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Minutes 01-30-07 MINUTES OF THE JOINT WORKSHOP OF THE CITY COMMISSION, COMMUNITY REDEVELOPMENT AGENCY AND PLANNING AND DEVELOPMENT BOARD, HELD AT THE LIBRARY, ON TUESDAY, JANUARY 30,2007 AT 6:30 P.M. Present: Community RedeveloDment Agenev Henderson Tillman, Chair Stormet Norem, Vice Chair Rev. Lance Chaney Jean Heavilin Marie Horenburger Steve Myott Lisa Bright, Executive Director CRA Vivian Brooks, Senior Planner CRA Bob Reardon, Finance Director CRA Kurt Bressner, City Manager Wilfred Hawkins, Assistant City Manager Michael Curillo, Assistant City Attorney Janet Prainito, City Clerk Quintus Greene, Director of Development Mike Rumpf, Director of Planning & Zoning Octavia Sherrod, Community Development Hanna Matras, Economic Planner City Commission Mayor Jerry Taylor Vice Mayor Jose Rodriguez Commissioner Ron Weiland Commissioner Mack McCray Commissioner Carl McKoy Plannina &. DevelODment Board Lee Wische, Chair Jon Blehar Sergio Casaine Shirley Jaskiewicz Roger Saberson Matthew Barnes - Alternate Sharon Grcevic - Alternate I. CALL TO ORDER Mayor Taylor called the meeting to order at 6:42 p.m. The members of the Commission, board members and staff introduced themselves for the benefit of the public. Wilfred Hawkins, Assistant City Manager, welcomed everyone to the meeting and thanked the staff who had worked on the project over the past six months, including national, state and local research on the affordable housing issues. Mr. Hawkins indicated affordable housing was a critical problem in all of Palm Beach County. The County's new program has a requirement for 16.5% of new home construction to include affordable housing. The median housing price has now risen to $270,000 while south Florida workers earn below the median household income. Another factor for consideration was the age of the current housing stock being 50% 1 Minutes Joint Meeting Boynton Beach, FL. January 30, 2007 over 25 years old and in the Community Redevelopment Agency area, 58% falls within the same category. Currently, the City of Boynton Beach is 90% built out. Mr. Hawkins contended a strategy had to be created, along with an ordinance to frame the strategy, to provide enough affordable housing. It was Mr. Hawkin's prediction that the units currently in the pipeline for construction will not meet the need for affordable workforce housing. The future of workers within the City of Boynton Beach would be in jeopardy. Commissioner McCray suggested the parameters of workforce housing and affordability should be explained and clarified. He stressed the American dream is to own a home and not be a renter. The State of Florida needed to intercede and reduce or control rising insurance cost and taxes, according to Commissioner McCray, to stabilize the entire economy. Kurt Bressner, City Manager, noted under Florida law there is currently no protection from higher taxes when purchasing a new home. Legislation is pending regarding portability and other local protections for those relocated due to a redevelopment plan. Vivian Brooks, CRA planner, emphasized affordable housing is not Section 8 or low income housing. Affordable housing relates to those households that could pay rent or pay a mortgage in some amount. Ms. Brooks reported the Metropolitan Center at FlU had been hired to do a study of current and future housing needs. It revealed the top occupations in the area fell within the service business arena and low wage brackets earning below the income level needed for home purchases or renting. The essential workers category included occupations such as healthcare and safety workers and teachers. The median household income in Palm Beach County, as it related to affordable housing programs, had been established at $64,400 for a family of four. The study also revealed that rents have increased by 79% since 2000 while incomes have not increased proportionally, creating the gap in the housing market. Another issue that became apparent was the housing stock was aging and in need of renovation. Purchasing a home and then doing renovations had become cost prohibitive even with the various rehabilitation programs that are available. Mr. Hawkins added the majority of the older homes were east of 1-95 that needed major transitioning and many would not meet Code standards. In many instances tearing the home down and building new would be the best alternative. Commissioner McCray noted these were people's homes and many of the residents were very comfortable with their homes. Commissioner McKoy clarified that the 50% of the housing stock that was 25 years or older encompassed the entire City and not just east of 1-95. Ms. Brooks stressed the age factor was problematic when HUD would not allow investment in the homes because they did not meet Code requirements for hurricane protection. She emphasized most of the available land for development can only support low density housing. The various occupational earnings were displayed and it was noted the analysis did not reflect two income households or retirement incomes that could affect the analysis. The City does provide some down payment assistance of $50,000 to $75,000 which would not close the existing affordability gap. 2 Minutes Joint Meeting Boynton Beach, FL. January 30, 2007 Sharon Grcevic, alternate member of the Planning and Development Board, and local realtor, had searched the market database and found only three homes in the City of Boynton Beach on sale for less than $150,000. Hanna Matras, Economic Planner for the City of Boynton Beach, reported companies with options to move elsewhere will not come to south Florida because workers cannot afford the homes and pay the insurance rates and property taxes. The wages are low to attract businesses to the area; however, available work force would be an issue. Workers will be forced to move further away and commute to the jobs causing increased traffic problems. The current trend is for employers to build housing for employees and some school districts are giving loans to teachers to buy housing. Mr. Hawkins noted the ability of people to pay the asking price for homes in Florida, after sales of their existing homes up north, has helped maintain the high housing prices. Now that the inflated housing market has been publicized, the market should level. Commissioner McCray surmised the rising housing costs have driven many families to cohabitate to increase the household income and maintain some type of housing for everyone. Ms. Brooks explained HUD had defined affordable housing as no more than 30% of your gross monthly income budgeted for housing expenses. She also predicted the decline in housing prices would not fall to wage levels. Henderson Tillman, Chair of the Community Redevelopment Board, questioned if the impact of rising number of foreclosures would drive the market down further. Commissioner Rodriguez stressed the majority of the foreclosures would be outside the market of affordable housing. Ms. Brooks emphasized that over the last four years no housing had been built for two thirds of the population. Based on the historic growth of the City, the need for workforce housing is 10,800 units in 154 acres of available land. Ms Horenburger questioned the basis for the data and contended the figures were merely projections on the population growth. The study also revealed an adequate supply of workforce housing would strengthen the economy, reduce traffic congestion, retain essential workers and attract and retain businesses due to the increased number of year-around residents. Workforce housing is needed because of low pay levels, scarcity of residential land and the cut of federal funds for housing. A workforce housing program should be consistent with the County's program, meet traffic concurrency requirements, be consistent with the Comprehensive Plan, disperse workforce units throughout the City and triggered by the request for increased density land use. Mr. Bressner cautioned any changes would drastically affect the revenue stream to the City for federal funding assistance programs. The legislature has been withholding additional funding. The Florida League of Cities has been pushing an initiative to increase funding for the past several years. Ms. Brooks reviewed the aspects of the proposed ordinance and stressed the CRA was not in compliance with the Traffic Concurrency Exception Area (TCEA) requirement for affordable housing. Mayor Taylor pointed out affordable housing units were being built in the northeast 3 Minutes Joint Meeting Boynton Beach, FL. January 30, 2007 area of the City. Commissioner McKoy questioned the impact of the non-compliance. Ms. Brooks responded the CRA could be prohibited from further development. Mr. Hawkins emphasized the City is in a redevelopment mode. It was explained that the proposed program was voluntary, rather than the County's mandatory ordinance. The plan would disperse the workforce units throughout the City and was triggered by continued requests for higher density, a benefit for the developer. There would be three land use categories requiring affordable housing units: Special High Density Residential - 20% affordable units Mixed-Use 1, 2 and 3 - 15% affordable units Mixed-Use Core - 10% affordable units. Sergio Casaine, Planning and Development Board member, admonished the availability of land would remain a problem. Ms. Brooks pointed out the mixed-use zoning could only be used in the CRA area where most of the growth will occur. Mr. Tillman concurred with Mr. Casaine and added if the program is voluntary there is no accountability to enforce the ordinance. Ms. Horenburger suggested timing was a factor to be sure there was vertical growth as soon as possible to meet the demand and market. Mr. Bressner suggested a draft ordinance be prepared with the appropriate language requiring affordable housing. Currently there is a performance based Code and a voluntary process. Mr. Tillman contended there needed to be portability and a definitive target date defined. Staff's approach had been if a developer requested an increase in density, then an affordable housing component had to be included. Mr. Casaine agreed there had to be teeth in the plan and a conditional use. Mayor Taylor felt the rezoning was the incentive. The developer came in voluntarily and requested the rezoning. Jon Blehar, Planning and Development Board member, remarked he felt there has been a reduction in the quality of developments and the workforce housing component should not be voluntary. He cautioned the higher density could create slums and crime problems. Ms. Brooks responded the adopted redevelopment plan included higher densities to increase the tax base and economic development. Commissioner McCray clarified that the Heart of Boynton plan called for 20 units per acre. Ms. Brooks commented the downtown area consisted of the area between the Intracoastal to the railroad tracks where the High Density Residential would apply, to develop the downtown area. The density is not on the ground and any changes have to be requested by the developer, then the affordable housing can be included. Mr. Bressner added with an ordinance in place the workforce housing could be required. Mike Curillo, Assistant City Attorney, advised using a more conservative approach as an incentive would create less legal challenges than mandatory. The features of the workforce housing program would encourage units of different types, with similar exterior appearances. The units would be onsite unless it is a luxury development with 4 Minutes Joint Meeting Boynton Beach, FL. January 30, 2007 home purchase prices over $500,000 that could elect off-site units. Both low income and moderate income units would have to be provided Commissioner Weiland suggested the off-site option, if selected, must coincide with the entire development. Ms. Brooks noted the units would be deed restricted so flipping the units would not be possible. Any of the off-site options would be required to be completed before the Certificate of Occupancy would be issued. Vice Mayor Rodriguez contended the off-site option should be more difficult to obtain. Mr. Bressner agreed and suggested the alternatives be less attractive to the developer. Mr. Myott contended the County ordinance would not involve the higher priced waterfront properties so the similarity would end. Ms. Matras suggested a percentage of the units be built on-site. Mr. Zimet inquired if the homeowner association fees and taxes and insurance had been factored into the affordability issue. Ms. Brooks illustrated a purchase example that considered the fees, taxes and insurance. The various subsidy programs were being combined to further close the affordability gap. There are currently six applications for subsidy. The shared equity resale is apportioned in a 20/80% split after five years. The monies would be returned to the housing trust fund. Commissioner McCray question who would be responsible for the housing trust fund. Ms. Brooks replied the City of Boynton Beach and the Community Development offices. Mayor Taylor discussed two issues. First, the issue of portability and there was a strong challenge as being unconstitutional that could succeed. Second, the possibility of prefab homes being allowed should be investigated. The new models meet the hurricane standards and the highest priced home is lower than the affordable home price and should be considered. Commissioner McKoy's opinion was that if the goal was to provide housing, then the options should drive the developer in the direction of making the units on-site. Mr. Casaine liked the idea of prefab homes and suggested a certain percentage of prefab homes could be allowed. Jeanne Heavilin, Community Redevelopment Agency board member, thought all options should be considered. She cautioned if new development remains stagnant some program should be undertaken rather than waiting for the construction market to recover. Mr. Hawkins responded a redevelopment strategy for housing and the ordinance would be tools in the complete strategy. Ms. Horenburger felt Mayor Taylor's suggestion would be a quick fix. Ms. Jaskiewicz suggested a prefab project could be developed on City owned vacant property. Ms. Heavilin expressed her concern regarding the homes in the areas of highest density and the maintenance fees and special assessments decreasing the affordability status for the workforce. Mr. Bressner felt the Commission, CRA and Planning and Development should review the two versions of the ordinance; being the one submitted and the second with the modification to delivery of affordable housing on-site rather than off-site. The third component would be the introduction of prefab or pre-engineered housing for infill housing. 5 Minutes Joint Meeting Boynton Beach, FL. January 30, 2007 Mr. Casaine mentioned clustered housing should be considered as a possibility also. Commissioner McCray commented the placement of modular or prefab homes would generate the concern of lowering existing home values in neighborhoods. Mayor Taylor suggested the new draft be reviewed by the Planning and Development Board and the CRA before it comes to the Commission. Mr. Bressner further suggested there be a review of the minimum lot size requirements for single family homes and partnering with major employers including the City of Boynton Beach to explore other funding issues. ATTEST: 6