Document Centrecountypa_doc_f1a178b83a

INCLUSIONARY HOUSING : MODEL POLICIES for CENTRE COUNTY June 30, 2010 ---PAGE BREAK--- 2 This document was made possible through a Land Use Planning and Technical Assistance Program Grant from the Department of Community and Economic Development, financial support from the Centre County Housing Trust Fund, and in-kind contributions from the Centre County Planning and Community Development Office. A special thank you to DJ Liggett of the Centre Regional Planning Agency for providing the language in the section entitled, “Developing a Housing Development Plan.” ---PAGE BREAK--- 3 ACKNOWLEDGEMENTS-Key Person Interviews The following individuals graciously gave their time to be interviewed for this document. The input received from the interviews helped guide the development of the recommended policies. Thank you. Kevin Abbey Centre County Planning Commission Erica Anderson Centre County Housing and Land Trust Perry Babb Centre County Affordable Housing Coalition Eric Bernier CATA Doug Bierly Gregg Township Steven Bodner RE/MAX Centre Realty Scott Brown Pennoni Associates Jean Collins Centre County Affordable Housing Coalition Paul Confer Prudential First Choice Realty Bob Corman Centre County Planning Commission Natalie Corman Centre County Affordable Housing Coalition Emily Gette-Doyle Moshannon Valley Economic Development Partnership Daniel Eckley Walker Township Jon Eich Centre County Board of Commissioners Max Gill State College Borough Water Authority Sharon Heckman Millheim Borough Carl Hess Centre County Housing and Land Trust George Khoury Centre County Housing and Land Trust Chris Kunes Christopher Kunes General Contractor, LP Stan LaFuria Moshannon Valley Economic Development Partnership Sally Lenker Centre County Housing and Land Trust Pat Long Keller Williams Advantage Realty Mark McMaster RE/MAX Centre Realty Tom Mesko Centre County Housing and Land Trust Warren Miller Spring-Benner-Walker Joint Authority Katie Ombalski ClearWater Conservancy Ron Quinn Centre County Affordable Housing Coalition Ed Reiter Realty World, Reiter Agency Mike Savage Rush Township Gary Schultz Centre County Housing and Land Trust John Sepp PennTerra Engineering, Inc. Tom Sharer Potter Township Russell Shuey Bellefonte Borough Codes Renee Swancer Benner Township Cindy Thackston Centre County Affordable Housing Coalition Timothy Weight Marion Township Scott Yocum RE/MAX Centre Realty Steve Yohannan Jersey Shore State Bank Vaughn Zimmerman Spring Township ---PAGE BREAK--- 4 This page left intentionally blank. ---PAGE BREAK--- 5 INTRODUCTION In 2005, the Centre County Affordable Housing Needs Assessment: A Blueprint for Action was released, identifying and quantifying the affordable housing needs in Centre County. One of the key findings was the projected need for 2,000 new single-family units to be affordable for low and moderate-income households by the year 2030. The Assessment also analyzed impediments to affordable housing, especially public policies that impact affordable housing development such as zoning and planning processes. This analysis revealed that current regulatory practices in the municipalities inhibit the production of affordable housing. In response, the consultant recommended that the County Planning Office partner with others to: consider methods for reducing regulatory barriers, identify those that are more applicable to Centre County municipalities; and identify existing or draft model ordinances/regulations. Implementation of this recommendation began with the Centre County Planning and Community Development Office applying for a Land Use Planning and Technical Assistance Program Grant through the Department of Community and Economic Development for the purpose of developing a menu of municipal options for promoting affordable housing development. In addition, this document follows the Homes Within Reach Toolkit developed for municipal officials and developers by the Centre County Affordable Housing Coalition. Throughout the development of this manual, the Centre County Housing Cabinet, an advisory body to the Centre County Board of Commissioners on affordable housing policies and strategies, served as the Steering Committee, providing input and guidance on the document’s format, direction and policy recommendations. The consensus of the discussions was that no one size fits all for inclusionary housing and that a model ordinance was not the preferred method for promoting affordable housing development. The outcome of the discussions was that the municipality, developer, builder’s representative and the non-profit need to work closely from the beginning of the process of developing inclusionary regulations to the day the house key is turned over to the home buyer in order to have a successful project. Since the release of the 2005 Needs Assessment and during the process of developing this document, several of Centre County’s municipalities have responded to the need for affordable housing by drafting and/or adopting regulations to promote new housing units. The regulations are used as examples for other Centre County municipalities to follow. Municipalities that have adopted regulations are: College Township, Ferguson Township, Gregg Township, Harris Township, Patton Township and Spring Township. Draft regulations are being considered by the following municipalities: Halfmoon Township and State College Borough. These municipalities are to be commended for their efforts in meeting this important need. NOTE: The primary focus of this document is on owner-occupied housing. The Centre County Housing Cabinet has recommended the development of a parallel document on affordable rental h i ---PAGE BREAK--- 6 CENTRE COUNTY HOUSING CABINET Derek Canova Centre County Association of REALTORS Emily Gette-Doyle Moshannon Valley Economic Development Partnership Glenn Fisher Clearfield Bank & Trust Carl Hess State College Borough Planning and Community Development Department Robert B. Jacobs Centre County Planning and Community Development Office George M. Khoury Centre County Housing and Land Trust Chris Kunes Penns Valley Region Bill MacMath Nittany Valley Region Jim May Centre Regional Planning Agency Tom Mesko Habitat for Humanity of Greater Centre County Sue Smith Centre County Housing Authority Tommy Songer Central Builders Association Thelma Walters Centre County Affordable Housing Coalition Former Members: Doug Bierly Penns Valley Region Bob Crum Centre Regional Planning Agency Sue Hannegan Nittany Valley Region Randy Holderman Centre County Housing Authority Ron Quinn Centre County Affordable Housing Coalition Tom Zilla Centre Regional Planning Agency ---PAGE BREAK--- 7 HOW TO USE THIS MANUAL The manual, written for municipal officials working in partnership with a developer(s), builder(s), non-profit and other concerned parties, is intended to be a step by step process for developing inclusionary regulations and policies. The steps, listed on Page 19, are to serve as a sequential guide for the components that need to be considered when planning for inclusionary housing and to help the reader gain a better understanding of the process. Research conducted for this document included national, state, and local examples of inclusionary housing. After reviewing the results of the staff’s research, the Centre County Housing Cabinet recommended that an emphasis be placed on regulations and policies adopted or drafted for municipalities in Centre County. Other examples are provided for reference purposes. Resources are available to municipalities considering inclusionary housing and include: ™ Centre County Planning and Community Development Office www.co.centre.pa.us/151/.asp ™ Centre Regional Planning Agency http://cog.centreconnect.org/crpa-mpo/index.htm ™ Centre County Housing and Land Trust Email: [EMAIL REDACTED] ™ State College Borough Planning and Community Development Department http://www.statecollegepa.us/index.aspx?nid=1152 ™ Centre County Affordable Housing Coalition www.ccaffordablehousingcoalition.org ---PAGE BREAK--- 8 This page left intentionally blank. ---PAGE BREAK--- 9 For a family of 4, the County’s Area Median Income for 2010 is $66,300. EXECUTIVE SUMMARY What is Inclusionary Housing? Inclusionary housing is a concept that promotes the creation of housing that is affordable to income eligible households as part of a subdivision or land development proposal. The municipality would require or incentivize the developer to provide 10 to 20 percent of the dwelling units to be affordable. The units would be integrated throughout the development. Income eligibility is based on the County’s Area Median Income, adjusted annually by the US Department of Housing and Urban Development. Housing Affordability is defined as a household spending no greater than 30% of gross income on housing costs. In exchange for building the affordable units, the developer will be granted cost offsets in order to make the overall project economically viable. Benefits of inclusionary housing include: o Increasing housing options for individuals, families, senior citizens and persons with disabilities; o Easing the transportation burden for service sector employees by providing housing close to places of employment and public transportation; o Supporting employers’ efforts to hire and retain employees when housing is affordable within a short commute distance; and, o Promoting more efficient land use and sustainable communities. Is there a need for Inclusionary Housing in Centre County? Young professionals, families, older residents and persons with disabilities are challenged by the limited existing and new affordable housing stock finding it difficult to realize the American Dream by purchasing a home. In 2005, the Centre County Affordable Housing Needs Assessment: A Blueprint for Action projected a demand for 2,000 new single- family units to be affordable to low and moderate-income households by the year 2030. In addition, the Centre County Associations of REALTORS® established the American Dream Fund to financially support inclusionary or workforce housing since the Association recognized the need based on the Association’s annual market analyses. Centre County Building Permit data for the year 2009 list the median value of a single- family, newly constructed home as $212,976, which does not include the cost of land. Using a mortgage calculator, a household of two with a gross income of $52,600 (100% of the County’s Area Median Income) would be able to afford a home price at $181,000. See below: Affordability Calculator Results Source: www.homefair.com 30% of household income ($4,383.33)=$1,315.00 Using the 30% amount of 1,315.00 for PITI* - because this value is lower than the amount 1,409.50 calculated using the 39% debt value. *PITI=Principal + Interest + Property Tax + Homeowner’s Insurance With an interest rate of 5.50% over 30 years means every dollar the home buyer pays each month buys the home buyer $176.12 of loan. ---PAGE BREAK--- 10 EXECUTIVE SUMMARY Tax and Insurance are estimated to total 1.5% of the home value and the home buyer will have $10,000.00 to cover the down payment. House value: $198,008.18 Loan value: $188,008.18 Principal+Interest: $1,067.49 Prop Tax+Insurance: $247.51 Down Payment: 5.05% Loan To Value (LTV): 94.95% Since the down payment is less than 20% the home buyer must pay Private Mortgage Insurance (PMI). That's an extra 0.78% of the loan each year. House value: $181,023.86 Loan value: $171,023.86 Principal+Interest: $971.05 Prop Tax+Insurance: $268.28 PMI: $111.17 Down Payment: 5.52% Closing costs are not included in this calculation. Note: Mortgage rates and other costs fluctuate. The calculation shown above is to provide one example of housing costs. Other calculators are available on the web. Based on the calculation of the mortgage payment and acknowledging the fact that the median value of a single-family home in 2009 did not include the price of land, the two person household at 100% of the County’s Area Median Income would not be able to afford a newly constructed single-family home at the median value. Contributing to higher home prices is the value of the land, infrastructure improvements and increases in construction costs. Also adding to the overall cost are regulatory barriers such as larger minimum lot size requirements, lot and street standards, and fees for parkland fee in lieu. In an effort to meet a more diverse range of housing needs, the Centre County Planning and Community Development Office with guidance from the Centre County Housing Cabinet developed this step by step manual to help guide municipalities address the provision of inclusionary housing at the local level. What are the Steps to follow? #1 Understanding the Concept of Inclusionary Zoning First, municipal officials need to understand the concept behind inclusionary policies as explained in the paragraphs above. #2 Identifying Households to be Served by Inclusionary Policies Before policies to encourage inclusionary housing are drafted, it is important to first identify the community’s housing gaps. By researching current and historic data, which is available through a variety of sources such as the US Census, Centre County Association of REALTORS market data, and building permits, a municipality can determine housing needs. Typically, municipalities develop policies to serve households within a range of incomes based on the County’s Area Median Income. #3 Establishing a Legal Basis for Inclusionary Housing The next step would be for the municipality to establish a legislative purpose justified through the supporting data. Powers are granted through the Municipalities Planning Code. Article III, Comprehensive Plan, and Article VI, Zoning, contain provisions for establishing legislation. Recommendation for owner-occupied households to be served: ƒ 80% to 120% of the County’s Area Median Income(AMI) ƒ 60% to 79.9% if the developer partners with a non-profit or local government ---PAGE BREAK--- 11 EXECUTIVE SUMMARY #4 Planning for Inclusionary Housing In planning for new affordable housing units, several factors should be considered with the most important being: location, transportation costs, proximity to employment and services, availability of infrastructure and quality of life. Policies and regulations should be consistent with growth management strategies which entail the factors listed above. When planning for new housing units, transportation costs should also be a consideration since providing housing in close proximity to places of employment and services, reducing the transportation burden for households. Developers and municipalities may access Centre County’s GIS (Geographic Information Systems) data to seek appropriate locations for inclusionary housing by contacting the Centre County Planning and Community Development Office. #5 Deciding on an Appropriate Inclusionary Housing Approach Policies and regulations for creating inclusionary housing may be structured as a voluntary approach by offering a range of incentives or as a mandatory requirement which would include cost offsets. Note: Before deciding on an approach, municipal officials are advised to seek the advice of their solicitor. Both approaches should regulate a minimum threshold by which the regulations would apply. The threshold may be determined by the number of acres to be developed or the number of housing units to be provided. Cost offsets are provided to make up the difference between the cost of building a below market rate or inclusionary home and that of a market rate home. The most common cost offsets are: o Providing a Density Bonus or Other Bonus Opportunities o Providing for Housing Type Options o Reducing Lot Size o Reducing Setbacks o Reducing Sidewalk Requirements o Reducing Street Standards o Waiving Parkland Fee in Lieu Fees o Waiving or Deferring Fees Density bonus option allows developers to exceed the density on the tract in exchange for the development of inclusionary housing. Typically, density bonuses permit one or more additional units per acre for every inclusionary unit provided. Permitting a range of housing types such as duplexes and townhomes gives the developer the flexibility to more effectively meet the affordable price range of income eligible households. For example, the median value for a new duplex in 2009, minus the value of the land, was $163,889 compared to a single- family unit which was $212,976. Reducing the minimum lot size should result in decreased land cost. Consistent with the reduction in minimum lot size, setbacks should also be reduced to provide sufficient land area to construct a home and future improvements. Sidewalk requirements may also be reduced; however, pedestrian safety should not be compromised. Depending on the development sidewalks on one side may be an option to consider. ---PAGE BREAK--- 12 EXECUTIVE SUMMARY Consideration should be given to changes in street standards consistent with the Department of Transportation and the New Jersey Department of Transportation Smart Transportation Guidebook, March 2008. Standards are based on land use contexts such as rural, suburban, town/village and urban. In terms of parkland fee in lieu, the developer has the option to pay a fee instead of providing parkland on site. The fee can be as high as $2,500 per dwelling unit. Waiving the fee for the affordable housing units may be done through the waiver provision in Section 503.B of the Municipalities Planning Code under Contents of Subdivision and Land Development Ordinance. Fees associated with inclusionary housing development such as administrative, utility, or other applicable fees may be reduced, waived or deferred as another way to offset costs. One option is a provision in College Township’s regulations, whereby, the developer when requesting a discount or deferral of payment of fees should detail how the cost savings will be passed on to the inclusionary unit. Alternatives to Development As an alternative to on-site development, the municipality may want to offer a fee in lieu option, allowing the developer to pay cash instead of constructing the inclusionary units. The cash, deposited in a designated account or housing trust fund, would be used for future affordable housing development within the municipality or designated area. One option for the municipality would be to provide the fee in lieu funds to the Centre County Housing and Land Trust to create affordable housing opportunities. Two concerns are: structuring the formula or setting the fee so that the end result is the construction of new affordable housing units and making certain that mixed income housing is achieved through the integration of inclusionary units into a development. Off-site construction of inclusionary housing units is another option. Proposed sites for off- site construction should be appropriate. #6 Exploring Other Inclusionary Housing Opportunities Inclusionary housing may also be provided through other opportunities. The following are tools for inclusionary housing units and include: o Infill development. The construction of new housing units on scattered sites, vacant lots, within a community. o Accessory Dwelling Units. The creation of separate housing units within single- family homes or on the lot. (Rental option) o Mixed Use Development. The practice of allowing more than one use in a building or set of buildings. o Conservation Design. The preservation of 50% of open space while allowing housing density to occur on the remainder of the tract. o Adaptive Reuse. The reuse of older buildings. o Acquisition, Rehab & Resale. The purchase of an existing home and rehabbing and reselling it. These tools can be effective methods for providing new affordable housing units and at the same time be consistent with growth management strategies for the County. #7 Sustaining Housing Affordability The critical component of any affordable housing development is sustaining the affordability of the units. Without controls, the market value of the housing unit could appreciate beyond an affordable price limit. The controls may: establish income eligibility; set a period for which the unit is to remain affordable which is typically for a period of 30 ---PAGE BREAK--- 13 EXECUTIVE SUMMARY years to perpetuity; restrict improvements; and, provide a formula for appreciation. Tools to sustain affordability include: o Deed restriction prescribes the period of housing affordability, income eligibility, restrictions on improvements to the unit, and resale formula, including how appreciation will be shared. o Community Land Trust prescribes the same as the deed restriction. The home is affordable since the land value is separated from the price of the home. Land Trust leases the land to the home buyer for a nominal fee. Land leases are in effect for a period of 99 years to perpetuity. There are two community land trusts in Centre County which are: Centre County Housing and Land Trust and State College Community Land Trust. o Housing Cooperative is a not-for-profit cooperative corporation that is formed for the purpose of jointly owning or controlling housing units. Each resident pays a fee to cover their share of the operating expenses. Currently, there are no owner-occupied housing cooperatives in Centre County. o Habitat for Humanity builds homes for families with household incomes up to 60% of the County’s Area Median Income. The first mortgage is based on the cost to build the home. A soft second mortgage is forgiven over a 15 year period and is based on the difference between the first mortgage and the appraised value. Implementing tools to sustain housing affordability requires expertise. The Centre County Housing and Land Trust is prepared to offer these services, developing and administering the controls for an established period of time. Other components include: o Home buyer budget counseling o Homeownership education o Post-purchase counseling and support o Oversight of property improvements In addition to the controls listed in this section, principal residency is also important. Not requiring principal residency may result in the unit being converted to an income-producing property. #8 Promoting Cost Effective Building Standards As previously noted on page 9, Centre County Building Permit Data and the mortgage calculator illustrates the fact that new single family housing units are beyond the affordable price range for households in need of affordable units. Efficiencies in housing construction methods can help reduce the overall cost of the unit. The most common housing construction methods are: o Stick-built: Constructed on the building site, piece by piece.1 Average cost per square foot: $85-$125 o Modular home: Factory-built homes that are built to state, local or regional code where the home will be located. Modules are transported to the site and installed.2 Average cost per square foot: $60-$75 o Manufactured home: “Homes are built entirely in the factory under a federal building code administered by the US Department of Housing and Urban Development (HUD). The Federal Manufactured Home Construction and Safety Standards (commonly known as 1 Source: www.About.com: Architecture Website http://architecture.about.com 2 Source: Manufactured Housing Institute Website www.manufacturedhousing.org ---PAGE BREAK--- 14 EXECUTIVE SUMMARY the HUD Code) went into effect June 15, 1976. Manufactured homes may be single-or multi-section and are transported to the site and installed. The federal standards regulate manufactured housing design and construction, strength, durability, transportability, fire resistance, energy efficiency and quality. The HUD Code also sets performance standards for the heating, plumbing, air conditioning, thermal and electrical systems. It is the only federally- regulated national building code. On-site additions, such as garages, decks and porches, often add to the attractiveness of manufactured homes and must be built to local, state or regional building codes.”3 Average cost per square foot: $40-$45 Referencing the cost per square foot, the municipality can work with the developer/builder to determine the housing construction method(s) that would be most appropriate. Another construction method promoting efficiency is advanced framing techniques or Optimum Value Engineering, which is intended to reduce waste as well as the amount of lumber required to frame a home. Techniques include: o Using 2x6 studs at 24” on-center intervals; o Designing homes based on 2-foot modules to take advantage of common sheet sizing, minimizing cutting; o Using 24” on-center spacing for roof rafters and floor joists; and, o Transfer all loads directly downward by aligning floor joists, roof rafters and studs vertically.4 3 Ibid 4 Source: www.informedbuildng.com House size is also an important factor in controlling the total cost of the home. Municipal officials may address the size of the home in local policies, encouraging more cost effective, smaller homes. Accessible Homes Designing homes to accommodate persons with physical disabilities or for individuals and couples aging in place should also be a priority. One housing design is a visitable home. There are three important features that make a home visitable which are: o An at-grade or zero-step entrance to the home that is approachable by an accessible route such as a sidewalk. o Doors (one exterior and all interior) that are at least 2 feet, 10 inches wide to allow 32 inches of clear passage space. (Three foot doors are required in fully accessible units.) o A powder room on the first floor.5 As per Concrete Change, the above-listed features make it easier for persons with mobility impairments to live in and visit. Concrete Change is a resource for visitable homes.6 www.concretechange.org Energy Efficiency The three most widely used housing construction certifications that promote energy efficiency are: o o NAHB Green Building Standard o LEED (Leadership in Energy and Environmental Design) is a joint program of the U.S. Environmental Protection Agency and the U.S. 5 Myers, Diana Centre County Affordable Housing Needs Assessment: A Blueprint For Action, 2008 6 Source: Concrete Change Website www.concretechange.org ---PAGE BREAK--- 15 EXECUTIVE SUMMARY Department of Energy to help consumers save money and at the same time protect the environment through energy efficient products and practices. The ICC National Green Building Standard™, “…incorporates environmental considerations and resource efficiency into every step of the building and development process to minimize environmental impact. The design, construction, and operation of a home must focus on energy and water efficiency, resource efficient building design and materials, indoor environmental quality, and must take the home's overall impact on the environment into account.” The construction areas for the Green Standard include: o Lot & Site Development o Resource Efficiency o Energy Efficiency o Water Efficiency o Indoor Environmental Quality o Homeowner Education. LEED “…is an internationally recognized green building certification system, providing third- party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts.” http://www.usgbc.org/ LEED for Homes promotes efficiencies such as: o Compact development o Site selection close to existing infrastructure o Limited outdoor water use o Homes with ready access to community resources and open spaces o Homes that are smaller than the national average Common Considerations for Energy Efficient Homes Siting of the home In order to take advantage of solar energy, the house should face a southerly direction with south facing glazing and properly sized overhangs. Consideration should also be given to the orientation of homes when designing the lot configuration for subdivisions. Windows Install high performance Energy Star certified windows. Heating systems Electric baseboard heating systems are the least expensive to install; however, the long- term cost of electric service may no longer be an affordable option when the rate caps expire on January 1, 2011.7 The decision on which heating system to choose should be based on cost, energy- efficiency and available fuel choices. Heat pumps are promoted as a heating option for affordable homes option. Insulation Consistent with the UCC, recommended insulation standards are as follows: o R-21 insulation in the wall with R-5 rigid sheathing for a total of R-26 o R-50 insulation in the attic The use of caulk, spray foam and damp spray cellulose are also highly recommended to control leakages. Conducting a blower door test will help determine whether or not the home has been properly sealed. 7 Source: Public Utility Commission Website http://www.puc.state.pa.us/general/consumer_ed/p df/Rate_Caps.pdf ---PAGE BREAK--- 16 EXECUTIVE SUMMARY Air quality Proper air flow is important in the house to promote good air quality. If the newly constructed home is sealed too tight then a fresh air ventilation system may be needed. For more information on Ventilation for Homes visit: http://www.epa.gov/iaq/homes/hip- ventilation.html Water efficiency Use low flow fixtures, harvest rain water, and landscape with native plants. Whole house energy efficiency is the end result of a comprehensive approach to employing adopted green-type standards from the start of the pre-planning phase to and including constructing and finishing the home. When addressing green and energy efficient standards, the question is whether or not the standards will add to the initial cost of the home making it less affordable at the time of purchase but affordable over the life of the home. #9 Establishing an Affordable Housing Plan Once a municipality makes a commitment to formally address the need for inclusionary housing in the community and adopts enabling legislation to accomplish its goals, a step-by- step companion document is often needed to guide the process. The municipal ordinance generally provides a broad overview of the inclusionary housing program, including: the goals of the program, the zoning districts within which inclusionary housing will be encouraged/required, the cost offsets available to developers, and the income eligibility targets. Such ordinances do not typically provide detailed guidance on the role and responsibilities of the various parties involved in the inclusionary housing project. By incorporating the general parameters rather than the specific details of the inclusionary housing program in the ordinance, the municipality allows flexibility for the program to evolve over time. Amending a municipal ordinance to keep up with program changes can be expensive and time-consuming. Thus it makes sense for items such as income guidelines or construction details to be included in a separate manual that can be easily amended by resolution on an annual or as-needed basis. That is where a Policies and Procedures Manual comes in. A Policies and Procedures Manual for Inclusionary Housing is a resource document for the municipality, the developer, and the land trust or non-profit agency administering the program. It provides specific guidance on the requirements of the program, the responsibilities of the developer, construction requirements for the housing units, the period of affordability, and eligibility requirements for homebuyers. The heart of the Policies and Procedures Manual is the Housing Development Plan, within which the developer describes the details of housing project. The Housing Development Plan is prepared by the developer in consultation with the municipality and the non-profit agency that will be responsible for program administration. The Housing Development Plan specifies the number of units proposed for construction, the location of the units within the overall project, and the applicable affordability restrictions. It may also require the developer to provide a copy of the market analysis s/he used to determine the need and demand for the type of housing units planned for the development and an artist’s rendering of the project. If the project is proposed to be built in phases, the Housing Development Plan should describe the timing for construction of the inclusionary units within each phase. The Housing Development Plan is a legal document that is executed by the developer and the municipality and recorded with the subdivision/land development plan. As a ---PAGE BREAK--- 17 EXECUTIVE SUMMARY result, any change to the Housing Development Plan must be requested in writing and approved by the municipality. A model Policies and Procedures Manual is included in the Appendices. #10 Considering Model Regulations, Policies and Procedure Model ordinances have been developed to promote the creation of inclusionary housing at the municipal level. The following are three examples to consider when drafting municipal regulations, policies and procedures. Model Affordable Housing Density Bonus Ordinance Model Smart Land Development Regulations Interim PAS (Planning Advisory Series) Report-American Planning Association, March 2006 pdf/section44.pdf Montgomery County Planning Commission’s Workforce Housing Reports Report Promoting Workforce Housing: Expanding Locations and Development Potential, Density Bonus Model Ordinance, Page 9 http://planning.montcopa.org/planning/cwp/vie w,a,1629,q,58514.asp Inclusionary Zoning-Guide/Model Regulations, Lehigh Valley Planning Commission, December 2008 http://www.lvpc.org/pdf/inclusionaryZoning.pdf Getting Started When developing this document, the Centre County Housing Cabinet concluded that a model inclusionary housing ordinance for Centre County’s municipalities to adopt would not be the most appropriate solution to meeting local and regional housing needs since local conditions vary throughout the County due to differences in existing housing stock, housing need, areas zoned for residential growth, and geologic conditions, to name a few. These factors would need to be considered for each municipal set of regulations and policies. Municipalities are encouraged to tailor regulations and policies that best meet local and regional needs. This manual is intended to be a guide. In addition, the Centre County Planning and Community Development Office, Centre County Housing and Land Trust, and the Centre County Affordable Housing Coalition are ready and willing to work with municipalities in developing policies to meet this important need. The key components of this process are: partnerships, flexibility and patience. The municipality, developer, and non-profit need to sit together at the table and thoughtfully work through the process from the inception of the inclusionary housing policies to the development’s completion. Adjustments in regulations, local policies, and development plans may be necessary in order to ensure the economic viability of the project In Mount Joy Borough, Lancaster County, inclusionary housing regulations were adopted as part of a Traditional Neighborhood Development Ordinance. Experience in Lancaster County has shown that the success of the project depends on a committed partnership between the municipality, developer, and non-profit. Before adopting inclusionary policies, municipalities should encourage developers to test the economic viability of the draft regulations. The Borough of State College’s process serves as an example for other local officials to follow in that the municipality has requested developers to conduct a financial analysis, pro forma, of proposed development scenarios to determine if the proposed regulations would result in inclusionary units. ---PAGE BREAK--- 18 EXECUTIVE SUMMARY Resources are available to municipalities interested in creating inclusionary housing opportunities. For assistance contact the Centre County Planning and Community Development Office. ---PAGE BREAK--- 19 INTRODUCTION/ HOW TO USE THIS MANUAL Pages 5-7 EXECUTIVE SUMMARY Page 9-18 STEP by STEP PROCESS PAGE # 1 UNDERSTANDING THE CONCEPT OF INCLUSIONARY ZONING 21 2 IDENTIFYING HOUSEHOLDS TO BE SERVED BY INCLUSIONARY POLICIES 25 3 ESTABLISHING A LEGAL FRAMEWORK FOR INCLUSIONARY ZONING 29 4 PLANNING FOR INCLUSIONARY HOUSING 31 5 DECIDING ON APPROPRIATE INCLUSIONARY HOUSING APPROACH 33 6 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES 53 7 SUSTAINING HOUSING AFFORDABILITY 61 8 PROMOTING COST EFFECTIVE BUILDING STANDARDS 69 9 DEVELOPING AN AFFORDABLE HOUSING PLAN 79 10 CONSIDERING MODEL POLICIES 81 DEFINITIONS 83 ---PAGE BREAK--- 20 APPENDICES http://www.co.centre.pa.us/planning/housing.asp 87 Centre County Assisted Housing Inventory See Web Page Map of Assisted Housing in Centre County See Web Page Legal Basis for Inclusionary Zoning See Web Page INCLUSIONARY REGULATIONS, Examples See Web Page Inclusionary Housing Model Policies and Procedures Manual See Web Page 1 ---PAGE BREAK--- UNDERSTANDING THE CONCEPT OF INCLUSIONARY ZONING Zoning is a tool used by municipalities to regulate land uses. A recognized consequence of traditional zoning has been the segregation of land uses, which has resulted in housing being exclusionary. Regulations promoting larger lots, construction of larger homes, and cookie-cutter residential development have priced housing units out of the affordable range. Reversing this trend can be realized through inclusionary housing policies. Inclusionary housing is defined as promoting the production of affordable housing units by reserving a percentage of residential units that are priced affordable to low and moderate income households. It may also be viewed as the modification of local standards which results in reducing the overall costs of developing and constructing residential units. For example, State College Borough has drafted an ordinance that requires that 20% of a new residential development of six of more units be affordable. College Township does not require a percentage set aside but instead offers the developer a menu of incentives in exchange for the creation of new workforce housing units. Benefits of inclusionary housing include: o Increasing housing options for individuals, families, senior citizens and persons with disabilities. o Easing the transportation burden for service sector employees by providing housing close to places of employment and public transportation. o Supporting employers’ efforts to hire and retain employees when housing is affordable within a short commute distance. o Promoting more efficient land use and sustainable communities. Historically, these policies date back to the 1970s when communities in different parts of the country began to address the need for affordable housing units. One of the most successful examples is the Montgomery County, Maryland, Moderately Priced Dwelling Units (MPDU) program. The law requires that between 12.5% and 15% of the houses in new subdivisions of 20 or more units be moderately priced dwelling units (MPDUs).8 asp?url=/content/dhca/housing/housing_p/mpd u/Summary_new.asp The practice of inclusionary zoning in is more recent. Mount Joy Borough, Lancaster County, adopted inclusionary housing regulations through a Traditional Neighborhood Development Ordinance, requiring at least 10% of the dwelling units be affordable to income eligible households. In addition to incentivizing or requiring a developer to set aside a percentage of dwelling units as affordable, a municipality typically requires a developer to: o Integrate the affordable housing units throughout the development instead of segregating the units. o Match the exteriors of the market rate and inclusionary units. UNDERSTANDING THE CONCEPT OF INCLUSIONARY ZONING 8 Montgomery County Department of Housing and Community Development, Maryland-Moderately Priced Dwelling Unit Program Source: ---PAGE BREAK--- 22 o Sustain the units as affordable for a set period or in perpetuity. o Work with a non-profit for the administration of the affordability controls. The intent of inclusionary policies is to increase the supply of affordable housing without stigmatizing the residents of the newly created units. See Example on Page 23. Finally, it is important to note that government funding to finance the construction of affordable units is scarce. The adoption of local regulations and policies can be an effective tool to increase production of affordable housing units. The critical element in this process is to establish a partnership between the municipality, developer and non- profit in order to structure a program that will be successful. ---PAGE BREAK--- 23 ---PAGE BREAK--- 24 This page left intentionally blank. ---PAGE BREAK--- 25 IDENTIFYING HOUSEHOLDS TO BE SERVED BY INCLUSIONARY POLICIES Affordable housing is intended to serve income eligible households. The standard measurement for household income is typically the County’s area median income (AMI), which is based on the US Census and adjusted annually. Three primary categories of income-based affordable housing are: o Assisted housing o Low to moderate-housing o Moderate-income housing Assisted housing is rental units supplied through a mix of financing that includes funds from local, state or federal government programs. Funding sources include: U.S. Department of Housing and Urban Development, Rural Development through US Department of Agriculture, Low Income Housing Tax Credits through the Housing Finance Agency, and Department of Community and Economic Development. The funds expand affordable housing by providing dollars for construction, assisting renters, and encouraging home ownership. See Appendices for a listing of assisted housing units in Centre County. The programs listed serve households at or below 60% of the County’s area median income (AMI). 9 Source: US Department of Housing and Urban Development, US Census data, adjusted annually Another subset is low-income households which range from 60 to 80% AMI. Providing home ownership opportunities for this income range can be challenging since the developer may not be able to build affordable units at a price that low-income households could afford. The solution would be for the developer to partner with a non-profit, accessing government dollars to offset construction and housing costs. Funding made available through the Community Development Block Grant and HOME Programs can be used for affordable housing projects or related costs, serving households up to 80% of the County’s area median income. Moderate-income housing serves households over 80% up to 120% AMI. The means for providing dwelling units for this income range is through regulatory and policy relief, reducing per unit costs. As part of the process of developing policies and regulations to address the affordable housing needs on a municipal or regional level, it is important to first consider the existing housing stock of a municipality and its affordability. Depending on the current and projected affordable housing inventory, policies and regulations should be written to best address the local needs. AREA MEDIAN INCOME (AMI) for CENTRE COUNTY-20109 Household Size 30% 60% 80% 100% 120% 1 Person $13,950 $27,900 $37,150 $46,500 $55,800 2 Person $15,950 $31,860 $42,450 $53,100 $63,720 3 Person $17,950 $35,820 $47,750 $59,700 $71,640 4 Person $19,900 $39,780 $53,050 $66,300 $79,560 5 Person $21,500 $43,020 $57,300 $71,700 $86,040 2 ---PAGE BREAK--- 26 IDENTIFYING HOUSEHOLDS TO BE SERVED BY INCLUSIONARY HOUSING Studies show that there is less housing stock available for households within the 60 to 100% AMI income range. One such study is the Centre County Affordable Housing Needs Assessment: A Blueprint for Action (2005) (www.co.centre.pa.us/ planning/housing.asp) which projects a demand for 2,000 new single- family units to be affordable to low and moderated-income households by 2030. In addition, the Centre County Association of REALTORS ® established an American Dream Fund to support workforce housing since the organization recognized the need. Sources of data for determining housing needs include: o Municipal or regional comprehensive plans-Elements include: -Housing elements -Existing and future land use -Growth management plans o US Census data sets include: -Median household income -Value of housing -Age of structure -Housing starts US Census http://factfinder.census.gov o Market data from the Centre County Association of REALTORS provides average sales prices for residential units for each of the school districts. Centre County Association of REALTORS® 2040 Sandy Drive, Ste. D, State College, PA 16803 Phone: [PHONE REDACTED] o Growth forecasting data-Centre County Planning and Community Development Office & Centre Regional Planning Agency The County’s Long Range Transportation Plan (LRTP) shows forecasted growth in each of the County’s 35 municipalities. The plan is updated every 4 years. o Building permits The Planning Office tracks the number and dollar amount of new construction of structures (not including the price of land) on a yearly basis. Building Permits for new construction of residential and commercial structures can be found at County, Planning Region, and Municipal levels from 1996 forward. For additional information, please contact the Planning Office. • 1996-2002 Historical Summary of Building Permits [PDF] • 2003 Building Permit Report [PDF] • 2004 Building Permit Report [PDF] • 2005 Building Permit Report [PDF] • 2006 Building Permit Report [PDF] • 2007 Building Permit Report [PDF] • 2008 Building Permit Report [PDF] • 2009 Building Permit Report [PDF] o School district strategic plans or facilities planning provide data on school district population projection, forecasting areas where growth will occur. Contact the school district for current demographic data and community growth projections. o US Department of Labor’s Bureau of Labor Statistics provides a listing of occupations in Centre County and hourly wage estimates. 2 ---PAGE BREAK--- 27 IDENTIFYING HOUSEHOLDS TO BE SERVED BY INCLUSIONARY HOUSING Data on earnings is helpful in understanding the home buying potential for income eligible households. The standard rule is that a household should not pay more than 30% of its gross income on housing costs. http://www.bls.gov/oes/2008/may/oes_44 300.htm#b43-0000 o Housing Costs: Homeowners: Principal, Interest, Taxes, Insurance, and PMI (Private Mortgage Insurance), and Homeowners Association Dues/Condominium Fees, if applicable Renters: Rent and utilities In response, municipalities typically provide regulatory and policy incentives for developers to build new units for households between 60% and 100% AMI based on an identified need. Below is a chart that provides examples of income eligible households to be served by inclusionary housing policies. Included in the provisions is the standard for which income is measured. INCLUSIONARY ZONING REGULATIONS: EXAMPLES OF INCOME ELIGIBILITY REQUIREMENTS INCOME ELIGIBILITY MEASUREMENT STANDARD CENTRE COUNTY COLLEGE TOWNSHIP 60% to 100% AMI Annual data from HUD or Census Bureau FERGUSON TOWNSHIP 80% to 120% AMI Latest Census data HALFMOON TOWNSHIP (Draft) 80% to 100% AMI HUD income data available at the time of final plan submission HARRIS TOWNSHIP 60% to 100% AMI HUD, annually adjusted PATTON TOWNSHIP Up to 120% AMI SPRING TOWNSHIP 60% TO 120% AMI ½ of units shall fall w/in the 60% to 90% range & ½ units shall fall w/in the 91% to 120% range As calculated by the Federal Government, adjusted annually for family size STATE COLLEGE BOROUGH (Draft) Up to 120% AMI, adjusted for household size Rental: Up to 80% AMI HUD 2 ---PAGE BREAK--- 28 IDENTIFYING HOUSEHOLDS TO BE SERVED BY INCLUSIONARY HOUSING RECOMMENDATION INCOME Determine the community’s housing needs and the available housing stock. Decide on the AMI range that will best meet the identified housing gaps: Income range for owner- occupied dwelling units: 80% to 120% of the County’s AMI; 60 to 79.9%, if the developer partners with a non-profit or local government. STANDARD US Census, as adjusted annually by the US Department of Housing and Urban Development (HUD) SUGGESTED ADMINISTERING AGENICES for qualifying renters or home buyers o Centre County Housing & Land Trust o State College Community Land Trust 2 ---PAGE BREAK--- 29 ESTABLISHING A LEGAL BASIS FOR INCLUSIONARY HOUSING is a Dillon’s Rule state, whereby, “…the powers of local governments must be sanctioned by the state.” The state grants powers to municipalities for the adoption of inclusionary zoning regulations through the provisions of the Municipalities Planning Code. Applicable sections include: Article 1-General Provision Section 105. Purpose of Act. “…to permit municipalities to minimize such problems as may presently exist or which may be foreseen…” Problems may be defined as housing needs in a community which are not being met. Article III-Comprehensive Plan Section 301. Preparation of Comprehensive Plan The municipal, multi-municipal or county comprehensive plan, consisting of maps, charts and textual matter, shall include, but need not be limited to the following related basic elements: (2.1) A plan to meet the housing needs of present residents and of those individuals and families anticipated to reside in the municipality, which may include conservation of presently sound housing, rehabilitation of housing in declining neighborhoods and the accommodation of expected new housing in different dwelling types and at appropriate densities for households of all income levels. Article VI-Zoning Section 603. Ordinance Provisions Zoning ordinances should reflect the policy goals of the statement of community development objectives and give consideration to the character of the municipality, the needs of the citizens and the suitabilities and special nature of particular parts of the municipality. Zoning ordinances may contain: provisions to encourage innovation and to promote flexibility, economy and ingenuity in development, including subdivisions and land developments as defined in this act; provisions authorizing increases in the permissible density of populations or intensity of a particular use based upon expressed standards and criteria set forth in the zoning ordinance; Section 604. Zoning Purposes. The provision of zoning ordinances shall be designed: To promote coordinated and practical community development and proper density or population. To provide for the use of land within the municipality for residential housing of various dwelling types encompassing all basic forms of housing, including single-family and two-family dwellings, and a reasonable range of multifamily dwellings in various arrangements, mobile homes and mobile home parks, provided, however, that no zoning ordinance shall be deemed 3 ---PAGE BREAK--- 30 ESTABLISHING A LEGAL BASIS FOR INCLUSIONARY HOUSING invalid for the failure to provide for any other specific dwelling type. To accommodate reasonable overall community growth, including population and employment growth, and opportunities for development of a variety of residential dwelling types and nonresidential uses. Municipalities considering the adoption of inclusionary regulations are advised to seek the advice of their solicitor. Important questions to ask when developing inclusionary zoning: 1) Do the regulations comply with Article VI, Zoning, Sections 603 and 604 of the Municipalities Planning Code? 2) Do the regulations show a reasonable relationship to a legislative purpose? 3) Does the ordinance provide for incentives to offset any regulatory burden? 4) Does the ordinance offer relief or alternatives? 5) Are the standards established clear, avoiding arbitrary interpretation of the standards? considerations when adopting inclusionary regulations …No person shall be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. Grant powers to the states not delegated to the US Constitution. The police powers enable the state to act to protect and promote safety, health and welfare of its residents. …No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United State; nor shall any State deprive any person of life, liberty, or property, without due process of law’ nor deny to any person within its jurisdiction the equal protection of the laws. Appendices: Legal Basis for Inclusionary Zoning in RESOURCE An excellent resource for understanding the legal basis for inclusionary zoning: “Avoiding Constitutional Challenges to Inclusionary Zoning” Authors: Deborah Collins and Michael Rawson National Housing Conference, Inclusionary Zoning: The California Experience, February 2004 http://www.calruralhousing.org/sites/default /files/Inclusionary%20Housing%20- %20NHC%20Report.pdf 3 ---PAGE BREAK--- 31 PLANNING FOR INCLUSIONARY HOUSING Housing is affordable when a household pays no more than 30% of its gross income on housing costs10. Currently, there is a supply of affordable housing throughout the county; however, the inventory is insufficient to meet the growing need. In planning for new affordable units, several factors should be considered with the most important being: location, transportation costs, proximity to employment and services, availability of infrastructure, and quality of life. SITE WITHIN GROWTH MANAGEMENT AREAS Consistent with comprehensive planning, development of affordable housing should be sited within designated growth management areas, served by public water and sewer. Where appropriate, development should also be encouraged in areas adjacent to existing towns and villages, extending public sewer and water to serve the new housing units. LOCATE NEAR PUBLIC TRANSPORTATION Transportation is also an important when siting affordable housing. New housing units should, where possible, be located near public transportation routes, places of employment, and services. Incorporating a transportation component into the planning of affordable housing will not only reduce the number of vehicle trips generated by the new development, 10 US Department of Housing and Urban Development but more importantly lessen a household’s transportation burden. CATABUS http://www.catabus.com CATACOMMUTE PLAN FOR WALKABLE COMMUNITIES Walkable communities encourage social interaction, promote physical activity, and reduce vehicle trips, when services and amenities are provided. Priority locations for affordable housing should be walkable, which opens up opportunities for pedestrians to access not only community and commercial services but also schools and places of employment. CREATE RECREATION OPPORTUNITIES Recreation is a valuable asset to communities throughout the County with active and passive recreation facilities being taken full advantage of 4 PRIORITY # 1 PRIORITY # 2 PRIORITY # 3 PRIORITY # 4 ---PAGE BREAK--- 32 PLANNING FOR INCLUSIONARY HOUSING by residents of all ages. The proximity of affordable housing to local and regional parks, greenways, athletic fields, or other recreational opportunities should be a factor in the planning process. Centre County Recreational Resources: http://www.crpr.org Centre County Greenway Plan Greenway Initiative http://www.co.centre.pa.us/planning/cultural/gre enway/default.asp Centre County YMCAs Source: http://www.ymcaofcentrecounty.org/ Finally, implementing Priorities #1 through #4 fosters healthy, inclusionary communities; however, planning efforts should also focus on encouraging and sustaining local services such as grocery stores, pharmacies, libraries, post offices, and restaurants, integrated in such a way to support residential development. HOUSING OPPORTUNITIES Developers or builders interested in new residential development opportunities may take advantage of GIS (Geographic Information Systems) data available through the Centre County Planning and Community Development Office which shows vacant parcels or lots located in residential zoning districts. This data is updated every four years through the Long Range Transportation Plan growth forecasting process with the most current plan being adopted in 2010. As noted in Priority growth should be encouraged in designated growth management areas of the County which are served by public sewer and water. For more information, contact Centre County Planning Office at 355-6791. 4 ---PAGE BREAK--- 33 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH After the municipality has determined its current and projected housing gaps for low to moderate households, the next step is to explore the development of regulations and policies that would promote the creation of affordable housing. The Municipalities Planning Code enables boroughs and townships to zone for inclusionary housing; however, the municipality is advised to first seek legal advice from their solicitor. A voluntary approach provides incentives to encourage the developer to construct inclusionary housing. Incentives or cost offsets may include: density bonus, reductions in regulatory requirements such as lot and street standards, waivers of fees, and/or streamlining the administrative process. Cost offsets provide an economic balance to the loss of profit a developer would incur when constructing inclusionary units as part of a development plan. A mandatory approach requires the developer to provide for a specified percentage of inclusionary housing units or set aside as part of a development plan. As with the voluntary approach, costs offsets are provided. Both voluntary and mandatory approaches will regulate a minimum threshold by which the regulations would apply. The threshold may be determined by the number of acres to be developed or the number of housing units to be provided. MOST COMMON COST OFFSETS o Provide a Density Bonus and Other Bonus Opportunities o Provide Housing Type Options o Reduce Lot Size o Reduce Setbacks o Reduce Sidewalk Requirements o Reduce Street Standards o Waive Parkland Fee in Lieu Fees o Reduce Parking Requirements o Waive or Defer Fees o Streamline the Review Process PROVIDE A DENSITY BONUS A density bonus is a tool used by municipalities, incentivizing or requiring developers to provide a percentage of inclusionary housing units as part of a development plan. This tool allows developers to exceed the maximum permitted density on a tract of land, if inclusionary units are provided. In exchange, the developer may construct additional market rate units. Zoning regulations will specify the percentage or ratio of additional market rate units to inclusionary housing units. DENSITY BONUS Within the Traditional Neighborhood District, Mount Joy Borough offers a 1:1 density bonus in exchange for the provision of workforce housing, or one additional dwelling unit per acre in exchange for each workforce housing unit provided. The base density for the district is four dwelling units per acre, but this may be increased to a maximum of eight dwelling units per acre should the developer take advantage of the workforce housing density bonus and other density bonuses provided for in the ordinance. Source: Lancaster County Smart Growth Toolbox http://www.co.lancaster.pa.us/toolbox/s ite/default.asp?toolboxNav=I 5 ---PAGE BREAK--- 34 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH Typically, density bonuses permit one or more additional unit(s) per acre for every inclusionary unit provided, or as a percentage of market rate units above the base zoning, which is oftentimes equal to the set aside or regulated percentage of inclusionary units. Local examples: MUNICIPALITY BONUS COLLEGE Permits a market rate unit to have similar lot requirements of WFH unit in exchange for the provision of WFH units SPRING 5% WFH units/3.5 units per acre (single-family, duplex, quadplex, townhouse) Additional 5% WFH units- Apartments are permitted and building height may increase to 40 feet STATE COLLEGE (Draft) Inclusionary requirement: 20% of total dwelling units; Developer has an option to add 1 additional equivalent dwelling unit for every inclusionary unit OTHER BONUS OPPORTUNITIES Municipalities may strive to achieve other planning goals by providing alternative types of bonuses to developers. For example, Ferguson Township encourages good design in its Traditional Town Development District (TTD) regulations, offering flexibility to the developer in exchange for additional workforce housing units, above the required ratio. Harris Township provides for a reduction in open space in their Agricultural District served by public sewer, permitting the developer to plan for maximum build out over a greater land area, in exchange for inclusion of workforce housing units. MUNICIPALITY BONUS FERGUSON Design Incentive: For each WFH unit provide in excess of the required 1:10 ratio, 2 units may be placed on lots between 15,000- 20,000 sq. ft. HARRIS Open Space Reduction: 10% reduction-10% WFH units required 20% reduction-15% WFH units required US Department of Housing & Urban Development’s REGULATORY BARRIERS CLEARINGHOUSE Affordable Housing Toolkits provide community leaders with a set of best practices that can help meet your affordable housing needs. Toolkits offer assistance on a variety of topics, including developing partnerships with stakeholders, overcoming affordable housing implementing flexible zoning and building codes, gaining community support, and providing incentives that encourage affordable development. The links below are online toolkits which are posted on HUD’s website @ http://www.huduser.org/rbc/nca/toolkits.html Toolkit for Affordable Housing Development Affordable Housing Toolkit for Evanston Regulatory Barriers to Affordable Housing Town of Cary Affordable Housing Toolkit Equitable Development Toolkit Homes within Reach Toolkit: Centre County, 5 ---PAGE BREAK--- 35 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH PROVIDE HOUSING TYPE OPTIONS Constructing an affordable stick built, single-family detached home within the price range of low to moderate income households can be challenging. In Centre County, the average cost of stick built construction per square foot ranges from $85 to $125, which does not include the price of the lot and other overhead. The Housing Types Chart, 2009 Centre County Building Permit Data, reflects these figures. As noted, the median value for a single family detached unit exceeds an affordable price range. In addition, the Mortgage Calculator estimates a purchase price limit for an income- eligible household. Together, the two charts illustrate the gap between actual housing costs and purchase power of income-eligible households. 2009 Centre County Building Permit Data Median Values-Minus the land value Single-Family Home $212,976 Duplex Unit $163,889 Townhouse $100,015 http://www.co.centre.pa.us/planning/data.asp Providing for other housing types such as duplexes and townhomes gives the developer the flexibility to more effectively meet the affordable price range of income eligible households. In addition, a range of housing types “can help to create a diverse population that can accommodate all ages and a variety of income levels.”11 11 “Site Design Considerations,” page 1-18, Standards for Residential Site Development, Hamer Center and Housing Research Center, March 2007 Local examples include: MUNICIPALITY HOUSING TYPE OPTIONS COLLEGE For every 5 WFH units serving households > 80% AMI, 1 unit may be provided in a dwelling type other than single-family; for every 5 WFH units serving households less than 80% AMI, 2 units may be provided in a dwelling type other than single family FERGUSON Traditional Town District encourages a mix of housing types HALFMOON Draft Rural Village District allows for new residential construction regardless of dwelling unit type PATTON Commercial-Transitional District’s Conditional Use regulations provide for duplexes, townhomes and apartments. SPRING Single-family, duplex, quadplex, townhouse housing types are permitted Additional 5% WFH units- Apartments are permitted and building height may increase to 40 feet STATE COLLEGE Draft 1 and 2 family, row dwellings or townhomes and multi-family units Florin Hills, Mount Joy Borough A mix of housing types in the Traditional Neighborhood Development MORTGAGE CALCULATOR Household of 4 @ 80% AMI Gross income: $52,650 5% down 5.5% Interest Rate Assuming $550.000 in other expenses and 28% limit on PITI (mortgage, taxes and insurance) and 38% limit on debt TOTAL HOME WORTH: $138,060.93 5 ---PAGE BREAK--- 36 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH REDUCE LOT SIZE Higher density development is key to the provision of affordable housing. By reducing lot sizes, the developer has the ability to maximize the development potential of a tract of land. In addition, providing for smaller residential lots reduces the overall land and infrastructure costs per housing unit. Typical lot price: 1/8 to 1/4 acre: $60,000 - $75,000 One option for reducing lot size is to specify the minimum or maximum lot size requirement based on square footage. Another option is to provide for a reduction in lot size based on a percentage. For example, the model inclusionary housing ordinance developed for municipalities in Montgomery County, recommends a lot size reduction up to 30%. In the chart below, local examples of both options are listed. REDUCE SETBACKS Consistent with the reduction in minimum lot size, setbacks should be reduced to provide sufficient land area for construction of a home and future improvements. As with lot size reductions, requirements may be based on a specified minimum footage, a percentage or set at zero. 12 WFH-Workforce Housing REDUCE SIDEWALK REQUIREMENTS Reducing sidewalk standards provides a cost savings to the developer; however, pedestrian safety should not be compromised. Depending on the development, sidewalks on one side may be an option to consider, making certain that safe access for the residents of the community is provided. Sidewalks should be constructed in areas accessing public or common facilities. Another benefit to reducing the sidewalk requirement is lowering the percentage of impervious surface coverage in a development. MUNICIPALITY SIDEWALKS COLLEGE May be reduced to at least one side of the street MUNICIPALITY LOT SIZES COLLEGE WFH12 lots may be reduced to a minimum of 5,000 sq. ft. PATTON 4,000 sq. ft minimum for single- family and duplex units; 3,500 sq. ft. minimum for multi-family STATE COLLEGE Draft 15% lot size reduction for 1 & 2 unit dwellings MUNICIPALITY SETBACKS COLLEGE Lot width: 40 foot minimum Front yard setback: 10 foot minimum Side yard setback: 7 foot minimum PATTON Lot width: 40 foot minimum Front yard setback: 5 foot minimum Side yard setback: 5 foot minimum Read yard setback: 5 foot minimum Zero yard setback is permitted w/10 foot minimum yard setback on opposite side STATE COLLEGE Draft Side yard setbacks can be eliminated for multi-family use 5 ---PAGE BREAK--- 37 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH REDUCE STREET STANDARDS Local roads provide access to residential properties and help define the neighborhood. Street standards regulated for inclusionary housing developments should be sensitive to the neighborhood character and also to the actual street construction costs. It is important that public safety not be comprised when formulating local policies. Two recently published reports provide recommendations on better roadway design based on sustainable design principles. The first document is Smart Transportation Guidebook, March 2008, which was developed by the Department of Transportation and the New Jersey Department of Transportation. The intent of the document is to promote sustainable, livable communities by marrying smart land use and transportation practices. HOMES WITHIN REACH TOOLKIT RECOMMENDATIONS Minimum Lot Size Reduce minimum lot size for smaller single-family homes to 3,500-6,000 square feet Maximum Lot Size Encourage the creation of smaller lots for the development of smaller homes through maximum lot size requirements Minimum Lot Width Permit minimum lot widths up to 50 feet. Front Yard Setbacks Reduce front yard setbacks to 0-5 feet. Side Yard Setback-Zero Lot Line Reduce side yard setbacks to 0 to 10 feet with zero setback on one side yard lot line and 10 feet setback from the other side yard ZERO LOT LINE Zero%20Lot%20Line%20Housing_files/frame.htm Local Road-Town/Village Neighborhood Setting Source: SmartTransportation Guidebook 5 ---PAGE BREAK--- 38 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH Smart Transportation is defined as, new approach to roadway planning and design, in which transportation investments are tailored to the specific needs of each project. The different contexts-financial, community, land use, transportation, and environmental-determine the design of the solution. The best transportation solution arises from a process in which a multi- disciplinary team, considering a wide range of solutions, works closely with the community. Inclusive of context-sensitive solutions (CSS), Smart Transportation also encompasses network connectivity, and access and corridor management. It will help both states and communities adapt to the new financial context of constrained resources.”13 As part of the Smart Transportation concept, street standards are recommended based on land use contexts. The contexts are defined as: Rural o Few houses and structures on agriculture or forest land o Small scale services o Rural hamlets o Population of the settled area exceeding 250 would be classified into the town/village context 13 Smart Transportation Guidebook, Department of Transportation and New Jersey Department of Transportation, March 2008 Suburban Neighborhood o Low density residential-Post WW II o Curvilinear streets o Lot sizes typically are ¼ to 2 acres o Older suburb lots-1/8th acre o Neighborhoods include community facilities such as schools, churches, recreational facilities and some stores and offices Suburban Corridor o Big box stores o Commercial strip centers o Office parks o Uses are sometimes interspersed with natural areas o Building are set back from roadway Suburban Center o Mixed use development with a cohesive collection of land uses-residential, office, retail and restaurant o Commercial uses serve surrounding neighborhoods o Designed to be accessible by car o On-street parking may or may not be provided Amberleigh Subdivision- Benner and Spring Townships Amberleigh Subdivision Benner & Spring Townships Street standard- Municipal waivers 22 foot cartway width Development provides for townhomes, and single-family detached units Construction of apartments is proposed for the final phase of the project 5 ---PAGE BREAK--- 39 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH Town/Village Neighborhood o Predominately residential neighborhoods o Some mix of retail, restaurant and offices o Block sizes are regular o On-street parking is common and well used o Majority of neighborhoods have sidewalks o Houses fronting the sidewalk and others with front lawns are both common o Retail may occupy corners of blocks Town/Village Center o High density-mixed use area o 2 to 4 story buildings are adjacent to sidewalk with commercial uses on the first floor o Parallel parking is on both sides of the street Urban Core o Downtown areas with mixed use o Building vary in height starting at 3 stories Wide Streets: High density neighborhoods, two-way, parking on both sides Medium Streets: Used in all neighborhoods, two-way, parking on both sides Narrow Streets: Low-density and medium density, two-way, parking both sides; all neighborhoods-one-way street, parking both sides or two-way parking one side Skinny Streets: All neighborhoods-one-way, parking one side; two-way, no parking Low Density: Less than or equal to 4 dwelling units per acre Medium Density: and less than or equal to 8 units/acre High Density: >8 units/acre Smart Transportation Guidebook, March 2008 Recommended street standards for the land use contexts are as follows: LOCAL ROAD Rural Suburban Neighborhood Town/Village Neighborhood Town/ Village Center Urban Core Lane Width 9’ to 11’ See roadway width See roadway width 9’ to 11’ 9’ to 11’ with bike lanes; w/o bike lanes or shoulder, 12’ to 14’ for bike routes Roadway Width See lane & shoulder width Wide: 34’ to 36’ Medium: 30’ Narrow: 26’ Skinny: 20’ Wide: 34’ to 36’ Medium: 30’ Narrow: 26’ Skinny: 20’ See lane & parking width See land & parking width Paved Shoulder Width 2’ to 8’ NA NA NA NA Parking Lane NA See roadway width See roadway width 7’ to 8’ parallel 7’ to 8’ parallel 5 ---PAGE BREAK--- 40 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH The Smart Transportation Guidebook references the AASHTO (American Association of State Highway Transportation Officials) Green Book which advocates for the use of narrower lane widths on roadways posted at 45 mph or less since narrower lanes reduce pedestrian crossing distance and are more economical to construct. The Guidebook further adds that local streets are, “…intended to make the motorist vigilant for the presence of other motorists, pedestrians and bicyclists, and hamper the ability to speed.”14 Another valuable resource for street standards is the Standards for Residential Site Development, which was developed by the Housing Research Center and the Hamer Center of The State University to assist municipalities in updating land development standards. The recommended standards are based on science and engineering and are intended to promote responsible and affordable development. Design standards for Residential Access Streets, which provide direct access to residential properties, are broken down into two categories based on design speed. The categories are: Type A 20 mph Type B 25 mph The standards are also categorized by types of traffic flow. The Manual recommends that the “yield-flow” only be considered for low-volume residential access streets to avoid safety concerns related to pedestrian and vehicular access and emergency response. 14 Smart Transportation Guidebook, Department of Transportation and New Jersey Department of Transportation, March 2008 Free-flow: Free-flow traffic requires a unique land for traffic moving in each direction. Free- flow streets shall have a marked center line. Slow-flow: Slow-flow traffic occurs when parked vehicles and/or constructed lane widths restrict the passing space available to vehicles moving in opposite directions. Slow-flow streets shall not have a marked centerline except in the vicinity of intersections. Yield-flow: Yield flow occurs when two-way traffic is impossible when parked vehicles are present. Yield-flow streets should not have a marked centerline except in the vicinity of intersections.15 15 “Chapter: 2 Street Standards”, Standards for Residential Site Development, Housing Research Center and the Hamer Center, April 2007 Free Slow Yield Types of Traffic Flow Modified from Source: National Association of Homebuilders et al., Residential Streets- Standards for Residential Site Development 5 ---PAGE BREAK--- 41 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH The standards listed above provide municipalities with guidance on adopting road standards that promote safety and give consideration to more sustainable design and reducing overall cost of construction. WAIVE PARKLAND FEE IN LIEU FEES Municipalities concerned about the availability of parkland for its residents have the option of adopting land dedication regulations, requiring the developer to set aside land for recreational use. Typically, the regulations include a provision which gives the developer the option to pay a fee in lieu of parkland under specified conditions. In Centre County, eleven municipalities have adopted parkland fee in lieu regulations. The adopted fee can be as high as $2,500 per dwelling unit. These fees are viewed as a barrier for affordable housing development. Residential Access TYPE A—Curbed Traffic Pattern Parking Type Travelway Width* (ft.) Parking Lane Width (ft.) Street Width (curb to curb) Yield** One Side or Alternating Sides 10 8 18 Slow Alternating Sides 18 8 26 Free No Parking 18 n/a 18 Free One Side 18 8 26 *All travelway widths are for two-way streets; for one-way use ½ of travelway width except for “yield” traffic pattern **Use only when ADT less than or equal to 300 Residential Access TYPE B—Curbed Traffic Pattern Parking Type Travelway Width* (ft.) Parking Lane Width (ft.) Street Width (curb to curb) Yield Alternating Sides 20 8 28 Free No Parking 20 n/a 20 Free One side 20 8 28 Free Two sides 20 8 each side 36 *All travelway widths are for two-way streets; for one way use ½ of travelway width Millbrook Marsh Nature Park Promote local and regional parks in close proximity to neighborhoods for community use 5 ---PAGE BREAK--- 42 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH As noted below, two of Centre County’s municipalities have adopted provisions to waive the fee for new dwelling units, serving income eligible households. MUNICIPALITY PARKLAND FEE IN LIEU COLLEGE Waived for WFH units PATTON Waived for WFH units serving households below 80% AMI The Municipalities Planning Code does not specifically authorize waiving parkland requirements for affordable housing; however, reduction in the requirements may be written into zoning regulations. Criteria should be established for the reduction. Determined by the governing body, the reduction can be as low as zero. A more effective option would be to utilize the waiver provision in Section 503.8 of the Municipalities Planning Code under Contents of Subdivision and Land Development Ordinance. REDUCE, WAIVE OR DEFER FEES Fees associated with inclusionary housing development plan may be reduced, waived or deferred as another way to offset costs. County, municipal, or utility fees may include but not limited to: o Subdivision & land development o Zoning o Building/construction permit o Utility tap-on o Highway Occupancy o Street opening o Mortgage recording o Realty transfer tax o Any other related fee As detailed in the College Township regulations, the developer when requesting a discount or deferral of payment of fees should detail how the cost savings will be passed on to the inclusionary unit. STREAMLINING the DEVELOPMENT PLAN PROCESS For municipalities subject to the County’s Subdivision and Land Development Ordinance (SALDO): First and foremost, the scheduling of pre- submission meetings with the Centre County Planning and Community Development Office to discuss the proposed development and the pre-submission checklist are highly recommended. Adhering to the checklist should result in a shorter plan review process, saving the developer time and money. This recommendation would also hold true for any subdivision and land development ordinance in the County. MUNICIPALITY WAIVER COLLEGE TOWNSHIP The Township may discount or defer municipal fees associated with the approval process of a subdivision/land development. The developer’s request must contain information detailing how real costs will be reduced and how the savings will be passed on to the workforce housing units. The Township shall respond to the developer’s request within 30 days of receipt of the request. LOWER MERION TOWNSHIP, Montgomery County (DRAFT) Waive of Fees includes: 20 percent of the filing fees associated with Tentative Sketch, Preliminary Subdivision Plan and Preliminary Land Development Plan applications may be waived if a minimum of 20 percent of the units are affordable. A discount proportional to the percentage of affordable dwelling units constructed shall be applied to the Construction Permits. 5 ---PAGE BREAK--- 43 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH In addition, the developer is advised to establish a not-to-exceed fee for agent engineering, surveying, and plan preparation services. The not-to-exceed fee would prevent additional charges for completing work items that were outlined as part of the plan submission requirements and were omitted or deficient. Developers in many cases may request a waiver of the County’s SALDO requirements in order to submit a final plan only, foregoing the preliminary plan process. The plan submission, review and approval process would be shorter by elimination of the Preliminary Plan step as well as the Preliminary Plan fees would be eliminated. ALTERNATIVES TO DEVELOPMENT FEE IN LIEU The fee in lieu option allows the developer to pay cash as an alternative to constructing inclusionary units. The cash, deposited in a designated account or housing trust fund, would be used for future affordable housing development within the municipality or other designated area. One option for the municipality would be to provide the fee in lieu funds to the Centre County Housing and Land Trust to create affordable housing opportunities. When considering the fee in lieu option, it is important to structure the formula or set the fee so that the end result is the construction of new affordable housing units. Some fee in-lieu policies are structured as a disincentive for developers. Formulas may be based on: actual cost per unit, unit square footage, and minimum threshold or on a case-by-case basis. Another concern to be addressed is making certain that the goal of providing for mixed income housing is achieved and that the fee in lieu option does not result in affordable housing being built in less appropriate areas of a municipality or region. Providing inclusionary housing should remain as a priority goal. In addition, municipalities mandating inclusionary housing requirements may consider providing for this alternative to avoid legal challenges. An excellent resource for fee in lieu of options as well as other components of inclusionary zoning is the Business and Professional People for the Public Interest at: http://www.bpichicago.org/index.php Local example: MUNICIPALITY FEE IN LIEU STATE COLLEGE Draft The total fee-in-lieu of payment shall be multiplied by 30% of the number of units proposed in the development. The per unit amount shall be based on the estimate of the actual costs of providing an inclusionary unit using actual construction cost data, which shall include a consideration of land purchase costs, from current developments of a similar type within State College. OFF-SITE DEVELOPMENT Municipalities may also give developers the option of constructing the units off-site. As with the fee in lieu provision, the requirement for off- site development is to build more units than would be required for on-site development. Proposed sites for off-site construction should be appropriate. 5 ---PAGE BREAK--- 44 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH In order to effectively develop regulations and policies that will meet the municipality’s housing needs, it is critical to include development and real estate professionals in the process as well as a potential non-profit partner. Developers can provide invaluable insight as to the economic viability of the municipal policies. If the inclusionary policies are not economically viable then developers will not take advantage of voluntary incentives or in terms of a mandatory approach, the regulations may be viewed as a taking. The REALTOR® may provide information on the market and price points for the households to be served. It is also advised to seek guidance from mortgage and commercial lenders on financing the development and mortgages for home buyers. The non-profit partner’s role will be to administer the affordable housing controls on the housing unit by qualifying home buyers or renters, monitoring principal residency and home improvement restrictions, and handing the re- sale or rental of the unit. The non-profit’s expertise on tools to retain the affordability of the housing unit is critical to the process. The chart, beginning on Page 45, provides additional information on the two approaches and local examples to consider. MUNICIPALITY OFF-SITE STATE COLLEGE (DRAFT) Units may be constructed or rehabilitated off-site at 150% of the on-site obligation. See Appendix: Inclusionary Zoning: Examples. IMPORTANT NOTE: Flexibility is key to the success of the provision of inclusionary units. Experience in Lancaster County has shown that a partnership between the municipality, developer, and non-profit is critical and that adjustments in regulations, local policies, and development plans throughout the process may be necessary in order to ensure the economic viability of the project. In addition, an educational component may be needed to help residents of the municipality better understand the housing needs. The Centre County Affordable Housing Coalition is an excellent resource for this purpose. Before adopting inclusionary policies, municipalities should encourage developers to test the economic viability of the draft regulations. The Borough of State College’s process serves as an example for other local officials to follow in that the municipality has requested developers to conduct a financial analysis, pro forma, of proposed development scenarios to determine if the proposed regulations would result in inclusionary units. 5 ---PAGE BREAK--- 45 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH INCLUSIONARY ZONING MANDATORY VOLUNTARY DESCRIPTION Requires a percentage of housing units to be affordable to income qualified households as part of a subdivision or land development plan Density bonus and/or incentives are provided in order to offset the cost burden of providing inclusionary housing units Provides incentives for developers in exchange for inclusionary housing units BENEFITS ƒ Produces more inclusionary units, particularly for lower income households ƒ Effective, if there is balance between the inclusionary requirement and cost offsets for the developer ƒ Less likely to be legally challenged ƒ Approach is easier to sell, politically ƒ Effective, if the right incentives are provided ƒ A good first step for municipalities with little or no housing experience CHALLENGES ƒ May result in development occurring in areas without inclusionary zoning regulations, outside of the areas of need ƒ Structuring the cost offsets ƒ Selling the approach to developers ZONING DISTRICTS Appropriate zoning districts include, but not limited to: Residential, Mixed Use, Traditional Neighborhood Development, Village, Overlay, Central Business District MINIMUM THRESHOLD ƒ Minimum project size to which the inclusionary housing regulations apply ƒ Minimum threshold is typically based on a minimum tract size or a specified number of housing units The primary factor for determining the minimum threshold should be the number of market rate units and other incentives needed to offset the cost of constructing the inclusionary units. LOCAL EXAMPLES COLLEGE TOWNSHIP Minimum threshold: None Incentives include: ƒ Reduced lot requirements ƒ Reduced sidewalk requirements ƒ Waiver on parkland requirements ƒ Density bonus, whereby, lot requirements are reduced for a market rate unit when 1 or 2 workforce housing units, depending on the income eligibility, are constructed 5 ---PAGE BREAK--- 46 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH INCLUSIONARY ZONING MANDATORY VOLUNTARY LOCAL EXAMPLES COLLEGE TOWNSHIP Cont’d ƒ Allowances for dwelling unit types other than single-family detached when 5 workforce housing units are provided ƒ Discount or deferral of municipal fees associated with the subdivision/land development approval process ƒ http://www.collegetownship.govoffi ce.com/vertical/Sites/{6F77EE0A- 5147-4D68-88D3- B3066A5A57B4}/uploads/{E8B31E 0C-56C1-40EB-8840- B0BEC8219779}.PDF FERGUSON TOWNSHIP Minimum Threshold: None Required ratio of 1:10-One WFH unit for every 10 units produced Incentives include: ƒ Providing additional WFH units in excess of the required 1:10 ratio, 2 dwelling units may be placed on lots of between 15,000 and 20,000 sq. ft. http://www.keystatepub.com/keystate- pdf//PA/Centre/Ferguson%20Township/ Chapter%2027%20Zoning.pdf HALFMOON TOWNSHIP DRAFT Minimum Threshold: Development that results in or contain 6 or more residential dwelling units 5% of the units are required to serve WFH HARRIS TOWNSHIP Minimum Threshold: For parcels of 30 acres or more zoned Agriculture within the Sewer Service Area and proposed for residential development Incentives include: ƒ Reduction in open space-(50% base requirement) 40% open space-10% WFH units required open space-15% WFH units required PATTON TOWNSHIP Minimum Threshold: Tracts within the Commercial-Transitional District may include residential units and the offer of donation of a minimum of 16% of the tract area to a community land trust for development as affordable housing; Minimum tract size for district is 10 acres 5 ---PAGE BREAK--- 47 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH INCLUSIONARY ZONING MANDATORY VOLUNTARY LOCAL EXAMPLES PATTON TOWNSHIP Cont’d Incentives include: ƒ Additional 1% of impervious coverage of the Commercial area may be used with the donation of an additional 5,000 sq. ft of land for affordable housing ƒ Parkland dedication requirement will be waived where all of the involved affordable housing units will be priced to be affordable to households below 80% AMI ƒ Zero setback is permitted SPRING TOWNSHIP Developer shall make provisions to accommodate workforce housing. Density Bonus Option R-1 TND Option 5% WFH units-3.5 units per acre TND in A-2 Development District: Apartment buildings shall be permitted with an increase of an additional 5% WFH units. Building height may increase to 40 ft. STATE COLLEGE BOROUGH DRAFT Minimum Threshold: For developments that contain 6 or more residential units Incentives include: ƒ 20% set aside ƒ Add one equivalent dwelling unit for every inclusionary unit provided as part of the land development plan ƒ Reduction in lot size by 15% for 1 and 2 family units ƒ 7 units per row permitted for row or townhome units ƒ Reduction in parking to one space per unit for multi-family affordable units with 2 or more bedrooms RESOURCE CONTACTS Centre Regional Planning Agency [PHONE REDACTED] or Email: [EMAIL REDACTED] Centre County Planning & Community Development Office [PHONE REDACTED] or Email: [EMAIL REDACTED] State College Borough Planning & Community Development Office [PHONE REDACTED] or Email: [EMAIL REDACTED] Centre County Housing & Land Trust Email:[EMAIL REDACTED] Centre County Affordable Housing Coalition [PHONE REDACTED] or Email: [EMAIL REDACTED] 5 ---PAGE BREAK--- 48 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH Florin Hill Facts 61 Acres 462 Dwellings 7.8 Dwellings/Acre 62 Workforce Dwellings $118,900/Workforce Dwelling w/subsidies Workforce units-Less than 80% AMI 223 Detached Dwellings 59 Townhouses 180 Apartments 4 Density Bonuses Bonus = 1 or 2 Dwellings/Acre Each 1000,000 sq. ft. Retail & Office Transit Route Along West Main Street Frontage 9 Acres Park Land RECOMMENDATION-Voluntary or Mandatory Approach VOLUNTARY OR MANDATORY Municipal officials should determine which approach can effectively meet the housing needs of the community. Municipalities should invite developer(s) and a housing non-profit to provide input throughout the process of developing the policies. If a voluntary approach is taken then incentives or cost offsets should be structured to encourage developers to provide for inclusionary housing. Costs offsets should also be provided as part of a mandatory requirement so that the regulation is not viewed as a taking. MINIMUM THRESHOLD Minimum threshold should be determined based on a sufficient number of market rates homes to be constructed, offsetting the cost of developing inclusionary units. OTHER Municipalities should seek guidance from their solicitor. When developing regulations, it is important to include the developer and the non-profit in the discussions. 5 INCLUSIONARY HOUSING Traditional Neighborhood Development with inclusionary housing units Mount Joy Borough, Lancaster County (Source: Mount Joy Borough) ---PAGE BREAK--- 49 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH RECOMMENDED LOT STANDARDS SINGLE FAMILY DUPLEX PER DU TOWNHOME PER DU APARTMENT PER DU LOT SIZE Minimum 4,000 sq. ft. 3,200 sq. ft. 2,000 sq. ft. 1,600 sq. ft. Maximum 10,000 sq. ft. 10,000 sq. ft. 3,000 sq. ft. LOT WIDTH Minimum 40’ 40’ 20’ N/A Maximum 80’ 75’ 35’ N/A LOT SETBACKS Front Minimum 0-5’ 0-5’ 0-5’ Front Maximum 20’ 20’ 20’ Side Minimum 0-5’ 5’ 5’ Side Maximum 10’ 10’ 20’ Rear Minimum 15’ 15’ 15’ LOCAL EXAMPLES LOT SIZE LOT WIDTH SETBACK OTHER College Township Single: 5,000 sq. ft. 40’ Min. Front: 10’ Side: 7’ Patton Township Single &Duplex: 4,000 sq. ft. Min.; Average lot size not to exceed 6,000 sq. ft. TH & Apts: 3,500 sq. ft. Min.; 5,000 sq. ft. Max. 40 ft. Min. Front: 5’ Min. Side & Rear: 5’ Side for duplexes: 0 & 10’ Min. State College Borough (Draft) 1 & 2 unit: 25% reduction in lot size Lot width may be reduced to the extent needed to provide for all inclusionary units required and the allowable bonus units provided all setback requirements are met MF-Side yard setbacks may be reduced to 5’ Row/TH-7 units per row will be permitted 5 ---PAGE BREAK--- 50 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH OTHER EXAMPLES LOT SIZE LOT WIDTH SETBACK OTHER Mount Joy Borough, Lancaster County (TND) Single: 4,800 sq. ft Min. Duplex: 4,000 sq. ft. Townhome: 2,000 sq. ft. Brown Township, Mifflin County Single: 4,800 sq. ft. Duplex: 3,200 sq. ft. TH & Apt: 1,600 sq. ft. 10 DU/Acre Max. RECOMMENDED STREET STANDARDS & PARKING CONSIDERATIONS Refer to Recommended Design Standards-Page 39 Parking considerations Developments with narrow cartway widths and no on-street parking should provide for areas designated for overflow parking. Overflow parking areas should be constructed with materials that encourage stormwater infiltration. Where appropriate, shared parking with other uses should be encouraged. Storage should be a consideration when designing affordable housing units so that garages may be dedicated for vehicle storage, reducing off-site parking demands. Allow on-street parking on one-side of the street on a case by case basis with permission granted by the municipality Reduce parking requirements for rental units if the property can prove that transit passes are provided to the tenants RECOMMENDED SIDEWALK STANDARD Minimum Sidewalk on one side of the street 5 ---PAGE BREAK--- 51 DECIDING ON AN APPROPRIATE INCLUSIONARY HOUSING APPROACH OTHER PARKLAND FEE IN LIEU Waive or reduce for inclusionary units. NOTE: If the units are sold as market rate units, the municipality may require fee in lieu payment. ADMINISTRATIVE FEES Waive, reduce or defer local fees associated with inclusionary housing development STREAMLINING- REVIEW PROCESS Hold pre-submission development plan meetings with the appropriate government agency and make certain that all parties understand the submission checklist 5 ---PAGE BREAK--- 52 This page is left intentionally blank. ---PAGE BREAK--- 53 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES Inclusionary housing is typically achieved through reserving a percentage of dwelling units as affordable housing when developing a vacant tract of land. Inclusionary housing may also be provided through other opportunities, which include: o Infill o Accessory Dwelling Units o Mixed Use Development o Conservation Design o Adaptive Reuse o Acquisition, Rehab and Resale INFILL DEVELOPMENT Infill or odd-lot development is defined as the, “development of new housing or other buildings on scattered vacant sites in a built-up area.”16 Residential opportunities for potential infill development in built environments have been identified as part of the Centre County Growth Forecasting Plan process. Infill development allows growth to occur in areas appropriate for residential development and integrates inclusionary housing into existing neighborhoods. Infill development, where appropriate, should be encouraged. See Example on Page 54. In 2008, the National Association of Home Builders in partnership with the International Code Council adopted the National Green Building Standard. The Standard promotes infill site development as a green building practice. 16 Moskowitz, Harvey S. and Lindbloom Carl The New Illustrated Book of Development Definitions, Rutgers University, 1999 In terms of new infill development, housing units should respect the scale of the neighborhood and the streetscape, making certain that building height, setbacks and housing types are compatible. Materials used should also be consistent with the neighboring properties. One housing type suitable for infill development is duplex units. Randall Arendt, in Rural by Design, promotes the duplex option for the following reasons: o House size lends them to single-lot infill development. o Owners can defray mortgage costs when half of the duplex is an income-producing property. o Renters of duplexes can live in more traditional neighborhoods. Arendt also emphasizes the importance of designing duplexes to look like large single family residences such as creating a large central entrance and a secondary entrance on the side. The book provides an example of a “Georgian double-house” designed by Bill Thompson, an architect from Wescasset, Maine. The duplex, “…disguised as a house from the Georgian period contains a two-bedroom unit with 1,164 square feet on the left half and a three-bedroom unit with 1,356 square feet on the right, in a compact upstairs-downstairs arrangement with 1 ½ baths for each family.”17 In Centre County, period architecture duplexes in communities throughout our County were designed to be consistent with the architecture of the community’s historic district. From the street, a pedestrian or passer-by would not be able to differentiate between the single-family and duplex units. 17 Arendt, Randall, Rural by Design, Planners Press, American Planning Association, 1994 6 ---PAGE BREAK--- ---PAGE BREAK--- 55 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES One comprehensive resource on infill development is the Municipal Research and Services Center of Washington, http://www.mrsc.org/Subjects/Planning/infilldev .aspx#spec18 ACCESSORY DWELLING UNIT (ADU) Another housing type appropriate for infill development is the accessory dwelling unit defined as, “…independent housing units created with single-family homes or on their lots.”19 Another commonly used term for accessory dwelling units is mother-in-law apartment. Examples of Accessory Dwelling Units: The benefits of accessory dwelling units include: o Increasing supply of affordable housing, especially for the elderly, one or two- person households, or persons with disabilities. o Providing supplemental income to the owner. 18 Source: Municipal Research and Services Center of Washington Website http://www.mrsc.org/Subjects/Planning/infilldev.asp x#spec 19 AARP, Accessory Dwelling Units: Model State Act and Local Ordinance, 2000 o Integrating well with existing houses. o Encouraging housing maintenance.20 The Smart Growth Toolkit of Massachusetts21 identified community characteristics that support accessory dwelling units which are: • Available housing stock • Preservation goals • Aging demographics • Entry-level job growth • Supportive neighborhoods • Supportive local public policies One example in Centre County is Bellefonte Borough’s revision to the zoning regulations which allows property owners to convert rear carriage houses or garages into dwelling units. The accessory dwelling units provide an income producing property, consistent with several of the characteristics listed above, and in turn maintains the contributing structures in the local historic district It is important to note that several of the County’s municipalities have adopted regulations providing for accessory dwelling units. Accessory dwelling units (ADUs) should be encouraged. Types of accessory dwelling22 units are: 1) Interior - using an interior part of a dwelling; 2) Interior with modifications where the outside of the dwelling is modified to accommodate a separate unit (this could include a unit over the garage if the garage is attached) 20 Homes Within Reach Toolkit: A Source of Options for Centre County Municipal Officials and Developers, Centre County Affordable Housing Coalition 21 Smart Growth Toolkit of Massachusetts http://www.mass.gov/envir/smart_growth_toolkit/pa ges/mod-adu.html 22 Smart Growth Toolkit of Massachusetts http://www.mass.gov/envir/smart_growth_toolkit/pa ges/mod-adu.html Source: Smart Growth Toolkit-Massachusetts 6 ---PAGE BREAK--- 56 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES 3) Detached - a structure on a residential lot that is separate from the main dwelling, yet by definition still "accessory" and so smaller than the main unit (this would include a unit over the garage if the garage is detached). The following are examples23: 23 Transportation and Land Use Coalition of California Website ody Considerations for accessory dwelling units include: o Allowing the unit as a permitted or conditional/special exception use. o Establishing a square footage/size and height limitation. o Deciding on the type or types of allowable units-interior only or detached. o Allowing for accessory dwelling units in new construction. o Requiring that the owner live in the primary or accessory unit. o Providing parking for the unit. o Issuing renewable and revocable permits. The following resources provide guidance for developing accessory dwelling unit zoning regulations. Smart Growth Toolkit-Massachusetts http://www.mass.gov/envir/smart_growth_toolki t/pages/mod-adu.html AARP (American Association of Retired Persons) http://assets.aarp.org/rgcenter/consume/d1715 8_dwell.pdf Transportation and Land Use Coalition (California) ml#body Rural by Design by Randall Arendt, Chapter 10, Affordable Housing, Planners Press, American Planning Association, 1994 MIXED USE DEVELOPMENT Mixed use development refers to the practice of allowing more than one type of use in a building or set of buildings. In planning terms, this can mean some combination of 6 ---PAGE BREAK--- 57 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES residential, commercial, industrial, office, institutional, or other land uses.24 Encouraging this type of development is the first priority of many smart growth set of principles. SMART GROWTH PRINCIPLES Smart Growth Network25 www.smartgrowth.org 1. Mix Land Uses 2. Take Advantage of Compact Building Design 3. Create Range of Housing Opportunities and Choices 4. Create Walkable Neighborhoods 5. Foster Distinctive, Attractive Communities with a Strong Sense of Place 6. Preserve Open Space, Farmland, Natural Beauty and Critical Environmental Areas 7. Strengthen and Direct Development Towards Existing Communities 8. Provide a Variety of Transportation Choices 9. Make Development Decisions Predictable, Fair and Cost Effective 10. Encourage Community and Stakeholder Collaboration Mixed use can be in the form of vertical or horizontal development. o Vertical Mixed Use is when the shops are at street level and the residential units are provided on the upper floors. o Horizontal Mixed Use is providing for different uses at street level. One example is a live/work unit, whereby, a building is used jointly for commercial and residential purposes where the residential use is secondary or accessory to the primary use as the place of work. 24 Wikipedia 25 Smart Growth Network Website www.smartgrowth.org A mixed use development fosters walkable communities and also increases the economic viability of commercial uses by mixing in residential units. Residents, living in a mixed use development, are able to walk to work, patronize neighboring establishments, and easily access local services. Central business districts throughout Centre County currently have apartments on floors above ground floor commercial uses. New mixed use developments are encouraged to pattern development similarly, providing new units that are affordable to low to moderate income households. In addition, several local municipalities have incorporated live/work unit provisions into zoning regulations, which offers a potentially affordable living option for business owners. CONSERVATION DESIGN Inclusionary housing opportunities may also be provided through Conservation Design regulations, promoting open space preservation and connection while allowing for new residential development. Typically, fifty percent or more of the tract to be developed is preserved as open space with inter- connectivity of open space being a priority. A valuable resource is Growing Greener, A Conservation Planning Workbook for Municipal Officials in authored by the Natural Lands Trust, January 1999. Chapter 4, Conservation Zoning Techniques, includes a section on “Density Bonuses to Further Certain Public Objectives”, encouraging municipalities to offer specially targeted density bonuses to further public objectives, which is as follows: Section 4.6.3. Encouraging Housing Affordability A third possible objective is to encourage the provision of housing that would be more affordable to a broader range of local residents, such as retirees or young couples. By allowing a developer to spread his land 6 ---PAGE BREAK--- 58 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES costs over a larger number of houselots, the sales prices can be lowered on each one. Looked at another way, when a developer is permitted 15 lots instead of 10, the land costs for those additional five lots is zero, which means that new homes on them can be deeply discounted and sold for a price that basically reflects the actual construction cost, plus associated profits.” In 2008, Gregg Township adopted a Conservation Design Overlay District, as a Zoning Ordinance Amendment. The Township received guidance from Natural Lands Trust staff. The Overlay District provides an inclusionary/affordable housing incentive, Discretional Density Bonus, which may be granted by the Township’s Board of Supervisors. The Township defined affordable housing as, “Units sold or rented to families earning up to 120 percent of the area median income, adjusted for family size, as determined by the US Department of Housing and Urban Development.” As per the regulations, “A density increase is permitted where the subdivision proposal provides on-site or off-site housing opportunities for low-or moderate income families. When off-site housing provision is proposed, the Board shall require evidence that these units will in fact be constructed by a certain date. The amount of density increase shall be based on the following standard: For each affordable housing unit provided under this section, one additional building lot or dwelling unit shall be permitted, up to a maximum 15 percent increase in dwelling units.” “…density bonuses may be implemented by reducing the amount of required greenway land by up to 10%, reducing the minimum lot area requirements by up to 10%, or by a combination of these approaches, at the discretion of the Board. The cumulative reductions may total up to 30%, if the Board is satisfied that the public purposes are being served.”26 ADAPTIVE REUSE Adaptive Reuse is defined as, “the development of a new use for an older building or for a building originally designed for a special or specific purpose.”27 One of the advantages of adaptive reuse is the conversion of structures that are no longer needed for their original purpose such as school buildings. Adaptive reuse of historic or non-contributing structures should be encouraged when the proposed project is structurally and financially feasible. An innovative mix of financing will make it more economically feasible for the project. One incentive that should be considered is the federal Investment Tax Credit program for income producing historic properties, as noted below. The PHMC, serving as the State Historic Preservation Office, administers the federal Rehabilitation Investment Tax Credit (RITC) program in partnership with the National Park Service (NPS) and the Internal Revenue Service (IRS). The tax credit program is one of the most successful and cost-effective programs that encourage private investment in rehabilitating income producing, historic properties such as office buildings, rental housing, hotels, bed and breakfasts, and retail stores. http://www.portal.state.pa.us/portal/server.pt/co mmunity/historic_preservation/3741 26 Gregg Township Zoning Amendment, 2008 27 Moskowitz, Harvey S. and Lindbloom, Carl The New Illustrated Book of Development Definitions, Rutgers, 1993 6 ---PAGE BREAK--- 59 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES The benefits of adaptive reuse include: o Preserving existing buildings, which are part of the community’s fabric; o Providing new housing opportunities in built environments; and, o Reusing buildings rather than promoting greenfields development. Regulatory examples include: State College Borough’s Draft Inclusionary Housing Regulations allow for the conversion of an existing single-family residential structure to a multiple-family residential structure and also conversion of a non-residential property to a residential property. Lower Merion Township’s (Montgomery County) Draft Regulations also provides the same provisions as noted in State College Borough’s draft. In there are a few examples of adaptive reuse projects that include or are solely dedicated to affordable housing. One project is the former Acme Warehouse site, Brewerytown, in Philadelphia. The transformation of Brewerytown by Pennrose Properties includes 62 affordable loft apartments. The mixed use project with office and residential uses took advantage of the Rehabilitation and Investment Tax Credit, as noted above. http://www.pennrose.net/portfolio/brewerytown Another example is the proposed mixed use Brodart Commons Revitalization Project located in the City of Williamsport, which would include affordable housing. ACQUISITION, REHAB & RESALE Acquisition, Rehab, and Resale of homes is another effective method of providing inclusionary housing. Existing housing stock is purchased, rehabilitated and brought up to code standards and then resold to an income eligible buyer. This approach could incorporate the land trust model as part of the process or impose a deed restriction on the property in an effort to sustain the affordability of the housing unit. An added benefit is improving the existing housing stock in our neighborhoods. Local examples: The State College Community Land Trust, over the past 13 years, has purchased 31 properties and served 35 income-eligible households in the Borough of State College. The purchases were made possible by federal and local government grants; however, some renovations were covered through the organization’s fundraising efforts. 28 Housing Transitions, Inc. and State College Borough acquire homes to sell to low-income households. If needed, the homes are rehabbed. In addition, mortgage and closing costs assistance are provided, which is in the form of a 30 year forgivable loan. In addition to paying back the assistance, the buyer agrees to share the equity in the home when sold. The paid back funds are used for future home acquisition to assist new buyers. Habitat for Humanity of Greater Centre County has purchased, rehabbed and resold 12 properties throughout Centre County. The homes are sold to income-eligible family partners, and Habitat has the option to re- purchase the home when sold. 28 State College Community Land Trust, November 2009 Newsletter (Source: State College Community Land Trust Website www.scclandtrust.org ) 6 ---PAGE BREAK--- 60 EXPLORING OTHER INCLUSIONARY HOUSING OPPORTUNITIES The Centre County Housing and Land Trust is also exploring this housing option. Implementation of this method could be through: o Properties sold to the Trust at below market rate value; o Flexible financing options from local lenders, providing up-front financing for acquisition and housing rehab; o Public or non-profit funds, providing a revolving loan for the acquisition and rehabilitation of the property; o Donation of real property; and, o Combination of the above listed options. The tools outlined in this section provide other options to promote inclusionary housing. Flexibility is critical to the success of these projects. 6 ---PAGE BREAK--- 61 SUSTAINING HOUSING AFFORDABILITY Increasing the inventory of affordable housing either through new construction, housing rehabilitation or adaptive reuse provides homes, both owner-occupied and rental, for a broader range of incomes. The critical component of any affordable housing program is sustaining affordability. Without controls, the market value of the housing unit could appreciate beyond an affordable price limit. TOOLS TO SUSTAIN AFFORDABILITY o Deed restriction o Community Land Trust o Housing Cooperative o Habitat for Humanity DEED RESTRICTION A deed restriction29, protective covenant, is a tool that can be used by municipalities, non- profits, and/or developers to sustain housing affordability for a specified period of time. The number of years that affordability is required varies, depending on local policies. In general, deed restrictions prescribe the period of affordability, income eligibility, restrictions on improvements to the unit, and resale formula, including how appreciation will be shared. One well known example for utilizing deed restrictions to sustain housing affordability is Montgomery County, Maryland’s Moderately Priced Dwelling Unit (MPDU) program,. At the program’s inception, the County’s program established a five-year time period for sustaining the affordability. Today, the period is thirty years, including a provision for continuing the deed restriction when the property is resold. More information on Montgomery County’s program may be found at the following website: 29 Deed restriction is a clause in a deed that limits the use of land. Source: Barron’s Real Estate Handbook, Sixth Edition, Jack Friedman, Jack C. Harris, and Barry A. Diskin; 2005 asp?url=/content/DHCA/housing/housing_P/m pdu.asp Typically, the developer works/coordinates with a non-profit housing agency that administers the affordable housing program. The non- profit partner provides services such as income qualification of potential residents, budget and financial counseling for homebuyers, and on- going the residency requirements. An agreement between the developer and the non-profit, and approved by the governing body of the municipality specifies the role of each partner. COMMUNITY LAND TRUST Another tool for sustaining housing affordability is a community land trust. According to the National Community Land Trust Network, “A community land trust (CLT) is a private non- profit community organization that safeguards land in order to provide affordable housing opportunities. CLTs build and sell affordably- priced homes to families Community Land Trust Toolkit National Community Land Trust Network http://www.cltnetwork.org/index.php?fuseactio Community Frameworks Technical Assistance-Toolboxes http://www.communityframeworks.org/technica l/toolbox/clts_web/clts_othermodels.html 7 ---PAGE BREAK--- 62 SUSTAINING HOUSING AFFORDABILITY with limited incomes. The CLT keeps the price of homes affordable by separating the price of the house from the cost of the land. When a family decides to sell a CLT home, the home is resold at an affordable price to an income eligible homebuyer. The goal of CLTs is to balance the needs of homeowners to build equity and gain stability in their lives with the needs of the community to preserve home ownership opportunities for future generations.”30 In Centre County, there are two community land trusts: the Centre County Housing and Land Trusts and the State College Community Land Trust (http://www.scclandtrust.org/). The State College Community Land Trust is limited to the political boundaries of the Borough of State College. The period of affordability for both land trusts is in the form of a 99-year lease. Both the Centre County Housing and Land Trust and the State College Community Land Trust have the capacity to administer deed restrictions, as per any adopted and recorded agreement. Address: South Hills Avenue Status: For Sale Price: $101,000 30 Definition of Community Land Trust; Source: National Community Land Trust Website This single story ranch home close to public transportation and is within easy walking distance of the State College high school and Easterly Parkway Elementary, shopping and PSU's campus and downtown. There is a deck off the back as well as a one car garage and basement. 960 square feet, .25 acre Included: Refrigerator, Smooth-Top Electric Range/Oven, Dishwasher, Clothes Washer and Dryer. Inclusion of garden shed (10' x 14') is negotiable. Features: • 3 bedrooms • 1 bathroom • Updated kitchen includes stove, dishwasher, and refrigerator • Oil forced air heat • Central A/C EXAMPLE For Sale: State College Community Land Trust home 7 ---PAGE BREAK--- 63 Next Page: Comparison Chart This comparison chart provides data on housing cooperatives, rental units, single-family ownership, and condominiums. SOURCE: National Association of Housing Cooperatives www.coophousing.org SUSTAINING HOUSING AFFORDABILITY OTHER TOOLS: HOUSING COOPERATIVE Housing cooperative is defined as a not-for- profit cooperative corporation that is formed, “when people joining with each other on a democratic basis to own or control the housing and/or related community facilities in which they live…Each month they simply pay an amount that covers their share of the operating expenses of their cooperative corporation. Personal income tax deductions, lower turnover rates, lower real estate tax assessments, controlled maintenance costs, and resident participation and control are some of the benefits of choosing cooperative homeownership.”31 The National Association of Housing Cooperatives is a resource for cooperatives. www.coophousing.org Currently, there are no owner-occupied housing cooperatives in Centre County; however, discussion has occurred on employing this tool for mobile home parks in the path of commercial development. 31 Definition of Housing Cooperative; Source: National Association of Housing Cooperatives Website 7 ---PAGE BREAK--- 64 COMPARISON CHART SOURCE: National Association of Housing Cooperatives Website- www.coophousing.org Cooperative Rental Single Family Condominium Ownership The residents are shareholders in a corporation that owns the property. Owning a share entitles you to occupy a unit. Tenants own nothing. On expiration of lease, tenants may be forced to vacate. Owners acquire individual title to their dwellings and yard. Unit "airspace" owned by individual, plus an undivided share of common elements. Cost Members pay the Co-op for their share of the actual operating cost, building mortgage, and real estate taxes, based on the non-profit operation of entire community. Tenants pay rent specified in lease. Owner must make his or her purchases of whatever is needed, often at higher retail costs. Owner makes mortgage and tax payments to lender. Same as cooperative, except mortgage payments and taxes are paid directly to the lender. Move-in Cost New members buy their share in the cooperative and also pay the first charge in advance. Usually one month's rent is paid as a security deposit, plus the first month's rent. Purchaser must buy the property, usually with a mortgage with a down payment of at least 5% and closing costs of 3% or more. Same as single family, plus first month's condo fee and often a "contribution to capital" of 1-2 months' fee. Community Control Co-op resident members elect their board of directors, which decides all policy matters. The Board usually sets up several committees to help run the community. Renters usually have no voice at all in establishing and maintaining community standards. Individual owners have no jurisdiction over their neighbors. Condo owners, like cooperatives, elect a board of directors. Community Service Co-ops provide a natural base for service and activity desired by its members. Provided at discretion of landlords. On your own. Condos similar to co-ops, unless limited by state law. Federal Tax Benefits to Individuals Your share of mortgage interest and real estate taxes are deductible on personal income tax return. No benefit. Mortgage interest and real estate taxes are deductible on personal income tax return. Mortgage interest and real estate taxes are deductible on personal income tax return. ---PAGE BREAK--- 65 SUSTAINING HOUSING AFFORDABILITY HABITAT FOR HUMANITY Habitat for Humanity of Greater Centre County has been building homes for qualified partner families since 1983. In 2008, the organization increased the income limit for participation from 50 to 60% of the County’s Area Median Income, as adjusted by the US Department of Housing and Urban Development, in order to better serve low income households. The homes, built by volunteers, are sold to the home buyer for solely the cost of construction, which is the amount of the first mortgage for the partner family. However, a soft second mortgage is also on the property which is the difference between the cost of construction and the appraised value. The soft second mortgage is forgiven over a 15 year period at 1/15 per year. Sustaining the non-profit’s inventory is important to the organization. As a result, Habitat for Humanity holds a right of first refusal on the property when the partner family decides to sell the home. Purchasing the home is dependent upon the non-profits resources at the time of resell. AFFORDABILITY TOOL COMPONENTS Sustaining the affordability of a housing unit for income eligible households requires that several controls be put in place. Without the controls, municipalities would not be able to maintain their inventory of affordable housing. Homes could potentially be resold at market value and be no longer affordable. The controls, which would be approved by the governing body of a municipality, may include: o Period of affordability o Home Buyer Eligibility o Principal Residency o Property Maintenance o Improvements o Resale of the property o Decontrol of restrictions Period of Affordability The period of affordability is the number of years or period of time in which the housing unit is to remain affordable to an income eligible household. Communities throughout the nation have adopted regulations and policies that establish the period as low as 15 years up to perpetuity. Some regulations do not prescribe the period, but rather base it on approval of the agreement between the developer, non-profit and the municipality, which may set the period of time on a development-by-development basis. Home Buyer Eligibility Is the housing unit to serve the needs of the workforce, persons with disabilities, elderly or a special class of workers such as police officers, teachers, or other? What are the income limitations? Depending on the financing of the program, if any, and the local policies, the income eligibility would begin at 60% of the AMI up to 120% AMI. A municipality may decide to limit the range of households serve based on the existing housing stock and the housing needs of the community. Principal Residency The intent of adding affordable housing units to the housing inventory is to provide safe, sound, and permanent homes for households within a specified income range. Residency needs to be defined to avoid the housing unit being converted to an income producing property; however, the municipality may want to consider a subletting provision under certain circumstances. The residency requirement should be monitored annually by the administering agency. 7 ---PAGE BREAK--- 66 SUSTAINING HOUSING AFFORDABILITY Property Maintenance Compliance with local regulations and codes is important, which may include but is not limited to zoning, sanitary, or building codes. Agreements should specify the compliance requirements as well as the enforcement and penalties for any maintenance deficiencies. Improvements Most major home improvements build equity. Limiting certain improvements such as increasing the home’s square footage by expanding the building footprint or prohibiting the installation of an in-ground swimming pool will help sustain the affordability of the housing unit. Therefore, provisions for controlling the home improvements should be factored into the home buyer agreement. The agreement should detail what type of improvements the homebuyer will receive credit for and/or how the improvements will be calculated in the resale formula. It is recommended that pre-approval of major home improvements by the administering agency be required. Resale of the property Controlling the value of the affordable housing unit at the time of resale is implemented through an agreed upon resale formula, which is included as part of the home owner’s agreement. Resale formulas are designed to limit the realization of equity in a home by the seller in order to keep the home affordable for an income eligible household. As previously noted, major home improvements are also factored into limiting the market value of the home. Typically, the resale formula dictates a percentage of appreciation that can be realized by the seller. The percentage may be based on a pre-determined fixed percentage such as 5% or can be based on an index such as the Consumer Price Index. There are multiple ways to structure a resale formula, and it is important for any municipality considering this method of sustaining housing affordability to seek technical expertise on the matter. Release from restrictions There may be times when the affordable unit reverts to a market rate unit, particularly when the period of affordability is lapsed or if a homeowner defaults (foreclosure). Provisions need to be put in place to address under what circumstances developers would be released from compliance with the restrictions. An excellent resource for all components of affordability controls is entitled, “Shared Equity Homeownership: The Changing Landscape of Resale-Restricted, Owner-Occupied Housing”, John Emmeus Davis http://www.nhi.org/pdf/SharedEquityHome. pdf RECOMMENDATION-Deed restrictions or land trust PERIOD OF AFFORDABILITY Minimum of 40 years ADMINISTERING AGENCIES Centre County Housing and Land Trust State College Community Land Trust AGREEMENTS Recorded at the Centre County Recorder and noted on recorded Subdivision/ Land Development plans 7 ---PAGE BREAK--- 67 SUSTAINING HOUSING AFFORDABILITY HOME BUYER EDUCATION AND COUNSELING An important element of achieving success with any affordable housing program is home buyer counseling and home ownership education. The following is the counseling program developed by Housing Transitions, Inc. for the Housing Transitions, State College Community Land Trust and State College Borough home buyer programs. The program, as outlined below, is being considered by the Centre County Housing and Land Trust, for its housing initiatives. Home buyers are required to commit to 8 hours of pre-purchase counseling and education. After the purchase of the home, the home buyer is required to commit to 4 hours per year for 5 years of post-purchase counseling, as described below. Budget Counseling Budget counseling addresses credit and budgeting issues and provides a realistic assessment for homeownership. Pre-Purchase Homeownership Education The emphasis of homeownership education is to provide the home buyer with an outline of steps necessary in achieving homeownership, and explain the roles of the various professionals who will be involved in the process. The home buyer education components include: 1. Ownership versus renting: ƒ Advantages of ownership; disadvantages of ownership 2. How much house can you afford? ƒ Pre-qualification for a mortgage 3. What type of home to consider? ƒ Single family, condominium/townhouse, multi-family ƒ “Wish list” and “necessities” list ƒ Understanding the market; comparing Prices 4. How to begin looking for a home? ƒ Working with a REALTOR ® ƒ The real estate attorney 5. Making an offer ƒ Determining the amount ƒ Negotiating ƒ Purchase and sales agreement ƒ Applying for financing 6. Do the deal ƒ Home inspection ƒ Energy audit/evaluation ƒ Closing 7. Do-it-yourself home repairs and home safety Post-Purchase Counseling Post-purchase counseling is provided to buyers that have purchased homes through the affordable housing program. The purpose of the post-purchase counseling is to support successful homeownership through creating an environment for homeowners to share their concerns, answering any remaining questions concerning homeownership, and imparting relevant information including predatory lending practices and updates for home maintenance. In addition, post-purchase counseling attempts to reduce the likelihood of loan default by maintaining contact with the homeowner and providing on-going guidance. Municipal policies should include home buyer pre- and post-purchase counseling and education requirements for any inclusionary housing policy or regulations. 7 ---PAGE BREAK--- 68 SUSTAINING HOUSING AFFORDABILITY CENTRE COUNTY HOUSING AND LAND TRUST’S ROLE Developing and administering affordability controls requires expertise and experience. The Centre County Housing and Land Trust was established in response to a countywide need for these specialized services as noted in this section. The non-profit’s partners are: o Habitat for Humanity of Greater Centre County o Housing Authority of Centre County o Housing Transitions, Inc. o State College Borough o State College Community Land Trust Each organization brings a wealth of housing knowledge to the newly formed Housing and Land Trust. The Goals of the Centre County Housing and Land Trust include: o Administering municipal ordinances and policies; o Developing new housing units; o Conducting an affordable housing market study; and, o Establishing an acquisition, rehab, resale program for single site homes. Municipalities are encouraged to give serious consideration to partnering with the Centre County Housing and Land Trust for these services. 7 ---PAGE BREAK--- 69 PROMOTING COST EFFECTIVE BUILDING STANDARDS The cost of residential construction continues to increase in Centre County. One method of tracking increases in home construction costs is building permit data, compiled annually by the Centre County Planning Office. The permit data is based on the cost to construct the improvement and does not include the land cost. When comparing housing construction costs in 2000 and 2009, the value of the permits increased over the eight year period by 58 percent for a single-family detached unit and 231 percent for a duplex unit. CENTRE COUNTY BUILDING PERMIT DATA SINGLE FAMILY Average Value DUPLEX Average Value 2000 $134,905 $49,448 2009 $212,976 $163,889 % Change 58% 231% The increase in the average value may be attributed to: o Rising oil costs which result in higher productions costs for oil/gas used in shingles, PVC pipe, and fiberglass; o Transportation cost increases due to rising gas prices; o Increased labor costs; o Non-building material costs such as the cost of doing business i.e. insurance; and, o Building codes and permit fees. In addition to residential dwelling unit construction costs, other costs associated with residential development are: lot price and infrastructure cost per lineal foot of street. Typical lot price (1/8 to ¼ acre): $60,000-$75,000 Typical infrastructure cost per lineal foot of street: $475/LF-$700/LF Reductions in lot and street standards are addressed in the previous section, Deciding on an Appropriate Inclusionary Housing Approach, as one option for reducing the cost of affordable housing development. This section will focus on the construction of the home and methods to promote overall sustainability. Key Partner: Builder Builders should be included early on in the process of developing inclusionary housing policies, providing guidance to the municipality and developer’s agent on design of building sites as well as housing construction standards. Resource: Central Builders Association Green Building Committee and the ICC National Green Building Standard™ The Committee’s mission is to provide leadership in the promotion, education, and encouragement of sustainable and affordable green building principles and voluntary rating standards for the Building Association of Central PA and their end users. Contact: [PHONE REDACTED] 8 ---PAGE BREAK--- 70 PROMOTING COST EFFECTIVE BUILDING STANDARDS HOUSING CONSTRUCTION METHODS The cost of building residential dwelling units depends on the construction method. Three most common methods for constructing homes are: o Stick-built: Constructed on the building site, piece by piece.32 Average cost per square foot: $85-$125 o Modular home: Factory-built homes that are built to state, local or regional code where the home will be located. Modules are transported to the site and installed.33 Average cost per square foot: $60-$75 o Manufactured home: “Homes are built entirely in the factory under a federal building code administered by the US Department of Housing and Urban Development (HUD). The Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) went into effect June 15, 1976. Manufactured homes may be single-or multi-section and are transported to the site and installed. The federal standards regulate manufactured housing design and construction, strength, durability, transportability, fire resistance, energy efficiency and quality. The HUD Code also sets performance standards for the heating, plumbing, air conditioning, thermal and electrical systems. It is the only federally- regulated national building code. On-site additions, such as garages, decks and porches, often add to the attractiveness of manufactured homes and must be built to local, state or regional building 32 Source: www.About.com: Architecture Website http://architecture.about.com 33 Source: Manufactured Housing Institute Website www.manufacturedhousing.org codes.”34 Average cost per square foot: $40-$45 Vinyl board is standard in manufactured homes; however, drywall is an option for impact areas at an additional cost of $1,200. Roof pitch: Manufactured housing can be altered to appear like stick-built single family homes by changing the roof pitch from 3/12 to 5/12 pitch. The approximate cost for the change in pitch is $2,000. 3/12 Roof Pitch 5/12 Roof Pitch Photos: Courtesy of RidgeCrest Home Sales www.ridgecresthomesales.com Modular housing is better suited for roof pitches of 7/12 and 9/12. A 7/12 roof pitch provides the homeowner with attic storage when built with trusses. A pitch of 9/12 enables the homeowner to finish the attic as living space. 34 Ibid 8 ---PAGE BREAK--- 71 PROMOTING COST EFFECTIVE BUILDING STANDARDS As noted above, modular and manufactured homes offer more affordable options to the income eligible home buyer. Another benefit of modular and manufactured housing is a condensed construction time frame. Since modular and manufactured homes are built inside, weather is not a factor. Conventional financing is available for manufactured housing through a variety of bank programs which include the US Department of Agriculture’s Rural Development program and the Housing Finance Agency and Veterans Administration loans. Interest rates are current with today’s rates for these types of loan programs. The home must be on permanent foundation, or can also be placed on piers and footers, or crawlspace. It does not have to have a full foundation to qualify. Units on a permanent foundation and financed through FHA will need to meet the HUD Permanent Foundations for Manufactured Housing Code 75-84, which is certified by a licensed engineer. State loan programs require the unit meet the state code developed by the Housing Research Center. Manufactured home dealers are required to submit the home’s title, similar to a vehicle title, to the Department of Transportation along with Form MV16 which releases the title. The home then becomes real estate, and the title is retired. Once a home is on permanent foundation, crawlspace, or piers/footer, it is considered real estate. In regard to stick-built construction, there are ways to lower the cost per square foot and at the same time incorporate green building standards into the construction of the home. In 2008, the National Home Builders Association, in collaboration with the International Code Council (ICC), adopted the National Green Building Standard™ 2008. The adopted green building practices, ICC National Building Standard, emphasize advanced framing techniques which in turn minimize the generation of construction waste. Advanced framing techniques35 or Optimum Value Engineering,:…a collection of techniques intended to reduce construction waste as well as the amount of lumber required for framing a home. In addition to the cost and environmental advantages of using less lumber, advanced framed homes are also more energy efficient.” Techniques include: o Using 2x6 studs at 24” on-center intervals; o Designing homes based on 2-foot modules to take advantage of common sheet sizing, minimizing cutting; o Using 24” on-center spacing for roof rafters and floor joists; and, o Transfer all loads directly downward by aligning floor joists, roof rafters and studs vertically.36 As noted in the ICC National Green Building Standard, construction efficiency involves, “Detailed framing or structural plans, material quantity lists and on-site cut lists for framing, structural materials, and sheathing materials.”37 35 Source: Informed Building Website www.informedbuilding.com 36 Ibid. 37 National Home Builders Association and International Code Council, National Green Building Standard™ 2008, Section 601.4. Framing and structural plans. 8 ---PAGE BREAK--- 72 PROMOTING COST EFFECTIVE BUILDING STANDARDS Pre-planning is critical to this process and requires the involvement of all subcontractors and specialized trades. The Central Builders Association’s Green Committee recommends builders assigning one person to cut building materials based on the pre-planned cut lists. Other construction efficiencies include: o Building stacked stories, using a smaller footprint; and, o Incorporating preassembled or panelized assemblies for floor, wall and roof systems. Panelized homes are, “factory-built homes in which panels, a whole wall with windows, doors, wiring and outside siding, are transported to the site and assembled. The homes must meet state or local building codes where they are sited.”38 House size is also an important factor in controlling the total costs of the home. Municipal officials may address the size of the home in municipal policies, encouraging more cost effective, smaller homes. One option as noted in the chart is for a municipality to set a minimum size for the housing unit, making certain that the size of the home is livable standard. 38 Source: Manufactured Housing Institute Website www. manufactured housing.org MUNICIPALITY HOUSE SIZE COLLEGE TOWNSHIP Workforce housing units may differ from the market rate units in a development with regard to interior amenities and gross floor area provided that: The gross floor area of the workforce housing dwelling units is not less than the following minimum requirements: One bedroom- 750 sq. ft.; Two bedroom- 1,000 sq. ft.; Three bedroom-1,200 sq. ft.; Four bedroom-1,400 sq. ft. HALFMOON TOWNSHIP Draft Workforce units may differ from market-rate units with regard to interior amenities and gross floor area provided that: The gross floor area of the workforce units is not less than the following minimum requirements: One bedroom: 750 sq. ft.; Two bedrooms: 1,000 sq. ft.; Three bedrooms-1,100 sq. ft.,; Four bedrooms: 1,250 sq. ft. MODEL POLICIES Draft The unit mix of one bedroom, two bedroom, three bedroom, etc. must be proportional to the mix of market rate units. They may not be smaller than the following: One bedroom-550 sq. ft.; Two bedroom-800 sq. ft.; Three bedroom-1,080 sq. ft. 8 ---PAGE BREAK--- 73 PROMOTING COST EFFECTIVE BUILDING STANDARDS Foundations are an added cost to home construction. In order to keep the housing unit affordable, the builder may need to determine if it is more cost effective to build a garage or a full basement. Deciding on whether to build a garage may depend on the households needs. Housing professionals in Centre County have indicated that the senior households prefer a garage instead of a basement; however, family households seem to prefer a full basement. Foundation options include: Slab foundation: “A site is leveled off, and a trench is dug around the perimeter of the home site. Gravel is then spread across the site, and concrete is poured approximately four inches thick over wire mesh and a moisture barrier. In areas of load bearing walls, trenches need to be dug to allow for additional thickness at this location. Slab foundations have no piers or floor joists, and the concrete slab is the floor system.”39 Crawl space foundation: A low, narrow space providing access to plumbing, wiring, and heating systems.40 The crawl space is typically no higher than four feet.41 Basement foundation: “A basement is a usable foundation that typically has ceiling heights of 8' and is often finished off as living or storage space.”42 Advanced concrete system: This foundation option is pre-cast concrete foundation system which is close in price to the traditional concrete block foundation. 39 Ibid 40 Webster’s II, New College Dictionary, Houghton Mifflin Company, 1999 41 Source: Home Design Central Website www.homedesigncentral.com 42 Source: Home Design Central Website www.homedesigncentral.com One company noted for these systems is Superior Walls. Contractors using these systems may be awarded point towards the ICC National Green Building Standards™. In addition, the pre-cast walls include pre-insulated and framed panels, making it less expensive to finish off the basement. Average cost per square foot: 10% less or greater than the cost of a traditional basement The inclusion of a garage as part of or separate from the housing unit provides for vehicle and other types of storage. An attached garage may be more cost effective since there is one less wall to construct. The average cost to construct a garage by a contractor is $35 to $45 per square foot.43 Another option is to construct the house adjacent to one of the side yard setbacks. This would provide for a wider side yard on the opposite side of house, creating an area for a future addition which could include construction of a garage or vehicle storage building. Improvements to deed-restricted or land trust homes would need to comply with any recorded agreement for the property. Since affordable housing units are smaller in size, providing for storage is an important consideration. If a garage or a basement is not included in the building plans for the inclusionary housing unit then another form of storage should be provided such as individual or community 43 Source: Factoring the Cost to Build a Garage www.life123.com 8 ---PAGE BREAK--- 74 PROMOTING COST EFFECTIVE BUILDING STANDARDS storage units that mimic or complement the exterior of the housing units. Storage sheds would be defined as an accessory use to the residential units and not intended for commercial use. Driveways serve as the home’s access to the street and are also calculated as part of the residential off-street parking requirements. In order to save driveway construction cost, the following options are recommended: o Using asphalt materials instead of concrete. o Planning for shared driveways. Gravel driveways are more cost effective but may not be an appropriate option for a more densely developed residential or mixed use setting. Driveway requirements may be reduced when on-street parking is permitted and overflow parking provided. Accessible Homes Designing homes to accommodate persons with physical disabilities or for individuals and couples aging in place should also be a priority. One housing design is a visitable home. There are three important features that make a home visitable which are: o An at-grade or zero-step entrance to the home that is approachable by an accessible route such as a sidewalk. o Doors (one exterior and all interior) that are at least 2 feet, 10 inches wide to allow 32 inches of clear passage space. (Three foot doors are required in fully accessible units.) o A powder room on the first floor.44 44 Myers, Diana Centre County Affordable Housing Needs Assessment: A Blueprint For Action, 2008 As per Concrete Change, the above-listed features make it easier for persons with mobility impairments to live in and visit. Concrete Change is a resource for visitable homes.45 www.concretechange.org Photo: Concrete Change Visitable home in San Antonio, Texas Communities throughout the country have adopted visitable ordinances requiring basic access in all homes. Concrete Change’s website provides a photo gallery of other visitable housing types as well as additional resources. Another design is adaptable housing, whereby, “…housing is designed in such a way that it can be easily modified in the future to meet changing needs of occupant and visitors. This might include increased doorway and hallway width, adjustable countertops and cabinetry, no steps, electrical outlets and light switches placed at more accessible heights, larger bathrooms, wall reinforcements for handrails, and accessible baths and toilets.”46 45 Source: Concrete Change Website www.concretechange.org 46 Myers, Diana Centre County Affordable Housing Needs Assessment: A Blueprint For Action, 2008 8 ---PAGE BREAK--- 75 PROMOTING COST EFFECTIVE BUILDING STANDARDS The third concept is Universal Design which, “…targets all people of all ages, sizes, and abilities. The concept promotes designing every building so that everyone can use them to the greatest extent possible.”47 ENERGY EFFICIENCY There are three widely used housing construction certifications that promote energy efficiency are: o o NAHB Green Building Standard o LEED (Leadership in Energy and Environmental Design) is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy to help consumers save money and at the same time protect the environment through energy efficient products and practices. construction is approximately 15% more energy efficient than UCC (Uniform Construction Code) Construction. Home designers or builders should work with an energy rater during the design phase of the home since achieving an certification is more difficult once the home is built. When constructing an home, attention is paid to insulation, air flow and the heating system. Habitat for Humanity of Greater Centre County has worked hard to achieve certification for the houses constructed for 47 Ibid Habitat families. Habitat anticipates that homes built in the near future will be certifiable. More information on homes or available tax credits may be obtained at The ICC National Green Building Standard™, “…incorporates environmental considerations and resource efficiency into every step of the building and development process to minimize environmental impact. The design, construction, and operation of a home must focus on energy and water efficiency, resource efficient building design and materials, indoor environmental quality, and must take the home's overall impact on the environment into account.” The construction areas for the Green Standard include: o Lot & Site Development o Resource Efficiency o Energy Efficiency o Water Efficiency o Indoor Environmental Quality o Homeowner Education. http://www.nahbgreen.org/ The National Association of Home Builders website provides information on additional financial incentives for energy efficient/green construction. LEED “…is an internationally recognized green building certification system, providing third- party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and 8 ---PAGE BREAK--- 76 ® Heat Pumps use a refrigeration cycle to both heat and cool the home. In the summer, a heat pump functions exactly like an air conditioner-heat is extracted from inside the home and transferred outside. The resulting cooled and dehumified air is distributed throughout the home in a duct system. In the winter, heat pumps operate in reverse-by extracting heat from the air, the ground, or a source of water outdoors and transferring it to the indoor air, which is distributed throughout the home in a duct system. Source: PROMOTING COST EFFECTIVE BUILDING STANDARDS stewardship of resources and sensitivity to their impacts.” http://www.usgbc.org/ Specific to non-profit developers, the US Green Building Council created a program, Initiative for Affordable Housing –LEED for Homes, to serve households at or below 80% AMI. Assistance is provided through a grant from The Home Depot Foundation, which covers the cost of registration, verification and certification fees associated with LEED certification. LEED for Homes promotes efficiencies such as: o Compact development o Site selection close to existing infrastructure o Limited outdoor water use o Homes with ready access to community resources and open spaces o Homes that are smaller than the national average More information on LEED for Homes may be obtained at http://www.usgbc.org/ShowFile.aspx?Docume ntID=3980 Common Considerations for Energy Efficient Homes Siting of the home In order to take advantage of solar energy, the house should face a southerly direction with south facing glazing and properly sized overhangs. Consideration should also be given to the orientation of homes when designing the lot configuration for subdivisions. Windows Install high performance Energy Star certified windows. Heating systems Electric baseboard heating systems are the least expensive to install; however, the long- term cost of electric service may no longer be an affordable option when the rate caps expire on January 1, 2011.48 The decision on which heating system to choose should be based on cost, energy- efficiency, ventilation needs, and available fuel choices. Heat pumps are promoted as a heating option for affordable homes option. Habitat for Humanity of Greater Centre County homes plans to install heat pumps in future homes. Insulation Consistent with the UCC, recommended insulation standards are as follows: o R-21 insulation in the wall with R-5 rigid sheathing for a total of R-26 o R-50 insulation in the attic The use of caulk, spray foam and damp spray cellulose are also highly recommended to control leakages. Conducting a blower door test will help determine whether or not the home has been properly sealed. 48 Source: Public Utility Commission Website http://www.puc.state.pa.us/general/consumer_ed/p df/Rate_Caps.pdf 8 ---PAGE BREAK--- 77 PROMOTING COST EFFECTIVE BUILDING STANDARDS Blower Door Testing US Department of Energy Website http://www.energysavers.gov/your_home/ energy_audits/index.cfm/mytopic=11190 Air quality Proper air flow is important in the house to promote good air quality. If the newly constructed home is sealed too tight then a fresh air ventilation system may be needed. For more information on Ventilation for Homes visit: http://www.epa.gov/iaq/homes/hip- ventilation.html In addition, window placement to promote cross ventilation of air should also be a consideration. Water efficiency Use low flow fixtures, harvest rain water, and landscape with native plants. Whole house energy efficiency is the end result of a comprehensive approach to employing adopted green-type standards from the start of the pre-planning phase to and including constructing and finishing the home. When addressing green and energy efficient standards, the question is whether or not the standards will add to the initial cost of the home making it less affordable at the time of purchase but affordable over the life of the home. Making affordable homes sustainable should be a priority and a goal to achieve. Energy Mortgages An Energy Efficient Mortgage (EEM) is,”… a mortgage that credits a home’s energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost- effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home.”49 For more information on energy mortgages, visit: enders_raters.energy_efficient_mortgage OTHER Utilities Shared sewer laterals and other utility trenches between two or more residential units is another way to reduce cost, provided individual metering units and shut-off valves are available for each unit. When affordable housing development is being proposed, discussions with the utility providers should occur in order to explore ways to provide a more efficient and cost-effective approach to the installation of utilities. Another cost savings is to construct the sewer lateral at the same depth as the sewer main. Basement service would not be provided at the time of construction. Any future improvements to the basement would require the installation of a lift or grinder pump to handle the flow of sewage from the basement to the lateral. 49 Source: ® Website 8 ---PAGE BREAK--- 78 PROMOTING COST EFFECTIVE BUILDING STANDARDS STORMWATER MANAGEMENT CONSIDERATIONS The management of stormwater is unique to any development site with no one size fitting all development scenarios. It is important that stormwater be managed or mitigated close to the source. Low Impact Development (LID) techniques should be encouraged. The US Environmental Protection Agency defines, “…an approach to land development (or re-development) that works with nature to manage stormwater as close to its source as possible. LID employs principles such as preserving and recreating natural landscape features, minimizing effective imperviousness to create functional and appealing site drainage that treat stormwater as a resource rather than a waste product. There are many practices that have been used to adhere to these principles such as bioretention facilities, rain gardens, vegetated rooftops, rain barrels, and permeable pavements. By implementing LID principles and practices, water can be managed in a way that reduces the impact of built areas and promotes the natural movement of water within an ecosystem or watershed. Applied on a broad scale, LID can maintain or restore a watershed's hydrologic and ecological functions.” 50 http://epa.gov/nps/lid/ Recommended practices for residential development include: o Retaining the topsoil on the site; o Minimizing soil compaction by establishing boundaries and restricted areas for construction equipment; o Chisel tilling or restore site following completion of construction; 50 Source: US Environmental Protection Agency’s Website http://epa.gov/nps/lid/ o Designing site to direct stormwater to spread over the landscape into a small depression; o Protecting natural drainageways; and, o Reducing impervious coverage. The challenge is incorporating LID techniques when planning for higher density residential development since managing stormwater on a small lot typically results in stormwater channeling to and through utility trenches and ending up in basements. The use of rain barrels and directing rain water to a shared stormwater flow system which incorporates a swale at the rear of the properties might be a workable solution. Other considerations include: o Recommending or requiring a peer review of plans to determine if there are ways that the development could be designed differently to reduce costs for affordable housing development. o Exploring regional flood control facility for major events. 8 ---PAGE BREAK--- 79 DEVELOPING AN AFFORDABLE HOUSING DEVELOPMENT PLAN Once a municipality makes a commitment to formally address the need for inclusionary housing in the community and adopts enabling legislation to accomplish its goals, a step- by-step companion document is often needed to guide the process. The municipal ordinance generally provides a broad overview of the inclusionary housing program, including: the goals of the program, the zoning districts within which inclusionary housing will be encouraged/required, the cost offsets available to developers, and the income eligibility targets. Such ordinances do not typically provide detailed guidance on the role and responsibilities of the various parties involved in the inclusionary housing project. By incorporating the general parameters rather than the specific details of the inclusionary housing program in the ordinance, the municipality allows flexibility for the program to evolve over time. Amending a municipal ordinance to keep up with program changes can be expensive and time-consuming. Thus it makes sense for items such as income guidelines or construction details to be included in a separate manual that can be easily amended by resolution on an annual or as-needed basis. That is where a Policies and Procedures Manual comes in. A Policies and Procedures Manual for Inclusionary Housing is a resource document for the municipality, the developer, and the land trust or non-profit agency administering the program. It provides specific guidance on the requirements of the program, the responsibilities of the developer, construction requirements for the housing units, the period of affordability, and eligibility requirements for homebuyers. The heart of the Policies and Procedures Manual is the Housing Development Plan, within which the developer describes the details of housing project. The Housing Development Plan is prepared by the developer in consultation with the municipality and the non-profit agency that will be responsible for program administration. The Housing Development Plan specifies the number of units proposed for construction, the location of the units within the overall project, and the applicable affordability restrictions. It may also require the developer to provide a copy of the market analysis s/he used to determine the need and demand for the type of housing units planned for the development and an artist’s rendering of the project. If the project is proposed to be built in phases, the Housing Development Plan should describe the timing for construction of the inclusionary units within each phase. The Housing Development Plan is a legal document that is executed by the developer and the municipality and recorded with the subdivision/land development plan. As a result, any change to the Housing Development Plan must be requested in writing and approved by the municipality. A successful inclusionary housing program is based on cooperation and commitment by the partners: the municipality, the developer, and the non-profit program administrator. Each partner must have input on the Housing 9 ---PAGE BREAK--- 80 DEVELOPING AN AFFORDABLE HOUSING PLAN/AGREEMENT Development Plan and be in agreement on the requirements of the document. To achieve this level of satisfaction among all parties, the process of preparing a Housing Development Plan must begin early in the life of the inclusionary housing project. Over the course of several preliminary meetings, the municipality and the developer will want to discuss the desired outcomes of the inclusionary housing project. It is important to align the municipality’s expectations for the project with the developer’s anticipated return on investment. These early meetings offer an opportunity for the municipality and the developer to exchange ideas, inform and educate one another on the issues, and reach some preliminary agreement on the project. Often, the non-profit program administrator is helpful in facilitating such meetings and providing valuable input based on experience with inclusionary housing programs in other communities. Some of the issues that should be considered during these sessions include: o Should inclusionary housing units be in scattered or clustered within the development? o Will inclusionary and market rate units be required to appear indistinguishable from one another? o Must inclusionary units be constructed concurrent with the market rate units? o What is the period of affordability for the inclusionary housing units? o What strategies should be in place in the event that inclusionary units remain on the market beyond a specified period of time? o Will the developer or a third party be constructing the inclusionary housing units? These and other issues discussed at the preliminary meetings provide the framework for the Housing Development Plan. Throughout the planning process, it is important to recognize the many variables that affect the construction of any new housing project. Inclusionary housing projects are no different. Therefore, partners should strive for a high level of communication and be prepared to address unanticipated issues when they arise. It is commonly observed that the most important factor in real estate development is location, location, location. Perhaps the most important factor in any successful inclusionary housing development is flexibility, flexibility, flexibility. Respect for each other’s concerns and discussion of problems when they arise makes for a successful partnership—and for a successful inclusionary housing project. A Model Policies and Procedures Manual is included in the Appendices. 9 ---PAGE BREAK--- 81 CONSIDERING MODEL REGULATIONS, POLICIES AND PROCEDURES Model ordinances have been developed to promote the creation of inclusionary housing at the municipal level. The following are three examples to consider when drafting municipal regulations, policies and procedures. Model Affordable Housing Density Bonus Ordinance Model Smart Land Development Regulations Interim PAS (Planning Advisory Series) Report-American Planning Association, March 2006 pdf/section44.pdf Montgomery County Planning Commission’s Workforce Housing Reports Report Promoting Workforce Housing: Expanding Locations and Development Potential, Density Bonus Model Ordinance, Page 9 http://planning.montcopa.org/planning/cwp/vie w,a,1629,q,58514.asp Inclusionary Zoning-Guide/Model Regulations, Lehigh Valley Planning Commission, December 2008 http://www.lvpc.org/pdf/inclusionaryZoning.pdf Another reference is Inclusionary Regulations: Examples which is included in the Appendices. The document is a compilation of municipal inclusionary regulations that have either been adopted or are in draft form. 10 ---PAGE BREAK--- 82 This page left intentionally blank. ---PAGE BREAK--- 83 DEFINITIONS Affordable Housing Agreement: A written agreement between an applicant for a development and the local government containing specific requirements to ensure the continuing affordability of housing included in the development. Section 4.4 Model Affordable Housing Density Bonus Ordinance, Interim PAS Report, American Planning Association, March 2006 Affordable Housing Dwelling Unit or Inclusionary Unit: Any affordable housing subject to covenants or restrictions requiring such dwelling units to be sold or rented at prices preserving them as affordable housing for a period of at least 30 years. Section 4.4 Model Affordable Housing Density Bonus Ordinance, Interim PAS Report, American Planning Association, March 2006 AMI: Area median income, as calculated by the federal government and adjusted annually for household size and local cost of living Accessory Unit: A secondary dwelling unit established in conjunction with and clearly subordinate to a primary dwelling unit, whether a part of the same structure as the primary dwelling or a detached unit on the same lot. A Glossary of Zoning, Development and Planning Terms, American Planning Association Affordable Housing: Housing that cost no more than 30 percent of a household’s gross income. Owner occupied housing costs are: principal, interest, taxes and insurance. Rental housing costs are: rent and utilities. (HUD) Cartway: The paved area of a street between the curbs, including travel lanes and parking areas but not including shoulders, curbs, sidewalks, or swales. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Community Land Trust (CLT): A community land trust (CLT) is a private non-profit community organization that safeguards land in order to provide affordable housing opportunities. CLTs buy and hold land permanently, preventing market factors from causing prices to rise. CLTs build and sell affordably-priced homes to families with limited incomes— the CLT keeps the price of homes affordable by separating the price of the house from the cost of the land. When a family decides to sell a CLT home, the home is resold at an affordable price to another homebuyer with a limited income. The goal of CLTs is to balance the needs of homeowners to build equity and gain stability in their lives with the needs of the community to preserve affordable home ownership opportunities for future generations. National Community Land Trust Network Conditional Use: A use permitted in a particular zoning district upon showing that such use in a specified location will comply with all the conditions and standards for the location or operation of the use as specified in the zoning ordinance and authorized by the governing body. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Cost Burden: The fraction of household’s total gross income spent on housing costs. For renters, housing costs include rent paid by the tenant plus utilities. For owners, housing costs include mortgage payment, taxes, insurance, and utilities. (Comprehensive Housing Affordability Strategy-CHAS) Deed Restriction/Covenant: A clause in a deed that limits the use of land. Barron’s Real Estate Handbook, 6th Edition, 2005 Density: The number of dwelling units per acre of land. A Glossary of Zoning, Development and Planning Terms, American Planning Association Density Bonus: An increase in the number of market-rate units on the site in order to provide an incentive for the construction of affordable housing pursuant to the ordinance. Section 4.4 Model Affordable Housing Density ---PAGE BREAK--- 84 DEFINITIONS Bonus Ordinance, Interim PAS Report, American Planning Association, March 2006 Development: The process of adding improvement on or to a parcel of land. Such improvements may include drainage, utilities, subdividing, access, building, and any combination of these elements. Barron’s Real Estate Handbook, 6th Edition, 2005 Duplex: A building containing two single- family dwelling units totally separated from each other by an unpierced wall extending from ground to roof. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Fair Market Rent: Housing market-wide rent estimates that provide housing opportunities throughout the geographic are in which rental units are in direct competition. HUD Infill: Development or redevelopment of land that has been bypassed, remained vacant, and/or is underused as a result of the continuing development process. Generally, the areas and/or sites are not particularly of prime quality, however, they are usually served by or are readily accessible to the infrastructure (services and facilities) provided by the applicable local government entity. Use of such lands for new housing and/or other development is considered more desirable alternative than to continue to extend the outer development pattern laterally and horizontally thus necessitating a high expenditure for capital improvements that would be required for infill development. The use of development, among others, promotes the best use of resources and also tend to have a positive impact upon the tax and other fiscal policies. A Glossary of Zoning, Development and Planning Terms, American Planning Association Lot: the basic development unit for determination of area, width, depth, and other dimensional variations; or a parcel of land whose boundaries have been established by some legal instrument, such as a recorded deed or recorded map, and is recognized as a separate legal entity for purposes of transfer of title. Section 4.4 Model Affordable Housing Density Bonus Ordinance, Interim PAS Report, American Planning Association, March 2006 Lot Width: The horizontal distance between the side lines of a lot measured at right angles to its depth along a straight line parallel to the front lot line at the minimum required building setback line. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Manufactured Housing: A factory-built, single-family structures that meet the National Manufactured Home Construction and Safety Standards Act, commonly known as the HUD code. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Mixed-Use Zoning: Regulations that permit a combination of different uses within a single development. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Modular Housing: A factory-built home that complies with local building codes. Barron’s Real Estate Handbook, 6th Edition, 2005 Multi-Family Dwelling Units: A building containing three or more dwelling units, including units that are located one over the other. Comment: Multifamily buildings include garden apartments and mid- and high-rise apartment buildings. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Quadplex: Four attached dwellings in one building in which each unit has two open space exposures and shares one or two walls with ---PAGE BREAK--- 85 DEFINITIONS adjoining unit or units. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Rental Housing: Housing occupied by a tenant paying rent to an owner and no part of the rent is used to acquire equity in the property. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Row House: An attached dwelling separated from others in a row by a vertical unpierced wall extending from basement to roof. See Townhouse. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Set-Aside: The percentage of housing units devoted to low-and moderate-income households within an inclusionary development. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Setback Line: The required minimum distance from any lot line and that establishes the area within which the principal structure must be erected or placed. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Shared Equity Homeownership: Methods to ensure that homes remain affordable to lower- income households on a long-term basis by restricting the appreciation that the owner can retain, preserving affordable housing in areas where rising prices are forcing lower income households out of the market. Shared Equity Homeownership, John Emmeus Davis Single-Family Detached: A dwelling that is not attached to any other dwelling by any means. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Special Exception: A use permitted in a particular zoning district upon showing that such use in a specified location will comply with all the conditions and standards for the location or operation of the use as specified in the zoning ordinance and authorized by the municipal zoning hearing board. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Townhouse: A one-family dwelling in a row of at least three such units in which each has its own front and rear access to the outside, each unit is separated from any other unit by one or more vertical common fire-resistant walls. Comment: Townhouses (single-family attached dwellings) usually have separate utilities, such as individual hot water and heating systems, separate electric meters, and so forth. However, in some condominium developments, the condominium association may arrange for bulk purchase of certain utilities and distribute it to individual dwelling units. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Transfer of Development Rights (TDR): The removal of the right to develop or build, expressed in dwelling units per acre or floor area, from land in one zoning district to land in another district which such transfer is permitted. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 Variance (Area): A variance that permits deviation from zoning requirements as to construction and placement, but not from requirements as to use. Black’s Law Dictionary, 1996, Bryan A. Garner, Editor Variance (Use): A variance that permits deviation from zoning requirements as to use. Black’s Law Dictionary, 1996, Bryan A. Garner, Editor ---PAGE BREAK--- 86 DEFINITIONS Visitability: Single-family housing designed in such a way that it can be lived in or visited by people with disabilities. A house is visitable when it meets three basic requirements: at least one no-step entrance, doors and hallways wide enough to navigate through, and a bathroom on the first floor big enough to get into in a wheelchair, and close the door. Concrete Change and Centre County Affordable Housing Needs Assessment: A Blueprint for Action, 2005 Zoning: The delineation of districts and the establishment of regulations governing the use, placement, spacing, and size of land and buildings. The New Illustrated Book of Development Definitions, Harvey S. Moskowitz and Carl G. Lindbloom, 1999 ---PAGE BREAK--- 87 APPENDICES Posted @ http://www.co.centre.pa.us/planning/housing.asp ™ Centre County Assisted Housing Inventory ™ Map of Assisted Housing in Centre County ™ Legal Basis for Inclusionary Zoning ™ INCLUSIONARY REGULATIONS, Examples ™ Inclusionary Housing Model Policies and Procedures Manual