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Affordable Housing Mandate Could Be on Its Way Back to Longmont

November 9, 2018

Francesco Garcia on Thursday drills a hole for an anchor on the ground floor of the Fall River Apartments senior affordable housing project now under construction in northeast Longmont. City council on Tuesday could vote on an ordinance that would reinstate affordable housing requirements for the construction of new market-rate housing.

Longmont City Council on Tuesday could give initial approval to reinstating a mandate for developers of market-rate housing to provide affordable homes as well.

The ordinance council will examine was drafted by city staff with feedback gathered since December at 16 meetings between council members, developers and Longmont real estate experts.

As currently written, it would require housing developers to guarantee 12 percent of the livable square footage in a new development is dedicated to affordable units.

In other words, for every 1,000 square feet of market-rate homes built, developers would have to incorporate 120 square feet of affordable housing — defined as attainable for home buyers making 80 percent of the area median income, and for renters making 60 percent of the area median income.

“The inability of low- and moderate-income working households to reside within the city negatively impacts the community’s jobs/housing balance and has detrimental transportation and environmental effects for the city as a whole,” the proposed ordinance reads. “The council finds that 12 percent is the reasonable proportion at this time, given economic indicators and community need.”

The ordinance, if approved as written, would allow three methods for developers to get around placing the affordable units on the same site as market-rate homes. Those include paying $7.90 in fees per square foot of new market-rate housing, which would go into the city’s affordable housing fund; building the required amount of affordable housing in another location; or donating to the city ready-to-be-developed land of a value that matches what would be required in fees, on which the city could then construct affordable units.

A combination of the three also would be acceptable.

Longmont officials held a meeting Thursday afternoon with property developers and real estate experts and dissected the proposed rule, sections of which were called unclear or inconsistent with city staff’s stated intent.

Questions arose, for example, over whether 12 percent of an entire development — including a leasing office and other amenities at an apartment complex — would be subject to the calculation for an affordable housing requirement.

City staff assured meeting attendees that only the square footage of housing units themselves would be the basis for calculating the amount of required affordable housing or cash in lieu.

Other provisions of the ordinance allow for exemptions from the full 12 percent requirement for developments that include for-sale homes that are attainable for people making 60 percent of the area median income, or for-rent homes that people making 40 percent of area median income can afford.

If those less-expensive units are provided in a development, then its affordable housing obligation is reduced from 12 to 9 percent of the total market-rate square footage.

Kevin Mulshine, a partner in HMS Development, which is helping bring a tiny home village for homeless veterans to Longmont , advocated for changing the proposed ordinance so cash in lieu payments to the city could be made after the sale of a home is complete, rather than up front by the developer, which is currently written into the proposed rule.

Doing so, he said, would relieve developers from passing on the cash in lieu cost to builders of homes, who could be motivated to try building homes in the range deemed affordable to avoid paying cash in lieu when the sale is complete.

Re-writing the ordinance so it differentiates between developers — who prepare properties for construction through municipal platting processes — and home builders, and so it provides flexibility in which party can pay the fee would be helpful, Longmont Association of Realtors CEO Amy Aschenbrenner said.

The Longmont Association of Realtors opposed bringing an affordable housing mandate back to the city when the idea was first brought up, but has been involved in the development of the rule and supports the changes it has undergone.

The per-square-foot fee that was originally explored was $11, but the association’s leaders have been glad to see it decrease to the currently proposed $7.90.

“We are encouraged and hope that the city will implement a program that will work in the best interest of not only the Realtor community, but the builders and contractors, and most importantly, the residents who will ultimately participate in this program,“Aschenbrenner said. “We’re very happy to see that council did take into consideration the concerns that the contractors, builders and Realtor’s association have brought forth over the course of the last several months.”

The city seven years ago did away with a requirement for a match of 10 percent affordable units compared to new market rate units. But in the time since, the city hasn’t gained any affordable units under a new incentive program that allows developers to build more densely if they agree to build affordable homes, Longmont Housing and Community Investment Manager Kathy Fedler said earlier this year .

Sam Lounsberry: 303-473-1322, slounsberry@prairiemountainmedia.com and twitter.com/samlounz .

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