TOWN OF EASTON, MARYLAND
Affordable Housing Workshop
June 15, 2004
Councilmember Maureen Scott-Taylor Councilmember Moonyene Jackson-Amis
Ms. Becky Sherblom, Executive Director, MD Center for Community Development; Mr. Jeff Griffith, Mr. Hamilton, the Town Planner, and Mr. Karge the Town Clerk were also present.
CONVENING
At 3:00 p.m., the President of the Council called the meeting to order.
The agenda for the meeting was reviewed to be:
Review the notes from the last meeting
Review the Vision and Key concerns we heard
Walk thru IZ and Commercial Linkage to review and finish consensus points,
Walk through rest of package, for how to support affordable housing and neighborhood revitalization in the existing neighborhoods of town.
Jeff reviewed the Vision/Definition of Success that the Council had articulated for its desired housing policy in the first session, and asked for consensus that this is still accurate.
Becky reviewed with the council what she had heard as the key concerns for what the council is seeking in an affordable housing policy; reviewed all the bullets from the earlier session, and summarized that into three core areas”
1. predictability and transparency for developers
2. not overly bureaucratic for town
3. Fair distribution across town and balance between town and county.
Becky also reminded the council of her agenda from the funding source paying for the facilitation (HUD), which is to create a process that makes it more likely that developers can successfully access state funds for affordable housing in Easton (homeownership and rental).
Becky then walked the council through summary sheets where
she had attempted to outline what she had heard as decision points regarding
the two programs – Inclusionary Zoning and Commercial Linkage, to review for
accuracy, make any modifications, assure full consensus of the council.
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Unit Threshold and setaside level:
Initial straw poll had been between 5-20 units; Becky recommended settling at 10; discussion lead to consensus that the contribution starts at one unit, with exception for owner-occupied units. The reasoning behind this is that there are smaller developers who may do 10-20 units in a year but only do one at a time, sell it, and then do the next.
Resulting consensus on Unit Threshold is:
n Contribution begins at one unit, except for owner occupied units;
n Below 10 units, contribution is a fee paid to the Trust Fund rather than requiring the set aside of 10%;
n at 10 units the set aside requirement kicks in;
n For any incremental units there would be a fee paid to the trust fund (i.e., if the 10% set aside would mean requiring 2.3 units, the developer provides 2 units and pays a fee on the .3)
Offsite Option?: No, except for environmental concerns
Fee in Lieu?: No, except for environmental concerns
Incentives?: The initial brainstorming consensus had been yes, perhaps density bonuses. This evening’s conversation covered what increased zoning is being written into the revised zoning plan, and so the resulting consensus is that there is no need for additional incentives; No, increased density is in the new zoning plan so no need to provide any for this.
Target: Initial consensus view had been to somehow get at the mix of incomes in need; resulting consensus based on Becky’s recommendation is to do at least ½ below 80% AMI, and the remainder at 80%AMI. This recognizes the need for lower-cost housing but also the reality that it would be extremely difficult to deeply target from the developers side. Hopefully special buyers such as the LHA or nonprofits can purchase some units and more deeply target them as well.
Term of Affordability: Consensus was affirmed for permanent affordability. For rental units, strategy is to encourage sale to LHA or 501©3, or allow the funding source rules to dictate the permanent affordability; In for-sale units, strategy is to tie annual resale price to the Consumer Price Index (CPI), with the council setting in public resolution annually (See model ordinances for examples and language); other option would be annual allowance of 5% increase, which seemed steep compared to historic record of appreciation.
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Key components, consensus positions:
Development Type:
Retail – Yes
Office -- Yes
Hotel – Yes
Commercial/Medical – Yes
Assisted Living, Retirement Homes – Yes, discussion was that these are treated in zoning as commercial uses rather than residential uses, and have enormous impact on jobs/housing situation;
Industrial/Manufacturing/Warehouse – No, consensus was to exclude these.
Timing: two options appear to be at the time of building permit, or at the time of use and occupancy; Consensus of Council is to have full disclosure from first conversation, that developers know about the fee requirement and have it calculated, and to require payment prior to issuance of Use and Occupancy Permit. Reasoning is this allows shortest time between payment of fee and developer receiving rents/sales revenue to cover his expenses, so financial impact will be somewhat mitigated.
Rate: Options discussed were to do it by square footage of development, or by dollar value; Consensus was to go with square footage. Staff needs to recommend actual rates, based on the nexus study and their review of models from other cities.
Threshold: earlier discussion had been to either exempt the first 2,000 square feet of all projects, or to stratify the threshold by type of development; tonight’s consensus is to eliminate the minimum square footage threshold, so all development pays.
Exemptions:
n Yes, exemption for rehab, reuse, redevelopment of existing sites at the existing footprint (any additional footprint added would pay rate on that new square footage);
n Yes, exemption for industrial/manufacturing/warehouse;
n Yes, exemption for downtown retail/mainstreet retail;
n Yes, exemption for government agencies if they are the developer, if they are just the primary lease holder that would not give the developer an exemption;
n No exemption for nonprofits, they generate low-wage jobs just like other employers.
Housing Trust Fund – key components
Funding sources:
n Commercial Linkage fees
n Fees from single unit and incremental units in Residential Inclusionary Zoning
n Grants, donations, bequests (passive acceptance, no marketing and outreach for these is planned right now)
Administration:
n Use funds to pay for staffing of the programs
n Use funds to pay for marketing of programs
n Use funds as leverage and match to other resources, to achieve the goals
Where and Who to Administer, options include:
n Hire existing agency with experience/expertise (i.e., local housing authority)
n Staff it internally with town employees
n Send out an RFP and see who responds, consultants, etc.
Becky distributed and reviewed a one page summary outline she had prepared based upon the council’s conversations, providing as one package a set of policy recommendations. In addition to the Inclusionary Zoning, Commercial Linkage, and Housing Trust Fund, the other key elements are focused on the existing neighborhoods.
n Create a Housing Trust Fund (by council action) that will receive the commercial linkage fees and any other appropriate revenues, to achieve the following objectives:
n First-time homebuyer program, to assist that segment of the population able to afford the monthly costs of homeownership but who need down payment and closing cost assistance (There are existing grants of $5,000/$10,000 your population may not know about because you don’t market them);
n Homeowner rehab loans and grants, to improve existing owner occupied houses in targeted neighborhoods (existing resources at state you can access, as well as local banks);
n Small rental rehab loans, to encourage landlords to improve properties without displacing tenants (existing resources at state you can access, as well as local banks);
n Infill construction, adaptive reuse of existing structures, and vacant property improvement (There are resources developers can bring to Easton if the town had some funds to help with leveraging);
The resources from the Housing Trust Fund, used for these activities, should be done through strategic targeting in an opportunistic manner to build off of development occurring, by neighborhood. For instance, if a developer is undertaking a major project in a neighborhood, you should bring these resources to-bear in the surrounding area so the visual and physical improvements occur. Similarly, if you target code enforcement to an area, target the marketing of the resources at the same time, to encourage property improvement with minimal displacement.
Attached is the full one page outline that puts the pieces together.
Becky stated that to accomplish all this the Town of Easton needs to take the following steps:
1. Do Nexus Study for the commercial linkage, to establish the right level of cause/impact to justify the fees; and then draft Commercial Linkage Ordinance based on that;
2. Draft Inclusionary Zoning ordinance, based on models MCCD can provide;
3. Hold focus groups with residential developers, and commercial developers to gain their input to the full set of strategies and the draft ordinances prior to adoption; and gain their input to Development Approval Process that will be used;
4. Create the Housing Trust Fund by council legislation, using models MCCD can provide;
5. Create a work plan for a Housing Programs Manager, with one-year and three-year outline for what the council wants the level of impact to be; and decide if this will be a town employee or a contract with another entity. The Housing Authority of Easton has experience with single family development, special loans, other state programs, AHP and other bank products and programs, and should be talked with about what it would cost for them to do this for the town.
6. Other piece of predictability that is needed is to clarify who gets to say “No”, when they get to say it, and on what basis; when a developer is following the rules, has a proposal that meets your guidelines and vision, who do they have to talk with and get approval from? Role of community associations/neighborhoods around the proposed project, individual council members where project is proposed, other stakeholders?
7. Adopt the ordinances and begin to implement.
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Calendar committed to for next steps:
Nexus Study Staff Econ.Dev. Completed by September 1, 2004
Town Attorney
Ordinances drafted Town Attorney Completed by October 1, 2004
Inclusionary Zoning
Affordable Housing Trust Fund
Commercial Linkage Initiative
Council Adoption Process
Information Work session* October 2004
Public Hearing October 2004
Vote by Council November 1, 2004 council meeting
*Becky Sherblom of MCCD offered to return to facilitate the information work session with developers. She is also available by phone or email to assist with any questions staff may have in completing the nexus study or drafting the ordinances.
Easton, MD Affordable Housing and Neighborhood Revitalization Policy: A set of strategies that will strengthen neighborhoods, give families choice and meet the housing needs of the town’s workers.
A set of strategies that will:
n Create new affordable housing in new growth areas;
n Recognize and address the economic development growth impact on affordability and supply;
n Support improvements in existing units and neighborhoods.
To do this the town should focus on a few things:
n Inclusionary Zoning Ordinance and use of Overlay Zones and PUD areas, to facilitate affordable units being built within new projects;
n Commercial Linkage Ordinance that collects fees from commercial growth to help offset the additional demand on affordable housing that the growth causes;
n Clear Policies and Procedures and Transparency for all development approval, so developers know the decision process, know who has a say in their gaining approval and what the decision will be based on;
n Code Enforcement in existing neighborhoods in a targeted and strategic way that will lead to both neighborhood and unit level improvements;
n Create a Housing Trust Fund (by council action) that will receive the commercial linkage fees and any other appropriate revenues, to achieve the following objectives:
n First-time homebuyer program, to assist that segment of the population able to afford the monthly costs of homeownership but who need down payment and closing cost assistance (There are existing grants of $5,000/$10,000 your population may not know about because you don’t market them);
n Homeowner rehab loans and grants, to improve existing owner occupied houses in targeted neighborhoods (existing resources at state you can access, as well as local banks);
n Small rental rehab loans, to encourage landlords to improve properties without displacing tenants (existing resources at state you can access, as well as local banks);
n Infill construction, adaptive reuse of existing structures, and vacant property improvement (There are resources developers can bring to Easton if the town had some funds to help with leveraging);
The resources from the Housing Trust Fund, used for these activities, should be done through strategic targeting in an opportunistic manner to build off of development occurring, by neighborhood. For instance, if a developer is undertaking a major project in a neighborhood, you should bring these resources to-bear in the surrounding area so the visual and physical improvements occur. Similarly, if you target code enforcement to an area, target the marketing of the resources at the same time, to encourage property improvement with minimal displacement.
The Housing Trust Fund needs a manager. The experience/skill set needed is to coordinate the spending of resources on the above four objectives, oversee and monitor the Inclusionary Zoning units, market resources and programs for neighborhood-based housing improvement in Easton; broker relationships and programs with local banks, accessing state special loans, etc. At least three options:
1. Hire the Housing Authority under a specific contract to manage this on behalf of the town;
2. Hire a new dedicated staff position to manage this for the town;
3. Develop a work plan and issue an RFP and see who responds as contractor to manage this.
The meeting was adjourned at 6:00 p.m.
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Town Clerk