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Minutes 02-27-07 Aff Housing MINUTES OF THE SPECIAL JOINT MEETING OF THE COMMUNITY REDEVELOPMENT AGENCY AND PLANNING AND DEVELOPMENT BOARD HELD ON TUESDAY, FEBRUARY 27, 2007 AT 7:05 P.M. IN CITY COMMISSION CHAMBERS COMMUNITY REDEVELOPMENT AGENCY PRESENT: Henderson Tillman, Chair Stomet Norem, Vice Chair Rev. Lance Chaney Jeanne Heavilin Marie Horenburger Steve Myott Guarn Sims Lisa Bright, Executive Director Ken Spillias, Board Attorney PLANNING AND DEVELOPMENT BOARD PRESENT: Lee Wische, Chair Woodrow Hay, Vice Chair Sergio Casaine William Cwynar Shirley Jaskiewicz Matthew Barnes, Alternate Sharon Grcevic, Alternate Jamila Alexander, Assistant City Attorney Mike Rumpf, Director, Planning and Zoning ABSENT: Jon Blehar Roger Saberson Mike Rumpf opened the meeting at 7:05 p.m. and welcomed all. Workforce Housing Program Code Review Project: Agent: Descri ption: Workforce Housing Regulations (CDRV 07-003) City- Initiated Request to amend the Land Development Regulations to include a Workforce Housing Program that creates a supply of workforce housing units within the City. The program would implement recommendations of the 1 Meeting Minutes Joint Planning &. Development and CRA Boynton Beach, Florida February 27, 2007 Boynton Beach Housing Needs Assessment Study and include eligibility requirements, incentives using development density, provisions to ensure continued program implementation, and flexibility for compliance with emphasis on the contribution of on-site housing units. The purpose of the meeting was to hear recommendations from both boards on the Affordable Housing Ordinance and forward recommendations to the City Commission. A workshop was held on January 30, 2007 with the City Commission and two recommendations were made. The first recommendation was to determine if prefabricated housing would meet building codes and if it could accommodate the needs of the Ordinance. The second recommendation dealt with using non-conforming lots for housing. Ms. Brooks, CRA Planner, explained Palm Beach County enacted an Ordinance last year that required all development to include workforce-housing units. The City, likewise, recognized the need for workforce housing. She noted the affordable housing units that existed in Boynton Beach were either age restricted, and the units that were not, were old. To grow and strengthen the City's economy, an array of housing types and pricing would be needed. The proposed Ordinance would allow a developer to request an increase in density in certain land use categories provided they offered workforce housing units in the development. Special High Density Residential land use classification would have 20% workforce housing; Mixed-Use (Mixed-Use Low 1, 2 and 3) and Mixed-Use Core, which are typically multifamily zoning land use designations, would have 15% and 10% workforce-housing units respectively. Ms. Brooks also clarified the Mixed-Use Core was generally the Central Business District and was a fairly small area. Staff felt the market was down and the time was right to enact the Ordinance. Ms. Brooks explained there were only 264 acres of buildable land available in the City, with the majority of them being small infill areas. The exchange for the land would be the increase in density. She clarified this was not a requirement; rather it was an option the developer could request. Individuals who currently owned land with the designated land use classifications would not be impacted. The units would be restricted to individuals and families earning less than 120% of the median household income using HUD's calculations, which was $64,400. Those figures were higher than the City's median income and would allow more individuals to qualify. There were three categories in the Affordable Housing Ordinance: Very-low, which was below 50% of the median household income; Low, which was 50%-80% of the median household income, and Moderate, which was 80% to 120% of the median household income. Most of the units that would be supplied were in the moderate range, and Ms. Brooks reported developers knew how to reach their markets. The units would be comparable to the market rate units, having the same exteriors, and would be offered in the same ratio and mix as the market units. Often, developers did not have to market the units, they just spoke with the CDCs and other similar entities. 2 Meeting Minutes Joint Planning &. Development and CRA Boynton Beach, Florida February 27, 2007 Workforce housing units would also be deed restricted for 30 years; however, owners would earn equity the longer they inhabited the dwelling. Ms. Brooks noted after five years there would be quite a bit more equity earned. The homes would also need to be resold to another income-qualified person earning between $35K and $77K per year. Ms. Jaskiewicz asked if the Ordinance would apply to projects already in process or with time extensions. She asked how many potential future developers could apply. Ms. Brooks explained the Ordinance would not apply to anyone with approved site plans or site plan time extensions. She pointed out site plan time extensions were valid for 18 months. Under Option II, those seeking an additional site plan time extension would be subject to the Ordinance. Chair Henderson, CRA, asked what the time line for building would be under the Ordinance, and if neighborhoods would be ruined if the density were traded for workforce housing. Ms. Brooks responded the developer would build the workforce units concurrently with the market rate units. She clarified there was only one off site option, and that was if the development was a luxury development and 80% of the units had a sales price of $500K or greater. She also explained the density referenced in the Ordinance was the same density contained in the adopted Heart of Boynton Plan. She clarified the community provided feedback with the HOB plan and did not feel neighborhoods would not be negatively impacted. Chair Henderson asked about restrictions on where the housing could be built. Ms. Brooks clarified only the designated land use classifications would have the housing on site, and further commented the Ordinance only applied to land within City limits. Previously, the Federal Highway Corridor allowed for these uses, but the Ordinance expanded the provision throughout the City to encourage the use of small infill sites. The City wanted to capture the development on those sites. No development would be 100% workforce housing unless a developer wanted it to be so. Mr. Rumpf explained the process prioritized workforce housing. The Ordinance did not jeopardize zoning analyses. If a piece of property needed to be rezoned into one of the specified land use designations, staff would still conduct the same review and tests for rezoning to determine any impacts and compatibility issues. Ms. Heavilin commented the inventory must remain affordable for 30 years. She asked if a developer was unable to sell those units, would they remain vacant? Ms. Brooks explained the mechanism the City had to enforce the program was restrictions would be placed on the units that would be filed and recorded prior to a Certificate of Occupancy being issued. She referenced Cornerstone CDC and explained new relationships would develop in the market place. This type of program was working very well in California and Maryland. 3 Meeting Minutes Joint Planning &. Development and eRA Boynton Beach, Florida February 27, 2007 Ms. Heavilin asked about payment in lieu of units if the land was donated and the appraisals paid for by the developer. She thought the cost of appraisals should be reversed; the buyer typically obtained the appraisals. Ms. Heavilin did not think the developer should control the price. Ms. Brooks explained appraisals would then be made on land developers did not own. She thought appraisals were part of the development cost and if an appraisal was obtained from an MAl appraisal, staff was knowledgeable to identify whether it was a realistic appraisal and sales price. Mr. Cwynar was not in favor of the initiative and felt builders should not be told what to do. He spoke about the effect of impact fees and ad valorem taxes, and thought the Ordinance should be tabled until after the next session of the Legislature to see what they did with the property tax and/or sales tax. He clarified he was not against workforce housing, but it was market driven. He indicated if builders did not take a chance to develop homes and communities, no one would have a home. There was discussion the Ordinance was offering a trade, land for density, and builders would make a profit. There was also discussion that $500K homes would be built next to workforce housing units. Ms. Brooks explained Special High Density Residential, Mixed-Use and Mixed-Use Core would not be single-family homes. In the Central Business District, the permitted residential density was 10.6%. A developer could request, under approved redevelopment plans, up to 80 units per acre. Several projects were already in process that would not be subject to the request unless the developer requested. The highest average density within the entire City was 10.8% and a developer would have a very hard time demonstrating how the increased density had hurt them unless they overpaid for the land. Ms. Jaskiewicz commented the last workshop dealt mainly with condominium units. She announced the American dream was to own a home, and most families would not want to live in a condominium with 200 other families. She asked how the Ordinance would help residents own a home. She asked if monies were accumulated in a trust fund, whether the City could offer a diversified housing stock and whether the Housing Trust would be confined to the CRA area. Ms. Brooks responded a Housing Trust would be a City-wide fund. She also explained town homes were reported to be the new single-family homes for young families. The CRA was purchasing single-family infill lots and turning them over to Habitat for Humanity and the Boynton Beach Faith Based CDC. There were rehabilitation programs available and many tools were needed to address the issue in total. She explained the Ordinance did not address all segments of the population; however, the Ordinance was the biggest tool they had. A precarious situation had been created, and although prices would adjust, she reported they had not adjusted enough for most people in California. California cannot find and keep labor. Similarly, Boynton Beach has a service economy; if services were not available, residents would leave the area. Purportedly, more workers left Florida over the last quarter than moved in. School enrollment declined significantly and 40% of individuals were not able to purchase homes during the last three years. 4 Meeting Minutes Joint Planning &. Development and CRA Boynton Beach, Florida February 27,2007 Lisa Bright, CRA Executive Director, announced for the record, the CRA has four initiatives: economic development, elimination of slum and blight, affordable housing, and community policing. These were the reason the density in the downtown area was being discussed. Mr. Casaine commented this was the first opportunity the City had to address workforce housing. He announced he had discussed this Ordinance with developers and they all agreed with it, provided it was beneficial to them. Chair Henderson observed housing for teachers, police and firefighters does not exist, and government and private sectors need to partner. Christopher Roog, Gold Coast Builders Association, announced he reviewed the Ordinance. He agreed other factors have a bearing on affordable housing and announced programs could be problematic if they relied solely on density. He recommended waving impact fees, the fees for Art in Public Places, and providing an expedited review for workforce housing projects. He noted the price of the buyout in the Ordinance was high. Historically, the buyout amounts were used to fill the affordability gap of the existing income level versus what the average price was. He explained if there was an affordability gap of $70K, traditionally that was the in-lieu of fee. The Housing Leadership Council and HUD have a publication for reducing barriers to public housing. The builders association would like to see a parallel track to those to determine what could be waived. Land was the central issue. Ms. Brooks agreed with Mr. Roog's comments that impact fees should be waived for affordable housing. Rev. Chaney was concerned with the median income range of $64K used by HUD, which contrasted with the actual median income of about $40K for City residents. He noted a large population was excluded and a more realistic number should be used. He thought if he ran statistics, the price of an affordable housing unit for moderate to medium, those prices would still equate to $240K - $305K per unit. He also asked how a rental program would be beneficial. Ms. Brooks explained 25% of the workforce units would be for low-income participants. The applicant would apply for a mortgage for whatever amount could be obtained and down payment assistance was available up to $74K for Low-income participants. She reiterated the Ordinance did not capture all populations; however, Tax Credit Programs, SHIP Downpayment Assistance, Infill Housing, and Habitat for Humanity were all tools that could reach more people. The rent levels required for the workforce housing units would be set by income limits and would not be subsidized, similar to rent controlled units where the rents were capped. Twenty- five percent would be for Low-income and 75% would be Moderate. The median income of $64K was used because the rules would be uniform with the County and State rules, and participants could access subsidies. She noted $64,400 was the income limit for a family of four. The average sized family in the City was 2.3 persons per dwelling. There would also be two income families. With the luxury builders, if units were offered in a community at $450K and market rate units were $500K, the amount of subSidy would be absurd. 5 Meeting Minutes Joint Planning &. Development and CRA Boynton Beach, Florida February 27, 2007 Hanna Matras, Economic Development Planner, explained the City did not have income studies. The data the City had from commercial providers showed the median income was about $43K per year. They needed to be consistent with other State and County programs. With the Very-low income category, the average income of $8K per year was not viable for the program. She clarified that was why the City included the Low-income level. Rev. Chaney suggested using $38K with a variance of $8K. Ms. Matras thought at some point price adjustments would be made. Chair Wische thought the program would give many people earning less than $34K false hope. He suggested distributing literature indicating applicants needed to earn more than $34K in order to utilize the program. Ms. Brooks commented in some instances a person earning less than $34K could obtain a home. There were many factors involved, but she emphasized the main issue was there was no housing inventory to even consider purchasing a home. There was discussion the cost of the housing was not the issue; rather it was the cost of maintaining the home. Mr. Cwynar noted individuals are taxed. He referenced FPL and explained the State mandated a sales tax be paid from where the bill was issued. He announced the Dade County Sales Tax is 7% with 6% to the State and a 1% sales tax to the County. Residents were paying a 1% sales tax to Dade County on all FPL payments. He explained similar situations occur with the phone company, businesses that rent, property taxes and water. He thought those issues should be examined. Mr. Myott agreed there should be tax reform but felt the larger issue was no inventory and having a housing program in place. The units would be put on the tax rolls at the price the buyer paid including the subsidies. The sales price of the workforce units was calculated on homeowner association fees, insurance, management fees and others. Ms. Brooks explained neither board could change issues such as taxes and fees, and there should be a study to see how that would affect workforce housing. Additionally, another workshop should be held. Ms. Brooks clarified Option 2 were comments they added pertaining to applicability. The language specified projects applying for site plan time extensions and developments whose site plans expired would be included. Staff also wanted to tighten ways to prevent opting out and added language that in any case where off-site options were permitted, 25% of the total units would be constructed on site. Motion Ms. Horenburger moved to approve Option 2. Mr. Myott seconded the motion that unanimously passed. Ms. Bright clarified anytime the CRA staff entertained a Direct Incentive Funding Agreement under affordable housing programs, the CRA routinely wrote off the impact fees for the development. That was a standard incentive. 6 Meeting Minutes Joint Planning &. Development and CRA Boynton Beach, Florida February 27, 2007 Motion Mr. Casaine moved to approve Option 2 with two changes; the change on the income-qualified household to be properly defined in accordance to the income of the City of Boynton Beach, and that the density being discussed was actually attainable. Ms. Jaskiwiecz seconded the motion that passed 6-1 (Mr. Cwynar dissenting). Mr. Rumpf advised he would forward the recommendations to the City Commission. There was a short discussion on whether there would be another workshop held for fine-tuning the Ordinance. It was suggested inviting the City Commission if one was held. Adjournment There being no further business to discuss, there was consensus from both boards to adjourn. Meeting properly adjourned at 8:25 p.m. ~ l!lVuruj- ~dVu~ Catherine Cherry-Guberman Recording Secretary 030207 7