MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Review of Comprehensive Plan Affordable Housing Strategies
DATE: April 27, 2005
The Council called this work session to review the Town’s Comprehensive Plan strategies for affordable housing.
BACKGROUND
The Town Council’s adopted 2005 Council goals calls for reviewing the Comprehensive Plan’s strategies for affordable housing, including funding, incentives, and whether to pursue inclusionary zoning. (Goal #7, Highest Priority). Council decided to hold this work session, and then decide on future steps to implement the Comprehensive Plan.
The Comprehensive Plan Affordable Housing strategies for review are:
a. Affordable Housing Funding Sources
b. Funding of Affordable Housing Development
c. Consideration of an Affordable Housing Incentive Program
d. Inclusionary Zoning
These strategies are based on the revision of the Comprehensive Plan Action Plan adopted by the Council on May 12, 2003. The 2000 Comprehensive Plan chapter on Housing is attached (please see Attachment 1).
DISCUSSION
Funding Sources and Funding of Affordable Housing
Strategy 7A-1 of the Comprehensive Plan calls for the Town to work with housing providers to aggressively develop affordable housing in Chapel Hill (see pp.51-53, Attachment 1). To do so, the strategy recommends the Town identify and enact funding sources to generate revenues for affordable housing production and/or first time homebuyers. Suggested options in the plan include “traditional revenue generators such as property taxes and General Obligation Bonds, or new techniques such as tax-exempt Private Activity Bonds or Mortgage Revenue Bonds.”
This strategy also recommends continuing to fund housing development and to make maximum use of state and federal funding programs. Please see Attachment 2 for an information report on current initiatives in affordable housing, prepared for the Council’s January 10, 2005 meeting. This report reviews currently available funding sources.
Affordable Housing Incentives
Strategy 7A-2 of the Comprehensive Plan is to provide incentives for housing providers to develop affordable housing (see pp. 53-56, Attachment 1). Currently used incentives include:
· The Town’s policy of encouraging developers to provide 15% affordable housing
· The Residential-Special Standards-Conditional (R-SS-C) Zoning District
· Expedited review of development meeting public purposes
· Fee waiver for affordable housing developments
Other ideas listed in the Comprehensive Plan include:
· Development Fee rebate program for impact fees
· Reductions in setbacks, frontage, and yard requirements, such as in conjunction with zero lot line techniques
· Relaxation of street and sidewalk requirements
· Reduction in parking requirements
· Use of innovative techniques, such as clustering, zero lot line development, small single-family or “cottage” housing, and modular construction
Attachment 3 provides an overview of current affordable housing regulations and policies in the Town of Chapel Hill.
Attachment 4 lists the recent Town Council approvals for affordable housing as components of new development.
Inclusionary Zoning
Strategy 7A-3 recommends the Town continue to pursue the adoption of inclusionary zoning legislation at the State level (see pp. 56-57, Attachment 2).
In the development of the Town’s Land Use Management Ordinance, adopted January 27, 2003, the Council considered, but did not include, inclusionary zoning provisions. In September, 2001, the Town’s consultant, Mark White of Freilich Leitner & Carlisle, provided a memorandum to the Council with advice as to how inclusionary zoning could be included in the Land Use Management Ordinance (please see Attachment 5).
Subsequently, the Town Attorney provided advice to the Town Council on April 10, 2002 that additional legislative authority should be obtained before implementing inclusionary zoning. At that time, the Council had under consideration a possible inclusionary zoning section for the draft Land Use Management Ordinance written by Mark White. The Land Use Management Ordinance adopted on January 27, 2003 did not include inclusionary zoning provisions. At that time, the Town Council decided to continue its reliance on the incentive zoning approach based on the Town’s Comprehensive Plan policy and other mechanisms as described in Attachments 3 and 4.
In 2003 and 2004, additional regional and local studies were done, and a new court case was decided. The following materials are attached for the Council’s review:
· Council member Sally Greene provided information to the Council, including the Triangle J Council of Governments report of the 2002-2003 Inclusionary Zoning Task Force, on January 12, 2004 (please see Attachment 6).
· On January 10, 2005, we provided the Council with an initial report on Davidson, North Carolina’s Affordable Housing provisions in its Planning Ordinance (please see Attachment 7).
· Information on a major Court decision in Virginia is attached (please see Attachment 8).
· In 2004, the Institute of Government issued a report on inclusionary zoning for local governments in North Carolina (previously distributed to the Council).
These materials are provided to assist the Council in its discussion of inclusionary zoning.
ATTACHMENTS
1. Excerpt from 2000 Comprehensive Plan, Chapter 7, Housing
2. Memorandum to Town Council, Affordable Housing Report on Current Initiatives, January 10, 2005
5. Inclusionary Zoning Memorandum from Consultant Mark White to the Town Council, September 19, 2001
8. Washington Post Article, “Affordable Housing Guidelines Rejected,” December 13, 2004