SUBJECT:
Title
Inclusionary Housing and Affordable Housing Linkage Fee Presentation and Discussion
Body
DEPARTMENT: Planning and Development
Department
PRESENTER(S): MJ Adams, AICP, Affordable Housing Manager
Brian Duffany, Principal, Economic & Planning Systems, Inc. (EPS)
First Name Last Name, Title
TIME ESTIMATE: 45 minutes
only required for non-consent items
POLICY ISSUES:
In June 2024, the Town Council adopted the Town of Erie Affordable Housing Policy, which outlines a series of actions the Town intends to take to advance efforts to achieve the Town’s affordable housing goals. These goals include encouraging the development of a variety of housing types and affordability. This diversity of housing opportunities will accommodate a broad range of households from families to individuals who live here and/or want to call Erie home. In turn, this greater diversity of households will make it easier for local businesses and organizations to hire employees who live in Erie. This will ultimately help to reduce traffic associated with jobs in Erie, enable more people who have grown up in Erie to afford to move back home, make it possible for more elders to afford to “age in community,” and make it easier for grandparents who live elsewhere to move to Erie to be near their families. Additionally, this work supports the Town’s commitment through the Regional Housing Partnership to have 12% of Erie’s housing stock affordable by 2035.
STAFF RECOMMENDATION:
Recommendation
Informational item only.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
Lack of affordable housing has been on the minds of Erie leadership since 2005. When Erie adopted its Comprehensive Plan that year, the plan cited the lack of affordable housing and starter homes as a concern. The rising cost of housing became out of reach for many families, empty-nesters and retirees. The Plan recommended several actions including:
1) the development of an inclusionary housing ordinance; and
2) participating in regional partnerships.
In 2021, Erie adopted Resolution 21-140 to collaborate with the Boulder County Regional Housing Partnership to expand access to affordable housing and work towards a goal of 12% of the housing stock to be affordable by 2035.
In 2022, the Town started to seriously explore the creation of an inclusionary housing ordinance. Newly hired affordable housing staff successfully sought a grant to fund a Housing Needs Assessment and Affordable Housing Strategy. With the Housing Needs Assessment completed, and an Affordable Housing Policy adopted in June 2024, the next step is to develop an inclusionary housing ordinance. In addition to the inclusionary housing ordinance, which will only affect new residential development submittals, Town staff are evaluating an Affordable Housing Linkage Fee that could be applied to entitled housing units that have not yet applied for building permits. The Affordable Housing Linkage Fee could also apply to smaller developments that are not subject to the inclusionary housing ordinance. Town staff have shared the draft outline of the inclusionary housing ordinance with the development community and have received helpful and insightful feedback as staff develop the final draft of the ordinance.
Earlier this year, town staff developed the following outline for the Inclusionary Housing Ordinance and the Affordable Housing Linkage Fee.
Inclusionary Housing
• Applicable to all new development entitlements that have eight or more units;
• Requires 15% of units to be affordable, with options to meet the requirement by building the units on-site, dedicating buildable land, a fee-in-lieu payment, or a combination of the three;
• For the affordable ownership units, 75% of the units must be affordable to households at 120% of the Area Median Income (AMI) and 25% must be affordable to households at 100% AMI;
• For the affordable rental units, 75% of the units must be affordable to households at 80% AMI and 25% must be affordable to households at 60% AMI; and
• All affordable units built must hold a perpetual deed restriction.
Affordable Housing Linkage Fee
The Affordable Housing Linkage Fee under evaluation would be applied to housing units already entitled but not yet constructed and smaller residential developments (less than 8 units). This fee is calculated on a square foot basis and revenues collected would be dedicated to support affordable housing incentives.
Both the ordinance and the fee are currently under development and analysis by staff, with the assistance of our consultants, Economic and Planning Systems (EPS), to test the market dynamics. EPS has also completed a financial analysis to help calibrate the fee-in-lieu and the linkage fee levels to ensure financial feasibility of the Inclusionary Housing Ordinance and the Affordable Housing Linkage Fee that balances the realities of the real estate market and the cost of creating new affordable housing units.
The EPS feasibility analysis has led to a modification of our initial outline of the Inclusionary Housing Ordinance. The presentation will outline the change in percentage of units from 15% to 12% and a recommendation that we reduce the income levels served by the new units created under the inclusionary housing and affordable housing linkage fee ordinances.
Discussion and consideration of the Inclusionary Housing Ordinance and Affordable Housing Impact Fee will lay the groundwork for ordinances that add to the Town of Erie’s Affordable Housing Toolbox in support of our affordable housing goals.
COUNCIL PRIORITY(S) ADDRESSED:
ü Engaged and Diverse Community
ü Prosperous Economy
ü Safe and Healthy Community
ü Effective Governance
ü Environmentally Sustainable
ü Fiscally Responsible
ATTACHMENT(S):
1. Presentation