SUBJECT:
Title
Staff Report and Discussion of Ordinance 017-2023 Expedited Development Review for Affordable Housing
Body
DEPARTMENT: Planning and Development
Department
PRESENTER(S): Sarah Nurmela, Director of Planning and Development
MJ Adams, Affordable Housing Manager
First Name Last Name, Title
TIME ESTIMATE: 15 minutes
only required for non-consent items
FISCAL SUMMARY:
n/a
POLICY ISSUES:
Ordinance 017-2023 was a policy decision made by the Board of Trustees in 2023 to encourage the development of a variety of affordable housing types.
STAFF RECOMMENDATION:
Recommendation
For discussion only
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
In July 2023, the Board of Trustees (now the Town Council) adopted Ordinance 017-2023 <https://portal.laserfiche.com/Portal/DocView.aspx?id=173437&repo=r-a69d230a>, which amended the Unified Development Code (UDC) to implement an expedited permitting process for affordable housing. This amendment was the result of a multi-year effort during which Erie Town Management, community, staff, and the Board examined the issue of housing affordability and developed strategies to increase a variety of housing types and affordability.
In 2020, the Board voted 7-0 for Resolution 20-140 <https://portal.laserfiche.com/Portal/DocView.aspx?id=116378&repo=r-a69d230a> adopting the Boulder County Regional Housing Partnership’s priorities and strategies for expanding access to diverse housing for the Town of Erie. These included:
• a goal of 12% of the housing stock to be affordable housing by 2035; and
• supporting regional actions while implementing local strategies that address the housing needs of Erie.
In 2022, the Town engaged czb Planning Consultants to conduct a housing needs assessment and to develop recommendations on how to address affordable housing challenges specific to Erie. In late 2022, the initial findings from the report on the housing stock, affordability challenges, and strategic options for affordable housing were presented to the Board and Planning Commission.
To further the 12% affordable housing goal, the 2023 Board of Trustees Work Plan included affordable housing as a “Top 10” budget priority. The Planning and Development Department priorities included Phase One implementation of the Affordable Housing strategy, which included an update to the UDC to facilitate affordable housing development.
This update to the Code was informed by both analysis and community input, including the Housing Needs Assessment and Strategy <https://www.erieco.gov/DocumentCenter/View/18429/Affordable-Housing-Needs-Assessment> and the Town-wide Community Survey. Key takeaways from the housing study delivered in February 2023, include:
• If Erie wants to make progress on housing affordability, additional diversity in the community’s housing stock is needed.
• Erie needs to provide more housing choice for local workers (both existing workers and future workers) and aging homeowners who may have different needs but want to age in place within the community.
• Development costs (the costs of land, cost of construction, developer financing costs) pose serious housing affordability challenges. Additional density and public subsidies will likely be required to ensure affordable housing units are constructed.
• The Town can make an impact by exploring connected strategies around land use policy, regulations, financial subsidies, and purchasing land for constructing housing.
Results of the 2023 Town of Erie Community Survey showed, that among other things,
• 77% of respondents either strongly agreed (50%) or somewhat agreed (27%) that they want employers to have the opportunity to hire employees who can buy or rent a home in Erie.
• 74% of respondents either strongly agreed (48%) or somewhat agreed (26%) that they want to reduce traffic, improve air quality, and reduce the cost of business by employees having the ability to live and work in Erie.
• 73% of respondents either strongly agreed (50%) or somewhat agreed (23%) that they are concerned with affordability of buying a home.
• 72% of respondents either strongly agreed (47%) or somewhat agreed (25%) that they want Erie to have housing options for young adults, first-time home buyers and other "non-traditional" buyers.
• Only 23% of respondents rated the availability of affordable quality housing positively.
Ordinance 017-2023 - Unified Development Code (UDC) Amendments
The UDC amendments included in Ordinance 017-2023 support the creation of new affordable units in the Town. The adopted amendment allows projects with at least 12% of the units as affordable to access an expedited development review process. This process provides for an administrative application review similar to the one used for minor subdivisions. The ordinance also provides additional flexibility for specific design standards to facilitate alternative housing types. Although not always required, a neighborhood meeting may be required if the development is likely to create a substantial deviation from the existing character of the surrounding properties. The amendment was written with the goal of reducing the time and cost of developing housing to accomplish affordability. Specifically, the amendments allow affordable housing projects to be eligible for the following:
a. The maximum residential density may be increased up to 25% over that allowed by the zone district in which the underlying property is located.
b. No minimum lot size to allow for alternative housing types.
c. Reduction of required setbacks and lot width by up to 25% of that required by the zone district in which the underlying property is located.
d. Alternate equivalent compliance may be approved for parks, open space and trail requirements, transportation and access requirements, and off-street parking and loading requirements. The criteria for such approval shall be those identified in Section 10-6-1-(C)(4).
The amendment also provides definitions for Affordable Housing Projects and Area Median Income (AMI) as follows:
• Affordable Housing Project means a development in which 12% or more of the total residential units will be restricted to occupancy by households as follows:
o For ownership units: initial occupancy shall be restricted to households with incomes at or below 120% of AMI;
o For rental units: occupancy shall be permanently restricted to households who at the time of initial lease up have incomes at or below 80% of AMI.
These affordable housing requirements shall be secured by a recorded deed restriction in a form approved by the Town.
• Area Median Income ("AMI") means the number annually calculated by the U.S. Department of Housing and Urban Development for Boulder County, Colorado.
Benefits Provided by the Ordinance
1. Clarity in defining terms like Affordable Housing by tenure (ownership versus rental) and Area Median Income.
2. Expedited review intended to trim the time it takes for an entitlement approval to move from first submittal to final approval, thus reducing risk and the cost of development. Projects that provide units at affordable incomes often require many different sources of funding. Many of these sources are connected with local, State, and federal grants that have specific funding, entitlement, and permit timelines. Additionally, these sources typically look for “shovel ready” projects for granting funds. Extended timeframes for development review also require consulting resources and result in higher soft costs for development.
3. Expedited review also attracts developers to build what the Town of Erie has identified as needed housing in the community. The expedited review process makes the statement that the Town is willing to work with the developer to encourage affordable housing to be created in Erie.
4. The UDC amendments focused on creating some flexibility for standards like setbacks and lot size allow for more creative solutions and alternative housing types to be accommodated. The allowance for increased density allows for increased site efficiency, reducing the cost of land per unit, which impacts the overall project feasibility.
5. Expedited permitting will be required to continue eligibility for Proposition 123 funding in support of creating affordable housing. This requirement will be applicable to the 2027-2029 commitment period.
6. Finally, while the 12% minimum requirement is consistent with the Town’s goal to achieve that level of affordable units by 2035, it also supports the development of mixed-income projects that are predominantly market rate so affordable units are not concentrated in any location.
Challenges of the Ordinance
1. If a site is already zoned appropriately to accommodate the use and density of the proposed project, the expedited review reduces the opportunity for community and Council input on the housing design, potential density increase, and site layout.
2. Although a neighborhood meeting is not required, the Director may require one. As the Planning Commission and Town Council hearings are eliminated in the expedited review process, communication and information sharing with neighbors requires more direct staff outreach. Staff need to work on the issues that neighbors have identified and attempt to address these concerns during the review process. For example, multiple meetings and one-on-one check-ins were conducted with neighboring property owners for the Cheesman Residences project.
Amendment Process for Ordinance 017-2023
Currently, no projects are utilizing the administrative review or code allowances for an affordable housing development. If Town Council wants to re-evaluate all or a portion of the UDC amendments included in Ordinance 017-2023, staff will initiate an amendment process that will include:
1. Developing an amendment to address Town Council direction;
2. Potential working sessions with Planning Commission and/or Town Council to review proposed amendments;
3. Drafting an ordinance for decision-maker consideration;
4. Planning Commission Hearing; and
5. Town Council Hearing.
COUNCIL PRIORITY(S) ADDRESSED:
ü Engaged and Diverse Community
ü Prosperous Economy
ü Small Town Feel
ü Safe and Healthy Community
ü Environmentally Sustainable
ATTACHMENT(S):
1. Ordinance 017-2023
2. Presentation