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HomeMy WebLinkAboutItem 3C - Housing DispersalEUGENE CITY COUNCIL AGENDA ITEM SUMMARY Adoption of Resolution 4820 Repealing Resolution No. 4477 that Adopted the 1996 Housing Dispersal Policy, and Providing an Effective Date Meeting Date: January 10, 2005 Agenda Item Number: 3C Department: Planning and Development Staff Contact: Richie Weinman www. cl. eugene, or. us Contact Telephone Number: 682-5533 ISSUE STATEMENT The Housing Policy Board and Planning Commission recommend repealing the existing Housing Dispersal Policy and replacing it with new language added to the council-adopted HUD Consolidated Plan. BACKGROUND The City of Eugene first adopted a Housing Dispersal Policy approximately 36 years ago, in 1968. It was updated on three occasions, most recently in 1996, to amend policies and to incorporate the 1990 Census data. The Housing Policy Board took up the issue in October because if the current policy is retained, it must be updated with data from the 2000 census. The Planning Commission considered the Housing Policy Board's recommendations in November and unanimously forwarded this recommendation to the City Council. Summary of Housing Dispersal Policy Goals The Dispersal Policy applies to family housing and has three goals: 1) to provide more housing choices for low-income families by encouraging the development of affordable housing throughout all parts of the community; 2) to avoid concentrations of low-income families; and 3) to limit "Not In My Backyard" (NIMBY) opposition by ensuring that all neighborhoods have some affordable housing for families. The Dispersal Policy consists of two policies: Policy 1: The City encourages dispersal of low-income families, in subsidized housing, throughout the City. Public assistance for the construction of subsidized housing is discouraged in unsuitable areas. This policy may be balanced by the City Council against other City concerns and policies. [Unsuitable areas are defined in the document as census tract block groups that are either predominately low-income (over 50% of all families) or have significant concentrations of subsidized housing (over 20% of total housing units).] Policy 2: The City discourages subsidized housing developments that are larger than 60 units. This policy may be balanced by the City Council against other City concerns and policies. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc Basis of Recommendation Eugene is the only city in Oregon that has a dispersal policy. Additionally, staff has been unable to locate a similar policy in any United States city. Nevertheless, the concept of housing dispersal has merit and it can and should be retained by placing it in the adopted Consolidated Plan. The Consolidated Plan is approved by City Council and submitted to HUD. With language in the plan, its impact will be subject to review every five years. Repeal of the current free-standing policy is recommended for the following reasons: Reasons to Repeal Poficy 1 (Locational Limitation) · When the Dispersal Policy was created there were very few assisted housing units and there was not any significant dispersal throughout Eugene. Now, subsidized housing is located throughout the community. Furthermore, partially due to recent acquisitions from the school district, the City has a significant supply of landbanked sites for future housing, spread out in a variety of neighborhoods. · The need for low-income housing is acute and the land supply is limited. All opportunities to create new low-income housing should be on the table for examination. Dispersal Policy 1 limits site choice, and prevents the use of some of the most affordable sites. · Federal Low-Income Housing Tax Credits are a critical funding source for many subsidized housing projects. Due to changes in the 2000 census, most of Eugene is not eligible for increased funding. Ironically, the very areas that could get the substantial (33%) funding bonus are the areas excluded by the Housing Dispersal Policy. · The Housing Policy Board (HPB) includes three elected officials and provides an adequate filter to examine developments and their locations, and make recommendations prior to the allocation of subsidies. Most subsidies are offered after a Request for Proposal (RFP) process, which offers ample opportunities for evaluation. The Housing Dispersal Policy was adopted before either the HPB or the RFP process was created. In fact, the policy was adopted at a time when most affordable housing development was done by the federal government, with little City support. Now, little or no affordable housing for very low-income families is built without City assistance and HPB support. · The 1968 Community Goals Plan, adopted by the City Council, first proposed a dispersal policy - as an aspirational goal, not a prohibition. The plan stated: "Dispersal will, inevitably, be limited by certain considerations and must be tempered by common sense." The Housing Policy Board now provides that "common sense" filter when it makes a recommendation to the City Council for final action. · New low-income housing has proven to be an asset to its neighborhood when properly constructed and well maintained. HPB-supported projects historically are well-designed, constructed, maintained, and managed. Based on experience, new affordable housing developments enhance their neighborhoods. · The policy conflicts with other City goals that encourage greater density, especially in city-center neighborhoods. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc · The policy is potentially limiting in some neighborhoods, such as downtown, where there are few total housing units, but the existence of one or two subsidized developments potentially makes the area ineligible for future assistance - even though it is zoned for higher density housing. · The policy may be an impediment to federally mandated "Fair Housing" practices. The policy discriminates against families with children, by singling them out for limitations. Staff proposes that the policy to be included in the Consolidated Plan not be limited to families. Reasons to Repeal Pohcy 2 (Maximum Number Of Units) · As noted above, the HPB could exercise common sense and determine an appropriate number of units on a case-by-case basis. Given the scarcity of sites, and the size of the current landbank sites, it is not likely that many approved projects would end up being larger than the current 60- unit recommended maximum. · The 1968 Plan had no maximum number of units. The 1974 amendments added a maximum of 80 units. The 1996 amendments lowered that maximum to 60, but gave the council authority to balance the policy with other community goals. · There is typically an economy of scale associated with construction of a larger project. Given the needs and the financial constraints, opportunities to build more units for less money per unit should be considered. · One key to a successful project is on-site management. Smaller projects struggle to financially support on-site management. · As noted above, there are a limited number of good multi-family development sites. The unit limit prevents maximizing the use of those sites. · Other communities, including Portland, allow construction of much larger projects and they are not experiencing problems. For example, a current Portland project, New Columbia, will build 850 housing units in a new mixed-income neighborhood that will include home ownership, family rentals and elderly rentals. Staff research has not turned up a similar policy in any other city. · The State of Oregon does not have a history of problems associated with the large projects found in big cities. Most people have negative impressions based upon large projects in the east that include hundreds of housing units and that were poorly designed and maintained. An Argument in Favor of Retaining the Policy A member of the Housing Policy Board requested an opportunity to submit a minority opinion. Mr. Bob Doppelt believes we need a free standing dispersal policy as opposed to relying on comprehensive plans or RFPs. He believes that such a policy provides clarity of purpose for affordable housing developers. Mr. Doppelt also believes that over time there is a risk that low-income housing could become L:\CMO\2005 Council Agendas\M050110\S0501103C.doc concentrated in lower-income neighborhoods, if this is where land is cheaper. Mr. Doppelt did not object to eliminating Policy 2. RELATED CITY POLICIES The following Growth Management Policies conflict with concepts in the Housing Dispersal Policy: 1. Support the existing Eugene Urban Growth Boundary by taking actions to increase density and use existing land within the boundary more efficiently. 2. Encourage in-fill, mixed use, redevelopment, and higher density development. 3. Work cooperatively with metro-area partners (Springfield and Lane County) and other nearby cities to avoid urban sprawl and preserve the rural character in areas outside the urban growth boundaries. 4. Increase the density of new housing development while maintaining the character and livability of individual neighborhoods. 5. Promote the construction of affordable housing. COUNCIL OPTIONS The council may adopt the resolution or may vote to retain the current policy. If the current policy is retained, it will need to be amended, in the near future, to reflect current census data. CITY MANAGER'S RECOMMENDATION The City Manager recommends a repeal of the a free-standing Housing Dispersal Policy, effective when language is added to the HUD Consolidated Plan that encourages low-income housing to be dispersed throughout the City of Eugene; and further recommends that the council require the Housing Policy Board to report back in five years on all impacts of repealing the policy. SUGGESTED MOTION Move to adopt Resolution 4820 repealing Resolution No. 4477 that adopted the 1996 Housing Dispersal Policy, and providing an effective date. ATTACHMENTS A. Resolution B. Current Housing Dispersal Policy C. Minutes of October 4, 2004 Housing Policy Board discussion D. Minutes of November 15, 2004 Planning Commission discussion E. Map of current low-income family housing and landbank sites FOR MORE INFORMATION Staff Contact: Richie Weinman Telephone: 682-5533 Staff E-Mail: Richie.d.weinman~ci. eugene.or.us L:\CMO\2005 Council Agendas\M050110\S0501103C.doc ATTACHMENT A RESOLUTION NO. A RESOLUTION REPEALING RESOLUTION NO. 4477 THAT ADOPTED THE 1996 HOUSING DISPERSAL POLICY, AND PROVIDING AN EFFECTIVE DATE. The City Council of the City of Eugene finds that: A. The City of Eugene first adopted a Housing Dispersal Policy ("the Policy") in 1968. The Policy has been updated on three occasions since that time, most recently by Resolution No. 4477 on January 24, 1996. B. The goals of the Policy are to provide more housing choices for low income families by encouraging the development of affordable housing throughout all parts of the community, to avoid concentrations of low income families, and to limit NIMBY opposition by ensuring that all neighborhoods have some affordable housing. Due to the many changes since 1968 in housing needs, land supply, funding issues, improved housing polices, changes in City goals, and limitations in the number of units developed, the Housing Policy Board recommended that housing dispersal policies should be incorporated into the Consolidated Plan for Housing and Community Development Needs (the "Consolidated Plan"), rather than being retained as a free-standing policy. C. Based on the Housing Policy Board's recommendation, on November 15, 2004, the Planning Commission unanimously supported repealing Resolution No. 4477, and incorporating housing dispersal policies into the Consolidated Plan. Upon approval of the Consolidated Plan by the City Council it will be submitted to the U.S. Department of Housing and Urban Development. NOW, THEREFORE, based upon the above findings, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: Section 1. Resolution No. 4477 adopting the 1996 Housing Dispersal Policy is hereby repealed, effective upon addition of housing dispersal policies to the Consolidated Plan for Housing and Community Development Needs and its approval by the City Council. Section 2. Housing dispersal policies that encourage low-income housing to be dispersed throughout the City of Eugene shall be added to the Consolidated Plan for Housing and Community Development Needs. After the City Council's approval of the Consolidated Plan it shall be submitted to the U.S. Department of Housing and Urban Development. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc Section 3. The City's Housing Policy Board shall report to the City Council in five years of the effective date of this Resolution to give an account of the impact of the repeal of the 1996 Housing Dispersal Policy. Section 4. Section 2 of this Resolution shall become effective immediately upon its adoption. This Resolution in its entirety, including the repeal of Resolution No. 4477 and the 1996 Housing Dispersal Policy adopted therein, shall become effective upon the date the City Council approves the Consolidated Plan for Housing and Community Development Needs containing the housing dispersal policies as directed in Section 2 of this Resolution. The foregoing Resolution adopted the day of January, 2005. City Recorder L:\CMO\2005 Council Agendas\M050110\S0501103C.doc · Current Housing Dispersal Policy Attachment B 1'996 HOUSI.NG DISPERSAL 'POLICY. · INTRODUCTION The Housing Dispersal Policy'provides guidelines by which the City of Eugene can evaluate whether aspeclflc housing development.is furthering the goal of.dispersal of Iow-income family rental units throughout the city. The policy seeks to accomplish this goal by discouraging the.placement of additional subsidized housing in areas characterized by concentrations of either subsidized housing or Iow-income families. The definitions below describe how these concentrations are measured and geographic · areas defined. Currently, there are no areas characterized by concentrations of Iow- income families as a result of too much subsidized hoUSing. Currently there are. ten "block groups that have concentrations of Iow-income.families at a rate (defined below) that makes those.block groups "unsuitable areas" for city 'assistance. PURPOSE STATEMENTS The purposes of the housing dispersal policy are to: 1. Maximize housing choice for Iow-income families who have traditionally been limited in the location of housing they could .afford, 2. Discourage the creation of large areas characterized by Iow-income families. 3. Encourage the creation 'of additional housing integrated throughout the community fOr Iow-income families. DEFINITIONS Block Grou0: Block Groups are clusters of individual blocks, which ar~subdivisiens.of the census tracts, established by the Census Bureau in 1990. -. Construction: Includes only new construction of family rental housing. Construction shall not' include housing rehabilitation or housing acquisition in which the current .occupants remain or have a right to remain. Dispersal: Distribution of additional subsidized family housing throughout the city while maintaining and preserving the existing housing. Home..Qwnership: Home ownership refers to units that shall be owned by the residents either individually Or COOperatively such as into 0ps or community land trusts. Home ownership shall also include lease-to-own units in whiCh residents have the exclusive option to buy within five years. Low-Income Families: A Iow-income family'consists· of at ieaSt one adUlt and one child, and has an income at 50% of median income or.below for the area,.as determined.by the U.S. 'Department of Housing and Urban DevelopmenL Public Assistance: This includes, but is not limited to: land banking, land write downs, financial assistance, financing, and tax abatements for the construction of subsidized housing for Iow- income families through local govemments including the City of Eugene, Lane County and the Housing Authority. Student housing: Institutionally owned housing excluSively for use by students and ·their families. SubsidiZed Housing: Subsidized housing is' permanent newly constructed rental housing, for Iow-income families,-which has, received public assistance. Subsidized housing shall not include student housing, home ownership, or acquisition of rental housing with the intent to convert to home ownership within five years. 'Unsuitable Areas:. Based upon 1990 census data, Unsuitable areas are block groups designated On the accompanying adopted map; that have an adequate share of Subsidized housing or of Iow income families. They are designated as unsuitable because they are: a) block groups in which subsidized houSing units equal 20%.or more of the ~ total number of housing units within that block group, and/or b) block groups in which more than 50% of all families have incomes at or belOw 50% of the median income~ An area shall not be considered unsuitable due to the presence of student housing. Student housing units shall not be counted when determining unsuitable areas. Student housing .shall be allowed in all block groups. DISPERSAL pOLICIES %-- POLICY 1 ' .. The City encourages dispersal of Iow-income families, in subsidized houSing, throughout the city. Public assistance for the construction of subsidized housing is discouraged in unsuitable areas. This policy may be balanced by the City Oouncil against other City concerns and ~policies. pOLICY 2 The City discourages subsidized housing developments of more than 60 units. This policy may be balanced by the City Council against other City concerns and policies. TABLE A: SUBSIDIZED HOUSING BY TRACT AND .BLOCK GROUP EUGENE - 1990 CENSUS 4% ~~~ 3101 2~ ~ 4~ 9% ........... ~ . ........... 4~ 4% Tab~ A ~en~ subsid~ housing un~ as a ~r~n~e of to~l housing un~, by ~nsus ~ and bl~ gmS. ~e da~ in Table A sho~ ~at ~em am no unsu~ble areas due to ~e presence of su~id~ housing development. So~ ~ ~ housing develop~ have ~o ~mte in~ lim~ ~r admiss~n. ~e buiE under ~e HUD 2~ p~mm a~pt ~mili~ at 80% of ~ian in~ ~r ~e ar~. ~ of ~e~ devebp~n~ has a ~in ~n~ge ~at am HUD S~on 8 rant subsid~ and a~pt ~mili~ at 50% of m~bn or ~1~. Under ~e ~lumn ~ad~ '~ of un~," ~e num~ to ~e ~ff ~ ~e to~l numar of un~ in ~e development and ~e numar to ~e dght is ~e numar of un~ ~at am S~on 8, E ~is is a m~ in~ development ~e 236 develop~n~ am: ~llage Oa~, Foud~n Pin~, Fi~ ~llage and Ha~ome Pa~ Housing develop~n~ ~ on~ one nu~r am S~te flnan~ and all ~e un~ am subsid~ wi~ ~e S~on 8 p~mm. Tenan~ in ~ese develop~n~ must have in~mes at 50% of m~ian or ~1~. S~te finan~S~on 8 developmen~ am: ~bie ~ne, CapEol Manor and Cobu~ Rd. ~a~en~. Two housing developmen~ were built under ~e HUD S~on ~1 d-3 BMIR pr~mm. ~ey am C~ ~ew ~n~ and Oa~ Manor. ~ i~ li~ ~r ~e un~ is 95% of ~ian in.me in ~e a~. Ci~ ~ew ~a~n~ were not indud~ for ~is r~n; h~ever ~e 57 un~ at ~e Oa~ Manor ~at am also s~on 8 un~ were include. ~e ~ ~lafion b ~e numar of subs~B~ un~ ~at ~e ~o~ at ~% of in~ or ~low as a pe~nt of to~! ~milies in ~at bl~ group. TABLE B: UNSUITABLE AREAS BY CENSUS TRACT AND BLOCK GROUPS - 1990 CENSUS 500 100% 40o 75.95% 300 100% 400 64% 600 58.33% 100 63.43% 100 50.45% 400 75.94% 200 54% 300 79.49% Table B identifies census lmct block groups in which mom than 50% of all families have incomes at or below 50% of the median income (Iow-income families). The data in Table B shows that these ten block group are unsuitable areas due to the number of Iow-income families. - C:~AUSER~.,OUNCIL~DISPFINg.CC Housing Dispersal Policy Eligibility Map 1990 Census Shaded Areas show "Unsuitable Block Groups" Tra~s' ~.. and mups 6 " g..77, A ? SOL ON OoPa'mG '19 6 HOUSING DISP .P'SAL POLICY AND REPEALING RESOLUTION NO. 4195, The City coUncil of the City of Eugene f'mds 'that: A. The City Council, acting upon the recommendation of the City's Planning Committee and testimony of members of the public, adopted the 1990 Interim Housing Dispersal Policy Plan by Resolution No. 4195 on IUne 25, 1990, as the housing dispersal policy for the City Of Eugene. B. The 1990 Interim Housing Dispersal Policy Plan was based on 1980 census data, and provided that it should remain in effect until adoption of a more permanent policy, created after consideration of the 1990 census data. C. In response to direction from the City CoUncil to update the Interim Housing Dispersal Policy Plan, the Planning Commission held discussions on the proposed update six times between August 7 and December 11, 1995, including two public heatings. As a result of those hearings the Planning Commission h~s recommended adoption of a revised Housing Dispersal Policy that (a) is aspirafional, as opposed to prescriptive in nature; Co) that separates the housing dispersal policy from the land use application process; and (c) updates evaluation criteria and the map from 1980 to 1990 census data, as more particularly set forth in the Copy of the 1996 Housing Dispersal Policy amched as Exhibit A hereto and incorporated herein by reference. D. On January 22, 1995, the City CoUncil held a public heating and considered the recommendation of the Planning Commission and testimony of members of the public.' Now, therefore, based upon the above findings, and the testimony presented at the above hearing, BE IT RESOLVED BY THE CITY COUNCIL OF THE CIT~ OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: S~/i.OllA. Resolution No. 4195, and any other resolution in conflict herewith is hereby repealed.. ~Ig.911_~. The 1996 Housing Dispersal Policy and attached map is hereby adopted as the housing dispersal policy for the City of Eugene. The foregoing Resolution adopted th,~n,~d day of January, 1996. Resolution ATTACHMENT C Minutes: Housing Policy Board - October 4, 2004 IV. City of Eugene Housing Dispersal Policy Mr. Weinman recapped the housing dispersal policy for Eugene, noting it was further delineated in the memorandum in HPB agenda packets by the same title as the agenda heading. He asked members to consider whether the policy still made sense in 2004. He demonstrated with the aid of a map that affordable housing projects were well-dispersed in the City. He related that he had checked around the State and found that no other cities had such a policy. He also sought out cities where larger projects with families were located or that had problems with such projects. He found no evidence of problems with such projects. He pointed out that an economy of scale came from building larger projects, the need for low-income housing was acute, and land supply was limited. He noted that the HPB did not exist when the policy was put into place. Given that the HPB acted as a filter for such projects, he thought the policy to be no longer necessary and somewhat redundant. He recommended looking at housing dispersal aspirationally and not from strict policy. Mr. Weinman underscored that the kind of projects that were coming out of the providers the HPB worked with were assets to any neighborhood and had not caused problems. He reiterated that the policy had recently prevented a project from being supported for development. He questioned the 60-unit maximum, as there was an economy of scale to be found with larger projects, and opposed limits to housing for families, calling it discriminatory. Mr. VanLandingham noted that both aspects of the policy could be overridden by the City Council. He discussed some of the history behind the policy, adding that it did address the concerns of those who did not want a project in their back yard, by building in every area of the City. He thought the argument could be made that the projects that came out of the HPB were improvements to neighborhoods. Ms. Cuellar remarked that not all low income projects were built on land bank sites. She averred that providers should be able to pencil out expenses in advance. Without knowing whether the City Council would grant an exception a developer could not risk planning for housing with greater than 60 units. Ms. Hadley did not oppose elimination of the 60-unit limit, but felt some criteria regarding dispersal should remain. She noted that land was cheap in the Trainsong neighborhood and wondered if this area would end up with a larger abundance of low-income housing than other areas. Mr. Pap6 also felt the 60-unit limit had outlived its usefulness and could result in limitations placed on a good mixed use project. In response to a question from Mr. Cabell, Mr. Weinman stated that about ten years ago the limit had been changed from a ;;hard" 80 to a more flexible 60. Mr. VanLandingham related that the Planning Commission had made the recommendation to change it. Ms. Cuellar stressed that the goal was to develop low income housing as long as it did not ;;cheapen the neighborhood." Ms. Tate recalled that the policy had hampered the development of the Apple Orchard project. She recommended that the HPB set up guidelines for the providers and not hard and fast policies. Mr. McCoy thought the housing dispersal policy prevented more efficient building projects. He foresaw the day in which some bond funding could be used for such projects and predicted the policy would effectively prevent larger projects. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc Mr. Doppelt expressed discomfort at eliminating the policy altogether. He thought the Board should discuss how to make the policy easier to work with as there were serious risks and it was more difficult to back up and do things again. Ms. Katie believed that some of the "unsuitable block groups" were eligible for the increased funds in the 9 percent tax credit because they are in the "difficult to develop" block groups. She explained that the dispersal policy prevented housing in the very block groups where a bonus was available. Mr. Weinman recommended that the concept of a Housing Dispersal Policy be folded into the Consolidated Plan rather than as a stand alone policy. He thought it possible to say that the HPB supported the concept but found the policy itself limiting. Mr. Cabell surmised that everyone was opposed to labeling areas unsuitable block groups. He was in favor of dropping the limitation on the number of units but felt less sure about the limits placed on family housing. He noted that family projects, such as the Maplewood project, that grew beyond a certain size had proven to create some problems. Mr. McCoy thought problems with the Maplewood Meadows project, a development of 38 units, were a function of its being comprised of three and four bedroom units. Mr. VanLandingham added that family projects with two bedroom units and less children experienced less problems. Ms. Cuellar supported elimination of the policy. She said, as a bare minimum, any of the projects should be allowed to build to the density that the code allowed. Mr. Cabell asked what the staff proposal regarding the number of units was. Mr. Weinman replied that he was recommending elimination of the entire policy. He supported letting the HPB keep track of projects. Mr. Cabell expressed concern that there should be some language regarding project size. Mr. Weinman responded that there were numerous examples of projects larger than 60 or 80 units of family housing all over the country that were functioning "just fine." Mr. Papd moved to recommend to the City Council the elimination of the Housing Dispersal Policy. Ms. Cuellar provided the second. Mr. Pitts raised the concern that elimination of the policy altogether might create a situation wherein the Board would not have the right to say no to a project. He asked how, as a policy board, the HPB would support its argument. Mr. Weinman replied that, for example, tax exemptions were approved by the City Council on a case by case basis. Mr. Doppelt likened elimination of the policy to "eviscerating the tools we have." He felt the policy should be tweaked and then developers should apply for exemptions when they need to. Mr. VanLandingham responded that it seemed that it was only a tool to stop something and not to make something happen. He stressed that the HPB controlled the requests for proposals (RFPs) and this was a large measure of control. Ms. Cuellar felt it was the role of the HPB to help needed housing get built. She said the philosophical difference was whether the HPB wanted to keep the policy so that projects could be stopped or whether the HPB wanted to remove the limitations and put policies in effect to help projects go forward. Mr. VanLandingham underscored the importance of conveying the message to the council clearly. He opined the HPB should continue to work hard to maintain its reputation for representing its policy recommendations and issues effectively. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc The motion passed, 4:2; Mr. Doppelt and Ms. Hadley voting no. Ms. Hadley requested that a minority report be submitted with the recommendation. Mr. Doppelt agreed, adding that he wanted it to be clear that they supported the idea of changing the policy, but not eliminating it. Mr. VanLandingham suggested that Mr. Doppelt and Ms. Hadley each submit something to Mr. Weinman. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc ATTACHMENT D Planning Commission: - November 15, 2004 (draft minutes) IV. DISCUSSION: HOUSING DISPERSAL POLICY Mr. Weinman provided a brief history of the Housing Dispersal Policy (HDP). He reported that the HDP was adopted by the City of Eugene in 1968 as a part of the first community goals conference. He added that it had been updated on three occasions, most recently in 1996 to make policy changed d to incorporate the 1990 census data. He said the issue came up recently in conjunction with the 2000 census, noting the policy must be updated if it was to be retained. Mr. Weinman said the HDP was the only policy of its kind in Oregon and quite possibly the United States. Referring to a map showing affordable housing sites, he said the policy had served the city well over the years in that housing dispersal had been significantly accomplished. Mr. Weinman said the HDP consisted of two policies: · Policy 1 discouraged city assistance for new rental family housing in census tract block groups that were either predominantly low-income (over 50 percent of all families) or have significant concentrations of subsidized housing (over 20 percent of total housing units). · Policy 2 discouraged city assistance for new rental family housing developments that were larger than 60 units. The City Council could balance the two policies against other city concerns, and allow city assistance to new development that would otherwise violate the HDP. Mr. Weinman reported that the Housing Policy Board (HBP), an intergovernmental group that advised local governments on low-income housing, had recommended that the policy be repealed. Mr. Weinman said he was bringing the HPB recommendation to the Planning Commission because the Planning Commission had provided input on the 1996 HDP update. Mr. Weinman said there were a number of reasons, several of which he cited, for repealing the policy, as noted in the Agenda Item Summary. · When the HDP was created there were very few assisted housing units and there was no significant dispersal throughout Eugene. Subsidized housing was now located throughout the community, and the L:\CMO\2005 Council Agendas\M050110\S0501103C.doc City had a supply of landbanked sites for future housing distributed in a variety of neighborhoods. · The need for low-income housing was acute and the land supply was limited. All opportunities to create new low-income housing should be on the table for examination. Dispersal Policy 1 actually limited site choice, and prevented use of some of the most affordable sites. · Federal Low Income Housing Tax Credits were a critical funding source for many subsidized housing projects. Due to changes since the 2000 census, most of Eugene was not eligible for increased funding. Ironically, the very areas that were tax credit eligible were the areas excluded by the HDP. · The HPB provided an adequate filter to examine developments and their locations and to make recommendations prior to subsidy allocation. Most subsidies were offered after a Request for Proposal (RFP) process that offered ample opportunities for evaluation. The HDP, put into place before the HPB or the RFP process were created, was adopted at a time when most affordable housing development was done by the federal government, with little city support. Now, little affordable housing for very low- income families was built without city assistance and HPB support. · The 1968 Community Goals Plan, adopted by the City Council, first proposed a dispersal policy as an aspirational goal, not a prohibition. The plan stated: "Dispersal will, inevitably, be limited by certain considerations and must be tempered by common sense." Hopefully, that is where the HPB comes in. · New low-income housing has generally proven to be an asset to its neighborhood when properly constructed and well maintained. HPB supported projects historically were well-designed, constructed, maintained, and managed. Based on experience, new affordable housing developments enhance their neighborhoods. · The policy conflicted with other city goals that encouraged greater density, especially in city-center neighborhoods. · The policy was potentially limiting in some neighborhoods, such as downtown, where there were few total housing units, but where the existence of one or two subsidized developments made the area ineligible for future assistance - even though it was zoned for higher density housing. · The policy may be an impediment to Fair Housing law, in that the policy discriminated against families with children, by singling them out for limitations. Mr. Weinman said there was a minority opinion on the HPB in favor of retaining the policy, citing several reasons: · If it was not broken it does not need to be fixed. · It was a tool that should be held on to. · Over time there was a risk that there would be less dispersal without the policy. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc Mr. Weinman stated that staff was proposing that the concept of housing dispersal had merit and it should be incorporated into the City Council adopted Consolidated Plan that was submitted to the United States Department of Housing and Urban Development (HUD). Referring to the October 4, 2004 HPB minutes, Ms. Levis observed that Ms. Cuellar and Mr. Van Landingham questioned whether the HDP was a tool to stop projects or enable projects to move forward. She added that the policy had become outdated and had been replaced with more effective tools including the HPB. She supported the elimination of the HDP as proposed by the HBP. Mr. Lawless opined that he liked the idea of keeping the spirit of the policy, and supported folding it into another policy, noting that the results of the HDP over more than 20 years had been very successful. He felt confident this was the right action. Mr. Belcher asked what was the percentage of the substantial tax credit bonus in eligible areas. Mr. Weinman said it was one third more money. In response to a question from Mr. Belcher, Mr. Weinman stated that this IRS program provided a significant tax shelter for investors involved with low-income housing. Mr. Weinman added that the State of Oregon allocated tax credits through a competitive process for projects. This creates an infusion of capital into low-income housing projects that allow for lower rent payments by tenants. In response to a question from Mr. Belcher regarding concentration of low-income housing, Mr. Weinman replied that repeal of the policy would potentially allow some housing to be built in neighborhoods such as Whiteaker and Trainsong, although there were landbanked sites all over Eugene. Mr. Weinman added that some neighborhoods would be enhanced by new investment in rental housing. Mr. Belcher said he agreed with Mr. Dopplet, a member of the HPB, that the HDP was a good policy that had served the city well, and should be retained. Anecdotally, he added that as a member of the City Club racism sub-committee, he had participated in discussions about the unfortunate leafleting that recently occurred in the Churchill neighborhood. He said some members of the sub-committee felt that the high densities of R-3/R-4 housing in the neighborhood contributed to development of those types of attitudes. He added that George Russell, Superintendent of the Eugene School District 4-J, recently spoke to the City Club regarding issues of economic segregation in the school district. Mr. Russell said it was beginning to look like unintentional segregation by race was occurring in the community. Mr. Belcher emphasized the need for the Planning Commission to seek ways to help the community remain heterogeneous. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc Mr. Duncan said he understood that the nature of the tax credit program resulted in large projects due to the complexity of the tax credit process. He added that there was not sufficient land in the Whiteaker or Trainsong neighborhoods that could be used for larger projects. He noted that the literature indicated the tax credits had created a positive impact in some low-income projects, due to requirements that units be well constructed and had moved away from cinder block buildings. In response to a question from Ms. Colbath, Mr. Weinman explained that the shaded area on the Housing Dispersal Policy Eligibility Map 1990 Census indicated block groups that were not eligible for family subsidized housing due to existing concentrations. He added that Mr. Doppelt supported the notion of not having a six unit limit in the policy. Ms. Colbath supported low-income housing that was integrated into the neighborhoods. She asked if the Walnut Grove would have been built without the HDP. Mr. Weinman explained that there was a lot of pressure to develop low-income housing in south Eugene that was certainly reinforced by the HDP. Ms. Colbath expressed concern that there would not be enough teeth in a policy that was folded into the Consolidated Plan. Mr. Weinman explained the existing HDP precluded low-income housing development in some neighborhoods, citing the recent purchase of several Eugene School District 4-J properties for landbanking sites. He said the City did not purchase Whiteaker School because the HDP prohibited development of additional low-income housing in that neighborhood. He said some neighbors argued that it would have been a positive move to have new, higher quality, low-income rental housing in the neighborhood. In response to Mr. Belcher's concerns, Mr. Weinman suggested that the Planning Commission motion could contain specific language regarding dispersal of low-income housing throughout the community for inclusion in the Consolidated Plan. Ms. Levis remarked that the HPB did not exist when the HDP was developed. She said things had changed and an outmoded plan prevented the city from doing good things. Mr. Lawless expressed concern that a viable project would be turned down due to the current HDP, adding that he supported eliminating the specific barriers to desired development. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc In response to a concern expressed by Mr. Belcher, Mr. Duncan observed that land costs generally represented approximately one percent of project costs, noting that the value of real estate in the community was growing rampantly. Mr. Duncan said he did not want to have a policy that precluded purchase of available land. Mr. Belcher saw both sides of the argument compelling, and he wanted to recommend to the City Council that the HPB report to the City Council in five years on the effectiveness of eliminating the HDP as a stand alone policy, while incorporating the concept and intent into The Consolidated Plan. Mr. Belcher, seconded by Ms. Levis, moved to recommend to the Eugene City Council (1) the repeal of a free-standing Housing Dispersal Policy, while adding language in the HUD Consolidated Plan that encouraged low-income housing dispersal throughout the City of Eugene; and (2) recommend that the City Council require the Housing Policy Board to report back in five years on all impacts of repealing the policy. The motion passed unanimously, 5:0. L:\CMO\2005 Council Agendas\M050110\S0501103C.doc ATTACHMENT E Map of current low-income family housing and landbank sites A1 I,~:~d~! mer'd B ! City of Eugeae Fa~mi;ly H~t~g Bevel,~pmenl:~ ,C,e,~s~s L:\CMO\2005 Council Agendas\M050110\S0501103C.doc