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HomeMy WebLinkAboutMarch 30, 2023 Late Handout DATE: March 10, 2023 TO: Geoff Fruin, City Manager FROM: Tracy Hightshoe, Neighborhood & Development Services Director RE: 2022 Affordable Housing Action Plan Update In 2020, City Council directed staff to create an Affordable Housing Steering Committee to aid in the development of a new affordable housing plan that builds off the Affordable Housing Action Plan approved in 2016. After over a year of review and public input staff presented the 2022 Affordable Housing Acton Plan to City Council for their review at their May 3, 2022 work session. Following presentation of the plan, staff initiated implementation of the 29 action steps. The recommendations were categorized based on 1) existing policies and programs; 2) development regulations; and 3) programs and policies to implement if additional funding is made available based on household income. This memo provides an update about the status of the actions identified in the plan. Existing Policies and Programs Since May of 2022 several items under Existing Policies and Program have either been completed or are in progress. Some of the major accomplishments to date include: • The Affordable Housing Location Model was discontinued, and funding criteria revised to focus on incentivizing affordable housing in all neighborhoods. To date, three rental acquisition projects are moving forward that would have been ineligible for City funding under the former model. This change has helped projects that were behind schedule to move forward. • The HCDC process has been revised to provide greater transparency in funding. Both the Housing and Community Development Commission (HCDC) and Community Development staff score the applications received based on pre-approved funding criteria and funding recommendations are based on those scores. • An agreement was entered with Shelter House to implement the Risk Mitigation Fund to incentivize private landlords to rent to households or individuals with limited incomes, poor rental or credit histories, and/or a criminal background. Funds are anticipated to be available this spring and will cover excessive damages to a rental unit, lost rent or legal fees beyond those covered by a security deposit, up to $3,500. Eligibility for these funds will be limited to landlords renting to households receiving assistance through various programs such as Rapid Rehousing and Mainstream housing vouchers that serve extremely low income households. The agreement also provides for additional staffing to prevent evictions and increase housing stability for those at risk of homelessness in our community. • In January the first technical assistance meeting was held with area affordable housing providers to present information on what City resources are available to support their affordable housing efforts as well as introduce City staff who administer housing related programs and policies. A funding guide for developers was provided and the information placed on the City’s website. This free training will be provided annually. Development Regulations Many of the Affordable Housing Action Plan’s Development Regulation recommendations are in progress. The annual work plan for Urban Planning includes several prioritized items based on the Council’s Strategic Plan in addition to affordable housing related items. Recommendations provided through the City’s Invest Health collaboration grant with Logan Simpson Consultants addressing barriers in our zoning code that negatively impact housing supply will also be incorporated. • One of Logan Simpson’s recommendations focused on changes the City can make to increase flexibility in our zoning code that supports development of smaller residential units such as Accessory Dwelling Units (ADUs), duplexes, triplexes, fourplexes, and small apartment complexes if limited in building mass, bulk, and scale to that within the surrounding neighborhood. These changes align with Council’s Strategic Plan to encourage compact neighborhoods with diverse housing types and land uses. The consultant recommended allowing various building forms by right and focused on expanded flexibility in lot size and standards, setbacks, common space requirements, parking reductions, and allowance of ADUs in all residential zones. • The consultant also recommended increasing administrative reviews (staff reviews that do not go to the planning and zoning commission or City Council) and approvals of applications that meet minimum standards to facilitate development. Local development processes that make decisions on a case-by-case basis, rather than following consistent, transparent rules, increase the uncertainty and risk of development, which translates into higher costs. • The Southwest District Plan-Rohret Subarea was completed to facilitate form based code principles in greenfield areas of development. This area was prioritized as installation of utility infrastructure this construction season will open the area for development. • The City budgeted funds in FY24 for a consultant to update the Comprehensive Plan to achieve Council’s goals of greater density and a variety of housing types in our residential zones. A substantial Comprehensive Plan Amendment is a multi-year endeavor with a great deal of public engagement. Changes to the Comprehensive Plan may include consolidating or reducing district plans and substantially expanding the scope of allowed types of housing in single family residential zones. • Additional identified action steps may proceed without a Comprehensive Plan amendment. Urban Planning will proceed with the planning, research and drafting of code amendments that align with the current Comprehensive Plan such as the allowance of ADUs and duplexes under more circumstances in residential zones. Additional Funding Opportunities The City has received additional extraordinary funding through the American Rescue Plan Act (ARPA) and other federal funds focused on COVID impact recovery. As mentioned previously the City entered a three-year pilot program with Shelter House to expand our efforts to prevent eviction and increase housing stability for our most vulnerable residents. This includes funding to staff Coordinated Entry, housing navigation, eviction prevention and housing stabilization efforts. The pilot project will also restart the RentWise tenant education courses and begin administration of the Landlord Risk Mitigation program. The City anticipates allocating approximately $2.5 in ARPA funds, as well as other City funds reserved for affordable housing, to support large scale affordable housing projects yet to be identified. Staff has been in discussions with the Housing Trust Fund to administer this funding through future allocation cycles. A spring/summer work session is planned to obtain Council input to establish funding parameters. The City’s Housing Authority office is partnering with Horizons, A Family Service Alliance, to provide an Introduction to Homeownership Workshop for potential South District applicants and Housing Choice Voucher holders who are interested in converting their voucher to homeownership. Quarterly workshops were initially planned, but due to considerable interest sessions will be scheduled monthly until the demand has been met. The City will continue its partnership with GreenState Credit Union to provide downpayment assistance for low-income homebuyers. The program increases homeownership opportunities through more lenient underwriting and downpayment assistance for households under 80% median income that do not meet traditional financial parameters in an effort to close the racial homeownership gap in Iowa City. GreenState pays for homebuyer counseling through Horizons for their applicants. Pending a funding award through the FY24 CDBG/HOME allocation process, we will expand this partnership to Hills Bank to further serve income-qualified homebuyers. Additional lenders have contacted us to determine how they can also become a partner in this program. Our Housing Rehabilitation staff are partnering with Climate Action Outreach staff to incorporate energy efficiency improvements in the South District Affordable Homeownership Program homes to reduce energy costs for homebuyers under 80% of median income. Conclusion Since last May City staff have worked to complete many of the steps identified in the 2022 Affordable Housing Action Plan. The City will continue to work on those remaining action steps, while incorporating the goals and values of the Council’s Strategic Plan. Staff anticipates updating Council every six months on our progress. The table below highlights our ongoing activities and the status of each action step identified in the Affordable Housing Action Plan. Cc: Housing and Community Development Commission March 2023 Update - 2022 Affordable Housing Action Plan Summary of Recommendations Existing Policies and Programs Activity Status 1 Discontinue Affordable Housing Location Model and consider incentives or prioritization policies that encourages affordable housing in all neighborhoods. Resolution to discontinue model approved on 10-18-22 Completed 2 Require staff analysis and funding recommendations of CDBG/HOME housing applications before HCDC review.Initiated since FY23 CDBG/HOME recommendations Completed 3 Further define how CDBG/HOME funds will be allocated to improve transparency (e.g. full funding for top-rated applications, partial funding based on scores, etc.). Staff revised FY24 CDBG/HOME Application Guide to increase transparency. Criteria set, top rated applications to be considered for funding first. Funding based on scores.Completed 4 Allocate funds to the Affordable Housing Fund with a goal of a 3% annual increase. City staff and Council will consider the 3% increase annually. The FY24 budget does not contain an increase due to budget constraints and millions in one-time ARPA dollars that are expected to bolster affordable housing efforts in FY24. Ongoing 5 Affordable Housing Fund: Include the LIHTC reservation with the HTFJC allocation. If no LIHTC projects apply during the annual allocation or if an approved LIHTC project does not get IFA funding, allow the HTFJC to make those funds available for general applications. Changed process. If the LIHTC set-aside remains unallocated after 2nd allocation cycle, funding released for HTFJC general allocation. Completed 6 Implement the Risk Mitigation Fund. Agreement entered with Shelter House on 1-10-2023. Expect outreach and availability this spring. In progress 7 Enact policy that prioritizes partnerships with not-for-profit affordable housing developers/organizations to preserve affordable housing units in all housing programs. Staff revised FY24 CDBG/HOME Application Guide. CHDO and non-profit housing developers in good standing receive additional points in the scoring criteria. Criteria set, top rated applications are considered for funding first. Funding based on scores. Ongoing 8 Allow non-profit affordable housing developers to apply for additional funds to support ongoing operations (Opportunity Fund, HOME CHDO funds, etc.). Developed funding guide for developers. Placed Opportunity Fund and Emergent applications on website.Ongoing 9 Allow developers of affordable housing to apply for technical assistance needs from a variety of city programs, including but not limited to, the Affordable Housing Opportunity Fund and Climate Action grants. Developed funding guide for developers of affordable housing. Placed information on website. (www.icgov.org/affordablehousing). Applications for the Opportunity Fund and Emergent Funds now available online. Held first annual TA meeting with housing providers on 1/11/2023 to educate on City housing assistance opportunities. Ongoing 10 Encourage, but not mandate permanent affordable housing in new residential annexations. With future annexations explore partnerships and funding opportunities to secure permanent affordability when possible. Ongoing as opportunities arise. Ongoing 11 Increase efforts to educate all tenants about tenant rights and responsibilities and how to address housing issues. Fall 2022 partnered with UISG on magnets regarding where to go with leasing/housing/discrimination issues. Tips for First Time renters on website (www.icgov.org/rentertips) and promoted each fall to university students.Ongoing Development Regulations Applicable to both single and multi-family: 12 Encourage infill development flexibility by reducing the minimum amount of land eligible to apply for a planned overlay zoning.Contained in Urban Planning work plan. 13 Create form based code regulations for additional neighborhoods, focusing on growth areas first and then infill locations. South District-Complete, SW District -Rohret Subarea- Complete.Ongoing Applicable to Single Family: 14 Allow by right more types of dwelling units in single family zoning districts such as duplexes and zero-lot line structures in more locations. (Note: Comprehensive Plan amendment may be required. Possible consultant.) Duplex in SF zones- contained in Urban Planning work plan. ADUs under separate item. FY24 budget includes Comprehensive Plan update to achieve greater density in residential zones for various types of dwelling units. In progress 15 Increase the allowable number of bedrooms in duplex and zero-lot line structures in single family zoning districts.Contained in Urban Planning work plan. 16 Allow accessory dwelling units (ADUs) under more circumstances and in more locations.Currently drafting amendments to ADU standards.In progress Applicable to Multi Family: 17 Facilitate multi-family development by purchasing land to be developed.Contained in Urban Planning work plan. 18 Conduct a City initiated rezoning to allow multi-family housing or mixed use in areas supported by the Comprehensive Plan. (Note: Comprehensive Plan amendment may be quired. Possible consultant.)Contained in Urban Planning work plan. 19 Allow multi-family dwelling units with more than three bedrooms when required to meet local, state or federal affordable housing funding parameters such as the LIHTC program. Currently researching/analyzing bedroom restrictions in MF dwellings.In progress 0-30% Median Income Recommendations: 20 Seek proposals for a local landlord risk mitigation fund for hard to house tenants and secure funding to operationalize it annually. Encourage proposals that seek partnerships with regional entities (Johnson County, Coralville, and North Liberty) to expand housing options and landlord participation.Agreement entered with Shelter House on 1-10-2023. Expect outreach and availability this spring. In progress 21 Continue to support existing permanent supportive/Housing First projects, expanding into projects for families experiencing chronic homelessness. 22 Allocate ARPA funds and future City funds to support larger investments in affordable housing, prioritizing permanent affordability. Discussions with the Housing Trust Fund to seek proposals, review, allocate and fund large investments in affordable housing. City will set funding parameters (Summer 2023). 23 Increase funding for those improvements that improve energy efficiency, lower utility costs, supports aging in place initiatives and improves home safety. Provide grants where feasible. 31-60% Median Income Recommendations: 24 Provide additional funds to support security deposit assistance. 25 Support and expand eviction prevention programs. Agreement entered with Shelter House on 1-10-2023 for the Housing Stability Pilot Project with ARPA funds (3 year project). Ongoing 26 Provide additional grant funding for energy efficiency improvements that lower utility costs. Partnered with Climate Action Office to incorporate energy efficiency improvements into the South District homes as rehabilitation commences to benefit owners under 80% MI through reduced utility costs.Ongoing 27 Support downpayment assistance, including credit and financial counseling to potential homebuyers. Partnered with Horizons to provide Intro to Homeownership workshops for South District potential applicants and voucher holders. First class 3/8/2023. Will schedule monthly until demand is met.Ongoing 61-100% Median Income Recommendations: 28 Provide additional grant funding for energy efficiency improvements that lower utility costs. Partnered with Climate Action Office to incorporate energy efficiency improvements into the South District homes as rehabilitation commences to benefit owners under 80% MI through reduced utility costs.Ongoing 29 Support downpayment assistance, including credit and financial counseling to potential homebuyers. Partnered with GreenState Credit Union for CDBG/HOME downpayment assistance. Greenstate pays for homebuyer financial counseling through Horizons for their applicants. Ongoing If additional funds are allocated/reserved for affordable housing, recommendations based on household income: