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HomeMy WebLinkAboutcoa.lu.ca.301 W Hyman.0060.20090060.2009.ASLU 301 W. HYMAN AVE MAJ APP TEXT/MAP AMENDMENT 2735 12 46 7 002 C� 40 THE CITY OF ASPEN City of Aspen Community Development Department CASE NUMBER 0060.2009.ASLU PARCEL ID NUMBERS 2735 12 4 67 002 PROJECTS ADDRESS 301 W. HYMAN AVE PLANNER BEN GAGNON CASE DESCRIPTION MAJOR APP TEXT/MAP AMENDMENT REPRESENTATIVE PETER FORNELL DATE OF FINAL ACTION 3.22.10 CLOSED BY ANGELA SCOREY ON: 12.29.11 e_� 0 Vill b Cap` � �r MEMORANDUM TO: Mayor and City Council FROM: Ben Gagnon, Special Projects Planner THROUGH: Chris Bendon, Director, Community Development Department 0 DATE OF MEMO: March 15, 2010 MEETING DATE: March 22, 2010 RE: Amendment to the Text of the Land Use Code to Establish a Certificate of Affordable Housing Credit, 2nd Reading of Ordinance No. 6, Series of 2010 APPLICANT /OWNER: Ajax Apartments LLC REPRESENTATIVE: Peter Fornell LOCATION: Proposed amendment to the text of the Land Use Code applicable within the City of Aspen. PROPOSED LAND USE CODE AMENDMENT: Applicant seeks a code amendment that will allow developers of deed -restricted affordable housing that is not developed for the purpose of mitigation to obtain a "Certificate of Affordable Housing Credit" that may later be used, or transferred to another entity and used, to meet affordable housing mitigation requirements for some future land use development. STAFF RECOMMENDATION: Staff recommends that City Council determine that this Amendment to the Land Use Code meets required standards. SUMMARY: Applicant requests that the Council determine that this Amendment to the Land Use Code meets required standards. RESPONSE TO COUNCIL QUESTIONS AT FIRST READING: The following section is intended to answer question from City Council at First Reading, including 1) a "walk-through" of how a land use review would result in the awarding of a Certificate of Affordable Housing Credit, 2) a "walk-through" of how a land use case requiring housing mitigation could result in the use of a Certificate of Affordable Housing Credit and 3) a sense of how the market for such credits would work. Land Use Review Resulting in Award of Certificate Staff believes there is a limited opportunity for developing affordable housing that is not required for mitigation, and would likely occur in the area of multi -family housing. The city's regulations regarding the redevelopment of multi -family housing are perceived as an obstacle by developers, and the result has been approximately one application in the last 10 years. Creating a new option that could make redevelopment more financially viable could result in some limited number of land use applications. Such applications could be limited because many multi -family parcels are owned by numerous people in condominium form, and in many cases, they will not be interested in converting free market units into deed -restricted affordable housing. For free market multi -family parcels that are owned by one entity and rented out, the Certificate program would be an option to explore, especially if the property is ripe for development. With regard to residential neighborhoods in town without multi -family housing, such as the West End or Cemetery Lane, this code amendment does not change any of the rules regarding land use review or decision -making. A property owner in the Medium -Density Residential Zone District (R-6) could file an application next week asking for a rezoning to Affordable Housing/Planned Unit Development (AH/PUD). In this scenario, the Planning and Zoning Commission and City Council would have to determine whether the proposal was consistent with the AACP, was "compatible with existing land uses and neighborhood characteristics" and dozens of other review standards. A similar application could be made today for the Cemetery Lane neighborhood. Once again, the P&Z and Council would need to arbitrate and decide if the zoning change fits in with the neighborhood. The bottom line is that nothing would change in terms of how the P&Z and City Council review land use applications — the rules of review remain the same. It is worth noting that staff cannot recall anyone submitting an application to dramatically increase density in the West End or Cemetery Lane neighborhoods even for a free market multi -family project — never mind an affordable housing multi -family project. Usine the Certificate to Meet Mitigation Requirements One of the scenarios involving the use of a Certificate of Affordable Housing credit would occur at an administrative level, when someone demolishes an existing home and replaces it with a larger home (single-family or duplex). Under a "scrape and replace" scenario, whenever there is a net increase of floor area, housing mitigation is required. The property owner has five choices on how to mitigate, but the actual choices are almost always between building an Accessory Dwelling Unit (ADU) or making a "payment -in -lieu." 2 Case # 1 ADU Option Cash -in -lieu AH Certificate Net increase in Little or no cost $72,100 .33 FTE square footage = 1,000 s.f. Case #2 ADU Option Cash -in -lieu AH Certificate Net increase in Little or no cost $180,250 .83 FTE square footage = 2,500 s.f. How does the Owner Make the Choice? The owner will take into account financial considerations as well as personal preference. Because the square footage of an ADU counts towards total allowable floor area, the owner's total construction cost will be about the same either way — the only question is whether to build a 300 square foot detached ADU space or use the 300 square feet as part of the principal structure. Some property owners may strongly desire to have a person renting the ADU for security or caretaker purposes, or they may have in-laws they would like to put in a guest house, or they have a "boomerang" kid returning from college. In any of these cases, the owner will build an ADU partly because it's in alignment with their personal preference — and also because it represents little or no increase in their total construction costs. However, an owner who strongly desires to use every last square foot available in the single-family or duplex structure must pay an additional cost for this preference. Under the current code, that means they most likely will make a payment -in -lieu. Under Case # 1 above, that payment -in -lieu cost would be $72,100. However, if your redevelopment project includes a substantial amount of net new square footage (as shown in Case #2), the payment in lieu fee goes up substantially, and the owner might take a second look at the ADU option, which basically costs them nothing. If this code amendment is approved, the owner who does not want to build an ADU would almost certainly explore the option of buying a Certificate of Affordable Housing Credit rather than paying cash -in -lieu especially if the Credit were offered on the open market at some price lower than the required cash -in -lieu payment. Using the Certificate to Meet P&Z Mitigation Requirements Another scenario involving the use of a Certificate of Affordable Housing credit could occur as part of a P&Z Growth Management review. Staff has chosen one scenario — Case #3 below -- to "walk through." 1 The owner will incur about the same 300 square foot -construction cost whether they build a detached ADU or build the 300 square feet as part of the single-family home or duplex. 0 Case #3 Newly Built Units Buy -Down Units AH Certificate New commercial 3, two -bedroom Buying down 3, Buy a Certificate of space = 2,750 sf units at 950 sq. ft. two -bed units at 950 Affordable Housing each = 6.75 FTEs sq. ft. each to Credit = 6.75 FTEs Must provide Category 4 or less = mitigation for 6.75 FTEs 6.75 FTEs If a development proposal generates one (1) or more employees, mitigation must be provided in the form newly built affordable housing units or buy -down affordable housing units — unless City Council approves a payment -in -lieu, according to a set of critcria. How does the Developer Make the Choice? The developer will likely seek the option that costs the least and carries the least risk. Building new units includes the risk of navigating the approval process, while buying down units avoids that risk. If this code amendment is approved, the developer would probably explore the market for Certificates of Affordable Housing Credits to find out if they could negotiate a purchase of certificates that would cost less than constructing new units or buying down existing units. The seller of certificates would certainly be interested in negotiating with such a developer. From a community benefit perspective, the developer who buys housing certificates is the equivalent of a developer who builds new deed -restricted units, or buys down free market units. The Market for Certificates of Affordable Housing How will a market for Certificates of Affordable Housing function? Essentially, our local government would be creating a new commodity that would be bought and sold in a new "marketplace." This commodity reflects a community benefit in the form of new deed -restricted and occupied affordable housing units. Those who are required to provide this benefit can buy a certificate. But perhaps the more important element of this new commodity is that it places a cash value on the development of affordable housing that is entirely separate from the minimal cash value that is realized by selling the units themselves. The cash value of developing affordable housing is the amount that developers who must provide affordable housing are willing to pay so they don't have to develop it themselves. Although this new commodity market would be created through government rules, and the prices would be influenced by the city's mitigations -- the market would be influenced by supply and demand like any other. M If there were many certificates on the market at a time with little construction activity and not much mitigation required, the sellers of certificates might lower their prices. Someone who owed $100,000 as cash -in -lieu might find a seller of housing certificates on their doorstep, lowering their price for equal mitigation to $50,000. Or„if the certificate seller could afford to wait, they'd hold on to the certificates, hoping that new construction activity picks up. If there were very few housing certificates available and the economy was picking up, a developer who is planning a new land use proposal might get right on the phone with someone who has certificates to sell. Ultimately, the price is set between the buyer and the seller. The city would not set, or guarantee, the price of a certificate. Credits Only Apply to Future Proiects Staff drafted the code changes so that only developments approved in the future could be eligible for housing certificates. Staff is aware that the City has approved some projects in the past that included a subsequent employee generation audit. These audits may have shown that the project exceeded its employee generation requirements. In other cases, large employers have bought housing for their employees on a voluntary basis. Any development approval in the past was granted based on the Land Use Code in place at that time. Past applicants who received a development approval entered into a comprehensive agreement based on numerous factors in play at the time. Staff believes the totality of each individual agreement includes a range of community benefits and private sector benefits, and should not now be effectively reopened to award additional financial benefits that were not under consideration at the time of original approval. Similarly, if a future developer proposes to exceed affordable housing requirements with the specific intent of improving his/her chances of gaining approval for the overall development, those "extra" housing units would not be eligible for housing credits — and the developer would not be able to return later and claim housing credits. BACKGROUND: Applicant is in a parallel review process that seeks approval to demolish a residential structure with four (4) existing free market units and replace it with a new residential structure that contains eight (8) deed -restricted affordable housing units. While the applicant is not required to build these deed -restricted units for the purpose of mitigation, he is seeking the ability to sell them in the future as mitigation "credits" to other entities who desire to use them for affordable housing mitigation. The City of Aspen Land Use Code does not currently accommodate this course of action, and the City does not currently have the ability to establish or otherwise grant such a "Certificate of Affordable Housing Credit." LAND USE REQUEST AND REVIEW PROCEDURES: The applicant is requesting the following land use approvals from the City Council: 5 • • Amendment to the Text of the Land Use Code — An application for Amendment to the Text of the Land Use Code, pursuant to Land Use Code Section 26.310.020, requires the City Council, at a public hearing, to determine if the application meets the standards for an amendment to the Land Use Code. The City Council is the final decision -making body STAFF FINDINGS: Many of the standards of review for an amendment to the Land Use Code do not apply to this proposal. For example, various standards ask whether the proposal is "compatible with surrounding zone districts;" if it would have an impact on "traffic generation;" if it would place "demands on public facilities;" or if it would have "adverse impacts on the natural environment." This proposal to amend the Land Use Code would not increase allowable Floor Area Ratio, maximum height, maximum density allowances — it would not change any existing dimensional requirement in any zone district. Therefore, the code amendment would not have any impact on surrounding zone districts, traffic generation, public facilities or infrastructure, or the natural environment. Once a developer has received approval to build deed -restricted affordable housing that is not required for the purpose of mitigation, this code amendment would simply allow for the establishment of a "Certificate of Affordable Housing Credit." This credit would account for the number of Full -Time -Employees (FTEs) that the new deed -restricted housing would accommodate, according to Aspen Pitkin County Housing Authority (APCHA) Guidelines. Finally, the credits would be transferrable to other entities for the purpose of meeting affordable housing mitigation requirements imposed as part of some other land use application. The standards of review that are relevant to this proposed code amendment are 1) If the proposed amendment is consistent with the Aspen Area Community Plan, and 2) If it is consistent with "community character," and 3) Whether it's "in harmony" with the purpose and intent of the Land Use Code. Encouraging the private sector to produce affordable housing is a priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) The critical questions for staff are whether this code amendment would encourage or inhibit the development of affordable housing, and whether a Certificate of Affordable Housing Credit is an acceptable form of mitigation. Because the ability to sell a Certificate of Affordable Housing Credit would add to the revenue stream of building affordable housing, staff believes the code amendment would encourage the private sector to develop new affordable housing, although probably limited to converting some of the more dilapidated multi -family housing stock. (There is more discussion on this point later in the memo.) 71 Because a Certificate of Affordable Housing Credit could only be issued after new affordable housing is built and occupied, the subsequent use of these certificates as mitigation would offset negative development impacts before they occur, and would therefore be a preferred form of mitigation. In fact, staff believes such credits would be a far better form of mitigation than cash in lieu payments, or Accessory Dwelling Units. Mitigation for Single -Family and Duplex Redevelopment. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single-family and duplex structures. The Growth Management system currently provides five options for property owners choosing to demolish, replace and expand a single- family home: 1) Provide an above -grade, detached Accessory Dwelling Unit (ADU); 2) Provide a partially or fully sub -grade, and/or attached ADU through Special Review; 3) Provide an off -site, deed -restricted affordable housing unit; 4) Pay cash -in -lieu; 5) Establish a Resident Occupied (RO) deed restriction on the single-family home. The overwhelming majority have chosen the option of building an ADU or paying cash - in -lieu. There are drawbacks to both of these mitigation options: ➢ Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before affordable housing is created to offset the impacts. Plus, the burden of actually providing the mitigation is transferred to the public. ➢ Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread throughout town, occupancy rates are estimated at 20-30%. If this code amendment is approved, it would create a new option for a property owner/developer to provide housing mitigation by purchasing a "credit" for affordable housing that has already been built and occupied. This is the equivalent of Option #3 above: Provide an off -site deed -restricted affordable housing unit. Staff believes that adding a 61h option — the ability to buy a Certificate of Affordable Housing Credit — could become the most desirable option for the property owner needing to provide mitigation: For those who don't want to build an ADU, they could save money by purchasing a certificate of credit if it is priced lower than the cash in lieu requirement. Redevelopment of Dilapidated Multi -Family Housing. Although redeveloping single- family or duplex homes into 100% affordable housing does not make sense financially, the ability to sell "credits" as mitigation could be a viable financial option for converting some free market multi -family housing into 100% affordable housing. When multi -family properties are redeveloped into a mix of free market and deed - restricted housing, according to our current Growth Management system, a problem crops up: How do you establish a fair system of homeowner's association charges related 7 to capital reserves or future capital improvements? The Aspen Pitkin County Housing Authority has struggled with this issue, and prefers not to see deed -restricted units mixed with free market units in multi -family properties. Therefore, staff believes this code amendment could achieve a number of community goals: ✓ A better mitigation option compared to ADUs or cash in lieu; ✓ The conversion of some dilapidated free market multi -family housing stock into permanently deed -restricted housing; ✓ By requiring 100% affordable housing in redeveloped multi -family properties, it avoids an inequity issue with regard to future capital improvements. At the same time, it should be recognized that those who want to redevelop free market multi -family housing into affordable housing are taking a risk that there will be enough demand for mitigation to support their certificate -based pro forma, plus any other risks of development. Quality of Housing Built in Exchange for Certificates. The proposed code amendment would require that any housing built for the purpose of obtaining certificates of credit must meet the same requirements and go through the same review process that's required to build housing for the purpose of mitigation. Applicants must meet APCHA Guidelines, they must obtain a recommendation from APCHA, and they must be approved by the P&Z. Certificates as Mitigation for P&Z-Reviewed Developments. The Growth Management system encompasses much more than the demolition, replacement and expansion of single-family homes or duplexes. There are more than a dozen development or redevelopment scenarios included in Growth Management — most are reviewed by the Planning and Zoning Commission, and some are reviewed by City Council. For land use applications that are reviewed by the P&Z under Growth Management, housing mitigation is provided in the following ways, according to Section 26.470.070.4: ❖ Newly built units or buy -down units within the City limits. Units outside city limits must be approved by Council. ❖ For mitigation of less than one unit, cash in lieu may be accepted by P&Z. For mitigation of more than unit, cash in lieu must be approved by Council. ❖ All units must be at least 50% above -grade. All units must be at Category 4 or lower. All units must comply with APCHA Guidelines. Clearly, the most preferred option is the provision of newly built units or buy -down units within the city limits. The provision of cash in lieu is a less desirable type of mitigation, which is why the Growth Management system gives the P&Z or City Council the authority to specifically approve or deny a cash -in -lieu transaction. .1 The proposed code amendment would add an option to use a certificate of affordable housing credit to meet mitigation requirements — but it would be processed administratively by the Community Development Director. This is due to the fact that the P&Z must have already approved the establishment of a certificate of affordable housing credit before it can be used. The housing credit is the equivalent of the most preferred forms of mitigation — newly built or buy -down unit(s) — and therefore there is no need for further review. Again, the market would dictate that those who are selling certificates of credit must set their price just below the cash -in -lieu that would otherwise be paid in order to be an attractive option for developers who need housing mitigation. As previously stated, staff sees the provision of certificates as a superior form of mitigation compared to the payment of cash -in -lieu. Certificates as Mitigation for Council -Reviewed Developments. The two types of development for which the City Council establishes housing mitigation are developments requiring Multi -year Growth Management Allotments, and Essential Public Facilities. In both cases (and unlike P&Z reviews), the code uses discretionary language that allows the Council to decide what mix of mitigation is appropriate. Staff finds that this discretionary language allows Council to determine whether Certificates of Affordable Housing Credit are appropriate on a case -by -case basis. Building Affordable Housing for Future Purposes. The code amendment may also have other impacts. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. Technical Code Language. In addition to adding a chapter to the land use code to establish, transfer and extinguish a Certificate of Affordable Housing Credit, several parallel code amendments are suggested. One makes it possible for the owner of free market multi -family housing to replace it with 100% deed -restricted affordable housing - only, an option that is not currently addressed in the land use code. Another allows for those demolishing and redeveloping a single-family home or duplex to buy affordable housing credits for mitigation. The other language changes allow for Certificates of Affordable Housing Credit to be used as mitigation for projects under the Growth Management review authority of the P&Z and City Council. PLANNING AND ZONING COMMISSION REVIEW: The Planning and Zoning Commission voted 6-0 on January 19, determining that the proposed code amendment met the required standards of review. The only concerns related to whether this would generate a rash of PUDs in residential neighborhoods. As discussed above, staff believes that any PUD or zoning change would still be subject to the full scrutiny of the P&Z, the City Council and the public. It is possible that this certificate program will result in E applications coming forward, but the city would have no obligation to approve development considered out of character with its neighborhood context. ASPEN PITKIN COUNTY HOUSING AUTHORITY REVIEW: The Aspen Pitkin County Housing Authority Board reviewed the proposed code amendment during a January 8 meeting, and recommended approval of the code change. This was an informal review and recommendation. It is not officially required as part of the land use review process. RECOMMENDATION: Staff recommends in favor of these code amendments. finding that they meet or exceed the standards of review. CITY MANAGER COMMENTS: RECOMMENDED MOTION: If the Mayor and City Council choose to recommend approval of the request, they may use this motion, "I move the adoption of Ordinance No.(, Series of 2010, creating an affordable housing credit program." ATTACHMENTS: Exhibit A — Existing code language; excerpts of Section 26.470 Growth Management Exhibit B — Proposed code language; excerpts of Section 26.470 Growth Management Exhibit C — Staff findings 10 ORDINANCE NO.6, (SERIES OF 2010) AN ORDINANCE OF THE ASPEN CITY COUNCIL APPROVING AN AMENDMENT TO THE TEXT OF THE LAND USE CODE OF THE CITY OF ASPEN, PITKIN COUNTY, COLORADO. WHEREAS, the Community Development Department received an application from Ajax Apartments LLC, represented by Peter Fornell, requesting an Amendment to the Text of the Land Use Code.; and, WHEREAS, upon initial review of the application and the applicable code standards, the Community Development Department recommended in favor of the proposed Amendment to the Text of the Land Use Code; and, WHEREAS, during a duly noticed public hearing on January 19, 2010, the Planning and Zoning Commission approved Resolution No. 3, Series of 2010, by a 6-0 vote, finding that the Amendment to the Text of the Land Use Code met the required standards of review; and, WHEREAS, the Aspen City Council has reviewed and considered the Amendment to the Text of the Land Use Code under the applicable provisions of the Municipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the applicable referral agencies, and has taken and considered public comment; and, WHEREAS, the Aspen City Council finds that the Amendment to the Text of the Land Use Code meets or exceeds all applicable standards of review and that the Amendment to the Text of the Land Use Code is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, during a duly noticed public hearing on March 22, 2010, the Aspen City Council approved Ordinance No. 6, Series of 2010, by a vote, finding that the proposed Amendment to the Text of the Land Use Code met the required standards of review; and, WHEREAS, the Aspen City Council finds that this ordinance furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE BE IT RESOLVED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF ASPEN, COLORADO THAT: Section 1 Pursuant to the procedures and standards set forth in Title 26 of the Aspen Municipal Code, the City Council hereby finds that the proposed Amendment to the Land Use Code meets the required standards of review. 0 • Section 2: Amendment to Section 26.470.050.13 of the Land Use Code Section 26.470.050.13 shall read as follows: B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate. shall be extinguished pursuant to Chapter 26.540.090 Criteria for Administrative Extinguishment of the Certificate. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.090 Criteria for Administrative 0 • Extinguishment of the Certificate, utilizing the calculations in Section 26.470.100 Employee/Square Footage Conversion. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. Section 3: Amendment to Section 26.470.060.2 of the Land Use Code Section 26.470.060.2 shall read as follows: 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (5) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special C� • review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. 6) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have six (6) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [I ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [1] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 7) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. 0 • Section 4: Amendment to Section 26.470.070(4+5) of the Land Use Code Section 26.470.070(4+5) shall read as follows: 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. A Certificate of Affordable Housing Credit may be used to satisfy mitigation requirements by approval of the Community Development Department Director, pursuant to Section 26.540.080 Extinguishment of the Certificate. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Non -Mitigation Affordable Housing. Affordable housing units that are not required for mitigation, but meet the requirements of Section 26.470.070.4(a-d). The owner of such non -mitigation affordable housing is eligible to receive a Certificate of Affordable Housing Credit pursuant to Section 26.540. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining demolishing converting; or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi -family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site that are not required for mitigation purposes, including any net additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in • the redevelopment are eligible for a Certificate of Affordable Housing Credit, pursuant to Section 26.540 Certificate of Affordable Housing Credit. Any remaining unused free market residential development rights shall be vacated. Section 5: Establishing Chapter 26.540 of the Land Use Code Section 26.540 shall read as follows: Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: Sec.26.540.010 Purpose Sec.26.540.020 Authority Sec. 26.540.030 Application and fees Sec. 26.540.040 Review criteria for Planning and Zoning Commission Sec. 26.540.050 Procedures for establishing a Certificate of Affordable Housing Credit Sec. 26.540.060 Authority of the Certificate Sec. 26.540.070 Transferability of the Certificate, contents of the grantor and grantee certificates Sec. 26.540.080 Extinguishment of the Certificate Sec. 26.540.090 Criteria for administrative extinguishment of the Certificate See. 26.540. 100 Appeals 26.540.010 Purpose. There are two main purposes of this chapter: to encourage the development of affordable housing; and to establish a new option for housing mitigation that immediately offsets the impacts of free market development. A Certificate of Affordable Housing Credit is issued to the developer of affordable housing that is not required for mitigation. Another entity can purchase such a Certificate and use it to satisfy housing mitigation requirements. Establishing this transferable Certificate creates a new revenue stream that can make the development of affordable housing more economically viable. Establishing this transferable Certificate also establishes a new option for mitigation that reflects built and occupied affordable housing, thereby offsetting the impacts of free market development before those impacts are felt. This section describes the process for establishing, transferring and extinguishing a Certificate of Affordable Housing Credit. 26.540.020 Authority. The Planning and Zoning Commission is authorized, at a public hearing meeting the noticing requirements of Section 26.304.060.E Public Notice, to approve, approve with conditions, or deny an application for the establishment of a Certificate of Affordable Housing Credit in the form of a resolution, subsequent to a recommendation of the Community Development Director. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications must also include the following information. 1. The net livable square footage of each unit. 2. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen Pitkin County Housing Authority Guidelines. 3. Proposed category of each unit. 4. Proposed Full -Time -Equivalents housed by the units in increments of no less than five - one -hundredths (.05). 26.540.040 Review criteria for planning and zoning commission A Certificate of Affordable Housing Credit may be established by the Planning and Zoning Commission, pursuant to the adoption of a Resolution, if all of the following criteria are met: A. A Certificate of Occupancy has been issued for affordable housing units that have been deed -restricted subsequent to the adoption of Ordinance No. 6, Series of 2010, and pursuant to the requirements of Section 26.470.070.4(a-d). B. The affordable housing units are not for the purpose of mitigating impacts of development, or a requirement or obligation of a Development Order. C. A recommendation of the Aspen Pitkin County Housing Authority Board of Directors has been made, establishing the number of Full -Time -Equivalents (FTEs) accommodated by the affordable housing units, pursuant to Affordable Housing Guidelines, as amended. 26.540.050 Procedures for Issuing a Certificate of Affordable Housing Credit. Once the Planning and Zoning Commission has approved the creation of a Certificate of Affordable Housing Credit through adoption of a Resolution, the Community Development Director shall issue a Certificate of Affordable Housing Credit in a form prescribed by the Director. 1. Content of the Certificate. The originating certificate is the certificate of affordable housing credit initially memorializing the housing credit. The content of the originating certificate shall include the following information: a) A number of the certificate in chronological order of their issuance. b) Parcel identification number, legal address and the street address of the affordable housing. c) The number of Full Time Equivalents (FTEs) accommodated by the affordable housing units, in increments of no less than five -one -hundredths (.05). 2. Issuance of the Certificate. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.060 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of an FTE no less than .05 FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.070 Transferability of the certificate 1. A Certificate of Affordable Housing Credit may be sold, assigned, transferred, or conveyed in whole or in part, in increments no less than five -one -hundredths (.05). Transfer of Title shall be evidenced by an assignment of ownership on the actual certificate document. Upon transfer, the new owner may request the City re -issue the certificate acknowledging the new owner. Re -issuance shall not require re -review by the Planning and Zoning Commission. 2. The market for Historic TDR Certificates is unrestricted and the City shall not prescribe or guarantee the monetary value of a Historic TDR Certificate. 3. The Community Development Director shall establish policies and procedures not inconsistent with this Chapter for the printing of certificates, their safe -keeping, issuance, record -keeping, and extinguishments. 26.540.080 Extinguishment of the certificate. 1. Upon approval of a land use application pursuant to Chapter 26.470, the Community Development Director shall extinguish all or part of a Certificate of Affordable Housing Credit, as applicable, to be noted in the subsequent Development Order. 2. When all of a certificate is extinguished, the city shall void the certificate. 3. When part of a certificate is extinguished, the city shall issue a replacement certificate amending the certificate in increments of no less than .05 FTE. 26.540.090 Criteria for Administrative Extinguishment of a Certificate The Community Development Director shall extinguish all or part of a certificate of Affordable Housing Credit for the purposes of meeting mitigation requirements if the application meets one or more of the following criteria: A. An Ordinance approved under this Title that includes a condition describing required housing mitigation has taken legal effect, and the portion of the Certificate to be extinguished is equal to the mitigation required in terms of FTEs as calculated under Aspen Pitkin County Affordable Housing Guidelines, as amended. B. A Development Order has been issued that satisfies housing mitigation pursuant to Section 26.470.060.2(c)vi, or Section 26,470.060.2(c)7, and the portion of a Certificate to be extinguished is equal to the mitigation required, according to Aspen Pitkin County Affordable Housing Guidelines, as amended. If the portion of the Certificate to be extinguished satisfies mitigation requirements under Section 26.470.050.13.6 General Requirements, the required number of FTEs, in increments of no less than .05 FTE, shall be calculated pursuant to Section 26.470.100 Employee/Square Footage Conversion. Section 26.540.100 Appeals An applicant aggrieved by a determination made by the Community Development Director or Planning and Zoning Commission, pursuant to this Section, may appeal the decision to the City Council, pursuant to the procedures and standards of Chapter 26.316, Appeals. Section 6: This Resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 7• If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. APPROVED BY the Aspen City Council on this 22"d day of March, 2010. APPROVED AS TO FORM: John Worcester, City Attorney ATTEST: Kathryn Koch, Cite Clerk ASPEN CITY COUNCIL: Michael C. Ireland, Mayor • L� Exhibit A Existing Code Language, Section 26.470.050 General Requirements; Section 26.470.060 Administrative Applications; Section 26.470.070 Minor Planning and Zoning Commission Applications The following is the existing code language in the Growth Management Quota System chapter of the City of Aspen Land Use Code, in Section 26.470.050 General Requirements; Section 26.470.060 Administrative Applications; and Section 26.470.070 Minor Planning and Zoning Commission Applications, including subsection 4. Affordable housing, and 5. Demolition or redevelopment of multi- family housing. 26.470.050 General Requirements B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26,470,070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. • c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (5) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. Duplex. In order to qualify for a duplex approval, the applicant shall have six (6) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 0 26.470.070 Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. 5. Demolition or redevelopment of multi -family housing. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning 0 n Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free-market multifamily housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi- family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free-market multifamily housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free- market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free-market residential units within a multi -family or mixed -use project. 2. Requirements for demolishing affordable multi -family units: In the event a project proposes to demolish or replace existing deed -restricted affordable housing units ... :1 Exhibit B Proposed Code Amendments The proposed code amendments in the Growth Management Quota System chapter and the addition of a Certificate of Affordable Housing Credit chapter in the City of Aspen Land Use Code, are found in blue italic as follows: Section 26.470.050 B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.90 Criteria for Administrative Extinguishment of the Certificate. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.90 Criteria for Administrative Extinguishment of the Certificate, utilizing the calculations in Section 26.470.100 Employee/Square Footage Conversion. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: 0 0 Single-family. In order to qualify for a single-family approval, the applicant shall have six (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. 6) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 7) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. 26.470.070(4+5) Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. A Certificate ofAffordable Housing Credit may be used to satisfy mitigation requirements by approval of the Community Development Department Director, pursuant to Section 26.540.080 Extinguishment of the Certificate. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited • to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Non -Mitigation Affordable Housing. Affordable housing units that are not required for mitigation, but meet the requirements of Section 26.470.070.4(a-d). The owner of such non -mitigation affordable housing is eligible to receive a Certificate of Affordable Housing Credit pursuant to Section 26.540. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning LJ 0 Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site that are not required for mitigation purposes, including any net additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for a Certificate of Affordable Housing Credit, pursuant to Section 26.540 Certificate of Affordable Housing Credit. Any remaining unused free market residential development rights shall be vacated. Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: Sec.26.540.010 Purpose Sec.26.540.020 Authority Sec. 26.540.030 Application and fees Sec. 26.540.040 Review criteria for Planning and Zoning Commission Sec. 26.540.050 Procedures for establishing a Certificate of Affordable Housing Credit Sec. 26.540.060 Authority of the Certificate Sec. 26.540.070 Transferability of the Certificate, contents of the grantor and grantee certificates Sec. 26.540.080 Extinguishment of the Certificate Sec. 26.540.090 Criteria for administrative extinguishment of the Certificate Sec.26.540.100 Appeals 26.540.010 Purpose. There are two main purposes of this chapter: to encourage the development of affordable housing; and to establish a new option for housing mitigation that immediately offsets the impacts of free market development. A Certificate of Affordable Housing Credit is issued to the developer of affordable housing that is not required for mitigation. Another entity can purchase such a Certificate and use it to satisfy housing mitigation requirements. Establishing this transferable Certificate creates a new revenue stream that can make the development of affordable housing more economically viable. Establishing this transferable Certificate also establishes a new option for mitigation that reflects built and occupied affordable housing, thereby offsetting the impacts of free market development before those impacts are felt. This section describes the process for establishing, transferring and extinguishing a Certificate of Affordable Housing Credit. 26.540.020 Authority. The Planning and Zoning Commission is authorized, at a public hearing meeting the noticing requirements of Section 26.304.060.E Public Notice, to 0 approve, approve with conditions, or deny an application for the establishment of a Certificate of Affordable Housing Credit in the form of a resolution, subsequent to a recommendation of the Community Development Director. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications must also include the following information. 1. The net livable square footage of each unit. 2. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen Pitkin County Housing Authority Guidelines. 3. Proposed category of each unit. 4. Proposed Full -Time -Equivalents housed by the units in increments of no less than five - one -hundredths (05). 26.540.040 Review criteria for planning and zoning commission A Certificate of Affordable Housing Credit may be established by the Planning and Zoning Commission, pursuant to the adoption of a Resolution, if all of the following criteria are met: A. A Certificate of Occupancy has been issued for affordable housing units that have been deed -restricted subsequent to the adoption of Ordinance No. 6, Series of 2010, and pursuant to the requirements of Section 26.470.070.4(a-d). B. The affordable housing units are not for the purpose of mitigating impacts of development, or a requirement or obligation of a Development Order. C. A recommendation of the Aspen Pitkin County Housing Authority Board of Directors has been made, establishing the number of Full -Time -Equivalents (FTEs) accommodated by the affordable housing units, pursuant to Affordable Housing Guidelines, as amended. 26.540.050 Procedures for Issuing a Certificate of Affordable Housing Credit. Once the Planning and Zoning Commission has approved the creation of a Certificate of Affordable Housing Credit through adoption of a Resolution, the Community Development Director shall issue a Certificate of Affordable Housing Credit in a form prescribed by the Director. 1. Content of the Certificate. The originating certificate is the certificate of affordable housing credit initially memorializing the housing credit. The content of the originating certificate shall include the following information: a) A number of the certificate in chronological order of their issuance. b) Parcel identification number, legal address and the street address of the affordable housing. c) The number of Full Time Equivalents (FTEs) accommodated by the affordable housing units, in increments of no less than five -one -hundredths (.05). 2. Issuance of the Certificate. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.060 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of an FTE no less than .05 FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.070 Transferability of the certificate 1. A Certificate of Affordable Housing Credit may be sold, assigned, transferred, or conveyed in whole or in part, in increments no less than five -one -hundredths (.05). Transfer of Title shall be evidenced by an assignment of ownership on the actual certificate document. Upon transfer, the new owner may request the City re -issue the certificate acknowledging the new owner. Re -issuance shall not require re -review by the Planning and Zoning Commission. 2. The market for Historic TDR Certificates is unrestricted and the City shall not prescribe or guarantee the monetary value of a Historic TDR Certificate. 3. The Community Development Director shall establish policies and procedures not inconsistent with this Chapter for the printing of certificates, their safe -keeping, issuance, record -keeping, and extinguishments. 26.540.080 Extinguishment of the certificate. 1. Upon approval of a land use application pursuant to Chapter 26.470, the Community Development Director shall extinguish all or part of a Certificate of Affordable Housing Credit, as applicable, to be noted in the subsequent Development Order. 2. When all of a certificate is extinguished, the city shall void the certificate. 3. When part of a certificate is extinguished, the city shall issue a replacement certificate amending the certificate in increments of no less than .05 FTE. 26.540.090 Criteria for Administrative Extinguishment of a Certificate The Community Development Director shall extinguish all or part of a certificate of Affordable Housing Credit for the purposes of meeting mitigation requirements if the application meets one or more of the following criteria: A. An Ordinance approved under this Title that includes a condition describing required housing mitigation has taken legal effect, and the portion of the Certificate to be extinguished is equal to the mitigation required in terms of FTEs as calculated under Aspen Pitkin County Affordable Housing Guidelines, as amended. B. A Development Order has been issued that satisfies housing mitigation pursuant to Section 26.470.060.2(c)vi, or Section 26,470.060.2(c)7, and the portion of a Certificate to be extinguished is equal to the mitigation required, according to Aspen Pitkin County Affordable Housing Guidelines, as amended. If the portion of the Certificate to be extinguished satisfies mitigation requirements under Section 26.470.050.B.6 General Requirements, the required number of FTEs, in increments of no less than .05 FTE, shall be calculated pursuant to Section 26.470.100 Employee/Square Footage Conversion. Section 26.540.100 Appeals An applicant aggrieved by a determination made by the Community Development Director or Planning and Zoning Commission, pursuant to this Section, may appeal the decision to the City Council, pursuant to the procedures and standards of Chapter 26.316, Appeals. Exhibit C Amendment to Code Text, Review Criteria & Staff Findings Sec. 26.310.040. Standards of review. In reviewing an amendment to the text of this Title or an amendment to the Official Zone District Map, the City Council and the Planning and Zoning Commission shall consider: A. Whether the proposed amendment is in conflict with any applicable portions of this Title. Staff Finding: The amendment is not in conflict with any applicable portions of this title. B. Whether the proposed amendment is consistent with all elements of the Aspen Area Community Plan. Staff Finding: Encouraging the private sector to produce affordable housing is a priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) The critical questions for staff are whether this code amendment would encourage or inhibit the development of affordable housing, and whether a Certificate of Affordable Housing Credit is an acceptable form of mitigation. Because the ability to sell a Certificate of Affordable Housing Credit would add to the financial pro forma of building affordable housing, staff believes the code amendment would encourage the private sector to develop new affordable housing. Because a Certificate of Affordable Housing Credit could only be issued after new affordable housing is built and occupied, the subsequent use of these certificates as mitigation would offset negative development impacts before they occur, and would therefore be an excellent form of mitigation. In fact, staff believes such credits would be a far better form of mitigation than cash in lieu payments, or Accessory Dwelling Units. Mitigation for Single-family and Duplex Redevelopment. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single- family and duplex structures. The Growth Management system currently provides five options for property owners choosing to demolish, replace and expand a single-family home: 1) Provide an above -grade, detached Accessory Dwelling Unit (ADU); 2) Provide a partially or fully sub -grade, and/or attached ADU through Special Review; 3) Provide an off -site, deed -restricted affordable housing unit; • • 4) Pay cash -in -lieu; 5) Establish a Resident Occupied (RO) deed restriction on the single-family home. The overwhelming majority have chosen the option of building an ADU or paying cash - in -lieu. There are drawbacks to both of these mitigation options: ➢ Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before affordable housing is created to offset the impacts; ➢ Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread throughout town, occupancy rates are estimated at 20-30%. If this code amendment is approved, it would create a new option for a property owner/developer to provide housing mitigation by purchasing a "credit" for affordable housing that has already been built and occupied. This is the equivalent of Option #3 above: Provide an off -site, deed -restricted affordable housing unit. Staff believes that adding a 5`h option — the ability to buy a Certificate of Affordable Housing Credit — would become the most desirable option to achieve community housing goals. It would also be an attractive option for the property owner needing to provide mitigation: For those who don't want to build an ADU, they can save money by purchasing a certificate of credit that is priced lower than the cash in lieu requirement. Redevelopment of Dilapidated Multi -Family Housing. This ability to sell "credits" as mitigation could also provide a viable financial incentive for the conversion of free market multi -family housing into 100% affordable housing. Developers do not currently build affordable housing largely because the fixed price they can get for the units is lower than what it costs to build them. But with the ability to sell FTEs, the development of affordable housing could become financially viable, especially for multi -family properties, which face significant redevelopment obstacles posed by the city's Growth Management system. Even when multi -family properties are redeveloped into a mix of free market and deed - restricted housing, according to our Growth Management system, another problem crops up: How do you establish a fair system of homeowner's association charges related to capital reserves or future capital improvements? The Aspen Pitkin County Housing Authority has struggled with this issue, and prefers not to see deed -restricted units mixed with free market units in multi -family properties. Therefore, staff believes this code amendment could achieve a number of community goals: ✓ A better mitigation option compared to ADUs or cash in lieu; ✓ The conversion of dilapidated free market multi -family housing stock into permanently deed -restricted housing; ✓ By requiring 100% affordable housing in redeveloped multi -family properties, it L' • avoids an inequity issue with regard to future capital improvements. At the same time, it should be recognized that those who want to redevelop free market multi -family housing into affordable housing are taking a risk that there will be enough demand for mitigation to support their certificate -based pro forma. Quality of Housing Built in Exchange for Certificates. The proposed code amendment would require that any housing built for the purpose of obtaining certificates of credit must meet the same requirements and go through the same review process that's required to build housing for the purpose of mitigation. Appljicants must meet APCHA Guidelines, they must obtain a recommendation from APCHA, and they must be approved by the P&Z. Certificates as Mitigation for P&Z-Reviewed Developments. The Growth Management system encompasses much more than the demolition, replacement and expansion of single-family homes or duplexes. There are more than a dozen development or redevelopment scenarios included in Growth Management — most are reviewed by the Planning and Zoning Commission, and some are reviewed by City Council. For land use applications that are reviewed by the P&Z under Growth Management, housing mitigation is provided in the following ways, according to Section 26.470.070.4: ❖ Newly built units or buy -down units within the City limits. ❖ Units outside city limits must be approved by Council. For mitigation of less than one unit, cash in lieu may be accepted by P&Z. For mitigation of more than unit, cash in lieu must be approved by Council. All units must be at least 50% above -grade. All units must be at Category 4 or lower. v All units must comply with APCHA Guidelines. Clearly, the most preferred option is the provision of newly built units or buy -down units within the city limits. The provision of cash in lieu is a less desirable type of mitigation, which is why the Growth Management system gives the P&Z or City Council the authority to approve or deny a cash in lieu transaction. The proposed code amendment would add an option to use a certificate of affordable housing credit to meet mitigation requirements — but it would be processed administratively by the Community Development Director. This is due to the fact that the P&Z must have already pproved the establishment of a certificate of affordable housing credit before it can be used. The housing credit is the equivalent of the most preferred form of mitigation — newly built unit(s) — and therefore there is no need for further review. In addition, a second "bite at the apple" may create too much risk for those interested in developing affordable housing for the purpose of obtaining housing credits. Again, the market would dictate that those who are selling certificates of credit must set their price just below the cash in lieu that would otherwise be paid in order to be an attractive option for developers who need housing mitigation. As previously stated, staff n • sees the provision of certificates as a superior form of mitigation compared to the payment of cash in lieu. Certificates as Mitigation for Council -Reviewed Developments. The two types of development for which the City Council establishes housing mitigation are developments requiring Multi -year Growth Management Allotments, and Essential Public Facilities. In both cases (and unlike P&Z reviews), the code uses discretionary language that allows the Council to decide what mix of mitigation is appropriate. Staff finds that this discretionary language allows Council to determine whether Certificates of Affordable Housing Credit are appropriate on a case -by -case basis. Building Affordable Housing for Two Purposes. The code amendment may also have other impacts. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. C. Whether the proposed amendment is compatible with surrounding zone districts and land uses, considering existing land use and neighborhood characteristics. Staff Finding: The proposed amendment would apply under the AH-PUD Zone District, but have no impact on the allowable dimensions of future affordable housing projects. D. "The effect of the proposed amendment on traffic generation and road safety. Staff Finding: The amendment itself does not generate additional development. E. Whether and the extent to which the proposed amendment would result in demands on public facilities and whether and the extent to which the proposed amendment would exceed the capacity of such public facilities including, but not limited to, transportation facilities, sewage facilities, water supply, parks, drainage, schools and emergency medical facilities. Staff Finding: The amendment itself does not generate additional development. F. Whether and the extent to which the proposed amendment would result in significantly adverse impacts on the natural environment. Staff Finding: The amendment itself does not generate additional development. G. Whether the proposed amendment is consistent and compatible with the community character in the City. Staff Finding: This amendment could result in new affordable housing that may not otherwise be built. Sufficient Affordable Housing inventory is an important part of the community character. H. Whether there have been changed conditions affecting the subject parcel or the surrounding neighborhood which support the proposed amendment. Staff Finding: No applicable. I.Whether the proposed amendment would be in conflict with the public interest and whether it is in harmony with the purpose and intent of this Title. Staff Finding: The production of affordable housing is a priority of the 2000 AACP. The proposed amendment allows for the development of affordable housing that might not otherwise be built prior to development impacts. The amendment allows an entity to receive a "Certificate of Affordable Housing Credit" for building affordable housing that is not required for mitigation, and subsequently allows the same or some other entity to later use the certificate for mitigation purposes. a AFFIDAVIT OF PUBLIC NOTICE REQUIRED BY SECTION 26.304.060 (E), ASPEN LAND USE CODE ADDRESS OF PROPERTY: C'C"M us'c Aspen, CO SCHEDULED PUBLIC HEARING DATE: STATE OF COLORADO ) ss. County of Pitkin ) I, A-V%ai 0.r>1 94; 'M (name, please print) being or representing an Applicant to the City of Aspen, Colorado, hereby personally certify that I have complied with the public notice requirements of Section 26.304.060 (E) of the Aspen Land Use Code in the following manner: Publication of notice: By the publication in the legal notice section of an official paper or a paper of general circulation in the City of Aspen at least fifteen (15) days prior to the public hearing. A copy of the publication is attached hereto. Posting of notice: By posting of notice, which form was obtained from the Community Development Department, which was made -of suitable, waterproof materials, which was not less than twenty-two (22) inches wide and twenty-six (26) inches high, and which was composed of letters not less than one inch in heiglit: Said notice was posted at least fifteen (15) days prior to the public hearing and was continuously -visible from the _ day of , 200_, to am including the dates and time of the public hearing. A photograph of the posted notice (sign) is attached hereto. Mailing of notice. By the mailing of a notice obtained from the Community Development Department, which contains the information described in Section 2.6.304.060(E)(2) of the Aspen Land Use Code. At least fifteen (15) days prior to the public hearing, notice was hand delivered or mailed by first class postage prepaid U.S. mail to all owners of property within three hundred (300) feet of the property subject to the development application. The names and addresses of property owners shall be those on the current tax records of Pitkin County as they appeared no more than sixty (60) days prior to the date of the public hearing. A copy of the owners and governmental agencies so noticed is attached hereto. (continued on next page) 0 46 Mineral Estate Owner Notice. By the certified mailing of notice, return receipt requested, to affected mineral estate owners by at least thirty (30) days prior to the date scheduled for the initial public hearing on the application of development. The names and addresses of mineral estate owners shall be those on the current tax records of Pitkin County. At a minimum, Subdivisions that create more than one lot, Planned Unit Developments, Specially Planned Areas, and COWAPs are subject to this notice requirement. Rezoning or text amendment. Whenever the official zoning district map is in any way to be changed or amended incidental to or as part of a general revision of this Title, or whenever the text of this Title is to be amended, whether such revision be made by repeal of this Title and enactment of a new land use regulation, or otherwise, the requirement of an accurate survey map or other sufficient legal description of, and the notice to and listing of names and addresses of owners of real property in the area of the proposed change shall be waived. However, the proposed zoning map shall be available for public inspection in the planning agency during all business hours for fifteen (15) days prior to the public hearing on such amendments. Signature The foregoing "Affidavit of Notice" was acknowledged before me this _7_ day of 20QQ, byAyAqeAea sCU� PUBUIC NOTICE RE: SECTIONSS OF THE LAND USE CODE NDMENT TO CERTAIN NOTICE IS HEREBY GIVEN that a public hearing will be held on Monday, March 22, 2010. at a meeting to begin at 5:00 p.m. before the Aspen City Council, Council Chambers. City Hall, 130 S. Galena St., Aspen, to consider a staff initialed ordi- nance that may amend the following Chapters of the Land Use Code: 26.470, Growth Management Ouota System and Chapter 26.575, Miscellaneous Supplemental Regulations. Essentially, the pro- posed code amendment allows for the voluntary development of deed restricted affordable housing in exchange for the issuance of an affordable housing credit to the developer based upon the number of amreloyees housed by the affordable housiGagnon at'the City of Aspen r further oCommunity Develrmation, contact op- ment Department, 130 S. Galena St., Aspen, Cu. (970) 429.2755, ben. gagnon@ci.aspen.co, us. slMick Ireland, Chair Aspen City Council Published in the Aspen Times Weekly on March 7. 2010 [47243131 WITNESS MY HAND AND OFFICIAL SEAL My commission expires: lSTL� yuu � ^. Notary Public TTACHMENTS AS APPLICABLE: �UBLICA TION OF THE POSTED NOTICE (SIGN) WNERS AND GOVERNMENTAL AGENCIES NOTICED • APPLICANT CERTIFICATION OF MINERAL ESTAE OWNERS NOTICE AS REQUIRED BY C.R.S. §24-65.5-103.3 0 0 V11 MEMORANDUM TO: Mayor and City Council FROM: Ben Gagnon, Special Projects Planner THROUGH: Chris Bendon, Director, Community Development Department qj DATE OF MEMO: February 15, 2010 MEETING DATE: February 22, 2010 RE: Amendment to the Text of the Land Use Code to Establish a Certificate of Affordable Housing Credit, First Reading of Ordinance No. (p , Series of 2010 APPLICANT /OWNER: Ajax Apartments LLC REPRESENTATIVE: Peter Fornell LOCATION: Proposed amendment to the text of the Land Use Code applicable within the City of Aspen. PROPOSED LAND USE CODE AMENDMENT: Applicant seeks a code amendment that will allow developers of deed -restricted affordable housing that is not developed for the purpose of mitigation to obtain a "Certificate of Affordable Housing Credit" that may later be used, or transferred to another entity and used, to meet affordable housing mitigation requirements for some future land use development. STAFF RECOMMENDATION: Staff recommends that City Council determine that this Amendment to the Land Use Code meets required standards. SUMMARY: Applicant requests that the Council determine that this Amendment to the Land Use Code meets required standards. BACKGROUND: Applicant is in a parallel review process that seeks approval to demolish a residential structure with four (4) existing free market units and replace it with a new residential structure that contains eight (8) deed -restricted affordable housing units. While the applicant is not required to build these deed -restricted units for the purpose of mitigation, he is seeking the ability to sell them in the future as mitigation "credits" to other entities who desire to use them for affordable housing mitigation. The City of Aspen Land Use Code does not currently accommodate this course of action, and the City does not currently have the ability to establish or otherwise grant such a "Certificate of Affordable Housing Credit." LAND USE REQUEST AND REVIEW PROCEDURES: The applicant is requesting the following land use approvals from the City Council: • Amendment to the Text of the Land Use Code — An application for Amendment to the Text of the Land Use Code, pursuant to Land Use Code Section 26.310.020, requires the City Council, at a public hearing, to determine if the application meets the standards for an amendment to the Land Use Code. The City Council is the final decision -making body STAFF FINDINGS: Many of the standards of review for an amendment to the Land Use Code do not apply to this proposal. For example, various standards ask whether the proposal is "compatible with surrounding zone districts;" if it would have an impact on "traffic generation;" if it would place "demands on public facilities;" or if it would have "adverse impacts on the natural environment." This proposal to amend the Land Use Code would not increase allowable Floor Area Ratio, maximum height, maximum density allowances — it would not change any existing dimensional requirement in any zone district. Therefore, the code amendment would not have any impact on surrounding zone districts, traffic generation, public facilities or infrastructure, or the natural environment. Once a developer has received approval to build deed -restricted affordable housing that is not required for the purpose of mitigation, this code amendment would simply allow for the establishment of a "Certificate of Affordable Housing Credit." This credit would account for ,the number of Full -Time -Employees (FTEs) that the new deed -restricted housing would accommodate, according to Aspen Pitkin County Housing Authority (APCHA) Guidelines. Finally, the credits would be transferrable to other entities for the purpose of meeting affordable housing mitigation requirements imposed as part of some other land use application. The standards of review that are relevant to this proposed code amendment are 1) If the proposed amendment is consistent with the Aspen Area Community Plan, and 2) If it is consistent with "community character," and 3) Whether it's "in harmony" with the purpose and intent of the Land Use Code. Encouraging the private sector to produce affordable housing is a priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) The critical questions for staff are whether this code amendment would encourage or inhibit the development of affordable housing, and whether a Certificate of Affordable Housing Credit is an acceptable form of mitigation. 2 Because the ability to sell a Certificate of Affordable Housing Credit would add to the revenue stream of building affordable housing, staff believes the code amendment would encourage the private sector to develop new affordable housing, although probably limited to converting some of the more dilapidated multi -family housing stock. (There is more discussion on this point later in the memo.) Because a Certificate of Affordable Housing Credit could only be issued after new affordable housing is built and occupied, the subsequent use of these certificates as mitigation would offset negative development impacts before they occur, and would therefore be a preferred form of mitigation. In fact, staff believes such credits would be a far better form of mitigation than cash in lieu payments, or Accessory Dwelling Units. Mitigation for Single-family and Duplex Redevelopment. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single- family and duplex structures. The Growth Management system currently provides five options for property owners choosing to demolish, replace and expand a single-family home: 1) Provide an above -grade, detached Accessory Dwelling Unit (ADU); 2) Provide a partially or fully sub -grade, and/or attached ADU through Special Review; 3) Provide an off -site, deed -restricted affordable housing unit; 4) Pay cash -in -lieu; 5) Establish a Resident Occupied (RO) deed restriction on the single-family home. The overwhelming majority have chosen the option of building an ADU or paying cash - in -lieu. There are drawbacks to both of these mitigation options: ' Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before affordable housing is created to offset the impacts; ➢ Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread throughout town, occupancy rates are estimated at 20-30%. If this code amendment is approved, it would create a new option for a property owner/developer to provide housing mitigation by purchasing a "credit" for affordable housing that has already been built and occupied. This is the equivalent of Option #3 above: Provide an off -site, deed -restricted affordable housing unit. Staff believes that adding a 51h option — the ability to buy a Certificate of Affordable Housing Credit — would become the most desirable option to achieve community housing goals. It would also be an attractive option for the property owner needing to provide mitigation: For those who don't want to build an ADU, they can save money by purchasing a certificate of credit that is priced lower than the cash in lieu requirement. Redevelopment of Dilapidated Multi -Family Housing. Although redeveloping single- family or duplex homes into 100% affordable housing does not make sense financially, 3 the ability to sell "credits" as mitigation could be a viable financial option for converting some free market multi -family housing into 100% affordable housing. A basic pro forma analysis by staff showed that converting a single-family or duplex lot in the R-6 or R-15 zone district to 100% affordable housing through the sale of FTEs would yield about half the revenue compared to a traditional free market sale. However, the significant redevelopment obstacles posed for multi -family housing by the city's Growth Management system could make a 100% conversion to affordable housing financially viable, in some cases. When multi -family properties are redeveloped into a mix of free market and deed - restricted housing, according to our current Growth Management system, a problem crops up: How do you establish a fair system of homeowner's association charges related to capital reserves or future capital improvements? The Aspen Pitkin County Housing Authority has struggled with this issue, and prefers not to see deed -restricted units mixed with free market units in multi -family properties. Therefore, staff believes this code amendment could achieve a number of community goals: ✓ A better mitigation option compared to ADUs or cash in lieu; ✓ The conversion of some dilapidated free market multi -family housing stock into permanently deed -restricted housing; ✓ By requiring 100% affordable housing in redeveloped multi -family properties, it avoids an inequity issue with regard to future capital improvements. At the same time, it should be recognized that those who want to redevelop free market multi -family housing into affordable housing are taking a risk that there will be enough demand for mitigation to support their certificate -based pro forma. Quality of Housing Built in Exchange for Certificates. The proposed code amendment would require that any housing built for the purpose of obtaining certificates of credit must meet the same requirements and go through the same review process that's required to build housing for the purpose of mitigation. Applicants must meet APCHA Guidelines, they must obtain a recommendation from APCHA, and they must be approved by the P&Z. Certificates as Mitigation for P&Z-Reviewed Developments. The Growth Management system encompasses much more than the demolition, replacement and expansion of single-family homes or duplexes. There are more than a dozen development or redevelopment scenarios included in Growth Management — most are reviewed by the Planning and Zoning Commission, and some are reviewed by City Council. For land use applications that are reviewed by the P&Z under Growth Management, housing mitigation is provided in the following ways, according to Section 26.470.070.4: Newly built units or buy -down units within the City limits. Units outside city limits must be approved by Council. ❖ For mitigation of less than one unit, cash in lieu may be accepted by P&Z. 4- For mitigation of more than unit, cash in lieu must be approved by Council. All units must be at least 50% above -grade. All units must be at Category 4 or lower. ❖ All units must comply with APCHA Guidelines. Clearly, the most preferred option is the provision of newly built units or buy -down units within the city limits. The provision of cash in lieu is a less desirable type of mitigation, which is why the Growth Management system gives the P&Z or City Council the authority to specifically approve or deny a cash in lieu transaction. The proposed code amendment would add an option to use a certificate of affordable housing credit to meet mitigation requirements — but it would be processed administratively by the Community Development Director. This is due to the fact that the P&Z must have already approved the establishment of a certificate of affordable housing credit before it can be used. The housing credit is the equivalent of the most preferred form of mitigation — newly built unit(s) — and therefore there is no need for further review. Again, the market would dictate that those who are selling certificates of credit must set their price just below the cash in lieu that would otherwise be paid in order to be an attractive option for developers who need housing mitigation. As previously stated, staff sees the provision of certificates as a superior form of mitigation compared to the payment of cash in lieu. Certificates as Mitigation for Council -Reviewed Developments. The two types of development for which the City Council establishes housing mitigation are developments requiring Multi -year Growth Management Allotments, and Essential Public Facilities. In both cases (and unlike P&Z reviews), the code uses discretionary language that allows the Council to decide what mix of mitigation is appropriate. Staff finds that this discretionary language allows Council to determine whether Certificates of Affordable Housing Credit are appropriate on a case -by -case basis. Building Affordable Housing for Two Purposes. The code amendment may also have other impacts. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. Technical Code Language. In addition to adding a chapter to the land use code to establish, transfer and extinguish a Certificate of Affordable Housing Credit, several parallel code amendments are suggested. One makes it possible for the owner of free market multi -family housing to replace it with 100% deed -restricted affordable housing - only, an option that is not currently addressed in the land use code. Another allows for 5 those demolishing and redeveloping a single-family home or duplex to buy affordable housing credits for mitigation. The other language changes allow for Certificates of Affordable Housing Credit to be used as mitigation for projects under the Growth Management review authority of the P&Z and City Council. PLANNING AND ZONING COMMISSION REVIEW: The Planning and Zoning Commission voted 6-0 on January 19, determining that the proposed code amendment met the required standards of review. The only concerns related to whether this would generate a rash of PUDs in residential neighborhoods. Staff has since conducted a basic pro forma analysis that shows converting single-family or duplex lots into 100% affordable housing, and selling the FTEs, would yield only about half the revenue compared to a traditional free market sale. Minutes of the P&Z meeting are attached. ASPEN PITKIN COUNTY HOUSING AUTHORITY REVIEW: The Aspen Pitkin County Housing Authority Board reviewed the proposed code amendment during a January 8 meeting, and recommended approval of the code change. This was an informal review and recommendation. It is not officially required as part of the land use review process. (See Exhibit F.) RECOMMENDATION: Staff recommends in favor of these code amendments, finding that they meet or exceed the standards of review. RECOMMENDED MOTION: If the Mayor and City Council choose to recommend approval of the request, they may use this motion, "I find that these code amendments meet the required standards of review for an Amendment to the Text of the Land Use Code." ATTACHMENTS: Exhibit A — Existing code language; excerpts of Section 26.470 Growth Management Exhibit B — Proposed code language; excerpts of Section 26.470 Growth Management Exhibit C — Staff findings Exhibit D — Planning and Zoning Commission / Resolution No. 3, Series of 2010 Exhibit E — Planning and Zoning Commission minutes / January 19, 2010 Exhibit F — Aspen Pitkin County Housing Authority Board review / January 8, 2010 6 i 0 ORDINANCE NO.�0, (SERIES OF 2010) AN ORDINANCE OF THE ASPEN CITY COUNCIL APPROVING AN AMENDMENT TO THE TEXT OF THE LAND USE CODE OF THE CITY OF ASPEN, PITKIN COUNTY, COLORADO. WHEREAS, the Community Development Department received an application from Ajax Apartments LLC, represented by Peter Fornell, requesting an Amendment to the Text of the Land Use Code.; and, WHEREAS, upon initial review of the application and the applicable code standards, the Community Development Department recommended in favor of the proposed Amendment to the Text of the Land Use Code; and, WHEREAS, during a duly noticed public hearing on January 19, 2010, the Planning and Zoning Commission approved Resolution No. 3, Series of 2010, by a 6-0 vote, finding that the Amendment to the Text of the Land Use Code met the required standards of review; and, WHEREAS, the Aspen City Council has reviewed and considered the Amendment to the Text of the Land Use Code under the applicable provisions of the Municipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the applicable referral agencies, and has taken and considered public comment; and, WHEREAS, the Aspen City Council finds that the Amendment to the Text of the Land Use Code meets or exceeds all applicable standards of review and that the Amendment to the Text of the Land Use Code is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, during a duly noticed public hearing on March 22, 2010, the Aspen City Council approved Ordinance No._, Series of 2010, by a vote, finding that the proposed Amendment to the Text of the Land Use Code met the required standards of review; and, WHEREAS, the Aspen City Council finds that this ordinance furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE BE IT RESOLVED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF ASPEN, COLORADO THAT: Section 1: Pursuant to the procedures and standards set forth in Title 26 of the Aspen Municipal Code, the City Council hereby finds that the proposed Amendment to the Land Use Code meets the required standards of review. Section 2: Amendment to Section 26.470.050.13 of the Land Use Code Section 26.470.050.13 shall read as follows: B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.090 Criteria for Administrative Extinguishment of the Certificate. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.090 Criteria for Administrative Extinguishment of the Certificate, utilizing the calculations in Section 26.470.100 Employee/Square Footage Conversion. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. Section 3: Amendment to Section 26.470.060.2 of the Land Use Code Section 26.470.060.2 shall read as follows: 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030,A.4, when the subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval. the applicant shall have five (5) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special LJ 0 review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. 6) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have six (6) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [I ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 7) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. 0 0 Section 4: Amendment to Section 26.470.070(4+5) of the Land Use Code Section 26.470.070(4+5) shall read as follows: 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. A Certificate of Affordable Housing Credit may be used to satisfy mitigation requirements by approval of the Community Development Department Director, pursuant to Section 26.540.080 Extinguishment of the Certificate. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Non -Mitigation Affordable Housing. Affordable housing units that are not required for mitigation, but meet the requirements of Section 26.470.070.4(a-d). The owner of such non -mitigation affordable housing is eligible to receive a Certificate of Affordable Housing Credit pursuant to Section 26.540. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi -family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site that are not required for mitigation purposes, including any net additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for a Certificate of Affordable Housing Credit, pursuant to Section 26.540 Certificate of Affordable Housing Credit. Any remaining unused free market residential development rights shall be vacated. Section 5: Establishing Chapter 26.540 of the Land Use Code Section 26.540 shall read as follows: Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: Sec.26.540.010 Purpose Sec.26.540.020 Authority Sec. 26.540.030 Application and fees Sec. 26.540.040 Review criteria for Planning and Zoning Commission Sec. 26.540.050 Procedures for establishing a Certificate of Affordable Housing Credit Sec. 26.540.060 Authority of the Certificate Sec. 26.540.070 Transferability of the Certificate, contents of the grantor and grantee certificates Sec. 26.540.080 Extinguishment of the Certificate Sec. 26.540.090 Criteria for administrative extinguishment of the Certificate 26.540.010 Purpose. There are two main purposes of this section: to encourage the development of affordable housing; and to establish a new option for housing mitigation that immediately offsets the impacts of free market development. A Certificate of Affordable Housing Credit is issued to the developer of affordable housing that is not required for mitigation. Another entity can purchase such a Certificate and use it to satisfy housing mitigation requirements. Establishing this transferable Certificate creates a new revenue stream that can make the development of affordable housing more economically viable. Establishing this transferable Certificate also establishes a new option for mitigation that reflects built and occupied affordable housing, thereby offsetting the impacts of free market development before those impacts are felt. This section describes the process for establishing, transferring and extinguishing a Certificate of Affordable Housing Credit. 26.540.020 Authority. The Planning and Zoning Commission is authorized, at a public hearing meeting the noticing requirements of Section 26.304.060.E Public Notice, to approve, approve with conditions, or deny an application for the establishment of a Certificate of Affordable Housing Credit in the form of a resolution, subsequent to a recommendation of the Community Development Director. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications must also include the following information. 1. The net livable square footage of each unit. 2. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen Pitkin County Housing Authority Guidelines. 3. Proposed category of each unit. 4. Proposed Full -Time -Equivalents housed by the units. 26.540.040 Review criteria for planning and zoning commission A Certificate of Affordable Housing Credit may be established by the Planning and Zoning Commission, pursuant to the adoption of a Resolution, if all of the following criteria are met: A. A Certificate of Occupancy has been issued for affordable housing units that have been developed and deed -restricted not for purposes of mitigation, and pursuant to the requirements of Section 26.470.070.4(a-d). B. A recommendation of the Aspen Pitkin County Housing Authority Board of Directors has been made, establishing the number of Full -Time -Equivalents (FTEs) accommodated by the affordable housing units, pursuant to Affordable Housing Guidelines, as amended. 26.540.050 Procedures for Issuing a Certificate of Affordable Housing Credit. Once the Planning and Zoning Commission has approved the creation of a Certificate of Affordable Housing Credit, the property owner shall provide proof of both the Resolution approving the creation of the affordable housing credits and the issuance of a Certificate of Occupancy to the Community Development Department prior to issuance of a certificate. 1. Content of the Certificate. The originating certificate is the certificate of affordable housing credit initially memorializing the housing credit. The content of the originating certificate shall include the following information: a) A number of the certificate in chronological order of their issuance. b) Parcel identification number, legal address and the street address. c) The number of Full Time Equivalents (FTEs) accommodated by the affordable housing units. 2. Issuance of the Certificate. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.060 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.070 Transferability of the certificate, contents of the grantor and grantee certificates 0 0 1. A certificate of affordable housing credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. 2. When all or part of a certificate is transferred to a recipient, the city shall issue a grantee certificate in increments of. I FTEs; and shall also issue a grantor certificate, which shall either be fully voided or amended to reflect the lesser number of FTEs remaining on the certificate, in increments of. I FTEs. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.080 Extinguishment of the certificate. 1. Upon approval of a land use application pursuant to Chapter 26.470, the Community Development Director shall extinguish all or part of a Certificate of Affordable Housing Credit, as applicable, to be noted in the subsequent Development Order. 2. When all or part of a certificate is extinguished, the city shall issue a replacement certificate reflecting either the voiding of the certificate or amendment of the certificate in increments of .1 FTE. 26.540.090 Criteria for Administrative Extinguishment of a Certificate The Community Development Director shall extinguish all or part of a certificate of Affordable Housing Credit for the purposes of meeting mitigation requirements if the Community Development Director meets one or more of the following criteria: A. An Ordinance approved under this Title that includes a condition describing required housing mitigation has taken legal effect, and the portion of the Certificate to be extinguished is equal to the mitigation required in terms of FTEs as calculated under Aspen Pitkin County Affordable Housing Guidelines, as amended, in increments of .1 FTE. B. A Development Order has been issued that satisfies housing mitigation pursuant to Section 26.470.060.2(c)vi, or Section 26,470.060.2(c)7, and the portion of a Certificate to be extinguished is equal to the mitigation required, according to Aspen Pitkin County Affordable Housing Guidelines, as amended. C. If the portion of the Certificate to be extinguished satisfies mitigation requirements under Section 26.470.050.B.6 General Requirements, the required number of FTEs, in increments of .1 FTE, shall be calculated pursuant to Section 26.470.100 Employee/Square Footage Conversion. Section 6• This Resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances C� repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 7: If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. APPROVED BY the Aspen City Council on this 22nd day of March, 2010. APPROVED AS TO FORM: ASPEN CITY COUNCIL: John Worcester, City Attorney ATTEST: Kathrvn Koch, Cite Clerk Michael C. Ireland, Mayor • • Exhibit A Existing Code Language, Section 26.470.050 General Requirements; Section 26.470.060 Administrative Applications; Section 26.470.070 Minor Planning and Zoning Commission Applications The following is the existing code language in the Growth Management Quota System chapter of the City of Aspen Land Use Code, in Section 26.470.050 General Requirements; Section 26.470.060 Administrative Applications; and Section 26.470.070 Minor Planning and Zoning Commission Applications, including subsection 4. Affordable housing, and 5. Demolition or redevelopment of multi- family housing. 26.470.050 General Requirements B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (5) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. Duplex. In order to qualify for a duplex approval, the applicant shall have six (6) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. • 26.470.070 Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. 5. Demolition or redevelopment of multi -family housing. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning • Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free-market multifamily housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi- family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free-market multifamily housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free- market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free-market residential units within a multi -family or mixed -use project. 2. Requirements for demolishing affordable multi -family units: In the event a project proposes to demolish or replace existing deed -restricted affordable housing units ... Exhibit B Proposed Code Amendments The proposed code amendments in the Growth Management Quota System chapter and the addition of a Certificate of Affordable Housing Credit chapter in the City of Aspen Land Use Code, are found in blue italic as follows: Section 26.470.050 B. General requirements: All development applications for growth management review shall comply with the following standards. The reviewing body shall approve, approve with conditions or deny an application for growth management review based on the following generally applicable criteria and the review criteria applicable to the specific type of development: 1. Sufficient growth management allotments are available to accommodate the proposed development, pursuant to Subsection 26.470.030.D. Applications for multi -year development allotment, pursuant to Paragraph 26.470.090.1 shall not be required to meet this standard. 2. The proposed development is consistent with the Aspen Area Community Plan. 3. The development conforms to the requirements and limitations of the zone district. 4. The proposed development is consistent with the Conceptual Historic Preservation Commission approval, the Conceptual Commercial Design Review approval and the Conceptual Planned Unit Development approval, as applicable. 5. Unless otherwise specified in this Chapter, sixty percent (60%) of the employees generated by the additional commercial or lodge development, according to Subsection 26.470.100.A, Employee generation rates, are mitigated through the provision of affordable housing. The employee generation mitigation plan shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, at a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.90 Criteria for Administrative Extinguishment of the Certificate. 6. Affordable housing net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher, shall be provided in an amount equal to at least thirty percent (30%) of the additional free-market residential net livable area, for which the finished floor level is at or above natural or finished grade, whichever is higher. Affordable housing shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing, and be restricted to a Category 4 rate as defined in the Aspen/Pitkin County Housing Authority Guidelines, as amended. An applicant may choose to provide mitigation units at a lower category designation. Affordable housing units that are being provided absent a requirement ("voluntary units") may be deed -restricted at any level of affordability, including residential occupied. If an applicant chooses to use a Certificate of Affordable Housing Credit as mitigation, pursuant to Chapter 26.540, such Certificate shall be extinguished pursuant to Chapter 26.540.90 Criteria for Administrative Extinguishment of the Certificate, utilizing the calculations in Section 26.470.100 Employee/Square Footage Conversion. 7. The project represents minimal additional demand on public infrastructure, or such additional demand is mitigated through improvement proposed as part of the project. Public infrastructure includes, but is not limited to, water supply, sewage treatment, energy and communication utilities, drainage control, fire and police protection, solid waste disposal, parking and road and transit services. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have six (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. 6) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [1] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 7) Providing a Certificate of Affordable Housing Credit as mitigation, pursuant to Section 26.540.060 Authority of the Certificate, commensurate with the net increase of square footage, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. 26.470.070(4+5) Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. A Certificate of Affordable Housing Credit may be used to satisfy mitigation requirements by approval of the Community Development Department Director, pursuant to Section 26.540.080 Extinguishment of the Certificate. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Non -Mitigation Affordable Housing. Affordable housing units that are not required for mitigation, but meet the requirements of Section 26.470.070.4(a-d). The owner of such non -mitigation affordable housing is eligible to receive a Certificate of Affordable Housing Credit pursuant to Section 26.540. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning 0 0 Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site that are not required for mitigation purposes, including any net additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for a Certificate ofAffordable Housing Credit, pursuant to Section 26.540 Certificate of Affordable Housing Credit. Any remaining unused free market residential -development rights shall be vacated. Chapter 26.540 CERTIFICATE OFAFFORDABLE HOUSING CREDIT Sections: Sec.26.540.010 Purpose Sec.26.540.020 Authority Sec. 26.540.030 Application and fees Sec. 26.540.040 Review criteria for Planning and Zoning Commission Sec. 26.540.050 Procedures for establishing a Certificate of Affordable Housing Credit Sec. 26.540.060 Authority of the Certificate Sec. 26.540.070 Transferability of the Certificate, contents of the grantor and grantee certificates Sec. 26.540.080 Extinguishment of the Certificate Sec. 26.540.090 Criteria for administrative extinguishment of the Certificate 26.540.010 Purpose. There are two main purposes of this section: to encourage the development of affordable housing; and to establish a new option for housing mitigation that immediately offsets the impacts offree market development. A Certificate of Affordable Housing Credit is issued to the developer of affordable housing that is not required for mitigation. Another entity can purchase such a Certificate and use it to satisfy housing mitigation requirements. Establishing this transferable Certificate creates a new revenue stream that can make the development of affordable housing more economically viable. Establishing this transferable Certificate also establishes a new option for mitigation that reflects built and occupied affordable housing, thereby offsetting the impacts of free market development before those impacts are felt. This section describes the process for establishing, transferring and extinguishing a Certificate of Affordable Housing Credit. 26.540.020 Authority. The Planning and Zoning Commission is authorized, at a public hearing meeting the noticing requirements of Section 26.304.060.E Public Notice, to approve, approve with conditions, or deny an application for the establishment of a 0 0 Certificate of Affordable Housing Credit in the form of a resolution, subsequent to a recommendation of the Community Development Director. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications must also include the following information. 1. The net livable square footage of each unit. 2. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen Pitkin County Housing Authority Guidelines. 3. Proposed category of each unit. 4. Proposed Full -Time -Equivalents housed by the units. 26.540.040 Review criteria for planning and zoning commission A Certificate of Affordable Housing Credit may be established by the Planning and Zoning Commission, pursuant to the adoption of a Resolution, if all of the following criteria are met: A. A Certificate of Occupancy has been issued for affordable housing units that have been developed and deed -restricted not for purposes of mitigation, and pursuant to the requirements of Section 26.470.070.4(a-d). B. A recommendation of the Aspen Pitkin County Housing Authority Board of Directors has been made, establishing the number of Full -Time -Equivalents (FTEs) accommodated by the affordable housing units, pursuant to Affordable Housing Guidelines, as amended. 26.540.050 Procedures for Issuing a Certificate of Affordable Housing Credit. Once the Planning and Zoning Commission has approved the creation of a Certificate of Affordable Housing Credit, the property owner shall provide proof of both the Resolution approving the creation of the affordable housing credits and the issuance of a Certificate of Occupancy to the Community Development Department prior to issuance of a certificate. 1. Content of the Certificate. The originating certificate is the certificate of affordable housing credit initially memorializing the housing credit. The content of the originating certificate shall include the following information: a) A number of the certificate in chronological order of their issuance. b) Parcel identification number, legal address and the street address. c) The number of Full Time Equivalents (FTEs) accommodated by the affordable housing units. 2. Issuance of the Certificate. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.060 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.070 Transferabilitj, of the certificate, contents of the grantor and grantee certificates 1. A certificate of affordable housing credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. 2. When all or part of a certificate is transferred to a recipient, the city shall issue a grantee certificate in increments of .1 FTEs; and shall also issue a grantor certificate, which shall either be fully voided or amended to reflect the lesser number of FTEs remaining on the certificate, in increments of. I FTEs. At the time of issuance of a Certificate by the City, a letter acknowledging receipt and acceptance of the certificate shall be submitted by the owner to the Community Development Department. 26.540.080 Extinguishment of the certificate. 1. Upon approval of a land use application pursuant to Chapter 26.470, the Community Development Director shall extinguish all or part of a Certificate of Affordable Housing Credit, as applicable, to be noted in the subsequent Development Order. 2. When all or part of a certificate is extinguished, the city shall issue a replacement certificate reflecting either the voiding of the certificate or amendment of the certificate in increments of. I FTE. 26.540.090 Criteria for Administrative Extinguishment of a Certificate The Community Development Director shall extinguish all or part of a certificate of Affordable Housing Credit for the purposes of meeting mitigation requirements if the Community Development Director meets one or more of the following criteria: A. An Ordinance approved under this Title that includes a condition describing required housing mitigation has taken legal effect, and the portion of the Certificate to be extinguished is equal to the mitigation required in terms of FTEs as calculated under Aspen Pitkin County Affordable Housing Guidelines, as amended, in increments of. I FTE. B. A Development Order has been issued that satisfies housing mitigation pursuant to Section 26.470.060.2(c)vi, or Section 26, 470.060.2(c)7, and the portion of a Certificate to be extinguished is equal to the mitigation required, according to Aspen Pitkin County Affordable Housing Guidelines, as amended. C. If the portion of the Certificate to be extinguished satisfies mitigation requirements under Section 26.470.050.B.6 General Requirements, the required number of FTEs, in increments of .1 FTE, shall be calculated pursuant to Section 26.470.100 Employee/Square Footage Conversion. 0 01 Exhibit C Amendment to Code Text, Review Criteria & Staff Findings Sec. 26.310.040. Standards of review. In reviewing an amendment to the text of this Title or an amendment to the Official Zone District Map, the City Council and the Planning and Zoning Commission shall consider: A. Whether the proposed amendment is in conflict with any applicable portions of this Title. Staff Finding: The amendment is not in conflict with anv applicable portions of this title. B. Whether the proposed amendment is consistent with all elements of the Aspen Area Community Plan. Staff Finding: The production of affordable housing is a priority of the 2000 AACP. The proposed amendment allows for the development of affordable housing that might not otherwise be built. The amendment allows an entity to receive a "Certificate of Affordable Housing Credit" for building affordable housing that is not required for mitigation, and subsequently allows the same or some other entity to use the certificate for mitigation purposes. The proposed amendment is consistent with the following statements in the 2000 AACP: • "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27) • "Encourage greater participation by the private sector in de%'eloping affordable housing." (Goal E, pg 27) Certainly, the production of affordable housing is a central priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) A critical question for staff is whether this code amendment would encourage or inhibit the development of affordable housing. Staff believes the code amendments may encourage the development of new affordable housing, and just as importantly, it could encourage affordable housing to be built before any development -related impacts are experienced by the community. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single-family and duplex structures. For many years, those who redevelop such structures either have chosen to pay cash -in -lieu, or have built an Accessory Dwelling Unit (ADU). 0 0 There are drawbacks to both of these mitigation options: • Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before a housing unit is created to offset those impacts; • Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread out through town, occupancy rates are not likely much higher than 30%, if that. If this code amendment is approved, it would create a new option to purchase a "credit' for affordable housing that has already been built and occupied — either rented or owned. This ability to sell "credits" as mitigation could also provide a viable financial incentive for the redevelopment of free market multi -family housing into 100% affordable housing, The code amendment may also have impacts on a larger scale, rather than just as a new mitigation option for those redeveloping single-family homes and duplexes. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. C. Whether the proposed amendment is compatible with surrounding zone districts and land uses, considering existing land use and neighborhood characteristics. Staff Finding: The proposed amendment would apply under the AH-PUD Zone District, but have no impact on the allowable dimensions of future affordable housing projects. D. The effect of the proposed amendment on traffic generation and road safety. Staff Finding: The amendment itself does not generate additional development. E. Whether and the extent to which the proposed amendment would result in demands on public facilities and whether and the extent to which the proposed amendment would exceed the capacity of such public facilities including, but not limited to, transportation facilities, sewage facilities, water supply, parks, drainage, schools and emergency medical facilities. Staff Finding: The amendment itself does not generate additional development. F. Whether and the extent to which the proposed amendment would result in significantly adverse impacts on the natural environment. Staff Finding: The amendment itself does not generate additional development. 0 r G. Whether the proposed amendment is consistent and compatible with the community character in the City. Staff Finding: This amendment could result in new affordable housing that may not otherwise be built. Sufficient Affordable Housing inventory is an important part of the community character. H. Whether there have been changed conditions affecting the subject parcel or the surrounding neighborhood which support the proposed amendment. Staff Finding: No applicable. I.Whether the proposed amendment would be in conflict with the public interest and whether it is in harmony with the purpose and intent of this Title. Staff Finding: The production of affordable housing is a priority of the 2000 AACP. The proposed amendment allows for the development of affordable housing that might not otherwise be built prior to development impacts. The amendment allows an entity to receive a "Certificate of Affordable Housing Credit" for building affordable housing that is not required for mitigation, and subsequently allows the same or some other entity to later use the certificate for mitigation purposes. 0 eE -,� k , 1, '4 ,-') RESOLUTION NO.3, (SERIES OF 2010) A RESOLUTION OF THE CITY OF ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THE CITY COUNCIL APPROVE AN AMENDMENT TO THE TEXT OF THE LAND USE CODE OF THE CITY OF ASPEN, PITKIN COUNTY, COLORADO. WHEREAS, the Community Development Department received an application from Ajaz Apartments LLC, represented Peter Fornell, requesting an Amendment to the Text of the Land Use Code.; and, WHEREAS, the Applicant requests a recommendation by the Planning and Zoning Commission to the City Council for Amendment to the Text of the Land Use Code, Section 26.470.070(4+5); and, WHEREAS, upon initial review of the application and the applicable code standards, the Community Development Department recommended in favor of the proposed Amendment to the Text of the Land Use Code; and, WHEREAS, during a duly noticed public hearing on January 19, 2010, the Planning and Zoning Commission approved Resolution No. 3, Series of 2010, by a six to zero (6 to 0) vote, finding that the proposed Amendment to the Text of the Land Use Code meets required standards of review; and, WHEREAS, the Planning and Zoning Commission has reviewed and considered the Amendment to the Text of the Land Use Code under the applicable provisions of the Municipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the applicable referral agencies, and has taken and considered public comment; and, WHEREAS, the Planning and Zoning Commission finds that the Amendment to the Text of the Land Use Code meets or exceeds all applicable development standards and that the Amendment to the Text of the Land Use Code is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, the Planning and Zoning Commission finds that this resolution furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE BE IT RESOLVED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF ASPEN, COLORADO THAT: Resolution NO3_, Series 2010 Page 1 of 8 Section 1 Pursuant to the procedures and standards set forth in Title 26 of the Aspen Municipal Code, the Planning and Zoning Commission hereby finds that the proposed Amendment to the Land Use Code meets the required standards of review. Section 2• Amendment to Section 26 470 070(4), Affordable Housing, of the Land Use Code The changes in Section 2 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit. Therefore, Section 26.470.070 (4), Affordable Housing, is amended as follows: 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental Resolution Not, Series 2010 Page 2 of 8 units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Affordable Housing Credit. Affordable housing units that are not required for mitigation, but are developed or acquired and deed restricted after ---, 2010 (date amendment is effective), are eligible to receive a Certificate of Affordable Housing Credit. The rules and regulations for establishing and extinguishing a Certificate of Affordable Housing Credit are provided in Chapter 26.540, Certificate of Affordable Housing Credit. Section 3• Amendment to Section 26 470.070 (5)(1), requirements for combining, demolishing, converting or redeveloping free-market multi -family housing units, of the Land Use Code The changes in Section 3 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit if the property is developed with 100 percent affordable housing. Therefore, Section 26.470.070 (5)(1), Affordable Housing, is amended as follows: 1. Requirements for combining demolishing converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. Resolution Na_, Series 2010 Page 3 of 8 0 0 b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi -family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site, including any additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for an affordable housing credit, pursuant to Section 26.470.070(4)e., Certificate of Affordable Housing Credit. Any unused development right shall be restricted to the future development of additional affordable housing, which would also be eligible for an affordable housing credit. Section 4• Amendment to Section 26.470.060 (2)(c), affordable housing requirements for single-family and duplex development, of the Land Use Code The language in Section 4 permits affordable housing for a single-family or duplex dwelling to be mitigated through a Certificate of Affordable Housing Credit. Therefore, Therefore, Section 26.470.060 (2)(c), Affordable Housing, is amended as follows: c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special Resolution No, Series 2010 Page 4 of 8 • 0 review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed; or 6) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing Credit, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied(RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [1] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 7) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Resolution NoJ_, Series 2010 Page 5 of 8 0 • Section 5• Creating a new chapter: 26.540, Certificate of Affordable Housing Credit, of the Land Use Code The language in Section 5 adds a new chapter of the land use code permitting certificates of Affordable Housing Credit. Therefore, Chapter 26.540, Certificate of Affordable Housing, is adopted as follows: Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: 26.540.010 Purpose 26.540.020 Authority 26.540.030 Application and fees 26.540.040 Procedures for establishing a certificate of affordable housing credit. 26.540.050 Authority of the certificate 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate 26.540.070 Extinguishment of the certificate. 26.540.010 Purpose. Establishing a Certificate of Affordable Housing Credit provides another option for meeting housing mitigation requirements. In particular, this mitigation method would mean that affordable housing would be certified for occupancy at the time the mitigation requirement is met, and before any development -related impacts are experienced by the community. 26.540.020 Authority. The Planning and Zoning Commission is authorized at a public hearing, meeting the noticing requirements of Section 26.304.060 E, Public Notice, to approve, approve with conditions, or deny an application for the establishment of a certificate of affordable housing credit in the form of a resolution. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications shall also include the following information. A. Net Livable Area. The net livable square footage of each unit B. Area Reductions. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen/Pitkin County Housing Authority Guidelines. Resolution No3, Series 2010 Page 6 of 8 • 0 C. Income Category. The proposed income category of each unit. D. FTEs. The number of full-time equivalents (FTEs) housed by the units. 26.540.040 Procedures for establishing a Certificate of Affordable Housing Credit. A. Content and recording of the certificate. Once the reviewing board approves the creation of affordable housing credits, a certificate can be established by the property owner when a certificate of occupancy is issued for the affordable housing units. The property owner shall provide proof of both the resolution approving the creation of the affordable housing credits and the issuance of a certificate of occupancy to the Community Development Department prior to the administrative issuance of a certificate by the Community Development Director. The content of the Certificate of Affordable Housing Credit shall include the following information. 1. Certificate number. A number on the certificate in chronological order of their issuance. 2. Property description. A parcel identification number, legal address and the street address. 3. FTEs. The number of full-time equivalents (FTEs) housed by the units. 4. Income category. The certificate shall note the income category the FTEs can mitigate; a maximum of category 4. B. Release of the certificate. Prior to release of a certificate by the Community Development Director, a letter acknowledging receipt and acceptance of the certificate shall be submitted to the Community Development Department. 26.540.050 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of no less than .1 of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate A. Transferability. A Certificate of Affordable Housing Credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. B. Reissuance of certificate(s). When all or part of a certificate is transferred to a recipient, the grantor certificate shall either be fully voided or amended to reflect the Resolution NO, Series 2010 Page 7 of 8 0 0 lesser number of FTEs remaining on the certificate, by following the procedures outlined in subsection 26.540.040 A, Content and recording of the certificate, above. 26.540.070 Extinguishment of the certificate. A. Commission/Council Approval. Upon approval of a land use application by City Council or the Planning and Zoning Commission pursuant to Chapter 26.470, Growth Management Quota System, the approving ordinance or resolution shall contain a condition that extinguishes all or part of a Certificate of Affordable Housing Credit, if applicable. An exhibit to be recorded with the ordinance or resolution shall include a copy the certificate. B. Administrative Approval. Upon administrative approval of a land use application pursuant to Section 26.470.060, Growth Management Quota System, the resulting Development Order shall include a condition that extinguishes all or part of a Certificate of Affordable Housing Credit. Section 6• This Resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 7• If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. APPROVED BY the Planning and Zoning Commission of the City of Aspen on this 19th day of January, 2010. APPROVED AS TO FORM: PLANNING AND ZONING James R. Truet7al ounsel ATTEST: jacdki!'to'thian, Deputy City Clerk COMMISSION: Stan Gibbs, Chair Resolution N0.3, Series 2010 Page 8 of 8 IF -� �x (' 1� 1' 4 — Minutes — January 19. 20 10 Comments................................................................................2 Minutes....................................................................................2 Conflicts of Interest...................................................................2 Proposed Certificate of Affordable Housing Credit Code Amendment .....2 301 W Hyman — Subdivision and additional land use reviews ................. 8 City Plannin � Zoning Meeting — Minutes — January 19 2010 Stan Gibbs called the regular meeting in Sister Cities Meeting Room to order at 4:30pm. Commissioners present were Jim DeFrancia, Cliff Weiss, Michael Wampler, LJ Erspamer, Stan Gibbs and Bert Myrin. Jasmine Tygre and Brian Speck were excused. Staff present were Jim True, Special Counsel; Jennifer Phelan and Ben Gagnon, Community Development; Jackie Lothian, Deputy City Clerk. Minutes MOTION: Bert Myrin moved to approve the minutes from January 05, 2010, seconded by Michael Wampler; all in favor, APPROVED. Conflicts of Interest None stated. PUBLIC HEARING: Proposed Certificate of Affordable Housing Credit Code Amendment Stan Gibbs opened the public hearing for the proposed certificate of affordable housing credit code amendment. Ben Gagnon stated there was a parallel in that Peter brought forward this idea to amend the text of the land use code but it would apply to anywhere in the city so it is not to be considered just in terms of this project. Gagnon explained the P&Z's job to amend the text in the land use code is to determine if the application meets the standards for an amendment. Gagnon said those standards are spelled out in exhibit C and as the memo states there are a number of standards that don't apply to this proposed amendment. None of the standards related to this particular amendment: would this amendment be compatible to surrounding zone districts, would it have an impact on traffic, would it place demands on public facilities, would it have adverse effects on the natural environment; this amendment would not change any dimensional requirements of any zone district. Gagnon said this amendment would not change any review process; it would simply allow for the issuing of certificates of affordable housing credit, so in terms of having an impact on its surrounding area in terms of a development this code change would not allow anyone to build anything more than is in the code or anything less or do anything that the code today allows or doesn't allow. Gagnon said this is strictly a technical process to allow the granting of a certificate; there certainly are other impacts but are not related to how big a house could be or how big a project could be. Gagnon said that staff focused on the standards of review regarding whether the amendment was consistent with the Aspen Area Community Plan, whether it's consistent with community character 2 City Planning & Zoning Meeting — Minutes — J and generally speaking whether it's in harmony with the purpose and intent of the land use code. Gagnon said the central priority of the 2000 Aspen Area Community Plan was affordable housing. Gagnon said that this code amendment would allow the person who is demolishing, replacing and expanding a single family or duplex to buy down the equivalent FTEs and what they've done is say Peter has a certificate of 14 full time equivalent credits, which would be issued because he scraped and replaced and created deed restricted housing; the person would come in and buy those from him and what's happened instead of putting cash down this person will now have bought a certificate that reflects an actual affordable housing unit that is actually built and actually occupied as opposed to putting down cash towards housing that may or may not be built in the next 2 years or 5 years or 8 years or whenever that cash in lieu is exercised. Gagnon said that another way the certificate could be used was if the growth management application comes before the Planning and Zoning Commission or it goes to City Council, in other words it's a bigger project, it's a PUD, a multi- family housing replacement; it's something that goes to P&Z instead of just an administrative application and requires housing mitigation for say 4 FTEs and one of the options for the application is to buy down credits in the form of certificates that reflect actual housing that's out there and actual housing that's been built and occupied as opposed to trying to find some kind of payment in lieu or some other way to mitigate. Gagnon said the process for actually establishing the certificates relies on the housing authority to make a finding that the development of affordable housing up to a certain size and certain number of units according to the housing guidelines. This is not in the code this is affordable housing not in the code; this is affordable housing not required for the purpose of mitigation. Gagnon said in the past Lodge employers have acquired or built affordable housing just for employees or converted a Lodge to employee housing. Gagnon said that what this code amendment says is that if it creates deed restricted affordable housing that's not required for mitigation you will get credits that can be used in the future against required mitigation and staff did not see where that would inhibit or discourage the building of affordable housing or the acquisition of deed restriction of affordable housing and that could in fact could serve a real community benefit in that the mitigation that is applied through the development of a small or large size could be built right away and not be built and developed later on so that the mitigation be provided immediately before the development impact is created. 3 City Plannin R Zonin Meeting — Minutes — Janu ry 19 2010 Gagnon said that the multi -family housing stock is aging and our code allows for the redevelopment of multi -family housing in a number of ways but for whatever reason the applicants are not excited to go through the options that we have in growth management for multi -family housing replacement. This code amendment creates an opportunity; a different route to do 100% deed restricted affordable housing for a multi -family replacement project. Gagnon said that if you have 3 or more free market multi -family housing units you could demolish and replace it with all deed restricted affordable housing and because of this ability to get a credit that's actually a financially viable redevelopment strategy for the developer but it creates affordable housing where none exists. Jennifer Phelan said that it provides another potential form of mitigation where it's a voluntary ability for someone to develop or deed restrict a site and have those units on line before the mitigation is actually bought on the private market. Gagnon distributed the existing TDR certificates. Cliff Weiss asked if this went through APCHA and where are their minutes. Gagnon replied yes it did but they are in the other memo. Stan Gibbs stated they were on page 30. Jennifer Phelan said that Council considered this at a work session last fall and were willing to entertain this idea. Gibbs asked if Council was final decision on this. Gagnon replied that Council was final decision and the way the language was written was for P&Z was that P&Z finds that the amendment meets the standards of review. Michael Wampler said that he didn't see cost anywhere in the memo or resolution, they were proposing to build 8 units; how would the credit work towards them. Wampler said if those units aren't used for 5 years, how are those credits; obviously there will be an inflation rate on value of what those credits are but where is it addressed. Gagnon replied it is actually the same way it is addressed in the code today; the housing authority will determine how many credit he gets, how many FTEs he gets; there is a formula to follow. LJ Erspamer asked if this will exclude the public purchase of housing; in other words let's say the city has a housing fund and they want to buy these certificates. Gagnon replied that there was nothing in the language that would keep the city from doing the same type of thing. Erspamer asked if this reduced the requirement for more employee housing inventory. Gagnon said there were 2 separate distinct motivations for affordable housing; one was large employers must provide housing for their employees in town and some is motivation. Erspamer asked how records C1 City Planning& Zoning Meeting — Minutes — JaaEy 19 2010 were kept. Gagnon replied it was in the back section; it's like a certificate and is recorded; the transferability of the certificate; the reissuance of the certificate and APCHA and Community Development have it. Erspamer asked if a sunset date could be included. Gagnon replied that it wasn't fair to the market. Cliff Weiss said that FAR was touched on but what was the FAR AH Zone limits; what are the height limits. Gagnon said there was a guide in the memo; if you want to rezone to AH you automatically go through a PUD process. Stan Gibbs asked Ben to explain on page 2 of the memo what "buy down" means. Gagnon replied that the credits could be applied in either case; if you were to redevelop something or if you wanted to take a free market unit and buy it down; it was possible to do but not necessarily likely. Bert Myrin asked where the landing site could go wrong. Gagnon replied you have to approve the amount of mitigation that's required; this is a different method for meeting the mitigation. Peter Fornell, applicant, stated that when a developer wants to build something and they know that there is required mitigation for it; if that developer builds an ADU we have to hope that he puts someone deserving in it; if somebody decides to go the cash in lieu route we have to hope that money is well spent. Fornell said when he went to Council they said they would be interested in supporting this code amendment; he said that he is creating competition for himself but that doesn't bother him because he wants to see the furthence of employee housing. Weiss asked the applicant if there were code for this kind of conversion in terms of setbacks, height and density would you prefer that to a PUD process. Fornell replied that a PUD process gets a lot of lighter scope than a permitted use in a zone district and this is causing a harder microscope and your questions was I going to spend $300,000.00 or $3,000,000.00 to build this building gets settled on its own because nobody's going to approve a PUD project for any purpose that doesn't have the inherent qualities that they need to have including structural and design and appropriateness. Fornell said that he would prefer to see it as a PUD for an employee housing development but if you think there is an idea out there in future that might cause a new zone district, well certainly that's something that could be addressed. Jeffrey Halfrety, designer/architect, said that was an interesting question because different zones apply with different mass and scale and height requirements so it enables the community to control it better through a PUD process in one generic AH because we were trying to make AH zoning in different E City Planning Zoning Meeting — Minutes — January 19, 2010 parts as far as the AACP in the Commercial Core and zone by zone was different with lot size, density and should be site specific. LJ Erspamer asked if a certain amount of rent was charged for the certain category. Fornell responded that they were all going into the housing lottery that category dictates the housing price and they were for sale units. Erspamer asked how many locations in town did Peter see this applying to. Forriell responded that there were maybe 3 to 10 maximum and most of them consist of old buildings that need something done with them because nothing fits them. Weiss asked if this building to be torn down was historic. Phelan responded that it was not on the list. Public Comments: 1. Gary Snyder, public, said this seems to fit a slot that hasn't been thought of before as far as the code amendment goes. Snyder said the property and the people building those are taking the chance that they weren't going to work for them financially. Snyder said it was a good time that someone steps up and does something about employee housing as opposed to doing another single family home. 2. Michael Behrendt, public, asked briefly how FTEs were computed. Phelan replied that in the land use code there was a section that talks about a studio unit mitigates for 1.25 employees. Gagnon said that a 1 bedroom mitigates for 1.75 employees and a 2 bedroom mitigates for 2.25; there was a whole sliding scale. Behrendt asked if they were also size related. Gagnon replied they were. Behrendt said that in this case you were dealing with 6 or 7 FTEs here with four 1 bedroom units. Gagnon explained that these were free- market units today and the code amendment proposal is to convert free- market units to deed restricted affordable housing units in perpetuity you get credit for the deed restricted affordable housing units. Gibbs closed the public cominent section. Bert Myrin said that a while back lodges converted from lodging to affordable housing; does this create a potential for more lodging to convert to affordable housing because it would create some money for these old lodges. Gagnon replied that they would have to rezone to AH PUD and you have to go through the list of criteria for PUD and a whole separate set of considerations that we are talking about but yes it was an option to rezone the property but it must be consistent with the Aspen Area Community Plan. Gagnon said the Aspen Area Community Plan on City Planning& Zoning Meeting — Minutes — J gy 19 2010 wants to see old lodges persevered. Fornell said the market will prevent that from ever happening. Erspamer asked what happens if the certificates for the mitigation prices raise. Gagnon replied the developer was happy and the city was just as happy. Gagnon said that they would still be providing mitigation for development. Weiss said this was obviously good for the community but he had 2 hesitations: one is the PUD versus zoning for this project and he was worried that everything coming PUD will max out the P&Z agenda year in and year out with this; he recognizes that it's debatable; the PUD certainly gives P&Z more control but there is a very pro affordable housing Council and he didn't know if they cared as much about the neighborhoods as P&Z does. Weiss said a lot of things pass that are necessarily fit for the community. Weiss said his other concern was that there was a discrepancy between what housing recommends and the code in this choice of category; he was confused by category 4 verses Housings recommendation category 1, category 2; he would have like to have seen more of a presentation on the sliding scale when it is closer to the core it has more value and as you move out to Cemetery Lane there is less value and there was nobody from housing to debate this and present their side of this. Phelan replied there was a minimum size for sale studio category 4; a category 4 one bedroom; a category 2 one bedroom is actually allowed to have a smaller size so when you design something that doesn't meet your minimum square footage for a category 4 one bedroom, it would be dropping to a lower category. Gagnon said that in these cases you will see a tendency for lower category units because the FTEs are an important part of the equation and if you can only fit so much square footage on a site then you are more likely to do a category 2 rather than a category 4 because of space. Gagnon said there is a limit on the number of certificates that can be sold also; there is only so much activity out there in terms of mitigation requirements and single family and duplex scrape and replace; we are not seeing any of that right now. Fornell said although this is the R-15 zone district has a strange district line. Myrin said his two hesitations were one is pushing the housing to the outskirts of the city limits because the land values are less expensive. Gagnon responded the Aspen Area Community Plan values in town affordable housing much more than it values much more than it value out of town affordable housing. Myrin said the second hesitation he did not have an answer to because we were creating code for possibly forever and we may not be here when it is implemented. 7 City Planning— Zoning Meeting — Minutes — Ja• 19 2010 Erspamer said that the neighbors come to Council and the Council might listen to them; in his neighborhood they went and Council ignored them, the character of the neighborhood means nothing in the Aspen Area Community Plan. Erspamer said that he thought this was a good idea and he has met the criteria for the code change. Erspamer said he was concerned about the duplex lots changing to 4plex and 8plex and what it is going to do to the neighborhood. Erspamer said the PUD process for this affordable housing is only one parking space per unit. Gibbs echoed a little bit of what LJ said and the amendment has a lot of merit and met the criteria. Gibbs said this would get around cash in lieu and generate more affordable housing. MOTION: Jim DeFrancia moved to approve Resolution #3, series 2010; seconded by Mike Wampler. Roll call vote: Erspamer, yes; Myrin, yes; Wampler, yes; Weiss, yes; DeFrancia, yes; Gibbs, yes; APPROVED 6-0. Discussion of the motion prior to the vote: Weiss said that he had stronger feelings about the code amendment then he did about the project; it has good intentions but was not so sure about the unintended consequences and was worried about voting on this passing the code change. Weiss said he liked the concept but was worried for certain neighborhoods; he felt that the PUD and COWOP processes needed to be reined in. DeFrancia appreciated Cliff's comments and concerns; his own view was there was not any code that would be absolutely perfect; this is an amendment and could be amended again. DeFrancia thought it was a positive step and it was a code amendment that would contribute some flexible alternatives and the staff recommended it and that was the basis for his motion to approve. Myrin said that he wasn't convinced that P&Z could change it completely because there was no restriction on the way the certificates were being used or landed. Weiss said that parking in relation to this code; there are certain requirements for parking now both zoning and housing. Weiss said that yes P&Z will have to judge the parking plan but parking has a big effect on every place that you may apply this code change; in some cases it requires certain amount of on street and certain amount of off street parking; this is open ended. PUBLIC HEARING: 301 W Hyman — Subdivision and additional land use reviews Stan Gibbs opened the hearing on 301 W Hyman and asked for the public notice. Peter Fornell said that he had the photo and Jim True said the photo had to be clear and the posting and affidavit had to be attached; it must be up 15 days prior to the hearing. Fornell said that he would bring it in Wednesday. Mike Wampler saw it. Citv Plannin& Zoning Meeting — Minutes — Jaary 19, 2010 Jim True said that traditionally they have allowed an applicant 24 hours to provide the affidavit. Fornell said that he was representing John Cooper; the property was owned by an LLC and Peter was the managing member of the LLC. Ben Gagnon explained there were 4 land use review processes: the amendment to the zone district map, rezoning; consolidated conceptual and final PUD; Subdivision and Growth Management for Affordable Housing. Gagnon said that the first 3 Rezoning, PUD and Subdivision are P&Z recommendations to City Council, where the City Council is the final authority. The Growth Management for Affordable Housing is the Planning & Zoning Commission is the final decision making body. Gagnon said that there are some criteria that are repeated in different land use processes for example Rezoning, PUD and Subdivision you are supposed to find the proposal consistent with the AACP. Gagnon said the AACP talks about the public and private sectors working together to ensure success in providing affordable housing; the AACP wants to see greater participation by the private sector and those criteria are met in this case. Gagnon said another distinct criteria in the AACP is encourage affordable housing within the traditional town site and that's where transportation comes in being able to walk to work and events and less reliance on the automobile; those criteria are repeated in the Transportation and Housing Sections and the Growth Management Section as well. Also the AACP talks about Housing needing to be compatible with the scale and character of the community; this is criteria within the AACP that's also found in the PUD section with regard to this case. Gagnon said on page 32 was a zoning analysis of the neighborhood and starts with a table that compares different zone districts and basically this was to get across what a R-6 and R-15 zone district require or allow for in terms of floor area ratio somewhere between .3 and .5 is typical which is a relatively small floor area ratio and densities are obviously pretty low densities; single family and duplex uses in R-6 and R-15 and as you work your way up to residential multi -family you see higher floor area ratios, higher densities and when you get to AH PUD you see higher floor area and higher densities. Gibbs asked if the density numbers were a person per 6,000 square feet. Gagnon replied that it was a unit for lot area; for R-6 you need a maximum of 6,000 square feet for a single family home size; in the R- 15 you need a maximum of 15,000 for a single family home. Gagnon said the floor area ratios were on page 33 and the densities were on page 34; the purpose was to see what was in the neighborhood and what fit into the neighborhood. Gagnon said the City of Aspen owns open space land between the 301 W Hyman parcel and the closest neighbor and only neighbor to the west and that buffer 9 City Plannin — Zoning Meeting — Minutes — January 19 2010 creates an unusual feel you don't usually have a 30 foot swath of open space between two parcels. Gagnon said this was a 3600 square foot lot and in the AH PUD process all of the dimensions are left to the process; there are guides for FAR and for maximum allowable density. Because the lot size is 3600 square feet the suggested guide is that the structure be 3960 square feet for a 1.1 to 1 FAR. Gagnon said the initial proposal was 4024 square feet, which was a small amount over the suggested guide and that proposal had stairways on the outside of the building and walkways; staff asked the applicant internalize all of those walkways and stairways primarily of architectural standards that staff found weren't being met in that manner so the applicant changed their proposal in response to staffs request the FAR went to 4486 square feet and that was a 13% increase what the zone district guide identifies. Gagnon said the whole point to a PUD was measuring and balancing; community benefit over dimensional requirements. Gagnon said the other guide was the maximum allowable density in this case if it were to fit the guide exactly he would be able to build 7.2 dwelling units and he is looking to build 8 so he is looking to vary that guide slightly. Gagnon said the PUD section specifically allows you to ask for an increase in maximum allowable density if there is a significant community goal to be achieved through such and increase and a development pattern that is compatible with the surrounding neighborhood. Gagnon said the next big section is about Traffic and Transit, Pedestrian Circulation and Parking; the existing condition on page 7 in the photograph is about 6 head in parking spaces on the east side of the property, those are in the City right-of-way and the parking department does not want to lose those head in spots if they were to be parking on site on the property and secondly the only parking would be on the north side of the parcel on Hyman Avenue and there were a number of places in the code that it does not want to see onsite parking accessed from a public street it would rather see it accessed from an alley or a private road and neither of which exists on the site. The onsite parking spaces can be changed by special review in the PUD process and take place at the PUD process and not special review. Gagnon said the reason staff is supporting no onsite parking is the combination of the parking department wanting to retain those head in spaces on the east and to avoid having people drive off a public street onto a parking space on the front lawn, which the code does not want to see in two different places of the code in the residential design and in the characteristics of off street parking. Gagnon said that if you put any head in parking spaces on site you would be knocking out the parallel parking spaces on the street so your net gain overall parking would be very small if any. Gagnon said the Parking Department walked 10 City Planni & Zoning Meeting — Minutes — J ary 19 2010 the site with staff and being familiar with that neighborhood finding sufficient on street parking capacity for generating another 4-6 vehicles both on Hyman and Second Streets and on Hopkins. Gagnon said that when Peter came in with his first proposal staff found that it didn't meet the PUD requirements for architectural character. This becomes a real difficult situation for staff because naturally the applicant will say what don't you like about it and how can we change it so you will like it and staff is not in the business of designing buildings; some changes were made but they still didn't meet staffs overall objectives and didn't feel like it met the housing program in a positive way and staff didn't feel like that was happening with what staff had in front of them. Gagnon said that the finding for Growth Management was that the APCHA Board makes an approval; all of the units are above grade; the units are for sale units; sold to APCHA qualified people. Erspamer asked what time of day did the Parking Department take you to the site. Gagnon replied it was sometime in the afternoon and two people from parking came and they were familiar with the area and a page was written up and signed by Tim Ware. Erspamer asked if Ben spoke to anyone at the Ice Garden. Gagnon replied that they haven't and the parking department said that the Ice Garden generates parking in the area more in the winter than the summer but again parking found there was sufficient on street parking to handle a net increase of 4 units at about 500 square feet each. Erspamer said that if an alley doesn't exist around a home how can the City requirement of access from an alley or private property be made. Gagnon replied it was a preference. Erspamer said there is no alley so you can't apply the City regulations to that. DeFrancia said that staff is recommending that P&Z remand this back so that you can work with the applicant on the architecture; does that imply that you are recommending approval of the application. Gagnon replied yes. Myrin said that on page 6 the requirement for AH PUD for off street parking; even though there are no parking requirements; he asked if they can include parking requirements. Gagnon replied yes P&Z could. 11 City Planning I ZoningMeeting— Minutes —Jan ry 19 2010 Peter Fornell, applicant, said that the area of the residential design was what he was most focused on. Fornell said that he wants it to be the right thing and compatible with the neighborhood. Fornell passed around drawings from the 1 st through the 41" attempts on designs (exhibits) and the last attempt was what was shown. Fornell said that they have taken what Housing said from the standpoint of the interior use of the building. Fornell said that the first floor component would be brick and stacked rock and incorporated the second floor decks front and back to the units and the 4 upstairs units will have vaulted ceilings and the 4 downstairs units will be handicap accessible. Fornell said that his motivation was to get the right people on the piece of real estate and then move forward with the credits. Fornell distributed the design guidelines 26.410 from the code; he said that he met with 9 of the 10 standards. DeFrancia said that some landscaping up to the building would soften and some shutters on the windows would give a little depth. Fornell asked the Commission to help make this building better. Gagnon said staff was looking for that porch entry on the longer block face which staff considers Hyman as opposed to Second Street. MOTION: Jim DeFrancia moved to extend the meeting to 7:30 pm; LJErspamer seconded. All in favor, APPROVED. Jim DeFrancia said that he had to leave at 7:15 pm. Public Comments: Michael Behrendt, public, requested the neighborhood meet with the applicant and he though the big problems that they will have are parking and sidewalks. Behrendt said that he was there as an outreach. Gibbs closed the public hearing portion. Erspamer stated it was a big mistake not going to the Ice Garden about parking. Michael Wampler said he has watched Aspen change over the years; we are missing that funkiness and there was a lot missing for fun in the employee housing that is missing here. Wampler said that he personally liked the beginning drawings because it represents old Aspen in an old Aspen neighborhood and it would be a spot that represents old Aspen. Wampler said bring the roof over the decks. 12 City Planning, Zoning Meeting — Minutes — J aa 19 2010 Myrin questioned the snow shedding and storage. Gagnon replied that was on page 21 of the memo #3 so the snow would shed off beyond the walkway and entrances. Myrin supported the parking concerns from the commissioners. Phelan said that staff concern about the roofline was a volume issue. Weiss recommended that P&Z not vote on this tonight. Jim DeFrancia excused himself at 7:15pm. MOTION. Cliff Weiss moved to continue the public hearing for 301 W Hyman to February 2, 2010 with recommendations for the 29 feet to the peak, minimize mass and scale and the roof to come out to cover the walkways, parking spaces should be set aside for this project and the Aspen Ice Garden's thoughts on parking; seconded by LJErspamer. All in favor, APPROVED. Adjourned at 7:30 pm. Yackile Lothian, Deputy City Clerk 13 Exhibit F APCHA Board Votes and Recommendations MEMORANDUM TO: Ben Gagnon FROM: Cindy Christensen, Housing Operations Manager DATE: January 8, 2010 RE: 301 WEST HYMANREDEVELOPMENT Parcel ID # 2735-124-67-002 ISSUE: The proposal is to change the use of the parcel to affordable housing, demolish the existing structure, replace with eight affordable housing units and utilize the units for credits that other developers could utilize for future developments. BACKGROUND: The development of the property provides a 100% affordable housing project — all one -bedroom units — with the units to be utilized as credits for future development. The use of the units for credits requires an amendment to the Land Use Code. The proposal has four units on the first floor and four units on the second floor with eight storage units located in the basement of the structure. The units will be approximately 503 square feet. Although there is no off -site parking proposed there is street parking available in the area. The square footage does not meet the minimum requirements for a one -bedroom unit, but the Guidelines allow for a 20% reduction of square footage if certain criteria are met; i.e., the location of the project, additional storage, the units being provided are above grade, etc. With the ability to have the 20% reduction, the units meet the minimum requirements for Category 1 and 2 one - bedroom units as stated in the Guidelines. Then language being proposed for the Land Use Code would be an additional to paragraph 4 of the Affordable Housing section. The language is as follows: e. The initial owner of one or more affordable housing units that are developed after (EFFECTIVE DATE OF CODE AMENDMENT APPROVAL) and that is not required for mitigation is eligible to receive a Certificate of Affordable Housing Credit (CAHC) fully describing the dimensions of the affordable housing units, to be recorded with the Aspen/Pitkin County Housing Authority and the Pitkin County Clerk and Recorder's Office; such certificate is legally transferable and may be utilized subsequently to satisfy 0 0 affordable housing mitigation requirements in accordance with other applicable sections of this Title. The affordable housing section of the Land Use Code is attached. The Housing Board reviewed the project at their regular meeting held January 6, 2009. The applicant expressed to the Board that the project had been modified per the Community Development Department to satisfy certain requirements of the Land Use Code and per the Fire Marshall to meet fire regulations. RECOMMENDATION: The Housing Board is recommending approval of the redevelopment of the parcel as well as the additional language to be added to the Land Use Code. The Board is recommending approval with the following conditions: 1. The units shall be ownership units and sold through the Aspen/Pitkin County Housing Authority lottery system upon certificate of occupancy. 2. The applicant, upon Certificate of Occupancy, shall receive the use of 14 mitigation credits (1.75 employee for each one -bedroom unit times 8 units) in the form of a Certificate of Affordable Housing Credit (CAHC). 3. The units shall be classified as one -bedroom units, 503 square feet for the four units on the first floor and 508 square feet for the four units on the second floor, for a total of 4,044 square feet. 4. The units shall be classified as Category 1 and 2 with the preference for the units to sold as Category 2, but that the credits can be utilized to mitigate at the Category 1 or 2 rate. 5. That the language allowing for the use of the 100% privately constructed affordable housing development be able to use a Certificate of Affordable Housing Credits to sell to future developers to be approved. 6. The Certificate of Affordable Housing Credits shall be required to describe the dimensions of the affordable housing units (size, number of bedrooms) as well as the category, and shall be recorded with APCHA and with the Pitkin County Clerk and Recorder. 2 RESOLUTION NO.3, (SERIES OF 2010) A RESOLUTION OF THE CITY OF ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THE CITY COUNCIL APPROVE AN AMENDMENT TO THE TEXT OF THE LAND USE CODE. OF THE CITY OF ASPEN, PITKIN COUNTY, COLORADO. WHEREAS, the Community Development Department received an application from Ajaz Apartments LLC, represented Peter Fornell, requesting an Amendment to the Text of the Land Use Code.; and, WHEREAS, the Applicant requests a recommendation by the Planning and Zoning Commission to the City Council for Amendment to the Text of the Land Use Code, Section 26.470.070(4+5); and, WHEREAS, upon initial review of the application and the applicable code standards, the Community Development Department recommended in favor of the proposed Amendment to the Text of the Land Use Code; and, WHEREAS, during a duly noticed public hearing on January 19, 2010, the Planning and Zoning Commission approved Resolution No. 3, Series of 2010, by a six to zero (6 to 0) vote, finding that the proposed Amendment to the Text of the Land Use Code meets required standards of review; and, WHEREAS, the Planning and Zoning Commission has reviewed and considered the Amendment to the Text of the Land Use Code under the applicable provisions of the Municipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the applicable referral agencies, and has taken and considered public comment; and, WHEREAS, the Planning and Zoning Commission finds that the Amendment to the Text of the Land Use Code meets or exceeds all applicable development standards and that the Amendment to the Text of the Land Use Code is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, the Planning and Zoning Commission finds that this resolution furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE BE IT RESOLVED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF ASPEN, COLORADO THAT: Resolution NO3 , Series 2010 Page 1 of 8 Section 1 Pursuant to the procedures and standards set forth in Title 26 of the Aspen Municipal Code, the Planning and Zoning Commission hereby finds that the proposed Amendment to the Land Use Code meets the required standards of review. Section 2: Amendment to Section 26.470.070(4), Affordable Housing, of the Land Use Code The changes in Section 2 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit. Therefore, Section 26.470.070 (4), Affordable Housing, is amended as follows: 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental Resolution No15, Series 2010 Page 2 of 8 units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Affordable Housing Credit. Affordable housing units that are not required for mitigation, but are developed or acquired and deed restricted after ---, 2010 (date amendment is effective), are eligible to receive a Certificate of Affordable Housing Credit. The rules and regulations for establishing and extinguishing a Certificate of Affordable Housing Credit are provided in Chapter 26.540, Certificate of Affordable Housing Credit. Section 3• Amendment to Section 26.470.070 (5)(1), requirements for combining, demolishing, converting or redeveloping free-market multi -family housing units, of the Land Use Code The changes in Section 3 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit if the property is developed with 100 percent affordable housing. Therefore, Section 26.470.070 (5)(1), Affordable Housing, is amended as follows: 1. Requirements for combining demolishing, converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. Resolution Nel Series 2010 Page 3 of 8 0 • b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi -family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site, including any additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for an affordable housing credit, pursuant to Section 26.470.070(4)e., Certificate of Affordable Housing Credit. Any unused development right shall be restricted to the future development of additional affordable housing, which would also be eligible for an affordable housing credit. Section 4: Amendment to Section 26.470.060 (2)(c), affordable housing requirements for single-family and duplex development, of the Land Use Code The language in Section 4 permits affordable housing for a single-family or duplex dwelling to be mitigated through a Certificate of Affordable Housing Credit. Therefore, Therefore, Section 26.470.060 (2)(c), Affordable Housing, is amended as follows: c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special Resolution No3, Series 2010 Page 4 of 8 C • review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed; or 6) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing Credit, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied(RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [1] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 7) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Resolution NoJ, Series 2010 Page 5 of 8 Section 5: Creating a new chapter: 26.540, Certificate of Affordable Housing Credit, of the Land Use Code The language in Section 5 adds a new chapter of the land use code permitting certificates of Affordable Housing Credit. Therefore, Chapter 26.540, Certificate of Affordable Housing, is adopted as follows: Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: 26.540.010 Purpose 26.540.020 Authority 26.540.030 Application and fees 26.540.040 Procedures for establishing a certificate of affordable housing credit. 26.540.050 Authority of the certificate 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate 26.540.070 Extinguishment of the certificate. 26.540.010 Purpose. Establishing a Certificate of Affordable Housing Credit provides another option for meeting housing mitigation requirements. In particular, this mitigation method would mean that affordable housing would be certified for occupancy at the time the mitigation requirement is met, and before any development -related impacts are experienced by the community. 26.540.020 Authority. The Planning and Zoning Commission is authorized at a public hearing, meeting the noticing requirements of Section 26.304.060 E, Public Notice, to approve, approve with conditions, or deny an application for the establishment of a certificate of affordable housing credit in the form of a resolution. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications shall also include the following information. A. Net Livable Area. The net livable square footage of each unit B. Area Reductions. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen/Pitkin County Housing Authority Guidelines. Resolution Noa, Series 2010 Page 6 of 8 C. Income Category. The proposed income category of each unit. D. FTEs. The number of full-time equivalents (FTEs) housed by the units. 26.540.040 Procedures for establishing a Certificate of Affordable Housing Credit. A. Content and recording of the certificate. Once the reviewing board approves the creation of affordable housing credits, a certificate can be established by the property owner when a certificate of occupancy is issued for the affordable housing units. The property owner shall provide proof of both the resolution approving the creation of the affordable housing credits and the issuance of a certificate of occupancy to the Community Development Department prior to the administrative issuance of a certificate by the Community Development Director. The content of the Certificate of Affordable Housing Credit shall include the following information. 1. Certificate number. A number on the certificate in chronological order of their issuance. 2. Property description. A parcel identification number, legal address and the street address. 3. FTEs. The number of full-time equivalents (FTEs) housed by the units. 4. Income category. The certificate shall note the income category the FTEs can mitigate; a maximum of category 4. B. Release of the certificate. Prior to release of a certificate by the Community Development Director, a letter acknowledging receipt and acceptance of the certificate shall be submitted to the Community Development Department. 26.540.050 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of no less than .1 of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate A. Transferability. A Certificate of Affordable Housing Credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. B. Reissuance of certificate(s). When all or part of a certificate is transferred to a recipient, the grantor certificate shall either be fully voided or amended to reflect the Resolution No3, Series 2010 Page 7 of 8 lesser number of FTEs remaining on the certificate, by following the procedures outlined in subsection 26.540.040 A, Content and recording of the certificate, above. 26.540.070 Extinguishment of the certificate. A. Commission/Council Approval. Upon approval of a land use application by City Council or the Planning and Zoning Commission pursuant to Chapter 26.470, Growth Management Quota System, the approving ordinance or resolution shall contain a condition that extinguishes all or part of a Certificate of Affordable Housing Credit, if applicable. An exhibit to be recorded with the ordinance or resolution shall include a copy the certificate. B. Administrative Approval. Upon administrative approval of a land use application pursuant to Section 26.470.060, Growth Management Quota System, the resulting Development Order shall include a condition that extinguishes all or part of a Certificate of Affordable Housing Credit. Section 6• This Resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 7• If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. APPROVED BY the Planning and Zoning Commission of the City of Aspen on this 19th day of January, 2010. APPROVED AS TO FORM: PLANNING AND ZONING COMMISSION: Z!a-n R. True, Special Counsel Stan Gibbs, Chair ATTEST: �v factie Lothian, Deputy City Clerk Resolution No.3, Series 2010 Page 8 of 8 AGENDA ASPEN PLANNING AND ZONING COMMISSION REGULAR MEETING TUESDAY, January 19, 2010 1:00 p.m. - Site Visit — Aspen Valley Hospital 4:30 p.m. — Sister Cities Room CITY HALL I. ROLL CALL H. COMMENTS A. Commissioners B. Planning Staff C. Public III. MINUTES IV. DECLARATION OF CONFLICT OF INTEREST V. PUBLIC HEARINGS: A. Proposed Certificate of Affordable Housing Credit Code Amendment B. 301 W. Hyman — Subdivision and additional land use reviews VI. OTHER BUSINESS VII. BOARD REPORTS VIII. ADJOURN Next Resolution Number: 3 **For internal Staff use only. Not for publication. Dates subject to Change** CITY AGENDAS City Council-2nd and 41h Mon. @ 5:00 PM, (Work sessions for Council @ 5 on Mondays, 4 on Tuesdays) P/Z-1'' and 3 d Tues. @ 4:30 PM, HPC-2nd & 4" Wed. @ 5:00 PM. BOA Thurs. @ 4 Week of January 11, 2010 1/19 P&Z (aD-4:30 Notice: 12/28 Code Amendment, AH Credit, PH — BG 301 W. Hyman, AH/PUD, PH — BG 1/26 P&Z (a)4:30 Special Meeting Joint P&Z AACP work session— JG 2/2 P&Z A-4:30 Notice: 1/11 217/219 S. Third, Rezoning, PH — JP 301 W. Hyman, AH/PUD, PH — BG (continued from 1/19) 2/9 P&Z 014:30 Special Meeting Joint P&Z AACP work session— JG 2/16 P&Z (d-)4:30 Notice: 1/25 217/219 S. Third, Rezoning, PH — JP(continued from 2/2) Baptist Church — Conditional Use —DA AVH: PHASE II, Final PUD, PH- JP (tentative) 2/23 P&Z P4:30 Special Meeting Joint P&Z AACP work session— JG 312 P&Z P-4:30 Notice: 2/8 Code Amendments: Signs, PH — CB, DA (cont from 1/5) AVH: PHASE II, Final PUD, PH- JP 3/9 P&Z @4.30 Special Meeting Joint P&Z AACP work session— JG 3/16 P&Z (cD4:30 Notice: 2/22 AVH: PHASE II, Final PUD, PH- JP 3/23 P&Z (a-)4.30 Special Meeting Joint P&Z AACP work session— JG 3/30 P&Z (o)4.30 Special Meeting Joint P&Z AACP work session— JG 4/6 PL& ri�4:30 Notice: AVH: PHASE if, Final PUD, PH- JP 4/13 P&Z (-)4.30 Special Meeting 4/20 P&Z (�4:30 Notice: 4/27 P&Z a(�4 30 Special Meeting Future AACP Special Meetings: P&Z May 11 May 25 June 8 June 22 June 29 July 13 July 27 MEMORANDUM TO: Planning and Zoning Commission FROM: Ben Gagnon, Special Projects Planner'SC THROUGH: Jennifer Phelan, Deputy Director, Community Development Department 1 DATE OF MEMO: January 14, 2010 MEETING DATE: January 19, 2010 RE: Amendment to the Text of the Land Use Code APPLICANT /OWNER: John Cooper REPRESENTATIVE: Peter Fornell LOCATION: Proposed amendment to the text of the Land Use Code applicable within the City of Aspen. PROPOSED LAND USE CODE AMENDMENT: Applicant seeks a code amendment that will allow developers of deed -restricted affordable housing that is not developed for the purpose of mitigation to obtain an official "certificate of credit" that may later be used, or transferred to another entity and used, to meet affordable housing mitigation requirements for some future land use development. STAFF RECOMMENDATION: Staff recommends that the Planning and Zoning Commission determines that this Amendment to the Land Use Code meets required standards. SUMMARY: Applicant requests that the P&Z determine that this Amendment to the Land Use Code meets required standards. BACKGROUND: Applicant is in a parallel review process that seeks approval to demolish a residential structure with four (4) existing free market units and replace it with a new residential structure that contains eight (8) deed -restricted affordable housing units. While the applicant is not required to build these deed -restricted units for the purpose of mitigating some other project, he is seeking the ability to sell them in the future as mitigation "credits" to other entities who desire to use them for affordable housing mitigation. The City of Aspen Land Use Code does not currently accommodate this course of action, and the City does not currently have the ability to establish or otherwise grant such a "Certificate of Affordable Housing Credit." • 0 LAND USE REQUEST AND REVIEW PROCEDURES: The applicant is requesting the following land use approvals from the Planning and Zoning Commission: • Amendment to the Text of the Land Use Code — An application for Amendment to the Text of the Land Use Code, pursuant to Land Use Code Section 26.310.020, requires the Planning and Zoning Commission, at a public hearing, to determine if the application meets the standards for an amendment to the Land Use Code. The City Council is the final decision -making body STAFF FINDINGS: Many of the standards of review for an amendment to the Land Use Code do not apply to this proposal. For example, various standards ask whether the proposal is "compatible with surrounding zone districts;" if it would have an impact on "traffic generation;" if it would place "demands on public facilities;" or if it would have "adverse impacts on the natural environment." This proposal to amend the Land Use Code would not change the existing dimensional requirements of any zone district, nor would it change any element of the land use review process. Once a developer has received approval to build deed -restricted affordable housing that is not required for the purpose of mitigation, this code amendment would allow for the establishment of a "Certificate of Affordable Housing Credit." This credit would account for the number of Full -Time -Equivalents (FTEs) the new deed -restricted housing would accommodate, according to Aspen Pitkin County Housing Authority Guidelines. Finally, the credits would be transferrable to other entities for the purpose of meeting affordable housing mitigation requirements. The standards of review that are relevant to this proposed code amendment are 1) If the proposed amendment is consistent with the Aspen Area Community Plan, and 2) If it is consistent with "community character," and 3) Whether it's "in harmony" with the purpose and intent of the Land Use Code. Certainly, the production of affordable housing is a central priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) A critical question for staff is whether this code amendment would encourage or inhibit the development of affordable housing. Staff believes the code amendments may encourage the development or "buy -down" of new affordable housing. It could also encourage affordable housing to be established before any development -related impacts are experienced by the community. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single-family and duplex structures. For many years, most of those who have demolished, redeveloped and expanded such structures either have chosen to 0 • meet mitigation requirements by paying cash -in -lieu, or building an Accessory Dwelling Unit (ADU). There are drawbacks to both of these mitigation options: • Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before affordable housing is created to offset those impacts; • Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread throughout town, occupancy rates are not likely much higher than 30%, if that. If this code amendment is approved, it would create a new option for a property owner/developer to provide housing mitigation by purchasing a "credit" for affordable housing that has already been built and occupied. This ability to sell "credits" as mitigation could also provide a viable financial incentive for the redevelopment of free market multi -family housing into 100% affordable housing. This could be a significant step forward with regard to the future of the city's often dilapidated multi -family housing stock. The code amendment may also have other impacts. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. In addition to adding language in the form of a new chapter to establish, transfer and extinguish a Certificate of Affordable Housing Credit, three parallel code amendments are suggested in the Growth Management Quota System chapter. One makes it possible for the owner of free market multi -family housing to replace it with 100% deed -restricted affordable housing -only, an option that is not currently addressed in the land use code. The second allows for those demolishing and redeveloping a single-family home or duplex to buy affordable housing credits. Finally, the third change recognizes that affordable housing, not required for mitigation, is eligible to receive an affordable housing credit. RECOMMENDATION: Staff recommends in favor of these code amendments. RECOMMENDED MOTION: If the Planning and Zoning Commission chooses to recommend approval for the request, they may use this motion, "I find that these code amendments meet the required standards of review for an Amendment to the Text of the Land Use Code." ATTACHMENTS: Exhibit A — Existing code language Exhibit B — Proposed code language 0 0 Exhibit C — Staff findings 0 • RESOLUTION NO. _, (SERIES OF 2010) A RESOLUTION OF THE CITY OF ASPEN PLANNING AND ZONING COMMISSION RECOMMENDING THE CITY COUNCIL APPROVE AN AMENDMENT TO THE TEXT OF THE LAND USE CODE OF THE CITY OF ASPEN, PITKIN COUNTY, COLORADO. WHEREAS, the Community Development Department received an application from Ajaz Apartments LLC, represented Peter Fornell, requesting an Amendment to the Text of the Land Use Code.; and, WHEREAS, the Applicant requests a recommendation by the Planning and Zoning Commission to the City Council for Amendment to the Text of the Land Use Code, Section 26.470.070(4+5); and, WHEREAS, upon initial review of the application and the applicable code standards, the Community Development Department recommended in favor of the proposed Amendment to the Text of the Land Use Code; and, WHEREAS, during a duly noticed public hearing on January 19, 2010, the Planning and Zoning Commission approved Resolution No. _, Series of 2010, by a vote, finding that the proposed Amendment to the Text of the Land Use Code meets required standards of review; and, WHEREAS, the Planning and Zoning Commission has reviewed and considered the Amendment to the Text of the Land Use Code under the applicable provisions of the Municipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the applicable referral agencies, and has taken and considered public comment; and, WHEREAS, the Planning and Zoning Commission finds that the Amendment to the Text of the Land Use Code meets or exceeds all applicable development standards and that the Amendment to the Text of the Land Use Code is consistent with the goals and elements of the Aspen Area Community Plan; and, WHEREAS, the Planning and Zoning Commission finds that this resolution furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE BE IT RESOLVED BY THE PLANNING AND ZONING COMMISSION OF THE CITY OF ASPEN, COLORADO THAT: Resolution No , Series 2010 Pagel of 8 0 Section 1 Pursuant to the procedures and standards set forth in Title 26 of the Aspen Municipal Code, the Planning and Zoning Commission hereby finds that the proposed Amendment to the Land Use Code meets the required standards of review. Section 2: Amendment to Section 26.470.070(4), Affordable Housinf*, of the Land Use Code The changes in Section 2 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit. Therefore, Section 26.470.070 (4), Affordable Housing, is amended as follows: 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental Resolution No , Series 2010 Page 2 of 8 units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Affordable Housing Credit. Affordable housing units that are not required for mitigation, but are developed or acquired and deed restricted after ---, 2010 (date amendment is effective), are eligible to receive a Certificate of Affordable Housing Credit. The rules and regulations for establishing and extinguishing a Certificate of Affordable Housing Credit are provided in Chapter 26.540, Certificate of Affordable Housing Credit. Section 3: Amendment to Section 26.470.070 (5)(1), requirements for combining, demolishing, converting or redeveloping free-market multi -family housing units, of the Land Use Code The changes in Section 3 add a new subsection that recognizes the allowance to receive a Certificate of Affordable Housing Credit if the property is developed with 100 percent affordable housing. Therefore, Section 26.470.070 (5)(1), Affordable Housing, is amended as follows: 1. Requirements for combining, demolishing, converting or redeveloping free- market multi -family housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. Resolution No Series 2010 Page 3 of 8 b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26,470,070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi -family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site, including any additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for an affordable housing credit, pursuant to Section 26.470.070(4)e., Certificate of Affordable Housing Credit. Any unused development right shall be restricted to the future development of additional affordable housing, which would also be eligible for an affordable housing credit. Section 4: Amendment to Section 26.470.060 (2)(c), affordable housing requirements for single-family and duplex development, of the Land Use Code The language in Section 4 permits affordable housing for a single-family or duplex dwelling to be mitigated through a Certificate of Affordable Housing Credit. Therefore, Therefore, Section 26.470.060 (2)(c), Affordable Housing, is amended as follows: c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special Resolution No _, Series 2010 Page 4 of 8 0 0 review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed; or 6) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing Credit, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied(RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 7) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Resolution No , Series 2010 Page 5 of 8 Section 5: Creating a new chapter: 26.540, Certificate of Affordable Housine Credit, of the Land Use Code The language in Section 5 adds a new chapter of the land use code permitting certificates of Affordable Housing Credit. Therefore, Chapter 26.540, Certificate of Affordable Housing, is adopted as follows: Chapter 26.540 CERTIFICATE OF AFFORDABLE HOUSING CREDIT Sections: 26.540.010 Purpose 26.540.020 Authority 26.540.030 Application and fees 26.540.040 Procedures for establishing a certificate of affordable housing credit. 26.540.050 Authority of the certificate 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate 26.540.070 Extinguishment of the certificate. 26.540.010 Purpose. Establishing a Certificate of Affordable Housing Credit provides another option for meeting housing mitigation requirements. In particular, this mitigation method would mean that affordable housing would be certified for occupancy at the time the mitigation requirement is met, and before any development -related impacts are experienced by the community. 26.540.020 Authority. The Planning and Zoning Commission is authorized at a public hearing, meeting the noticing requirements of Section 26.304.060 E, Public Notice, to approve, approve with conditions, or deny an application for the establishment of a certificate of affordable housing credit in the form of a resolution. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications shall also include the following information. A. Net Livable Area. The net livable square footage of each unit B. Area Reductions. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen/Pitkin County Housing Authority Guidelines. Resolution No , Series 2010 Page 6 of 8 CJ C. Income Category. The proposed income category of each unit. D. FTEs. The number of full-time equivalents (FTEs) housed by the units. 26.540.040 Procedures for establishing a Certificate of Affordable Housing Credit. A. Content and recording of the certificate. Once the reviewing board approves the creation of affordable housing credits, a certificate can be established by the property owner when a certificate of occupancy is issued for the affordable housing units. The property owner shall provide proof of both the resolution approving the creation of the affordable housing credits and the issuance of a certificate of occupancy to the Community Development Department prior to the administrative issuance of a certificate by the Community Development Director. The content of the Certificate of Affordable Housing Credit shall include the following information. 1. Certificate number. A number on the certificate in chronological order of their issuance. 2. Property description. A parcel identification nwnber, legal address and the street address. 3. FTEs. The number of full-time equivalents (FTEs) housed by the units. 4. Income category. The certificate shall note the income category the FTEs can mitigate; a maximum of category 4. B. Release of the certificate. Prior to release of a certificate by the Community Development Director, a letter acknowledging receipt and acceptance of the certificate shall be submitted to the Community Development Department. 26.540.050 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of no less than .l of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate A. Transferability. A Certificate of Affordable Housing Credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. B. Reissuance of certificate(s). When all or part of a certificate is transferred to a recipient, the grantor certificate shall either be fully voided or amended to reflect the Resolution No _, Series 2010 Page 7 of 8 lesser number of FTEs remaining on the certificate, by following the procedures outlined in subsection 26.540.040 A, Content and recording of the certificate, above. 26.540.070 Extinguishment of the certificate. A. Commission/Council Approval. Upon approval of a land use application by City Council or the Planning and Zoning Commission pursuant to Chapter 26.470, Growth Management Quota System, the approving ordinance or resolution shall contain a condition that extinguishes all or part of a Certificate of Affordable Housing Credit, if applicable. An exhibit to be recorded with the ordinance or resolution shall include a copy the certificate. B. Administrative Approval. Upon administrative approval of a land use application pursuant to Section 26.470.060, Growth Management Quota System, the resulting Development Order shall include a condition that extinguishes all or part of a Certificate of Affordable Housing Credit. Section 6: This Resolution shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided; and the same shall be conducted and concluded under such prior ordinances. Section 7• If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. APPROVED BY the Planning and Zoning Commission of the City of Aspen on this 19th day of January, 2010. APPROVED AS TO FORM: PLANNING AND ZONING COMMISSION: City Attorney ATTEST: Jackie Lothian, Deputy City Clerk Stan Gibbs, Chair Resolution No_, Series 2010 Page 8 of 8 Exhibit A Existing Code Language, Section 26.470.070 Minor Planning and Zoning Commission Applications; Section 26.470.060 Administrative Applications The following is the existing code language in the Growth Management Quota System chapter of the City of Aspen Land Use Code, in Section 26.470.070 Minor Planning and Zoning Commission Applications, including subsection 4. Affordable housing, and 5. Demolition or redevelopment of multi -family housing. 26.470.070 Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the first purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping free-market multifamily housing units: Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi- family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. a. One -hundred -percent replacement. In the event of the demolition of free-market multifamily housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free- market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free-market residential units within a multi -family or mixed -use project. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: • 0 a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, whenthe subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annual development allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have five (5) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed. Duplex. In order to qualify for a duplex approval, the applicant shall have six (6) options: 0 0 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied (RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; or 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended. 0 Exhibit B Proposed Code Amendments The proposed code amendments in the Growth Management Quota System chapter and the Miscellaneous Supplemental Regulations chapter of the City of Aspen Land Use Code, are found in blue italic (there are no deletions of the existing code proposed, only additions) as follows: 26.470.070 Minor Planning and Zoning Commission Applications 4. Affordable housing. The development of affordable housing deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on the following criteria: a. The proposed units comply with the Guidelines of the Aspen/Pitkin County Housing Authority. A recommendation from the Aspen/Pitkin County Housing Authority shall be required for this standard. The Aspen/Pitkin County Housing Authority may choose to hold a public hearing with the Board of Directors. b. Affordable housing required for mitigation purposes shall be in the form of actual newly built units or buy -down units. Off -site units shall be provided within the City limits. Units outside the City limits may be accepted as mitigation by the City Council, pursuant to Paragraph 26.470.090.2. If the mitigation requirement is less than one (1) full unit, a cash -in -lieu payment may be accepted by the Planning and Zoning Commission upon a recommendation from the Aspen/Pitkin County Housing Authority. If the mitigation requirement is one (1) or more units, a cash -in -lieu payment shall require City Council approval, pursuant to Paragraph 26.470.090.3. Required affordable housing may be provided through a mix of these methods. c. Each unit provided shall be designed such that the finished floor level of fifty percent (50%) or more of the unit's net livable area is at or above natural or finished grade, whichever is higher. d. The proposed units shall be deed -restricted as "for sale" units and transferred to qualified purchasers according to the Aspen/Pitkin County Housing Authority Guidelines. The owner may be entitled to select the firsi purchasers, subject to the aforementioned qualifications, with approval from the Aspen/Pitkin County Housing Authority. The deed restriction shall authorize the Aspen/Pitkin County Housing Authority or the City to own the unit and rent it to qualified renters as defined in the Affordable Housing Guidelines established by the Aspen/Pitkin County Housing Authority, as amended. The proposed units may be rental units, including but not limited to rental units owned by an employer or nonprofit organization, if a legal instrument in a form acceptable to the City Attorney ensures permanent affordability of the units. The City encourages affordable housing units required for lodge development to be rental units associated with the lodge operation and contributing to the long-term viability of the lodge. Units owned by the Aspen/Pitkin County Housing Authority, the City of Aspen, Pitkin County or other similar governmental or quasi -municipal agency shall not be subject to this mandatory "for sale" provision. e. Affordable Housing Credit. Affordable housing units that are not required for mitigation, but are developed or acquired and deed restricted after ---, 2010 (date amendment is effective), are eligible to receive a Certificate of Affordable Housing Credit. The rules and regulations for establishing and extinguishing a Certificate of Affordable Housing Credit are provided in Chapter 26.540, Certificate of Affordable Housing Credit. 5. Demolition or redevelopment of multi -family housing. The City's neighborhoods have traditionally been comprised of a mix of housing types, including those affordable by its working residents. However, because of Aspen's attractiveness as a resort environment and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second -home use. Such redevelopment results in the displacement of individuals and families who are an integral part of the Aspen work force. Given the extremely high cost of and demand for market -rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the community. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commute on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of working residents from the City's neighborhoods. The Aspen Area Community Plan established, a goal that affordable housing for working residents be provided by both the public and private sectors. The City and the Aspen/Pitkin County Housing Authority have provided affordable housing both within and adjacent to the City limits. The private sector has also provided affordable housing. Nevertheless, as a result of the replacement of resident housing with second homes and tourist accommodations and the steady increase in the size of the workforce required to assure the continued viability of Aspen area businesses and the City's tourist -based economy, the City has found it necessary, in concert with other regulations, to adopt limitations on the combining, demolition or conversion of existing multi -family housing in order to minimize the displacement of working residents, to ensure that the private sector maintains its role in the provision of resident housing and to prevent a housing shortfall from occurring. The combining, demolition, conversion or redevelopment of multi -family housing shall be approved, approved with conditions or denied by the Planning and Zoning Commission based on compliance with the following requirements (see definition of demolition.): 1. Requirements for combining, demolishing, converting or redeveloping market multi -family housing Only one (1) of the following two (2) options is required to be met when combining, demolishing, converting or redeveloping a free-market multi -family residential property. To ensure the continued vitality of the community and a critical mass of local working residents, no net loss of density (total number of units) between the existing development and proposed development shall be allowed. 0 a. One -hundred -percent replacement. In the event of the demolition of free- market multi -family housing, the applicant shall have the option to construct replacement housing consisting of no less than one hundred percent (100%) of the number of units, bedrooms and net livable area demolished. The replacement units shall be deed -restricted as resident occupied affordable housing, pursuant to the Guidelines of the Aspen/Pitkip County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Subsection 4, Affordable housing, of this Section. When this one -hundred -percent standard is accomplished, the remaining development on the site may be free-market residential development with no additional affordable housing mitigation required as long as there is no increase in the number of free-market residential units on the parcel. Free- market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use development. b. Fifty -percent replacement. In the event of the demolition of free-market multi -family housing and replacement of less than one hundred percent (100%) of the number of previous units, bedrooms or net livable area as described above, the applicant shall be required to construct affordable housing consisting of no less than fifty percent (50%) of the number of units, bedrooms and the net livable area demolished. The replacement units shall be deed -restricted as Category 4 housing, pursuant to the guidelines of the Aspen/Pitkin County Housing Authority. An applicant may choose to provide mitigation units at a lower category designation. Each replacement unit shall be approved pursuant to Paragraph 26.470.070.4, Affordable housing. When this fifty -percent standard is accomplished, the remaining development on the site may be free-market residential development as long as additional affordable housing mitigation is provided'pursuant to Paragraph 26.470.070.3, Expansion of free-market residential units within a multi -family or mixed -use project, and there is no increase in the number of free-market residential units on the parcel. Free-market units in excess of the total number originally on the parcel shall be reviewed pursuant to Paragraph 26.470.080.2, New free- market residential units within a multi -family or mixed -use project. c. One -hundred percent affordable housing replacement. When one -hundred - percent of the free-market multi family housing units are demolished and are solely replaced with deed -restricted affordable housing units on a site, including any additional dwelling units, pursuant to Section 26.470.070.4, Affordable Housing; all of the units in the redevelopment are eligible for an affordable housing credit, pursuant to Section 26.470.070(4)e., Certificate of Affordable Housing Credit. Any unused development right shall be restricted to the future development of additional affordable housing, which would also be eligible for an affordable housing credit. 26.470.060 Administrative Applications 2. Single-family and duplex dwelling units. The following types of development of single-family or duplex structures shall require the provision of affordable housing in one (1) of the methods described in Subparagraph c: a. The development of a new single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling on a vacant lot in one (1) of the following conditions: ■ A vacant lot created by a lot split, pursuant to Subsection 26.480.060.C. ■ A vacant lot created by an historic lot split, pursuant to Paragraph 26.480.030.A.4, when the subject lot does not itself contain an historic resource. ■ A vacant lot that was subdivided or was a legally described parcel prior to November 14, 1977, that complies with the provisions of Subsection 26.480.020.E, Aspen Townsite lots. These new residential units shall be deducted from the development ceiling levels established pursuant to Section 26.470.030, but shall not be deducted from the respective annualdevelopment allotments for residential development. b. The replacement after demolition of an existing single-family, multiple detached residential units when permitted in the zone district or a duplex dwelling, regardless of when the lot was subdivided or legally described. These redeveloped units shall not require a growth management allocation and shall not be deducted from the respective annual development allotments or development ceiling levels established pursuant to Section 26.470.030. c. Affordable housing requirements for the types of single-family and duplex development described above shall be as follows: Single-family. In order to qualify for a single-family approval, the applicant shall have AiX (6) options: 1) Providing an above -grade, detached accessory dwelling unit (ADU) or a carriage house pursuant to Chapter 26.520, Accessory Dwelling Units and Carriage Houses; 2) Providing an accessory dwelling unit, or a carriage house, authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 3) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with 0 • the Aspen/Pitkin County Housing Authority Guidelines, as amended; 4) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Recording a resident -occupancy (RO) deed restriction on the single-family dwelling unit being constructed; or 6) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing Credit, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. Duplex. In order to qualify for a duplex approval, the applicant shall have seven (7) options: 1) Providing one (1) free-market dwelling unit and one (1) deed -restricted resident occupied(RO) dwelling unit with a minimum floor area of one thousand five hundred (1,500) square feet; 2) Providing either two (2) above -grade, detached accessory dwelling units or carriage houses (or one [ 1 ] of each), or one (1) above -grade, detached ADU or carriage house with a minimum floor area of six hundred (600) net livable square feet, pursuant to Chapter 26.520; 3) Providing either two (2) accessory dwelling units or carriage houses (or one [ 1 ] of each) or one (1) ADU or carriage house with a minimum of six hundred (600) net livable square feet authorized through special review to be attached and/or partially or fully subgrade, pursuant to Chapter 26.520; 4) Providing an off -site affordable housing unit within the Aspen Infill Area accepted by the Aspen/Pitkin County Housing Authority and deed -restricted in accordance with the Aspen/Pitkin County Housing Authority Guidelines, as amended; 5) Providing two (2) deed -restricted resident -occupied (RO) dwelling units; 6) Paying the applicable affordable housing impact fee pursuant to the Aspen/Pitkin County Housing Authority Guidelines, as amended; or 7) Providing the required full-time equivalents (FTEs) through the extinguishment of a Certificate of Affordable Housing Credit, according to Aspen/Pitkin County Housing Authority Guidelines, as amended. 0 Chapter 26.540 CERTIFICATE OFAFFORDABLE HOUSING CREDIT Sections: 26.540.010 Purpose 26.540.020 Authority 26.540.030 Application and fees 26.540.040 Procedures for establishing a certificate of affordable housing credit. 26.540.050 Authority of the certificate 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate 26.540.070 Extinguishment of the certificate. 26.540.010 Purpose. Establishing a Certificate of Affordable Housing Credit provides another option for meeting housing mitigation requirements. In particular, this mitigation method would mean that affordable housing would be certified for occupancy at the time the mitigation requirement is met; and before any development -related impacts are experienced by the community. 26.540.020 Authority. The Planning and Zoning Commission is authorized at a public hearing, meeting the noticing requirements of Section 26.304.060 E, Public Notice, to approve, approve with conditions, or deny an application for the establishment of a certificate of affordable housing credit in the form of a resolution. 26.540.030 Application and fees. All applications shall include the information required under Chapter 26.304, Common Development Review Procedures. In addition, all applications shall also include the following information. A. Net Livable Area. The net livable square footage of each unit B. Area Reductions. If applicable, the conditions under which reductions from net minimum livable square footage requirements are requested according to Aspen/Pitkin County Housing Authority Guidelines. C. Income Category. The proposed income category of each unit. D. FTEs. The number of full-time equivalents (FTEs) housed by the units. 26.540.040 Procedures for establishing a Certificate of Affordable Housing Credit. A. Content and recording of the certificate. Once the reviewing board approves the creation of affordable housing credits, a certificate can be established by the property owner when a certificate of occupancy is issued for the affordable housing units. The property owner shall provide proof of both the resolution approving the creation of the affordable housing credits and the issuance of a certificate of occupancy to the Community Development Department prior to the administrative issuance of a certificate by the Community Development Director. The content of the Certificate of Affordable Housing Credit shall include the following information. 1. Certificate number. A number on the certificate in chronological order of their issuance. 2. Property description. A parcel identification number, legal address and the street address. 3. FTEs. The number offull-time equivalents (FTEs) housed by the units. 4. Income category. The certificate shall note the income category the FTEs can mitigate; a maximum of category 4. B. Release of the certificate. Prior to release of a certificate by the Community Development Director, a letter acknowledging receipt and acceptance of the certificate shall be submitted to the Community Development Department. 26.540.050 Authority of the certificate The certificate may be utilized in whole or in part, including fractions of no less than .1 of an FTE, to satisfy affordable housing mitigation requirements in accordance with other applicable sections of this Title. 26.540.060 Transferability of the certificate, contents of the grantor certificate and grantee certificate A. Transferability. A Certificate of Affordable Housing Credit is legally transferable in whole or in part in the form of FTEs, including fractions of FTEs. B. Reissuance of certificate(s). When all or part of a certificate is transferred to a recipient, the grantor certificate shall either be fully voided or amended to reflect the lesser number of FTEs remaining on the certificate, by following the procedures outlined in subsection 26.540.040 A, Content and recording of the certificate, above. 0 • 26.540.070 Extinguishment of the certificate. A. Commission/Council Approval. Upon approval of a land use application by City Council or the Planning and Zoning Commission pursuant to Chapter 26,470, Growth Management Quota System, the approving ordinance or resolution shall contain a condition that extinguishes all or part of a Certificate of Affordable Housing Credit, if applicable. An exhibit to be recorded with the ordinance or resolution shall include a copy the certificate. B. Administrative Approval Upon administrative approval of ' a land use application pursuant to Section 26.470.060, Growth Management Quota System, the resulting Development Order shall include a condition that extinguishes all or part of a Certificate of Affordable Housing Credit. 0 • Exhibit C Amendment to Code Text, Review Criteria & Staff Findings Sec. 26.310.040. Standards of review. In reviewing an amendment to the text of this Title or an amendment to the Official Zone District Map, the City Council and the Planning and Zoning Commission shall consider: A. Whether the proposed amendment is in conflict with any applicable portions of this Title. Staff Finding: The amendment is not in conflict with any applicable portions of this title. B. Whether the proposed amendment is consistent with all elements of the Aspen Area Communi"- Plan. Staff Finding: The production of affordable housing is a priority of the 2000 AACP. The proposed amendment allows for the development of affordable housing that might not otherwise be built. The amendment allows an entity to receive a "Certificate of Affordable Housing Credit" for building affordable housing that is not required for mitigation, and subsequently allows the same or some other entity to use the certificate for mitigation purposes. The proposed amendment is consistent with the following statements in the 2000 AACP: • "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27) • "Encourage greater participation by the private sector in developing affordable housing." (Goal E, pg 27) Certainly, the production of affordable housing is a central priority of the 2000 AACP, which states that, "The public and private sectors should work together to ensure success in providing affordable housing." (Goal C, pg 27.) The 2000 AACP also "Encourage(s) greater participation by the private sector in developing affordable housing." (Goal E, pg 27.) A critical question for staff is whether this code amendment would encourage or inhibit the development of affordable housing. Staff believes the code amendments may encourage the development of new affordable housing, and just as importantly, it could encourage affordable housing to be built before any development -related impacts are experienced by the community. The code amendments could have a substantial impact on how mitigation is provided for the redevelopment of single-family and duplex structures. For many years, those who redevelop such structures either have chosen to pay cash -in -lieu, or have built an Accessory Dwelling Unit (ADU). There are drawbacks to both of these mitigation options: • Cash -in -lieu payments do not immediately translate into affordable housing, meaning the impacts of redevelopment can be felt for years before a housing unit is created to offset those impacts; • Building an ADU (usually at the minimum standard of 300 square feet) can result in local residents renting them, but occupancy is not mandatory. While the program can result in the positive result of affordable housing spread out through town, occupancy rates are not likely much higher than 30%, if that. If this code amendment is approved, it would create a new option to purchase a "credit" for affordable housing that has already been built and occupied — either rented or owned. This ability to sell "credits" as mitigation could also provide a viable financial incentive for the redevelopment of free market multi -family housing into 100% affordable housing. The code amendment may also have impacts on a larger scale, rather than just as a new mitigation option for those redeveloping single-family homes and duplexes. It could encourage large employers who are interested in providing housing for employees — and also have the potential for involvement in future land use developments -- to go ahead and acquire affordable housing before it is mandated through mitigation. This would allow employers to provide housing for employees right away, and later use the housing as mitigation for some future project. C. Whether the proposed amendment is compatible with surrounding zone districts and land uses, considering existing land use and neighborhood characteristics. Staff Finding: The proposed amendment would apply under the AH-PUD Zone District, but have no impact on the allowable dimensions of future affordable housing projects. D. The effect of the proposed amendment on traffic generation and road safety. Staff Finding: The amendment itself does not generate additional development. E. Whether and the extent to which the proposed amendment would result in demands on public facilities and whether and the extent to which the proposed amendment would exceed the capacity of such public facilities including, but not limited to, transportation facilities, sewage facilities, water supply, parks, drainage, schools and emergency medical facilities. Staff Finding: The amendment itself does not generate additional development. F. Whether and the extent to which the proposed amendment would result in significantly adverse impacts on the natural environment. Staff Finding: The amendment itself does not generate additional development. G. Whether the proposed amendment is consistent and compatible with the community character in the City. Staff Finding: This amendment could result in new affordable housing that may not otherwise be built. Sufficient Affordable Housing inventory is an important part of the community character. H. Whether there have been changed conditions affecting the subject parcel or the surrounding neighborhood which support the proposed amendment. Staff Finding: No applicable. I.Whether the proposed amendment would be in conflict with the public interest and whether it is in harmony with the purpose and intent of this Title. Staff Finding: The production of affordable housing is a priority of the 2000 AACP. The proposed amendment allows for the development of affordable housing that might not otherwise be built prior to development impacts. The amendment allows an entity to receive a "Certificate of Affordable Housing Credit" for building affordable housing that is not required for mitigation, and subsequently allows the same or some other entity to later use the certificate for mitigation purposes. • ATTACHMENT 2 —LAND USE APPLICATION rKuanq- I Name: r- 4c 0 Location: (Indicate street address, lot & block number, legal description where appropriate) Parcel ID # UIRED) i ,; = 0 t9 :' PI IC s NT: Name: C 00 1' `< Address: G -7j� r 5, Cis Phone #: �- PREWNTATIVE: Name: Ia , L Address: v Phone #: YPE OF APPLICATION: (please check all that apply): X ❑ GMQS Exemption ❑ Conceptual PUD ❑ Temporary Use ❑ GMQS Allotment � Final PUD (& PUD Amendment) X Text/Map Amendment ❑ Special Review ❑ Subdivision ElConceptual SPA ❑ ESA — 8040 Greenline, Stream ❑ Subdivision Exemption (includes ❑ Final SPA (& SPA Margin, Hallam Lake Bluff, condominiumization) Amendment) Mountain View Plane ❑ Commercial Design Review ❑ Lot Split ❑ Small Lodge Conversion/ Expansion ❑ Residential Design Variance ❑ Lot Line Adjustment ❑ Other. ❑ Conditional Use EXISTING CONDITIONS: (description of existing bQdings, uses, previous approvals, etc.) : (descriation of etc.) Have you attached the following? FEES DUE: $ ❑ Pre -Application Conference Summary ❑ Attachment #], Signed Fee Agreement ❑ Response to Attachment #3, Dimensional Requirements Form ❑ Response to Attachment #4, Submittal Requirements- Including Written Responses to Review Standards ❑ 3-D Model for large project All plans that are larger than &5" X 11" must be folded. A disk with an electric copy of all written text (Microsoft Word Format) must be submitted as part of the application. Large scale projects should include an electronic 3-D model. Your pre -application conference summary will indicate if you must submit a 3-D model. RECEIAb 9 X-' 5EP 2 3 2009 i-le"VOSASMN COMMUNITY DEVELOPMENT DEPARTMENT ;4MMUNITY DEMOPMENT Agreement for Payment of City of Aspen Development Application Fees n CITY OF ASPEN (hereinafter CITY) and (hereinafter APPLICANT) AGREE AS FOLLOW : APPLICANT has submitted to CITY an application for (hereinafter, THE PROJECT). 2. APPLICANT understands and agrees that the City of Aspen has an adopted fee structure for Land Use applications and the payment of all processing fees is a condition precedent to a determination of application completeness. 3. APPLICANT and CITY agree that because of the size, nature or scope of the proposed project, it is not possible at this time to ascertain the full extent of the costs involved in processing the application. APPLICANT and CITY further agree that it is in the interest of the parties that APPLICANT make payment of an initial deposit and to thereafter permit additional costs to be billed to APPLICANT on a monthly basis. APPLICANT agrees additional costs may accrue following their hearings and/or approvals. APPLICANT agrees he will be benefited by retaining greater cash liquidity and will make additional payments upon notification by the CITY when they are necessary as costs are incurred. CITY agrees it will be benefited through the greater certainty of recovering its full costs to process APPLICANT'S application. 4. CITY and APPLICANT further agree that it is impracticable for CITY staff to complete processing or present sufficient information to the Historic Preservation Commission, Planning and Zoning Commission and/or City Council to enable the Historic Preservation Commission, Planning and Zoning Commission and/or City Council to make legally required findings for project consideration, unless current billings are paid in full prior to decision. 5. Therefore, APPLICANT agrees that in consideration of the CITY's waiver of its right to collect full fees prior to a determination of application completeness, APPLICANT shall pay an initial deposit in the amount of $ which is for _ hours of Community Development staff time, and if actual recorded costs exceed the initial deposit, APPLICANT shall pay additional monthly billings to CITY to reimburse the CITY for the processing of the application mentioned above, including post approval review at a rate of $235.00 per planner hour over the initial deposit. Such periodic payments shall be made within 30 days of the billing date. APPLICANT further agrees that failure to pay such accrued costs shall be grounds for suspension of processing, and in no case will building permits be issued until all costs associated with case processing have been paid. CITY OF ASPEN APPLICANT By: By:_ Chris Bendon Community Development Director Date: Billing Address and Telephone Number: > 1 • CITY OF ASPEN PRE -APPLICATION CONFERENCE SUMMARY PLANNER: Jennifer Phelan, 429-2759 DATE: 9/23/09 PROJECT: Code Amendment, Affordable Housing Credit REPRESENTATIVE: Peter Fomell TYPE OF APPLICATION: Text Amendment (of the land use code) DESCRIPTION: The above -referenced representative requested that council consider sponsoring a code amendment allowing private developers to build affordable housing (that is not required for mitigation) and receive a credit for the employees housed by the development. The credit can then be sold to private developer to meet all or some of their affordable housing mitigation requirements. Staff and City Council supported further consideration of this concept through the processing of a code amendment; however, staff also requested that Mr. Fomell submit a land use application and agree to pay all staff fees associated with drafting and processing the code amendment. Land Use Code Section(s) 26.304 Common Development Review procedures (as applicable) 26.310 Amendments to the Land Use Code and Official Zone District Map Review by: - Staff for complete application - Referral agencies for technical considerations - P8Z and City Council for consideration Public Hearing: Yes (P&Z and City Council) Planning Fees: $2,940.00. Deposit for 12 hours of staff time (additional staff time required is billed at $245.00 per hour) Total Number of Application Copies: 2 Copies To apply, submit the following information: I. Planning Fee for review of application ($2,940.00). 2. Land Use Application (Attachment 2) 3. Agreement to pay (Attachment 1) Disclaimer: The foregoing summary is advisory in nature only and is not binding on the City. The summary is based on current zoning, which is subject to change in the future, and upon representations by the applicant that may or may not be accurate. The summary does not create a legal or vested right. 0 • MEMORANDUM TO: Mayor Ireland and Aspen City Council FROM: Jennifer Phelan, Deputy Planning Director THROUGH: Chris Bendon, Community Development Director IVA RE: Affordable Housing Credit proposal WORK SESSION DATE: September 21, 2009 General Background: Peter Fornell is requesting that the city consider a code amendment (Exhibit A) that will allow the private sector to develop affordable housing which not associated to any required affordable housing mitigation, receive a credit for the housing, and then be able to transfer the credit to another development (or multiple developments) to meet part or all of the development's affordable housing mitigation requirement. This concept has been brought up in the past, most recently in the 2002 Infill Report (Exhibit B), with the idea that some developers may provide more affordable housing than required by receiving a credit, resulting in additional inventory in the city. Code Amendment Process: To implement a program to permit affordable housing credits, a code amendment to the Land Use Code will need to be processed and adopted. The proposed code amendment is first considered by the Planning and Zoning Commission and a recommendation is provided to Council. Council then considers the amendment and makes a final decision on the matter. Currently, a code amendment can be initiated by the City Council or the Planning Commission and Mr. Fornell is requesting that City Council agree to sponsor the land use application. Requested Direction: Staff is requesting direction on whether the code amendment should be pursued. At this point, Mr. Fornell, is suggesting a concept to city council. Staff believes the idea has merit and may create another way to add additional affordable housing inventory to the city; however, exact code language will need to be developed. If council is interested in considering a potential code amendment and enabling Mr. Fornell to apply, staff suggests the following: 1) Mr. Fornell submit a land use application, 2) A deposit be submitted, as well as an agreement to pay all staff fees associated with the drafting and processing of the code amendment Attachments: A. Transferable FTE concept letter from Peter Fornell, August 25, 2009 B. Excerpt from 2002 Infill Report To: Steve Barwick From: Peter Fornell Date: August 25, 2009 Re: transferable FTE concept Dear Steve, Thanks for your contact back with me to discuss the results of the City's meeting regarding my concept for affordable housing creation. You asked me to reduce the concept to writing, so I'll do my best to describe the basic concept I have. It is no secret that the City of Aspen always has had as one of their major goals, the creation of deed restricted affordable housing. Those goals for the most part involve the City having to develop in whole or in part, such creation. Historically, private property owners do not seek out the process because other development scenarios have higher returns. This leaves the burden of housing construction on the City. If a developer could create affordable housing that other developers could use for their mitigation, this may entice certain landowners to consider the notion of creating affordable housing themselves. Essentially, a new method of creating the required housing for development by the private sector. The theory would be, that a property owner builds deed restricted housing and receives credit for his or her development which may be transferred to another developer that has housing mitigation requirements as part of their development. To be more specific, I'll use the parcel my partner owns at 301 Hyman. He as owner, obtains a PUD allowing the creation of affordable housing on that lot. With a lot size of 3600 sq. ft. the FAR for that zone district would allow for 4034 sq. ft. of development. A simple to use scenario would be a two story building of 2000 sq. ft. each floor. 450 sq. ft. is necessary to build a 1 br category 2 or 3unit, so 4 units on each floor and 8 total units. A Ibr unit mitigates for 1.75 FTE's so we would produce a total of 14 FTE's. Upon completion of the project a lottery is held for the sale of the units at their deed restricted price (or the City could even buy the completed development at the deed restricted value if rental inventory is their goal) and he as the developer receives from the city 14 FTE credits (similar to historical tdr's) that he can transfer to another developer to retire to satisfy their required mitigation. There are certainly parcels in the city owned by the private sector, where the owners of those parcels toil over the best use for their goals. This could cause a landowner to consider development of affordable housing as a viable highest and best use of their lot, therefore furthering the creation of affordable housing without public involvement. I hope this assists you in understanding the concept, I am happy to review this further with you or anyone at the 6ty anytime. Sincerely eter omell 0 `II Proposed Off -Site Affordable Housin_g Mitigation Credits Sending Sites — Developing more affordable housing than required ■ Development of affordable housing in excess of minimum required for Infill Growth Management Exemption. The Housing Authority (or the City of Aspen) would issue certificates for employees housed beyond the minimum requirement. One certificate for each extra employee housed. ■ Buy -down of existing housing stock to affordable housing. Issue certificates in terms of employees housed by buy -down action. ■ Units would need to be within Infill area. Units outside the Infill area but within the city limits could be used if approved through a Special Review (either Housing Board or P&Z). 1 Landing Sites — Developing less affordable housing than required 1 Commercial development where employees are generated and need to be mitigated. This program would allow a developer a fourth option for mitigating employee generation (on -site units, off -site units, redemption of mitigation credits, or via cash -in -lieu). Redeem one certificate for each mitigation employee not housed on -site. Historic TDR certificates would not be applicable in this 1 program. 1 1 / / 1 / S / 1 / / Q 1 1 / Section Four, Page 9 • rc ACA A L V • yJ,J"4- 1 JL O� �D u,. C1ihI C�n � _ _ _ • To: arwick From: Peter Fornell Date: August 25, 2009 Re: transferable FTE concept Dear Steve, Thanks for your contact back with me to discuss the results of the City's meeting regarding my concept for affordable housing creation. You asked me to reduce the concept to writing, so I'll do my best to describe the basic concept I have. It is no secret that the City of Aspen always has had as one of their major goals, the creation of deed restricted affordable housing. Those goals for the most part involve the City having to develop in whole or in part, such creation. Historically, private property owners do not seek out the process because other development scenarios have higher returns. This leaves the burden of housing construction on the City. If a developer could create affordable housing that other developers could use for their mitigation, this may entice certain landowners to consider the notion of creating affordable housing themselves. Essentially, a new method of creating the required housing for development by the private sector. The theory would be, that a property owner builds deed restricted housing and receives credit for his or her development which may be transferred to another developer that has housing mitigation requirements as part of their development. To be more specific, I'll use the parcel my partner owns at 301 Hyman. He as owner, obtains a PUD allowing the creation of affordable housing on that lot. With a lot size of 3600 sq. ft. the FAR for that zone district would allow for 4034 sq. ft. of development. A simple to use scenario would be a two story building of 2000 sq. ft. each floor. 450 sq. ft. is necessary to build a 1 br category 2 or 3unit, so 4 units on each floor and 8 total units. A Ibr unit mitigates for 1.75 FTE's so we would produce a total of 14 FTE's. Upon completion of the project a lottery is held for the sale of the units at their deed restricted price (or the City could even buy the completed development at the deed restricted value if rental inventory is their goal) and he as the developer receives from the city 14 FTE credits (similar to historical tdr's) that he can transfer to another developer to retire to satisfy their required mitigation. There are certainly parcels in the city owned by the private sector, where the owners of those parcels toil over the best use for their goals. This could cause a landowner to consider development of affordable housing as a viable highest and best use of their lot, therefore furthering the creation of affordable housing without public involvement. I hope this assists you in understanding the concept, I am happy to review this further with you or anyone at the City anytime. Sincerely, '-A Peter Fornell f �k<n tir4e' 0 /Y V l ti 1\ hM�\�- Z� -TD 1 cc� 1, — �� MEMORANDUM TO: Mayor Ireland and Aspen City Council FROM: Jennifer Phelan, Deputy Planning Director THROUGH: Chris Bendon, Community Development Director 01WA RE: Affordable Housing Credit proposal WORK SESSION DATE: September 21, 2009 General Background: Peter Fornell is requesting that the city consider a code amendment (Exhibit A) that will allow the private sector to develop affordable housing which not associated to any required affordable housing mitigation, receive a credit for the housing, and then be able to transfer the credit to another development (or multiple developments) to meet part or all of the development's affordable housing mitigation requirement. This concept has been brought up in the past, most recently in the 2002 Infill Report (Exhibit B), with the idea that some developers may provide more affordable housing than required by receiving a credit, resulting in additional inventory in the city. Code Amendment Process: To implement a program to permit affordable housing credits, a code amendment to the Land Use Code will need to be processed and adopted. The proposed code amendment is first considered by the Planning and Zoning Commission and a recommendation is provided to Council. Council then considers the amendment and makes a final decision on the matter. Currently, a code amendment can be initiated by the City Council or the Planning Commission and Mr. Fornell is requesting that City Council agree to sponsor the land use application. Requested Direction: Staff is requesting direction on whether the code amendment should be pursued. At this point, Mr. Fornell, is suggesting a concept to city council. Staff believes the idea has merit and may create another way to add additional affordable housing inventory to the city; however, exact code language will need to be developed. If council is interested in considering a potential code amendment and enabling Mr. Fornell to apply, staff suggests the following: 1) Mr. Fornell submit a land use application, 2) A deposit be submitted, as well as an agreement to pay all staff fees associated with the drafting and processing of the code amendment Attachments: A. Transferable FTE concept letter from Peter Fornell, August 25, 2009 B. Excerpt from 2002 Infill Report 0 F-J-uv-x,� To: Steve Barwick From: Peter Fornell Date: August 25, 2009 Re: transferable FTE concept Dear Steve, Thanks for your contact back with me to discuss the results of the City's meeting regarding my concept for affordable housing creation. You asked me to reduce the concept to writing, so I'll do my best to describe the basic concept I have. It is no secret that the City of Aspen always has had as one of their major goals, the creation of deed restricted affordable housing. Those goals for the most part involve the City having to develop in whole or in part, such creation. Historically, private property owners do not seek out the process because other development scenarios have higher returns. This leaves the burden of housing construction on the City. If a developer could create affordable housing that other developers could use for their mitigation, this may entice certain landowners to consider the notion of creating affordable housing themselves. Essentially, a new method of creating the required housing for development by the private sector. The theory would be, that a property owner builds deed restricted housing and receives credit for his or her development which may be transferred to another developer that has housing mitigation requirements as part of their development. To be more specific, I'll use the parcel my partner owns at 301 Hyman. He as owner, obtains a PUD allowing the creation of affordable housing on that lot. With a lot size of 3600 sq. ft. the FAR for that zone district would allow for 4034 sq. ft. of development. A simple to use scenario would be a two story building of 2000 sq. ft. each floor. 450 sq. ft. is necessary to build a 1 br category 2 or 3unit, so 4 units on each floor and 8 total units. A 1br unit mitigates for 1.75 FTE's so we would produce a total of 14 FTE's. Upon completion of the project a lottery is held for the sale of the units at their deed restricted price (or the City could even buy the completed development at the deed restricted value if rental inventory is their goal) and he as the developer receives from the city 14 FTE credits (similar to historical tdr's) that he can transfer to another developer to retire to satisfy their required mitigation. There are certainly parcels in the city owned by the private sector, where the owners of those parcels toil over the best use for their goals. This could cause a landowner to consider development of affordable housing as a viable highest and best use of their lot, therefore furthering the creation of affordable housing without public involvement. I hope this assists you in understanding the concept, I am happy to review this further with you or anyone at the City anytime. Peter Fomell -� ( �5`I 3`f Proposed Off -Site Affordable Housin_g Mitigation Credits Sending Sites — Developing more affordable housing than required ■ Development of affordable housing in excess of minimum required for Infill Growth Management Exemption. The Housing Authority (or the City of Aspen) would issue certificates for employees housed beyond the minimum requirement. One certificate for each extra employee housed. ■ Buy -down of existing housing stock to affordable housing. Issue certificates in terms of employees housed by buy -down action. ■ Units would need to be within Infill area. Units outside the Infill area but within the city limits could be used if approved through a Special Review (either Housing Board or P&Z). Landing Sites — Developing less affordable housing than required ■ Commercial development where employees are generated and need to be mitigated. This program would allow a developer a fourth option for mitigating employee generation (on -site units, off -site units, redemption of mitigation credits, or via cash -in -lieu). Redeem one certificate for each mitigation employee not housed on -site. Historic TDR certificates would not be applicable in this program. Section Four, Page 9 0 2�3512� b� oo `L 0060 ' 2oo-1- ASW - J t3 File Edit Eecord Navigate Form Reports Format Tab Help JL Main Valuation Custom Fields 6oJws J Feek Parcels Fee Summary Sub Qermits Attachments RorUting Status Routing / Permit Type aslu Aspen Land Use Permit # 0060.2009.ASLU Address 301 W HYMAN J AptjSuite BLOCK 47 City ASPEN State CO Zip 81611 J Permit Information Master Permit Routing Queue 1aslu07 Project J Status '.pending Description MAJOR APPLICATION - TEXTIMAP AMENDMENT Submitted PETER FORNELL Owner Last Name AJAX PROPERTIES LTD Phone F- Owner Is Applicant? Applicant Last Name COOPER Phone Lender Last Name Phone Clock Running Days F JFirst Name Applied 09123j2009 ApP►. —J Issued-� Foal Expires 09j18/2010 First Name JOHN PO BOX 1747 SPRINGFIELD MO 65801 Cust # 24336 First Name Enter the state of the permit address AspenGold(b) ® Record: 1 of 1 C,YL AM 4 2 g 4,o-°