March 11, 2019
Incentives for Affordable Housing
The Longmont City Council has been discussed revising incentives for affordable housing projects for several months. The goal has been to align the complicated inclusionary housing ordinance with the development code.
The inclusionary housing ordinance requires developers to offer 12 percent of their units to individuals below the average median income (AMI). This applies to for sale units and rentals. Planner Erin Fosdick explained the current Land Use Code (LUC) offers incentives for affordable housing projects, including greater density and height and reductions in lot size, width and parking space requirements, as well as expedited application review. She said the expedited review is the most popular incentive because it offers developers predictability.
After much discussion, the Council decided to require a 12 percent threshold (of a development’s units) for eligibility for any affordable housing incentives. The Council also agreed unanimously that any project offering “exceptionally affordable” housing (for sale units at 60 percent or less of the area median income (AMI) would be eligible for incentives even if the project didn’t meet the 12 percent threshold requirement. In addition, the Council directed staff to discontinue providing expedited application review as an incentive.
It is encouraging to see that the Council is willing to offer incentives to developers simply for complying with the ordinance. The ordinance passed first reading on March 5 and is scheduled for a public hearing on March 19.
Deferred Impact Fees
On March 5 the City Council also passed a bill on first reading that will help developers by deferring the requirement to pay impact (also known as capital expansion) fees until residential units are issued a certificate of occupancy. The deferment does not impact the amount of revenue collected and will not affect ongoing operations or planned capital improvements.
Even Aren Rodriguez, who typically sides with Mayor Pro Tem Polly Christensen, supported this ordinance. He argued that requiring the payment of the fees early creates an undue loan burden on developers that is passed on to home buyers. Councilman Tim Waters agreed, saying “Anything that drives cost up (for developers) works against our interests.”
This concept was initially proposed last year by the Longmont Economic Development Partnership and the Longmont Area Chamber of Commerce in a policy paper on workforce housing. Impact fees to be deferred include water system development fee, sewer system development fee, Windy Gap fee, electric community investment fee, park fee, recreation fee, transportation fee, and storm drainage fees. These fees combined account for greater than 60 percent of the fees collected. Some fees would continue to be collected at the time the building permit is issued, including permit and plan review fees, inspection fees related to construction, as well as City and County sales tax.