Agenda Packet 3-13-19 Work Session

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Housing Tools and Strategies Action Inventory 17 Recommended Actions B. Reduce Cost and Time Burden Action Explanation Level of Support Impact Does this action increase housing affordability, availability, and/or diversity A reduction in SDCs charged of any new development will negatively impact the City’s ability to generate adequate revenue in SDC Funds. key corridors versus single family developments elsewhere. Cost- 13 Adjust SDCs to reduce development costs for market-rate housing that are smaller and lower cost and have a lower impact on the City’s infrastructure needs. SDCs are calculated based on methodology set by the City (EC 7.700), and the methodology varies for each SDC type. For housing, a small house (i.e., an ADU or cottage cluster) pays the same SDC as a larger single-family detached house. For the smaller units, the SDCs make up a higher portion of total construction costs and limit the ability of builders to construct low-cost housing that is financially feasible. Most of these SDC fees have a direct nexus to the size of the structure being built. A smaller structure will utilize less dependency on stormwater, wastewater, and water services. A reduction in SDCs charged of any new development will negatively impact the City’s ability to generate adequate revenue in SDC Funds. The HTS WG identified 4 different options to reduce SDCs for smaller housing types. Of the 2 that had a final vote, support ranged from 61% to 64%. No one opposed 1 of those options and 7% opposed the other. Yes - Because smaller houses have a lower impact on city infrastructure, lowering the SDCs required for smaller housing types would lower the cost for a builder and increase the likelihood that more of these types of smaller homes would be built. The City recently updated the Transportation SDC, and the new fee structure offers a 100% reduction in transportation fees for secondary dwelling units, with an annual cap on the total allowed citywide. Cost- 14 Extend the MUPTE boundary to include key corridors. The MUPTE program exempts new multi-family housing developments from property taxes of the construction value for up to 10 years (taxes are still due on the land). The exemption lowers the operating costs for new developments in the early years of operation and can help shift a new development from not financially feasible to feasible. The program is currently available in the downtown, but its boundary has shifted over the HTS working group supported this option (65%) in the preliminary vote. Yes -The MUPTE lowers the new development’s operating costs, which could impact the project’s financial feasibility. The property continues to generate taxes for the land value during the exemption period. By expanding the boundary to include key corridors more sites become eligible for the tax exemption, which could shift more multi-family development projects to be financially feasible. March 13, 2019, Work Session - Item 2