CITY OF BELMONT AFFORDABLE HOUSING PROGRAMS City Council Study Session February 23, 2016
TONIGHT S MEETING Introduction to Key Concepts Review Program Issues and Options Review Potential Uses of Funds Discussion & Direction 2
WHY ARE WE HERE? Belmont City Council Priority to Create Affordable Workforce Housing 2015 Adopted Belmont Housing Element Goals/Programs for provision of Affordable Housing County Wide Nexus Study Conclusions New Development creates need for Affordable Housing County-wide August 2015 direction from City Council to proceed with preparation of an Inclusionary Ordinance and Impact Fees 3
EXISTING HOUSING RESOURCES Belmont Housing Successor Agency Real Property Assets Opportunity to leverage assets, in conjunction with new sources of revenue, for new affordable housing Subject to Prevailing Wage 4
HOUSING SUCCESSOR PROPERTY ASSETS 2014 City Council Recommendations: DISPOSITION High financial liability High management costs Reach out to housing service providers for sale/transfer Private property sale DEVELOPMENT Proximity to opportunity area; potential for change Retain assets while City solicits development proposals Future planning area HOUSING Consistent with State Law Assets to continue providing affordable housing unit(s) 5
QUESTIONS FOR CITY COUNCIL Should the City adopt a Commercial Linkage Fee and/or Housing Impact Fee? See following slides for information related to this question 6
IMPACT/LINKAGE FEES Calculate new fees that mitigate the impact of new development on demand for affordable housing Commercial Linkage Fees Housing Impact Fees 7
COMMERCIAL LINKAGE FEE New Commercial Space New Workers Affordable Workforce Housing 8
HOUSING IMPACT FEE New Housing Units New Household Spending New Workers Affordable Workforce Housing 9
IMPACT FEE ALTERNATIVES Developers may opt to build units on-site City should specify required percentage of on-site units as alternative to fees Fees and alternative can be structured to encourage either on-site affordable housing or fees 10
SUMMARY: IMPACT FEE BASICS New Affordable Housing Fees paid Market rate housing development or new commercial development Affordable Housing Fund 11
QUESTIONS FOR CITY COUNCIL Does the Council support fees consistent with the conclusions of the Nexus Study and feasibility analysis? See following slides for information related to this question 12
BELMONT NEXUS STUDY Nexus Study provides maximum nexus-based fee that could be charged to mitigate affordable housing impacts from new development 13
FEASIBILITY ANALYSIS Identifies maximum feasible fee that could be charged without discouraging development; less than the maximum nexus based fee Looked at pipeline projects and neighboring jurisdictions Source: Keyser Marston Associates 14
Belmont Fee Comparison NEXUS STUDY (Max. Nexus-Based Fee) FEASIBILITY STUDY (Max. Feasible Fee) SINGLE-FAMILY RESIDENTIAL MULTI-FAMILY RESIDENTIAL HOTEL RETAIL OFFICE MIXED USE $40-$44 $62-69 $151 $259 $247 $20-$30 $20-30 $4-$10 $5-$10 $12-$15 $8-$10 Sources: Vernazza Wolfe Associates, Inc.; Strategic Economics, 2015. Keyser Marston Associates, 2016. 15
QUESTIONS FOR CITY COUNCIL Should the City adopt Inclusionary Housing requirements for new housing development? See following slides for information related to this question 16
INCLUSIONARY ZONING Prescribes that a certain % of new housing development be made affordable Current case law allows mandatory inclusionary programs only for for-sale housing (single-family, condos) New for-sale housing x % inclusionary applied = New affordable units 17
INCLUSIONARY FEES (FOR-SALE) For some projects, the City and/or the Developer may prefer in-lieu fees rather than production of units (i.e. smaller projects). Note developer always has right to build units. Inclusionary in-lieu fees do not require a nexus, but must be reasonable ; may use the results of nexus studies to inform/support in-lieu fees New for-sale housing In-lieu fees paid consistent with Nexus Study Affordable housing fund 18
INCLUSIONARY UNITS/FEES Percentage requirements may create fractional units (e.g., a 10% requirement on a 23-unit 2.3 affordable units) Some programs round up for fractional units of 0.5 and up Offer in-lieu fee for fractional units of 0.5 and below 19
QUESTIONS FOR CITY COUNCIL Should affordable housing requirements promote fees or onsite production? Does the Council support a minimum affordable unit threshold for required on-site production? (i.e. 10 affordable units) See following slides for information related to this question 20
INCLUSIONARY ISSUES AND OPTIONS Requirement to build unit on-site applies only to for-sale housing; does not typically serve Low, Very Low or Extremely Low Income households 21
INCLUSIONARY ISSUES AND OPTIONS Units vs Fees: At what project size threshold does the City prefer units to be built on site? Smaller projects with fewer affordable units are known to have long-term monitoring/compliance issues; increased burden on staff resources Reasonable threshold of 10+ affordable units based on City experience Outside resources available for housing program management (Housing service providers, other jurisdictions) 22
POTENTIAL USES OF FUNDS Impact Fees may be applied to the types of uses analyzed in Nexus Study (single-family detached, apartments, and condos) Impact fees must serve the workforce (i.e. % of residents must be employed; need to survey seniors, etc.) Inclusionary In-Lieu Fees collected can be used for broad range of affordable housing needs (not specifically workforce) 23
POTENTIAL USES OF FUNDS Housing Partnership Partner with an affordable housing provider to fund a variety of housing projects and programs Offer Funds Via NOFA Collect Funds and offer them via a Notice of Funding Availability (NOFA) Process Multi-Jurisdictional Collaboration Create a Joint Powers Authority or Housing Authority, possible Countywide if designed properly 24
QUESTIONS FOR CITY COUNCIL Is there support for a housing partnership? Is there support for programs or projects built outside the City of Belmont? See following slides for information related to this question 25
HOUSING PARTNERSHIPS Partner with experienced Affordable Housing provider to maximum resources and project opportunities Opportunities to pool resources from multiple jurisdictions, create region-wide affordable housing Mitigates concerns that fees don t result in provision of affordable housing Less administrative burden on City staff/resources 26
HOUSING PARTNERSHIP New Construction - minimum 40 units, preferred 60 units, $70k/unit for land + construction costs Multi-Family Preservation Stay in Place acquire existing multi-family housing to arrest rent growth, $100-$150k per unit Alternative Mitigation allows market rate developers to invest directly with housing providers to mitigate need for affordable housing (off-site units, land donation, conversion of existing units) Source: MidPen Housing 27
QUESTIONS FOR CITY COUNCIL Should the City continue with the real property asset disposition and development as directed in 2014? See following slides for information related to this question 28
CITY OWNED PROPERTY Opportunity to leverage existing Housing Successor owned real property: Potential development sites for affordable housing Proceeds from sale of assets can be applied towards affordable housing programs/projects 29
QUESTIONS FOR CITY COUNCIL Should the City explore local workforce housing opportunities? See following slides for information related to this question 30
WORKFORCE HOUSING Recent sampling of public agencies developing housing that serves a specific local workforce*: San Mateo Community College District Employee Rental Housing and firsttime homebuyer loans City of San Mateo collaboration with private developers and MidPen Housing; 1/3 units set aside for public sector employees who meet income qualifications San Mateo Union High School District considering school relocation and new teacher and staff affordable housing South San Francisco considering policies that allow for affordable workforce housing on Cityowned parcels *Tenant selection must comply with state and federal law. 31