mcminnville affordable housing task force 231 ne 5 th ... · mcminnville affordable housing task...

City of McMinnville Planning Department

231 NE Fifth Street McMinnville, OR 97128

(503) 434-7311

www.mcminnvilleoregon.gov

McMinnville Affordable Housing Task Force 231 NE 5th Street, Large Conference Room

Wednesday, September 27, 2017 10:00 AM

Task Force Members Time Agenda Items Remy Drabkin, Chair Elise Hui Jon Johnson Chris McLaran Kellie Menke Darrick Price Alan Ruden Jeff Sargent

10:00 AM 10:05 AM 10:10 AM

10: 15 AM 10:25 AM 10:35 AM 10:40 AM 10:45 AM 10:55 AM 11:00 AM

1. Call to Order/Introductions 2. Citizen Comments 3. Action Items: Approval of Minutes

• January 25, 2017 (Exhibit 1) • February 22, 2017 (Exhibit 2) • April 26, 2017 (Exhibit 3) • May 24, 2017 (Exhibit 4)

4. Discussion Items:

• Emergency Shelter Ordinances (presentation at meeting)

• Development Incentives – 1944 NE Baker Street (Exhibit 5)

• DLCD TA Grant – Housing Needs Analysis 5. Updates:

• Planning Commission Code Update

• Homeless Subcommittee 6. Task Force Member Comments 7. Staff Comments – 8. Adjournment

*Please note that these documents are also available on the City’s website www.mcminnvilleoregon.gov; click on Government, click on Boards and Commissions, click on McMinnville Affordable Housing Task Force. You may also request a copy from the Planning Department at the Community Development Center, 231 NE 5th Street, 503-434-7311.

http://www.mcminnvilleoregon.gov/


EXHIBIT 1



(503) 434-7311


MINUTES

January 25, 2017 10:00 am McMinnville Affordable Housing Task Force Community Development Center Regular Meeting McMinnville, Oregon Members Present: Chair Remy Drabkin, Elise Hui, Jon Johnson, Darrick Price, Alan Ruden,

and Jeff Sargent

Members Absent: Chris McLaran and Kellie Menke

Staff Present: Chuck Darnell – Associate Planner, Ron Pomeroy – Principal Planner, and Heather Richards – Planning Director

Others Present Mayor Scott Hill, Jared Miller, and Mary Stern

1. Call to Order/Introductions

Chair Drabkin called the meeting to order at 10:00 a.m.

2. Citizen Comments None

3. Approval of Minutes

None

4. Action Items None

5. Discussion Items

A. Formation of a Homelessness Subcommittee

Chair Drabkin proposed forming a homelessness subcommittee that specifically addressed homelessness.


McMinnville Affordable Housing Task Force 2 January 25, 2017

Task Force Member Hui thought that was one of the issues this Committee was supposed to address and thought it was a good idea. Planning Director Richards thought with the subcommittee, the dialogue could be broadened and other agency partners could be brought in to find solutions. Chair Drabkin thought the subcommittee could also bring in broader community involvement. There was consensus to form a homelessness subcommittee. Chair Drabkin, Task Force Member Hui, and Jeff Sargent volunteered to serve on the subcommittee.

B. Inclusionary Zoning Subcommittee Report

Task Force Member Ruden said there had been good discussions regarding what inclusionary zoning was and the potential incentives for developers. He thought it would be a good thing to establish in the future. Jared Miller explained this would be a zoning district that would require developers of multi-family housing to set aside 20% of the units for low income housing. Most apartments were more affordable housing, but they were looking at long term and inflation where they might not be as affordable ten years from now. One incentive they discussed was a density bonus where multi-family was allowed which would give developers more profitable projects. Planning Director Richards discussed how the City already offered 50% fee reductions and 100% SDC waivers for affordable housing. There had been discussion regarding a Construction Excise Tax as well. The subcommittee thought density bonuses were something the development community would respond to. Committee Member Ruden thought they could start with an inclusionary zone in the downtown area and as time went on, more could be added. Planning Director Richards stated the foundational, regulatory language would have to be done that created the zone and the density bonus. They could decide where they would be placed in McMinnville. Many multi-family projects currently being built were complying with this already. Was there a need now in different areas to implement this program or was it a targeted program that they wanted to incentivize one area in particular? There would be an administrative piece to make sure that these units were being continually maintained as affordable housing. Staff was planning to look at the current housing in the City to understand where the needs were and what areas needed to be incentivized. Mr. Miller said he was working on an assessment comparing what populations had significant needs and the housing burden threshold. He could include some questions the City would like to ask regarding housing needs as well. There was concern about balancing having enough units and having too many vacancies. Chair Drabkin asked what districts this should apply to and did they want to create an excise tax. Task Force Member Ruden was not sure if developers needed incentives in McMinnville. He explained that one of the biggest incentives for building multi-family was tax advantages.


Planning Director Richards thought the next step for inclusionary zoning should be a discussion with the building community. Were the private side multi-family developers building units that were 80% area median income right now and did they see the market sustaining that in the near term or were they moving out of that market. What would be the incentives to keep building multi-family and what were there locations in the City where it made more sense initially. They could also ask about the Construction Excise Tax. She clarified the subcommittee wanted to continue to talk about inclusionary zoning, putting a structure together, and exploring the Construction Excise Tax. She would work on putting together a meeting in the next 60 days.

C. HB 4079

Planning Director Richards stated she attended the webinar on HB 4079. This House Bill directed the state to choose two pilot programs to streamline UGB amendments for affordable housing. The formula associated with the bill was for one city with a population of over 25,000 and one city with a population under 25,000. McMinnville was on the list for the cities with a population over 25,000. The state was still putting dates together for the competitive application process, but it would be sometime in the fall. If they won, it would allow the expansion of the UGB to bring some land into the City for housing, and 30% would be affordable housing units. There were a lot of criteria they would have to meet and there had to be developers interested in developing this in a timely fashion because they wanted to get projects on the ground. There was a piece of property on the west side of the City that would be in proximity to transit and neighborhood commercial services. Task Force Member Ruden owned that piece of property. He bought it when he thought the UGB was going to be expanded, although that did not happen. It was surrounded by urban community on three sides. There was transportation available and at least 30% would be affordable housing. He discussed his other projects that had over 30% affordable housing. If this property came into the City, he anticipated doing the same and also dedicating park property to the City and doing street improvements. Principal Planner Pomeroy explained the location of the property. Planning Director Richards said the City would be the applicant and partner with the developer. There would be a pre-application process. If the City wanted to pursue it, staff would start putting it together. Task Force Member Ruden would include multi-family on that property. He thought the development could be well designed and done creatively and would combine multi-family and R-1 housing. Planning Director Richards said to be competitive, they would have to show that the City was taking good measures to look at efficient use of land within the City limits, which had to do with the code revisions. There was not an updated buildable lands inventory or a housing needs analysis, but there was a need for more land and housing. There was discussion regarding the reasons the UGB expansion was not passed previously and how the Friends group wanted to protect agricultural land.


Task Member Ruden suggested discussing this application with representatives of the Friends. Principal Planner Pomeroy stated there was a ten year monitoring portion of this project that they would be obligated to do if they won. They would have to meet certain parameters for ten years, and do annual reporting on it. He did not know what would happen if they did not comply and if the property would be taken out of the UGB. Planning Director Richards said if they did move forward, there would be an agreement with the developer stating who would do what and the financing if there were capacity issues. There might be other properties that made sense and they were not identifying only one property at this time. There was consensus to recommend the City Council move forward with the application.

D. Code Revisions

Planning Director Richards said HB 4079 created a checklist of measures to encourage affordable and needed housing within the current UGB. One of the actions in the Affordable Housing Task Force Plan was for staff to come back with a review and evaluation of cottage codes. Staff would do a comparison of what other cities were doing, where they had been successful, and what those cities would do differently. She asked what other elements the Task Force wanted them to explore. Some ideas were density bonuses with the inclusionary zoning, accessory dwelling units, and density standards. Chair Drabkin thought they should look at density standards. Planning Director Richards identified the following areas for further exploration: density bonuses, accessory dwelling units, density standards, limitations on low density housing types which had to do with the R-4 zone allowing single family dwelling units, multi-family off street parking requirements, amount of high density zoning districts, duplexes in low density zones, vertical housing, and the missing middle. Possibilities for the future would be discussions regarding a city center housing strategy and providing motivation for residential downtown.

E. Tiny Homes / Homeless Pods - (Presentation and Discussion)

Planning Director Richards said a potential solution for immediate needs in McMinnville were tiny homes or homeless pods. She thought it would be good to discuss what was currently allowed, what was not allowed, and potential issues and barriers. The tiny homes were small homes built on foundations and would go through the building code process. They were typically used as affordable workforce housing. There were some issues with minimum lot sizes for these in the City. There was another type of tiny home, a home on wheels, for those who wanted to be more transient and mobile. Those were considered a recreational vehicle and did not have to follow the code. They were being used by other communities as solutions for homelessness. There were also sheds, which were not on foundations or wheels and were not hooked up to services or followed the code. She was not sure how they would be classified in land use. They were being used for homeless solutions in some communities.


Building Official Bob Poskin said the International Code Council was looking into these issues, and he had been talking with other states as well. There were contract inspectors who could do the inspections on RVs and the applicant could pay for the cost. An approved RV could be placed in an RV park and it would not have to follow the building code. If a tiny home met the code requirements, it would become a zoning problem for where to place them. If they wanted to have several on one site, there would be a commercial standard problem because three or more units required sprinkler systems. Each unit would have to have their own sanitation system, water system, electrical system, and be on a permanent foundation. As an alternative, they could use manufactured home specifications for tie downs for the foundations. The building code said there had to be a minimum floor area of 120 square feet and those with a loft would not work because there had to be a stairwell. He thought realistically the tiny homes should be about 250 square feet. He was not allowed to approve any of these until the state came up with an appendix chapter for tiny homes that were not on foundations or did not have kitchen facilities. Principal Planner Pomeroy said there were different products aimed at meeting different housing needs. The garden sheds being used as residences were the most problematic because they did not meet any definition of habitable space. The regulations did not allow people to live in a garden shed. There were tiny homes and there were pod houses, both that could have everything needed to pass inspection. In McMinnville, as long as the tiny homes met the minimum square footage definition they could be placed in any residential zone. The problem was the smallest lot they could create in McMinnville was 5,000 square feet. People wanted smaller lots for their tiny homes, such as 1,000 square feet. That would need to be a policy discussion for the Council to create 1,000 square foot residential lots. If there was a planned development application, there would be density averaging and the smaller lots could be allowed. This would work for multiple homes, but not for individual homes. He passed out a document that explained the zoning ordinance and what was allowed in the different zones. If these tiny homes or pod homes could be tied down to a foundation, they qualified as any other site built home. He thought the challenge was for individuals who wanted their own tiny home on a very small lot. Planning Director Richards said most cities were allowing these as a subdivision, so it was a clustering of the tiny homes together with the amenities needed to serve that type of lifestyle. Principal Planner Pomeroy discussed the cottage cluster housing development average standards and requirements. He thought McMinnville could accommodate this type of development. It would be a type of condominium on one lot and the units could be individually designed, built, and sold. They would be processed as any other multi-family development with 25% landscaping on the site. The common areas could be accommodated in the landscape plan. There was no minimum or maximum dwelling unit size in McMinnville as most cities had. The land would be commonly owned through a Homeowners Association. It would allow the units to be designed in any configuration to create the common shared open communal spaces that they wanted in cottage clustered development. This could be done now with no changes to the code and there were a few in the City currently. Planning Director Richards said it could be used for permanent housing or homeless shelters. If it was homeless shelter, they would have to determine how to identify that for land use and the impact to neighboring properties.


Principal Planner Pomeroy said they could also view tiny homes as a hotel/motel in the general commercial zone if they were rented for a certain time period. These could be accommodated in the current code as well. Planning Director Richards said the ones that were difficult to fit the code were the ones on wheels, the sheds, the pods, and emergency shelters. Chair Drabkin suggested having the people who were offering emergency shelters come to the Task Force for a future discussion. Task Force Member Ruden thought the tiny homes on foundations were the future. They needed to change the code to allow small lot sizes based on maximum unit sizes. He saw these as affordable. There was discussion regarding garages for tiny homes. Principal Planner Pomeroy said the City could accommodate most configurations for tiny homes. The catch seemed to be tiny homes on wheels, but these could be tied down like manufactured homes would be and that would meet code. Two other issues were if the City wanted to allow the creation of small individual lots for tiny homes and in what zones would they be allowed, and addressing homeless shelters like garden sheds, tents, or camping trailers. Building Official Poskin said for tiny homes on wheels, the wheels would have to be removed and they would need to be inspected in accordance to the code. The average cost of building one of these was $55,000, and the price of the lots were $80,000 to $100,000. They would have to be on a foundation and have separate utilities. Planning Director Richards said the City of Portland had a large grant to build tiny homes just outside of McMinnville. They had approached the County to talk about an opportunity to leverage that locational build out in partnership with the needs around here. There could be a regional inspector assigned to this type of product that served Newberg and McMinnville as well. Task Force Member Ruden thought they needed to allow less than 5,000 square foot lots, more like 2,500 or 2,000 square foot lots. That would help reduce the costs as well. Building Official Poskin said in lieu of garages they could have a separate area for cars to park.

6. Task Force Member Comments

None

7. Staff Comments Planning Director Richards stated the Friends of Yamhill County discussed the large number of vacation home rentals in McMinnville which they thought were supplanting residential land supply. She had Associate Planner Darnell create a map of them.


Associate Planner Darnell explained how to read the map. These were vacation rentals that were licensed in residential zones. There were not as many as they anticipated.

8. Adjournment

Chair Drabkin adjourned the meeting at 12:02 p.m.

EXHIBIT 2



(503) 434-7311


MINUTES

February 22, 2017 10:00 am McMinnville Affordable Housing Task Force Community Development Center Regular Meeting McMinnville, Oregon Members Present: Chair Remy Drabkin, Elise Hui, Jon Johnson, Chris McLaran, Kellie

Menke, Darrick Price, Alan Ruden, and Jeff Sargent

Members Absent:


Others Present Mayor Scott Hill

1. Call to Order/Introductions




None


5. Discussion Items A. Formation of a Homelessness Subcommittee


McMinnville Affordable Housing Task Force 2 February 22, 2017

Chair Drabkin said the Task Force decided to form a homelessness subcommittee. The structure of the group and a list of members had been determined. They were going to follow a socio-ecological model where they focused on smaller groups first identifying priority populations and then solutions to address those populations. They would be meeting the second Monday of every month at 4 p.m. The first meeting would be in March. B. Inclusionary Zoning Subcommittee Task Force Member Ruden said inclusionary zoning came with the benefit of discounted SDCs and other incentives for builders. Prices were continuing to escalate and inclusionary zoning was appropriate to make multi-family housing affordable for builders and residents. A recommendation would be brought back to the next meeting on inclusionary zoning. Planning Director Heather Richards said the City needed to do a housing needs analysis to give them an idea of what the inventory of affordable housing was in the City. Staff was currently working on a buildable lands inventory and was working with the state on a grant for the housing needs analysis to be done next fiscal year. Task Force Member Johnson discussed an article called “The Missing Middle” regarding different types of housing. C. Code Revisions Planning Director Richards said staff looked at the State’s efficiency measures for affordable housing as well as what other cities were doing and compared them to McMinnville’s Code. The other cities were chosen based on size and location. A chart was created to show what was in McMinnville’s Code and the other cities’ codes. Staff tried to delineate where other codes were more flexible and allowing some outcomes and had put a value system to that. Associate Planner Chuck Darnell discussed the comparison of Accessory Dwelling Units. The efficiency measures of the State for ADUs were builders got the most points for allowing ADUs with little constraint. Compared to other cities, McMinnville in general was unconstrained. ADUs were allowed in all residential districts as a permitted use and they had to be on a single family lot. One thing McMinnville had that other cities did not was a minimum size requirement of 300 square feet for ADUs. Other differences were in McMinnville they did not have many architectural standards or specific design requirements for an ADU and in McMinnville ADUs were required to be on their own independent utility. Task Force Member Menke asked about compliance with DEQ standards and the separate utility requirement. Planning Director Richards said the concern was if the lot was divisible and there were two dwelling units on it. The services would have to be separated if the property was divided. Some communities decided that when the land division process happened the burden was on the property owner to invest in the separation of services at that time to meet the DEQ standards. In McMinnville the separation happened in the forefront. The Task Force could look at the definition of ADU and if it was attached to the primary structure, did it have to have a separate utility as it would not go through a land division process in the future. Detached ADUs could still have a separate utility requirement.


Associate Planner Darnell said some cities like Grants Pass did not allow a lot with an ADU to be subdivided. The definitions could be looked at, assuming they could handle the additional water usage. Planning Director Richards said most people viewed ADUs as attached to the primary structure and having an SDC associated with the construction was a cost burden to that type of product. Associate Planner Darnell said duplexes were not required to have separate utilities unless the property was divided. There was discussion regarding granny flats above garages, reduction of SDCs, and allowable size for ADUs. There was consensus that the utilities, minimum and maximum size limitations, and SDC reductions should be further explored. Chair Drabkin said there was concern that the ADUs would be used for VRBOs, vacation rentals by owner, instead of housing units. Task Force Member Menke thought they should include language discouraging that from happening. Principal Planner Ron Pomeroy said there were 28 VRBOs in McMinnville and a few B&Bs. So far no complaints had been received about them and they seemed to be integrating well and at a moderate pace in the community. Even if they were revoked, several would be owner occupied and there would be a small percentage available for rent. The impact would be minimal on the community as far as creating additional rental opportunities. Planning Director Richards said there was a retired population that moved to other destinations during certain seasons, but wanted to maintain their homes and put them on the vacation rental market for a season. Principal Planner Pomeroy said there were a number of ADUs in McMinnville that were not classified as ADUs due to not meeting the building code requirements. If they did not have a stove top or oven which constituted a kitchen, it was not considered a dwelling unit. These were considered as additions to the home. In some ways this worked for aging parents or grandparents. Task Force Member Ruden suggested adding language for converting a structure to an ADU. Associate Planner Darnell then gave a comparison of parking and street requirements. For smaller sized multi-family units, such as studios or one-bedrooms, McMinnville’s parking requirement was higher than other cities. Most other cities required one parking space per unit, but McMinnville required 1.5 parking spaces. McMinnville’s Single family requirements were similar to other cities. Duplex and triplex parking requirements were different. Duplexes in McMinnville were treated the same as single family, two spaces per unit. Other communities required one space per unit or followed the multi-family requirements based on unit size and in most cases were lower. Other opportunities for reduced parking included proximity to transit or on street parking. Regarding residential street standards, McMinnville’s local residential streets had to be 28 feet wide which allowed for parking on both sides. Other communities had wider street minimums and allowed for reduction in widths if parking was limited to one side or none at all. He thought McMinnville’s local residential street width and design was more conducive to pedestrian activity than other communities.


There was consensus to look into reducing the parking requirements for studios and one-bedroom apartments and structures in proximity to transit. There was discussion regarding parking as a barrier to affordable housing. Principal Planner Pomeroy discussed density standards. Duplexes in McMinnville were allowed in R-1 and R-2 zones on corner lots. Compared with other communities, McMinnville was in the middle as some allowed them not only on corners but on interior lots as well. Other communities had more residential zones than McMinnville had. Planning Director Richards explained the maximum density standard for R-3 was 7.3 dwelling units per acre and for R-4 it was 29 dwelling units per acre. It was a significant jump and there might need to be something in the middle. Principal Planner Pomeroy stated the City had 16% multi-family zoned lands. Half of the other communities didn’t know how much of this land they had and for the other half, the range was 11% to 35%. McMinnville was sitting squarely where the rest of the communities were. Planning Director Richards said there were no maximum lot sizes in McMinnville, which most cities had. Chair Drabkin thought this topic should be brought back to the next meeting for more discussion.

6. Task Force Member Comments None

7. Staff Comments None

8. Adjournment Chair Drabkin adjourned the meeting at 11:07 a.m.

EXHIBIT 3



(503) 434-7311


MINUTES

April 25, 2017 10:00 am McMinnville Affordable Housing Task Force Community Development Center Regular Meeting McMinnville, Oregon Members Present: Chair Remy Drabkin, Elise Hui, Jon Johnson, Chris McLaran,

Kellie Menke, Alan Ruden, and Jeff Sargent

Members Absent: Darrick Price

Staff Present: Mike Bisset – Community Development Director and Ron Pomeroy – Principal Planner

Others Present Mayor Scott Hill and Kaye Sawyer

1. Call to Order




None

4. Action Items • Macy Street Vacation Request - Gospel Rescue Mission

Community Development Director Mike Bisset said this was a vacation request received from the Yamhill County Gospel Rescue Mission for a piece of Macy Street south of 14th and north of 13th. He explained the vacation process. The two adjacent property owners had agreed to the vacation. The vacation also tied into the Council’s goal regarding


McMinnville Affordable Housing Task Force 2 April 26, 2017

homelessness and affordable housing. This would be a recommendation to the Council supporting a City initiated process rather than a property owner process. If the City initiated the process, it would relieve the Mission from having to seek the signatures from the area that was affected. The vacation would allow the Mission to use the area for parking. The street would never be connected to 14th because of traffic safety issues and there was no need for a public street there. There were utilities in the corridor, but they would be protected through an easement. Kaye Sawyer, representing the Mission, said there was a need for parking at the Mission and it was a huge neighborhood issue. They could utilize the current parking to expand the building and there would be plenty of space on Macy to park. This would alleviate the parking issue. The shelter was packed in the winter due to the weather and this would also help provide extra space for the shelter as well. Task Force Member McLaran thought this would be a good use for Macy Street as there was a dire need for parking. Chair Drabkin asked if the parking would be for those utilizing the shelter and staff only. Ms. Sawyer was not sure how much parking would be available after the expansion. They currently had two spots and a disable spot for the shelter. The parking would primarily be for guests and employees. Chair Drabkin thought people would want to know if people living in their cars would be able to park there and live on the property in their vehicles. Ms. Sawyer did not know how many spaces they would be getting or utilizing. There were people who parked at the shelter, but did not want to utilize the shelter because it was so packed. There were no neighborhood houses near that parking. Principal Planner Pomeroy said the vacation of the street would give them more parking than what the code required. Regarding people sleeping in their cars, the Police Department should be a part of the conversation. Since this was private property, he did not know if it was an issue. Task Force Member Hui moved to recommend to the City Council a City initiated vacation process for a portion of Macy Street. The motion was seconded by Task Force Member Menke and approved unanimously.

5. Discussion Items

• Code Revisions

Principal Planner Pomeroy discussed mixed use housing and vertical housing. Mixed use housing was commercial and residential occurring on the same property. Staff looked at comparable cities and what McMinnville’s code allowed. Every jurisdiction allowed mixed use development of one or more types. There had not been many mixed use projects over the last five years. There had been two in Ashland which were high end projects, one was condominiums starting at $500,000. There was one in Redmond which was a senior


apartment project above a ground floor medical office. There were three in Corvalis, two of which were high end projects and the other was student housing. He thought the reason there were not many of these projects was based on the market and profitability. It was also hard to find a loan for this type of product. Mixed projects could occur, but they were typically not affordable housing and required subsidy in order to make the project work. There also seemed to be an interest on the developer side of matching the price point of the residential component to the commercial product on the ground floor. DLCD did a study on mixed use development and they found that there needed to be a connection to market rates in order for these projects to work and in the cases where there wasn’t that connection they would need subsidies to make it pencil. There were a number of ways to get the subsidies, such as through block grants and tax credits. Vertical housing was a program created by the state and was directly related to a tax benefit that was received by the developer for housing that was placed above commercial development. A jurisdiction had to create a vertical housing zone that was verified by the state and qualifying projects could take advantage of up to 20% tax credit depending on the tax valuation of the project for each residential floor of the project. There was a maximum of 80% tax credit for the whole project. For the projects approved through the vertical housing program, only three included a lower income housing component. The state did not connect this program to needed or affordable housing.

There was discussion regarding what subsidies the City could offer and possible planned development areas. Chair Drabkin said there was not a lot the City could do to encourage more of this type of development without more incentives because it was market driven. Associate Planner Darnell discussed cottage cluster development. He had done a comparison to other jurisdictions and some allowed this type of development and some did not. Cottage housing was housing on a large lot with individual structures that were smaller single family detached homes arranged in such a way to utilize open space. It was allowed in McMinnville. He explained some of the case studies of cottage codes around the state and how the cottages had been used to form a unique development pattern and introduce a new type of product into the market. It met market demands for smaller homes and because there were more units that could be put on a piece of land, it could help reduce land and housing costs. He thought they should consider if it would be a useful tool to introduce more density in lower density residential areas and if it would achieve affordable housing goals of providing a unique housing based on the ability to maximize the land and reduce land costs. It was not necessarily a tool to achieve lower income housing, but would meet the middle income needs or workforce housing. Principal Planner Pomeroy thought for cottage development, people were looking for amenities for what they would give up, such as private yard space or garages attached to the home. They were looking for a communal type of living space with common garden areas, meeting spaces, and plazas. It was a balance between how small the units needed to be to hit the affordable price point and how many amenities could be provided but not eliminating too many units so that it was no longer marketable. There was consensus that this was a good concept, but the Task Force did not want to continue exploring it as it was not guaranteed to be affordable housing.



Task Force Member Ruden thought the time was not right for inclusionary zoning. A Construction Excise Tax was usually attached to the zoning which would mean a tax on any building permit that came into the City to give credits for the zoning. From a developer point of view, it might be an incentive, but he did not think it was necessary. Task Force Member Hui said it was being done in a few communities, but many thought the same, that now was not the time. There was no evidence that it would not slow down overall development to create a tax that would fund the zoning. The tax would be 20 housing units at 20%. Task Force Member Ruden said the tax on an average home being built would be $1,500. It would take away from the perception of affordable housing by creating a higher cost for other housing.

7. Staff Comments

• HB 2007, HB 4079, AH Permit Activity, AH Fee Reductions

Task Force Member Ruden discussed the property that he had looked at partnering with the City for the HB 4079 program. He had purchased the property several years ago in anticipation of the Urban Growth Boundary expansion, but that never happened. He explained the design which included 20 lots for small houses surrounding a dedicated four acre park. There would be 5.6 acres of multi-family for 130 units, there would be a commercial building with residential above, a walking path to the dedicated park area, a future high school site was nearby, large lots would be on the higher elevations, and there would be bungalow style homes which were good for families. Most of the housing would be affordable.

Task Force Member Hui moved to recommend Council direct staff to start the pre-application process. The motion was seconded by Task Force Member Menke and approved unanimously.

8. Adjournment

Chair Drabkin adjourned the meeting at 11:15 a.m.

EXHIBIT 4



(503) 434-7311


MINUTES

May 24, 2017 10:00 am McMinnville Affordable Housing Task Force Community Development Center Regular Meeting McMinnville, Oregon Members Present: Chair Remy Drabkin, Elise Hui, Kellie Menke, and Jeff Sargent

Members Absent: Jon Johnson, Chris McLaran, Darrick Price, and Alan Ruden


Others Present:

1. Call to Order




None


5. Discussion Items

• Homelessness Subcommittee Report

Chair Drabkin said Task Force Member Sargent would be co-chairing the Homelessness Subcommittee at the next meeting on June 12.


McMinnville Affordable Housing Task Force 2 May 24, 2017

Task Force Member Hui explained the work that had been done for the homeless veterans action plan. It was arranged similar to the Affordable Housing Task Force for short and long term actions. A chart had been created that would track the action item, lead agency, additional resources and partners, due date, and date completed. They had reached out to the agencies who were also working on the homeless veterans issue. Task Force Member Sargent said as part of their Support Services for Veteran Families three year contract, they had been collecting a master list of homeless veterans throughout the County. He did not know whether their contract would be extended, but they would continue to support veterans. They were also communicating with partners that could provide housing throughout the County and encouraging a veterans preference where possible. They also had a shelter diversion and rapid rehousing program to have a dedicated room in shelters and rentals for veteran families. They could also provide additional support and assurances such as down payments, ongoing case management, and protection for the property owner’s property. Task Force Member Hui said the Housing Authority had two rental assistance programs for veterans. They were working on a master brochure advertising all of the programs available for veterans who were homeless or in danger of becoming homeless. They applied for targeted funding from OHCS to assist with repairs to veterans’ existing homes. The long term plan was to reach functional zero for veteran homelessness. Task Force Member Menke suggested this information be presented to Council on June 13. Staff would help put together a PowerPoint presentation. Chair Drabkin stated instead of the Homelessness Subcommittee dividing into other subcommittees to take on tasks, the Subcommittee would like more direction from the Task Force on what should be explored or worked on.

• Annual Review of Action Plan

Planning Director Heather Richards said the Task Force was required to present an annual update to the City Council. Part of the update was to evaluate what had been done and the other part was to propose any needed amendments to the action plan. Chair Drabkin suggested Task Force Member Ruden present the information on inclusionary zoning and have Task Force Member Price in attendance as well. Chair Drabkin reviewed the Items to include in the annual report such as the SDC discounts for affordable housing and cottage codes and review of other City codes. These were the short term actions, and the Task Force would be working on the mid-term projects such as density bonuses. There was discussion regarding the County list of foreclosed properties. Planning Director Richards said they could work on an agreement with the County that if there were foreclosed properties in McMinnville, the Task Force could they look at them to see if they should be purchased by the City and added into the program. There was consensus to amend mid term action 2 to include initiating discussions with the County regarding their surplus property list for affordable housing purposes. There was discussion regarding adding the action of supporting an application to the House Bill 4079 pilot program.

McMinnville Affordable Housing Task Force 3 May 24, 2017

There was further discussion about prioritizing the Housing Needs Assessment as mid term action 1, and adding review and engage owners of buildable lands to assess for possible rezoning for multi-family housing to mid term action 2. There was consensus to report to the Council that inclusionary zoning and construction excise tax options were discussed by the Task Force. The recommendation was not to pursue these items at this time, but some members of the Task Force thought there would be benefit to pursuing them and would like the direction of the Council. Task Force Member Hui moved to add the following mid term actions: 1. Review opportunities for working with partners to leverage vacant properties for affordable housing needs. Under that there would be three bullet points: one would be working with the faith based community, one would be looking at City owned lots, and one would be initiating a discussion with the County regarding surplus lots. 2. Support for a City application to the House Bill 4079 pilot program. The motion was seconded by Task Force Member Sargent and passed 4-0.

• Code Revisions Direction

Planning Director Richards discussed the requirements for the House Bill 4079 pilot project application which included affordable housing measures and needed housing measures. To reach some of these requirements, staff suggested making some Code revisions. She thought there should be discussion regarding removing constraints for accessory dwelling units, whether or not to increase the amount of high density zoning districts, whether or not to allow detached residences in high density residential zones, looking at the maximum lot size in the R-3 zone and shifting it to 5,000 square feet, looking at duplexes in low density residential zones to be on other lots besides corner lots, and adding a chapter in the Zoning Ordinance for cottage codes. There was consensus to move forward with the Code revisions as suggested by staff.


None

7. Staff Comments Planning Director Richards reviewed the items that would be on the June 13 Council meeting agenda. There was consensus to make the Affordable Housing Task Force presentation at the Work Session before the Council meeting on June 13 at 5:30 p.m. and see if it could be televised.

8. Adjournment Chair Drabkin adjourned the meeting at 11:06 a.m.

Attachments: Attachment A: Foregone Revenue Chart Attachment B: City Council Staff Report and Resolution No. 2017-61



(503) 434-7311


EXHIBIT 5 - MEMORANDUM DATE: September 27, 2017 TO: McMinnville Affordable Housing Task Force Members FROM: Heather Richards, Planning Director SUBJECT: Development Incentives – 1944 NE Baker Street

Resolution No. 2017-61 (See Attachment B) was presented to the McMinnville City Council on September 12, 2017, as consideration of an Affordable Housing SDC Exemption and Permit Fee Reduction for 1944 NE Baker Street in the amount of $104,304.25 ($98,983.20 in system development charges exempted and $5,321.05 in permitting fee reductions). The project is a 16-unit apartment complex being built by TDJC LLC, a local developer, for Yamhill County Health and Human Services. There will be nine two-bedroom units and six one-bedroom units that will be rented to individuals and families managing significant mental health issues with household incomes of 50% or less of area median income. In addition there will be an on-site residential manager. On November 8, 2016, the McMinnville City Council approved Ordinance No. 5012 and Resolution No. 2016-81 exempting qualifying affordable housing projects from system development charges and reducing building and permitting fees by 50% for qualifying affordable housing projects. The City Council took these actions based upon the recommendation of the McMinnville Affordable Housing Task Force in an effort to incentivize and stimulate the development of more affordable housing in the community. Criteria for qualifying projects are:

• Housing for low-income residents which is exempt from real property taxes under state

law. • Owner-occupied or lease-to-purchase housing for households with an income at or

below 80% of the Area Median Income as determined by the State Housing Council based on information from the United States Department of Housing and Urban Development. Income levels will need to be certified and provided by the applicant at the time of application.

• Homeless Shelter Developments • If the project has units that do not qualify for the exemption or a commercial component,

the exemption will be applied to only that portion of the project that qualifies.


Attachments: Attachment A: Foregone Revenue Chart Attachment B: City Council Staff Report and Resolution No. 2017-61

The City of McMinnville’s current annual allocation for this program is $75,000 with anything (singular project or aggregate) going over $75,000 needing to go to the City Council for approval. Since this request was over the $75,000 allocation, it was considered by City Council on September 12, 2017. At that meeting, the City Council discussed the impact to the SDC funds and asked for more information before making a decision on the request. Their concerns centered on the fact that current permitting levels are 50% of what was forecasted, thus making the foregone revenue impact more substantial, and that the allocation could preclude future projects such as McMinnville Habitat for Humanity from participating this fiscal year in the same program this year. When the program was first approved, it was approved on the basis that the impact to city funds would be 6% foregone revenue or less, and that anything over that amount should go to the City Council for approval. At the time, an analysis of impact was conducted based upon 125 dwelling unit permits per year, which equated to an annual allocation of $75,000 per year which would maintain the 6% impact threshold to city funds. However, residential permitting levels are substantially lower than what was anticipated. Only 65 dwelling permits were issued in FY 16/17. If the same permitting level is maintained in FY 17/18, then the overall impact to city funds if this request is approved would be anywhere from 17 – 25%. (Please see Attachment A). With McMinnville Habitat for Humanity and YCAP both preparing to submit building permits in this fiscal year, the City Council was worried about overall impact in terms of foregone revenue to the SDC funds and the ability to fund future projects in the same fiscal year.

1944 NE BAKER STREET FOREGONE REVENUE IMPACT ON CITY FUNDS:

PROGRAM FOREGONE REVENUE AMOUNT

FY 17/18 Forecast (Budgeted)

% of Forecast Foregone

Adjusted Permit Trends Forecast

(Based on FY 16/17) *

% of Adjusted Forecast Foregone

Permit Fees

Building $4,793.55 $335,000 1.5%

Planning $527.50 $25,000 2.1%

Total Permit Fees Foregone

$5,321.05

System Development Charges Transportation Fund $19,175.20 $200,000 9.6% $114,000 17%

Parks Fund $33,888.00 $248,600 14% $140,660 24%

Wastewater Fund $45,920.00 $325,000 14% $185,250 25%

Total SDCs Foregone

$98,983.20

TOTAL (Permit Fees and SDC Exemptions):

$104,304.25

*65 Dwelling Permits were issued in FY 16/17.

ATTACHMENT A

Attachments: Attachment A: Resolution No. 2017-61 Attachment B: Agreement between Yamhill County Health and Human Services and Housing Authority of Yamhill County Attachment C: CU 1-17 Decision Document



(503) 434-7311


STAFF REPORT DATE: September 12, 2017 TO: Mayor and City Councilors FROM: Heather Richards, Planning Director SUBJECT: Resolution No. 2017-61: Affordable Housing SDC Exemption and Permit Fee

Reductions – 1944 NE Baker Street

Council Goal: Promote Sustainable Growth and Development

Report in Brief:

This action is the consideration of Resolution No. 2017-61 providing development fee exemptions and reductions for an affordable housing project at 1944 NE Baker Street in the amount of $104,304.25 ($98,983.20 in system development charges exempted and $5,321.05 in permitting fee reductions). (See Attachment A).

The project is a 16-unit apartment complex being built by TDJC LLC, a local developer, for Yamhill County Health and Human Services. There will be nine two-bedroom units and six one-bedroom units that will be rented to individuals and families managing significant mental health issues with household incomes of 50% or less of area median income. In addition there will be an on-site residential manager.

(1944 NE Baker Street Site Plan)

ATTACHMENT B


AH COE – 2017-01 Page 2


Background:

On November 8, 2016, the McMinnville City Council approved Ordinance No. 5012 and Resolution No. 2016-81 exempting qualifying affordable housing projects from system development charges and reducing building and permitting fees by 50% for qualifying affordable housing projects. The City Council took these actions based upon the recommendation of the McMinnville Affordable Housing Task Force in an effort to incentivize and stimulate the development of more affordable housing in the community.

Criteria for qualifying projects are:

• Housing for low-income residents which is exempt from real property taxes under state law.

• Owner-occupied or lease-to-purchase housing for households with an income at or below 80%of the Area Median Income as determined by the State Housing Council based on informationfrom the United States Department of Housing and Urban Development. Income levels willneed to be certified and provided by the applicant at the time of application.

• Homeless Shelter Developments

• If the project has units that do not qualify for the exemption or a commercial component, theexemption will be applied to only that portion of the project that qualifies.

With limited budgets and financially constrained programs, the city elected to establish an annual allocation for these exemptions at $75,000 unless approved by action of the McMinnville City Council.

Additionally, each qualifying project will have a Certificate of Exemption recorded through the Yamhill County Recorder’s office on the property stating that if the project does not continue to serve as a qualifying affordable housing project within ten years of the issuance of the Certificate of Occupancy, the property owner will pay the city back the full exemption listed on the certificate.

In February, 2017, Troy Haworth with TDJC LLC started visiting with city staff about a project he was building for Yamhill County Health and Human Services to provide housing for individuals and families managing significant mental health issues and maintaining a household income of 50% or less of area median income.

TDJC LLC applied for a conditional use permit for a social relief facility for the project that was approved on April 20, 2017, after a Planning Commission public hearing. (See Attachment C).

At the same time, city staff started working with TDJC LLC and Yamhill County Health and Human Services staff on determining whether or not the project qualified for the city’s affordable housing development incentives.

Housing will be provided for households making 50% or less of area median income and based upon the type of project that was being constructed it will be exempt from real property taxes under state law. Yamhill County Health and Human Services is partnering with the Housing Authority of Yamhill County to certify the income levels of the residents and to provide fast-track Section 8 housing choice vouchers for the units. The Housing Authority of Yamhill County will then provide an annual income certification audit for the residential units. (See Attachment B).

AH COE – 2017-01 Page 3


The end user will benefit from the development fee incentives by realizing a rental rate 25% less than the market rate.

Currently the approved program would allow the project at 1944 NE Baker Street to receive $75,000.00 in development fee incentives due to the authority established in the McMinnville City Code, Section 3.10.060(B)(2). Resolution No. 2017-61 increases that allocation to $104,304.25.

(Elevations of the project)

Discussion:

This development incentive program was initiated to try and stimulate more affordable housing opportunities and creative partnerships amongst service providers. This project is illustrative of that hoped for outcome, providing fifteen (15) residential units for households earning less than 50% of area median income.

However, with constrained budgets and expansive needs, the foregone revenue for the city’s programs should be monitored and considered. A $75,000 annual allocation to this program without additional City Council approval was meant to ensure that the impacted funds (Transportation, Wastewater and Parks SDC collections, and building and planning permitting fees) would not be overly impacted. This

AH COE – 2017-01 Page 4


project exceeds the $75,000 allocation and if approved all future projects in this fiscal year will need to be considered on a case-by-case basis and approved by the City Council. (See table below). The enabling ordinance for this program includes a program evaluation in three years. If the program is successful and is able to stimulate more projects than the funds are able to absorb, the City may consider an annual competitive process for the limited funds in the future.

Fiscal Impact:

Total fiscal impact to the City of McMinnville is $104,304.25 in foregone revenue that would have been distributed to the following programs:

PROGRAM AMOUNT Permit Fees Building $4,793.55

Planning $527.50

Total Permit Fees Foregone $5,321.05 System Development Charges Transportation Fund $19,175.20

Wastewater Fund $33,888.00

Parks Fund $45,920.00

Total SDCs Foregone $98,983.20 TOTAL (Permit Fees and SDC Exemptions): $104,304.25

City Council Options:

1. APPROVE Resolution No. 2017-61, approving $104,304.25 in development incentives for theaffordable housing project at 1944 NE Baker Street.

2. REQUEST more information.

3. DO NOT APPROVE Resolution No. 2017-61, limiting the amount of development fee incentivesavailable to the qualifying affordable housing project at 1944 NE Baker Street to $75,000.00.

Recommendation/Suggested Motion:

Staff recommends that the Council approve Resolution No. 2017-61.

“I MOVE TO APPROVE RESOLUTION NO. 2017-61.”

HR:sjs

CC STAFF REPORT - Attachment A

RESOLUTION NO. 2017 - 61

A Resolution approving system development charge exemptions and reduced building and planning permitting fees in excess of $75,000 for a 16-unit affordable housing project at 1944 NE Baker Street. The total SDC exemptions and permit reductions is $104,304.25.

RECITALS: The City of McMinnville understands the value and need for affordable housing in the

City of McMinnville: and

The McMinnville City Council would like to increase the availability of affordable housing for low and no-income residents of the City of McMinnville; and

On November 8, 2016, the City of McMinnville adopted Ordinance No. 5012, amending Section 3.10.060 of the McMinnville City Code, exempting qualifying affordable housing projects from system development charges; and

1944 NE Baker Street qualifies as an affordable housing project as housing for low-income residents which is exempt from real property taxes under state law, Section 3.10.060(B)(1)(a); and

1944 NE Baker Street is a 16-unit apartment complex managed by the Housing Authority of Yamhill County for the Yamhill County Health and Human Services Department serving households earning 50% or less of the area median income; and

The value of the system development charges exempted is $98.983.20; and

Resolution No. 2016-81 allows for a reduction in building and planning permit fees for qualifying affordable housing projects; and

Since the project at 1944 NE Baker Street is a qualifying affordable housing project, it also received a reduction in building and planning permitting fees totaling $5,321.05; and

The total combined exemptions and reductions for 1944 NE Baker Street equals $104,304.25; and

Per Section 3.10.060(B)(2) of the McMinnville City Code, the total annual allocation for affordable housing exemptions will not exceed $75,000 unless it is approved by action of the McMinnville City Council; and

Since the McMinnville City Council would like to increase the availability of affordable housing for low and no-income residents of the City of McMinnville

NOW, THEREFORE, THE COMMON COUNCIL FOR THE CITY OF MCMINNVILLE ORDAINS AS FOLLOWS:

Section 1. That the affordable housing project at 1944 NE Baker Street is exempt from paying $98,983.20 of system development charges to the City of McMinnville.

Section 2. A Certificate of Exemption documenting the date and amount of the exemption plus the amount of the reduced permit fees ($104,304.25) will be recorded on the property with the Yamhill County Recorder’s office.

Section 3. In the event the project at 1944 NE Baker Street ceases to be utilized for housing for low-income persons within ten years from the date the certificate of exemption is recorded, the person to whom the reduction was granted shall be required to pay to the city the amount of the exemptions and reduced permit fees.

Passed by the Council this 12th day of September, 2017 by the following votes:

Ayes:

Nays:

Approved this 12th day of September, 2017.

MAYOR (council president)

Approved as to form:

CITY ATTORNEY

CC STAFF REPORT Attachment B

CC STAFF REPORT Attachment C

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