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HomeMy WebLinkAboutAgenda - 05-15-2007-6dORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 15, 2007 Action Agenda Item No. (p '" C6 .SUBJECT: Comprehensive Housing Strategy DEPARTMENT: Housing/Community Dev. PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Strategy Snapshot Tara L. Fikes, 245-2490 Comprehensive Housing Strategy (Under Separate Cover) PURPOSE: To consider the approval of a Comprehensive Housing Strategy prepared for Orange County including the Towns of Carrboro, Chapel Hill, and Hillsborough. BACKGROUND: In 2005, the County engaged the services of Training & Development Associates (TDA) to prepare the Five Year Consolidated Plan for Housing and Community Development Programs in Orange County. That document was submitted to the U.S. Department of Housing and Urban Development (HUD) as required by recipients of HOME and CDBG funds. As an extension of that plan, the County engaged TDA to provide an overall housing market analysis for Orange County known as the Comprehensive Housing Strategy. The elements of this Strategy include: a) Executive. Summary; b) Analysis of Housing Production Activity; c) Analysis of Housing Sales and Lease Activity; d) Comprehensive Inventory of Affordable Housing Stock; e) Future Demand; f) Gaps Analysis -Production vs. Needs; g) Provider Analysis; and h) Strategies for Future Action. The first draft of this document was received in early 2006, however, local staff and the Affordable Housing Advisory Board continued to work with TDA during most of last year to refine this document. The document is now complete and data has been useful informing local housing efforts including the work of the Town of Chapel Hill's Inclusionary Zoning Task Force. Strategies for Future Action contained in the Plan include: a) Increase the capacity of existing non-profit organizations; b) Utilize existing older apartment rental units for low income housing; c) Expand current efforts to encourage developers to build affordable housing units and/or require developers who opt out of this requirement to make a contribution to the local government to be used for future housing development. Formal adoption of this plan by the BOCC will provide a definitive strategy for future affordable housing endeavors in the County. FINANCIAL IMPACT: None. RECOMMENDATION(S): The Manger recommends that the Board consider the approval of a Comprehensive Housing Strategy prepared for Orange County including the Towns of Carrboro, Chapel Hill, and Hillsborough. Orange Co. Comprehensive Housing Strategy ~~Snapshot" Analyzing the housing market is an important exercise for any community. However, it is especially important for those communities that are experiencing tremendous growth in population and property values. Assessing the health and fairness of the housing market helps a community to be sure that all of its citizens have choices when it comes to purchasing or renting their living quarters. Training and Development Associates, Inc. prepared an overall housing market analysis for Orange County including the Towns of Carrboro, Chapel Hill, and Hillsborough and provided the following components. Population ^ Orange County's population increased by more than 25 percent from 93,851 in 1990 to 118,227 in 2000,' outpacing the state by more than 3 percent. The County is expected to continue to grow through 2010, with the number of people increasing another 19 percent to 140,750. ^ Chapel Hill's population growth rate between 2000 and 2003 was 11.9 percent, or 3.96 percent annually. Based on this rate of growth, the population can be expected to reach 57,827 by the year 2009. ^ Carrboro's estimated growth rate for the period 2000 through 2003 was 4.8 percent or 1.6 percent annually; the population there can be expected to reach 21,340 by 2009.2 ^ Hillsborough's population grew 1.7 percent between 2000 and 2003, or .57 percent each year,' suggesting the population of Hillsborough will possibly reach 7,328 by 2009. Income ^ HUD reports the median income for a family of four in Orange County to be $71,300 in 2005.^ Assuming a constant growth rate, the percent of households with annual incomes of less than 50 percent of the County's median would represent approximately 25 percent of households in 2005. Fifty percent of the Orange County median income is an annual income of $35,650 in 2005 for a family of four. Housing Market Evaluation measures include: 1. The Affordability Index calculates the difference between what a family can pay and what the market indicates the family must pay on a monthly basis; and 2. The Availability Index determines appropriately sized housing currently listed for sale and defines what percentage of the available housing is affordable to various income levels. 3. The Cash-to-Close Index which defines the amount of cash needed by a given family to close the purchase of their first home; and 4. The Affordable House Index takes various income levels and derives what an affordable house would cost for that income level. (rising from 93,662 to 118,227). 2 State of North Carolina Municipal Population Estimates, 2003 3 State of North Carolina Municipal Population Estimates, 2003 ' HUD February 2005, Raleigh, Durham Chapel Hill MSA Future Demand Overall, Orange County is expected to experience a 1.3 percent annual population growth rate between 2005 and 2020. The projected population growth rate estimates are: Between 2005 and 2010 - 7.38 percent, or 2.1 percent annually; and Between 2010 and 2020 - 13.36 percent or 1.33 percent annually. In real terms, Orange County is expected to add 1,064 households per year for the balance of the decade.5 None of the communities in Orange County are expected to experience a decline in growth. Strategies for Future Action Orange County and the Towns of Chapel Hill, Carrboro, and Hillsborough should ^ Increase the capacity of an existing non-profit county-wide developers, or establish such an entity to act, as an owner and manager of acquired multifamily units and develop affordable single family units. ^ Regarding rental units older, large complexes with high vacancy rates are candidates for low income housing tax credit ("t_IHTC") or non-profit bond acquisition and rehabilitation. ^ Current efforts in Chapel Hill to encourage developers to build affordable units as part of new developments of five or more units should be expanded to include the entire County and strengthened. ^ Resale of the affordable properties should be restricted based on one or more of several different types of affordability clauses. Examples include: - An affordability clause that permits the buyer to retain appreciation in the property in relationship to the original purchase price. For example, if a buyer purchases the home at $200,000 and the appraised market value of the home is $260,000 in the current market, then the buyer may only retain the appreciation upon sale that is greater than $60,000. - A restricted resale provision which only allows sale of the property to a family at below the requisite median income at the time of sale. - Aland lease that requires the resale of the property to the countywide non-profit at the acquisition price plus some form of appreciation defined by the County. ^ Developers who wish to opt out of the requirement should be allowed to make a contribution to a countywide non-profit equal to the difference in price between the unit the developer builds and the required affordable unit. The countywide non-profit could then use those funds to: - Acquire, rehabilitate, and sell existing housing at affordable levels; - Acquire units in condominium properties which can be subsidized, restricted and resold to affordable buyers; - Build new restricted units for sale. s North Carolina State, Populations Estimates 2000 - 2003. The increase in population over the three year period established the current growth rate on an annual basis. This growth rate differs slightly from overall State projections, yielding an overall household growth rate about 10% higher than the State projection.