AFFORDABLE HOUSING BUILDING DEVELOPMENT INFORMATION

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2 AFFORDABLE HOUSING BUILDING DEVELOPMENT INFORMATION Ebenezer Gujjarlapudi, Director Land Use and Environmental Services Agency January 2017

3 EXECUTIVE OVERVIEW UNCC Urban Institute Recommendation History of Code Enforcement s Efforts Current Fee Structure Identified Barriers Available Incentives Survey Findings 106

4 UNC CHARLOTTE URBAN INSTITUTE RECOMMENDATION Expedited and Predictable Processes & Fee Waivers Provide expedited building permitting processes that are predictable and reduced fees to help reduce development costs of affordable housing $ MECKLENBURG COUNTY S RESPONSE Research local, regional and national practices and understand barriers identified by area developers 107

5 HISTORY Single-family housing construction has been trending towards a higher density of homes, creating smaller residences, using minimum code per square foot for heated and unheated areas, e.g., bathroom, bedroom and kitchens. Commercial projects followed the Federal Housing and Urban Development guidelines, which in most cases, met the North Carolina State Building Code. The Department created a permit fee structure based on heated and unheated square feet. In 2003, the Board of County Commissioners and Building Development Commission approved a fee change, in which permit fees were recalibrated to encourage various projects, including affordable housing. 108

6 HISTORY In FY16, Code Enforcement reduced fees 5% for all permits. Stratified/Commercial fee structure, providing additional savings for Multifamily construction projects. Garden Style Apartments (3 story, single exit buildings) 20% discount in permit fees Medium Size Construction (4 to 5 story buildings) 20% discount in permit fees Podium Style Buildings (4 to 7 story building with parking garage) 15% discount in permit fees 109

7 CURRENT FEE STRUCTURE Cost to permit per heated square feet is lower than it was in Total estimated construction cost for a 1500 square foot house, with base fee, approximately $60, The estimated permit cost ($692.95) would be around 1% of total project cost. 110

8 LARGE PROJECT EXAMPLE Building Project Summary 3 Buildings (per NCSBC code) 4 Stories 98 Units Total Construction Cost (est.) submitted by the General Contractor $9,808, Mecklenburg Code Enforcement Fees $41, City of Charlotte Fees (Fire, Zoning, and Land Development) $29, Total Fees $71, County cost to permit is less than 0.5% of total project cost 111

9 BARRIERS IDENTIFIED BY CUSTOMERS Financing for Projects Is identified as one of the greatest barriers to affordable housing (income to construction cost ratio). Placement & Requirements (NIMBY) Neighbors of affordable housing projects typically demand additional structures and options such as screen walls and trees, resulting in higher costs as compared to the typical apartment building. Code and Ordinances Conflict with local ordinances, for example, alternate exterior for affordable housing is permissible in the state building code; however, local zoning and historical ordinances or the planning commission may not approve this type of exterior finishes. 112

10 CURRENTLY AVAILABLE INCENTIVE PROGRAMS Design Professionals AE Pass Rate Program - Implemented in 2008; grading Architects and Engineers on performance in disciplines of Building Design and Engineering for Electrical, Mechanical and Plumbing. Review Schedule Preference Once application is submitted, the project is eligible for the first available preference within the OnSchedule Review process. Walk Through Service CTAC (Commercial Technical Assistance Center) provides this service for small up-fit and renovation projects. Customers can visit the Customer Service Center to request a review of their project within the same day. 113

11 CURRENTLY AVAILABLE INCENTIVE PROGRAMS CONTRACTOR INCENTIVES Pass CONTRACTORS Rate Incentive Program Established in 2006, identifies and rewards high performance contractors. Single-family contractors performing at a high pass rate receive adjustments of up to 15%. Multifamily residential and commercial contractors can receive up to 10% on permit fees once the permit is closed out and a Certificate of Occupancy is issued. The program penalizes high failure rate contractors (> 40%) with additional charges per inspection, or on the permit. Automatic three day wait before the next inspection will be performed. 114

12 PRELIMINARY SURVEY FINDINGS Locally City and County of Gastonia, City of Monroe and Union County Building Departments, either used total constructions cost or square footage to calculate permit fees. No incentives provided affordable housing in their fee schedule. Regionally International Code Council (ICC) uses a general table based on square footage for cost estimation of construction. Other cities and county jurisdictions use this as benchmarks to determine fee structures for their departments. 115

13 CONTINUE PRELIMINARY SURVEY FINDINGS Nationally According to ICMA 2015 survey approximately 1/3 of the local governments nationwide provide financial support or incentives for affordable housing. Tax Credits Infrastructure incentives Water and sewer Streets and sidewalks 116

14 CONCLUSION AND OPPORTUNITIES Mecklenburg County s permitting fees represents a small percentage of the total construction costs for affordable housing projects because of the tiered structure. Opportunities for the County to support affordable housing development include: Exploring the use of publicly owned land. Funding/Financing of infrastructure improvements. 117

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