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Home My WebLink About09-20-2004 IOWA CITY SCATTERED SITE HOUSING TASKFORCE MEETING AGENDA 20 September 2004 City Hall, Lobby Conference Room 5:00 p.m. 1. Call to Order 2. Approval of Minutes from August 16,2004 and August 30, 2004 3. Presentation by Iowa Association of Realtors 4. Presentation by Iowa City Neighborhood Council 5. Update on October 4,2004 Meeting - Public Hearing 6. Adjournment MINUTES SCATTERED SITE HOUSING TASKFORCE AUGUST 30,2004 CITY HALL, LOBBY CONFERENCE ROOM MEMBERS PRESENT: Don Anciaux, Jerry Anthony, Darlene Clausen, Matthew Hayek, Jan Leff, Jan Peterson, Sally Stutsman MEMBERS ABSENT: Joan Vandenberg STAFF PRESENT: Tracy Hightshoe, Steve Rackis OTHERS PRESENT: Phil Jones, Von Stange (Residence Services, UI) Steve Gordon, Dan Smith, Joan Tiemeyer (Iowa City Homebuilders Assoc.) Heather MacDonald (Professor, Urban & Regional Planning, UI) CALL TO ORDER: Chairperson Hayek called the meeting to order at 5:10 pm. Approval of Auaust 2. 2004 and AUQust 16. 2004 Minutes: MOTION: A motion was made by Anciaux, seconded by Stutsman to approve the August 2 Minutes with corrections of typographical errors. Motion carried 7-0. Hayek requested deferral of approval of August 16 Minutes, as he did not receive them. All agreed. Stutsman noted that alternative Minute format from August 16 was easier to read and preferable to the previous format. Presentation bv University of Iowa Residence Services Phil Jones and Von Stange of University of Iowa (UI) Residence Services presented data on students housed by the University. Stange reported that residence halls have been at or over capacity for approximately the last 10 years. Residence halls house mostly freshman and sophomores, and the UI is committed to housing all incoming freshman to assist with the transition to college life. UI also maintains 694 - 2 BR apartment units on the west side of campus, with 60-65% of the occupants being married. Hayek: What have been recent changes and trends in student housing, and how does enrollment affect on-campus housing? Also, what are percentages of students in UI housing versus the private market? What impact do the students have on the private market? Stange reported that UI houses approximately 90% of the freshman class and 27% of the sophomore class. Numbers drop drastically for upperclassmen and graduate students. Percentage of freshman housed is consistent with other comparable universities, and has been consistent over past years. Jones estimated UI enrollment at 29,000 to 30,000, including graduate students. Jones predicted that the current housing status would remain the same unless changes occur in overall enrollment of the University. Jones further reported that UI enrollment is unlikely to increase significantly in the foreseeable future, as no increase in classroom space is occurring or planned. UI currently houses over 5,600 students in the residence halls, comprised mostly of freshmen and sophomores. Upperclassmen in residence halls are generally in Resident Advisor (RA) positions. The UI is working to reduce density in residence halls by reducing the number of triple rooms. However, all entering students are guaranteed housing, so the number of triple rooms varies. UI considers increases in capacity with concern directed towards educational needs. UI does not have any designated grad student Scattered Site Housing Taskforce Minutes August30,2004 Page 2 residence halls, but apartments are available for married students, where priority is given to students with dependents. A large number of students living in these apartments are from foreign countries. Plans are currently underway for changes and new residence halls, including studies overseen by Stange to determine the ideal size of additional residence halls. Residence halls are moving towards single or suite-style living arrangements. Long-term plans at UI may lead to housing for as many as 6,500 students. Anciaux asked for the number of freshmen and sophomores currently in residence halls. Jones answered about 4,000 freshmen and 2,300 sophomores. Hayek: Are numbers stable or expected to change, and has a decrease in number of triple rooms affected residence halls? Jones reiterated that there has been no increase in classroom space, so no increase in enrollment is expected. Graduation classes are gradually decreasing over the past decade, though Ul's market share has stabilized. The number of triple rooms varies, and has increased in past few years in order to accommodate incoming freshmen classes. Hayek: What is the planned capacity of the new west side residence hall? Jones said that the needs are still being assessed. Jones noted that the original plans were for 500 beds, but it may be anywhere from 250 to 500. He also said that the new space would be replacing some lost capacity due to a planned renovation of Slater Hall. Stange added that the timeline for increasing overall residence hall capacity is long, as the renovation of current facilities will take several years. Hayek: Were numbers of students housed prior to the 1970's significantly different than current numbers, or have they been consistent? Jones reported that there was a surge in numbers in the mid-1970's, but nothing significant since. A large building boom in residence halls in 1960's, and during recent years due to the renovation of older space. Unless universities are increasing enrollment size, there is little reason to increase housing capacity. Hayek inquired about the affordability of private market units for students and whether there has been any change in the ability of an average student to rent in Iowa City. Jones reported that it appears to be easier this year, as he has seen an increase in listings through the Housing Clearinghouse. He said that the market seems to be softer right now as incentives are being offered by apartments in order to fill their units. Jones also noted that market rates do not affect UI housing rates, as residence hall rates are determined by costs. No State money is allocated for residence services, so residence halls must cover all operational costs, including food, labor, and renovations. Stutsman: Does UI do outreach to help students, such as low-income or foreign, to find housing? Jones replied that foreign students typically live in University Apartments, and residence halls are the choice of lower income students. Jones said the reality is that it is less expensive to live in residence hall with a meal plan than in an apartment. Hayek: Have there been changes in the affluence of students in past decade, thereby allowing students to bypass less expensive university housing? Jones said that housing near the university has responded to student demands, by improving the available housing and then renting at higher rates. Jones said that some students could pay $500 to $600 per person, and these higher end units typically few vacancies. Jones recommended consulting the landlords for more detailed information. Anciaux: What does the University pay the school district for busing? Stange reported that the University pays for busing to and from school for children from University Apartments, plus a subsidy to the school district to cover tuition costs. Strange said that this subsidy payment is essentially in lieu of property taxes. He said that last year the university paid $200,000 for busing, which varies from year to year, and is based on the number of students in the ICCSD. Strange noted that the ICCSD students range from in age from elementary to high school. Hayek: Are University Apartments on west side of town the only apartments? Jones confirmed that those are the only apartments supported by the University. The Parklawn building was recently converted to housing for persons living alone. Hayek: What are the plans for University Apartments? Jones said that all plans are on hold and the capacity will be maintained at its current level, and the units will be kept safe and clean. He said that studies are being done to determine what would be best improvements for that complex, but any significant improvements would require raising the rent substantially or obtaining a large University subsidy. Scattered Site Housing Taskforce Minutes August30,2004 Page 3 Jones also confirmed that based on numbers of students living in residence halls, and accounting for numbers who live at home during school, between 24,000 to 25,000 students do not live in university housing. Hayek: Are statistics on housing website correct? If the numbers are correct it is estimated that 75% of students live in housing provided by the private market live in Iowa City, and 25% live in Coralville. Jones did not know the proportion, nor did he have statistics on numbers of students living in the private market or the number of those who have children. Presentation bv Iowa Citv Area Homebuilders Association Smith began by thanking taskforce for inviting them to speak at the meeting, and stating that homebuilders' goal is to build housing for all income levels. Current trends in the market are highlighted by an increased interest in condos, as it is difficult for mid-range professionals to afford single-family homes. Gordon added that it is more difficult to build affordable single-family homes, as land values and raw material costs continue to rise. Condos and town homes are more affordable and still give pride of ownership. Stutsman: Is there an increased demand for condos, or are multi-unit developments labeled as condos after they are built, in order to capitalize on the market trends and tax assessment laws? Also, who tends to live in condos? Gordon said there is currently a large demand for that type of housing. Developers base decisions to sell or rent multi-unit buildings on a number of factors, such as demand and margins. Some seniors live in condos, as well as grad students and residents, but majority are young graduated singles or couples without children. Gordon's condos are located in the Saddlebrook subdivision on southeast side of Iowa City. Smith added that some people like condo living and are taking advantage of low interest rates. The market is very soft and the market is "churning." One barrier to building is the development approval process, specifically zoning, the design review process, and the approval timeline. The timeline varies, depending on various factors, from weeks to over a year in process, and all delays, reviews, and submittals have costs to the developers. Stutsman: Is there interest in the area for tract homes? Also, are developers interested mainly in higher- incoming housing? Smith replied that there is a correlation between amenities and costs. All developing is speculative, and most people try to fit into a certain niche in the market in order to sell developments and cover their overhead. Gordon also noted that there are all kinds of development going on in the area, both low and high income. Zoning is an issue that impacts that. If a developer has an idea that fits into an existing zone, the process is clearly laid out, but if the development doesn't fit into the zone, the process gets bogged down. Developers will put multiple units following the same building plan into an area, but zoning determines how much of this can be done in a given area. What developers build depends on what land they own and what the zoning permits. Hightshoe: Do you think the rewrite of the City's development code will make this better? Smith reported developers are looking for more flexibility, and there is a shared goal that this will help serve. All the restrictions bog the process down and are not efficient for the developers or the City administrators. Anciaux: What is the difference in the cost of land in Iowa City versus Coralville and North Liberty, and how much of a percentage does the land cost figure into the total cost? Gordon reported that land in Coralville and North Liberty is more expensive than Iowa City. Approximately $35,000 per acre in North Liberty, and with an average three houses on one acre, that makes the land cost about $10,000 to $12,000 without infrastructure. Stutsman: What is the average price of condos expected to sell this year? Gordon reported $90,000 to $92,000. Hightshoe: Apart from approval process, what would help the City encourage development of modest, affordable housing? Smith replied that "one-stop shopping" in the approval process, and more flexible zoning. Also establishing a shared vision on how the community will develop. Agreement on Building Code interpretation. Hightshoe: Are building codes between Coralville and Iowa City the same? Smith said that they agree for the most part, though everyone has their own interpretation on different aspects. Estimates that at a minimum Iowa City, Coralville, and North Liberty all adhering to 2001 International Building Code. Scattered Site Housing Taskforce Minutes August 30, 2004 Page 4 Hayek: Would like to give more context of the taskforce and background. The taskforce is responding to concerns expressed at the City level about concentrations of low-income housing. He said that the taskforce is to evaluate whether there is a concentration of subsidized housing and what the impact of these concentrations may be. Hayek is also interested in developing a working definition for "concentration" in this context. Also, Hayek said that the taskforce may be making recommendations on how the City could look at this issue, rather than coming up with specific Development Code or changes to the approval process. Last, do the homebuilders think there is a concentration of this type of housing? Smith responded that based on the theory of economy of scale, there are concentrations of low income housing due to condo or apartment complexes. However, this may not be what the taskforce is looking for. Zero-lot and duplexes are scattered throughout the city. Hightshoe: What would entice developers to devote a percentage of their developments to affordable/low income housing? Smith reported that incentives would vary between groups. What sort of housing is also influenced by what kinds of buildings will work within the character of the development. Anxiaux: What sorts of housing are the area developers able and willing to supply? Smith responded that they can meet any demand. Gordon added that there is an interest in supplying modest housing. Peterson: What is "modest?" Anthony said modest would be 1/3 below the median value of housing in the community. Gordon also responded that developers respond to the demands of the market, and that mixed-income housing areas do exist in Iowa City, such as the Saddlebrook subdivision. Hayek: Why isn't there more mixed-income housing areas? Gordon replied that it is difficult to do in many areas because of existing zoning. Hayek inquired whether developers would do more if there was a change in the regulations, and Gordon agreed that they would. Hayek: Would developers build more mixed-income housing areas as opposed to something more lucrative? Gordon responded that they would, because they will build what will sell. Smith noted that there are neighborhood issues to take into consideration with that as well. Hightshoe: Is there an interest or need for small-lot zoning? Smith replied that "small" would have to be defined. Also, the question is what features the purchasers want. Again, zoning figures into the problem. Anthony: What is the primary determiner in different land prices? Gordon said zoning and location are key, so comparable homes would be priced differently according to desirable location, such as near schools. Tiemeyer agreed that location is primary consideration. Stutsman: Is there currently a way for homebuilders to communicate with government agencies? Would meetings between the two groups be beneficial? Smith replied that the primary communication comes through letters. Gordon agreed that having regular meetings would be a positive step. Anthony: Are there any thoughts or theories regarding the increased percentage of income going to housing? Smith responded that the transient nature of the population may be a factor, but he doesn't know for sure. There are many possible reasons for this trend. Gordon noted that the students drive up the average. Tiemeyer added that another reason is the demand for increasing quality and amenities in housing. Anthony: Is there any census data available on housing in the area? Tiemeyer replied that she does not have data with her, but suggested sending specific questions to the Association in writing, and they would be able to gather data for the taskforce. Presentation bv Heather MacDonald MacDonald opened by explaining that she has done studies on the State's housing markets, and that individuals may contact her for a copy of the most recent housing study, or check on the website. The major question seems to be why Johnson County is so unaffordable. A "fair market" is defined as 40% of all apartments renting below a certain rate, which is determined by figuring a "housing income" of what income a family would have to receive to afford an affordable unit, defined in this case as a 2 bedroom apartment. Johnson County's housing income has risen steadily. In 2000, this income was $11.60 per hour. In 2003, it was $11.83. By contrast, in Des Moines the income was $12.60. Question remains why Johnson County is so different. Scattered Site Housing Taskforce Minutes August30,2004 Page 5 There is a perception that the top end of the housing market has been competed away, so homebuilders are more interested in serving lower income needs. Iowa City has a very low vacancy rate, between 1 and 1.5%. Median-income housing has had more active development in Iowa City relatively recently. Slide 1: Analysis of vacancy rates, median home prices, growth of new housing units, and population growth. Slide illustrates that Johnson County is growing rapidly, as derived from population growth, housing units, and low vacancy rates. North Liberty is in stable growth rate, indicated by moderate vacancy rates (3%), moderate house prices, and moderate rates of new units and population growth. Southeast of Iowa City is stable, and Coralville has an area of stagnant, characterized by high vacancy rates and low housing costs, much of it old stock in the process of being redeveloped. This area is by Highway 6 and the Iowa River. Much more of Johnson County is in the rapidly growing category, which is very different than Cedar Rapids and other larger cities. Noted that the information on all of the slides is census data, so a few years old. Slide 2: Percent of homeowners that pay more than 35% of their income for housing costs. Thirty-five percent (35%) is a higher figure than federal government uses, but generally is the upper limit that banks will allow when considering a loan. There are areas in Johnson County where 15% of all households are cost burdened. The state average is 9%. The data looks at income against housing prices. The railroad tracks roughly divided areas of less and more burdened households. Slide 3: Rental information Statewide, approximately 28% of renters are cost burdened or pay more than 35% of their income for housing. Students may skew the data on rentals in the downtown area. Data indicates that between 25% and 50% of renters are paying a significant amount in housing costs. Affordable rental markets exist in Linn and Washington counties. Possible reasons for this situation may include the employment base of the county, which is primarily service and depends on a large base of relatively low-paid employees. Iowa City industry includes service, information, education, and healthcare, which are different than other larger cities in the sate. Dichotomy in salaries is evident most strongly in the healthcare industry with highly paid professionals versus the lower-income support personnel. Relatively small high-income population pushes up costs for all. Slide 4: Where is affordable housing located in Iowa City? Defined as rentals leasing for fair-market rate or less. Affordable owner-occupied housing defined as affordable for households earning 80% of median income or 50% of median income, depending on where they fell on the continuum. Definition also assumes no significant debt, a 5% down payment, and an interest rate of 6%. For a four-person household earning $43,500, this would come to a $160,000 home. For a household at 50% of median income, it would be a house at approximately $110,000. Rentals that fall within these guidelines fell mostly on the east side of Iowa City, where 35-50% of the apartments are affordable. Also a number of affordable units can be found in north Iowa City and in Coralville. Slide 5: Analysis of 3 bedroom apartments They are distributed differently. South and east side had higher concentration of affordable units, with units becoming less affordable nearer to downtown. North Liberty provides more affordable units. The taskforce had a question on the number of units available per the data MacDonald collected. MacDonald responded that data on the slide reflects percentage of units available rather than actual numbers, though she can get that data. Anciaux requested that data be forwarded to the taskforce. Slide 6: Owner-occupied units selling for $110,000 or less More than 50% of units in the south part of Iowa City would be affordable. Near the river and west side is not very affordable, and the north side has somewhat more affordable housing. Noted that this data is based on the census, so does not reflect the more recent developments on the east side of Iowa City, such as large increase in condos. Scattered Site Housing Taskforce Minutes August30,2004 Page 6 Note that subsidized housing developments have not been a large effort in Iowa City. Many of the affordable houses in the affordable southern zone fall along the Hollywood Blvd area, where many homes are older. MacDonald added that manufactured homes fall in this category as well. Hayek: requested clarification - data seems to be showing that there is not a high percentage of new housing in the affordable range, but reflected primarily in the areas with older homes? MacDonald agreed, but added that even in 2000, some areas such as North Liberty and Tiffin with higher rates of new, affordable housing. At time the study was done, many of the condos and zero-lot homes had not yet been built in Iowa City. MacDonald approached question of what concentrations do. Homebuilders have some good suggestions, such as streamlining the approval process. There are pros and cons to regulations. Higher regulation can be attractive to those looking for a good investment in the community. A streamlined process and one- stop shopping especially geared towards developments that set aside a certain portion of their units for affordable housing would be attractive to the developers and a fair trade-off for the city for community development. More dialogue and marketing of diverse housing could be geared to address neighborhood issues and local opposition to developments of lower income housing in particular areas. This is not a significant problem yet, but in the long run it would be beneficial if more neighborhoods provided more choices. More variability is a good thing. Some communities have succeeded in bringing consensus on diverse housing issues, often with help from state legislation. Emphasis can be focused on growth and community management, to prevent urban sprawl and the impact on the environment. Housing integration can be a draw for the community. Hayek: What has caused this polarization? MacDonald responded that it reflects nationwide trends. Increasing dichotomy in incomes, community growth, and changes in the local culture are all contributing factors. Also people who move into area from other states with different economic situations are purchasing larger and more expensive homes. Hayek: Would a change in local economy to more of a manufacturing base provide a higher minimum wage? MacDonald replied that it can, but Cedar Rapids for example has moved to more of a white-collar base. Economic development professionals generally don't think manufacturing is the answer to the problem. Iowa City is poised to be on the leading edge of information industry. MacDonald noted that there are possibilities in roles of the local companies can take in helping to house. In other cities, some companies contribute to a housing trust fund that can help subsidize moderately priced housing. Mayo Clinic does this, not to help doctors, but the other professionals and support personnel. This subsidy may assist with down payment. Stutsman cited example of Coral Ridge mall, which was essentially subsidized by citizens statewide. Hayek: In terms of the cost burdens of Johnson County, summarize two or three suggestions for the city to consider. MacDonald responded to consider workforce housing employer-based linkage fees, in a trust fund for example, to assist with housing costs for lower-income employees. Develop comprehensive plan to outline how individual neighborhoods are going to meet the need for affordable housing, on the assumption that there should be fair-share housing throughout the community. Come to an agreement on a minimum share of this activity, which might involve rezoning land for higher-density housing. Noted that there are some architectural designs that might allow for multi-unit buildings that look like large houses. MacDonald added that positive marketing to make this more acceptable for more affluent areas. Finally, streamlining the process and allowing for one-stop shopping will help with costs, especially as an incentive for developers who designate a portion of their activities to affordable housing. Finally, consider modular housing, as it can look very nice and be inexpensive. Anciaux noted that while state law makes discrimination against modular homes illegal, issues could be raised if the home arrives at the lot on wheels. The covenant to the deed may prohibit homes arriving on wheels. Hayek thanked MacDonald for presenting, and may ask her to come back. MacDonald noted she will send the maps with the actual number of housing units. MacDonald said the UI website showing these slides, and more information on the study, is http://planning .urban. u iowa.edu/iowa2000. Scattered Site Housing Taskforce Minutes August30,2004 Page 7 OTHER BUSINESS Hayek handed out suggested study/deliberation guide, to be addressed at the next meeting. Requested that research materials be read by September 20 meeting, in order to begin discussing. There is no public hearing on September 20. The realtors and neighborhood council will be presenting, and begin discussion to create definitions. Public hearing tentatively set for October 4. Anciaux requested additional information. Hayek asked him to email or call. ADJOURNMENT: There being no further business to come before the taskforce, Vandenburg moved to adjourn. 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