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HomeMy WebLinkAboutP-0320 - Impact Fee Reimbursement Policy for Affordable Housing 03-04-1998-9aPOLICY FOR INSERTION INTO THE POLICY MANUAL MEETING DATE: March 4, 1998 NUMBER: A:0320 EFFECTIVE DATE: July 1, 1995 REVISIONS: April 1, 1997 March 4, 1998 Policy: Impact Fee Reimbursement Policy For Affordable Housing Elisibility Criteria: 1. A 501 (c) (3) non-profit organization which (1) develops affordable housing for first-time homebuyers with incomes at or below 80% of the HUD published area median income for the Raleigh-Durham-Chapel Hill, North Carolina MSA, or (2) develops affordable rental housing for persons with incomes at or below 60% of the HUD published area median income for the Raleigh-Durham-Chapel Hill, North Carolina MSA. 2. Affordable Housing is defined as (1) owner-occupied housing which can be purchased for no more than 2.5 times annual family income, or (2) rental housing for which the occupant pays no more than 30% of gross income for all housing costs, including utilities. 3. An organization requesting impact fee reimbursement must certify in writing that, for owner-occupied housing, it will remain affordable to the anticipated beneficiary or beneficiaries for a period of a minimum of twenty (20) years or at least as long as required by applicable HUD policy. For rental housing, the certification period is ninety-nine (99) years. The rental housing certification must be secured by a "deed covenant," requiring repayment to Orange County of the impact fee if the rental housing does not remain affordable during the period of affordability, which covenant will be further secured by a note and deed of trust. Evidence must be provided that agency and/or program guidelines are in place to assure affordability compliance. Procedure• 1. An organization requesting impact fee reimbursement must anticipate reimbursement needs for a given fiscal year and submit a request for fee reimbursement at the time for submission of the County's annual budget, non- departmental funding request. Further, at no time should an organization presume impact fee reimbursement, and in particular, presume a lump sum reimbursement payment or total reimbursement payment in one fiscal year. Therefore, the cost of impact fees should be considered when developing housing development projects and should be included in all grant and loan applications. Written request for impact fee reimbursement should be submitted to the Orange County Housing and Community Development Department prior to the anticipated date the building permit will be obtained. The request should include all information necessary for a determination of eligibility, including so much of the following that is pertinent: a description of the anticipated beneficiary (homeowner or tenant) a detailed construction budget, and an estimated completion date, the house selling price or the proposed rent schedule, including utility costs. If funding is unavailable in the current fiscal yeaz budget, the Housing and Community Development Director will notify the non-profit organization.- If funding is unavailable, the application for reimbursement will be considered in the next fiscal year. Applications will be considered on a first in, first out basis with unfunded applications carrying over from fisca yeaz to fiscal year unless withdrawn. 2. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager. The recommendation of the Housing and Community Development Director will be based on whether or not the application satisfies the eligibility criteria, includes all of the information required by this Procedure and whether or not the project budget is adequate for the proposed housing project. 3. The Manager's recommendation to the Boazd of County Commissioners, for or against reimbursement, will be conveyed to the applicant in writing by the Manager within 15 working days after the Manager receives the recommendation of the Housing and Community Development Director. The recommendation of the Manager will be based on the recommendation of the Housing and Community Development Director and whether or not there are adequate funds budgeted in the current fiscal yeaz to reimburse the applicant for impact fees paid by the applicant. 4. If the Manager's recommendation is favorable, the item will be placed on the next Boazd of County Commissioners agenda for its consideration. If the boazd decision is favorable the non-profit organization will be reimbursed for the impact fee that it has paid. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. 6. The non-profit organization is responsible for providing written notice, including documentation, of impact fee payment to the Housing and Community Development Department. After notification, the Finance Department will be asked within five working days to prepare a check for the organization. 7. All funding decisions by the Board of County Commissioners will be good for a period of six months from the date of approval. If the building permit is not obtained within that time period, the organization must reapply for funding. ~; APPROVED JUNE 2. 1998 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS • Regular Meeting March 4, 1998 The Orange County Board of County Commissioners met in regular session on Wednesday, March 4, 1998 at 7:30 p.m. in the Judge F. Gordon Battle Courtroom in Hillsborough, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Margaret W. Brown, and Commissioners Moses Carey, Jr., William L. Crowther, Alice M. Gordon and Stephen H. Halkiotis. COUNTY ATTORNEY PRESENT: Geoffrey Gledhill COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Managers Rod Visser and Albert Kittrell and Clerk to the Board Beverly A. Blythe (All other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. ALL RECORDINGS OF THE MEETING WILL ,B,€ KEPT FOR 5 YEARS. 1. SPECIAL PRESENTATIONS a. Marvin Collins The Board recognized and expressed its appreciation to retiring Planning Director Marvin Collins for more than 15 years of service to Orange County. Chair Margaret Brown read the resolution. A motion was made by Commissioner Gordon, seconded by Commissioner Carey to approve . the resolution of appreciation as stated below: Resolution Honoring Marvin Collins Whereas, Marvin Collins has served as Orange County Planning Director for over 15 years and has a distinguished record of almost 30 years of outstanding public service in local government planning. Whereas, Marvin Collins has brought great dedication, creativity and vision to Orange County's planning program. Whereas, Marvin Collins has made many innovative and significant contributions to planning in Orange County including: ^ Work on joint planning with Chapel Hill and Carrboro leading to creation of the Joint Planning Area Land Use Plan and Rural Buffer. ^ Guiding the development of watershed standards to protect the quality of our water resources. ^ Working with Randall Arendt, noted open space expert, to develop an open space design guidebook which has been distributed statewide to all 100 counties. ^ Analysis and support for development of public school impact fees. ^ Development of the historic preservation element of the County's comprehensive plan, the first County-wide historic preservation plan in the State. 8 9. ITEMS FOR DECISION -REGULAR AGENDA • a. Impact Fee Reimbursement Policv The Board considered approval of a revised impact fee reimbursement policy for housing development agencies. John Link gave an overview of the information in the agenda. Tara Fikes outlined the changes in this policy. Geoffrey Gledhill made reference to the pros and cons as listed in the agenda and expanded on several of these. Commissioner Gordon and Commissioner Carey made suggestions for changes. These are incorporated into the policy as stated below in these minutes. A motion was made by Commissioner Gordon, seconded by Commissioner Carey to approve the Impact Fee Reimbursement Policy for Affordable Housing as stated below: IMPACT FEE REIMBURSEMENT POLICY CONCERNING AFFORDABLE HOUSING FOR LOW INCOME INDIVIDUALS Guiding Principles for the Policv Reimbursements made under this policy must satisfy the public purpose requirement for spending County money. 2. All reimbursements are made subject to budgetary constraints, and are limited solely to the County's annual appropriations for reimbursement. Thus there is no entitlement to these reimbursements even for projects that qualify. Eligibility Criteria: 1. Reimbursements will onl _ y be made to 501(c)(3) non profit organizations which (1) develop affordable housing to be owner-occupied by first-time homebuyers with incomes at or below 80% of the HUD published area median income for the Raleigh-Dufiam-Chapel Hill, North Carolina MSA, or (2) develop affordable rental housing for persons with incomes at or below 60% of the HUD published area median income for the Raleigh/Dufiam -Chapel Hill, North Carolina MSA. 2. Affordable Housing is defined as (1) owner-occupied housing which can be purchased for no more than 2.5 times annual family income, or (2) rental housing for which the occupant pays no more than 30% of gross income for all housing costs, including utilities. 3. An organization requesting impact fee reimbursement must certify in writing that, for owner-occupied housing, it will remain affordable to the anticipated beneficiary or beneficiaries for a period of a minimum of twenty (20) years or longer if required by applicable HUD policy. For rental housing, the certification period is ninety-nine (99) years. The rental housing certification must be secured by a "deed covenant," requiring repayment to Orange County of the impact fee if the rental housing does not remain affordable during the period of affordability, which covenant will be further secured by a note and deed of trust. Evidence must be provided that agency and/or program guidelines are in place to assure affordability compliance. Procedure: i An organization requesting impact fee reimbursement must anticipate reimbursement needs for a given fiscal year and submit a request for fee reimbursement at the time for submission of the County's annual budget, non-departmental funding requests. Further, at no time should an organization presume impact fee reimbursement, and in particular, presume a lump sum reimbursement payment or total reimbursement 9 payments in one fiscal year. Therefore, the cost of impact fees should be budgeted when developing housing development projects and should be included in all grant and loan applications. Written request for impact fee reimbursement should be submitted to the Orange County Housing and Community Development Department prior to the anticipated date the building permit will be obtained. The request should include all information necessary for a determination of eligibility, including so much of the following that is pertinent: a description of the anticipated beneficiary (homeowner or tenant), a detailed constnaction budget including amounts for individual houses or rental units, an estimated completion date, the house selling price or the proposed rent schedule, including utility costs. If funding is unavailable in the current fiscal year budget, the Housing and Community Development Director will notify the non-profit organization. If funding is unavailable, the application for reimbursement will be considered in the next fiscal year. Applications will be considered on a first in, first out basis with .unfunded applications carrying over from fiscal year to fiscal year unless withdrawn. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager. The recommendation of the Housing and Community Development Director will be based on whether or not the application satisfies the eligibility criteria, includes all of the information required by this Procedure and whether or not the project budget is adequate for the proposed housing project. The Manager's recommendation to the Board of County Commissioners, for or against reimbursement, will be conveyed to the applicant in writing by the Manager within 15 working days after the Manager receives the recommendation of the Housing and Community Development Director. The recommendation of the Manager will be based on the recommendation of the Housing and Community Development Director AND whether or not there are adequate funds budgeted in the current fiscal year to reimburse the applicant for • impact fees paid by the applicant. 4. If the Manager's recommendation is favorable, the item will be placed on the next Board of County Commissioners agenda for its consideration. If the board decision is favorable, the non-profit organization will be reimbursed for the impact fee that it has paid. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. The non-profit organization is responsible for providing written notice, including documentation, of impact fee payment to the Housing and Community Development Department. The organization will be reimbursed within five working days of receipt of the written notice by the Housing and Community Development Department. All funding decisions by the Board of County Commissioners will be good for a period of twelve months from the date of approval. If the building permit is not obtained within that time period, the organization must reapply for funding. Effective: July 1, 1995 Approved: November 1, 1995 Revised: April 1, 1997; March 4, 1998 VOTE: UNANIMOUS b. Proposed Chances to County Tax Notice Format The Board considered a proposal to improve the tax notice form and provide the County with a low-cost method of communication with the citizens. ORANGE COUNTY BOARD OF COMMISSIONERS • Action Agenda Item No. 4-q .ACTION AGENDA ITEM ABSTRACT Meeting Date: March 4, 1998 SUBJECT: Impact Fee Reimbursement Policy for Affordable Housing DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/l~ ~ 'A~}`•~ {. i:;.; BUDGET AMENDMENT: (Y/1~ `~ ~~ . ;, ;~4k, ATTACHMENT(S): Revised Policy County Attorney Statement INFORMATION CONTACT: Tara L. Fikes TELEPHONE NUMBERS: - -eat. 2490 Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To approve a revised Impact Fee Reimbursement Policy for non-profit housing development agencies. BACKGROUND: On November 1, 1995, the BOCC approved a policy for impact fee reimbursement to local non- profit organizations meeting the established criteria. The eligibility criteria includes only non-prof t housing organizations producing single family housing for first-time homebuyers at or below 80% of area median income. Since adoption, the interest in reimbursement of fees paid for rental property developed for low income families has become more visible. In order to address rental housing development within the reimbursement policy, on April 1, 1997, the BOCC considered a policy revision to enable the BOCC to consider reimbursement requests from non-profit organizations developing rental property on a case by case basis. At that time the Boazd asked for the following additional information. 1. Definition: of Affordability -Affordable housing is defined as rental housing for which the occupant pays no more than 30% of gross income for all housing costs, including utilities; or owner-occupied housing which can be purchased for no more than 2.5 times annual family income. 2. Define Special Needs Populations -Special needs populations refer to such groups as: the disabled including the physically handicapped; mentally ill; the elderly; persons living with AIDS; substance abusers; and the homeless. 3. Will establishing criteria for reviewing of rental housing developments create an "entitlement policy"? -See County Attorney's Statement 4. Investigate the pros and cons of adding rental housing. to the policy. Are we setting a precedent? -See County Attorney's Statement RECOMMENDATION(S): The Manager recommends approval of a revised Impact Fee Reimbursement Policy for non-profit housing development agencies. • 2 • POLICY FOR IMPACT FEE REIMBURSEMENT ^^~r FOR AFFORDABLE HOIISING • Eligibility Criteria: 1. ~ A 501(c)(3) non-profit organization which (1) develops ei-egle-T affordable housing for first-time homebuyers with incomes at or below 80~ of the HUD published area median income for the Raleigh--Durhamf-Chapel Hill, North Carolina MSA, or (2) develops affordable rental housing for persons with incomes at or below 60~ of the HIID published area median income for the Raleigh/Durham - Chapel Hill, North Carolina MSA. 3 2. Affordable Housing is defined as (1) owner-occupied housiag which can be purchased for no more than 2.5 times annual family income, or (2) rental housing for which the occupant pays no more thaw 30`k~ of gross income for all housing costs, including utilities. 3. ~ An organization$ requesting impact fee reimbursement must certify in writing that, for owner-occupied ~e housing, it will remain affordable to the anticipated beneficiary or beneficiaries for a period of at-=e~~ a minimum of twenty (20) years or at least as long as required by applicable HIID policy. For rental housing, the certification period is ninety-nine (99) years. The rental housing certification must be secured by a "deed covenant,u requiring repayment to Orange County of the impact fee if the rental housiag does not remain affordable during the period of affordability, which covenant will be further secured by a note and deed of trust. Evidence must be provided that agency and/or program guidelines are in place to assure affordability compliance. Procedure• 1. An organization requesting impact fee reimbursement must anticipate reimbursement needs for a given fiscal year and submit a request for fee reimbursement at the time for submission of the County's annual budget, non-departmental funding requests. Further, at no time should an organisation presume impact fee reimbursement, and in particular, presume a lump sum reimbursement payment or totah:reimbursement payments in one fiscal year. Therefore, the cost: of impact fees should be considered when developing housiag development projects and should be included in all gram axed loan applications . Written request for impact fee reimbursement should be submitted to the Orange County Housing and Community Development Department prior to the anticipated date the building permit will be obtained. The request should include all information necessary for a determination of eligibility, including so much of the following that is pertinent: a description of the anticipated beneficiary (homeowner or tenant), a detailed i~r~-i~=~~-1 ~-te~~ construction budget, a~ an estimated completion date, the house selling price or the proposed rent schedule, including utility costs. If funding is unavailable in the current fiscal year budget, the Housing and Community Development Director will notify the non-profit organization. If funding is unavailable, the application for reimbursement will be considered in the next fiscal year. Applications will be considered on a first in, first out basis with unfunded applications carrying over from fiscal year to fiscal year unless withdrawn. -~~ -~-a~c~-ee ~ex~.r:o~ew--wig ~a~e-gi~ae~~t--~ t. -a,. 2. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager €e~-~~-~re~:--a~a ate. The recommendation of the Housing and Community Development Director will be based on whether or not the application satisfies the eligibility criteria, includes all of the information required by this Procedure and whether or not the project budget is adequate for the proposed housing project. 3. The ~i-~~--~ee~~ie~-w~--be Manager's recommendation to the Board of County Commissioners, for or against reimbursement, will be conveyed to the applicant in writing by the Manager within 15 working days after the -~'~~- ~a. Manager receives the recommendation of the Housing and Community Development Director. The recommendation of the Manager will be based on the recommendation of the Housiaq and Community Development Director AND whether or not there are adequate funds budgeted in the current fiscal year to reimburse the applicant for impact fees paid by the applicant. 4. If the Manager's recommendation is favorable, the item will be placed on the next Board of County Commissioners agenda for its consideration. If the board decision is favorable, ~••~a~ ~" '~~ a: ~`~~'~••'--~' '-~ the non-profit organization will be reimbursed for the impact fee that ft has ~ee~~ paid ~ r: YPQiI.P fi t' 1 Yig ,=r~nr?j~ , 5. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. 6. The non-profit. organization is responsible for providing written notice, including documentation, of impact fee payment: to the Housing and Community Development Department. After,,n.otification, the Finance Department will be asked within°five working days to prepare a check for the organization. 7. All funding v ~-a,~:~-~ decisions by the. Board of County Commissioners will be good for a period of six months from the date of approval. If the building permit is not obtained within that time period, the organization must .reapply for funding. Effective: July 1, 1995 Approved: November 1, 1995 Revised: April 1, 1997; March 4, 1998 * Revisions in bold lsg-12\impfee.pol 4 LAW OFFICES • COLEMAN, GLEDHILL & HARGRAVE A PROFESSIONAL CORPORATION 129 E. TRYON STREET - P. O. DRAWER 1529 HILLSBOROUGH, NORTH CAROLINA 27278 919.732.31% FROM THE DESK OF FAX 919.732.7997 GEOFFREY E. GLEDHILL February 24, 1998 -~ Margaret Brown, Chair Moses Carey, Jr. Bill Crowther Alice Gordon Stephen Halkiotis Orange County Board of Commissioners Post Office Box 8181 Hillsborough, North Carolina 27278 RE: Impact Fee Reimbursement Policy Dear Board Members: Last year, the Board considered expanding its impact fee reimbursement policy related to affordable housing to include rental housing. I have been asked to present pros and cons of such a policy expansion. I have enclosed a copy of my June 26, 1996 letter to the Board as background for your consideration of the policy expansion. The conclusion of that June 26, 1996 letter is that spending County money on a project which will directly benefit families or persons of low to moderate income over a sustained period of time satisfies the public purpose requirement for spending County money. A policy which reimburses school impact fees for projects exclusively committed to renters with incomes at or below 60% of the HUD published area median: income (the Raleigh/Durham/Chapel Hill metropolitan statistical area total median family incot~)-satisfies that public purpose. The enclosed chart may help you see the population at which this: reimbursement policy is aimed. The obvious. first "pro." of making impact fee reimbursements available to such rental projects is that it will arguably increase the number of affordable housing units available and arguably make those housing units more affordable. Requiring the units in the project to remain affordable for a significant length of time assures the availability of affordable housing for the period of affordability. A "con" is that the housing may not remain affordable in perpetuity and that at some point the housing units may be rented at market rates. The question becomes whether the County's investment in impact fees is sufficiently "amortized" over the period of required • Board of Commissioners 6 Page 2 February 24, 1998 • • affordability. To further insure affordability for the desired length of time it is possible to develop an agreement or land covenant secured by a note and deed of trust which will require repayment of the. impact fee for any unit that does not remain affordable for the covenanted period of time. Whether the obligation to repay the impact fee could be enforced if there's a need to enforce it will depend on whether there is equity in the housing project and whether the County, at that time, has the will to enforce the reimbursement requirement. Establishing a policy for reimbursement of impact fees to rental housing projects has the potential to be perceived as an entitlement. That is, once the standards for reimbursement are established, they become the benchmark for projects seeking reimbursement. Since the amount of money involved in impact fees is significant, it is reasonable to assume that all new affordable housing projects, whether home ownership or rental, will meet Orange County's impact fee reimbursement standards. This fact may be perceived to be a "con." It will cost the County money. And, there is no rational way that I can think of to distinguish among the qualifying projects. In order to avoid the impact fee reimbursement policy from being perceived to be an entitlement program, the policy must limit reimbursements solely to the County's annual appropriations for .reimbursement. The appropriation limitation limits the County's annual expenditure for impact fees. I think it is very important that all reimbursement requests, both home ownership and rental, be treated first in, first out. Those that cannot be funded in the fiscal year in which the application is made will be held until they are either withdrawn or ultimately funded in a subsequent fiscal year, again on a first come, first served basis. This means that Orange County's standards for reimbursement will determine the universe of applicants. The tighter the standards, the fewer the applicants. The converse is also true. The standards proposed in the rental policy under consideration are parallel to those for home ownership affordable housing. They could be tighter for both home ownership and rental. For example, the Town of Carrboro has a policy for waiving permit fees. A copy is enclosed. This policy is more narrow than the County's impact fee policy and would, by and large, result in fewer Canboro permit fee waivers than County impact fee reimbursements. The "con" of limiting reimbursements as Carrboro has, is that otherwise affordable housing units may not be built or there may -not be as many built. For example, not all Habitat for Humanity housing projects would qualify under the Carrboro fee waiver policy. Eliminating a Habitat house from school impact fee reimbursement consideration based on the fact that no federal, state or local money is used to fund the project or the fact that the project is not necessary to implement the HOME program may lessen the number of Habitat houses that can be constructed and, therefore, may not be the kind of distinguishing characteristics that the Board would want to make in deciding whether to reimburse impact fees. The Board also sought some clarity as to what special needs populations are. A definition is provided as part of the abstract for the impact fee reimbursement policy revision. Providing reimbursement for special needs population housing is not addressed separately in the • Board of Commissioners ~ Page 3 February 24, 1948 recommended policy. This is so principally because, although definable, this housing may not be readily identifiable as a class large enough to include in a policy. Assuming that the Board has an interest in, from time to time, reimbursing impact fees for housing for a special needs population that does not meet the affordable housing definitions recommended, it can handle the request on a case by case basis and outside the policy with the only criterion being that the reimbursement satisfy the public purpose requirement for spending County money. The Board makes similar determinations annually when it considers funding requests from outside agencies. Very truly yours, HII.L & HARGRAVE, P.C. GEG/lsg Enclosures . xc: Tara Fikes John M. Link, Jr. lsg-12 boardimp.ltr i• I• _ POLICY FOR IMPACT FEE REIMBURSEMENT FOR - AFFORDABLE HOUSING (Based on 1998 Data) HOME OWNERSHIP Raleigh-Durham-Chapel Maximum Home Hill, North Carolina Purchase Metropolitan Statisti- Family Price to cal Area Total Median Income Homeowner Family Income (80~) Family family of 4 $54,700 $43,760 $109,400 "- family of 3 49,200 39,360 98,400 family of 2 43,800 35,040 87,600 family of 1 38,300 30,640 76,600 RENTAL HOUSING Raleigh-Durham-Chapel Hill, North Carolina. Metropolitan Statisti- Family . cal Area Total Median Income Family Income 6( 0~) family of 4 $54,700 family of 3 49,200 family of 2 43, 800 family of l 38,300 $43,760 39,360 35,040 30,640 Maximum Housing cost to Family (included: rent, heat, electric, water and sewer utilities) per month $820.50 738.00 657.00 574.50 8 • ~~,~~ • LAW OFFICES COLEMAN, GLEDHILL & HARGRAVE A PROFESSIONAL CORPORATION 129 E. TRYON STREET P. O. DRAWER 1529 - HILLSBOROUGH. NORTH CAROLINA 27278 919.732.2196 FAX 919.732.7997 Bill Crowther Alice Gordon Stephen Halkiotis Don Willhoit Orange County Board Post Office Box 8181 Hillsborough, North Moses Carey, Jr., Chair June 26, 1996 of Commissioners Carolina 27278 FROM THE DESK OF GEOFFREY E. GLEDHILL RE: Impact Fee Exemption or Reimbursement Requests by First Centrum Corporation Dear Board Members: In letters. to John Link and Tara Fikes, Mr. Jerry A. Lohla, Executive Vice President of First Centrum Corporation, makes the .case for exemption or refund of school capital impact fees for an apartment complex planned to be built in Carrboro. The apartment complex is presented as a rental, .affordable housing project for seniors. The request seeks exemption or refund of $186-,000. The. impact fee for the Chapel Hill-Carrboro School District approved by the Board of Commissioners on June 3, 1996 no doubt makes this request one for exemption or refund of $369,000 in impact fees. Exemption: The impact fee is based on the Orange County Educational Facilities Impact Fee Ordinance and is a fee charged on all new residential dwelling units located within Orange County. That. ordinance provides no exception for. residential dwelling units regardless of ownership, whether to be used for home ownershg,or rental, affordability or classification of the resident population of the dwelling unit. In other words, an apartment complex developed to be rented to persons over 62 years of age who meet affordability requirements is not exempt under the Impact Fee Ordinance. That Ordinance would have to be amended to permit an exemption for this classification of residential dwelling or any other. The Impact Fee Ordinance provides a process for review of the assumptions which form the basis for the fee and its amount. • That process is described in Section 5F. The Board of County Board of Commissioners Page 2 June 2 6 , 19 9~6 _ Commissioners are directed in that Section to review a report (known as the Technical Report) annually to determine "if, within each benefit area (school district), all areas of new construction are being benefitted by the fees." If the Board of Commissioners determines areas of new construction are not being benefitted, then it is empowered to adjust the impact fee accordingly. The County has gone through such an annual adjustment process, concluding most recently with the May 28, 1996 public hearing and adoption of revisions to the Impact Fee Ordinance on June 3, 1996. It is my opinion that this adjustment process can happen more often than annually and that the Board could direct such a review at any time. Following any such review a report would be prepared and presented to the Board of Commissioners. The Board could then call for a public hearing to consider changes in the Impact Fee Ordinance. Prior to the hearing the Board must cause notice of the hearing to be published once a week for two calendar weeks.- The first publication can be not less than 10 days nor more than 25 days before the date fixed for the hearing. As you know, the impact fee is supported by the Technical Report.. Originally, it included in its analysis all existing housing, derived from the latest census data. That data was updated in an August 8, 1995 study focusing only on new housing units. This study resulted in new student generation rates which were in part the basis for the increase in the Chapel Hill- Carrboro School System impact fee from $1,500 to $3,000 approved on June 5, 1996. All new residential housing units, including for example those in the Carol Woods Retirement Center, were included in the data base for the purpose of calculating the student generation rate presented in the August 8, 1995 report and used in the Technical Report calculation of the permissible impact fee. Any decision to exclude classifications of housing .because of an actual or perceived lesser impact on the school capital needs would call for a recalculation of the student generation rate and the Technical Report. Further staff analysis of this seniors-only affordable housing project'could result in a conclusion that some of that work could be avoided, at least for the purpose of determining whether this classification of housing should be exempt from school capital impact fees. Among-the things that staff will look at will be: (1) the period of affordability and seniors- only limitation compared with the period the housing could impact school capital needs; (2) the ability to "buy out" the project limitations (affordability and seniors-only) and convert the • project to a "market one." 10 Board of Commissioners 11 Page 3 June 26, 1996 Reimbursement: A decision by the Board to reimburse the impact fees for this housing project is less legalistic and would not require the analysis or the time that would be involved for an ordinance amendment. Presently Orange County has a policy permitting reimbursement of educational impact fees paid for housing units constructed by nonprofit corporations for home ownership by persons meeting an affordability test. These reimbursements are predicated on (1) a qualified applicant (nonprofit), (2) long term affordability and (3) Orange County using its general fund revenue to.satisfy a public purpose that is deemed as important as the educational impact fees. The line drawn by the Board concerning this policy can be redrawn. Its -- present location is analogous to the property tax exemption made for property used for charitable purposes. That tax exemption has two features. The entity seeking exemption must be qualified and the use of the property must qualify. A qualifying entity is a nonprofit corporation. A qualifying use is-affordable housing. Since the impact fee is not a tax, Orange County is not bound by the line drawn in the property tax laws, drawn for exempting property taxes. On the other hand, before the County can spend general fund money, it must do so for public purposes. Article V, Section 2(1) of the North Carolina Constitution -provides that "[t]he power of taxation shall be exercised in a just and equitable manner, for public purposes only." "The power to appropriate money from the public treasury is nQ greater than the power to levy the tax which put the money in the treasury. Both powers are subject to the constitutional proscription that tax revenues may not be used for private individuals or corporations, no matter how benevolent." [Citation omitted.] The definition of a public purpose is an evolving and perhaps expanding one. The government may "experiment with new modes of dealing with old evils, except as prevented by the Constitution." [Citation omitted.] Most recently we saw evidence of the North Carolina Supreme Court's view of the expanding definition of public purposes in the Mareadv case. The Supreme Court approved public money being spent for industrial recruitment°-_~nd generally economic development. Some of the language in.ahat decision, although not related to affordable housing or this affordable housing project, suggests to me that the line on reimbursing impact fees could be redrawn to include the First Centrum project. I have enclosed a copy of the Mareadv decision for your review. And, as we know, public money is spent on affordable housing projects and programs at the federal, state and local level. • .Unlike fee exemption, fee reimbursement requires a source of funds. That is, the fee must be collected and deposited in the Board of Commissioners Page 4 June 26, 199 trust fund created for the administration of the impact fee. The reimbursement must come from the County's general fund. In this case, the amount of money in question is $369,000 (123 units x $3,000 per unit). Very truly yours, rnr_rr~rau !!T_1?TITITT_T~ & HARGRAVE, P . C . GEG/lsg Enclosure xc: John M. Link, Jr. lsg-5 gegimp.mem ill i• 12 i• ' t1 =1/ ~b% 157/ lc: .:+1 C7 ~.. 13 -_ A-D~INISTRATNE POL,ICX '~'OVYht OF CA.RRBORO NORTil< CAfiOLINA DErAR7MEr+r: r+Uht°ER: R,tVUtON: lrtECTtvtDArs: rAOe I or 2 Planning 540-I 0 February 18, 1997 SV9IECT: ~REMREDSY: ~~./ AtfRDVYD Land Use and Duitding Permit Roy Williford ~/Id,.~a-... Fee Waiver Policy Planning Director own Manager 1.0 P OSE To establish fens waiver policy for land use and building permitg~ 2.0 012GANIZATIONS AFFECTED All departments and divisions _ 3.0 REFERENCES 4.0 OF LICY • The Town of Carrboro in its desire,to firrtlicr affordable housing opportunltics hereby establishes a Permit Fee Waiver Policy. This policy was adopted by the Carrboro Board of Aldermen on February 11, 1997. 5.0 AEFINITION~ Affordable housing is defined as: I. A dwelling unit that can be purchased by families yr persons with incomes that arc less khan 80% of the median income for Orange County as reported by the_US Dept. of Housing and Urban Development and w~ier~c Cie total-monthly housing cost (including mortgage payments, utilities, truces, and insurzance) will not exceed 30% of their total monthly income. 2. A dwelling oral that can be routed by fanulies or persons with incomes that arc less than 60% of the median income for Orange County as reported by the US Dept, of Housing;- and. Urban Development and where the total monthly housing cost (including;rent payments, utilities,~taxes, and insurance) will not exceed 30 % of their • total monthly income. 6.0 PROCEAURE Subject to budgetary constraints, the IIoard of Aldermen may consider granting a fee waiver (excluding engineering fees) for affordable housing projects that are no being developed on property owned directly or .indirectly by the Town of Carrboro that can clearly demonstrate compliance with the following criteria: • V_l. The fee waiver will directly benefit families or persons of low to moderate income over a sustained period of time, • U411G! i77( LL; .71 :a7:oO~ r~~ • ~ vr« , ur ~,«-,ca:~t,r.U rHUC iii 14 r z fz ~. yr ABC 0 3 StAndard Policy hlo. 544-1 {~~~ I ~~.} -. 2. The project is_.directly funded by a Federal, State, or T.oca] unit of government specifically to provide tow and moderate income opportunities; and 3. The need and benefit will be realized by the community as a whole if the fee waiver is granted; and . 4. The project would not be affordable but for the granting of a fee waiver; and 5. The project is necessary to implement a component specified in the Consolidated Plan for Housirtg~and Community Development in Onangc County. NC as required by the HOME grogram administered du~ough Orange County. ,> i• ORANGE COUNTY BOARD OF COMMISSIONERS Action Agenda Item No. t~-Q ACTION AGENDA ITEM ABSTRACT Meeting Date: March 4, 1998 • SUBJECT: Impact Fee Reimbursement Policy for Affordable Housing DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/1~ `~ ~~ "~~'k'' BUDGET AMENDMENT: (Y/l~ ~::::;: ATTACHMENT(S): INFORMATION CONTACT: Revised Policy Taza L. Fikes County Attorney Statement TELEPHONE NUMBERS: - - ezt. 2490 Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 227-2031 PURPOSE: To approve a revised Impact Fee Reimbursement Policy for non-profit housing development agencies. BACKGROUND: On November 1, 1995, the BOCC approved a policy for impact fee reimbursement to local non- profit organizations meeting the established criteria. The eligibility criteria includes only non-profit housing organizations producing single family housing for first-time homebuyers at or below 80% of azea median income. Since adoption, the interest in reimbursement of fees paid for rental property developed for low income families has become more visible. In order to address rental housing development within the reimbursement policy, on April 1, 1997, the BOCC considered a policy revision to enable the BOCC to consider reimbursement requests from non-profit organizations developing rental property on a case by case basis. At that time the Board asked for the following additional information. 1. DefinitioII of Affordability - Af,~`ordable housing is defined as rental housing for which the occupant pays no more than 30% of gross income for all housing costs, including utilities; or owner-occupied housing which can be purchased for no more than 2. S times annual family income. 2. Define Special Needs Populations -Special needs populations refer to such groups as: the disabled including the physically handicapped; mentally ill; the elderly; persons living with AIDS; substance abusers; and the homeless. 3. Will establishing criteria for reviewing of rental housing developments create an "entitlement policy"? -See County Attorney's Statement LAW OFFICES COLEMAN, GLEDHILL & HARGRAVE A PROFESSIONAL CORPORATION 129 E. TRYON STREET P. O. DRAWER 1529 HILLSBOROUGH, NORTH CAROLINA 27276 919.732.21% FROM THE DESK OF FAX 919.732.7997 GEOFFREY E. GLEDHILL February 24, 1998 "~ Margaret Brown, Chair Moses Carey, Jr. Bill Crowther Alice Gordon Stephen Halkiotis Orange County Board of Commissioners Post Office Box 8181 Hillsborough, North Carolina 27278 RE: Impact Fee Reimbursement Poliey • Dear Board Members: Last year, the Board considered expanding its impact fee reimbursement policy related to affordable housing to include rental housing. I have been asked to present pros and cons of such a policy expansion. I have enclosed a copy of my June 26, 1996 letter to the Board as background for your consideration of the policy expansion. The conclusion of that June 26, 1996 letter is that spending County money on a project which will directly benefit families or persons of low to moderate income over a sustained period of time satisfies the public purpose requirement for spending County money. A policy which reimburses school impact fees for projects exclusively committed to renters with incomes at or below 60% of the HUD published area median-income (the Raleigh/Durham/Chapel Hill metropolitan statistical area total median family incon~I~)'satisfies that public purpose. The enclosed chart may help you see the population at which this reimbursement policy is aimed. The obvious first- "pro" of making impact fee reimbursements available to such rental projects is that it will arguably increase 'the number of affordable housing units available and arguably make those housing units more affordable. Requiring the units in the project to remain affordable for a significant length of time assures the availability of affordable housing for the period of affordability. A "con" is that the housing may not remain affordable in perpetuity and that at some • point the housing units may be rented at market rates. The question becomes whether the County's investment in impact fees is sufficiently "amortized" over the period of required Board of Commissioners 6 Page 2 February 24, 1998 affordability. To further insure affordability for the desired length of time it is possible to develop an agreement or land covenant secured by a note and deed of trust which will require repayment of the impact fee for any unit that does not remain affordable for the covenanted period of time. Whether the obligation to repay the impact fee could be enforced if there's a need to enforce it will depend on whether there is equity in the housing project and whether the County, at that time, has the will to enforce the reimbursement requirement. Establishing a policy for reimbursement of impact fees to rental housing projects has the _ potential to be perceived as an entitlement. That is, once the standards for reimbursement are established, they become the benchmark for projects seeking reimbursement. Since the amount of money involved in impact fees is significant, it is reasonable to assume that all new affordable housing projects, whether home ownership or rental, will meet Orange County's impact fee reimbursement standards. .This fact may be perceived to be a "con." It will cost the County money. And, there is no rational way that I can think of to distinguish among the qualifying projects. In order to avoid the impact fee reimbursement policy from being perceived to be an entitlement program, the policy must limit reimbursements solely to the County's annual appropriations for reimbursement. The appropriation limitation limits the County's annual expenditure for impact fees. I think it is very important that all reimbursement requests, both home ownership and rental, be treated first in, first out. Those that cannot be funded in the fiscal year in which the application is made will be held until they are either withdrawn or ultimately funded in a subsequent fiscal year, again on a first come, first served basis. This means that Orange County's standards for reimbursement will determine the universe of applicants. The tighter the standards, the fewer the applicants. The converse is also true. The standards proposed in the rental policy'iander consideration are parallel to those for home ownership affordable housing. They could be tighter for both home ownership and rental. For example, the Town of Carrboro has a policy for waiving permit fees. A copy is enclosed. This policy is more narrow than the County's impact fee policy and would, by and large, result in fewer Carrboro permit fee waivers than County impact fee reimbursements. The "con" of limiting reimbursements as Carrboro has, is that otherwise affordable housing units may not be built or there may-not be as many built. For example, not all Habitat for Humanity housing projects would qualify under the Carrboro fee waiver policy. Eliminating a Habitat house from school impact fee reimbursement consideration based on the fact that no federal, state or local money is used to fund the project or the fact that the project is not necessary to implement the HOME program may lessen the number of Habitat houses that can be constructed and, therefore, may not be the kind of distinguishing characteristics that the Board would want to make in deciding whether to reimburse impact fees. The Board also sought some clarity as to what special needs populations are. A definition is provided as part of the abstract for the impact fee reimbursement policy revision. Providing reimbursement for special needs population housing is not addressed separately in the • • Board of Commissioners Page 3 February 24, 1998 7 recommended policy. This is so principally because, although definable, this housing may not be readily identifiable as a class large enough to include in a policy. Assuming that the Board has an interest in, from time to time, reimbursing impact fees for housing for a special needs population that does not meet the affordable housing definitions recommended, it can handle the request on a case by case basis and outside the policy with the only criterion being that the reimbursement satisfy the public purpose requirement for spending County money. The Board makes similar determinations annually when it considers funding requests from outside agencies. Very truly yours, HILL & HARGRAVE, P.C. GEG/lsg Enclosures xc: Tara Fikes • John M. Link, Jr. lsg-12 boardimp.ltr • POLICY FOR IMPACT FEE REIMBURSEMENT FOR AFFORD ABLE HOUSING (Based on 1998 Data) HOME OWNERSHIP Raleigh-Durham-Chapel Maximum Home Hill, North Carolina Purchase Metropolitan Statisti- Family Price to cal Area Total Median Income Homeowner Familv Income (80~) Family family of 4 $54,700 $43,760 $109,400 family of 3 49,200 39,360 98,400 family of 2 43,800 35,040 87,600 family of 1 38,300 30,640 76,600 RENTAL HOUSING Raleigh-Durham-Chapel Hill, North Carolina Metropolitan Statisti- Family cal Area Total Median Income Familv Income (60~) family of 4 $54,700 $43,760 family of 3 49,200 39,360 family of 2 43,800 35,040 family of 1 38,300 30,640 Maximum Housing cost to Family (included.: rent, heat, electric, water and sewer utilities) Aer month $820.50 738.00 657.00 574.50 8 t • • ~'~~?ST • LAW OFFICES COLEMAN, GLEDHILL & HARGRAVE A PROFESSIONAL CORPORATION 129 E. TRYON STREET -. P. O. DRAWER 1529 - HILLSBOROUGH. NORTH CAROLINA 27278 919.732.2196 FAX 919.732.7997 Bill Crowther Alice Gordon Stephen Halkiotis Don Willhoit Orange County Board Post Office Box 8181 Hillsborough, North Moses Carey, Jr., Chair June 26, 1996 of Commissioners Carolina 27278 FROM THE DESK OF GEOFFREY E. GLEDHILL RE: Impact Fee Exemption or Reimbursement Requests by First Centrum Corporation Dear Board Members: In letters to John Link and Tara Fikes, Mr. Jerry A. Lohla, Executive Vice President of First Centrum Corporation, makes the case for exemption or refund of school capital impact fees for an apartment complex planned to be built in Carrboro. The. apartment complex is presented as a rental, affordable housing project for seniors. The request seeks exemption or refund of $186,000. The impact fee for the Chapel Hill-Carrboro School District .approved by the Board of Commissioners on June 3, 1996 no doubt makes this request one for exemption or refund of $369,000 in impact fees. Exemption: The impact fee is based on the Orange County Educational Facilities Impact Fee Ordinance and is a fee charged on all new residential dwelling units located within Orange County. That. ordinance provides no exception for residential dwelling units-regardless of ownership, whether to be used for home ownershpror rental, affordability or classification of the resident population of the dwelling unit. In other words, an apartment coiuplex developed to be rented to persons over 62 years of age who meet affordability requirements is not exempt under the Impact Fee Ordinance. That Ordinance would have to be amended to permit an exemption for this classification of residential dwelling or any other. The Impact Fee Ordinance provides a process for review of the assumptions which form the basis for the fee and its amount. That process is described in Section 5F. The Board of County • 9 Board of Commissioners 10 Page 2 - • June 2 6 , 19 9.6 Commissioners are directed in that Section to review a report (known as the Technical Report) annually to determine "if, within each benefit area (school district), all areas of new .construction are being benefitted by the fees." If the Board of Commissioners determines areas of new construction are not being benefitted, then it is empowered to adjust the impact fee accordingly. The County has gone through such an annual adjustment process, concluding most recently with the May 28, 1996 public hearing and adoption of revisions to the Impact Fee Ordinance on June 3, 1996. It is my opinion that this adjustment process can happen more often than annually and that the Board _ could direct such a review at any time. Following any such review a report would be prepared and presented to the Board of Commissioners. The Board could then call for a public hearing to consider changes in the Impact Fee Ordinance. Prior to the hearing the Board must cause notice of the hearing to be published once a week for two calendar weeks: The first publication can be not less than 10 days nor more than 25 days before the date fixed for the hearing. As you know, the impact fee is supported by the Technical Report. Originally, it included in its analysis all existing housing, derived from the latest census data. That data was • updated in an August 8, 1995 study focusing only on new housing units. This study resulted in new student generation rates which were in part the basis for the increase in the Chapel Hill- Carrboro School System impact fee from $1,500 to $3,000 approved on June 5, 1996. All new residential housing units, including for example those in the Carol Woods Retirement Center, were included in the data base for the purpose of calculating the student generation rate presented in the August 8, 1995 report and used in the Technical Report calculation of the permissible impact fee. Any decision to exclude classifications of housing because of an actual or perceived.lesser impact on the school - capital needs would call for a recalculation of the student generation rate and the~Technical Report. Further,~staff analysis of this seniors-only affordable housing project could result in a conclusion that some of that work could be avoided,-at least for the purpose of determining whether this classification of housing should be exempt from school capital impact fees. Among the things that staff will look at will be: (1) the period of affordability and seniors- only limitation compared with the period the housing could impact school capital needs; (2) the ability to "buy out" the project limitations (affordability and seniors-only) and convert the project to a "market one." Board of Commissioners 11 Page 3 - June 26, 1995 Reimbursement: A decision by the Board to reimburse the impact fees for this housing project is less legalistic and would not require the analysis or the time that would be involved for an ordinance amendment. Presently Orange County has a policy permitting reimbursement of educational impact fees paid for housing units constructed by nonprofit corporations for home ownership by persons meeting an affordability test. These reimbursements are predicated on (1) a qualified applicant (nonprofit), (2) long term affordability and (3) Orange County using its general fund revenue to satisfy a public purpose that is deemed as important as the educational impact fees. The line drawn by the Board concerning this policy can be redrawn. Its -- present location is analogous to the property tax exemption made for property used for charitable purposes. That tax exemption has two features. The entity seeking exemption must be qualified and the use of the property must qualify. A qualifying entity is a nonprofit corporation. A qualifying use is-affordable housing. Since the impact fee is not a tax, Orange County is not bound by the line drawn in the property tax laws, drawn for exempting property taxes. On the other hand, before the County can spend general fund money, it must do so for public purposes. Article V, Section 2(1) of the North Carolina Constitution -provides that "[t]he power of taxation shall be exercised in a just and equitable manner, for public purposes only." "The power to appropriate money from the public treasury is nq greater than the power to levy the tax which put the money in the treasury. Both powers are subject to the constitutional proscription that tax revenues may not be used for private individuals or corporations, no matter how benevolent." [Citation omitted.] The definition of a public purpose is an evolving and perhaps expanding one. The government may experiment with new modes of dealing with old evils,: except as prevented by the Constitution." [Citation omitted.] Most recently we saw evidence of the North Carolina Supreme Court's view of the expanding definition of public purposes in the Mareadv case. The Supreme Court-approved public money being spent for industrial recruitment ahd generally economic development. Some of the language in.aha~ decision, although not related to affordable housing or this affordable housing project, suggests to me that the line on reimbursing impact fees could be redrawn to include the First Centrum project. I have enclosed a copy of the Mareadv decision for your review. And, as we know, public money is spent on affordable housing projects and programs at the federal, state and local level. Unlike fee exemption, fee reimbursement requires a source of • funds. That is, the fee must be collected and deposited in the Board of Commissioners Page 4 _ June 2 6 , 19 9,~ trust fund created for the administration of the impact fee. The reimbursement must come from the County's general fund. In this case, the amount of money in question is $369,000 (123 units x $3,000 per unit). Very truly yours, rnr.t77rtaRi (_T.FTIATT.T, & I3ARGRAVE, P . C . GEG/lsg Enclosure xc: John M. Link, Jr. lsg-5 gegimp.mem ill 12 •I • 13 •. -__ AD~INISTRATIV~ PO~,ICX TO'VYI~ OF CA.RRBORO NORTA CAROLINA DEIARTMEM: NUM°flR: IlLYOtOH: lPFECTIVCOATB: tA06 I o~ 2 Planning 540-[ 0 Fcbniary 18, 1997 SU61BCr: ~REMREDbY: ~~~ AftRDVEO Land Use and Duilding Permit Roy Williford ~or~a~ Fte Waiver Policy Planning Director own Manager z 1.0 PU~I2 OSE To establish fees waiver policy for land use and building permit 2.0 ORGAMZA~IONS AFFECTED All departments and divisions _ 3.0 REFERENCES 4.0 OF LILY 'Ihe Town of Carrboro in its desire. to furtltcr affordable housing opportunities hereby establishes a Permit Fee Waiver Policy. This policy was adopted by the Carrboro Board of Aldermen oa February 11, 1997. 5.0 AEFINITION~ Affordable housing is defined as I. A dwelling unit that can be purchased by families or persons with incomes that arc less khan 80% of the median.income for_Orange County as reported by the_US Dept. of Housing and Urban Development grid wee Cie iota1-monthly housing cost (including mortgage payments, utilities, taxes, and insurance) will not exceed 30% of their total monthly income. 2. A dwelling unit that can be rented by farttilies or persons with incomes that arc less than ti0% of the median income for Orange County as reported by the US Dept, of Housing:- and Urban Development and whec~ the total monthly housing cost (ineludiitig rent payments, utilities,~taxes, and insurance) will not exceed 30 % of their total mnrahly income. 6.0 PROCEDURE Subject to budgetary constraints, the IIoard of Aldermen may consider granting a fee waiver (excluding engineering fees) for affordable housing projects that are no being developed on property owned directly or indirectly by the Town of Carrboro that cart clearly demonstrate compliance with the following criteria: ~,1. The fee waiver will directly benefit families or persons of low to moderate income • over a sustained period of time, U4/ld/177/ LL:.~1 7a7JOOrr~r 1'agc 2 of 2 , StAndard Poiiey No. 540-1 ~ -. ~ wn, ~,r ~r;ra:~t;r.U rh~c u:,. 14 it1~ l IY1 '; 2. Tiie project is-.directly, funded by a Federal, State, or J ocal unit of Boverrunent speciFcally to provide low and moderate income opportunities; and 3. The need and benefit will be realized by the community as a whole if the fee waiver . is granted; and , 4. The project would not be affordable but for the granting of a fee waiver; and S. The project is necessary to implement a component specified in the Consolidated flan for Housing and Gommuni Development in Orange County NC as required by the HOME program administered du~ough Orange County. ' •., ~i ~^ . ~ ~~ ~~ 1 POLICY FOR INSERTION INTO THE POLICY MANUAL ~'~~ MEETING DATE: November 1, 1995 NUMBER: A:0320 EFFECTIVE DATE: July 1, 1995 REVISIONS: 11/22/95 POLICY: REIMBURSEMENT OF IMPACT FEE Pursuant to the Orange County Educational Facilities Impact Ordinance, any 501 (c)(3) non-profit organization which develops single family housing for first-time home- buyers with incomes at or below 800 of the HUD published area median income for the Raleigh-Durham MSA may request funds from the County to pay applicable impact fees for such housing. Procedure for obtaining impact fee reimbursement: 1. Written request should be submitted to the Orange County Housing and Community Development Department not more than sixty (60) days prior to anticipated date building permit will be obtained. The request should include a description of the anticipated beneficiary (homeowner), a detailed individual house construction • budget and an estimated completion date. If funding is unavailable in the current fiscal year budget, the Housing and Community Development Director will notify the non-profit organization at this time and no further review will take place until funds are identified for this purpose. 2. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager for his review and recommendation. 3. The County Manager's recommendation will be placed on the next Board of County Commissioners meeting consent agenda for final approval. The Manager will notify the .applicant of the recommendation and the date the BOCC will make the final decision. The Manager or his/her designee will inform the applicant of the BOCC decision in writing within five working days of the meeting. 4. If the recommendation is favorable, funds will be distributed to the non-profit organization after the impact fee has been paid by the requesting agency. 5. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. • 6. The non-profit organization is responsible for providing written documentation of impact fee payment to the Housing and Community Development Department. After notification, the Finance Department will be asked within five working days to prepare a check for the organization. 7. All funding recommendations will be good for a period of six months from the date of approval. If the building permit is not obtained within that time period, the organization must reapply for funding. • • ' - ' ~ #~ • Memorandum DATE: November 22, 1995 To: Sylvia Clements, Commissioner's Office FROM: Tara L. Fikes, Housing/Comm. Dev. Direct • RE: Impact Fee Reimbursement Policy Enclosed is a copy of the above referenced policy which has been revised to incorporate the Commissioner's discussions and action on November 1, 1995. Please incorporate this version in your records. Thanks. ~J "" _ yr / ` ~ IMPACT FEE REIMBURSEMENT POLICY • Eligibility Criteria: Any 501 (c)(3) non-profit organization which develops single family housing for first-time homebuyers with incomes at or below 80% of the HUD published area median income for the Raleigh/Durham MSA. Procedure: Written request should be submitted to the Orange County Housing and Community Development Department not more than sixty (60) days prior to anticipated date building permit will be obtained. The request should include a description of the anticipated beneficiary (homeowner), a detailed individual house construction budget and an estimated completion date. If funding is unavailable in the current fiscal year budget, the Housing and Community Development Director will notify the non-profit organization at this time and no further review will take place until funds are identified for this purpose. 2. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager for his review and recommendation. 3. The County Manager's recommendation will be placed on the next Board of County Commissioners meeting consent agenda for final approval. The Manager will notify the applicant of the recommendation and the date the BOCC will make the final decision. The Manager orhis/her designee will inform the applicant of the BOCC decision in writing within five working days of the meeting. 4. If the recommendation is favorable, funds will be distributed to the non-profit organization after the impact fee has been paid by the requesting agency. 5. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. 6. The non-profit organization is responsible for providing written documentation of impact fee payment to the Housing and Community Development Department. After notification, the Finance Department will be asked within five working days to prepare a check for the organization. 7. All funding recommendations will be good for a period of six months from the date of approval. If the building permit is not obtained within that time period, the organization must reapply for funding. Effective: July 1, 1995 Approved: November 1, 1995 POLICY FOR INSERTION INTO THE POLICY MANUAL c`O MEETING DATE: March 4, 1998 NUMBER: A: 0321 v~~ ~ EFFECTIVE DATE: March 4. 1998 REVISIONS: March 4, 1998 POLICY: IMPACT FEE REIMBURSEMENT POLICY CONCERNING AFFORDABLE HOUSING FOR LOW INCOME INDIVIDUALS Guidin Principles for the Poli~~ Reimbursements made under this policy must satisfy the public purpose requirement for spending County money. 2. All reimbursements are made subject to budgetary constraints, and are limited solely to the County's annual appropriations for reimbursement. Thus there is no entitlement to these reimbursements even for projects that qualify. Eli ibility Criteria: 1. A 501(c)(3) non-profit organization which (1) develops affordable housing to be owner-occupied by first-time homebuyers with incomes at or below 80% of the HUD published area median income for the Raleigh-Durham-Chapel Hill, North Carolina MSA, or (2) develops affordable rental housing for persons with incomes at or below 60% of the HUD published area median income for the Raleigh/Durham -Chapel Hill, North Carolina MSA. 2. Affordable Housing is defined as (1) owner-occupied housing which can be purchased for no more than 2.5 times annual family income, or (2) rental housing for which the occupant pays no more than 30% of gross income for all housing costs, including utilities. 3. An organization requesting impact fee reimbursement must certify in writing that, for owner-occupied housing, it will remain affordable to the anticipated beneficiary or beneficiaries for a period of a minimum of twenty (20) years or longer if required by applicable HUD policy. For rental housing, the certification period is ninety-nine (99) years. The rental housing certification must be secured by a "deed covenant," requiring repayment to Orange County of the impact fee if the rental housing does not remain affordable during the period of affordability, which covenant will be further secured by a note and deed of trust. Evidence must be provided that agency and/or program guidelines are in place to assure affordability compliance. Procedure: An organization requesting impact fee reimbursement must anticipate reimbursement needs for a given fiscal year and submit a request for fee reimbursement at the time for submission of the County's annual budget, non-departmental funding requests. Further, at no time should an organization presume impact fee reimbursement, and in particular, presume a lump sum reimbursement payment or total reimbursement payments in one fiscal year. Therefore, the cost of impact fees should be budgeted when developing housing development projects and should be included in all grant and loan applications. Written request for impact fee reimbursement should be submitted to the Orange County Housing and Community Development Department prior to the anticipated date the building permit will be obtained. The request should include all information necessary for a determination of eligibility, including so much of the following that is pertinent: a description of the anticipated beneficiary (homeowner or tenant), a detailed construction budget including amounts for individual houses or rental units, an estimated completion date, the house selling price or the proposed rent schedule, including utility costs. If funding is unavailable in the current fiscal year budget, the Housing and Community Development Director will notify the non-profit organization. If funding is unavailable, the application for reimbursement will be considered in the next fiscal year. Applications will be considered on a first in, first out basis with unfunded applications carrying over from fiscal year to fiscal year unless withdrawn. Requests will be reviewed within 15 working days and the Housing and Community Development Director will make a recommendation to the County Manager. The recommendation of the Housing and Community Development Director will. be based on whether or not the application satisfies the eligibility criteria, includes all of the information required by this Procedure and whether or not the project budget is adequate for the proposed housing project. The Manager's recommendation to the Board of County Commissioners, for or against reimbursement, will be conveyed to the applicant in writing by the Manager within 15 working days after the Manager receives the recommendation of the Housing and Community Development Director. The recommendation of the Manager will be based on the recommendation of the Housing and Community Development Director AND whether or not there are adequate funds budgeted in the current fiscal year to reimburse the applicant for impact fees paid by the applicant. 4. If the Manager's recommendation is favorable, the item will be placed on the next Board of County Commissioners agenda for its consideration. If the board decision is favorable, the non-profit organization will be reimbursed for the impact fee that it has paid. The Housing and Community Development Director will communicate the decision to the Planning Department and the Finance Department. • • The non-profit organization is responsible for providing written notice, including documentation, of impact fee payment to the Housing and Community Development Department. The organization will be reimbursed within five working days of receipt of the written notice by the Housing and Community Development Department. All funding decisions by the Board of County Commissioners will be good for a period of twelve months from the date of approval. If the building permit is not obtained within that time period, the organization must reapply for funding. Effective: July 1, 1995 Approved: November 1, 1995 Revised: April 1, 1997; March 4, 1998 leg-12 impfee2.po1 POLICY FOR IMPACT FEE REIMBURSEMENT FOR AFFORDABLE HOUSING (Based on 1998 Data) HOME OWNERSHIP Raleigh-Durham-Chapel Hill, North Carolina Metropolitan Statistical Area Total Median Family Income Family Income Maximum Home Purchase Price to Homeowner (801) Family family of 4 $54,700 $43,760 $109,400 family of 3 49,200 39,360 98,400 family of 2 43,800 35,040 87,600 I• r. u family of 1 38,300 30,640 76,600 RENTAL HOUSING Raleigh-Durham-Chapel Hill, North Carolina Metropolitan Statistical Area Total Median Famil~Income Maximum Housing cost to Family (included: Family rent, heat, electric, Income water and sewer (60%) utilities) Per month family of 4 $54,700 $32,820 $820.50 family of 3 49,200 29,520 738.00 family of 2 43,800 26,280 657.00 family of 1 38,300 22,980 574.50 leg-12 chart •