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HomeMy WebLinkAboutAgenda - 11-21-2013 - 11 ORANGE COUNTY ASSEMBLY OF GOVERNMENTS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 21, 2013 Action Agenda Item No. 1 SUBJECT: Affordable Housing Updates DEPARTMENT: Housing /Human Rights /Comm. PUBLIC HEARING: (Y /N) No Development ATTACHMENT(S): INFORMATION CONTACT: (Provided as One Electronic Document) Tara L. Fikes, (919) 245 -2490 1 — Orange County Clearinghouse Loryn Clark, (919) 969 -5076 Network Patricia McGuire, (919) 918 -7327 11 — Town of Chapel Hill Affordable Margaret Hauth, (919) 732 -1270 Housing Strategy 111. Mayor's Committee Report and Recommendations IV — Carrboro Affordable Housing Task Force Recommendations V - Carrboro Affordable Housing Dialogue Sessions: Results and Recommendations VI — Hillsborough Memorandum VII — Memo from Robert Dowling, Community Home Trust VIII — Draft Charter PURPOSE: To receive an update on local affordable housing efforts from County and Town staff. BACKGROUND: The principal staff members working on affordable housing issues in the County and the Towns met to discuss the status of affordable housing initiatives throughout the County and the findings are summarized below. I. Orange County The Affordable Housing Advisory Board has met with the Board of County Commissioners twice this year to discuss affordable housing issues and concerns. Specifically, those conversations have centered on the following. • The challenges of the Community Home Trust (CHT) with HVAC systems at Greenbridge as well as its general challenges with selling its inventory in the current housing market. The Advisory Board plans to engage in conversation with CHT personnel to better understand its inventory challenges and its marketing strategies. 2 • There is a continued consideration that mobile homes provide affordable housing for many in the community. Therefore, preservation of existing mobile homes and mobile home parks continues to be important particularly in the unincorporated areas of the County. The Advisory Board plans to revisit a 2007 Manufactured Housing Survey to begin to improve its knowledge on the subject matter. • Together, the Advisory Board and the Centre for Homeownership and Economic Development Corporation continue to refine a proposal to create an Affordable Housing Clearinghouse to be known as the Orange County Clearinghouse Network. This network would create a housing referral network countywide for individuals seeking affordable housing information and opportunity. Attachment I provides a brief overview of the proposed Clearinghouse. • There is continued interest in advocating for a future housing bond referendum. All proceeds from the last housing bond in 2001 have been committed to affordable housing projects in the County. Additionally, the County maintains the Consolidated Housing Plan for Housing and Community Development Programs in the County as required to be eligible for various HUD funding programs. This plan is due for revision in 2015, thus efforts should be underway in 2014. This can provide an opportunity to incorporate the needs and strategies each local government, thereby expanding its relevance beyond HUD requirements. The current Consolidated Plan may be found at: htto:/ /www.co.oranae.nc.us /housina/ documents /FY2010- 2015ConPlan- 51410.Ddf II. Town of Chapel Hill Affordable Housing Strategy On June 13, 2011, the Town approved an Affordable Housing Strategy that provides a framework for consideration of affordable housing issues in Chapel Hill. A copy of the Strategy is attached as Attachment II. Mayor's Committee on Affordable Rental Housing Additionally, in May 2013, Chapel Hill Mayor Mark Kleinschmidt established a Committee on Affordable Rental Housing with the following charge. • Use research and data available and the expertise of the Committee to develop for Town Council consideration, short, medium and long term options, consistent with the Affordable Housing Strategy and the Chapel Hill 2020 comprehensive plan, that meet the community's affordable rental housing needs that the Council could apply to development applications that propose rental housing; and • Foster collaborative conversations among the Town, the private sector, and other community stakeholders to explore possible partnerships and financial resources to increase the availability of affordable rental housing in Chapel Hill. The Committee, led by Councilmembers Sally Greene and Donna Bell presented the Committee's recommendations to the Council on October 15, 2013. The C recommendations are included in this abstract as Attachment III. There are plans for further consideration of Committee's recommendations by the Chapel Hill Town Council in early 2014. Proposed Affordable Housing Development Recently, DHIC, a Raleigh non - profit housing developer has proposed developing up to 80 family apartments and up to 60 senior apartments on 10 acres of Town -owned land adjacent to the Chapel Hill Memorial Cemetery. Current funding plans include applying for Low Income Housing Tax Credits from the NC Housing Finance Agency to keep the project affordable. The preliminary application for this funding would be due in mid - January 2014. III. Town of Carrboro The Carrboro Board of Aldermen established an Affordable Housing Task Force in 2012. Three members of the Board of Aldermen were selected to serve: Dan Coleman, Michelle Johnson, and Sammy Slade. The purpose of the task force was to evaluate how /whether the Town's affordable housing density bonus provisions should be restructured and an initial report was presented on December 4, 2012. (See Attachment IV.) Following Alderman Coleman's resignation in December 2012, Alderman Lavelle joined the task force, as did representatives of the Planning Board and Transportation Advisory Board. Additionally, in the Fall of 2012, the Carrboro Planning Board held three Affordable Housing Dialogues to discuss affordable housing issues with the general public. The task force reported to the Board of Aldermen again in June 2013 on next steps related to a comprehensive housing policy. A report from those sessions is provided at Attachment V. At that time the Carrboro Aldermen authorized the Task Force to work on the following issues. • Impact on student housing on affordability • Section 8 Voucher Assistance • Consider "carrot and stick" approach for requiring affordable housing from developers • Look into ways to increase housing stock and for those developments to be centered around transportation corridors • Look into affordable housing incentives by "points" • Expand payment in lieu to include transportation costs • Talk to public transportation groups about providing services to additional locations • Look into tracking affordable housing stock /rental program IV. Town of Hillsborough There are two affordable housing projects underway in the Town of Hillsborough as described in the Memorandum included as Attachment VI. One is a 233 unit development that will provide, for the first time, payment in lieu of developing affordable housing, and the other is a planned affordable townhome development in the Waterstone Community. M V. Orange County Affordable Housing Coalition The Orange County Affordable Housing Coalition ( OCAHC) was formed in April 2013; its mission statement is: "Local affordable housing providers and advocates will collaborate to develop a vision and strategies for affordable housing development and preservation in Orange County." Members of the OCAHC currently include Habitat for Humanity, Community Home Trust, Self -Help Credit Union, Empowerment, CASA, Jackson Center, Orange County Partnership to End Homelessness, Justice United, Arc of NC, TOCH Housing Department and the Centre for Homeownership and Economic Development. Members of other nonprofit agencies, for - profit developers and consultants attend meetings when relevant to the agenda. The committee meets monthly and members collaboratively participate in other initiatives, taskforces, etc. The priority issues of the OCAHC are: 1. Increase local funding for affordable housing; 2. Increase the supply of all affordable housing; 3. Help preserve existing affordable housing stock; 4. Make recommendations to local elected officials on affordable housing policies, regulations and development review processes. Habitat for Humanity Executive Director Susan Levy is the primary contact for this group. VI. Community Home Trust — Interlocal Agreement (Charter) The Community Home Trust has introduced the idea of the development of an Interlocal Agreement between the Home Trust and the four local governmental entities in the County that would detail the shared expectations of the Home Trust in addressing the affordable housing needs in the County. A more detailed memorandum from Robert Dowling explaining the rationale is attached as Attachment VII and a copy of the current draft of this Agreement is attached as Attachment VIII. FINANCIAL IMPACT: None. RECOMMENDATION(S): The County Manager recommends that the Boards receive as information at this time. However, given parallel work being done to address affordable housing issues in the Towns and in the County, there may be an opportunity to work together on these matters. Additionally, the County's Consolidated Plan for Housing and Community Development Programs currently developed and utilized for eligibility for HUD funded programs could provide an opportunity to talk about the housing need and strategies. The update of the five -year plan is scheduled to get underway in 2014 to allow sufficient time for completing the task before April 2015. DRAFT PROPOSAL Orange County Clearinghouse Network OCC Network Values Attachment I 5 • Housing is a basic right and the foundation for success in life. All County residents benefit when everyone has a safe place to call home. • Preparation is the most important step in the process and individuals should have the ability to choose the housing that best suits their individual needs. It is important to appreciate and support the evolution of their search for housing. • Because housing resources are finite due to the limited number of programs and services available to Orange County residents would benefit from the operation of this proposed network of resources. Mission Statement: Our mission is to heighten the general awareness of housing needs by providing a clearinghouse type referral network for organizations and individuals seeking information regarding affordable housing in Orange County. Objective: To implement a resource referral housing network by establishing a central database with information about housing opportunities in Orange County. Design: The Orange County Clearinghouse (OCC) Network will offer the following type of information • Available housing Inventory for both rental and homeownership • Local Affordable Housing Program Information • Available federal and state housing programs • Financial Literacy & Money Management Training • Homebuyer Education Training • Foreclosure Prevention Counseling Services • Homeless Resources Operation: The OCC Network will operate from the Centre for Homeownership & Economic Development (CHOEDC) office in Hillsborough and will be managed initially by volunteers during normal business hours. A dedicated phone line will be established to receive calls to answer questions and provide referral information. Long Term Goal: The Clearinghouse Network would include a community based rental property listing service available to the general public. Funding: The initial funding for the Clearinghouse Network will be provided by the Centre for Homeownership & Economic Development (CHOEDC) located in Hillsborough. Future funding will be solicited through U.S. Housing and Urban Development (HUD), Wells Fargo Foundation, PNC Foundation and local governmental entities. Timeline: Implementation to begin July 1, 2014. 09/30/13 Attachment II . Town of Chapel Hill 405 Martin Luther King Jr. Blvd Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhiI1.org Affordable Housina Strateav Statement: The Town of Chapel Hill's goal is to increase the availability of and access to housing for households and individuals with a range of incomes, from those who are homeless to those in middle- income households. The Town of Chapel Hill will work with for - profit and non - profit housing providers to offer a variety of housing opportunities that will promote socioeconomic diversity; provide individuals with the ability to remain in Chapel Hill through different stages in their lives; and support employee recruitment and retention. Goal Statements 1) Support solutions and programs that offer affordable housing options along the entire continuum of housing need a) Research and quantify the number, type, and location of affordable housing units that are needed and desired by the community b) Maintain a commitment to providing affordable homeownership opportunities c) Focus on the development of affordable rental housing for a variety of lifestyles, which includes studio units, supportive housing units, universal access units, and units for families d) Support the reuse and redevelopment of property that can be developed into affordable housing e) Research, develop, and identify funding sources for a middle- income housing program, such as a revolving loan fund f) Support the ability for senior citizens to age -in -place or transition to affordable housing within the community g) Work with affordable housing providers to develop a sustainable housing maintenance program h) Develop a policy for the acceptance of an Inclusionary Zoning Ordinance payment -in -lieu option 2) Advocate for a sustainable community that balances economic vitality, social equity, and environmental protection a) Ease the residential tax burden by increasing the non - residential tax base consistent with the principles of the Town's Comprehensive Plan b) Evaluate the impact that adopted policies and regulations, such as the zoning regulations, neighborhood conservation districts and the urban services boundary, have on housing cost and development c) Link affordable housing policies with transportation needs and costs d) Work with community partners to support the rights of renters and landlords e) Develop affordable, off - campus student rental housing along transportation corridors in order to reduce the conversion of single - family properties into student rental units f) Address the development pressures on the Pine Knolls and Northside neighborhoods by supporting a housing and cultural preservation program in the neighborhoods 3) Pursue creative partnerships on a local and regional level a) Continue efforts to streamline the Town's development review process to reduce the cost of development b) Research and assemble incentive packages that encourage the development of mixed - income housing c) Identify and develop local funding sources d) Explore innovative solutions to reduce the cost of non - mortgage related housing costs such as energy expenses, homeowner association dues, and taxes e) Expand the financial support available to non - profit housing providers both for operating and project expenses f) Consider solutions that include partnering with the County, other municipalities, and major employers Adopted by the Town Council on June 13, 2011 Attachment III s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org Preface: Chapel Hill residents value an inclusive community and want to support a broad range of housing options affordable by all. Those unable to find affordable rental housing in Chapel Hill include people we encounter every day. They are, for example, teachers and teacher's aides, young entrepreneurs, senior citizens, people who serve us in restaurants and shops and doctor's offices, creative artists, nonprofit social workers, and people we know in many other essential positions. Increasing our stock of affordable rental housing furthers the Chapel Hill 2020 Comprehensive Plan's (2012) emphasis on the need for affordable housing as well as the Town's Affordable Housing Strategy (2011). Goal Statement: The goal of the affordable rental housing strategy is to increase the quantity and quality of rental housing affordable to all who want to live in Chapel Hill by promoting the development of new units and preserving existing units. Town of Chapel Hill Affordable Rental Housing Strategy 7 Attachment III s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org The unmet need for affordable rental housing Most occupied housing units in Chapel Hill are renter - occupied: by one estimate (2011 American Community Survey), 11,640, or 54.2 percent of them. This is a much higher rate than the 39.7 percent renter occupancy for the Durham - Chapel Hill metropolitan statistical area as a whole. A residential market study completed in 2010 estimated that between 2009 to 2014, approximately 1,257 new rental units would be needed to serve the Town's population: 706 serving households earning greater than 80 percent of the area median income (AMI) 290 serving households earning between 50 percent and 80 percent of AMI; At any given time, approximately 300 people are on the Town of Chapel Hill's public housing wait list and 1800 are on the housing choice voucher (Section 8) program waitlist. Demand far exceeds supply. Both programs mainly serve people with incomes of less than 30 percent of the AMI. Approximately 85 percent of households on the Section 8 waitlist have incomes below 30 percent of AMI; the waitlist has been closed for over two years, and the wait averages four to five years. Approximately 80 percent of households on the Town's public housing waitlist are in this income range; the average wait is around a year. Another important target population in this income range is people who are disabled and homeless. Permanent supportive housing units provide this population both an apartment and essential services, such as mental health and physical health care. Demand for these units vastly outstrips supply, with approximately 50 people on waitlists in Orange County at any time. HUD requires communities that receive funding for homeless programs to calculate their unmet need for such housing each year. In 2013, using HUD's formula, Orange County determined that approximately 42 additional units of permanent supportive housing are needed. Town of Chapel Hill Affordable Rental Housing Strategy Attachment III s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org Policy framework, definitions, and broad implementation strategies Prioritize affordable rental. This strategy document reflects the Town's strong policy objective to facilitate the efficient production of affordable rental units and to work continuously to support rental housing availability for households of all income. This policy is part of a larger strategy to increase and support the availability of both rental and ownership affordable housing. The most pressing need for affordable housing is for working families and individuals with incomes less than 80 percent of AMI. Creating new housing for these households in a timely manner requires a new clarity of regulations and a new process that is responsive to the needs of affordable housing funding sources and nonprofit providers. Benefits from a shortened process for approval of rental development applications with a 15 percent or more affordable housing componentf1l could extend to housing for 80 -120 percent AMI households and households with greater income. The expansion of the rental housing market at all price ranges will provide increased price competition for existing and new rental units, a benefit to households at all income levels. Strengthen the Town's resources devoted to affordable rental. Maintaining a high priority on affordable rental housing will require dedicated attention beyond existing staff resources. As has been done with respect to economic development, the Town should elevate affordable housing (ownership as well as rental) to a level for which a senior staff position has responsibility. This staff member would have the duty to champion the need, to seek out new ideas, and to bring these ideas into conversation with housing providers, policymakers, and the community. Just as critically, this staff member would take the lead in implementing this strategy and would serve as point of contact for developers of affordable housing projects. Consistent with the vision of an advisory board that focuses on affordable housing issues as discussed as part of Chapel Hill 2020, an affordable housing board should be created to advise the Council, staff, and developers on the full range of issues (for the ownership model as well as rentals) that arise with respect to affordable housing. The senior staff member with responsibility for affordable housing would work closely with this board. Town of Chapel Hill Affordable Rental Housing Strategy 9 Attachment III 10 s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org [1 ] Defined as on -site housing of 15 percent or more of the market rate units that will be for households with incomes less than 80 percent AMI. Definitions The Town recognizes two broad classes of need for affordable rental housing: (1) Rental housing that addresses the market at 80 -120 percent area median income (sometimes called "workforce housing ") for which the expectation is that the private market will be the provider. (2) Subsidized rental housing that serves people earning up to 60 percent of AMI, a range that qualifies for the low- income tax credit program, and through the 80 percent AMI level for which various other subsidies (e.g., HUD entitlement dollars) are available. Public hoL important component the subsidized portion of the housing continuum. MW affordable rental housing creatively and opportunistically. 1. To reduce barriers to market entry for all levels of affordable rental housing, the Town must work proactively to create new development standards, or modify existing standards or processes, and regularize its expectations. These changes to existing processes should allow more decisions regarding affordable housing developments (rental and ownership) to be addressed at the staff level. 2. Because the citizens of Chapel Hill value inclusivity and have expressed the need for greater housing affordability, an element of the strategy for affordable rental should include the dedication of tax dollars to the cause. 3. Increasing the supply of affordable rental housing should be a Council Goal, and toward that end, the staff should maintain an accountability system that tracks the implementation of this strategy, with regular reports provided to Council. 4. To facilitate affordable rental development in the subsidized ranges, the Town must work proactively with nonprofit housing providers to pursue funding opportunities from all identifiable funding sources, public and private, ranging from HUD to local foundations and employers. Town of Chapel Hill Affordable Rental Housing Strategy Attachment III 11 s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org 5. The Town should encourage market -rate developers to ap rtner with nonprofit housing providers to serve the subsidized rental market when opportunities arise. 6. Recognizing that affordable rental is a regional issue, the Town should maintain ongoing collaborations with Carrboro, Orange County, Hillsborough, Durham County, and other area jurisdictions. 7. As the largest employers in Chapel Hill, UNC- Chapel Hill and UNC Health Care are stakeholders of particular importance. The Town should make consistent efforts seek collaborative solutions with both organizations for the affordable rental needs of their employees. 8. The Town's efforts to grow the commercial tax base, generating increased property and sales taxes, contribute to a holistic strategy to support affordable rental and all affordable housing. ME INS Miff = MEN 9. A cohesive communications strategy is essential to maintain community support for these efforts. Keeping the need for affordable rental housing in front of the community needs to be part of a larger message about housing affordability. The communications strategy should involve the Town Council, Town committees and staff, and citizen advocates. 10. The Town should continue to draw upon II resources to identify proven and novel approaches to spurring the development and preservation of affordable rental and all affordable housing. IN Town of Chapel Hill Affordable Rental Housing Strategy Attachment III 12 s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org Short -term, mid - range, and long -range implementation strategies Short -term strategies (0 — 2 years) a) Pursue a Low - Income Housing Tax Credit (LIHTC) project on Town -owned land. b) Identify an additional publicly or privately owned "opportunity site" suitable for 2015 Tax Credit application. b) Establish with tax dollars a new dedicated revenue source for affordable housing, including rental, for example .01 on the tax rate. C) Dedicate senior staff support for implementing this strategy. d) Initiate high level conversations with UNC and UNC Health Care. e) Create a shortened review process for rental development applications with a 15 percent income ranges, for example: i) Increased density by right and shorter approval time frame for developments that include units up to 80 percent AMI. ii) All of the above plus fee reimbursements and expedited review for subsidized rental developments that include units up to 60 percent AMI. h) Implement expedited review process for subsidized affordable housing developments (rental or ownership). i) Identify other properties that may be appropriate for redevelopment and encourage the production of affordable rental units through the use of incentives. j) Create a resource data base for affordable housing by December 2013. k) Establish performance measures and an evaluation system to monitor progress by spring 2014. Town of Chapel Hill Affordable Rental Housing Strategy Attachment III 13 s Town of Chapel Hill 405 Martin Luther King Jr. Blvd # Chapel Hill, NC 27514 -5705 (p) 919 968 -8406 www.townofchapelhill.org Mid -range strategies (2 -5 years) Continue to work on all items in short -term strategies. 1) Pursue and actively campaign for an affordable housing bond for Chapel Hill. Arguments for the bond should be clear and particular, reflecting this affordable rental strategy and broader specific housing goals. m) Partner for ambitious development that includes affordable rental on Greene Tract. n) Acquire and preserve vacant land along transit corridors for future affordable (rental and ownership) development. Long -range strategies (5 + years) Continue to work on all items in short -term and mid -range strategies. v) Continue to pursue low- income housing tax credit projects throughout the Town w) Evaluate existing and establish new revenue sources for affordable housing. x) Explore the feasibility of development of new public housing units. Town of Chapel Hill Affordable Rental Housing Strategy Attachment IV 14 ATTACHMENT B Affordable Housing Task Force Recommendations (Submitted by Aldermen Coleman, Slade, and Johnson, December 4, 2012) At the close of four meetings, the Affordable Housing Task Force identified two areas of recommendations to share with the full Board of Aldermen: modify the Land Use Ordinance (LUO) to allow more flexibility in the way that developers can meet the Town's affordable housing goals, and consider ways to create funds to use toward affordable housing. With regard to potential amendments to the LUO, the Task Force focused on two distinct areas: A) the payment in -lieu option and B) the small house (size - limited) requirement. The full complement would include the following four elements. 1) Reduce the number of affordable units from 15 percent to 12 percent, while also reducing the cost of the unit from 80 percent AMI to 65 percent AMI (Area Median Income). 2) Add more flexibility to the program by allowing developers to build some units and pay some payment in lieu fees for other units —but requiring a minimum of 5% built units 3) Retain the density bonus only for the built units, allow developers to use the affordable housing density bonus ratio only for those units actually constructed (units paid for using the in -lieu of option would not count toward the density bonus allotment), providing the bonus only on built units provides an incentive for developers to build more houses and make fewer payments in lieu. 4) Examine the existing provision in the LUO that allows developers to build some affordable housing units in the 40 percent required open space area, and consider possible modifications. For example, allow developers, who agree to construct the full 12 percent of affordable units, to construct a portion of those units in the open space area so long as the open space is not less than 20 percent of the project site. The Task Force also discussed the issue of federal and state affordable housing funds, which have diminished significantly during the economic recession and are unlikely to return to earlier levels. The Town may wish to consider an affordable housing bond or allocating existing funds from Town resources to use toward an affordable housing purpose, such as buying land or establishing a revolving loan program. Another potential use of affordable housing funds would allow the Town to purchase affordable units, which have received their certificates of occupancy (CO) but have not yet been purchased to a qualified homebuyer through the Community Home Trust program. Developers have indicated that the holding costs for developers waiting for these housing to be purchased can become a substantial burden. A number of other ideas were discussed, some of which the Board may wish to consider as part of a more comprehensive approach toward a long -term affordable housing strategy. These include up- zoning for density increases, particularly in key locations along public transportation routes. And, finally, creating or encouraging the creation of an affordable housing advocacy group —a private or non - profit coalition building effort to continue to keep the issue in the forefront and to promote local affordable housing needs within the community and to state and federal legislators. Attachment V 15 Affordable Housing Dialogue Sessions: Results and Recommendations A Report to the Board of Aldermen from the Planning Board and the Transportation Advisory Board In October 2012, the Planning Board held three Affordable Housing Dialogues aimed at educating and engaging the public and itself around this important issue. The sessions were the first of what will become an annual observance of National Community Planning Month, sponsored by the American Planning Association. Dialogue topics included: • Housing Diversity and Affordability in Carrboro • Financial and Systemic Issues Affecting Housing Affordability and Access in Carrboro • Creative and Collaborative Solutions: Case Studies and Community Visioning Turnout was good, with 71 individuals attending at least one session and an average 36 people attending each night. Participants included affordable housing practitioners and advocates, residents of affordable housing, neighborhood residents affected by affordability issues, architects and planners, students, staff from the Town of Carrboro, Town of Chapel Hill, and Orange County, advisory board members, aldermen, and county commissioners. Participants offered positive and constructive feedback on evaluation forms, including suggestions for outreach and publicity that will help increase racial and ethnic diversity in future events. The Planning Board was grateful for the support of the Board of Aldermen throughout the series, especially from the Affordable Housing Task Force. In total, four aldermen were able to attend at least one session. Two partners also were extraordinarily helpful: the NC Housing Coalition provided a host of research, data, and facilitation support, and the UNC Department of Regional Planning provided meeting facilitation, publicity, and offers of future assistance. All of this assistance was provided to the Town free of charge. Presentation materials, discussion notes, and evaluation results are posted on the Town's website. What follows is a summary of participant perceptions, feedback, and ideas; a set of recommendations to the Board of Aldermen; and supporting data and analysis provided by the Transportation Advisory Board. Summary of Key Data The NC Housing Coalition provided an increasingly extensive set of data to fuel conversations over the three sessions. Particular discussion drivers included the following statistics: Page 1 1 Attachment V 16 • Of 19,582 residents in Carrboro, 14.4% are students and 23.7% are foreign -born. • There are 9,408 housing units in Carrboro, of which 36% are owner - occupied and 64% are renter - occupied. As a comparison, Chapel Hill's housing units are 48% owner - occupied and 52% renter - occupied. • Area median income for a family of four in Carrboro is $63,308, higher than in North Carolina overall ($59,872) but lower than in Chapel Hill ($75,178) and Orange County ($68,700). Eighty percent of Carrboro's area median income is $50,646, which is the figure that the US Department of Housing and Urban Development would consider as low income in its definition of affordable housing for a qualified family of four. • The fair market rent for a two - bedroom apartment in Carrboro and Chapel Hill is $864 per month, which contrasts with the statewide fair market rent of $709. • The mean renter wage in Carrboro is $9.67 per hour, much lower than the statewide mean renter wage of $12.11. At this wage, a head of household must work 62 hours per week to afford a two - bedroom apartment at the fair market rent. • Not surprisingly, 53% of renters in Carrboro are cost - burdened, meaning they spend more than 30% of their wages on housing costs. Similarly, 55% of homeowners are cost- burdened by their housing. • Thirty percent of Carrboro workers commute to employment outside Orange County. More than 4,000 workers commute to Orange County in order to work. Trends in Housing and Affordability Locally and Nationally In addition to considering data, participants aired and discussed the following local and national trends that are making affordable housing an increasingly urgent concern: Local Trends • Rental housing is going condo • Slow movement on real opportunities, • Flat wages yet housing costs rising such as the Green tract • Lack of affordable land and buildable lots • Low quality of affordable units • Growing immigrant population • Lack of retail /commerce for people with • 'Small' housing does not equal lower incomes 'affordable' housing • Lower income people require access to • Density is needed for successful transit —areas being developed don't development of affordable housing necessarily have this. • Desirability of the area (transit, green, • Gentrification schools) leads to higher cost housing. • Increased reliance on finance and • Lack of infrastructure due to OWASA developers role services boundary • Permitting process is a cost restriction • Reduced minority ownership • Big rental management companies are • Property taxes are high driving up rental costs. Page 1 2 Attachment V 17 Relevant National Trends • Sellers market transitioned to a buyers • Affordable housing bonding is happening market successfully in California. • Transit - oriented development (TOD) • Partnerships with developers • Collapse of mortgage market • Rehab assistance is being used successfully • Local government bonuses (not just to help some populations stay in their density bonuses) are given in other places homes • Mixed use development is a national • Misperceptions of low- income people trends makes some people resistant to affordable housing, especially if built near them. Housing Targets and Priority Goals With quantifiable data and the aforementioned trends undergirding their discussions, dialogue participants wrestled with a series of difficult questions related to their vision for affordable housing and quality life in Carrboro. Priority Demographics While the Town's current policies are designed to increase access of affordable homeownership opportunities, dialogue participants were equally concerned about the growing need for affordable family rental units; for housing that serves the homeless and at -risk, including the disabled; and for low -wage workers earning less than 60% of area median income. Participants emphasized a vision for diverse housing options —and a diverse economy —that allow people to live and work in Carrboro. Priority Goals for Affordable Housing in Carrboro Participants acknowledged there are many possible goals to achieve in designing and implementing affordable housing. While narrowing possible goals to a manageable list proved difficult, three goals resonated most with participants: Increasing the supply of affordable housing units. Participants cited development density and related restrictions; relative underutilization of the Low - Income Housing Tax Credit in Orange County and Carrboro; and the need to incentivize affordable housing development through a more predictable process and interpretation of guidelines, streamlined project reviews, and more direct, bottom -line incentives. Increasing the quality of housing stock while maintaining affordability. Participants bemoaned the declining quality of the lower- priced —but not necessarily affordable — housing in town. "We need to demand more," said one participant, referring to landlords and property management companies. Participants wondered whether creative policies and Page 1 3 Attachment V 18 incentives could encourage the rehabilitation of older rental units while preserving relative affordability. Poor quality, they agreed, should not be the benchmark for affordable rent. Helping people stay in the homes they have (both owners and renters). Participants were concerned about four dynamics: continuing foreclosure risks due to predatory lending and the continuing recession; property taxes that inordinately burden fixed - income seniors and other low- income owners; the need for additional rehab /repair assistance for low- resource owners and landlords; and the vulnerability of unemployed renters and the disabled, who are subject to changes in Social Security Disability Insurance payments. The Importance of Transportation A consistent theme throughout the discussion was the importance of public transportation. Lack of access to public transportation increases residents' cost of living, and members of the Transportation Advisory Board (TAB) urged that transportation costs be included in any definition of "affordability." Unfortunately, most new housing development is being created in places without transit routes. Furthermore, weekend bus routes that pass through downtown Carrboro are far too limited. Ironically, parking requirements for housing and mixed -use developments further burden residents who do not drive or own a car. Attachment 2, Transportation Costs and Housing Affordability, was crafted and contributed by the TAB and offers a detailed analysis of the relationship between transportation and housing in Carrboro. A Word About Students Many participants raised the issue of the ever - increasing student market as a driver for higher rents. Not only does high student demand for units reduce availability of units better suited for families, but owners charge more for units demanded by students given the number of occupants likely to be sharing the rent. Some participants blamed the university for a lack of housing options on campus, yet the university has a substantial number of vacant on- campus units. According to university statistics, 2,820 students live in Carrboro. Co- facilitator Carley Ruff of the NC Housing Coalition pointed out that the vast majority of renters in Carrboro are not students. Student demand influences but does not fully account for the housing dynamics in town. Ruff suggested approaching this market issue from a different angle, engaging UNC around affordable housing as a partner- contributor, rather than as an adversary. "Students help sustain the town in other ways," she said. "Use their growth and needs as a tool to also meet the needs of the town." Page 1 4 Attachment V 19 Ways to Support Affordability in Carrboro Participants offered a diversity of experience, perspective, and creative approaches to achieving a high - quality, diverse, and more affordable housing environment in Carrboro. Of the dozens of suggestions, the following surfaced most frequently: • Increased housing density. Reduced open space requirements and planning for major redevelopment opportunities well in advance could alleviate price pressure caused by current land use policies. In addition to relieving supply - related pressures, participants noted that higher- density housing is particularly senior - friendly; creates efficiencies in urban services; and can lead to innovations in attractive, livable design. • A dedicated revenue stream for affordable housing. Participants cited the City of Durham's Penny for Housing tax (which is actually half a penny) and municipal or county bond issues. • Community education aimed at reducing misperceptions about affordable housing and low- income people, and shifting housing preferences and expectations toward zero -lot- line housing options. • Modified land use restrictions, zoning, and approval processes to increase both predictability and efficiencies for developers when affordable housing is involved. • Understanding and accessing the state's new tenant -based rental assistance program for the disabled. • Innovative and nontraditional housing models, such as new -style boarding houses, equity - building rental models, and sustainable living models that compress housing density while increasing open space. • Help developers make better use of the Low - Income Housing Tax Credit, which is the federal government's main engine for new units. Developers particularly need local subsidy or donated or reduced -price land for workable tax credit projects. • Publicly funded land acquisition and banking specifically for affordable housing. • A housing trust fund that can be used for emergency escrow, rent subsidy, down payment assistance, or matching funds for individual development accounts. Two somewhat controversial issues also surfaced that are worth mentioning here. The first is inclusionary zoning that would require a percentage of new homeownership units in a development be affordable. Some argue that this strategy creates greater uniformity and certainty for developers. Facilitators helped clarify the different kinds of inclusionary zoning (mandatory, voluntary, and conditional) and outlined legal concerns that generally deter municipalities from adopting inclusionary rules. They also noted that municipalities have seen mixed results from their policies, particularly as they only apply to homeownership stock. Page 1 5 Attachment V 20 Nonetheless, when asked to choose a handful of tools for their vision for Carrboro, a majority of participants in the third dialogue chose inclusionary zoning for their toolbox. The second issue was infrastructure, particularly the constraints of the urban services boundary. As one participant noted, "Without allowing water and sewer to be provided for workforce and affordable housing outside the urban services boundary, we will develop very few new single - family, duplex, or townhome developments that are well suited for families with school -age children." Others disagreed, citing opportunities to explore innovative development solutions that can increase diverse housing stock while preserving the intent of the rural buffer. The issue was raised multiple times by different stakeholders, and suggests that residents would like to see additional public discussion about the rural buffer in the context of affordability and livability in Carrboro. Joint Recommendations from the Planning and Transportation Advisory Boards During discussions and on evaluation forms, participants were clear that increasing and maintaining housing affordability in Carrboro requires a collaborative, interdisciplinary approach with strong leadership by the Board of Aldermen. Both the Planning Board and the TAB agree In December, the Board of Aldermen's Affordable Housing Task Force made three preliminary recommendations specific to the Town's chief policy tool: • Modify affordable homeownership set -aside requirements from 15% to 12 %. • Reduce the affordability target from those earning 80% of area median income to those earning 65% of area median income. • Modify payment -in -lieu policies to ensure a minimum 5% of built units are affordable. These recommendations are consistent with the tenor of the dialogue sessions, and the Planning Board and TAB support them. However, like the Task Force, these advisory boards recognize there is more that can be done to align Town policies with the community's vision and goals. While not all members agree on all points, the following recommendations are offered for further consideration and discussion by the Task Force, Board of Aldermen and community stakeholders: Page 1 6 Attachment V 21 1. Make the Affordable Housing Task Force a standing committee of the Board of Aldermen, and expand it to include other public and private stakeholders, such as advisory boards, affordable housing developers, and advocates. The Task Force should be charged with actualizing Vision 2020 policy section 6.0: to develop a comprehensive housing policy that seeks to provide housing for all of Carrboro's citizens (see Attachment 1). This policy should be developed, vetted, and approved by December 2013 and should include clear defining terms and measurable goals against which the Board of Aldermen can measure progress and modify policy over the long term. 2. In that comprehensive policy, consider a staggered approach to income targeting and goals, such that people along the income continuum of very low (less than 50% of median income), to low (50% - 80 %) to moderate income (80% - 115 %) can benefit in some way from Carrboro's policy efforts and investments. Include transportation costs associated with housing location in the Town's consideration of "affordable housing" definitions and calculations. Consider the location and frequency of bus service, as well as walking and bicycling network distances to non - residential destinations when estimating household -level transportation costs. A more complete understanding of affordability will help the Town better identify policies, ordinances and subsidy necessary to achieve a comprehensive housing vision. Engaging Chapel Hill Transit and Triangle Transit in housing discussions could open the door for improved transit frequency and routes. 4. Modify parking requirements in the Land Use Ordinance for in -town apartment and condominium housing, especially in areas where public transportation is readily available. This would result in greater density, would unbundle parking costs from housing costs, and would encourage more creative transportation and parking solutions in development design. 5. Facilitate greater density in new ways. Look at re- zoning infill projects to allow for multifamily housing, connected housing, and zero lot line housing. Consider revising current limitations on or conditions for secondary units, particularly near downtown. 6. Question long- standing policies and our tolerance for the unintended effects of those policies. For example, consider how the current 40% open space requirement and the recreation space requirement impact housing affordability, environmental issues, tax rates, and monthly maintenance costs for homeowners. Ask how open Page 1 7 Attachment V 22 space can be made accessible to greater numbers of residents than to just those living in quasi - private housing developments. Ask whether current policy adequately weighs the value of open space against some standard for public benefit. Asking hard questions will help the Town better align policies with its visions for both affordability and sustainability. 7. Review all vacant or non - revenue - generating publicly- and privately -owned land, including parking lots, and identify tracts available for affordable housing or commercial uses that support affordable living. 8. Develop a master land use plan that clearly displays overlay districts and roadway network connectivity. Such a plan will help developers better understand development and redevelopment priorities and opportunities in Carrboro. If zoning follows the plan, it is reasonable and rational and will hold up in court in the event of a legal challenge. 9. Research effective rental registry models, including the program in Athens, Ohio, and determine the efficacy of a similar program here to protect renters and neighborhoods from further deterioration of housing stock. (It is unclear whether state statutes allow rental registries, but there may be similar ways to achieve the same objectives.) 10. Collaborate with affordable housing providers, Orange County government, the university, and others to establish a public - private housing trust fund as a permanent source of matching funds for new construction, rehabilitation, or refinancing of affordable rental and homeownership units. Direct all new payments in lieu to this housing trust fund. 11. Support local and statewide advocacy efforts that will preserve or expand the resources and tools available to affordable housing developers, managers, and residents. Examples include: • financially supporting the creation of an Orange County Affordable Housing Coalition or similar organizing effort; • joining and participating in the education and advocacy programs of the NC Housing Coalition; Page 1 8 Attachment V 23 • reviewing and commenting on proposed state and federal policy or regulatory changes affecting affordable housing, public transportation, utility rates, and living wages; • providing letters of support for local applicants to state and federal funding programs. 12. Increase opportunities for the Town's advisory boards to engage with each other, town staff, and the Board of Aldermen around planning, economic development, and transportation issues that are better approached collaboratively rather than in silos. Page 1 9 Attachment 1: Vision 2020: Housing Category 6.0 HOUSING Attachment V 24 The town should develop a comprehensive housing policy that seeks to provide housing for all of Carrboro's citizens. 6.1 Housing for a Diverse Population • 6.11 Town policy should accommodate a variety of housing styles, sizes and pricing. It should also address issues of density, funding and rezoning to allow for more non- detached housing, mixed -use development, and communal living options. • 6.12 The variety of strategies to be considered should include the investigation of alternative public and private funding for construction and renovation of low and moderate income housing. A low interest loan pool for individuals and nonprofits that wish to buy and rehabilitate housing is desired. • 6.13 The town should review all vacant municipally owned land for the purpose of making unneeded tracts available for housing programs. • 6.14 The town should continue to advocate for inclusionary zoning techniques to increase the local stock of affordable housing. • 6.15 The town should pursue the development of density bonus provisions for projects incorporating environmentally sensitive development and building practices. • 6.16 With our growing population of senior citizens, the town should support the creation of more housing that allows our senior citizens to interact fully with the larger community. Senior access to public transit will become an increasingly important concern. • 6.17 The town should interact with non - profit groups that work to provide affordable housing, including but not limited to the Land Trust, Orange Community Housing Corporation, Empowerment Inc., and Habitat for Humanity. • 6.18 A minimum of 15 percent of the residential units in any residential development should meet the affordability criteria specified in Section 15 -182.4 of the Carrboro Land Use Ordinance. Page 1 10 Attachment V 25 Attachment 2: Transportation Costs and Housing Affordability An Analysis by the Transportation Advisory Board The proposed definition of affordable housing, i.e. "housing that is valued at less than 80% of AMI" is not sufficiently inclusive. It must include transportation costs associated with housing location. • According to AAA's annual Your Driving Costs, the average American spends $8,946 a year to own, operate, insure and maintain one sedan car or nearly $750 /month per car. • The average cost per mile driven is 59.6 cents'. According to the 2009 National Household Travel Survey, the average household made 9.5 trips per day, with an average trip distance of 9.7 miles2. To illustrate the import of considering household -level transportation costs, consider the following scenarios: ■ The average American household making 9.5 trips per day, driving 9.7 miles each trip, will drive 92 miles driven per day at a cost of $0.596 per mile, which is about $55 a day or $1,650 a month ($55 x 30 days). ■ A plausible no car alternative in a two - worker household might involve purchasing two 31 -day regional passes from TTA for $68 x 2 = $136; renting a car an average of four days a month from Enterprise = $52.64 x 4 = $210.563; and keeping two bikes maintained at an average cost of $60 /month. Monthly transportation costs = ($136 + $210.56 + $60) = $436.56. • The hidden cost of residential parking directly impacts people living in condo and apartment housing. Carrboro's Land Use Ordinance requires an average of 1.5 car parking spaces per bedroom and 2 spaces per unit with two of more bedrooms4. Yet, one in 10 households in Carrboro have no vehicle available (this figure is more than 15 percent for single - person households and more than 13 percent for 4 -or- more - person households). This has implications for projects like Shelton Station, where the increase in housing unit cost per parking space will range from $50,000 and $70,0006. Unbundling parking costs from 1 http: / /newsroom.aaa.com /tag /your- driving- costs/ z http: / /nhts.ornI.gov /2009 /pub /stt.pdf 3 http: / /www. enterprise.com/ car_ rental /location.do ?selected Location Id= 5330 &transaction Id =We bTransaction1 4 http: // www. townofcarrboro.org /PZI /PDFs /LUO /Art- xviii.pdf 5 http: / /factfinder2. census .gov /faces /tableservices /jsf/ pages /p rod uctview.xhtmI ?fpt =table 6 Greenberg, A. (2005). How new parking spaces may effectively increase typical U.S. urban housing total unit costs by $52,000 to $117,000. Paper presented at the 84th TRB Annual Meeting. Page 1 11 Attachment V 26 housing costs presents greater housing options for people who cannot afford a vehicle and for those who choose to live without one. From Northeastern University's Dukakis Center for Urban and Regional Policy: "Residential parking is generally provided as an inseparable part of housing arrangements: a parking space is part of the apartment lease or condominium purchase. The price of parking can, however, be separated or 'unbundled' from that of the housing either if developers and landlords choose to do so or if municipal regulators so require. As San Francisco's Metropolitan Transportation Commission has explained, 'Unbundling parking is an essential first step towards getting people to understand the economic cost of parking and providing users with the opportunity to opt out of parking and make alternative travel decisions. Without unbundled parking, tenants experience parking as free, while transit costs them money "' (MTC, 2007, p. 31).' Figure 1 on the following page displays the variation in vehicle ownership by 2010 Census Tract in Carrboro. Figure 2 on the final page displays results from the Center for Neighborhood Technology's Housing and Transportation Affordability Index. The map on the left shows the distribution of households (by 2010 Census - defined block groups) where housing costs are both less than and greater than 30 percent of the households' income -30 percent is commonly considered the cut -off point for household -level housing affordability. Households that allocate more than 30 percent of the combined household's income toward housing costs are considered "cost burdened ". The map of the right shows the distribution of household where housing costs AND household location- derived transportation costs are both less than and greater than 45 percent of the households' income. Households that allocate more than 45 percent of the household's income toward housing and transportation are also considered cost burdened. Figure 2 illustrates how cost burdened status might apply to more of Carrboro's households after including household transportation costs into estimates of housing affordability. 7 http: / /www.dukakiscenter.org /unbundled - parking/ Page 1 12 Vehicles Available by 2010 Census Tract in Carrboro Figure 1. Attachment V 27 Page 1 13 Attachment V 28 Housing + Transportation Costs in Carrboro, NC Methodology The H +T Affordability Index is a model that describes the relationships between three dependent variables (auto ownership, auto use, and transit use) and independent household and local environment variables. Neighborhood level (Census block group) data on household income (both median and per capita), household size, commuters per household, household density (both residential and gross), street connectivity (as measured using average block size and intersection density), transit access, and employment access are the independent or predictor variables. 8 http: / /htaind ex.cnt.org /map/ 14 Attachment VI 29 Town of MEMORANDUM To: Board of Orange County Commissioners Carrboro Board of Alderman Chapel Hill Town Council Hillsborough Town Board of Commissioners From: Margaret A. Hauth, Planning Director Date: November 8, 2013 RE: Affordable Housing payments and set asides in Hillsborough In 2009, the Town Board approved a Special Use Permit for the first project in Hillsborough to offer a payment in lieu of developing affordable housing. The project (Forest Ridge) will contain 233 dwellings of a variety of types on 118 acres across from the SportsPlex on US 70 Business. A map of the approved lot layout is attached. The owners offered to town a payment of $1,000 per dwelling, due with issuance of the Zoning Permit for each unit constructed. The final payment will be $7,000, to bring the total contribution to $240,000. The project has walking trails that connect to the Mountains to Sea Trail and the town's Riverwalk which will allow residents to walk downtown as well as walk to the SportsPlex. The project has approved construction drawings and is anticipated to start site infrastructure construction this month. On a related note, the developers of Waterstone provided land and preliminary engineering services to reserve land for 24 affordable townhome units in their project, combined with a per unit contribution toward construction. Development of the market -rate townhomes is expected to start late this year or early in 2014, but a schedule has not been established for the affordable townhomes. The Town does not have a specific plan in place yet for the expenditure of the payment in lieu funds, but a variety of programs have been discussed. A plan will likely be finalized during the FY15 budget discussions. 101 East Orange Street • P. O. Box 429 • Hillsborough, North Carolina 27278 919 - 732 -1270 • Fax 919 - 644 -2390 J I I I I I I -`— -- — — — — — — — — -- — — — - �L Attachment VI 30 S I T E P L A N F O R E S T R I D G E HILLSBOROUGH eF/ ail 1D ?i _ 'a SITE DATA SITE AREA: RESIDENTIAL SUMMARY: NORTH CAROLINA 118.4 AC 13,000 SF LOTS 72 9,200 SF LOTS 71 6,000 SF LOTS 52 TOWNHOMES 38 TOTAL UNITS: 233 NON - RESIDENTIAL SUMMARY: MAX. OFFICE/RETAIL 28,000 SF LEGEND WITHERS &C RAVENEL 13,000 SF LOTS 9,200 SF LOTS 6,000 SF LOTS TOWNHOMES OFFICEIRETAIL STORMWATER PONDS WITHERS &C RAVENEL Attachment VII 31 BOARD OF Date: November 14, 2013 DIRECTORS To: Orange County Board of Commissioners 'r Chapel Hill Town Council ' Carrboro Board of Aldermen President Hillsborough Town Board of Commissioners HO From: Robert Dowling, Executive Director TRUST Re: Community Home Trust Charter BOARD OF As most of you know, Community Home Trust is a nonprofit organization that provides DIRECTORS affordable housing to low and moderate income households in Orange County. The Home Trust receives financial support from all the local governments and implements inclusionary Alan. Lee housing policies in Chapel Hill and Carrboro (and perhaps soon in Hiillsborough). As a result President of changing circumstances, the Home Trust has faced a variety of challenges in recent years, Gloria Beissinger including reduced mortgage financing options, an increase in condominiums and increased Treasurer turnover of our housing stock. Gordon Merklein As a result of these and other factors, the Home Trust board asked the Town Council to Secretary consider creating a Charter that would better define the roles and responsibilities of the Donna Bell Home Trust. The Council agreed that an interlocal agreement among the four local governments and the Home Trust was warranted. The County Commissioners have also Jess Brandes recently discussed the role of the Home Trust and whether we should be selling Cresha Cianciolo condominiums in high end developments. Jennifer Ferris Based upon these discussions, an initial meeting of staff from each local government and the Jacquelyn Gist Home Trust took place last summer. It was agreed that Home Trust staff would draft an initial Charter (or interlocal agreement) that is intended to establish a shared set of Eric Hallman expectations as to what affordable housing functions the Home Trust would provide to the Lisa Inman citizens of Orange County. Given the limited capacity of the Home Trust staff, it would benefit all parties to establish an agreed upon set of expectations and responsibilities, both of Jaimie Lee the Home Trust as well as of the local governments. Jim Merritt If we all agree that a shared Charter is in all of our interests, we would ask the Assembly of Penny Rich Governments to appoint a representative from each government to a working group that would be charged with drafting a Charter. That working group could consist of elected Maryann Toone officials who have served or will serve on the Home Trust board of directors. Of course, Jonathan Weiler Home Trust board and staff would welcome participation as well. Executive The board and staff of the Home Trust are privileged to manage the inclusionary housing Director policies in Orange County but we fully recognize that our success would not be possible Robert Dowling without your support. P.O. Box 307, Carrboro, NC 27510 1 919 -967 -1545 l � NORTH CAROLINA ORANGE COUNTY DRAFT Community Home Trust Charter Attachment VIII 32 THIS AGREEMENT made and entered into by and among the Orange County (hereinafter "County "), the Town of Carrboro, the Town of Chapel Hill, the Town of Hillsborough (hereinafter "Towns "), each being a general local governmental unit of the State of North Carolina and Community Home Trust (hereinafter CHT), a 501(c)3 corporation. WHEREAS, County and Towns agree that it is desirable and in the interests of their citizens to provide affordable housing to low and moderate income individuals and families, to ensure that such housing remains affordable in perpetuity and to have much of that housing administered and managed by a non - governmental entity; WHEREAS, County and Towns were responsible for the creation of the predecessor organization to CHT in 1990; WHEREAS, CHT revised its organizational structure and model for providing housing in 1999 at the behest of County and the Towns; And WHEREAS County and the Towns have provided financial operating support to CHT for many years; NOW, THEREFORE, the County, the Towns and CHT agree as follows: Section 1. Definitions A. Low Income means households that earn 80% or less of the Area Median Income (AMI) in the Metropolitan Statistical Area (MSA) in which Orange County resides, as published by HUD. B. Moderate Income means households that earn 115% or less of the Area Median Income (AMI) in the Metropolitan Statistical Area (MSA) in which Orange County resides, as published by HUD. C. HUD means the United States Department of Housing and Urban Development. Section II. Purpose of Charter Since all of CHT's homes are in Orange County, and since virtually all of CHT's work is driven by inclusionary housing policies that are supported by County and Towns, this Charter is intended to establish a shared set of expectations as to what affordable housing functions CHT will provide to County and Towns. County and Towns recognize that a shared and agreed upon set of expectations and responsibilities will reduce uncertainties and allow County and Towns to best utilize the expertise and experience of CHT. 1 Attachment VIII 33 Section III. Agreement A. Term of Agreement - The term of this Agreement begins with the effective date of January 1, 2014 and ends June 30, 2014. It is expected that this agreement or an amended version of this agreement will be renewed on an annual basis beginning July 1, 2014. It is recognized that the funding portions of this agreement will not take effect until at least July 1, 2014. B. CHT Board Representation - County and Towns are entitled to appoint a representative to the board of directors of CHT. According to the CHT bylaws, one -third of the board of directors will be CHT homeowners, one -third will be appointed persons (by County, Towns and the University of North Carolina at Chapel Hill (hereinafter UNC), and one -third of the directors will be members of the community who support the work of CHT. County and Towns' appointees to the board of directors enable County and Towns to remain informed of the work of CHT and in fact, to exert influence over that work. C. Responsibilities and Expectations of CHT - Since 2003, CHT's work load has been dominated by the implementation of inclusionary housing programs, particularly in the Towns of Chapel Hill and Carrboro. In the future, CHT may also manage inclusionary housing in the Town of Hillsborough. CHT can also serve in this same role for the County. As a result of inclusionary housing, CHT's inventory of affordable homes has increased from one home in 2000 to more than 210 homes as of the date of this agreement. It is agreed that CHT's primary roles and responsibilities are the following: I. Create and maintain homes that are affordable to low and moderate income households. Low income households earn 80% or less of the area median income as provided by HUD. Moderate income households earn no more than 115% of area median income; 2. The CHT board is responsible for the health and well -being of the organization and will ensure the organization is well managed and able to meet the expectations of County and Towns; 3. The CHT board of directors will hire, periodically evaluate and, if necessary, replace the organization's executive director; 4. Sell homes using the community land trust (CLT) model, wherein homes are conveyed to buyers using a 99 -year ground lease. CHT will be expected to continually revise its model to meet changing circumstances and to reflect best practices. 5. Advocate for affordable housing policies at the local, state and national levels. 6. Implement and manage inclusionary housing programs as requested by Towns and County. This requires a wide variety of tasks and responsibilities, including, but not exclusively, the following: 2 Attachment VIII 34 a. CHT staff works with developers on pricing, siting and other aspects of affordable housing within proposed developments that include ownership housing; b. CHT is responsible for the initial sales of affordable housing units and securing necessary subsidies; this requires executing purchase contracts with both developers and home buyers; c. CHT typically purchases a fee simple interest in real estate from developers and simultaneously conveys a leasehold interest to income - eligible buyers; d. CHT does not purchase inclusionary homes from developers until an income - eligible buyer is able to secure financing and close on the property; e. CHT is responsible for educating prospective home buyers and offering financial counseling to both buyers and current homeowners; f In 2007, CHT informed County and Towns that the organization faced challenges regarding long -term affordability and long -term maintenance of its housing inventory; g. Since 2007 CHT has worked to ensure the long -term maintenance of its affordable homes by collecting monthly stewardship fees from its homeowners. Stewardship funds, which are segregated from operating funds, are designed to pay for big- ticket maintenance items such as new roofs and HVAC replacement; h. Since more than 100 CHT homes were sold prior to the start of the stewardship program, these homes did not have stewardship funds available until they resold (some have still not resold). As of the date of this agreement, approximately 66 of CHT's homes still are not in the stewardship program; i. As the pre - stewardship homes resell, CHT is obliged to seed the stewardship accounts for the new buyers; j. CHT manages three homeowner associations in which all the homes are within the affordable housing inventory. As of the date of this agreement these associations are: Legion Road Townhomes, Rosemary Place Townhomes and Greenway Condominiums; k. CHT works with homeowner associations and management companies that manage inclusionary neighborhoods in which the affordable homes represent only a small portion of all the homes in the association. These are neighborhoods such as Larkspur, Vineyard Square, Claremont, etc. CHT seeks to ensure assessments are paid and that regulations are evenly enforced; Attachment VIII 35 1. CHT works with homeowners, lenders and legal counsel when owners are in default to prevent foreclosure; m. CHT strives to prevent foreclosures by paying off bank loans, terminating ground leases, and reacquiring properties. Paying off bank loans requires that CHT maintain adequate liquid reserves; n. CHT occasionally is required to take legal action against owners who are in breach of their ground lease; o. CHT oversees repairs to homes before reselling them to low and moderate income buyers; p. CHT is responsible for all resales of homes within its affordable housing inventory. Owners of these homes do not pay a commission to CHT; q. If necessary to sell a home, CHT pays a referral fee to Realtors who provide an income - eligible buyer who closes on a CHT property; r. CHT is responsible for financial management of its portfolio s. CHT will earn /raise a portion of its operating revenues through earned income on home sales, property management fees, ground lease fees, fundraising and other means permissible by the IRS; D. Resources required by CHT - In order to successfully perform its roles and responsibilities, CHT requires both financial operating support from County and Towns, as well as input into decision - making, particularly with regard to inclusionary ownership housing. Specifically, County and Towns agree to the following: I. Each local government will agree to a funding methodology that provides additional operating support as new inclusionary homes are added to the CHT inventory. It is recognized that this methodology may vary for each of the participating govenments; 2. An agreed upon staff compensation formula that is based upon compensation offered at County and Towns 3. An agreed upon level of operating reserves and project reserves that rightfully should be maintained by CHT. As of the date of this agreement, the board of directors of CHT has established operating reserves of $350,000 and project reserves of $400,000 4. CHT can be most effective if allowed flexibility to manage its portfolio of affordable homes without constantly seeking permission from County and Towns. Therefore, operating guidelines will be developed for the following circumstances; a. Selling homes to households above 80% of AMI b. Selling homes out of the affordable housing inventory c. Selling homes to households that do not meet locally imposed requirements, such as first -time homebuyer requirements, live /work requirements, etc. in Attachment VIII 36 d. Repaying subsidies embedded into homes that are sold out of the affordable inventory or sold to moderate income households 5. When new development applications are expected to include affordable housing units that CHT will administer, the applicable local government will seek input from CHT as to how and whether the proposed units are best incorporated into the affordable housing stock; 6. If CHT is expected to implement a particular housing policy for County or Towns, the applicable local government will consult with CHT to obtain input prior to initiating a new policy or requirement that will impact CHT's work. 7. As County and Towns revise their inclusionary housing policies, they will solicit input on proposed changes from CHT; 8. County and Towns will promote their inclusionary housing policies with their own employees and support CHT's efforts to sell homes to local government employees; E. Being Accountable to County and Towns 1. CHT will provide required documentation for every sale and resale of a property that includes subsidies provided by the local governments; 2. CHT will provide a quarterly report to County and Towns with information about sales, subsidies, challenges and other requested data; 3. CHT will provide an annual audit to the County and Towns; 4. CHT will provide interim financial statements as requested; 5. CHT will provide data on home sales, subsidy use and other indicators as requested; Attachment VIII 37 TOWN OF CARRBORO Town Manager ATTEST: Town Clerk NORTH CAROLINA ORANGE COUNTY This is to certify that on this day personally came before me , with whom I am personally acquainted, and being by me duly sworn, says that is the Town Manager, and that she the said , is the Town Clerk of the Town of Carrboro, the municipal corporation named within and which executed the foregoing instrument; that she knows the common seal of said corporation; that the seal affixed to said instrument is said common seal; that the name of corporation was subscribed thereto by the said Town Manager and that the said Town Manager and said Town Clerk subscribed their names hereto and said common seal was affixed, all by order of the Board of Alderman of the Town of Carrboro and that said instrument is the act and deed of said corporation. Witness my hand and notariral seal, this the day of , 20 Notary Public My Commission expires: Attachment VIII 38 TOWN OF CHAPEL HILL Town Manager ATTEST: Town Clerk NORTH CAROLINA ORANGE COUNTY This is to certify that on this day personally came before me , with whom I am personally acquainted, and being by me duly sworn, says that is the Town Manager, and that she the said is the Town Clerk of the Town of Chapel Hill, the municipal corporation named within and which executed the foregoing instrument; that she knows the common seal of said corporation; that the seal affixed to said instrument is said common seal; that the name of corporation was subscribed thereto by the said Town Manager and that the said Town Manager and said Town Clerk subscribed their names hereto and said common seal was affixed, all by order of the Town Council of the Town of Chapel Hill and that said instrument is the act and deed of said corporation. Witness my hand and notarial seal, this the day of Notary Public My Commission expires: 7 Attachment VIII 39 TOWN OF HILLSBOROUGH Town Manager ATTEST: Town Clerk NORTH CAROLINA ORANGE COUNTY This is to certify that on this day personally came before me , with whom I am personally acquainted, and being by me duly sworn, says that Eric Peterson is the Town Manager, and that she the said , is the Town Clerk of the Town of Hillsborough, the municipal corporation named within and which executed the foregoing instrument; that she knows the common seal of said corporation; that the seal affixed to said instrument is said common seal; that the name of corporation was subscribed thereto by the said Town Manager and that the said Town Manager and said Town Clerk subscribed their names hereto and said common seal was affixed, all by order of the Town Board of the Town of Hillsborough and that said instrument is the act and deed of said corporation. 20 Witness my hand and notarial seal, this the day of , Notary Public My Commission expires: E ORANGE COUNTY County Manager ATTEST: County Clerk NORTH CAROLINA ORANGE COUNTY Attachment VIII 40 This is to certify that on this day personally came before me Donna Baker, with whom I am personally acquainted, and being by me duly sworn, says that is the County Manager, and that she the said Donna Baker, is the Clerk to the Board of Commissioners of the County of Orange, the body politic and corporate named within and which executed the foregoing instrument; that she knows the common seal of said County; that the seal affixed to said instrument is said common seal; that the name of corporation was subscribed thereto by the said County Manager and that the said County Manager and said Donna Baker subscribed their names hereto and said common seal was affixed, all by order of the Board of County Commissioners of Orange County and that said instrument is the act and deed of Orange County. 20 Witness my hand and notarial seal, this the day of Notary Public My Commission expires: N