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HomeMy WebLinkAboutAffordable Housing Task Force Report - 4-3-2001 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: April 3, 2001 Action Agenda Item No. IO-c. SUBJECT: Commissioners Affordable Housing Task Force Report DEPARTMENT: Housing/CD PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Tara L. Fikes, ext 2490 Executive Summary TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To receive the report of the Commissioners Affordable Housing Task Force. BACKGROUND: In April 2000, the BOCC created the Commissioners Affordable Housing Task Force to investigate and analyze information and problems, and recommend strategies and policies, to assist the County Commissioners in formulating a comprehensive, long-range vision of decent and affordable housing in Orange County. Commissioners Margaret Brown and Barry Jacobs served as Co-Chairs for this Task Force. The results of these deliberations were presented as a Preliminary Report to the BOCC at its March 13 work session. Comments received at that meeting and a subsequent full Task Force meeting on March 28 have been considered in the further development of the Final Task Force Report. FINANCIAL IMPACT: No immediate financial impact. RECOMMENDATION(S): The Manager recommends that the Board of County Commissioners: a. Provide comments regarding the Preliminary Report; b. Approve the Executive Summary of the Report and forward it to the Capital Needs Advisory Task Force; and c. Receive the Final Report at the end of April 2001 after incorporation of final comments from the Board and Task Force. 2 Executive Summary Report of the Orange County Commissioners Affordable Housing Task Force April 2001 Introduction The Orange County Board of Commissioners recently decided to refine its approach to promoting decent and affordable housing. On March 13, 2000 the Board of County Commissioners convened an Affordable Housing Summit attended by more than 100 citizens, including elected officials and housing providers, to discuss housing needs and to clarify the policies and strategies that could be used to alleviate the identified housing needs. Following the Summit, the Board formed the Commissioners Affordable Housing Task Force, under the leadership of Commissioners Margaret Brown and Barry Jacobs. Specifically, the charge to the group was "to investigate and analyze information and problems, and recommend strategies and policies, to assist the county commissioners in formulating long-range vision of decent and affordable housing in Orange County." The Task Force began to meet in June 2000 and convened monthly thereafter through February 2001. In addition, its four subcommittees (Inventory/Needs, Funding, Zoning and Design, and Education) met at least monthly to gather and review pertinent information in order to develop strategies and/or recommendations for action. The results of the work of these subcommittees and the task force collectively are reported on the following pages, each gathering and developing its assigned information and recommendations for action. This material builds on previous local government and private efforts to ensure that all families have affordable housing options, particularly those with limited incomes, the homeless and other special need populations. The purpose of this Task Force Report is to accelerate and expand the development and maintenance of affordable housing stock in Orange County.The report is intended as a guide to countywide action with proposed housing targets, strategies, proposals for new funding sources, as well as other policy and educational elements. Perhaps the most critical recommendation is the establishment of an Affordable Housing Advisory Board in the County to assist with implementation of the strategies contained in this Report and advise the Board of Commissioners regarding other affordable housing issues. Further, throughout this document are references to the need for the County and Town leaders, University of North Carolina officials, the State Legislature, non-profit and for-profit organizations, and interested citizens to become involved in addressing the affordable housing needs of this community. The highlighted findings, recommendations, and strategies provide a snapshot view of the more detailed subcommittee reports contained in this report. 3 Acknowledgements Many thanks for the hard work of the Task Force Members Commissioner Barry Jacobs, Co-Chair Commissioner Margaret Brown, Co-Chair Elizabeth Carter Jack Chestnut Mark Chilton Dan Coleman Mark Dorosin, Chair, Education Subcommittee Robert Dowling John Eckblad Kevin Foy Marina Heatzig Trish Hussey Richard Leber Susan Levy Nancy Milio, Chair, Report.Subcommittee Chris Moran Scott Radway Mary Winne Sherwood Delores Simpson Ruby Sinreich Bill Strom Jim Ward Alison Weiner, Chair, Inventory/Needs Subcommitee Christine Westfall Runyon Woods, Chair, Finance Committee Staff Tara L. Fikes, Orange County Loryn Barnes, Town of Chapel Hill Chris Berndt, Town of Chapel Hill Lanier Blum,Triangle J. Council of Governments Special Thanks The Commmissioners Affordable Housing Task Force extends special thanks to Erin Kobetz, MPH and Rose Wilcher, students at the University of North Carolina at Chapel Hill for conducting focus groups with local housing program clients to better understand their housing needs. • 4 • Affordable Housing Needs at a Glance The data presented below demonstrate that affordable owner-occupied and rental housing for very-low income (< 30% of median income); low-income (30%-50% of median income); and moderate-income (51%-80%of median income) working families has become increasingly less accessible in recent years. In addition, the current pace of affordable housing construction, maintenance, and rehabilitation is dramatically lagging behind the growing need. This is especially true for affordable rental units. > There are approximately 44,854 households in Orange County, 58% owners and 42% renters. RENTAL HOUSING • Of a total 18,839 rental households, approximately 6,697 are paying more than 30% of their income for housing costs and 4,455 households are paying more than 50% of their income for monthly housing costs. Rental Households Pay more than 30% income for rent Other rental 36% households 64% Source: Karnes Research Company • The Housing Wage in Orange County is $14.52, higher than the North Carolina wage of $10.16. This is the amount a worker would have to earn per hour in order to be able to work 40 hours per week and afford a two-bedroom unit at the area's Fair Market Rent (FMR). The current FMR is 282% of the present minimum wage ($5.15 per hour) or 172% of the Orange County living wage ($8.45). Housing Wage Location Hourly Wage Needed to Percent As % of Minimum Wage Afford Change ($5.15/hr.) (@ 40 hrs./wk.) in 2BR One BR Two BR Three Housing One BR Two BR Three FMR FMR BR FMR Wage FMR FMR BR FMR (1999- 2000) North $8.60 $10.16 $13.58 1.80% 167% 197% 264% Carolina 5 Orange $12.37 $14.52 $19.48 14.57% 240% 282% 378% County Source: National Low Income Housing Coalition ➢ In Orange County, a worker earning the Minimum Wage ($5.15 per hour) has to work 113 hours per week in order to afford to rent a two-bedroom apartment. Work Hours/Week Necessary at Minimum Wage ($5.15)to Afford Location One Bedroom FMR Two Bedroom FMR Three Bedroom FMR North Carolina 67 79 105 Orange County 96 113 151 Source: National Low Income Housing Coalition HOMEOWNERSHIP Average Sales Price for New and existing homes in 2000 in unincorporated Orange County $235,633 Average Sales Price for new and existing homes in 2000 in the Town of Chapel Hill- $262,162 Average New Home Sales Price for Single Family Detached Houses in the Town of Chapel Hill $311,255 - - ;;��:•.- ;-ter' 'mange County 5 a P A1 it ,.*fit 1.111111111111111111;4,` :Wf _ II1 . n 1111 111111FF io I ______ 50K- $80K-$100K-120K$140K-$160K-$180K-$200K- Y „', -•;1: ,_.:.• S80K $100K$120K$140K$160K$180K S200K$220K r -+:'- :<.3 6 Source:Triangle Multiple Listing Service The number of housing units sold in Orange County during the past four (4) years has ' • declined in every price category except for those priced higher than $250,000. • The number of homes sold at more than $250,000 increased by 42%in four (4) years. • The number of homes sold for less than $79,000 decreased by 55% in four (4) years. Orange County Housing: Sales Price Distribution 1997-2000 Percent Housing Units Price Range 1997 1998 1999 2000 Change: 1997-2000 $0479,000 11.6 8.2 7.2 5.2 -55 $80,000-$119,000 16.7 14.5 14.8 13.1 -21 $120,000-$159,000 15.4 18.5 17.2 15.1 -2 $160,000-$199,000 14.8 13.5 15.3 14.2 -4 $200,000-$249,999 14.3 14.4 16.9 13.7 -4 $250,000 and 27.3 30.8 34.0 38.6 42 greater Average Price $197,071 $209,208 $218,875 $235,633 20 Source: Triangle Multiple Listing Services;2001 Chapel Hill Data Book 6 7 Additional Significant Findings ✓ In the years between 1995-2000, 399 new units of affordable housing were produced in Orange County. The total cost of producing this housing was $26,507,157. Of that total, $2,495,026 or 9% was provided by locally controlled funding sources. ✓ With one exception, non-profit providers completed all of the affordable housing projects created and renovated between 1995 and 2000. ✓ There is not currently any duplication of services among non-profit providers. Each provider fills a niche in the affordable housing market. ✓ Agencies that receive funding from a variety of sources and which incorporate donations and volunteerism into their programs require less per unit funding and produce units at a lower cost than agencies that rely exclusively on county and local government funding. ✓ The focus group study of clients conducted at three local housing facilities by the Inventory/Needs Subcommittee confirmed the affordable housing need data contained in this report. ✓ The Educational Impact Fee that is collected for all new residential construction in the County poses a potential barrier to affordable housing development. The revenue generated from the fee is used to finance a portion of the cost of new public school space created by new residential growth. Presently, the fee is $3,000 in the Chapel Hill-Carrboro School District and $750 in the Orange County School District. To address this concern, the Orange County Board of Commissioners adopted a Impact Fee Reimbursement Policy that provides funds to reimburse non- profit housing developers that construct affordable housing for low-income families. For-profit developers or individuals are not eligible for fee reimbursement under the current policy. 8 ✓ Fees for public water/sewer service extensions also pose a potential barrier to affordable housing development. In response, in 1998, OWASA implemented a tiered residential availability fee system for homes in five size classes with the lowest tier including homes less than 1701 square feet. There is currently discussion regarding the inclusion of a new lower tier of service as well. ✓ There is a continued need to combat the myth that affordable housing lowers neighborhood property values. Recommendations 1. Establish short-term (5-year) and long-term (10-year) affordable housing targets for development. Affordable housing targets should focus on low income rental families (those below 50% of the area median income, i.e., $31,400 for a family of 4 in 2000) and increase incrementally over the plan period as both the capacity and commitment of local providers grow and local funding sources are developed. Recommended Short-term Housing Targets % of Median Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Total Total Public Income(MI)/ Number Subsidy @ Rousing Tenure Units $20,000/unit <50%MI/Owner 20 22 24 26 28 120 $10 million <60%MI/Rental •50 60 80 100 110 400 Subtotals 70 82 104 126 138 520 $10 million 51-80%MI/Owner 25 30 36 42 50 183 $4 million Totals 95 112 140 168 188 703 $14 million • Given that approximately 12,281 households in the County are experiencing housing problems, 703 housing units addresses approximately six (6) percent of the estimated total housing need in Orange County during the next five (5) years. • $14 million in public subsidies will generate $80 million in affordable housing stock. (703 units x$112,000 [estimated cost per unit] = $80 million) • County bond initiatives, including the current bond monies and a new 2001 bond issue, can be used to finance the recommended housing targets. [Reference: Inventory and Needs Subcommittee Report] 2. Establish an Affordable Housing Advisory Board for Orange County. The Board would assist the Board of Commissioners with the following: ♦ Prioritizing needs; ♦ Assessing project proposals; ♦ Aid the process of publicizing the County's housing objectives; 9 ♦ Assist in the implementation of the strategies contained in the FY 2001 Commissioners Affordable Housing Task Force Report; • Monitor progress of local housing programs; ♦ Explore new funding opportunities; • Generally increase the community's awareness, understanding, commitment to and involvement in a comprehensive program of initiatives to increase the amount of attractive affordable housing; • Assist in the investigation of residential segregation patterns in the County. ♦ Other housing-related items identified by the Board of Commissioners. [Reference: All Subcommittee Reports] 3. Initiate a joint effort between the County and Town governments to engage a concerted and ongoing dialogue with the University of North Carolina at Chapel Hill on issues that affect affordable and accessible housing. Current estimates are that up to 15,000 students live in off-campus housing, a number equivalent to about a third of the total number of county households. [Reference: Inventory/Needs Subcommittee Report] 4. Adopt the revised Evaluation Criteria for the Housing Bond Program as proposed in this report. Housing bond funds should be awarded as soon as a proposal is approved. Housing proposals that score of 60 points indicate projects are well structured and deserve funding. If funds are not available, funds should be raised for all projects scoring above 60 points. [Reference: Finance Subcommittee Report] 5. Adopt affordable housing enabling zoning provisions including enhanced accessory zoning and inclusionary development ordinances. When necessary, the governments should aggressively encourage the state legislature to grant the authority to enact these provisions. [Reference: Zoning Subcommittee Report] 6. Acquire land for eventual affordable housing development purposes. There is a dwindling supply of appropriate available land for development in the County and the County and towns should take the lead in acquiring land for future housing development. [Reference: Finance Subcommittee Report] 7. Utilize equity sharing and other methods of limiting housing cost escalation to make and keep housing affordable for future generations of low income households. [Reference: Finance Subcommittee Report] 8. Challenge and encourage all non-profits and for-profit housing providers to share resources and collaborate together on affordable housing projects. Further, these groups should incorporate opportunities for in-kind donations and community support into their programs. Involvement creates consensus. [Reference: Finance Subcommittee Report] 10 9. Require all new residential and commercial developments in the County and Towns seeking zoning approval and/or permits to contain at least 15% of affordable units (for families at 80% or less of median income) in residential projects, or a donation of land for commercial developments. Further, these projects should be exempt from associated project development fees. [Reference: Zoning Subcommittee Report] See the attached memorandum regarding recent projects approved by the Council as an example. 10. Declare the Year 2002 "The Year of Affordable Housing" and implement a public education campaign defining affordable housing. [Reference: Education Subcommittee Report] Strategies I. Finance • Seek local government commitment to fund affordable housing initiatives with: • Bonds • Local Property Taxes • Rental License Fees • Challenge local governments to further avail themselves of the following funds and commit them to affordable housing initiatives: • Economic Development Initiative Funds (EDI) • HUD Section 108 Loan Guarantee Funds • Individual Development Accounts (IDA) • Seek state legislation to fund affordable housing initiatives from: • Corporate Tax Credits • Linkage Funds • Restructured Property Taxes • Title Transfer Fees • Reserve Fund Set-asides • Special Taxes • Encourage Public/Private Initiatives such as: • Private Placement Bonds • Seattle-style Philanthropy • Affordable Housing-Friendly Foundations II. Land-Use/Zoning • Review the inter-relationship between land use policies and affordable housing relevant to land costs, availability of water and sewer systems, density controls, and 11 government incentives and other policies that influence the development of affordable housing. • Locate new affordable housing where infrastructure is available, especially water, sewer, and public transportation services, and disperse it throughout the County, especially near jobs, with a range of types and densities of housing in urban and rural areas. • Encourage the preservation, repair and replacement of existing affordable housing stock, by, for example, adopting a maximum size limit for homes in neighborhoods where there is pressure to replace small homes with larger ones. • Balance affordable housing design standards, environmental concerns, and harmony with surrounding neighborhoods and ensure that the design of all housing minimize barriers to accessibility, allowing people to age in place and use materials that conserve energy. Expectations are that the 65 and older population of Orange County will grow from 9,308 to 21,553 by 2020. This is an increase of 131.6% compared to total county population growth of only 38.1%. (See Zoning Subcommittee Attachment) • Support safely installed and sited manufactured homes as a valuable form of affordable housing, expanding building inspector purview and improving standards for installation. • Provide a safety net for individual mobile home owners when parkland is removed through sale and development or due to health and safety deficits. • Work with human service providers to expand services and capacity in shelter, group homes, transitional housing, SROs, assisted living, and other "service- enriched" housing. Towns should locate and reserve suitable sites for these types of housing. III. Education • Utilize a variety of educational formats including brochures, videos, press/media kits, and an Internet website. • Provide personalized examples of "eligible" affordable housing consumers in educational materials using demographic data and celebrating successes to address NIMBY concerns of officials, providers, and neighborhoods. • Demonstrate the importance of affordable housing, the value of diversity for the community, and paint scenarios of what the community might look like if the problem of affordable housing is ignored (based on economic, racial, ethnic and age data). • Produce an annual report on affordable housing availability by cost, numbers in relation to need, and ownership type as well as an Annual Affordable Housing 12 Report Card to keep elected officials and the community up to date and aware of needs and successes. • Pursue a housing information clearinghouse that can be accessed by a hotline and website for individual renters, buyers, sellers, housing developers, media, and officials. Collaboration With UNC-CH • Encourage the University to house more students on University land, and assist with the provision of affordable housing for any projected new employees or facilities. • Include University officials in all ongoing deliberations in the County and the Towns regarding affordable housing. Further Development • Develop and support the capacity of non-profit and other willing providers to cooperatively plan, develop, and maintain affordable rental and owner- occupied low-income housing. • Investigate the feasibility of a countywide public-private investment fund. This would be open to public and private institutional and individual investors, especially area entrepreneurs, public and non-profit educational, religious, and other institutions and foundations, and upper-income earners in the Triangle. The fund would pay a guaranteed low interest rate of return (ranging at the choice of the investor between 0-5%) in order to allow the Fund to make loans to nonprofit low income housing providers at 3 percentage points below market rates. • Support the efforts of the Continuum of Care Committee to develop a Continuum of Care Plan is designed to organize and deliver housing and related support services to meet the specific needs of homeless individuals and families as they move to stable housing and maximum self-sufficiency. Key components of the plan include: outreach/assessment; emergency shelter; transitional housing; and permanent housing. Counties are required to engage in the Continuum of Care planning process in order to access available HUD funding for homeless families. Attachment 13 MEMORANDUM TO: Bill Strom, Council Member FROM: Rob Wilson, Current Development Planner SUBJECT: Affordable Housing DATE: March 28, 2001 Per our phone conversation this morning, you requested a list of the recent projects that the Council has approved, that included an affordable housing component. The list is as follow: Total # Name of Units/ Affordable Development Lots Units/Lots Miscellaneous Approved SUP required applicant to renovate 4 Franklin Grove 58 4 existing dwelling units, and make them "permanently affordable." Cluster Subdivision. Small dwelling units Parkside II 67 17 required per ordinance (15% of units must be 1,100 s.f. or less, 10% of units must be 1,350 s.f. or less). No regulations regarding cost of units, or permanent affordability. Providence Glen 192 18 Approved SUP (with rezoning) requires 18 Condos permanently affordable dwelling units. Approved SUP (with rezoning) requires 24 one- Chapel Ridge 180 24 bedroom/one bath dwelling units that shall be permanently available for rent to eligible households (Section 8 vouchers, and/or households earning less than 80% of the area median income). Please let us know if we may be of further assistance.