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HomeMy WebLinkAboutcoa.lu.ca.Employee Housing.1986hBhoRANDIIM TO: Aspen City Council THRU: Hal Schilling, City Manag r ^ FROM: Alan Richman, Planning and velopment Director~ll`1\ RE: Ordinance 2, Series of 1986 - Employee Housing Code Amendments L DATE: February 4, 198p SDMMARY: Planning Commission Resolution 85-23 recommends that the Aspen City Council adopt the following Code amendments with respect to employee housing: 1. Repeal of points awarded for conversion of existing units to deed-restricted status. 2. Clarification of requirements for provision of employee housing off-site. 3. Elimination of the ability to obtain an FAR Bonus in the commercial or lodge districts by providing employee housing off-site. 4. Reduction of the number of points available for employee housing in the residential scoring system. Additionally, the Planning Office and the Housing Authority recommend adoption of the following amendment which was rejected by the Commission: 5. Creation of a cash-in-lieu option for providing employee housing. PREVIOOS COIINCIL ACTION: Council initiated proposals #1 and #5 on October 28, 1985. Council approved Ordinance 2, Series of 1986 on first reading on January 13, 1986, adding Section 5 to the Ordinance, implementing a cash-in-lieu option for employee housing. The vote was 4 in favor, 1 against. BACRGROIIND: During the Council's consideration of the Aspen Mountain PUD proposal to house employees at Hunter Creek Apart- ments, several serious questions were raised about our options for providing housing. Council asked the Planning Office to look into the policy of converting existing units, and the provision which awards points for this option over and above those awarded for actually constructing the units. Based on our findings, remaining three items are proposals of the Planning Office, based on recent experience and analysis. Please note that the appli- cants for the Sunny Park Residential GMP Project have tabled their application in order to request that scoring changes #1 and #4 above alter the competitive system for the 1985 GMP appli- cants. PROBLElI DISCIISSION: The following analysis is keyed to the sections of the attached Ordinance, and to the list of recommend- ations above. 1. Conversion of free market units to deed-restricted status adds to our inventory of protected, affordable units without affecting our rate of growth and provides an incentive to renovate and upgrade our housing stock. For these reasons, we recommend that the policy of permitting conversion be retained. However, we do not want to be put in the position of "dictating" to the market that one form of affordable housing provision is preferable to another, as is done by the award of points only for conversion. We think that the applicant should have the freedom to choose which housing option to take, and recommend the repeal of this provision, now found in Sections 24-11.4(b)(5), 24-11.5(b)(4) and 24- 11.6(b)(4)(bb), a copy of which is available as Attachment nA n 2. In our experience in working with the provision of employee housing at off-site locations, we have run into some trouble getting applicants to be specific and realistic in the commitments they are making. It is simply impossible for the Housing Authority to evaluate a housing proposal which does not specifically identify the type and size of units involved and the level of upgrade proposed. Furthermore, it is not reasonable to spend time reviewing a proposal in which the applicant has no interest in the land and/or units. The amendments in Section 2 of the Ordinance are intended to rectify these problems. 3. The Code presently provides applicants in the CC, C-1, Office, L-1 and L-2 zones with the opportunity to obtain an FAR Bonus for the provision of employee housi ng. This "carrot" allows the following t o occur: Bonus FAR Bonus FAR Total Zone Allocable Employee Commercial Allov- FAR sousing Space able CC 1.5:1 0.2:1 0.3:1 2.0:1 C-1 1.0:1 0.2:1 0.3:1 1.5:1 0 0.75:1 0.1:1 0.15:1 1.0:1 L-1/L-2 0.75:1 0.08:1 0.17:1 1.0:1 2 Recently, it has become clear to us that the Bonus FAR awarded for the provision of employee housing is no longer serving any function. With last year's amendments to the quota system, minimum thresholds for housing exist in each of the three scoring systems, as noted above. Therefore, Furthermore, w th there tensiono oflthe syst m to mall zones, we will obtain such housing from all projects. Therefore, to award a density bonus for something which must already be provided gives the community nothing in return for its density award. The Planning Office's recommendation to the Commission to correct this problem was to eliminate the Bonus FAR for employee housing altogether, and to instead offer an FAR Bonus in exchange for a contribution to a "transportation capital improvements fund." This fund could be used in our commercial and lodge districts for a parking structure, downtown shuttle or similar amenity and has precedent in recently adopted programs in San Francisco, Boston and other cities. We also recommended the revision of the parking requirements citywide to make them more uniform, but to also provide for a reduction below the standard by the P&Z in exchange for a contribution to the transportation fund. The Planning Commission felt that this proposal had merit, but wanted more time to study the idea in light of the work being done on the Transportation Element and Downtown Land Use Plan. The Commission did recommend one amendment, which eliminates the ability of the applicant to obtain an FAR Bonus when employee housing is provided off-site. 4. The Code Simplification Task Force posed a question to us as to whether there are too many points being awarded in the area of employee housing for residential projects. We evaluated this issue, and tend to agree with their think- ing. Assuming for the moment that you agree with our prior recommendation, and repeal the conversion scoring category, following is a summary of the three scoring systems: 3 Residential Co~nercial Lodge Categories 1. Services 12 I:ts 1. Design 18 pts 1. Services lOpts 2. Design 15 pts 2. Services 10 pts 2. Design 39 I.ts 3. Proximity 6 pts 3. Housing 15 pts 3. Amenities 21 pts 4. Housing 40 pts 4. Housing 15 pts $ of 40/73 = 558 15/43 = 358 15/ffi = 18~ Total Pts llin. Hop. Housing 358 of housing Threshold pts or 14 pts 358 of Employees 358 of Ffiployees Generated or 9 pts Generated or 9 pts We believe that the above analysis shows that too much emphasis is placed on obtaining employee housing from residential projects since over 1/2 of the points available are in this category. In essence, a project with a bad design or unmitigated service impacts can receive an allocation simply by providing a high percentage of employee housing. Furthermore, the number of points available in housing is forcing applicants to create a significant number of new units in a market which may be reaching a short-term saturation. We, therefore recommend adoption of the change identified in Section 4 of the Ordinance which reduces the points available in the residential competition for housing to a total of twenty and thus reduces its percentage of the total points to 388, more in keeping with the other scoring systems. By not changing the minimum threshold, we also insure that we will still get an adequate portion of the project as affordable housing, but let applicants look at the service and design issues as having equal or greater weight in the system. 5. Recent employee housing proposals such as the Benedict- Larkin development and the Hunter Creek conversion have failed for a variety of reasons. One possible explanation is that with the limited amount of vacant land in the community, applicants are forced to bring forward compromise solutions which look upon employee housing as an after- thought, and not as the principal issue being addressed. Providing a new option, payment of cash-in-lieu of employee housing, may help to address this problem, by putting the Housing Authority or a similar entity in the position of being able to take the lead on a project. This option may provide the community with the means to respond to needs such as music student/winter employee dorm housing, senior housing, or simply insure that the proper mix or units is built (i.e., not the most economical unit for the developer, the 2-3 bedroom unit, but that demanded by the employees, the studio or one bedroom unit), and that the problem is addressed holistically, rather than on a project responsive basis. The concept behind the cash-in-lieu formula is a simple one. Essentially, the subsidy per employee reflects the difference between the cost of producing housing for a low, moderate or middle income employee, and the rental or sale price which an employee could afford to pay for that housing under our guidelines. The Planning Commission did not support this approach for the following reasons: 1. The cash-in-lieu option is an "easy way out" for the developer, by passing the problem of new construction on to the public sector. Therefore, the impacts of growth may not be met until after the new free market project has been brought on line. 2. The Castle Ridge and Centennial projects give the Commission little sense that the public sector can do a better job of providing housing than the private sector. Despite these arguments, we feel that the option for obtaining cash-in-lieu of production or conversion should be provided, giving you a choice as to how the current housing need can best be met. Providing this option puts the City in a position where it has more choice and flexibility in how our housing needs can be met, but never requires that the City accept the cash-in- lieu from any developer if this is not in the community's best interests at that point in time. In those cases where Council finds that the applicant is proposing the construc- tion or conversion of employee units which are contrary to other land use policies or that a viable alternative project sponsored by a public body is available, be it dorm housing, senior housing or some other project, then the cash-in-lieu option may be the best means of providing housing for the community. The language required to implement this option in the Municipal Code is included in Section 5 of this Ordinance, while the following is the language necessary to be placed in the Housing Authority guidelines: "Employee Housing Dedication Fees provided for in the Aspen Municipal Code and Pit kin County Land Use Code shall be based on the following formula: 5 housing is provided off-site. 5. Recent employ ee housing proposals such as the Benedict-Larkin development and the Hunter Creek conversion have failed for a variety of reasons. One possible explanation is that with the limited amount of vacant land in the community, applicants are forced to bring forward compromise solutions which look upon employee housing as an afterthought, and not as the principal issue being addressed. Providing a new option, payment of cash- in-lieu of employee housing, may help to address this problem, by putting the Housing Authority or a similar entity in the position of being able to take the lead on a project. This option may provide the community with the means to respond to needs such as music student/winter employee dorm housing, senior housing, or simply insure that the proper mix or units is built (i.e., not the most economical unit for the developer, the 2-3 bedroom unit, but that demanded by the employees, the studio or one bedroom unit), and that the problem is addressed holistically, rather than on a project responsive basis. The concept behind the cash-in-lieu formula is a simple one. Essentially, the subsidy per employee reflects the difference between the cost of producing housing for a low, moderate or middle income employee, and the rental or sale price which an employee could afford to pay for that housing under our guide- lines. The Planning Commission did not support this approach for the following reasons: 1. The cash-in-lieu option is an "easy way out" for the developer, by passing the problem of new construction on to the public sector. Therefore, the impacts of growth may not be met until after the new free market project has been brought on line. 2. The Castle Ridge and Centennial projects give the Commission little sense that the public sector can do a better job of providing housing than the private sector. Despite these arguments, we feel that the option for permitting cash-in-lieu of production or conversion should be provided, giving you a choice as to how the current housing need can best be met. The Planning Office and Housing Authority theref ore recommend that the following language (Section 24-11.10(1)(3)) be included as Section 5 of the Ordinance: "(3) Payment of an employee housing dedication fee, based on the formula for such fees identified within the guidelines approved by the City Council's housing designee and adopted by the Aspen City Council. Payment shall be made to the City of Aspen prior to, and on a proportional basis to the issuance of any building permits for the non-deed-restricted units 5 Subsi Per Employee S20.000/emo . S13.300/emv. 59.000/emo. Employee gMr Onit Lov Income Moderate Income Middle Income Studio 1.25 $ 25,000 $ 16,625 $ 11,250 1 Bedroom 1.75 35,000 23,275 15,570 2 Bedroom 2.25 45,000 29,925 20,250 3 Bedroom 3.00 60,000 39,900 27,000 (or larger) Dormitory Based on number actually housed. N/A N/A All employee housing dedication fees shall be earmarked for the subsidy of employee housing, including but not limited to the acquisition of land and buildings, subsidizing the planning, site development, construction and financing of employee projects, and other uses approved by the City Council and Board of County Commissioners. The dedication fee shall not be commingled with general operating funds of the City of Aspen, Pitkin County or the Aspen/Pitkin housing Authority nor used for general operations by the City of Aspen, Pitkin County or the Housing Authority. All dedica- tion fees, from the time they shall be due and payable, shall become a lien upon the land or improvements against which they are assessed, and may be collected against any subsequent owner of such land or improvements. Any claim for payment may be prosecuted as an action in personam or by an action in rem for enforcement of such lien, or both." ADVISORY COMMITTEE VOTE: The Planning Commission voted unani- mously in favor of Resolution 85-23 on December 15, recommending amendments 1 through 4 , but opposing #5. The Housing Authority voted unanimously in favor of all five proposals on November 21st . RECOMMENDED MOTION: "Move to adopt Ordinance 2, Series of 1986." AR.lOl:jlr RECORD OF PROCEEDINGS ]00 Leaves ORDINANCE NO. 2 (Series of 1986) AN ORDINANCE OF THE ASPEN CITY COUNCIL REPEALING SECTIONS 24-11.4(b)(5), 24-11.5(b)(4) and 24-11.6(b)(4)(bb) OF THE MUNI- CIPAL CODE OF THE CITY OF ASPEN, COLORADO, WITH RESPECT TO THE AWARD OF POINTS FOR CONVERTING EXISTING UNITS TO DBED-RESTRICTED STATOS; AND REPEALING AND RE-ENACTING SECTIONS 24-11.10(d), 24-11.10 (e) and 24-11.4(b)(4) OF THE MONICIPAL CODE OF THE CITY OF ASPEN, COLORADO, TO CLARIFY VARIOUS PROVISIONS WTTH RESPECT TO EMPLOYBE AOOSING; AND ENACTING A NEW SECTION 24-11.10 (i)(3) TO PROVIDE A CASH-IN-LIED OPTION FOR EMPLOYEE HOUSING WHEREAS, on October 23, 1985, the Aspen City Council did initiate amendment$ to the Municipal Code of the City of Aspen with respect to the conversion of non-deed-restricted units to deed-restricted status and to provide for cash-in-lieu of employee housing; and WHEREAS, the Aspen Planning and Zoning Commission (herein- after "Commission") did hold a public hearing on December 3 and December 17, 1985, to consider the amendments initiated by Council and various other employee housing Code amendments initiated by the Planning Office and Housing Authority and did adopt Resolution 85-23 making recommendations with respect to said amendments; and WHEREAS, the Aspen City Council does wish to accept the recommendations of the Planning Office, Housing Authority and the Commission. RECORD OF PROCEEDINGS 100 i.Paves NOW, THEREFORE, BE IT ORDAINED BY THS CITY COONCIL OF THE CITY OF ASPEN, COLORADO: That Sections 24-11.4(b)(5), 24-11.5{b)(4) and 24- 11.6(b) (4) (bb) (and the reference to this section in the Table found in Section 24-11.6(c)) be repealed and that subsequent subsections be renumbered appropriately. That Section 24-11.10 (d) be repealed and re-enacted to read as follows: "(d) Applicants shall be permitted to provide employee housing on the same site as the remainder of the development or on an alternate site, provided that credit shall only be given for units located within the City of Aspen or the Aspen Metro Area, as this area is currently defined by the Aspen/Pit kin County Growth Management Policy Plan. Applicants proposing to provide employee housing on an alternative site shall be required to demonstrate the feasibility of their proposal through having an interest in the property and/or units and by specifying the size and type of units to be provided, and the level of upgrade to be accomplished." That Section 24-11.10 (e) be repealed and re-enacted to read as follows: "(e) Applicants shall only be eligible to obtain an FAR Bonus pursuant to Section 24-3.4 by providing employee housing on the same site as the remainder of the 2 RECORD OF PROCEEDII~ S 700 LeaQes. development and not by providing said housing on an alternate site." That Section 24-11.4(b)(4) be repealed and re-enacted to read as follows: "(4) Provision for low, moderate and middle income housing (maximum twenty (20] points). (aa) The commission shall assign points to each applicant who agrees to provide low, moderate and middle income housing which complies with the housing size, type, income and occupancy guidelines of the City of Aspen and with the provisions of Section 24-11.10. (bb) Points shall be assigned according to the follow- ing schedule: One (1) point for each five (5) percent of the total development that is restricted to low income price guidelines and low income occupancy limita- tions; One (1) point for each ten (10) percent of the total development that is restricted to moderate income price guidelines and moderate income occupancy limitations; One (1) point for each twenty (20) percent of the total development that is restricted to middle income price guidelines and middle income occu- pancy limitations. In order to determine what percent of the total development is restricted to low, moderate and middle income housing, the Commission shall compare the number of persons to be housed by the project as a whole with the number of persons to be provided with low, moderate and middle income housing using the following criteria: 3 RECORD OF PROCEEDII~S 7 00~vn~ Studio - 1.25 residents One Bedroom - 1.75 residents Two Bedroom - 2.25 residents Three Bedroom - 3.00 residents or Larger Dormitory - 1.00 resident per 150 s.f. of unit space" That a new Section 24-11.10(1)(3) be enacted to read to follows: "(3) Payment of an employee housing dedication fee, based on the formula far such fees identified within the guidelines approved by the City Council's housing designee and adopted by the Aspen City Council. Payment shall be made to the City of Aspen prior to, and on a proportional basis to the issuance of any building permits for the non-deed-restricted units and/or commercial square footage of the project . Applicants may choose to prepay the employee housing dedication fee prior to the issuance of any building permits for the project and receive a discount on the fee, based on the present value index included within the guidelines approved by the City Council's housing designee and adopted by the Aspen City Council. Approval of the present value discount shall be at the option of the City Council's housing designee and the City Council." If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent 4 RECORD OF PROCEEDINGS 100 Leaves provision and such holding shall not affect the validity of the remaining portions thereof. Section 7 A public hearing on the Ordinance shall be held on the _ day of 198_, at 5:00 P.M. in the City Council Chambers, Aspen City Hall, Aspen, Colorado. INTRODOCED, READ AND ORDERED published as provided by law by the City Council of the City of Aspen on the day of 198 William L. Stirling, Mayor ATTEST Rathryn S. Roch, City Clerk FINALLY adopted, passed and approved on this day of B98 William L. Stirling, Mayor ATTEST Rathryn S. Koch, City Clerk AR.717:j1r 5 ,~ ~~~ "Conversion of existing units (maximum five (5) points). (aa) The Commission shall assign points to those applicants who guarantee to provide a portion of their low, moderate and middle income housing units by purchasing fully constructed units which are not restricted to Aspen's housing guidelines and placing a deed restriction upon them in compliance with Section 24-11.10. (bb) Points shall be assigned according to the following schedule: Point s 18-338 of all low, moderate and middle income 1 units proposed by applicant are to be purchased and deed restricted. 348-668 of all low, moderate and middle income 3 units proposed by applicant are to be purchased and deed restricted. 678-1008 of all low, moderate and middle income 5 units proposed by applicant are to be purchased and deed restricted. In order to determine the percentage of such housing to be purchased and restricted by the applicant, there shall be used the same formula (above) used for determining what per cent of the project is devoted to middle, moderate, and low income housing, with no credit to be given for any unit not meeting the most recent guidelines of the City's housing designee, as adopted by the Aspen City Council." n,\ ~. C'(~D~L. ve~n(~ ~.. RESOLUTION GF THE ASPEN PLANNING AND ZONING CO MFiISSION RECOMMEI7DING CODE AMENDMENTS WTTH RESPECT TO EMPLOYEE HOUSING Resolution No. 85-23 WHEREAS, the Aspen City Council did initiate amendments to the t9unicipal Code of the City of Aspen with respect to the conversion- of non-deed-restricted units to deed-restricted status and to provide for cash-in-lieu of employee housing; and WHEREAS, the Aspen Planning and Zoning Commission (herein- after "Commission") did hold a public hearing on Decembec 3, 1985, to consider the amendments initiated by Council and various other employee housing Code amendments initiated by the Planning Office; and WHEREAS, the Commission did accept the recommendaticns of the Planning Office with respect to the employee housing Code amend- ments, with the exception of the cash-in-lieu of employee housing option, due to having made the following findings: 1. The cash-in-lieu option allows the developer to pass the problem cf employee housing to the public se cter. Therefore, development does not pay its own way and there may be no additional housing constructed for some time. 2. Based on recent public sector housi nar projects, the Comrfis- sion feels that there is little lik elihwd that the govern- ment can do a better job of providi rcg housing than can the -_ .. private sector; and WHEREAS, it is the Commission's int ent icon that the amendments recommended below not apply to the scoring of any growth management quota system application submitted in 1985. NOW, THEREFORE, BE IT RESOLVED by the Coommission that it does - hereby recommend the following actions to Aspert City Council: Sertinn 1 That Sections 24-11.4(b)(5), 24-11 .5 (b)(4A and 24-11 .6 (b)(4)(bb) (and the reference to this section in the Table found in Section 24- 11.6(c)) be repealed and that subsequent suLi+se ct ions be renumbered appropriately. Fnrh14A~ That Section 29-11 .10(d) be repealed and. re-enacted to read as follows: "(d) Applicants shall be permitted to pr ov>de employee housing on the same site as the remainder of thce development or on an alternate site, peovided that credit shall. only be given for units located within the City of Ashen or the Aspen Pietro Area, as this area is currently def fired by the Aspen/Firkin County Growth >'a na gemc nt Policy Plan. Applicants proposing to provide employee housing on an alternative site shall be required to demonstrate the feasibility of their proposal through having an int ecest in the property and/or units and by specifying the size and type of units to be provided, and the level of upgrade to be accomplished." Section 3 That Section 24-11 .10(e) be repealed and re-enacted to read as- follows: "(e) Applicants shall only be eligible to obtain an FAR Bonus pursuant to Section 24-3 .4 by providing employee housing on the same site as the remainder of the development and not by providing said housing on an alternate site. cation 4 That the first paragraph of Section 24-11 .4(b)(4)(bb) be repealed ~. and re-enacted to read as follows: i "(bb) Points shall be assigned accordi n9 to the following sche- d~le: One (1) point for each five (5) percent of the total ~, development that is restricted to low income price guide- i lines and low income occupancy limitations; ~~ One (1) point for each ten (10) percent of the total development that is restricted to moderate income price guidelines and moderate income occupancy limitations; One (1) point for each twenty (20) percent of the total development that is restricted to middle income price guidelines and riddle income occupancy limitations." - APPROVED by the Commission at its regular meeting on December 17, 1985. ASPEN PLANNING AND ZONING COMMInSSION // BY ~~ C. S•lelto Anderson, Chairperson ATTEST: Kim 47 ilhoit, Deputy City Clerk AR .7 TO: Aspen City Council THRU: Hal Schilling, City Manager ~ ~ r~ FROM: Alan Richman, Planning and Develognent Director '~ RE: Ordinance ~ Employee Rousing Code Amendments DATE: December 23, 1985 SUMMARY: Planning Commission Resolution 85-23 recommends that the Aspen City Council ado pt the f ollowing Code amendments with respect to employee housing: 1. Repeal of points awarded for conversion of existing units to deed-restricted status. 2. Clarification of requirements for provision of employee housing off-site. 3. Elimination of the ability to obtain an FAR Bonus in the commer- cial or lodge districts by providing employee housing off-site. 4. Reduction of the number of points available for employee housing in the residential scoring system. Additionally, the Planning Office and the Housing Authority recommend adoption of the following amendment which was rejected by the Commis- sion: 5. Creation of a cash-in-lieu option for providing employee housing. PREVIOUS COUPCIL ACTION: Council initiated proposals #1 and #5 on October 28, 1985. BACKGROUND: During the Council's consideration of the Aspen Mountain PUD proposal to house employees at Hunter Creek Apartments, several serious questions were raised about our options for providing hous- ing. Council asked the Planning Office to look into the policy of converting existing units, and the provision which awards points for this option over and above those awarded for actually constructing the units. Based on our findings, Council initiated the first and last amendments noted above. The remaining three items are proposals of the Planning Office, based on recent experience and analysis. Please note that it is not our intention that either of the scoring changes (#1 and #4 above) affect the 1985 residential competition, but that they nevertheless should be implemented as expeditiously as possible, given the eventual community benefit they will bring. PR~LSM DISCOSSION: The following analysis is keyed to the sections of the attached Ordinance, and to the list of recommendations above. 1. Conversion of free market units to deed-restricted status adds to our inventory of protected, affordable units without affecting our rate of growth and provides an incentive to renovate and upgrade our housing stock. For these reasons, we recommend that the policy of permitting conversion be retained. However, we do not want to be put in the position of "dictating" to the market that one form of affordable housing provision is preferable to another, as is done by the award of points only for conversion. We think that the applicant should have the freedom to choose which housing option to take, and recommend the repeal of this provision, now found in Sections 24-11.4(b)(5), 24-11 .5(b)(4) and 24-11 .6 (b) (4) (bb), a copy of which is available as Attachment nAn 2. In our experience in working with the provision of employee housing at off-site locations, we have run into some trouble getting applicants to be specific and realistic in the commit- ments they are making. It is simply impossible for the Housing Authority to evaluate a housing proposal which does not specifi- cally identify the type and size of units involved and the level of upgrade proposed. Furthermore, it is not reasonable to spend time reviewing a proposal in which the applicant has no interest in the land and/or units. The amendments in Section 2 of the Ordinance are intended to rectify these problems. 3. The Code Simplification Task Force posed" a question to us as to whether there are too many points being awarded in the area of employee housing for residential projects. We evaluated this issue, and tend to agree with their thinking. Assuming for the moment that you agree with our prior recommendation, and repeal the conversion scoring category, following is a summary of the three scoring systems: Residefltial Commercial Lodge Categories 1. Services 12 pts 1. Design 18 pts 1. Services 10 pts 2. Design 15 pts 2. Services 10 pts 2. Design 39 pts 3. Proximity 6 pts 3. Housing 15 pts 3. Amenitie s 21 pts 4. Housing 40 pts 4. Housing 15 pts 8 of total 40/7 3 = 558 15/ 43 = 3 58 15/ 85 = 188 pt s lain. Emp. 358 of housing 35~ of Employees 358 of Em ployees Housing pt s or 14 pt s Generated or 9 pt s Generated or 9 pt s Threshold We believe that the above analysis shows that too much emphasis is placed on obtainin g employee housing fr om residential projects since over 1/2 of the points available are in this category. In essence, a project with a bad design or unmitigated service impa cts can receive an allocation simply by providing a high percentage of employee housing. Furthermore , the number of points available in housing is forcing applicants to create a significant number of new units in a market w hich may be reaching a short-term saturation. We, therefore recommend adoption of the following change: (bb) Points shall be assigned according to the following schedule: gwa-~2} One (1) point for each five (5) percent of the total development that is restricted to low income price guidelines and low income occupancy limitations; Twe--(-2~ One (1) point for each ten (10) percent of the total development that is restricted to moderate income price guide- lines and moderate income occupancy limitations; 'fwe-{~} One (1) point for each ftf-teeer-{}3} twenty (20) percent of the total development that is restricted to middle income price guidelines and middle income occupancy limitations. By this very simple change, we reduce the points available in the residential competition for housing to a total of twenty and thus reduce its percentage of the total points to 388, more in keeping with the other scoring systems. By not changing the minimum thres- hold, we also insure that we will still get an adequate portion of the project as affordable housing, but let applicants look at the service and design issues as having equal or greater weight in the system. 4. The Code presently provides applicants in the CC, C-1, Office, L-1 and L-2 zones with the opportunity to obtain an FAR Bonus for the provi- sion of employee housing. This "carro t" allows the following to occur: Bonus FAR Bonns FAR Total Bone Allowable FAR Employee Honsing Commercial Space Allowable CC 1.5:1 0.2:1 0.3:1 2.0:1 C-1 1.0:1 0.2:1 0.3:1 1.5:1 O 0.75:1 0.1:1 0.15:1 1.0:1 L-1/L-2 0.75:1 0.08:1 0.17:1 1.0:1 Recently, it has become clear to us that the Bonus FAR awarded for the provision of employee housing is no longer serving any function. With last year's amendments to the quota system, minimum thresholds for housing exist in each of the three scoring systems, as noted above. Therefore, applicants east provide housing to be competitive. Furthermore, with the extension of the system to all zones, we will obtain such housing from all projects. Therefore, to award a density bonus for something which must already be provided gives the community nothing in return for its density award. The Planning Office's recommendation to the Commission to correct this problem was to eliminate the Bonus FAR for employee housing altogether, and to instead offer an FAR Bonus in exchange for a contribution to a "transportation capital improvements fund." This fund could be used in our commercial and lodge districts for a parking structure, downtown shuttle or similar amenity and has precedent in recently adopted programs in San Francisco, Boston and other cities. We also recommended the revision of the parking requirements citywide to make them more uniform, but to also provide for a reduction below the standard for the P&Z in exchange for a contribution to the transportation fund. Our amendment, which would have replaced Sections 24-4.5, 24-4.6, and 24-4.1(c) (all as shown in Attachment "B") would read as follows: "(c) Off-street Parking spaces shall be provided as follows: 1. For all residential and lodges uses -- 1 space per bedroom. 2. For all lodge uses -- 0.75 spaces per unit 3. For all commercial uses -- 4 spaces per 1000 square feet. Provided that by review of the Planning Commission, the above requirements may be reduced, taking into account the projected traffic generation of the proposed development, site characteristics, pedestrian access, walking distance to the downtown area and the availa- bility of public transportation or public parking facilities. For each space required on the property which will not be provided, the applicant shall provide an in-lieu contribution to the City of Aspen transpor- tation improvements fund of $ For each space not provided to meet the parking req uirements for low, moderate or middle income housing units approved and deed-restricted to the most recent guidelines of the City's housing designee, as adopted by the Aspen City Council, the in-lieu contribution shall be $ The City Council shall annually review and adjust, as necessary, the value of the in-lieu contri- bution requirement." The Planning Commission felt that this proposal had merit, but wanted more time to study the idea in light of the work being done on the Transportation Element and Downtown Land Use Plan. The Commission did recommend one amendment, which eliminates the ability of the applicant to obtain an FAR Bonus when employee 4 and/or commercial square footage of the project. Applicants may choose to prepay the employee housing dedication fee prior to the issuance of any building permits for the project and receive a discount on the fee, based on the present value index included within the guidelines approved by the City Council's housing designee and adopted by the Aspen City Council. Approval of the present value discount shall be at the option of the City Council's housing designee and the City Council." Following is the additional language which would be included in the Housing Authority's guidelines: "Employee Housing Dedication Fees provided for in the Aspen Municipal Code and Pit kin County Land Use Code shall be based on the following formula: ~bG~ Per Emp~oyg~ $20.000/em o. S13.300/emn. 59.000/emn. Employee Low Moderate Middle Per Unit Income Income Income Studio 1.25 $ 25,000 $ 16,625 $ 11,250 1 Bedroom 1.75 35,000 23,275 15,570 2 Bedroom 2.25 45,000 29,925 20,250 3 Bedroom 3.00 60,000 39,900 27,000 (or larger) Dormitory Based on number actually housed. N/A N/A All employee housing dedication fees shall be earmarked for the subsidy of employee housing, including but not limited to the acquisition of land and buildings, subsidizing the planning, site development, construction and financing of employee projects, and other uses approved by the City Council and Board of County Commissioners. The dedication fee shall not be commingled with general operating funds of the City of Aspen, Pit kin County or the Aspen/Pit kin housing Authority nor used for general opera- tions by the City of Aspen, Pit kin County or the Housing Author- ity. All dedication fees, from the time they shall be due and payable, shall become a lien upon the land or improvements against which they are assessed, and may be collected against any subsequent owner of such land or improvements. Any claim for payment may be prosecuted as an action in per sonam or by an action in rem for enforcement of such lien, or both." ADVISORY COMMI'1R SB VOTB: The Planning Commission voted unanimously in favor of Resolution 85-23 on December 15, recommending amendments 1 through 4 , but opposing #5. The Housing Authority voted unanimously in favor of all five proposals on November 21st. MOTION: "Move to read Ordinance ~, Series of 1986." "Move to approve Ordinance No. ~ Series of 1986, as amended by the inclusion of a new Section 5 with respect to cash-in-lieu of employee housing production or conversion." AR.10 MENDRANDII M T0: FROM: RE: DATE: Aspen Planning and Zoning Commission Alan Richman, Planning Office Employee Housing Code Amendments December 3, 1985 SOMl4,RY: The Aspen City Council has initiated several Code amendments with respect to the employee housing provisions of the Growth Management Quota System and the Planning Office has identified several other possible amendments. We recommend: 1. The repeal of points awarded for conversion of existing units to deed- restricted status; 2. The adoption of a cash-in-lieu option for providing employee housing; 3. The clarification of the requirements for provision of employee housing off-site; 4. The reduction in the number of points available for employee housing in the residential scoring system; and 5. The repeal of the Bonus FAR granted to applicants providing employee housing. BACRGROIIND: During the Council's consideration of the Aspen Mountain PUD proposal to house employees at Hunter Creek Apartments, several serious questions were raised about our options for providing housing. Council asked the Planning Office to look into the policy of converting existing units, and the provision which awards points for this option over and above those awarded for actually constructing the units. Based on our findings, Council initiated the first two amendments noted above. The remaining three items are proposals of the Planning Office, based on recent experi- ence and analysis. Please note that it is not our intention that either of the scoring changes (#1 and #4 above) affect the 1985 residential competi- tion, but that they nevertheless should be implemented as expeditiously as possible, given the community benefit they will bring. PROBLEM DISCIISSION: In our evaluation of these issues, we made the following findings: 1. Conversion of free market units to deed-restricted status adds to our inventory of protected, affordable units without affecting our rate of growth. For this reason alone, we recommend that the policy of permitting conversion be retained. However, we do not want to be put in the position of "dictating" to the market that one form of afford- able housing provision is preferable to another, as is done by the award of points only for conversion. We think that the applicant should have the freedom to choose which housing option to take, and recommend the repeal of this provision, now found in Sections 24- 11.4(b) (5), 24-11 .5 (b) (4) and 24-11 .6 (b) (4) (bb) , a copy of which is available as Attachment "A". 2. Recent employee housing proposals such as the Benedict-Larkin develop- ment and the Hunter Creek conversion have failed for a variety of reasons. One possible explanation is that with the limited amount of vacant land in the community, applicants are forced to bring forward compromise solutions which look upon employee housing as an after- thought, and not as the principal issue being addressed. Providing a new option, payment of cash-in-lieu of employee housing, may help to address this problem, by putting the Housing Authority or a similar entity in the position of being able to take the lead on a project. This option may provide the community with the means to respond to needs such as music student/winter employee dorm housing, senior housing, or simply insure that the proper mix or units is built (i.e., not the most economical unit for the developer, the 2-3 bedroom unit, but that demanded by the employees, the studio or one bedroom unit). The concept behind the cash-in-lieu formula is a simple one. Essenti- ally, the subsidy per employee reflects the difference between the cost of producing housing for a low, moderate or middle income employee, and the rental or sale price which would be paid for that housing under our guidelines. The language to implement the concept is equally straightforward, and is included in Attachment "B" as Section 24-11.10(1)(3). Following is the additional language which would be included in the Housing Authority's guidelines: "Employee Housing Dedication Fees provided for in the Aspen Municipal Code and Pit kin County Land Use Code shall be based on the following formul a: Subsidy PPr Emnlovee 520.000/em D. 513,300/emo. S9.000_/_emt,. Eynployee Low Moderate Middle Per Unite Income Income _ Income Studio 1.25 $ 25,000 $ 16,625 $ 11,250 1 Bedroom 1.75 35,000 23,275 15,570 2 Bedroom 2.25 45,000 29,925 20,250 3 Bedroom 3.00 60,000 39,900 27,000 (or larger) Dormitory Based on number actually housed. N/A N/A All employee housing dedication fees shall be earmarked for the subsidy of employee housing, including but not limited to the acquisi- tion of land and buildings, subsidizing the planning, site develop- ment, construction and financing of employee projects, and other uses approved by the City Council and Board of County Commissioners. The dedication fee shall not be commingled with general operating funds of the City of Aspen, Pitkin County or the Aspen/Pitkin housing Authority nor used for general operations by the City of Aspen, Pitkin County or the Housing Authority. All dedication fees, from the time they shall be due and payable, shall become a lien upon the land or improvements against which they are assessed, and may be collected against any subsequent owner of such land or improvements. Any claim for payment may be prosecuted as an action in personam or by an action in rem for enforcement of such lien, or both." 3. In our experience in working with the provision of employee housing at off-site locations, we have run into some trouble getting applicants to be specific and realistic in the commitments they are making. It is simply impossible for the Housing Authority to evaluate a housing proposal which does not specifically identify the type and size of units involved. Furthermore, it is not reasonable to spend time reviewing a proposal in which the applicant has no interest in the land and/or units. The amendments in Attachment "B" to Section 24- 11.10(d) are intended to rectify these problems. The Code Simplification Task Force posed a question to us as to whether there are too many points being awarded in the area of employee housing for residential projects. We evaluated this issue, and tend to agree with their thinking. Assuming for the moment that you agree with our prior recommendation, and repeal the conversion scoring category, following is a summary of the three scoring systems: Residential Commercial Lodge Categories 1. Services 12 pt s 1. Design 18 pt s 1. Services 10 pts 2. Design 15 pts 2. Services 10 pts 2. Design 39 pts 3. Proximity 6 pts 3. Housing 15 pts 3. Amenities 21 pts 4. Housing 40 pts 4. Housing 15 pts 8 of total 40/73 = 558 15/ 43 = 358 15/85 = 188 pt s 14in. B•p. 358 of housing 358 of fSnployees 35$ of FSnployees Housing pts or 14 pts Generated or 9 pts Generated or 9 pts Threshold We believe that the above analysis shows that too much emphasis is placed on obtaining employee housing from residential projects since over 1/2 of the points available are in this category. In essence, a project with a bad design or unmitigated service impacts can receive an allocation simply by providing a high percentage of employee housing. Furthermore, the number of points available in housing is forcing applicants to create a significant number of new units in a market which may be reaching a short-term saturation. We, therefore recommend adoption of the following change: 3 (bb) Points shall be assigned according to the following schedule: 5. Zone gwe-~2} One (1) point for each five (5) percent of the total development that is restricted to low income price guidelines and low income occupancy limitations; Twe--h'~} One (1) point for each ten (10) percent of the total development that is restricted to moderate income price guide- lines and moderate income occupancy limitations; ~~--(~} One (1) point for each fs~teea-{}5} twenty (20) percent of the total development that is restricted to middle income price guidelines and middle income occupancy limitations. By this very simple change, we reduce the points available in the residential competition for housing to a total of twenty and thus reduce its percentage of the total points to 388, more in keeping with the other scoring systems. By not changing the minimum thres- hold, we also insure that we will still get an adequate portion of the project as affordable housing, but let applicants look at the service and design issues as having equal or greater weight in the system. One of the original approaches of the City to provide incentives for the provision of employee housing was to grant an FAR Bonus to developers who provided such housing on-site in our commercial dis- tricts. This "carrot" allows the following increases in Aspen: Bonus FAR Bonus FAR Total Allowable FAR Employee Housing Commercial Space Allowable CC 1.5:1 0.2:1 0.3:1 2.0:1 C-1 1.0:1 0.2:1 0.3:1 1.5:1 O 0.75:1 0.1:1 0.15:1 1.0:1 L-1/L-2 0.75:1 0.08:1 0.17:1 1.0:1 Recently, it has become clear to us that the Bonus FAR awarded for the provision of employee housing is no longer serving any function. With last year's amendments to the quota system, minimum thresholds for housing exist in each of the three scoring systems, as noted above. Therefore, applicants must provide housing to be competitive. Furthermore, with the extension of the sy stem to all zones, we will obtain such housing from all projects. Therefore, to award a density bonus for something which must already be provided gives the community nothing in return for its density award. We, therefore, recommend the elimination of the employee housing density bonus provisions which are contained in the area and bulk req uirements tables, Section 24-3 .4 and in Section 24-11.10(e). Instead of providing a density bonus for housing, the Planning Office recommends that we look to fulfilling another community need which is not already required by the Code. Based on the analysis which has been performed to date in the Transportation Element of the Comprehensive Plan, we recommend that you allow for an FAR Bonus in the CC and C-1 zones in return for providing a contribution to a "transportation capital improvements fund" which could be used for parking, a downtown shuttle or similar amenity. In our opinion, the FAR Bonus in the Office zone should be repealed altogether, making the FAR in that district 0.75:1, more in keeping with the residential character of Main Street. We feel that with some of the recent pressure we have been feeling in the Planning Office regarding Main Street, it is a most appropriate time to take this action in the interest of preserving the historic character of the street. Following the completion of the Land Use and Transportation Elements, it may be appropriate to re-evaluate this position we are recommending. The FAR Bonus in the L-1/L-2 zones should also be repealed, but in this case we recommend that the 1:1 allowable FAR be retained by right, in deference to our need for quality lodging facilities. Aowever, we recommend that we retain the internal FAR relationship between unit space (max. of .67:1) non unit space (min. of .25:1) and employee housing (min. of 0.08:1) to insure that a minimum level of housing is provided at the lodge and to provide for halls, lobbies, etc. Should you agree with the above concepts, we would be prepared to return at your next meeting with a cash proposal to handle the transportation/density bonus, or to provide you with any other information you may require. One concept which comes to mind would be to award an additional 0.1 FAR for a dollar contribution by the applicant, with the value of the contribution still as yet not determined. The maximum FAR in the CC and C-1 would still remain at 2.0:1 and 1.5:1 respectively. Should the concept of obtaining cash in exchange for FAR have appeal to P&Z, we can take it one step further by looking at the current parking requirements citywide. Attachment "C", the parking require- ments chart from Section 24-4.5 of the Code establishes the follow- ing basic standards for parking: 1. One space per bedroom for virtually all lodge uses, except in the CC and CL zones where there is no requirement. 2. One space per bedroom for virtually all residential uses, except in the CC zone and for employee housing, when it is set by review. 3. Three or four spaces per bedroom for all other uses (i.e, Commercial, Office), except where it is set by review (0, A, C, P, PUB) , or where there is no requirement (CC, CL, C- 1) . 5 An approach to consider would be to make the requirements more uniform -- i.e., one space per bedroom for lodge and residential uses in all zones where such uses are allowed, but then provide that applicants can reduce their requirement below the standard by a cash contribution for each space not provided on site for lodge and residential requirement s. An exception might be made for employee housing, where the requirement might instead be to contribute the cost of 1/2 space for each space not provided on-site, as somewhat of an inducement to providing affordable housing. The Planning Office supports this approach, and looks to your advice as to whether the following Code amendment should be adopted now, or following the completion of additional work on the transportation element: (This section would replace Sections 24-4.5, 24-4.6 and 24- 4.1(C)) "(c) Off-street Parking spaces shall be provided as follows: For all residential and lodges uses -- 1 space per bedroom. 2. For all commercial uses -- 4 spaces per 1000 square feet. Provided that by review of the Planning Commission, the above requirements may be reduced, taking into account the projected traffic generation of the proposed develop- ment, site characteristics, pedestrian access, walking distance to the downtown area and the availability of public transportation or public parking facilities. For each space required on the property which will not be provided, the applicant shall provide an in-lieu contribution to the City of Aspen transportation improvements fund of $ For each space not provided to meet the parking requirements for low, moderate or middle income housing units approved and deed-restricted to the most recent guidelines of the City's housing designee, as adopted by the Aspen City Council, the in-lieu contribution shall be $ The City Council shall annually review and adjust, as necessary, the value of the in-lieu contribution requirement." ADVISORY COMMITTEE VOTE: On November 21, 1985, these proposals were presented to the Housing Authority. The three members present unanimously supported each of the amendments contained herein. RECOMMENDATION: The Planning Office recommends that you direct us to return at your next meeting with a Resolution which embodies the Code amendments proposed herein. AR.26 ,. 4 24-11.10 ASPEN CODE ~ 24-11.10 Sec. 24-11.10. Employee housing. The following provisions shall apply to all low, moderate and middle income housing units proposed by applicants in confor- mance with the requirements of section 24-11: (a) Applicants shall only receive credit for those units which meet the housing size, type, income and occupancy guide- lines and/or approval of the city council and its housing designee. Applicants are encouraged to engage in a pre- application conference with the housing designee to obtain guidance as to the current guidelines and how these are to be applied. (b) Should an applicant propose a unit which is larger than provided for by the city's housing guidelines, then its rental or sales price shall be no greater than that allowable had the housing units complied with those size limitations. (c) When an applicant agrees to restrict only a portion of his development to low, moderate or middle income housing and the portion restricted is located adjacent to an unre- stricted portion, to be eligible for points within the provi- sions of this section, the adjacent portions of the develop- ment shall be constructed of the same exterior building materials with a compatible exterior architectural style. (d) Applicants shall be permitted to provide employee housing on the same site as the remainder of the development or on an alternate site, provided that credit shall only be given for units located within the City of P.spen or the Aspen Metro Area, as this area is currently defined by the - -_,_~Aspen/Pitkin County Growth Management Policy Plan. (e) Should an applicant provide employee housing on a site other than that on which his or her commercial or lodge development is located, then any floor area bonus obtained by the applicant for providing such housing shall only permit an increase to the maximum commercial floor area permitted in that zone, exclusive of any area which would have been associated with the housing. l L,(F)' Applicants for commercial or lodge developments shall not be restricted to housing employees of their own business Supp. No. 29 1512 Add: Applicants proposing to provide employee housing on an alternative site shall be required to demonstrate the feasibility of their proposal through having an interest in the property and/or units and by specifying the size and type of units to be provided. 4 24-11.10 ZONING 4 24-11.10 but shall also be permitted to house qualified employees of the community at large. Applicants should anticipate that the housing units proposed will be required to be restricted to the city's low income price and occupancy guidelines. Provided, however, that at the time the applicant requests growth management exemption for the housing units pur- suant to section 24-11.2(fl, the city council's housing des- ignee will review the current community need for housing in each category and will evaluate the affordability of the units to employees in each category and will recommend to the planning commission the appropriate category to which the units should be restricted. Should a proposed development cause the displacement of units which are currently deed restricted to employee hous- ing guidelines, then the applicant shall only receive credit for housing the net number of employees to be housed by the project, reflecting the number to be housed in the new units minus those housed in the existing units, rather than for housing the gross number of employees housed in the new units. ~{ (~ The deed restrictions created to obtain credit for employee housing may be amended by agreement between the prop- erty owner(s) and the city council upon the recommenda- tion of the planning and zoning commission. (F) Applicants may obtain credit for providing employee hous- ing by either-ef the following methods, or combination of said methods: (1) Production of new units which are deed restricted for a period of fifty (50) years to rental and sale price terms within the housing price and occupancy guidelines approved by the city council's housing designee and adopted by the Aspen City Council. (2) Conversion of existing units which are not restricted to Aspen's housing guidelines to deed restricted status by placing a deed restriction upon them for a period of fifty (50) years to rental and sale price terms within the housing price and occupancy guidelines approved by the city council's housing designee and adopted by , the Aspen City Council (Ord- I~io. 9-19f34, § 10~ . (3) Payment of an employee housing dedication fee, based on the formula foL such fees identified within the guidelines approved by the City Council's housing designee and adopted by the Aspen City Council. Payment shall be made to the City of Aspen prior to, and on a proportional basis to the issuance of any building permits for the non-deed-restricted units and/oz commercial square footage of the project. Applicants may choose to prepa3 the employee housing dedication fee prior to the issuance of any buildinc permits for the project and receive a discount on the fee, based on the present value index included within the guidelines approved by the Cit} Council's housing designee and adopted by the Aspen City Council. Approva: of the present value discount shall be at the option of the City Council's housing designee and the City Council. ~. c .. PC ..Rv~~e,~. Sec. 24-l.5. No~berei epaeea re9~~• (c) Off-street parking spaces shall be provided ss follows: PARKING REQUIRED Zoxe Lodps Uaea Residential Uaea AU otAar Uses CC N/A Review N/A C-1 N/A 1/Bedroom N/A C-L None N/A None S/C/I N/A 1/Bedroom 3/1,000 square feet C N/A 1/Bedroom 4/1000 square feet commercial urea O N/A 1/Bedroom 3/1,000 square feet foz all other Uaea; - fewer apnea may be permitted by special review of the planning commis- sion but no fewer than 1.5 spaces per 1,000 square feet shall be authorized by the commission Ul I/bedroom N/A 4/1000 square feet L-Y 1/bedroom 1/bedroom 4/1000 square feet $(all) -~ N/A _ I/hedroem eaeept for Review dornitery use upon application of a reai- deatial bonus overlay wherein the perking requirement shell be 2 spaces per 3 pillows A N/A Review Review C N/A Review Review P N/A N/A Review Pub N/A N/A Review L-3 1/bedroom Review 4/1,000 square feet (Ord. No. 11-1975, § 1; Ord. No. 49-1976, § 3; Ord. No. 66- 1976, § 1; Ord. No. 18-1981, § 1; Ord. No. 38-1982, § 7) Sec. 24-4.6. Review by zoning commission. Whenever the number of spaces required is subject to review, such review shall be made by the zoning commission which commission, in making such determination, shall consider the projected traffic generation of the proppsed development, site characteristics, the pedestrian access and walking distances to the downtown areas, and the availability of public transportation. (Ord. No. 11-1975, § 1) (c) For all low, moderate and middle income housing units approved and deed restricted to housing for employees to rental and sale price terms within housing price guidelines established by the city council and to eligibility established by the city coun- cil, the required off-street parking shall be established by special review of the city council. Prior to establishing the required off-street parking the city council may request a recommendation from the planning and zoning commission. (Ord. No. 11-1975, § 1; Ord. No. 29-1979, § 1; Ord. No. 17-1983, § 2) M E M O R A N D U M TO: Alan Richman, Planning Director FROM: J. Lucas Adamski, Housing Director RE: Present Value Calculations DATE: November 27, 1985 In response to your request for information concerning a defini- tion of a present value calculation, it would be my suggestion that it be stated in the code as a developer's option and incorporated and defined in the annually adopted Employee Housing Guidelines. CONCEPT OF PRESENT VALUE: The present value computes the value of a given amount over a prescribed period of time at a defined interest rate. Therefore, the present value allows for a discount of the payment-in-lieu if paid at time of application approval rather than time of building permit. This concept assumes that the reduced payment will be beneficial to the applicant and allows the Housing Authority access to funds not normally available for several years. The formula for computation is as follows: payment-in-lieu times interest rate times term = discount amount or 520,000 (1 low income employee) x's 10$ x's 2 years = 54,000 present value amount equals 516,000 (520,000 - 54000) INDEXES: For the purposes of this code amendment we would suggest that the following indexes be used: 1) Code amendment would reference 1986 quidelines as described in attachment I. 2) The interest rate would be indexed to the Syr treasury notes or a comparable and described in the Employee Housing Guidelines. 3) Term would be agreed upon by applicant and the Housing Authority prior to the Housing Offices's recommendations. At the time of approval, the applicant would sign an affidavit affirming the term used to calculate the present value. The term shall not exceed two years. The term should not be in conflict with the City Land Use Code for time for compliance. (Alan, this is a significant code change and must be taken with much care. We want to offer a developer the option without giving away the store. That is why I must strongly recommend that we reference it as an option of the Housing Authority and adopted by the City Council in the annual Employee Guideliens. The Housing Authority must be given the opportunity to analyze this option and its ramifications and it should only be imple- mented in the 1986 Employee Guidelines.) A proponent of a development may satisfy the employee housing requirement of the Pitkin County Land Use code, Section 5-400, through a payment of a housing dedication fee (Payment-In-Lieu as given below: UNIT EMPLOYEE TYPE PER UNIT I,,r~,j MODERATE MIDDLE DORMITORY 1 520,000 SO SO STUDIO 1.25 25,000 16,625 11,250 ONE BEDROOM 1.75 35,000 23,275 15,570 TWO BEDROOM 2.25 45,000 29,925 20,250 THREE BEDROOM 3 60,000 39,900 27,000 (or larger) SUBSIDY PER EMPLOYEE = 520,000 513,300 59,000 A developer may choose to use a 'present value' within the Employee Housing Guidelines approved by the City Council's Housing Designee and adopted by the Aspen City Council (note: the first present value calculations will be adopted in April 1986). M TO: Aspen City Council THRU: Hal Schilling, City Manager n n FROM: Alan Richman, Planning Office ~'\ RE: Repeal of Gt4P Points for Conversion of Existing Units DATE: October 28, 1985 You have asked that I report to you on that portion of the growth management system which awards points for converting free market units to deed restricted status. The section in question, which appears in the residential commercial and lodge scoring systems, reads as follows: "Conversion of existing units (maximum five (5) points). (aa) The Commission shall assign points to those applicants who guarantee to provide a portion of their low, moderate and middle income housing units by purchasing fully constructed units which are not restricted to Aspen's housing guidelines and placing a deed restriction upon them in compliance with Section 24-11.10. (bb) Points shall be assigned according to the following schedule: Points 18-33~ of all low, moderate and middle income 1 units proposed by applicant are to be purchased and deed restricted. 34~-66~ of all low, moderate and middle income 3 units proposed by applicant are to be purchased and deed restricted. 67~-1000 of all low, moderate and middle income 5 units proposed by applicant are to be purchased and deed restricted. In order to determine the percentage of such housing to be purchased and restricted by the applicant, there shall be used the same formula (above) used for determining what per cent of the project is devoted to middle, moderate, and low income housing, with no credit to be given for any unit not meeting the most recent guidelines of the City's housing designee, as adopted by the Aspen City Council." I have looked back in the records to determine how this provision originally came into effect. I find that this scoring criterion was created by City Council during work sessions held between first and second reading of Clydinance 9, Series of 1984. The scoring criterion replaced a criterion which had been created by the Planning Commission during its deliberations on the growth management quota system. Their idea had been to award points to applicants who agreed to put employee housing on the same site as the rest of the development. You elimin- ated this approach, and put in its place the criterion for conversion of units. I would like to point out to you that Section. 24-11.10 establishes the City of Aspen's policies with respect to employee housing. In subsection (d) o-re provide that applicants can provide employee housing on the same site as the remainder of the development or on an alterna- tive site within the Aspen tietro Area. In subsection (i) we permit applicants to obtain credit for providing employee housing either by constructing new units or converting existing units. I would note for Council's attention that a third method of providing housing, via cash-in-lieu of construction, was proposed in 1984 but not adopted at that time. 47e believe that given the problems we have recently witnessed with private provision of housing (i.e. failure of Benedict- Larkin, complaints at Hunter Creek, inability to address the need for ar. employee/music student dorm) it makes sense to bring this proposal forward again for your consideration. It seems to me that given the fact that the Code already addresses the questions of location and method of provision of housing, there is really no need to provide added emphasis to these provisions, nor to influence applicants to utilize one method over another. Should applicants find conversion a riore economic approach than production, I believe that this monetary advantage will dictate the method to be employee, regardless of the points we award. Given the kinds of downside impacts associated with conversion (displacement of existing residents, neighborhood issues, etc.) which may outweigh the positive effects (reduced growth impacts) we recommend that you should direct us to: 1. Repeal the award of points for conversion of existing units; 2. Retain the policy of allowing credit for conversion as a housing production method; and 3. Evaluate whether the City should implement a cash-in-lieu housing option. AR.22 2 § 24-11.10 ASPEN CODE § 24-11.10 Sec. 24-11.10. Employee housing. The following provisions shall apply to all low, moderate and middle income housing units proposed by applicants iri confor- mance with the requirements of section 24-11: (a) Applicants shall only receive credit for those units which meet the housing size, type, income and occupancy guide- lines and/or approval of the city council and its housing designee. Applicants are encouraged to engage in a pre- application conference with the housing designee to obtain guidance as to the current guidelines and how these are to be applied. (b) Should an applicant propose a unit which is larger than provided for by the city's housing guidelines, then its rental or sales price shall be no greater than that allowable had the housing units complied with those size limitations. (c) When an applicant agrees to restrict only a portion of his development to low, moderate or middle income housing and the portion restricted is located adjacent to an unre- stricted portion, to be eligible for points within the provi- sions of this section, the adjacent portions of the develop- ment shall be constructed of the same exterior building materials with a compatible exterior architectural style. (d) Applicants shall be permitted to provide employee housing on the same site as the remainder of the development or on an alternate site, provided that credit shall only be given for units located within the City of Aspen or the Aspen Metro Area, as this area is currently defined by the Aspen/Pitkin County Growth Management Policy Plan. (e) Should an applicant provide employee housing on a site other than that on which his or her commercial or lodge development is located, then any floor area bonus obtained by the applicant for providing such housing shall only permit an increase to the maximum commercial floor area permitted in that zone, exclusive of any area which would have been associated with the housing. (fl Applicants for commercial or lodge developments shall not be restricted to housing employees of their own business Supp. No. 29 1512 4 24-11.10 ZONING 5 24-11.10 but shall also be permitted to house qualified employees of the community at large. Applicants should anticipate that the housing units proposed will be required to be restricted to the city's low income price and occupancy guidelines. Provided, however, that at the time the applicant requests growth management exemption for the housing units pur- suant to section 24-11.2(f), the city council's housing des- ignee will review the current community need for housing in each category and will evaluate the affordability of the units to employees in each category and will recommend to the planning commission the appropriate category to whir-h the units should be restricted. (g) Should a proposed development cause the displacement of units which are currently deed restricted to employee hous- ing guidelines, then the applicant shall only receive credit for housing the net number of employees to be housed by the project, reflecting the number to be housed in the new units minus those housed in the existing units, rather than for housing the gross number of employees housed in the new units. (h) The deed restrictions created to obtain credit for employee housing may be amended by agreement between the prop- erty owner(s) and the city council upon the recommenda- tion of the planning and zoning commission. (i) Applicants may obtain credit for providing employee hous- ing by either of the following methods, or combination of said methods: (1) Production of new units which are deed restricted for a period of fifty (50) years to rental and sale price terms within the housing price and occupancy guidelines approved by the city council's housing designee and adopted by the Aspen City Council. (2) Conversion of existing units which are not restricted to Aspen's housing guidelines to deed restricted status by placing a deed restriction upon them for a period of fifty (50) years to rental and sale price terms within the housing price and occupancy guidelines approved by the city council's housing designee and adopted by the Aspen City Council. (Ord. No. 0-19134, S 10) Supp. No. 29 1513 PUBLIC NOTICE RE: Amendments to Section 24-11 and other related Sections ~,i1f the Municipal Code of the City of Aspen, Colorado Regarding Employee Housing NOTICE IS HEREBY GIVEN that a public hearing will be conducted by the Aspen Planning and Zoning Commission on December 3, 1985, at a meeting to beging at 5:00 P. M., in City Council Chambers, 130 S. Galena Street, Aspen, Colorado, to consider amendments to Section 24-11 and other related Sections of the Municipal Code of the City of Aspen, Colorado, which would: 1. Repeal the points awarded for conversion of existing units to deed-restricted status; 2. Adopt a cash-in-lieu option for providing employee housing; 3. Clarify the requirements for provision of employee housing off-site; 4. Reduce the number of points available for employee housing in the residential scoring system; and S. Repeal the Bonus FAR granted to applicants providing employee housing. For further information, please contact the Aspen/Pit kin Planning Office, 130 S. Galena Street, Aspen, Colorado 81611 (303) 925-2020, ext. 225. g/C Welton Anderson Chairperson, Aspen Planning and Zoning Commission Published in the Aspen Times on November 7, 1985. City of Aspen Account.