to: Mayor and Town Council
from: Council Committee on Affordable Housing
Council Member Greene, Chair
Council Member Kleinschmidt
Council Member Strom
Council Member Czajkowski
subject: Response to Petition from Orange Community Housing and Land Trust Regarding the Town’s Affordable Housing Policy
date: January 26, 2009
The purpose of this report is to respond to a petition from Orange Community Housing and Land Trust regarding a proposed change to the Town’s Affordable Housing Policy.
The Committee recommends that the Council continue to expect the private sector to include affordable units in its developments. However, we think that it would be beneficial for the Council to have flexibility in its policy to respond to development trends. We recommend that the Council adopt the attached resolution to modify the Town’s Affordable Housing Policy to allow the Council to: (1) accept a payment-in-lieu of all or part of an affordable housing obligation; and (2) require all projects with an affordable housing component to have an Affordable Housing Plan incorporated into an Affordable Housing Performance Agreement that would be signed by the applicant, the Town and the entity responsible for administration of the affordable housing units.
On March 6, 2000, the Council passed a resolution to increase the availability of affordable housing for low- and moderate-income households in Town. The policy states the Council’s expectation that any rezoning requests with a residential component incorporate a 15% affordable housing feature into their plans with mechanisms to assure ongoing affordability. As a result of the Council’s policy, 332 units of affordable housing have been approved and 180 units have been built. In addition, the Council has approved a total of $1,132,000 in payments-in-lieu of providing affordable housing; $502,000 has been received. These funds have been used to establish a revolving fund to purchase properties for homeownership opportunities, to renovate properties and to reduce the sales price of homes.
On September 8, 2008, Robert Dowling, Executive Director of Orange Community Housing and Land Trust, presented a petition to the Council requesting that the Council consider changing its affordable housing policy (see Attachment 1). The Land Trust requested that in addition to requiring that developers provide affordable housing units on site that the Council consider accepting some payments-in-lieu of affordable units. The Land Trust explained that in some cases, affordable units provided on-site present marketing challenges. The Land Trust also explained that additional funds will be needed to ensure the success of the Town’s affordable housing program.
As a result of the Council’s affordable housing policy, the Land Trust expects to be responsible for selling over one hundred condominiums in the next two years. The Land Trust has raised concerns about the number of units that are going to be built because of: (1) its limited staff capacity to market and sell the units; and (2) at this time, they are not able to determine the demand for one and two bedroom condominium units. In response to a separate request from the Land Trust, the Council authorized us to issue a request for proposals for a consultant to develop a market study. The study will examine the affordability and demand for condominium units that would analyze both the common expense assessments for condominium units as well as the demand for affordable 1- and 2-bedroom condominium units over the next ten years. We have learned from staff that this study will be paid for by a donation from RAM Development upon receipt of its Zoning Compliance Permit for the Downtown Economic Development Initiative project. The staff will issue a Request for Proposals for this study when these funds are received.
If the Council supports the Land Trust’s request for a change to the Town’s Affordable Housing Policy, we recommend directing payments to the Town’s Affordable Housing Fund to be used according to guidelines adopted by the Council. Please see Attachment 2 for the guidelines of the Affordable Housing Fund. Directing payments-in-lieu of providing affordable housing to the Affordable Housing Fund could help achieve the Town’s Comprehensive Plan goal of increasing the availability of well-designed, affordable, safe and sanitary housing.
We also recommend that the policy require applicants to submit an Affordable Housing Plan that would be incorporated into an Affordable Housing Performance Agreement. Elements of an Affordable Housing Plan would include general information about the nature and scope of a development, elevations or scaled drawings, the total number of market rate and affordable units in a development, the number of bedrooms and bathrooms and the square footage of the affordable units. Requiring an Affordable Housing Plan would allow the Town to participate in the decision making process about elements of the affordable units such as the design, size and location of the units. This requirement is included in the draft Inclusionary Zoning Ordinance, and we recommend including this language in the Council’s Affordable Housing Policy. Though the Town has recently required applicants to submit an Affordable Housing Plan that is incorporated into a Special Use Permit, adding the language to the policy statement could help emphasize the importance of these documents. Please see Attachment 3 for a summary of items that would be included in an Affordable Housing Performance Agreement and an Affordable Housing Plan. We suggest that the Council authorize the Manager to execute Agreements consistent with policies adopted by the Council.
We recommend that the Council adopt the attached resolution to modify the Town’s Affordable Housing Policy to allow the Council to: (1) accept a payment-in-lieu of all or part of an affordable housing obligation; and (2) require all projects with an affordable housing component to have an Affordable Housing Plan incorporated into an Affordable Housing Performance Agreement that would be signed by the applicant, the Town and the entity responsible for administration of the affordable housing units.