2011 nc planning conference development recovery incentives that support sustainable development...

2011 NC Planning Conference

Development Recovery Incentives that Support Sustainable Development

Asheville, NC

Panel Discussion

Shannon Tuch - Planning & Development

Jeff Staudinger - Community Development

Robert Griffin - Building Safety

Objectives & GoalsObjectives & Goals

Fulfill City Council’s Strategic Goals Affordable Fiscal Responsibility Job growth & Community Development Green & Sustainable Multi-modal Transportation

Fulfill goals and objectives of numerous adopted plans Comprehensive Plan Affordable Housing Plan Wilma Dykeman Riverway Plan Economic Development

Economic Forces & ResponseEconomic Forces & Response

• 2008 – The economy collapses and lending markets freeze → Leads to a dramatic drop in development activity

• 2008-2012 Permit Extension Act keeps permits alive

• Planning functions shift from development activity to long range planning

• Focus → How to support and incentivize development

(Not just any development though . . .)

StrategiesStrategies

• Grants

• Low Interest Loans

• Cost Sharing for Public Infrastructure

• Fee Rebates

• Increased Density

Strategies focused on sustainable

development projects only!

Grants & LoansGrants & Loans

Jeff Staudinger

Director of Community Development

City of Asheville

Land Use Incentive GrantsLand Use Incentive Grants

Required elements

• Energy Star Certification • Assume all legal costs if challenged• 20% equity participation by party requesting incentive • The proposed development must consist of two or

more dwelling units• Inside city limits, within ¼ mile of the following major

highways to the end of the City’s corporate limits

Sustainability Area - MapSustainability Area - Map

Land Use Incentive GrantsLand Use Incentive Grants

Green Building/ Energy:• Energy Star Certified 5• HB Silver 10• LEED Silver or HB Gold 20• LEED Gold or HB Platinum 30• LEED Platinum 40

Public Benefit Points

Land Use Incentive GrantsLand Use Incentive Grants

Affordable Housing

Must agree to 10 year affordability, with rents at

80% of area medium income:

10%+ affordable 10

20%+ affordable 20

30%+ affordable 30

40%+ affordable 40

Public Benefit Points

Land Use Incentive GrantsLand Use Incentive Grants

Workforce Housing

Must agree to 10 year affordability criteria for rents

at 120% of area medium income:

25%+ workforce 5

50%+ workforce 10

75%+ workforce 15

Public Benefit Points

Land Use Incentive GrantsLand Use Incentive Grants

Public Benefit Points

  Family 100% AMIMax rents at

80% AMI

Max rents at120%

AMI

0 BR 1 39,000 $600 1,110

1 BR 2 41,775 $650 1,176

2 BR 3 44,550 $780 1,242

3 BR 5 57,925   1,627

4 BR 6 64,600   1,792

Land Use Incentive GrantsLand Use Incentive Grants

Mixed Use and Transit Orientation

Includes a minimum 20% non-residential 5

Within the Sustainability Bonus area 10

Brownfield Redevelopment 15

Public Benefit Points

Land Use Incentive GrantsLand Use Incentive Grants

• This policy provides that every 10 points can earn one year of economic incentive.

• Equivalent to city property taxes in excess of currently assessed taxes for one year annually applied.

• Dated from the date of release of all occupancy permits and certification of all green building/energy standards designated for the project.

Formula

Land Use Incentive GrantsLand Use Incentive Grants

• Every 10 points can also earn a 10% reduction in the following fees and charges: Zoning Permit, Building Permit, Driveway Permit, Grading Permit, Plan review fees and Water service connection fee.

• This reduction is in addition to the existing fees rebated for affordable housing projects.

• Affordable housing projects eligible for the 50% fee waiver are not eligible for additional fee waivers for points garnered for housing affordability, although they can benefit from the “green” additional points

Formula

Land Use Incentive GrantsLand Use Incentive Grants

Proposed mixed use/apartment project

Riverside Dr.

• 200 apartments (180,000 square feet)• 40,000 square feet commercial (office and retail)• Gold LEED• 10% (20 units) “affordable” housing

• 25% (50 units) “workforce” housing

Example

Land Use Incentive GrantsLand Use Incentive Grants

Threshold:

Minimum Energy Star

Eligible Area

20% Equity

Two or More Units

Example

Land Use Incentive GrantsLand Use Incentive Grants

Green/Energy Benefit• 30 points: Gold LEED

Housing Benefit• 15 Points: 10% affordable

25% workforce

Mixed Use/Transportation Benefit• 10 points: 20% non-residential

Sustainability Bonus Area

Total Points: 55

Example

Land Use Incentive GrantsLand Use Incentive Grants

• Pre-development Tax Value: $250,000• Post-development Tax value: $25,000,000• Pre-Development Annual City Tax: $1,050• Post-development Annual City Tax: $105,000

Grant: $103,950 per year for 5.5 years: $571,725

Example

Land Use Incentive GrantsLand Use Incentive Grants

Permit Fees: $250,000

Grant: 55% of eligible fees = $137,500

Example

Land Use Incentive GrantsLand Use Incentive Grants

Total grant = $709,225

2.8% of development costs

Example

Affordable Housing Trust FundAffordable Housing Trust Fund

• Created in 2000

• $7.7 million loaned

• 751 affordable rental and homeownership units funded (672 Rental; 79 Homeownership)

• 617 units have been completed

Basic Stats

Affordable Housing Trust FundAffordable Housing Trust Fund

• $600,000 annual investment in prior years

• $300,000 annual investment in each of past two years due to budget constraints

• In FY 2010-2011, closed $600,000 in loans, for the production of 72 affordable units.

Affordable Housing Trust FundAffordable Housing Trust Fund

• Restructured in 2010

• Rental Housing highest priority

• Single-family housing limited to construction loans only

Affordable Housing Trust FundAffordable Housing Trust Fund

Current Goals & Priorities:

• Rental housing • Lower per-unit subsidies• Final planning and zoning approval • One-bedroom and efficiency (studio) units • Multi-family properties • Projects along transit corridors • Higher density and large-scale developments

Affordable Housing Trust FundAffordable Housing Trust Fund

Eligibility:

• A minimum of 20% of the total project units must be affordable

• Permanent Financing- The required period of affordability for all long term financing will be directly proportional to the loan term (i.e. Developers requesting a 20 year loan term will be required to keep rents affordable for 20 years).

Affordable Housing Trust FundAffordable Housing Trust Fund

Per-unit Subsidy Requested Maximum Loan Amount

More than $20,000 Ineligible $15,001 to $20,000 $150,000 $10,001 to $15,000 $200,000 $ 5,001 to $10,000 $300,000 Less than $5,000 $500,000

Eligibility:

Affordable Housing Trust FundAffordable Housing Trust Fund

Terms:

Loans are fully amortizing except:

• Loans for rental housing restricted to families earning less than 60% of the area median income, and with rents affordable to that population, may be amortized at 0.00% interest or interest-only at 2% with principal deferred for up to 20 years.

• Interest on construction loans may be deferred until the loan principal is due.

Affordable Housing Trust FundAffordable Housing Trust Fund

Terms:

• All permanent financing for rental housing will be in the form of secured loans for a term up to thirty (30) years.

• The Housing Trust Fund will not make grants, forgivable loans, or indefinitely deferred loans.

• All construction loans will be due and payable 24 months from the date of closing.

Affordable Housing Trust FundAffordable Housing Trust Fund

Number of Affordable Units I nterest Rate 1-9 4.50% 10-19 3.00% 20-29 2.50% 30+ 2.00%

Terms:

Affordable Housing Trust FundAffordable Housing Trust Fund

Housing Trust Fund website

http://go.usa.gov/8tf

Cost Sharing & RebatesCost Sharing & Rebates

Robert Griffin

Director of Building Safety &

Development Services Center

City of Asheville

Public Infrastructure: WaterPublic Infrastructure: Water

Two Options for Participation

Option 1

50% rebate of water connection fees for “Green” projects

• Tap & Meter for single family homes

• Meter for Commercial projects (fees vary based on size of meter)

Public Infrastructure: WaterPublic Infrastructure: Water

Option 1

Example:

• Single Family - Tap & Meter = $2,303.00

Total rebate = $1,151.50

• Commercial 2” drop-in meter = $9,813.80

Total rebate = $4,906.90

Public Infrastructure: WaterPublic Infrastructure: Water

Option 2 – Cost sharing for new public water line

Infrastructure

• Water is an enterprise fund and water revenue must be reinvested in water infrastructure

• $200,000 of water fund money set aside every year, projects must compete for available funds

• Development must meet 80 points from evaluation form

• Must include 5 or more residential units

• Minimum 20 year investment payback

• 50% of infrastructure cost or $100,000, which ever is less

Public Infrastructure: WaterPublic Infrastructure: Water

Option 2

Example:

• New 70 unit apartment building

• All units are “affordable”, scores 90 points on evaluation form

• Requires new water line extension from main road along new road

• New line estimated cost is $220,000

• City participation = $100,000

Permit RebatesPermit Rebates

Two Types of Rebates Offered

“Green” Rebates

&

“Affordable” Rebates

Permit RebatesPermit Rebates

Green Rebates

Upon issue of CO and verification:

• Healthy Built Home = $100

• Energy Star Rating = $100

• Geo Thermal installation = $50

• Solar installation = $50

• Wind Generator installation = $50

• Storm water collection for yard sprinkler = $50

• Rebates are cumulative (withhold $75 for processing)

Permit RebatesPermit Rebates

Affordable Housing Rebates

Fees are paid in full with 50% rebated upon project completion (CO) & verification:

• Applies to For-sale, Rental, and Rehab projects

• Includes Building, Engineering, Sewer, Water, and Zoning fees

Permit RebatesPermit Rebates

Affordable Housing Rebates – For Sale Units• Must meet NC State Building Code (manufactured

housing included only if it is attached to a permanent foundation and titled as real property)

• Sale Price Restrictions:

0 BR $115,000

1 BR $125,000

2 BR $145,000

3 BR $160,000

4BR $170,000

• Must provide copy of settlement statement and appraisal

Permit RebatesPermit Rebates

Affordable Housing Rebates – Rental Units

• Can be single family or multi-family

• Set aside for tenants below 80% AMI

• Requires affordability for a minimum of 10 years (monitored through a local, state or federal program)

Permit RebatesPermit Rebates

Affordable Housing Rebates – Rehab Units

• Applies only to single family or multi-family

• All single family units must be verified to belong to those with an income below 80% AMI

• Multi-family structures must include a minimum of 3 units that are occupied by tenants with an income below 80% AMI

Density BonusDensity Bonus

Shannon Tuch

Assistant Director of Planning & Development

City of Asheville

Density BonusDensity Bonus

• Named: “Sustainable Development Projects”

• Offers increased density in exchange for affordable and/or green building.

• Changed from a Conditional Use Permit application to a Use-by-right application.

• Has eligibility requirements and includes mandatory and optional elements.

Density BonusDensity Bonus

Negotiated Process

• Worked closely with the Mayor’s task force on Affordable Housing to develop concept and standards

• Draft is shared with other stakeholders (Coalition of Asheville Neighborhoods)

• Public hearing process provided input from CAN and the larger community – altered final product

Density BonusDensity Bonus

Eligibility Requirements

• Project site must be located within 1/8 mile of key transportation corridors.

• Must be a minimum of 5 units & must be energy star certified

Density Bonus - MapDensity Bonus - Map

Density Bonus – 1st Draft MapDensity Bonus – 1st Draft Map

Sustainability Area - MapSustainability Area - Map

Density BonusDensity Bonus

Mandatory elements• Good Neighbor Agreement

• Design compatibility standards

• Deed restrictions on affordable units

• Certification of LEED or Healthy Built units

Parking Building orientation & design Pedestrian orientation/multi-modal features

Density BonusDensity Bonus

Optional Elements

• Projects may be affordable and/or green

• Affordable: points assigned based on features of the project

• Green: based on LEED or NC Healthy Built (NCHB)

Density BonusDensity Bonus

Affordable:

• 50-80 points = 20% density bonus

• 81-100 points = 50% density bonus

• 100+ points = 100% density bonus

Density BonusDensity Bonus

Green Building:

• NCHB Silver = 20% density bonus

• LEED Silver or NCHB Gold = 40% density bonus

• LEED Gold or NCHB Platinum =  60% density bonus

• LEED Platinum = 80% density bonus

Density BonusDensity Bonus

Affordable Housing & Green BuildingFor an affordable housing project, an additional 10% may be added to the affordable housing density bonus for each level of NC Healthy Built or the corresponding LEED Certification achieved.

Green Building & Affordable HousingFor a green building project, an additional matching percentage of bonus may be added for the percentage of affordable units included in the project.

Density BonusDensity Bonus

Other Development Incentives – flexibility for:

• Lot width• Lot size • Setbacks• Parking requirements• Open space requirements• Building height• Waivers from public hearing process

SummarySummary

Five Separate Incentives

• Can be used individually or in combination with each other

• All support sustainable initiatives and goals

• All have a direct economic impact

SummarySummary

City of Asheville’s Website

ashevillenc.gov

SummarySummary

Questions?

Jeff Staudinger Community Development(828) 259-5723jstaudinger@ashevillenc.gov

Robert GriffinBuilding Safety & Development Services(828) 259-5726rgriffin@ashevillenc.gov

Shannon Tuch Planning & Development(828) 259-5817stuch@ashevillenc.gov