Transcript Affordable HOusing

AFFORDABLE HOUSING
IN BOZEMAN:
RECOMMENDATIONS FOR
REGULATORY CHANGES
AND OTHER ACTIONS
A report to the
City of
Bozeman by
Werwath
Associates
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SUMMARY OF RECOMMENDATIONS
 Affordable housing requirements for new construction
should be reinstated, with a new set of rules
 Regulatory incentives from previous ordinance should be
retained and strengthened
 Should apply to all affordable construction
 Some should apply to affordable rental construction
 Some of the strongest incentives depend upon increased
City funding for affordable housing
 Increased investment can leverage more affordable housing
construction and federal funding
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EVALUATION PROCESS
 Since November, 2014, the consultant team has
evaluated the City’s Workforce Housing Ordinance
and other possible regulatory changes
 The team collected and analyzed data through:
 Review of current regulations, demographic and home sales
data, building permits and subdivision data
 Public/stakeholder meetings, interviews, surveys
 The primary focus of recommendations is ownership
housing
 Needs and strategies for rental housing are included as well
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HOUSING PRICES HAVE REBOUNDED
Median sale prices before, during and after the recession
$310,000
$299,000
Bozeman condos &
townhomes
$237,500
$202,400
$197,000
County-wide single
family residences
$150,000
Source: Gallatin
Association of Realtors
2006
2011
2014
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THE SUPPLY OF AFFORDABLE HOMES IS
ONCE AGAIN DECLINING
Numbers of Sales of Detached Homes In Two Price Segments
600
500
400
Over
$250,000
300
Under
$250,000
200
100
0
2012
2013
2014
Source: Gallatin
Association of
Realtors
• $250,000 price point is affordable to a median income buyer
• Only 8 detached units priced under $200,000 sold in 2014
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RECOMMENDED TARGET MARKET FOR
AFFORDABLE HOMES
 Renter households with incomes between 65% and
80% of area median income (AMI)
 Example of income range:
 3 person households: Incomes $42,600 to $64,000/year
 Target home prices of $198,000 to $255,000
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RECOMMENDED TARGET MARKET FOR
AFFORDABLE RENTALS
 Households with incomes below 65% of AMI
 Example of income range:
 3 person households: Incomes below $42,600/year
 Substantial wave of new construction about to start
 Will create more moderate-priced rentals
 More student housing will reduce demand pressure
 Still, more subsidized rentals are needed
 With rents in the range of $500 to $900 a month
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GOALS FOR LOW-MODERATE INCOME
TARGET POPULATIONS
Numbers of Bozeman renters in six income brackets
Create more rental opportunities
2,628
Sufficient
Opportunities
For Now
2,628
2,385
2,211
Create More
Homeownership
Opportunities
950
567
< 30%
AMI
< 30%
AMI
30%-65% 65%-80% 80%-100%
AMI
AMI
AMI
100%+
AMI
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WHO WOULD BENEFIT?
Examples of 3-person households in different income brackets
AMI Bracket
Hourly Wage –
1 Wage Earner
Hourly Wage –
2 Wager Earners
Affordable Rent/Sales
Price
50% AMI
$16.00/hour
$8.00/hour
$800 rent
70% AMI
$22.00/hour
$11.00/hour
$198,000 sale price
90% AMI
$29.00/hour
$14.50/hour
$255,000 sale price
$8.00/hour
$16.00/hour
$22.00/hour
$29.00/hour
1Source:
Typically service jobs, just over minimum wage
About average pay for payroll clerk or auto mechanic in SW Montana1
About average pay for social worker or mail carrier in SW Montana1
Approx. median pay for a police officer in Bozeman (Source: Police Dept.)
U.S. Bureau of Labor Statistics, May, 2013 report
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RECOMMENDATIONS
1. Reinstate ordinance and apply to a broader range
of developments
- Include subdivisions, annexations and applications for
new site plans with 10+ units
2. Give developers a choice of two simplified options:
- Provide 10% low-priced homes –priced for 70%-80% AMI
buyers OR
- Provide 30% moderate-priced homes – for 80%-100%
AMI buyers
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RECOMMENDATIONS
3. Simplify requirements for income restrictions
- Low-priced homes- continue to have income certification
and long-term affordability requirements
- Moderate-priced homes would not have income caps
4. Focus on providing finished homes
- Eliminate complex requirements for marketing lots
5. Simplify standards for providing homes of different
types and sizes
- Types and bedroom mix of affordable homes should
mirror the rest of the development
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RECOMMENDED INCENTIVES
 Strengthen incentives for building low - and
moderate-priced homes, vary by housing type
 Impact fee deferral
 Partial financing for infrastructure
 Reduction or waivers of building/subdivision fees
 Reduced parkland requirements
 Reduced minimum lot sizes
 Allowance for simultaneous infrastructure-building work
 Study of narrower street options
 Expedited review for 100% affordable projects
 Streamlined review of smaller subdivision applications
 Lower parking requirements
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RECOMMENDATIONS
8. Make incentives more widely available
- To qualified affordable housing construction and very
affordable rental projects
9. Increase capitalization of affordable housing fund
- Needed to fund long-term deferral of impact fees and
partial funding of infrastructure
- Could be funded by collecting full mil rate available for
affordable housing, using general revenue, or G.O. bond
- Pursue outside funding sources like CDBG
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OTHER RECOMMENDED STRATEGIES
Other actions that the City should consider:
 Support new, very affordable rental development
 Promote employer-sponsored affordable housing
developments
 Investigate new ways to encourage preservation of
existing mobile home parks
 Evaluate options for new rental subdivisions/mobile
homes
 Reassess restrictions on accessory dwelling units
 Encourage private-sector innovation in design and
construction of smaller, very livable homes
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NEXT STEPS
 If directed by the City Commission, the Planning
Division will begin drafting a revised ordinance
 The consultants are available to assist
 Concerns and ideas of Commissioners will be addressed
 City staff and CAHAB will follow up on non -regulatory
recommendations at a later date, if directed to do so
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QUESTIONS?
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