ATTACHMENT 4
Excerpt from September 20, 2005 Memorandum to the Planning Board
At the September 6, 2005 meeting, Planning Board members raised the following issues. A staff response is provided. Staff provided responses to the Board’s questions at the September 20, 2005 Planning Board meeting.
1. Determination of Price: A Planning Board member asked who determines the price of an affordable dwelling unit.
Comment: Currently, the Town staff works with local non-profit organizations such as Orange Community Housing and Land Trust to determine the price of the units using federal government guidelines. The Department of Housing and Urban Development (HUD) considers housing to be affordable if a household does not pay more than 30% of its annual gross income on housing expenses. We usually apply this calculation to the income of a family of four making 80% or less of the Median Family Income, approximately $57,050 in this region (also determined by HUD).
2. Application of Percentages to Housing Unit Requirements: The Planning Board pointed out that Option 1 in the Comprehensive Plan language under consideration requests that developers provide 15 percent of their units at prices affordable to low and moderate income households and does not offer direction whether to round up or down when 15 percent of all proposed units results in a fraction of a unit. Because Option 2 is based on the percentage in Option 1, members indicated that the section seemed unclear.
Comment: On January 10, 2005, the Council adopted an Ordinance to adjust the rounding provisions for size restricted/affordable housing provisions, and explain how to apply percentages to the housing unit requirements in the Land Use Management Ordinance. The Ordinance removed language from the Land Use Management Ordinance that instructed applicants to drop fractions resulting from the percentage requirements in both the Floor Area Restrictions and the Substitution of Affordable Housing for Floor Area Restrictions. Without the language regarding rounding, the Land Use Management Ordinance simply instructs applicants to supply at least 25% of the dwelling units with floor area restrictions or at least 15% of the dwelling units when substituting affordable housing for floor area restrictions. The effect of the Land Use Management Ordinance is that fractions resulting from the housing unit requirements will be rounded up.
When calculating a payment-in-lieu, fractions would apply. For example, if the policy was applied to a subdivision where 15% of proposed dwelling units would be 12.5 units, the payment-in-lieu would be calculated based on the cost to make 12.5 units in that subdivision affordable.
Because the Council desires consistency between the Comprehensive Plan and the Land Use Management Ordinance, we have added the phrase “at least” in Option 1 of our recommended revisions to the Comprehensive Plan.
3. Clarification of the Options: A Planning Board member noted that the Comprehensive Plan section under revision did not clearly indicate that a developer of residential developments should choose between Options 1, 2 and 3.
Comment: This clarification has been addressed in the attached Resolution with the addition of the word, “or,” between the Options.
4. The Necessity of Option 3: A Planning Board member questioned whether Option 3 in the Comprehensive Plan section under revision is necessary. It was noted that Option 1 simply asks developers to provide at least 15 percent of their units at prices affordable to low and moderate income households and does not preclude alternative methods that are allowed in Option 3.
Comment: Although the Comprehensive Plan does not specifically state Option 1 should provide homeownership opportunities in new residential developments, we believe that it was the intent of the Council at the time of adoption for it to do so. Section 7A, “Affordable Housing,” discusses the need for affordable housing for all residents of Chapel Hill and proposes a variety of ideas to provide it, including: transitional housing for residents of publicly assisted housing, single room occupancy housing, and housing for middle income residents who currently cannot afford to live in the community. We believe Option 3 was written to provide opportunities for potential innovative ideas by developers and to allow the Council flexibility in applying the policy.
Since the adoption of the Comprehensive Plan in May of 2000 and the Land Use Management Ordinance, the Council has partnered with private developers of residential developments to create 167 affordable housing units. Several of the developments yielded units that were used for rental purposes rather than homeownership (62 rental units), thereby setting a precedent of flexibility with the affordable housing policy.