INTRODUCTION TO THE WHITEFISH LEGACY HOMES PROGRAM SUMMARY SHEET UPDATED

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1 INTRODUCTION TO THE WHITEFISH LEGACY HOMES PROGRAM SUMMARY SHEET UPDATED Purpose: Facilitate the creation of permanently affordable workforce housing in the City of Whitefish Why: 2016 Whitefish Housing Needs Assessment, adopted by the Whitefish City Council, shows 980 affordable units needed by 2020 (580 rental/400 ownership) of which 62% should be provided at an affordable rate. The 2017 Strategic Housing Plan, also adopted by the City Council, identified Inclusionary Zoning as one tool to build affordable housing. What is Inclusionary Zoning? A regulation requiring a certain percentage of homes to be deed restricted for long-term affordability. The current draft requires 20% of the total project be deed restricted and targeted toward a certain Area Median Income (AMI) depending on whether it is a rental or ownership product. What is AMI? AMI is the Area Median Income established by the federal government annually. The 2018 AMI for Flathead County for a 2-person household (the average in Whitefish) is $53,400. This is also referred to as 100% AMI. What is Affordable? Mortgage no more than 30% gross monthly income for households making % AMI Rental no more than 30% gross monthly income for households making 60-80% AMI What Types of Development Will be Subject to the WF Legacy Homes Program? Subdivisions (Major & Minor); Planned Unit Development (PUD) involving residential; Conditional Use Permits (CUP) involving multi-family residential Compliance: 1. Provide housing on-site and in-lieu fees (ILFs) for fractional units; 2. ILFs x 1.5; or 3. Other options may be considered. Incentives for Developers/Builders: Reduction in parking, lot sizes, lot width Increase in building height, density, lot coverage A streamlined development approval process for smaller projects and projects in the WB-3 For More Information Please Contact the Whitefish Planning Department:

2 WHITEFISH LEGACY HOMES PROGRAM DETAILED OVERVIEW Purpose of Program To facilitate the creation of permanently affordable workforce housing in the City of Whitefish. 20% = the percent of new homes deed-restricted for affordability required in a project Applicability Major and minor subdivisions Planned Unit Developments (PUDs) involving residential units Conditional Use Permits (CUPs) involving multi-family residential units Exemptions Subdivision creating only 1 additional lot Accessory apartments Minor waiver of subdivisions Residential units allowed by right Units that are deed or in other manner restricted for long term occupancy by households that meet some other housing program s eligibility criteria, at the discretion of the City. Pricing Based on needs identified in the 2016 Workforce Housing Needs Assessment, residential ownership units will be targeted for 2-person households earning % AMI, as published annually by the U.S. Department of Housing and Urban Development, and rental units will be affordable to households earning 80% or less AMI. The following represents rentals and home pricing based on April 2018 AMI. These numbers will change annually based on updated AMI information from U.S. Department of Commerce: AMI Category 1 Rental Units Category 2 Ownership Units 60-80% $820 to $1,094/month: 2-bedroom Average 70% $957/month 2-bedroom % $185,965 to $278,947: 2-bedroom Average 100% $232,456 2-bedroom For More Information Please Contact the Whitefish Planning Department:

3 Characteristics of Deed Restricted Units On-site and interspersed with market rate units with exemptions, as appropriate Same type of units as rest of development (if a mix, then proportional to rest of development) Owner/renter mix matches rest of development The bedroom mix for the deed restricted units will align with the bedroom mix of the market units provided it is responsive to the needs identified in the Workforce Housing Needs Assessment Phasing of the deed-restricted units will match phasing of the rest of the development The sizes of the deed restricted units may vary in a development, but must meet these requirements: Rental Minimum SF Average SF Studio Bedroom Bedrooms Bedrooms Ownership Minimum SF Average SF Studio Bedroom 700 1,000 2 Bedrooms 800 1,150 3 Bedrooms 1,100 1,300 Deed-restricted units will be architecturally compatible with surrounding development; exterior finishes will be compatible and consistent with the materials and finishes used on market rate units. Adequate storage space must be provided. Compliance A Housing Mitigation Plan will be submitted as part of the development permit application; it will detail how the proposed development will meet or exceed the WHP requirements and its contents will become conditions of the development permit approval. The proposal should clearly demonstrate how it meets or exceeds the requirements of the WHP and helps the City achieve its housing goals as established in the Strategic Workforce Housing Plan. Alternatives may be considered on a case-by-case basis. For More Information Please Contact the Whitefish Planning Department:

4 Inclusionary Rate The developer is expected to provide deed restricted Legacy units on site or pay a fee in lieu of the units equal to 1.5 times the rate regardless if the intention is to sell individual lots. The developer can also offer other options for the City Council to consider. Fees in Lieu Fees in lieu are allowed for fractions of units when the total number of units required does not equal whole units. For example, an 8-unit subdivision would require 1.6 units. Fees in lieu are allowed by right for the 0.6 unit required. For other than fractional units, fees in lieu of providing Legacy units may be considered at the discretion of the City Council. Fees for units will be assessed at 1.5 times the WLHP rate (the fee would be in lieu of providing 30% affordable units rather than 20%). For example, in a 10- unit subdivision the developer would pay a fee equivalent to three units in lieu of providing two deed-restricted units. Incentives for Meeting and Exceeding the Requirements As an offset to providing deed-restricted housing as part of a market-rate development, the WHP offers a shopping list of incentives that effectively reduce certain development standards. A project meeting the requirements could make use of the incentives below. Incentive categories include: Reduce parking requirements by 20% Increase building heights by 10% Increase density by 20% Increase percent maximum lot coverage by 10% Reduce minimum lot size by 20% Reduce minimum lot width by 10% Additionally, the Inclusionary Zoning working group is recommending an Administrative Conditional Use Permit for small projects, as recommended in the Strategic Housing Plan. Along with the recommendation for Administrative CUPs, we are proposing more stringent review criteria for multi-family and mixed-use projects. These review criteria would include: building orientation, parking lot design, grading/tree retention, open space and neighborhood scale. For More Information Please Contact the Whitefish Planning Department:

5 Whitefish Legacy Homes Program Administration 2019

6 February 27, 2019 Contents Whitefish Legacy Homes: Program Administration... 2 a) Responsibility for Administration Legacy Homes Coordinator/Whitefish Housing Authority Planning and Building Department City Council... 3 b) Housing Mitigation Plan Pre-Submission Conference Review of Housing Mitigation Plan Resubmittal of Housing Mitigation Plans Revisions to Housing Mitigation Plans After Approval Noncompliance with Conditions of Housing Mitigation Plan... 5 c) Legacy Homes Program Requirements Number of Legacy Homes in a Development Providing Fractions of Ownership or Rental Units Rental Housing Ownership Housing Timing of Compliance Alternatives that May Be Considered Incentives for Developers Meeting and Exceeding the Legacy Requirements Legacy Homes Program Administration - 1

7 February 27, 2019 Whitefish Legacy Homes: Program Administration The purpose of this program administration document is to 1) establish procedures for the City of Whitefish, staff, boards, or committees, the Legacy Homes Coordinator, and any agent of the City (Whitefish Housing Authority) to implement and administer the requirements of the Whitefish Legacy Homes Program and 2) provide the technical procedures to deliver the affordable housing required by the Whitefish Legacy Homes Program. Appendix X contains all relevant tables, which may be updated on an annual basis. a) Responsibility for Administration 1. Legacy Homes Coordinator/Whitefish Housing Authority The Legacy Homes Coordinator and the Whitefish Housing Authority (WHA) will be responsible for the following functions regarding administration of the Whitefish Legacy Homes Program (Legacy, Legacy Homes, or Legacy Homes Program): a. Facilitate flow of information and communication among City staff, WHA, and applicants for development. b. Set, review, adjust and publish Legacy Home rental rates and housing prices based on available Area Median Income (AMI) and other variables for Flathead County. c. Review the individual Housing Mitigation Plans in coordination with City staff to determine if each plan can be recommended for approval by the City Council. If plans are found to be deficient, the Legacy Homes Coordinator and City staff will work with the developer to resolve deficiencies. d. Track available and in progress Legacy Homes e. Manage all prior affordable housing agreements and the prior affordable housing program. f. Act as the primary resource to prospective and active Legacy Home buyers and renters in the Legacy Housing Program by 1) Developing and implementing public education and information activities including workshops, newsletters and public presentations. 2) Providing technical assistance. 3) Screening and qualifying households eligible to purchase or rent Legacy Home units. 4) Maintaining lists of pre-qualified households and matching qualified households with available housing units. 5) Assisting with marketing of Legacy rental and ownership homes. 6) Monitoring compliance of buyers and renters with Legacy Homes eligibility criteria. 7) Providing information to home purchasers and owners regarding allowed appreciation of deed restricted units and determining resale values of Legacy Homes. Legacy Homes Program Administration - 2

8 February 27, ) Determining allowable annual increases in rent for Legacy Homes based on Montana Board of Housing (MBOH) methodology 2. Planning and Building Department This City department or its designees will be responsible for the following functions regarding administration of the Legacy Homes Program: a. Require applicants to prepare a Housing Mitigation Plan concurrently and as part of the development review process. b. Work with applicants to ensure the Legacy Homes proposed in the Housing Mitigation Plans follows the Legacy Homes Policies and Procedures and help the City meet its goals for housing as outlined in the 2017 Strategic Housing Plan. c. Recommend to City Council approval or disapproval of Housing Mitigation Plans, including proposals for ILF contributions, clustered units, and off-site housing units. d. Monitor developer compliance with Legacy Homes Programs regulations through completion of construction, and in the event of noncompliance, requesting that the City Manager direct action by appropriate departments regarding the department s responsibility for administrating the Legacy Homes Program. 3. City Council The City Council will be responsible for approving Housing Mitigation Plans as part of the standard development permitting process. Council is also responsible for adopting any updates to these Administrative Procedures including changes to AMI or affordable rates and evaluating whether the housing goals are being met. Additionally, Council appoints the seven-member Board of Commissioners that governs the WHA. b) Housing Mitigation Plan Housing Mitigation Plans are required by the City for all residential developments described in 11-7, Whitefish Legacy Homes Program regulations. Housing Mitigation Plans will be prepared and submitted by the developer concurrently with the application request for the development permit (subdivision, CUP, PUD, etc.). Once projects are approved by City Council, the details described in the Housing Mitigation Plan become conditions of the development permit approval. Any amendment of the Housing Mitigation Plan requires approval of the Legacy Homes Coordinator and will be recorded. A Housing Mitigation Plan will include all the following, as applicable: Total number of market rate and Legacy units Square footage of total development and each unit Details regarding how the requirements of the Legacy Homes Program will be met, including unit types, sizes, number of bedrooms, amenities, heating systems and estimated utility costs, target income category, initial sales prices or rental prices, homeowner s association (HOA) structure and fees, if applicable Legacy Homes Program Administration - 3

9 February 27, 2019 Site plan, unit designs, and amenities The incentives to be employed by the project Average lot size and square footage of market rate and Legacy units Location of Legacy units within the project by type and size; justification for clustering of Legacy units, if proposed Proposed production schedule of market rate and Legacy units, including issuance of building permits Any proposed alternative methods of compliance with these Policies and Procedures, demonstrating how the alternative meets or exceeds the Legacy Homes Program requirements and helps the City achieve its housing goals as established in the Strategic Housing Plan Standardized deed restriction provided by the City Any other information deemed relevant by the Legacy Homes Coordinator 1. Pre-Submission Conference Prior to submitting any development request to which the Legacy Homes Program applies, the applicant will schedule a pre-submission conference with Planning and Building Department staff and the Legacy Homes Coordinator regarding the Legacy Homes requirements. 2. Review of Housing Mitigation Plan After submittal, each Housing Mitigation Plan will be reviewed by staff of the Planning and Building Department, in coordination with the Legacy Homes Coordinator. After review, staff will either a) accept the Mitigation Plan if it meets the Legacy Homes Program requirements and make a recommendation to City Council for approval of the Plan or b) not accept the Housing Mitigation Plan if it does not meet the Legacy Homes Program requirements and refer it back to the applicant. In this case, Planning staff will make written comments regarding the plan s deficiencies. If the identified deficiencies are not adequately addressed by the applicant, Planning staff will only recommend approval by Council with conditions added to address the deficiencies. 3. Resubmittal of Housing Mitigation Plans If a Housing Mitigation Plan has been disapproved, an applicant may resubmit a development permit application with a revised plan addressing and correcting the deficiencies identified by staff. 4. Revisions to Housing Mitigation Plans After Approval If the applicant wishes to modify or amend an approved Housing Mitigation Plan due to changes in the development proposal as it proceeds through the development review process or for other reasons, the developer must submit a new or amended Housing Mitigation Plan for approval by City Council. If the changes are minor and not substantive, Planning staff may approve the modification administratively. Minor changes would include modifications to the Legacy Homes Program Administration - 4

10 February 27, 2019 specific location of Legacy units within a development, for example, but not the number of those units. 5. Noncompliance with Conditions of Housing Mitigation Plan Failure to comply with the approved Housing Mitigation Plan is a failure to comply with the conditions of the development approval and may result in the revocation of the development approval. c) Legacy Homes Program Requirements 1. Number of Legacy Homes in a Development If a developer proposes to subdivide residential lots or construct residential housing, then twenty percent (20%) of the gross number of residential lots or housing units in a development will be Legacy Homes. The applicant for a development permit is required to produce the Legacy Homes on-site. The type of units to be constructed will be proposed in the Housing Mitigation Plan and approved by Council. In developments where both Legacy and market rate residential units will be constructed, the balance of ownership versus rental units, the type of units (single family attached, detached, or multi-family), and the number of bedrooms offered per unit will be proportional between the Legacy and market rate units. For example, a proposal to build eight single-family attached townhomes would require 8 x 0.2 = 1.6 Legacy townhomes for ownership. A proposal to build five single-family attached townhomes and eight rental units would be required to provide one Legacy ownership townhome and 1.6 Legacy rental units. 2. Providing Fractions of Ownership or Rental Units When the calculation to determine the number of units required by Legacy Homes Program, as described above, results in a fraction of a home, an in-lieu-fee (ILF) may be paid for the fraction. To calculate the fee, multiply the number of proposed units by 20% and the resulting number is the number of fractional units required. The resulting number is multiplied by the associated ILF rate. The ILF calculator used to determine the fee is found in Appendix X. If the calculation results in a whole number and a fraction (ie., the 1.6 described above), the whole number resulting from the formula is the number of Legacy units required be constructed and the remaining fraction may be satisfied with the ILF. The fee will be the associated rate from Appendix X multiplied by the remaining fraction. The ILFs are not and will not be used as an alternate means of compliance, except as outlined below in Alternatives That May Be Considered. The fees will be paid prior to issuance of a building permit or recording of a final subdivision plat. The proceeds of the fee will be credited to the WHA Affordable Housing Fund approved by the City Council. 3. Rental Housing Legacy Home Program (LHP) rental units will be marketed, leased, and occupied according to these criteria: Legacy Homes Program Administration - 5

11 February 27, 2019 a. Eligible Renters WHA will screen rental applicants for income and residency eligibility and maintain a list of eligible renters for LHP units. In general, households earning incomes of between 60% and 80% AMI will be eligible to rent Legacy Homes. Priority will be given to households with at least one household member who is employed in the City of Whitefish, then to those with members employed within the zip code area, and finally to those with employment outside the zip code area. Further program eligibility criteria may be established or modified by WHA. b. Rental Rates The monthly rent of a Legacy Home rental unit being rented pursuant to a Housing Mitigation Plan is provided in the calculator available in Appendix A under the rental. There will be no side agreement obligating the Legacy tenant to pay the property owner for any add-on features or services. Security deposits may not exceed the sum of two months rent at the Legacy Home rental rate for a unit and in no case can the security deposit be a larger percentage of rent than what is required of market rate units. Legacy Home rental rates are based on AMIs as established by HUD using MBOH methodology; the calculator is provided in Appendix A. Rental housing is affordable when housing expenses (including payment and utilities) are no more than 30% of a households income. Since AMI varies by household size, the following assumptions about the number of people in a household are made for Legacy rental units with different numbers of bedrooms: # Bedrooms # People in Household The price provided in the table below assumes the landlord pays all utilities. If heat, electric, or water utilities are not included in the rental price, the monthly rate will be reduced accordingly (Appendix A for calculator). Prices will be updated annually following HUD s updates to AMI numbers. Legacy Rental Unit Price Distribution AMI 0BR 1BR 2BR 3BR 60% $701 $751 $902 $1,041 70% $817 $876 $1,052 $1,215 80% $934 $1,001 $1,202 $1,388 Legacy Homes Program Administration - 6

12 February 27, 2019 c. Adjustment of LHP Rental Rates The Legacy Homes Coordinator will review and adjust the rent in each income range and for each unit size based on annual updates to AMI and using the MBOH methodology. The Legacy Homes Coordinator will publish the new rents immediately upon adoption of a Resolution approved by the City Council. d. Minimum Requirements for Legacy Home Rental Units Legacy Home rental units will be built to conform to local, state and federal laws according to the following guidelines concerning design, equipment, and physical features. Floor size Legacy Home rental units will be constructed according to the minimum and average requirements for bathrooms and square footage of habitable residential space in the table below. The size of each unit type may vary within a development, but no unit will be smaller than the minimum size, and the size of all units by type must meet the average size shown below. Unit Type Minimum Bathrooms Minimum Square Feet Average Square Feet of all units/type in development 0 Bedroom (Studio) Bedroom Bedroom Bedroom Minimum floor areas of habitable residential space include partitions, closets, heated utility rooms, halls and stairways but exclude attics, porches, unfinished basements, garages and unheated storage space. Equipment and hookups Each rental unit will include a new kitchen range and refrigerator; hookups for a clothes washer, dryer, or laundry on site. Design and location The proposed design and location of the Legacy Home rental units within the development will be reviewed and accepted by Planning staff, in consultation with the Legacy Homes Coordinator, and approved by City Council in order to achieve spatial integration with, dispersion throughout and compatible exterior architectural and landscaping appearance with the market units in the development. e. Mix of Unit Types The mix of Legacy Home rental units will match the mix of market rate rental units but may be modified by the City to meet the needs identified in the Workforce Housing Needs Assessment, Strategic Housing Plan, or any housing needs identified subsequent to those documents. Legacy Homes Program Administration - 7

13 February 27, 2019 f. Marketing to and Certifying Tenants for Legacy Rental Units The WHA will certify tenants who are eligible to rent Legacy Home rental units and will maintain a list of eligible tenants. Marketing of the Legacy Units will be the responsibility of the developer or property manager; the WHA may assist with marketing but will not be responsible for a unit being vacant for insufficient marketing or any other reason. Reviews, background checks, decision to rent or not rent, execution of rental leases, and the day to day management of the rental units will be the responsibility of the developer/property manager or their associate or successor. The WHA will establish and maintain an equitable process for allocating rights to lease the rental units, including waiting lists where demand exceeds supply. g. Certification of income after occupancy The income of tenants will be recertified by the WHA upon lease renewal, or no more often than once per year. Based on its findings, the WHA will determine whether or not the lease will be renewed. h. Terms of compliance Rental housing developments subject to the Legacy Homes Program requirements will maintain required occupancy and rental rates in Legacy units for a period of 90 years after the date of issuance of a certificate of occupancy for the entire development or portions thereof. Subsequent 90-year deed restrictions will be renewed any time the property changes hands. This requirement will be applicable to successors in title by means of a deed restriction. A Cityapproved deed restriction template is provided in Appendix X and must be used. 4. Ownership Housing This section covers all requirements specific to Legacy Homes ownership. a. Eligible Buyers Following are general eligibility criteria for purchasers of Ownership Housing; further program eligibility criteria may be established or modified by WHA. Ownership Legacy Homes created through the Legacy Homes Program will be sold to and occupied by an eligible owner-occupant household. An eligible owner-occupant household will be certified by the WHA no more than 90 days prior to a purchase contract being executed for a Legacy Home. Such certification is valid for 12 months following the execution of the purchase contract. If the 12 months elapses before closing of the unit for which the Legacy Home buyer is under contract, the household s eligibility will be re-certified and valid for an additional 90-day period. Income Legacy Homes will be targeted for households earning 80.1% AMI to 120% AMI; however, the range of incomes allowed for eligible households will be somewhat broader to ensure there are enough buyers for the Legacy Homes produced. The range of eligible household incomes will be established by the WHA but will not extend further than to households making 150% AMI. The AMI is updated annually by HUD and is provided in Appendix A for the current year. Legacy Homes Program Administration - 8

14 February 27, 2019 Liquid Assets Eligible purchasers must not have more than two times their annual income in liquid assets, excluding retirement funds, college savings funds, and funds in Health Savings Accounts. b. Characteristics of Legacy Ownership Units The type of housing unit (single-family detached or attached, duplex, triplex, townhome, etc.) and the number of bedrooms offered (not necessarily the square footage) will match the market units offered in a development. If the development provides a mix of unit types, the Legacy units will proportionately match the mix among market units acknowledging that rounding may be required (round down for 0.4 units or less, round up for 0.5 units or more). For example, a development of market rate townhomes must provide townhomes for the Legacy units. Exceptions may be allowed if all market units are single-family detached homes, in which case up to half of the required Legacy units may be attached single family homes (duplexes, triplexes, townhomes). If the project is a subdivision only in which the developer plans to sell lots but not build market rate units, the Legacy unit types and numbers of bedrooms required will be based on the needs identified at time of approval. The mix of the number of bedrooms offered in Legacy units will mirror the mix of bedrooms offered in the market rate units, provided the mix is responsive to the needs and demographics of Whitefish residents as established in an up to date market study and the performance of previous housing developments. The City reserves the right to adjust the mix once some Legacy Homes have been built in the community and the performance of various bedroom mixes established. Three-bedroom units may be allowed to satisfy the Legacy Homes requirement for market units with four or more bedrooms. The sizes of the Legacy units may vary in a development, but no unit may be smaller than the minimum square footage (SF), and the size of all units must at a minimum average the SF, listed below. # Bedrooms Minimum SF Minimum Average SF Studio Bedroom 700 1,000 2 Bedrooms 800 1,150 3 Bedrooms 1,100 1,300 When phased construction is planned for a development, the proportion of Legacy units will be constructed in proportion to the market rate units constructed during each phase of development. In a 10-unit development in which five units will be constructed in each of two phases, one Legacy unit must be constructed in each phase. If the development will be constructed in one phase, a financial assurance or some other guarantee that the Legacy units be completed concurrently with market units is required. Legacy Homes will meet the requirements of the City of Whitefish land development regulations and building codes. Legacy units will be architecturally compatible with surrounding development. Exterior finishes will be substantially compatible and consistent with the Legacy Homes Program Administration - 9

15 February 27, 2019 materials and finishes used on the market rate units. Adequate storage space must be provided. Designs that reduce utility costs and enhance the long-term affordability of the Legacy Homes are required; conversely, amenities that are costly to operate and maintain are not allowed. The design must address livability, maintenance, health, safety, climate, lifestyle, and the needs of the types of households the units are intended to serve. Balconies, decks and private yards similar to the market rate units are required to enhance livability of the Legacy units. c. Pricing of New Housing for Ownership The initial sales price of the Legacy ownership homes will be the lesser of either 80% of the appraised market value of the home, or the price shown in the price distribution table below. The Legacy Homes should be priced in a spectrum consistent with unit size, location, and market demand, with the average price of Legacy Homes affordable to households earning 100% of AMI ($210,419 for a 2-bedroom home). The following assumptions about the number of people in a household are made for Legacy ownership units with different numbers of bedrooms: # Bedrooms # People in Household Variables that affect the initial target sales price of a Legacy ownership unit include the mortgage interest rate, the amount of the down payment, the term of the mortgage, and the portion of the monthly mortgage payment that goes towards principal and interest. These variables will be updated annually as needed. The distribution of target prices is shown in the table below and the calculator for determining the prices is provided in Appendix A. Legacy Ownership Units Initial Sales Price Distribution (if lower than 80% of appraised value) AMI 0BR 1BR 2BR 3BR 80% $138,524 $148,461 $168,335 $188,061 90% $155,840 $167,019 $189,377 $211, % $173,156 $185,577 $210,419 $235, % $190,471 $204,134 $231,461 $258, % $207,787 $222,692 $252,503 $282,091 The maximum price for units restricted at 120% of AMI would be $252,503 for a 2-bedroom home or $282,091 for a 3-bedroom home. The actual sale price will include the following costs to the buyer as described on the settlement sheet for the sale: The sale price of the home Legacy Homes Program Administration - 10

16 February 27, 2019 Any sales commission which is payable by the buyer Any monthly fee such as a homeowner s association fee or common area fee Any other settlement cost charged to the buyer which in Whitefish is normally charged to the seller d. Adjustment of New Legacy Home Prices The Legacy home prices approved by Council on xxxx xx, 2019 will remain in effect until the updated AMIs are published by HUD, after which time the prices may be adjusted as set forth in these administrative procedures unless otherwise amended by Council. Beginning in 2020 and annually thereafter, the Legacy Homes Coordinator will review and adjust the Legacy Home price for each income range and for each unit size based on annual updates to AMI. The Legacy Homes Coordinator will publish new Legacy Home prices immediately upon adoption of a Resolution approved by the City Council. Nothing herein prevents Council from amending the Legacy Homes Program ordinance without such recommendations from the Legacy Homes Coordinator. e. Deed Restrictions for Ownership Housing All deed restrictions applicable to Legacy ownership homes must include resale restrictions binding future buyers and sellers to the applicable conditions set forth in this Program Administration as updated annually and will be in a form approved by the Housing Program Manager and the Whitefish City Attorney (Appendix B). The Legacy Homes will be deed restricted for a term of 90 years subject to renewal of the 90- year term anytime the property changes ownership. f. Recording of Deed Restrictions The developer or any owner selling a Legacy Home will cause to be recorded in the County land records, simultaneous with the recording of the deed of sale, a form of deed restriction that fulfills the requirements of this section regarding controls placed on the occupancy and resale of Legacy Homes. The effect of recording said deed restriction will be to create, in accordance with state law, an obligation that runs with the property. The Legacy Homes Coordinator/City Attorney will provide a template deed restriction to be used for the transaction. Initial affordability will be achieved by including in the Housing Mitigation Plan the terms of an escrow instruction requiring certification of Legacy Homes Program compliance by an escrow agent. g. Rental Prohibition Legacy Homes will not be rented to a second party, except at the discretion of and as approved in writing by the Legacy Homes Coordinator for instances in which the owner is under duress by reason of unemployment, family medical emergencies, inability to sell the home for an amount equal to or greater than the original sale price, or other unique circumstances of family hardship such as military deployment. In providing written permission, the Legacy Homes Coordinator will specify a limit on the rental not to exceed 24 months. Legacy Homes Program Administration - 11

17 February 27, Timing of Compliance The required number of Legacy Home rental units in a single project will be leased as each building or phase of the project is offered for rent. A phase is defined as a group of units which is completed and ready for occupancy within a period of one year. This principle will be reflected in each Housing Mitigation Plan providing for on-site rental housing. In developments where Council has approved an ILF as an alternative means of compliance, the ILF is due upon approval of the development request and prior to the issuance of a building permit. For ownership units, the Legacy Homes will be made available for sale at the same time and in proportion to the market rate homes in the project which are made available for sale. This principle will be reflected in the Housing Mitigation Plan providing ownership units. 6. Alternatives that May Be Considered The expectation is that 20% of the housing units produced in a development will be Legacy Homes and the Legacy Homes will be constructed on site and interspersed with the market rate residential units. An exception is condominium developments, for which buyer financing can be difficult to obtain. Condominium Legacy units are not desired, and the developer of such projects must instead comply with the requirement through an alternative method. Even if the intention is to subdivide only and sell individual vacant lots, the developer is expected to provide Legacy Homes on site. The developer of a subdivision with no market homes will be required to provide a financial guarantee for each unit required that will be released upon issuance of the certificate of occupancy for the deed restricted unit. Alternatives may be considered as described below. Additionally, there may be situations when the Legacy Home units are either not compatible with other uses on the proposed development site or the development site is not appropriate for Legacy Homes due to distance from services or characteristics of the property that would make affordability for Legacy housing impractical. In these situations, the City may consider alternative means of compliance with the Legacy Homes Program; however, any alternatives would be approved at the discretion of the City Council and are not guaranteed. High levels of property tax, high homeowner s association dues, a predominance of short-term rental use, some condominium developments, or a location far from schools, transit, or shopping are potential characteristics that would support a developer s proposal for alternative means of compliance with Legacy Homes Program requirements. Alternatives that may be considered are described below; this is not an all-inclusive list and the developer also may, at his or her own risk, propose an alternative means of compliance with the Legacy Homes Program that is not listed below. a. Off-Site Housing In situations where the provision of the Legacy Homes off-site is preferable to providing units on-site, an off-site location may be considered at the discretion of the City Council if the developer can demonstrate how the alternative option meets the City s housing goals Legacy Homes Program Administration - 12

18 February 27, 2019 established in the Strategic Housing Plan better than the on-site requirement. A developer may also propose to partner with another developer who already has an approved land use permit and could construct additional Legacy units as part of that project. When Legacy units are provided off-site from market rate units, unit size, quality, design, and construction shall be determined by the Housing Mitigation Plan approved by the City of Whitefish as part of the development permit approval process. The ratio of Legacy units required relative to market rate units in a project remains 20:80 when the off-site option is used. For example, a development to build 10 housing units will be required to have 2 of those 10 as Legacy Units (20:80 ratio achieved). If the developer is to build 10 on-site market rate units and 2 off-site Legacy Units (12 total), the developer will need to pay an ILF for 0.4 Legacy Units as 12 units built requires 2.4 Legacy Units (20:80 ratio achieved). b. In Lieu Fees For other than fractional units, fees in lieu of providing Legacy units (ILFs) may be considered at the discretion of the City Council when the proposed development location and building off-site are both inappropriate for Legacy Homes. Except for condominium developments, fees for units will be assessed at 1.5 times the Legacy Homes Program rate (the fee would be in lieu of providing 30% Legacy units rather than 20%). For example, in a 10-unit subdivision the developer would pay a fee equivalent to three units in lieu of providing two Legacy units. In a condominium development where Legacy units are not appropriate, the ILF would be the Legacy Homes Program rate without the multiplier. Fees will be calculated using the ILF calculator provided in Appendix A and is based upon publication of AMI s for Flathead County by HUD. An administrative charge of 10% is included to cover the costs associated with the furtherance of affordable housing initiatives. The ILF is due upon approval of the development request and prior to the issuance of a building permit. An applicant may propose an alternative to this timing requirement, subject to the Council s approval. c. Land in Lieu A developer who is subdividing property and selling parcels but is not a builder of residential homes or apartments may propose to provide land in lieu of the required Legacy Homes. The appraised value of the property to be dedicated must be of equal or greater value than the ILF that would otherwise be required. Additionally, the property to be dedicated must help further the goals of the Legacy Homes Program and provide a greater overall public benefit that if the required Legacy Homes were constructed within the development. It is the responsibility of the developer to propose a means of compliance with the Legacy Homes Program that City Council will consider and approve at their discretion. Considerations may include but are not limited to whether the parcel is served by existing infrastructure, adjacent land uses, and proximity to services. d) Clustering There may be special circumstances when clustering the Legacy units on the development site will be considered if clustering will enhance a sense of neighborhood, the market units are used Legacy Homes Program Administration - 13

19 February 27, 2019 as short-term rentals, the housing provided would be close to trails, bus stops, or places of employment, or the clustered Legacy Homes will otherwise exceed the requirements of the Legacy Homes Program. If Legacy units are not compatible on the proposed future development site, it is the responsibility of the developer or property owner to propose alternatives acceptable to the City. 6. Incentives for Developers Meeting and Exceeding the Legacy Requirements As a partial offset to the cost of providing Legacy housing as part of a market-rate development that requires a CUP, the Legacy Homes Program offers incentives that effectively reduce certain development standards by-right (below). The developer providing the required Legacy units, an ILF, or other approved alternative method of compliance receives the following incentives: Reduce Parking Requirements for 2+ Bedroom Units by 20% Increase Maximum Building Height by 10% Increase Maximum Lot Coverage by 10% Increase Density by 20% In the WR-3 (low density multi-family residential) zoning district, for example, these incentives would provide the following benefits for a one-acre site with an 8-plex and a 6-plex proposed (seven 2-bedroom, four 1-bedroom, and three studio): District Development Reduced Standard Standard Required # parking spaces Max building height 35 feet 38.5 feet Max lot coverage 40% = 0.4 acres = 17,424 sf 44% = 0.44 acres = 19,166 sf Max density 14 units/gross acre 16.8 units/gross acre (two more units could be added) The land developer who is subdividing and providing Legacy units, an ILF, or other approved alternative method of compliance will receive the following incentives: Reduce Lot Size by 20% Increase Density by 20% Reduce Lot Width by 20% Increase Lot Coverage by 10% In the WR-1 (one-family residential) zoning district, for example, these incentives would provide the following benefits for a two-acre site with an eight-lot subdivision proposed: District Development Reduced Standard Standard Minimum lot size 10,000 sf 8,000 sf Max density 4 units/gross acre = 8 lots 4.8 units/gross acre = 9 lots Legacy Homes Program Administration - 14

20 February 27, 2019 Minimum lot width 60 feet 48 feet Max lot coverage 35% = 3500 sf/10,000 sf lot 38.5% = 3080 sf/8,000 sf lot or 3850 sf/10,000 sf lot Note that the number of units used to determine density cannot be rounded up. If the subdivision application was instead for four lots on one acre, the density allowed would still be 4.8 units/gross acre, but an additional lot would not be permitted because it would increase density by greater than 20% to 5 units/acre. A developer using the PUD process may use by-right either set of incentives based on the project needs but may not use both. Should the developer need or want reductions in these standards that go beyond what is offered by-right, or in other development standards, the request would need to be made through the PUD process and would therefore require City Council approval. The density bonus provided for in the PUD chapter (11-2S-3) may be used if the project meets the community benefit criteria (11-2S-6). Note the provision of affordable housing in a project with a PUD required by the Legacy Homes Program is not considered a community benefit for the purposes of meeting the criteria. Legacy Homes Program Administration - 15

21 Draft Calculator will be Added When Complete

22 AFFORDABLE HOUSING DEED RESTRICTIONS THIS DEED RESTRICTION is made and executed this day of 20 by (the Owner ), whose address is, for the benefit of and enforceable by the City of Whitefish (the City ) and its duly designated and authorized agent, the Whitefish Housing Authority (the WHA ), their successors or assigns (referred collectively herein as the Beneficiaries ). RECITALS WHEREAS, the Owner owns real property (the Property ) located in Whitefish, Montana, and described as: [legal description] WHEREAS, a residence has been constructed on the Property to increase affordable housing opportunities in the City; and WHEREAS, pursuant to the Whitefish Legacy Homes Program, eligible purchasers such as the Owner are given the opportunity to purchase residential property at less than its fair market value if the purchaser agrees to certain use and transfer restrictions, including an agreement to occupy the property as a principal residence and convey the property for an amount not greater than a maximum resale price, all more fully provided herein; and WHEREAS, the Owner, on behalf of itself, its heirs, executors, administrators, representatives, successors, and assigns, desires to comply with the requirements of the Whitefish Legacy Homes Program by restricting the use and transfer of the Property as provided herein. NOW, THEREFORE, in consideration of the recitals set forth above and for value received, the Owner does hereby declare and impose the following covenants on the Property. COVENANTS 1. Covenants to Run with Property. The Property is hereby burdened with the covenants delineated herein, which covenants must be a burden upon, and run with, the Property for the benefit of the Beneficiaries, their successors and assigns, who may enforce the covenants and compel compliance therewith. Lack of compelled compliance at any time, for any duration, or for any reason does not remove the right of Beneficiaries, their successors and assigns, from enforcing the covenants and compelling compliance. 2. General Definitions. Guidelines means the Whitefish Legacy Homes Program policies and procedures, regulations and ordinances adopted by the Beneficiaries, as same may be amended from time to time. Owner means a Qualified Household.

23 Qualified Household means a household that has been certified by the WHA as qualified to own or occupy the Property according to the Guidelines. A Qualified Household must maintain continuous compliance with the Guidelines and the terms and provisions of this Deed Restriction during its entire term of occupancy of the Property. 3. Restrictions on Occupancy. 3.1 Residential Use Only. The Owner must use, and must cause all occupants to use, the Property only for residential purposes and any incidental activities related to residential use that are permitted by the applicable zoning. 3.2 Compliance with Law. The Owner must use the Property in a manner so as to not cause actual harm to others or create any nuisances, public or private. The Owner must use and maintain the Property in compliance with all applicable laws and regulations, including homeowner association covenants and requirements. 3.3 Occupancy. The Owner must occupy the Property as the Owner s primary residence. The Owner will be considered as occupying the Property as his/her/their primary residence if the Owner is living in the Property for at least ten (10) months out of each calendar year. The WHA may, in its sole discretion, grant a temporary waiver of this occupancy requirement for good cause such as to facilitate sale of the Property to a Qualified Household, illness, temporary job relocation, military deployment or sabbatical. The Owner must provide written request for a temporary waiver of the owner occupancy requirement to the WHA at least thirty (30) days prior to such temporary vacancy. The Owner s failure to comply with the provisions of this paragraph may, following a three (3) month notice to cure, be deemed a breach of this Deed Restriction, allowing the Beneficiaries or their designee to purchase the Property as set forth in section Maintenance and Inspection of Property. The Owner must maintain the Property and any improvements thereon in good condition and repair throughout the Owner s period of ownership. If the WHA receives a report of poor maintenance or unsafe condition, the Owner must allow the WHA, or its designee, access to the Property upon 48 hours notice. The WHA, or its designee, will inspect the property and notify Owner if repairs or corrections are required. The Owner must make any required repairs or corrections in a reasonable manner acceptable to WHA within thirty (30) days of being notified. In addition, upon the WHA s receipt of a Notice of Intent, as detailed in section 6, the WHA must be given the right to enter and inspect the Property. The Owner is obligated to make repairs to the Property deemed necessary by the WHA prior to appraisal and sale. If Owner is unable to make the required repairs, the WHA may cause the repairs to be made and charge one and one-half (1.5) times the repair costs to the Owner payable out of purchase proceeds at closing. 4. Taxes and Assessments. 4.1 Owner Responsibility. The Owner must be responsible for the payment of all taxes, governmental assessments, and homeowners dues/assessments relating to the Property.

24 4.2 Right to Contest. The Owner has, at the Owner s own expense, the right to contest the amount or validity of any taxes or assessments relating to the Property. 5. Term of Covenants and Restrictions. The covenants and restrictions contained herein must continue in full force and effect for a period of ninety (90) years after the date of recordation of this Deed Restriction. With each sale or transfer, the Owner must ensure that the purchaser or transferee executes these Deed Restrictions and records them with the Flathead County Clerk and Recorder. Said ninety (90) year period must start over with each resale, should resale occur within ninety (90) years of the previous sale. 6. Voluntary Sale of the Property. 6.1 Requirements. The Owner may, subject to the Purchase Option set forth in section 7, sell the Property if all the following conditions are met: i. The Owner must deliver a written notice of its intent to sell the Property ( Notice of Intent ) to the WHA. ii. No later than ten (10) days after delivering a Notice of Intent to the WHA, WHA, or designee, will inspect the property and notify the Owner of required repairs. The Owner must make required repairs within thirty (30) days. Once repairs are made, Owner must, at his/her/their own expense, commission an appraisal of the Property by a licensed appraiser. The appraisal must be by analysis and comparison of comparable properties, disregarding this Deed Restriction. The Owner must provide a copy of such appraisal to the WHA. iii. To proceed to the closing of the sale of the Property, the WHA must certify in writing that the prospective buyer is a Qualified Household. The WHA will maintain a list of Qualified Households. 6.2 Selling the Property. The Owner may sell the Property by selling the Property directly to a Qualified Household on the WHA s approved list or by using one of the methods outlined in the Guidelines. The Owner is ultimately responsible for selling the Property, including any real estate commissions and fees paid to the WHA, if any. 6.3 Maximum Resale Price. In no event shall the Property be sold for an amount exceeding the price calculated as follows: A. The lesser of: i. The original purchase price of the Property plus an increase in price of three percent (3%) of the original purchase price per year from the date of purchase to the date that the Owner s Notice of Intent is delivered to the WHA (prorated for each whole month of any part of a year and not compounded); or