Consider Adoption of Housing Assistance Policy for Affordable Housing Projects

The purpose of this Topic Report is to consider adoption of the Housing Assistance Policy for affordable housing projects. Based on final review of the documents, Staff is focusing on affordable housing developments, those most likely to request assistance. Staff also has a draft for market rate projects, but that component will require additional modification after third-party review, if a separate policy for market rate is deemed necessary.

The City Council authorized the formation of an ad-hoc sub-committee of the Planning Commission to focus on the creation of a Housing Assistance Policy to establish a framework in which to review requests for financial assistance (or other form of assistance) for housing projects. These requests could include, but are not limited to, City financing options, third-party financing options, and grant opportunities available to the City. Given the number of requests the City has been receiving related to housing projects and the forecasted housing growth of the community, the City Council felt that a policy was necessary in order to ensure an equitable and fiscally responsible application to housing assistance.

During the course of several meetings the sub-committee has reviewed the following:
 

1. Current Housing Plan, Goals, and Implementation Strategies
2. Current housing and population demographics (Census data)
3. Current housing and population forecasts (2030 Comprehensive Plan)
4. Current employment demographics
5. Current employment forecasts

The sub-committee also has completed the following deliverables:
 

1. Framework of Policy
2. Interim Policy Statement
3. Housing Product Priority List

The sub-committee agreed to a framework of the policy as follows:
 

1. Housing Product Priorities
2. Minimum Thresholds
3. Scoring Matrix

Housing Product Priorities
The first effort of the sub-committee was to establish housing product priorities. It is important to note that this priority list is an evolving document that would need to be reviewed and updated on a regular basis and was based on current demographic data (see attachment to this case). With every housing development that is completed, the assumptions that went into formulating this list change, and the list needs to be amended. When the City accomplishes a single housing goal, the priority likely shifts, at least in part, to a different priority.

The Priority List is as follows:
 

1. Senior Independent
2. Affordable/Workforce
3. Redevelopment
4. Energy Efficient
5. Rehabilitation of Existing
6. Amenity Rental
7. 3+ Unit Rental
8. Accessory Dwelling Unit
9. Executive Single-Family
10. Senior Skilled Nursing
11. Assisted Living/Memory Care
12. Condominium
13. Single-Family Detached
14. Single-Family Attached

Minimum Thresholds

The sub-committee agreed to utilize the existing Housing Goals and Implementation Strategies of the Comprehensive Plan as Minimum Thresholds. It is recommended that each development requesting housing assistance identify at least one existing goal/implementation strategy as Step #1. A development requesting assistance would need to be able to prove successful achievement of an implementation strategy in order to move to the formal review.

Scoring Matrix

The scoring matrix is divided between affordable (aimed at units priced below 80% or area medium income) and market rate (units priced above 80% AMI).

The scoring matrix then provides points based on each individual project. Points can be awarded for additional affordability levels, construction of senior housing, and provision of specialized senior housing, inclusion of development amenities, amount of private financing, redevelopment, architectural standards, development standards and energy efficiency.

Following the City Council's last review of this policy, Staff has received recommendation from the City's Economic Development Authority (EDA) as well as third-party review by Ehlers, Inc. The EDA made no formal motion, but consensus appeared to support moving to final adoption. Minutes of this EDA meeting are included for your review. Ehlers, Inc. suggested simplifying the document, which Staff has done to a certain degree. The Planning Commission felt it important and beneficial to proceed with a scoring system. If the City Council desires to further simplify the document and process, Staff would suggest removing the narrative requirement of the Minimum Thresholds, while keeping the now simplified and adjusted scoring matrix. Ehlers had stated that simplifying the document would reduce the burden on both City Staff as well as developer. Ehlers recommended that a strong third-party analysis would address many of the components contained in the policy. Finally, both the EDA and Ehlers noted questions about the subjectivity of the cap or maximum amount provided per unit. Ehlers had recommended that a strong financial analysis of the project will assist the City in determining a true gap or need for financial assistance. With that in mind, the draft has been amended to remove a cap.

On multiple occasions, it has been requested that Staff review previous projects that received assistance, or projects in general, against the scoring matrix. Staff is finalizing this review, and will present its findings as part of the presentation of this case.

Notification is not required.

Alternative #1. Adopt the Affordable Housing Assistance Policy as presented. This document has gone through extensive review and appears to be in line with the goals of the community. Staff would recommend adopting this document and continually review it's applicability with each development that comes forward for future enhancement.

Alternative #2. Adopt the policy with amendments. This alternative depends on discussion.

Alternative #3. Do not adopt the policy. Although there is not a requirement for this policy, it was a strategic goal and direction of the City Council to adopt this policy. Staff does not recommend this alternative.

Preparation of this policy is being handled as part of normal staff duties. In addition, Staff utilized portions of professional services budgets for the preparation and third-party review of this document.

Staff recommends that the City Council adopt the Affordable Housing Assistance Policy. Staff will follow up at a future date regarding the market rate assistance policy.

Motion to adopt the Affordable Housing Assistance Policy.