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ORDINANCE NO 47 SERIES 2011 INTRODUCED BY COUNCILOR WIESLEY AN ORDINANCE AMENDING CHAPTER 28 ARTICLE II AFFORDABLE HOUSING OF THE CODE OF ORDINANCES OF LAFAYETTE COLORADO BY ELIMINATING THE REQUIREMENTS FOR PERMANENTLY AFFORDABLE DWELLING UNITS WHEREAS on October 4 2011 City Council held a workshop to discuss the impacts of the current economy and housing market on the City s affordable housing program and WHEREAS City Council directed staff to draft amendments to the Code of Ordinances and Community Housing Guidelines that would eliminate the Permanently Affordable dwelling unit requirement for homebuilders developers and provide a process to allow owners of Permanently Affordable units to be released from the deed restriction if such owner is unable to sell their Permanently Affordable unit NOW THEREFORE THE CITY OF LAFAYETTE COLORADO ORDAINS SECTION 1 That Article II of Chapter 28 of the Code of Ordinances of the City of Lafayette Colorado is hereby repealed and re enacted as follows ARTICLE II AFFORDABLE HOUSING Sec 28 5 Legislative findings The city council hereby finds based in part upon the City of Lafayette Housing Study dated July 10 2001 that a significant housing problem exists within Lafayette with respect to the supply of affordable priced dwelling units Specifically the city council finds that a High levels of unmet demands for housing allows for housing to be highly priced discourages developers from offering a more diversified price range for housing and contributes to the unwillingness of developers to create housing that is affordable to lower income households b Regional growth has contributed to make land and construction costs higher causing a rise in the price of housing and causing the supply of housing that is affordable to moderate income households to be located in limited areas if at all c Increases in income have not kept pace with the rapid and significant increases in the cost of housing in Lafayette d Housing problems have escalated due to population increase a limited supply ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 2 of 8 of developable land and as a result of the lack of residential building permits available due to the adoption of Lafayette Charter Section 6 10 e Developers of new housing are not meeting the need for housing to serve households earning lower income levels f The lack of an adequate supply of housing that is affordable to a significant percentage of the wage earners employed in jobs within Lafayette will make it difficult for those individuals to find housing within Lafayette and negatively impacts employers within Lafayette due to the resulting impacts on employee productivity labor costs and the availability of a labor force g A lack of dwelling units that are affordable to lower income households threatens to negatively impact the prospects for economic development within Lafayette which economic development is necessary to sustain and improve upon the level of municipal services provided by Lafayette to its citizens h Without a program encouraging the construction of dwelling units that are affordable to lower income households it is unlikely based upon current trends that developers will provide such housing on their own initiative leaving Lafayette citizens without sufficient affordable priced housing and i Section 6 10 of the Charter of the City of Lafayette providing a limited exception to the number of residential building permits that may be issued in Lafayette contemplates that City Council may establish a program to encourage the provision of affordable housing within the City Sec 28 6 Purpose The purposes of this article are to a Provide standards and a process to carry out those provisions of Section 6 10 of the Charter of the City of Lafayette pertaining to affordable dwelling units under the Residential Growth Management program b Maintain a balanced community that provides housing for households of lower income levels c Retain and expand opportunities for people that work in the city to also live in the city and thereby to promote the economic well being of the city Sec 28 7 Definitions Words and phrases that are used but not defined in this article shall have the meanings given to them in the community housing guidelines The following words and phrases as used in this article have the following meanings ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 3 of 8 Charter affordable housing units means dwelling units that are constructed under building permits that are available from time to time under Section 6 10 of the Charter of the City of Lafayette for permanently affordable dwelling unit s and that are sold resold and or rented only in accordance with the standards and under the procedures set forth in the community housing guidelines and which dwelling units are permanently deed restricted or encumbered in perpetuity by a real covenant or other legal restriction to ensure that the units shall be priced and sold and or rented to be affordable at the time of the initial and each subsequent sale or rental to a household earning not more than the eighty 80 percent HUD area median income except that at each sale after the initial sale the units may be sold for a price that is the lesser of a the purchase price paid by the then owner plus an allowance for eligible rehabilitation expansion expenses as provided in the community housing guidelines plus three 3 percent per annum simple interest on that sales price and eligible rehabilitation expansion expenses and b the purchase price paid by the tfien owner plus an allowance for eligible rehabilitation eligible expansion expenses as provided in the community housing guidelines plus a percentage per annum of simple interest on that price and eligible rehabilitation expansion expenses that is equal on an annual basis to the percentage increase in the CPI for each year in which the determination is made Communiry housing guidelines means that certain document titled City of Lafayette Community Housing Guidelines initially dated June 3 2003 and as subsequently amended which document has been approved and adopted by the city council and which document may be further amended from time to time by the city council or by the city administrator in accordance with its terms and the terms of this article CPI or consumer price index means the Consumer Price Index U S City Average and Regions Urban Wage Earners and Clerical Workers CPI W All Items as published from time to time by the Bureau of Labor Statistics of the United States Department of Labor Eligible household means a household a That has complied with the procedures set forth in the community housing guidelines for a determination of eligibility for purchase of a a charter affordable housing unit and that has received a certificate of eligibility pursuant to said guidelines and b The income of which qualifies the household to purchase a charter affordable housing unit according to the standards set forth in the community housing guidelines and c Whose financial assets qualify the household to purchase a charter affordable housing unit according to the standards set forth in the community housing guidelines ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 4 of 8 Household means one 1 or more persons who intend to live together in the premises of a dwelling unit as a single housekeeping unit but does not mean a group of four 4 or more persons unrelated by blood adoption or marriage HUD means the United States Department of Housing and Urban Development HUD AMI or HUD area median income means the median annual income for the Boulder Longmont Primary Metropolitan Statistical Area as adjusted for household size and is calculated and published annually by HUD Program administrator means the administrator of the City of Lafayette or his designee Sec 28 10 Charter Affordable housing standards Charter affordable housing units shall a Be permanently deed restricted or encumbered in perpetuity by a real covenant or other legal restriction that ensures that the units shall be sold at the time of the initial and each subsequent sale and or rented if a rental property to a household earning not more than eighty 80 percent of the HUD area median income for the Boulder Longmont area provided however that at each sale after the initial sale of a permanently affordable housing unit the unit may be sold for a price that is the lesser of i the purchase price paid by the then owner plus an allowance for eligible rehabilitation expansion expenses as provided in the community housing guidelines plus three 3 percent per annum simple interest on that price and eligible rehabilitation expansion expenses and ii the purchase price paid by the then owner plus an allowance for eligible rehabilitation expansion expenses as provided in the community housing guidelines plus a percentage per annum of simple interest on that price and eligible rehabilitation expansion expenses that is equal on an annual basis to the percentage increase in the CPI for each year in which the determination is made b Except as provided in subsection a above be created sold and resold or rented only to eligible households and only in accordance wilh the standards and procedures and at or below the maximum sales prices for Charter affordable housing units that are set forth from time to time in the community housing guidelines c In accordance with requirements and subject to the exceptions set forth in the community housing guidelines and be occupied as the primary residence of the households to which such units are sold and resold or rented Sec 28 8 Community housing guidelines The city council hereby adopts the community housing guidelines and authorizes the city administrator to amend said guidelines in the manner and to the extent provided therein and to recommend to the city council from time to time other amendments to said ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 5 of 8 guidelines to ensure that they include such standards and or procedures as may be necessary or convenient to effectuate the purposes and requirements of this article including but not limited to standards and or procedures for a The determination of eligible households including but not limited to the establishment of maximum income and asset levels that will allow a household to purchase a charter affordable housing unit b The establishment of a fair and equitable preference system which may but need not include a lottery system to establish preferences for the purchasers of charter affordable housing units based upon the existence and or duration of a household s residency within the City of Lafayette and or the existence and or duration of a household s employment within the City of Lafayette and or the intention of the household with respect to residency within a charter affordable housing unit and or the graduation of a member of the household from a high school located within the City of Lafayette c The placement of permanent deed restrictions or perpetual real covenants or other legal restrictions that ensure that dwelling units shall remain as charter affordable housing units as the case may be including but not limited to the preparation of standard forms of deed restrictions real covenants or other legal restrictions to be used d The determination and amendment from time to time of pricing levels to be established as the maximum initial sale prices of charter affordable housing units which pricing levels shall be based among other considerations upon area median income levels set forth by HUD the conclusion that when the aggregate cost of mortgage loan principal and interest property taxes homeowners insurance and homeowners association fees exceed thirty 30 percent of a household s gross income that the housing is not affordable the household income household size dwelling unit type number of bedrooms and all other matters addressed in the community housing guidelines under the heading Sales Price Methodology e The minimum square footage of charter affordable housing units to assure the reasonable livability of such units f The review and approval of a community housing plan that shall be submitted by an applicant to demonstrate how it intends to comply with the requirements of this article and the community housing guidelines The submission of a community housing plan shall include payment of a review fee in an amount set by resolution of the city council g An incentive program that may upon a determination made by the city council pursuant to certain criteria provide incentives for the development of charter affordable housing that is above and beyond the nature or extent of charter affordable housing that is to be created pursuant to the requirements of this article and or the ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 6 of 8 community housing guidelines h The payment to the city and or its designated program administrator of fees in an amount set by resolution of city council to cover costs incurred by the city and or its program administrator in the administration and enforcement of the provisions of this article and the community housing guidelines i The limitation of homeowners association dues and assessments that may be applied to a charter affordable housing unit j The marketing and sale of charter affordable housing units SECTION 2 Effective January 13 2012 the requirement to construct Permar ently Affordable housing units pursuant to Section 28 5 of the Lafayette Code of Ordinances as established and amended by Ordinances No 14 Series 2003 adopted June 3 2003 Ordinance No 27 Series 2004 adopted November 16 2004 Ordinance No 10 Series 2005 adopted March 1 2005 Ordinance No 22 Series 2006 adopted June 6 2006 and Ordinance No 5 Series 2010 adopted February 2 2010 is hereby terminated Any Permanently Affordable housing units identified on any development s Final Plat or Final Planned Unit Development and within any development s Community Housing Plan that has not been constructed and or sold by the developer as of January 13 2012 is hereby released from the Permanently Affordable requirements The following are those approved developments to which this provision applies Coal Creek Village Subdivision PUD Silver Creek Subdivision PUD Indian Peaks Filing No 17 Subdivision PUD Midtown Subdivision PUD The Director of the Community Development Department is authorized to execute such documents that may be necessary to effectuate such release SECTION 3 Effective January 13 2012 owners of Permanently Affordable units constructed pursuant to Section 28 5 of the Lafayette Code of Ordinances as established and amended by Ordinances No 14 Series 2003 adopted June 3 2003 Ordinance No 27 Series 2004 adopted November 16 2004 Ordinance No 10 Series 2005 adopted March 1 2005 Ordinance No 22 Series 2006 adopted June 6 2006 and Ordinance No 5 Series 2010 adopted February 2 2010 may apply to the City for release of the permanently affordable deed restriction when it can be demonstrated that the owner has made a bona fide effort to market the Permanently Affordable unit and an eligible household has not been found or referred to the owner by the Program Administrator In determining whether there has been a bone fide effort to market the property consideration shall be given to matters such as a whether the unit has been ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 7 of 8 listed with a licensed real estate broker or otherwise been listed locally on available multiple listing service b the frequency and means by which the unit has been advertised for sale through customary electronic and or print media c the extent to which the unit has been posted with signage indicating that it is for sale d any other means by which the owner has publicized the availability of the unit for purchase and e the number of open houses that have been held The unit may upon release of the covenant or restriction by the City be sold and re sold free the deed restriction real covenant or other legal restriction The Director of the Community Development Department the Director is authorized to review and approve requests for such releases and to execute such documents that may be necessary to effectuate such releases under the following conditions a The required marketing period before the deed restriction or covenant can be considered for release by the Director shall be a minimum of one hundred eighty 180 days b The owner and the City sliall share equally that portion of the net proceeds from the sale of the Permanently Affordable unit that result for a sales price that is greater than that originally allowed by the City s Affordable Housing program for Permanently Affordable dwelling units The net proceeds of the sale shall be calculated based upon the gross proceeds minus realtor commission and or other expenses incurred that are directly related to the cost of selling the unit The payoff of any debts or obligations secured by the property shall not affect the calculation of net proceeds for the purpose determining the amount to be paid to the City A recordable document shall be executed by the Owner to reflect the City s interest in the proceeds of the sale All funds paid to the City asa result of this condition shall be used by the City to further affordable housing opportunities in Lafayette Any decision of the Director on an application for such a release may be appealed by the applicant to the City Council by providing a written notice of appeal to the City Clerk within 20 days of the decision of the Director If a request for a release exceeds the authority of the Director as provided above the Director shall refer the request to City Council SECTION 4 If any article section paragraph sentence clause or phrase of this ordinance is held to be unconstitutional or invalid for any reason such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance The city council hereby declares that it would have passed this ordinance and each part or parts hereof irrespective of the fact that any one part or parts be declared unconstitutional or invalid ---PAGE BREAK--- City of Lafayette Ordinance 47 Series 2011 Page 8 of 8 SECTION 5 All other ordinances or portions thereof inconsistent or conflicting with this ordinance or any portion hereof is hereby repealed to the extent of such inconsistency or conflict SECTION 6 The repeal or modification of any provision of the Code of Ordinances of Lafayette Colorado by this ordinance shall not release extinguish alter modify or change in whole or in part any penalty forfeiture or liability either civil or criminal which shall have been incurred under such provision Each provision shall be treated and held as still remaining in force for the purpose of sustaining any and all proper actions suits proceedings and prosecutions for enforcement of the penalty forfeiture or liability as well as for the purpose of sustaining any judgment decree or order which can or may be rendered entered or made in such actions suits proceedings or prosecutions SECTION 7 This ordinance shall become effective upon the latter of the 10 day following enactment or the day following the final publication of the ordinance 1NTRODUCED PASSED ON FIRST READING AND PUBLIC NOTICE ORDERED THE 6TH DAY OF DECEMBER 2011 PASSED ON SECOND AND FINAL READING AND PUBLIC NOTICE ORDERED THIS 3RD DAY OF JANUARY 2012 CITY OF LAFAYETTE COLORADO Carolyn D C tler ayor ATTEST GxT Y OF ti q 0of HOtijF YAA k114 Su an Koster CM i City Clerk m m 7n i m nOG 1958 D APPROVED AS TO FORM COL4 P David S Williamson City Attorney