing as a significant issue in the County; and WHEREAS, the Board of Supervisors has identified certain regulations applicable to the County s Affordable Dwelling Unit Program in the Zoning Ordinance and in the Codified Ordinances of Loudoun County ( Codified Ordinances ) that may conflict with affordable housing funding assistance offered by the Virginia Housing Development Authority (VHDA), the U.S. Department of Housing and Urban Development (HUD), and other State and Federal housing programs; and WHEREAS, the Board of Supervisors, at its May 3, 2016, Business Meeting, unanimously approved a Board member initiative to direct Staff to prepare a Resolution of Intent to Amend Article 7 of the Zoning Ordinance, as well as amendments to Chapter 1450 the Codified Ordinances, for the purpose of amending the current regulations applicable to the County s Affordable Dwelling Unit (ADU) Program to facilitate the process for providers of affordable housing in the County to obtain funding assistance from the VHDA, HUD, and other State and Federal Programs. NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors states its intention to amend the Revised 1993 Loudoun County Zoning Ordinance as follows: 1. Amend Article 7, Administration and Regulation of Affordable Dwelling Unit Developments, of the Zoning Ordinance, to establish new, and clarify, revise, and/or delete existing, regulations to facilitate the process for providers of affordable housing in the County to obtain funding assistance from the Virginia Housing Development Authority (VHDA), the U.S. Department of Housing and Urban Development (HUD), and other State and Federal Programs. 2. Amend Article 8, Definitions, of the Zoning Ordinance to establish new, and clarify, revise, and/or delete existing, definitions as may be necessary to fully implement and to maintain consistency with the foregoing amendments. 3. Amend such other sections of the Zoning Ordinance as may be necessary to fully implement and to maintain consistency with the foregoing amendments, to correct typos and update references, and to achieve the full intent of this Resolution. 1

39 BE IT FURTHER RESOLVED that (1) these amendments are in furtherance of the public necessity, convenience, general welfare, and good zoning practice; (2) Staff is directed to prepare draft amendments for consideration; and (3) the proposed amendments on these matters be brought forward for notice, hearing, Planning Commission recommendation and Board of Supervisors action. 2

40 ADUAB Meeting May 10, 2016 COMPARISON OF ADU RENTAL PROGRAM OPERATION & REQUIREMENTS FOR TAX CREDIT APARTMENTS (Information has not yet been verified to fill in the blank cells.) Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 1 1) Required Years in Program or term of affordability 2) Reversion to market 2) Developer May Opt Out 3) Restrict to Target Group 4) Background Checks 20 year covenant The ADUAB has recommended that the covenant period be increased. ADUAB recommended revisions were forwarded to the Board of Supervisors on January 21, 2015 as part of the Housing Stakeholders Group recommendations. 15 years in compliance period, after which monitoring/auditing is significantly reduced; and, 15 years in the Extended Use Agreement with State agency that prohibits eviction of LIHTC tenants (other than for good cause) or increase in rent other than allowable under LIHTC for remaining 15 years. 20 years 15 years in compliance period/15 years in the Extended Use period. No No Per Article 7, Section (A)(3) In the initial lottery for a new apartment Must be held out for use to the general complex providing rental ADUs, the public in a nondiscriminatory manner per following Board-adopted priorities apply: HUD Handbook Live & work in Loudoun 2. Work in Loudoun 3. Live in Loudoun 4. Anyone else Yes. All of the apartment complexes that provide rental ADUs require criminal background and credit checks Applicant may receive additional points for a commitment to maintain the low-income housing units in the development as a qualified lowincome housing development beyond the 30-year Extended Use period. (40 points for a 10 year commitment and 50 points for a 20 year commitment) 15 years in compliance period/15 years in the Extended Use period. No Must certify annually that all units in the development are for use by the general public and that no finding of discrimination under the Fair Housing Act has occurred. 1 The QAP must establish a procedure for ranking the projects on the basis of how well they meet the state s identified housing priorities and meet selection criteria that are appropriate to local conditions. In addition, the plan must give preference to projects that serve the lowest income tenants and serve qualifying tenants for the longest period of time. The QAP does not include all actions involved or required in the processing and administration of the credits.

41 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 5) Tenant Must Requalify Annually 6) May Prohibit Convicted Felons or Drug Users Yes. The tenant s Certificate of Qualification must be renewed and the apartment complex must verify monthly that ADUs contain qualified families. Yes. All apartment complexes that provide rental ADUs prohibit felony convictions including for drug use. Must at least be reviewed and documented throughout the 15 year compliance period. Initial tenant remains income qualified if qualified initially and income does not exceed 140% AMI and in the case of a Deep-Rent Skewed project can go up to 170% AMI. The 140% AMI tenant s unit is treated as a LIHTC qualified unit if another unit in the building of comparable or smaller size which subsequently becomes vacant is rented to a tenant who satisfies the applicable income test. (Available Unit Rule) For projects that are 100% LIHTC, not subject to annual income recertification. Must at least be documented and certified by the owner annually and may be reviewed by VHDA (see 16 below that describes VHDA s audit plan). 7) % of Units Meeting "504" Accessibility Requirements Must meet building code requirements. All apartment complexes that provide rental ADUs have a reasonable accommodation policy as does the program. The County and apartment complex managers work together with the household to match for accessibility needs. The QAP provides points in the application competition for development characteristics that include: 5 points for 5% of units conforming to 504 accessibility requirements and are actively marketed to persons with disabilities; 15 points for all elderly project meeting universal design; and 15 points multiplied by the percentage of universal designed units for nonelderly developments.

42 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 8) Require Durable Exterior Materials 9) Quality of Interior Finishes 10) Minimum Unit Size (2BR) Must meet building code requirements; it is up to the discretion of the apartment developer to design the exterior of the building. Interior finishes of rental ADUs are identical to the market rate rentals included in the complex; ADUs float within a complex. There is no minimum 2BR unit size or any minimum unit size requirement associated with the program. Unit sizes are not limited. Rent amount is set based on number of bedrooms not a function of income. Set 30% of allowable income according to allowable tenancy of bedroom size (i.e., 1 bedroom equals 1.5 persons income limit). The QAP provides points in the application competition for development characteristics that include: 10 points for brick or similar lowmaintenance material covering 30% or more of the exterior walls when at least a 749 square foot meeting room is provided, then an additional 1/5 point for each percent of exterior brick wall; or 1/10 of a point for each percent of exterior wall covered by cement fiber board. Certification that the design of the proposed development meets all VHDA applicable amenity and design requirements for the type of housing to be provided.

43 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 11) Require Energy Efficient Design 12) Require Efficient Use of Circulation 13) State Approved Management Agent 14) Approved Pre-Occupancy Operations Pro- Forma 15) Annual Management Performance Review Must meet building code requirements; it is up to the discretion of the apartment developer to incorporate energy efficiency within the complex. Must meet building code requirements; it is up to the discretion of the apartment developer to incorporate energy efficiency within the complex. The County works in partnership with the apartment complex managers that provide rental ADUs; an annual property managers meeting is held as well as monthly contact with the managers for rent & income certification. The County works with new apartment complex managers in advance of occupancy and has standard operating procedures that provide program consistency and a standard process for lease-up. The County meets with apartment complex managers annually, conducts regular site visits to all properties; and requires monthly reporting by apartment complex managers. Points are awarded in the competitive application process for various priority items that the developer proposes. Architect must have received VHDA LEED or Earthcraft certification. 15 points are awarded for LEED silver development designs or Earthcraft development designs; 30 points for LEED Gold developments development designs or Earthcraft Gold development designs developments; 45 points for LEED Platinum development designs or Earthcraft Platinum development designs. Requires commitment to use a VHDA certified property management company.

44 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 16) Annual Audit The County meets with apartment complex managers annually, conducts regular annual site visits to all properties; and requires monthly reporting by apartment complex managers. Project owner certifies annually that for the preceding 12 months the project was in compliance to include: the owner has received an annual income certification from each low income tenant and documentation supporting the certification, and that the building was suitable for occupancy. State must monitor either by: 1. Review the annual income certifications, including documentation supporting the certifications for at least 50% of the State s low-income projects, and tenant records in at least 20% of the low-income units in these projects, or 2. Make annual on-site inspections of at least 20% of the State s projects and review the low-income certifications, the documentation supporting the certification and rent record for each tenant in at least 20% of the low-income units in those projects or 3. Obtain from all State project owners tenant income and rent records for each lowincome unit and for at least 20% of the projects, review the annual tenant income certification, backup income certification and rent record for each low-income tenant in at least 20% of the low-income units in those projects. VHDA is required to monitor developments receiving credits. Compliance is the responsibility of the owner. Owner certifies annually to VHDA. The owner must keep records for each qualified low-income building for each year to include the total number of residential rental units in the building (including the number of bedrooms and the size in square feet of each rental unit); the percentage of residential rental units that are low-income units; the rent charged on each residential rental unit including utility allowance; the lowincome unit vacancies in the building and information that shows when, to whom, the next available units were rented; the annual income certification for each lowincome tenant; and documentation to support each low-income tenant s income certification. The owner must also certify that if a lowincome unit in the development became vacant during the year, reasonable attempts were made to rent that unit or the next available units of comparable or smaller size to tenants having a qualifying income before any units in the development were rented to tenants not having a qualifying income. Must also certify in the first year with information necessary for VHDA to determine eligibility for tax credits.

45 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 17) Annual All- Unit Inspection Initial inspection before end of second calendar year after last building is placed in service. Subsequent inspections of 20% of units every three years. VHDA will conduct on-site inspections of all the buildings in the development by the end of the second calendar year following the year the last building in the development is placed in service for at least 20% of the development s lowincome housing units, inspect the lowincome certification, the documentation the owner has received to support the certification, and the rent record for the tenants in those buildings. In addition, at least every 3 years, VHDA will conduct on-site inspections of all the buildings in each low-income housing development for at least 20% of the development s low-income units, inspect the units, the low-income certifications, the documentation the owner has received to support the certifications and the rent record for the tenants in those units. VHDA determines which developments to review in a particular year and which tenant records to inspect.

46 ADUAB Meeting May 10, 2016 Category ADU Rental Program Internal Revenue Code Section 42 VHDA Qualified Allocation Plan (QAP) Application 18) Maximum Household Income Households with incomes between 30% AMI to 50% AMI based on family/household size. The ADU program uses household income. There are two rental ADU complexes that set the income limit at 40%AMI. There are several apartment complexes in the County that have rental ADUs and that have been financed with LIHTC. Must meet minimum low-income set aside requirement to include: 1. 20/50 test at least 20% of the units must be both rent restricted and occupied by tenants with incomes at or below 50% AMI or 2. 40/60 test--at least 40% of the units must be both rent restricted and occupied by tenants with incomes at or below 60% AMI. The LIHTC program uses a projected gross income. Up to 50 points for the commitment to impose income limits on the lowincome units throughout the extended use period. May receive additional points for the percentage of both rent-restricted to and occupied by households at or below 50% AMI or below 30%. 19) Vacant Unit Rule All rental ADUs must be occupied by income eligible household If owner makes reasonable attempt to rent to income qualified tenant and is unable to rent to income qualified tenant, unit still qualifies as a LIHTC unit even if rented at market rate to nonincome qualified unit as long an equal or smaller unit is rented to a qualifying family.

47 2016 ZONING ORDINANCE AMENDMENT (ZOAM) WORK PROGRAM ZOAM PRIORITIES & GENERALIZED PROCESSING SCHEDULE - BY QUARTER Adopted: April 5, 2016 DRAFT Amended: June 23, 2016 ANTICIPATED ZOAM SCHEDULE ZOAM INITIATIVE/TOPIC Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 NOISE STANDARDS (ZOAM ) 2 RURAL USES AND HISTORIC STRUCTURES - "RURAL PACKAGE 1" (ZOAM ) 3 CRAFT BEVERAGES (ZOAM ) 4 TELECOMMUNICATIONS FACILITIES: MICRO CELL (ZOAM ) 5 DATA CENTERS IN CLI (ZOAM ) 6 MUNICIPAL WELLS (ZOAM ) 7 TELECOMMUNICATIONS: COMMUNICATIONS COMMISSION RECOMMENDATIONS (ZOAM ) 8 AFFORDABLE HOUSING #1: ADU PROGRAM REGULATIONS - CONSISTENCY WITH STATE & FEDERAL PROGRAMS 9 COVERED DECKS AND PORCHES 10 POLITICAL/TEMPORARY SIGNAGE (ZOAM ) 11 FLOODPLAIN OVERLAY DISTRICT (FOD) (ZOAM ) 12 STATE CODE ITEMS (BATCH AMENDMENT) 13 PD-TC (PLANNING DEVELOPMENT TOWN CENTER) DISTRICT (ZOAM ) 14 RURAL USES AND PERFORMANCE STANDARDS - RURAL PACKAGE 2 15 PARKING STANDARDS 16 FAR AVERAGING (PENDING COUNTY ATTORNEY FEEDBACK) 17 AFFORDABLE HOUSING #2: ADUAB RECOMMENDATIONS 18 SETBACKS/YARDS/BUFFERS & RELATED LANDSCAPING 19 GENERAL CLEAN-UP OF ORDINANCE (BATCH AMENDMENT) SCHEDULE NOTE: KEY: Time frames are approximate and indicate the quarters of each calendar year during which activity on the subject ZOAM initiative is Active/Pending ZOAM per prior Board direction. expected to occur. The schedule assumes time required to complete requisite research and analysis, agency referrals, public and Priority ZOAM per prior Board direction. stakeholder outreach (as needed), and Planning Commission and Board of Supervisors processes, to include worksessions and ZOAM per State Code and/or State/Federal Programs. committee deliberations. ZOAM identified by ZOAG and/or Staff. Preliminary review/prep by ZOAG committee. Anticipated ordinance adoption. Work Program Amendments 1 Add ZOAM "Affordable Housing #1: ADU Program Regulations - Consistency with State & Federal Programs"; adjust timeframes for other ZOAMs to accommodate addition; June 23, 2016

48 COUNTY OF LOUDOUN DEPARTMENT OF FAMILY SERVICES EQUAL HOUSING OPPORTUNITY MEMORANDUM TO: FROM: Mark Stultz, Zoning Administrator, Department of Planning and Zoning Kelly N. Marrocco, Housing Development Program Manager DATE: July 12, 2016 RE: Affordable Dwelling Unit Advisory Board (ADUAB) - Recommendations for Changes to Article 7 & Chapter 1450 The Affordable Dwelling Unit Advisory Board (ADUAB) met on July 12, 2016 to discuss the recommendations from the ADUAB Sub-committee concerning the Board of Supervisors approved Resolution of Intent to Amend (ROIA) Article VII of the Zoning Ordinance and Chapter 1450 of the County of Loudoun Codified Ordinance (Ordinances). ADUAB had the opportunity to discuss possible changes with Mark Stultz, the Zoning Administrator and Chris Mohn, the Deputy Zoning Administrator. ADUAB discussed the main Sub-committee items including: Interspersion The ADUAB discussed the current Ordinance requirement for interspersion and the various unit types that are provided as a result; the effect of the recommended changes to Ordinance requirements for interspersion; the impact of the proposed change on the ADU purchase program and the large waiting list of first-time home-buyers. Impact of the conversion of for-sale ADUs to rental ADUs The ADUAB discussed the loss of forsale units and the demand for both ADU for-sale and ADU rental units; the increase in the number of affordable rental units (non-adus) that could be provided in LIHTC projects (20%/50% AMI and 40/60% AMI options) and the income eligibility requirements for both programs. LIHTC projects The ADUAB discussed the number of existing LIHTC projects in the County; the competitive nature of the process to obtain tax credits; and the likelihood that the number of future developments in Loudoun that receive LIHTC allocations may be limited given the competitive process. Quick Fixes The ADUAB discussed the need to revise the Ordinances as they relate to covenants terminating at foreclosure in order to secure financing for both the for-sale and rental programs (this being the critical factor to receiving LIHTC and other forms of State and Federal funding) and defer any additional quick fixes not directly related to supporting the use of State and Federal programs to be addressed with the next Article 7 ZOAM scheduled to begin in 2016 per the Board of Supervisor s adopted Strategic Plan. In addition, ADUAB discussed the timing of the ROIA; ADUAB s participation in future language revisions; stress that this revision should be for specific developments and not allow the stockpiling of affordable housing in one building to meet ADU requirements in other developments; provide a clear recommendation that the revision specifically addresses the LIHTC and HUD 221 (d)(4) programs and other financing options would have to be approved by ADUAB with the understanding the programs meet Attachment 3a