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HomeMy WebLinkAboutagenda.council.worksession.202205231 AGENDA CITY COUNCIL WORK SESSION May 23, 2022 4:00 PM, City Council Chambers 427 Rio Grande Place, Aspen ZOOM MEETING INSTRUCTIONS Join from a PC, Mac, iPad, iPhone or Android device: Please click this URL to join. https://zoom.us/j/91319527525?pwd=SW01WnFDWndpbVhlR2pvQkxYVTF3Zz09 Passcode: 81611 Or join by phone: Dial: US: +1 669 900 6833 Webinar ID: 913 1952 7525 Passcode: 81611 I.WORK SESSION I.A.Moratorium Project Update - Residential Building Regulatory Framework 1 Staff Memo – Moratorium, Residential Building Final Work Session Page 1 of 14 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Ben Anderson, Principal Planner THROUGH: Phillip Supino, Community Development Director MEMO DATE: May 19, 2023 MEETING DATE: May 23, 2023 RE: Final Policy Check-in with Council prior to First Reading Residential Building Moratorium Response REQUEST OF CITY COUNCIL: At the Work Session on May 23, Council will be asked to review Staff’s policy proposals for the Residential Building aspects of the moratorium. While specific code language will not yet be presented, staff requests that Council engage in review and discussion of the Primary Policy Proposals identified in the memo as well as the areas in the code that will need to be amended in support. Additionally, there are a few additional policy questions on which staff will request direction from Council as we finalize our work. Following this discussion and final direction from Council on these policy items, staff anticipates returning to Council on June 14th for First Reading and June 28th for Second Reading in consideration of Ordinances that reflect this memo and the subsequent discussion. BACKGROUND AND SUMMARY: Where this Memo and Work Session fit into the larger process The contents of this memo reflect staff’s proposed policy responses to previous Council direction across numerous Work Sessions, input and feedback from participants in the engagement process, and the research and analysis of our consultant experts. There are a few remaining aspects of this proposed set of responses that are yet to be finalized. The memo identifies these outstanding items and staff will discuss further during the Work Session. Additionally, there are a few policy questions that have arisen during the last few weeks of our work that staff would like to review with Council and receive direction before the First Reading of the draft Ordinance (and the corresponding code language) is finalized. With this direction from Council, and the inclusion of final analysis by our consultant team and City staff, code language that is currently in draft will be formalized. Prior to Second Reading of the Ordinance, this language will have been reviewed by multiple staff members across relevant 2 Staff Memo – Moratorium, Residential Building Final Work Session Page 2 of 14 departments including the City Attorney’s office, our consultant team that includes a third-party land use law review, and by members of the community that have participated in our engagement efforts – particularly those in the development and design community. In spite of the extension of the moratorium, timelines remain tight as we finalize this work. Staff remains committed to making sure that interested community members that have participated in this process have an opportunity to review the final code changes prior to Council making a final decision at Second Reading. Exhibits For Council Review, there are several documents attached as Exhibits to the memo that have been developed by the staff of Design Workshop. They are included primarily for Council’s review but have all been instructive to staff as we have made decisions about what to include (and importantly, what not to include) in our proposed policy responses. Staff and the consultant team will be prepared to discuss any of the material presented in these exhibits should Council have questions or comments. It should be noted that the exhibits raise questions that Council may desire staff to re-visit following the moratorium. PRIMARY POLICY PROPOSALS: 26.470 – Growth Management Quota System Demolition Central to staff’s proposed response to concerns about the pace and scale of single-family and duplex development is the use of the long-standing GMQS allotment system to regulate projects that engage in the demolition and redevelopment of a property. Currently there are 19 Residential Development Allotments. Under current code, these are only necessary for new subdivisions or new multifamily units. The proposal is to now include redevelopment scenarios within this system and assign a portion of this total number of residential allotments to projects that trigger Demolition. In staff’s view, residential projects that trigger Demolition are very impactful to neighbors, to Aspen’s physical infrastructure and environment, and to the capacity at the Pitkin County Landfill. They generate a significant employee demand and often, these projects transform the scope and scale of the existing home into a new residence that is fundamentally different, both in form and function, from the previous structure. Additionally, in analysis of building permits over the last 9 years, there is a recent trend showing a significant increase in Demolition projects (15 in 2021; a rough average of 6.5 in the previous 8 years) and in the Demolition of increasingly more recent built homes (a building permit is currently in review for the demolition and redevelopment of a home built in 2006). In addition to limiting the number of Demolition projects that could be approved annually, the proposed policy would also establish standards during demolition and for the new home resulting from a redevelopment in order for a project to be issued a Demolition allotment. In staff’s view, implementing these standards would be a starting point that will be more fully built out, defined, and updated over time. To start, the Residential Demolition and Redevelopment Standards will include: 3 Staff Memo – Moratorium, Residential Building Final Work Session Page 3 of 14 • Waste Diversion: Participation in the Green Halo construction and demolition tracking system (used already by the Pitkin County Landfill) and a minimum diversion threshold of demolition and construction waste. • Embodied Carbon: A required reporting of the total embodied carbon of the building process and materials for a project using a choice of approved life-cycle assessment tools. At this time, the report will provide useful data to ComDev and Climate Action staff, rather than showing compliance with a particular threshold. • Energy Reporting: An approved Demolition allotment would require the future home to participate in Building IQ energy reporting and benchmarking for residential projects. This program will be developed by Climate Action and approved by Council at a later date and will support the community’s broader Greenhouse Gas (GHG) reduction goals • Building Energy Performance and Electrification: 1. Projects will be subject to the high-performance updates coming to our Building and Energy Codes in Title 8 that will include making sure homes are designed and built for potential future conversion to 100% electric and the accommodation of on-site photo-voltaic and battery storage systems. • Stormwater: Projects will be subject to a higher expectation in contributing to local water quality through implementation of non-structural Best Management Practices (BMPs). Note: The details of the Residential Demolition and Redevelopment Standards are one of the topics that have not yet been finalized. Staff is working across City agencies to ensure that the initial version of the standards does not add unintentional complexity or conflict between Land Use and other requirements in the development process. This is a document that will be reviewed by interested members of the public, prior to final Council consideration. For applications for projects that show compliance with the standards described above, the proposed process for the allotment system would work like this:  Up to the maximum number of annual allotments for Demolition, land use applications would be accepted on a first come, first serve basis and entered into the queue once determined “complete”.  Due to the requirements for submission of the land use application, it is anticipated that these requests would be submitted concurrently or at least proximately to the building permit. It is also anticipated that referral agencies would be given an opportunity early on in the review process to identify issues with the design and coordinate with the design team – hopefully reducing overall review times ahead of building permit issuance.  Since the standards for approval of an allotment are objective and definitive, staff proposes that the applications for allotments be reviewed administratively – with approval granted through a Notice of Approval that would include any necessary conditions.  The issuance of an allotment would have a three-year vesting period – consistent with the requirements of Colorado State law. 4 Staff Memo – Moratorium, Residential Building Final Work Session Page 4 of 14  If and when the annual allotments are fully utilized in a given year, there is a process for an application to request from Council the issuance of a multi-year allotment for an additional Demolition – that would reduce the number of allotments available in the following year. In addition to these outcomes in GMQS, a Demolition and Redevelopment would translate into affordable housing mitigation requirements on the entirety of the new home. Together, this set of policies seeks to discourage Demolition, but if it does happen, the resulting redevelopment will be high performing and be better aligned with the AACP and Aspen’s climate action goals and commitments. Additionally, policies (described later in the memo) are proposed to encourage energy performance upgrades and other flexibility to existing homes. Policy Questions for Council 1) What should the total number of allotments for Demolition be in a given year? Discussion: Staff recommends that Council identify a number in a range between (5) and (8) annual allotments. As staff has analyzed the last nine years – the yearly average number of single-family and duplex projects that required a demolition permit was roughly 6.5. In addition, each year, a small number (usually 1 or 2, at the most) cross the 40% threshold for Demolition (as defined in the LUC), but do not require a demolition permit from the building permit. In this way, staff has identified eight (8) as the upper limit of our recommendation for annual Demolition allotments. This number would generally maintain the recent trends (excepting 2021, which was 15). If Council desires to reduce the number of Demolition projects that would be approved annually, a number less than (8) could be identified, but staff does not recommend a number less than (5). In staff’s view, a number less than (5) would place an unreasonable limit on development activity. As Council considers what this number should be, it may be useful to think that once an approval for an allotment is granted, it could easily be three years before that project is complete. So, if eight allotments were granted annually, it is likely that there would be roughly 24 Demolition related projects happening in town at the same time, in different stages of completion. 2) Does Council agree with the staff recommendation to utilize an administrative review for projects that meet the redevelopment performance standards described above? Discussion: Other development allotment types in GMQS require P&Z (or HPC) or Council review. In some of those other reviews, there is some discretion for the review board within the review criteria. As currently conceived, the requirements for approval of a residential Demolition are not discretionary. There is some choice allowed from the applicant in terms of how to meet the criteria, but there is not discretion in the review. As such, staff is recommending an administrative review. This is a response to comments from the development community that high standards are acceptable, as long as they are objective. Additionally, it was stated that the ComDev land use and building permit is already rigorous and takes time – and that we should avoid making the process more difficult or time consumptive for otherwise compliant projects. An 5 Staff Memo – Moratorium, Residential Building Final Work Session Page 5 of 14 administrative review of a project, using objective standards – would in staff’s opinion respond to these issues while creating a high bar for projects seeking an allotment. Affordable Housing Mitigation In November of 2021, staff proposed Ordinance 24, which is currently tabled following Council discussion in December of 2021. The ordinance proposed to include the floor area of basements and garages and eliminate the credit for existing floor area (in redevelopment scenarios that trigger Demolition) in the calculation of affordable housing mitigation. Following public comment and Council discussion, Council tabled the ordinance and gave direction to staff to engage with consultants on an updated employee generation study – and to work on new standards for the mitigation deferral agreement for locals that pursue projects that require mitigation. Single-Family and Duplex Mitigation Requirements: Staff is continuing to work with our consultants to finalize and review for legal sufficiency the update to the 2015 Employee Generation Study. Based on preliminary findings, staff will continue to propose the inclusion of basements, garages and other currently exempted areas into the calculation of affordable housing mitigation requirements. Additionally, we are working on the necessary code adjustments to eliminate the credit for existing floor area in demolition and redevelopment scenarios. We will not have finalized numbers to report until First Reading, but as a preliminary estimate, Council could expect code changes to a have the following effect: Scenario: An existing home with 2,000 square feet of Floor Area (current floor area calculation) is Demolished. A new home is redeveloped with 3,240 square feet of Floor Area (current code with exempted basement and garage), but with a total square footage of 7,500 square feet that includes the basement and garage. Current Code that includes credit for existing floor area and exempts basements and garages = 0.20 FTE Proposed Changes: that excludes credit for existing floor area and includes basements and garages (assuming a 0.15 FTE per 1000 sf generation rate – the final number is TBD) = 1.13 FTE Also, to provide additional context, it is important to consider the mitigation requirements that were present prior to the 2015 study. Prior to 2015, the calculation of a home’s size for mitigation purposes was consistent with how it is now – the use of a net floor area calculation that excluded basements, garages, stairs and provided credit for existing Floor Area. However, the mitigation structure was completely different. The idea was that for every 3,000 square feet of net floor area, a home would provide 1 FTE of a “moderate income employee” (an average of Cat 2/Cat 3). Please look to the table below for further illustration of these dynamics that compare two previous mitigation systems with the one now proposed by staff. Scenario: 2,000 sf - existing home demolished, net Floor Area 3,240 sf – new home, net Floor Area 7,500 sf – new home, mitigation floor area – includes basement and garage See table on next page 6 Staff Memo – Moratorium, Residential Building Final Work Session Page 6 of 14 2013 Methodology & 2013 FIL 2013 Methodology & current FIL 2015 Methodology & current FIL Proposed Methodology & current FIL Square Footage on which mitigation is based 1,240 1,240 1,240 7,500 Employee Generation per 1000 sf 0.33 FTE 0.33 FTE .16 FTE TBD Total Mitigation Requirement (FTE) 0.41 FTE 0.41 FTE 0.20 FTE 1.13 FTE* Total AH Mitigation (based on FIL) $96,235 $154,345 $75,295 $425,417* AH Mitigation per square foot $77.60 $124.47 $60.72 $56.72* * These numbers are estimates, based on an Employee Generation placeholder of 0.15 FTE per 1000 sf. The proposed change does not drastically change the employees that a square foot generates, instead, it would reflect a policy change about what square footage counts towards the calculation. In the Proposed Methodology, the primary difference is the inclusion of subgrade and garages in the calculation of mitigation and the elimination of the credit for existing floor area. In the proposal, using this scenario, a 7,500 square foot home would be calculated in total – rather than that same house be calculated at the 1,240 sf calculated using previous versions of mitigation requirements in the Code. Note: Again, this description is preliminary and could change as the work on the employee generation study is finalized. Staff continues to work with our consultant team to ensure that the mitigation requirements in total are fair and defensible. Fee-in-Lieu In addition to changing calculation methods for employee generation, staff is also proposing in a separate ordinance to increase the Affordable Housing Mitigation Fee-in-Lieu. Per code, staff is directed to propose an annual increase in January of each year using the Engineering News Record National Construction Cost Index. Due to the moratorium, staff did not pursue this change in January, but believes it is appropriate to do this with the other proposed changes resulting from the moratorium so that the total impact can be understood. Based on the index from May of 2021 to May of 2022, it is anticipated that the proposed increase to the FIL will be roughly 8%. Current Category 2 FIL (applicable to single-family and duplex) per FTE: $376,475. With an 8% increase: $406,593. In the scenario above (7,500 square feet of new home), using the approximate update to FIL: Current Code and Current FIL = $75,295 of approximate mitigation ($10.03 / square foot). Proposed Change and update to FIL = $459,450 of approximate mitigation ($61.26 / square foot). As another way of thinking about this proposed change, using the estimate for Employee Generation, the following comparison shows the impact of the new calculation as a percentage of a typical real estate valuation in our current context: At $2,500 (rough estimate) of value per sq. ft. in the Aspen market of the same 7,500 sf home: Current mitigation requirements: .004 (0.4%) of the per square foot value Proposed mitigation requirements with update to FIL: .025 (2.5%) of the per square foot value 7 Staff Memo – Moratorium, Residential Building Final Work Session Page 7 of 14 Policy Question for Council 1) Should the mitigation calculation (which is currently mitigating at 100% of employees generated) for residential redevelopment and additional floor area, be instead calculated at 65%, consistent with lodge and commercial development? Or, as an alternative should the proposed calculation (at 100%) be phased in over time? Discussion: Staff has heard from Council that parity in AH mitigation requirements between different land uses is a priority. However, the intent of these Council comments has generally been framed within the sentiment that mitigation for residential uses is too low in comparison. Staff presents this question for Council consideration in response to comments received during engagement that the jump between the existing and proposed mitigation is too abrupt and should either be reduced or phased in over time. For example, under the proposed calculation and current assumptions about the generation study, the mitigation required for the 7,500 square foot home would be 1.13 FTE; $425,417 (100%). If we were to make consistent with lodge and commercial uses: 1.13 FTE x .65 = 0.73 FTE, $276,520. For purposes of trying to simplify the overall approach, staff could support the implementation a 65% mitigation rate, but does not recommend a phased implementation. AH Mitigation Deferral Agreement for Locals In response to several comments that staff received during consideration of Ordinance 24 and in our engagement efforts on the moratorium, staff is proposing improvements to the deferral agreement that would bring certainty to the value of future mitigation requirements when a resident enters into an agreement. Now, an FTE calculation is included in the agreement, but the future value of the mitigation is unknown as it is tied to the value of the FIL at the time that the agreement is terminated. Rather than be subject to the uncertainty around future updates to the FIL or other changes to mitigation requirements, future valuation of the mitigation would be tied to annual increase in the Consumer Price Index (CPI). In staff’s view, this would provide improved certainty for the resident, create simplicity for current and future staff, and improve the agreement in general terms. Toward this same end, staff also recommends that future mitigation requirements within the deferral agreement should be allowed to be met with fee-in-lieu, by right. Policy Question for Council Does Council agree with staff’ recommendation to use CPI as the mechanism for determining future mitigation requirements within a deferral agreement? And the ability to meet future mitigation requirements via fee-in-lieu? Discussion: Staff agrees with comments from the public that the deferral agreements, as currently implemented create uncertainty and risk for the party entering into the agreement. It is unknown what may happen to future policies or calculations around FIL and other aspects of the mitigation system. In this proposal, the agreement will set a fixed value of mitigation at the time of a building permit and then accelerate this value based on a standard measure of inflation over time. In this way, a person entering into a mitigation today would have some basis on which to evaluate the future obligation. Similar to the amount, the mechanism for meeting the mitigation also has uncertainty built in. If a person 8 Staff Memo – Moratorium, Residential Building Final Work Session Page 8 of 14 wanted to end a deferral agreement today, they would be required to extinguish an AH Credit for the mitigation requirement. In our current situation, AH Credits are unavailable or are trading at a price significantly above the current FIL values. By allowing FIL by right in the case of deferral agreements, it further contributes to future certainty. 100% Affordable Housing Review Process As has been previously discussed with Council, staff is proposing that 100% affordable housing projects (Category and RO) that are fully compliant with all other aspects of the Land Use Code, would be reviewed and approved administratively. Currently these projects would most commonly be reviewed by P&Z, but if on a designated property or in a historic district, HPC would review. The purpose of this change is to remove unnecessary and unpredictable review processes for projects that are otherwise compliant with the Land Use Code. The change would also create parity between AH and free-market residential development in the level of staff review and public scrutiny the development types receive. Under the proposal, to qualify for administrative review, these projects would be compliant with the use and dimensional limitations of the underlying zone district, APCHA regulations related to the size and qualities of the units, parking requirements, and residential design standards. Additionally, the process has been designed to bring clarity to the Land Use application process for 100% AH projects and builds in a development review committee (City staff from development review departments) process to identify and troubleshoot potential issues in setting up the eventual building permit process for a more expedient review. One topic that is not easily addressed in making these reviews administrative is the relationship to Aspen’s Historic Preservation Design Guidelines and the Historic Preservation Commission review process. Any project on a designated property or in a historic district for affordable housing would be of a scope that would necessitate an HPC review. While staff desires to streamline and make more predictable the process in reviewing AH projects, historic preservation review has been essential in maintaining Aspen’s historic, cultural, and architectural character in the face of immense pressure to do otherwise. Staff does not want to undermine this role, but at the same time wants to avoid the weaponization of HPC review criteria by those desiring to create obstacles to the development of affordable housing. Policy Question for Council 1) How does Council desire to balance the policy outcome that review of AH projects becomes more predictable and streamlined with the important role of HPC review for designated properties and properties in the historic district? Discussion: There are three practical responses to this question: • All compliant AH projects that are not under HPC’s purview will be administrative and those projects under HPC purview will continue to be evaluated by the board. Staff will work within this framework to identify measures to simplify and streamline the review. Or, • AH projects that are in a historic district, but not on properties that are designated will be a part of the administrative review path. Projects that involve designated properties will remain under HPC purview. 9 Staff Memo – Moratorium, Residential Building Final Work Session Page 9 of 14 • All AH projects will be subject to an administrative review, regardless of designated status or location in a district. This would not preclude an administrative review of a project through the HP Design Guidelines, but would remove the role of HPC Options 2 and 3 would fundamentally change the role of HPC and the HP Design Guidelines in evaluating projects that are designated and/or are located in a historic district. 26.710 – Zone Districts Additional Opportunity for Affordable Housing In our conversations with Council and with the public during our engagement efforts, staff heard two comments loud and clear: 1) Affordable housing should be allowed and encouraged throughout Aspen. 2) Any affordable housing should be consistent with neighborhood scale and character. With these two concepts in mind, staff is proposing targeted changes to Chapter 26.710 to eliminate unnecessary obstacles to 100% AH development and to provide some additional opportunity for AH that respects underlying zoning. It should be understood, however, that these changes will not in themselves result in new AH units. Rather, these changes should be viewed as an improved foundation, that when paired with other policies, incentives and subsidies, could result in additional interest in affordable housing from the private sector, and create more predictable and affordable paths for public sector AH development. It is important to note that the proposed changes only apply to projects that are comprised of 100% AH (Category and RO). As the number of changes is extensive, the following provides a brief identification and description of the proposed changes: 1) In residential zone districts (R-6, R-15, R-15A), triplexes and fourplexes (3 and 4-unit multifamily) would be allowed by right if the project otherwise conformed to the underlying dimensional limitations. For example, in the R-6, the allowable floor area for a duplex on a 6,000 square feet lot, is 3,600 square feet. Under this change, four units could go in where there is currently a limit of two – fitting within the 3,600 square foot limit. 2) In the R-6 and R-15 there are some existing multi-family developments that are currently non-conforming. This means that they are stuck in their current conditions, and if demolished, would need to resort to allowed uses. The proposed change would convert 100% affordable properties, or properties proposed for 100% affordable projects into a conforming use. This would give flexibility for moderate expansion, redevelopment with upgraded or redesigned units, and remove current limitations on even minor upgrades. For these now conforming projects, they would be granted an FAR of .75:1 (which is consistent with the minimum in RMF). 3) Across the residential zones, including RMF, there has been an unintended intersection between the zone district standards and language in the Non-Conformities (26.312) chapter that identifies “non-conforming lots of record”. In staff’s view, the intent of the 10 Staff Memo – Moratorium, Residential Building Final Work Session Page 10 of 14 code as written is to grant a minimum development right (of a single-family home) on lots that do not meet lot size criteria. Instead, the code has been applied over time to restrict otherwise allowed uses based on lot size criteria. These changes would in several sections and zones provide clarity to this issue. The outcome would be that in the RMF (and other residential zones) that 100% affordable projects would be allowed regardless of the lot size. So, on a 3,000 or 4,500 square foot lot in the RMF (standard lot size is 6,000), 100% AH multifamily could be built, although scaled down accordingly based on the dimensions already identified in the zone district limitations. 4) Across Zone Districts, both residential and commercial (but excluding zones like Park and Open Space), identifying 100% affordable housing as an allowed use. As a result of past code changes this was either intentional or left ambiguous. For the most part, the dimensional and use limitations that are currently in effect are retained (example: AH as an allowed use in the CC – but with limitations. Only on upper floors, and only as part of a mixed-use project). In other circumstances, dimensional changes are proposed. In the Lodge Zone District, 100% AH as a single use is not currently allowed. The proposed change would create this as an allowed use and would establish an FAR of 1.5:1. In this zone, lodge or mixed-use projects are granted an FAR of 2:5 or 2.75:1 depending on lot size. Additionally, in the SCI Zone District, the FAR for affordable in a mixed-use scenario is proposed to increase from .75:1 to 1:1. In the SCI, this would not change the overall massing of a development but would increase the proportion of FAR that could be allocated to AH. 5) It is proposed that any limitations on where AH Credits can be pursued for the development of AH units are removed. This was previously included as a limitation in the CC, C-1, and NC zones. This change would allow projects across zone districts to pursue AH credits. 6) In the Mixed-Use Zone District, it is proposed that new, free-market residential units (single-family, duplex and multifamily) are prohibited and no longer an allowed use. The mechanism and language to implement this are identical to past actions toward this outcome in the CC, C-1, and NC zones. While no new units can be established, existing units remain as conforming uses. This change has two purposes: to preserve the current mix of residential and commercial uses in the zone district and to encourage development of affordable housing. In essence, this amendment would preclude future change of use to additional free-market housing. Code changes necessary in support of the primary policy proposals: 26.104.100 – Definitions The Definitions section of Part 100 contains all of the specific terms utilized throughout the Land Use Code. Because of the complexity and nature of land use and the local conditions found in Aspen, these definitions serve as the basis to understand and implement the provisions of the LUC. Anytime an amendment is done to any section of the LUC, the definitions section often needs to be amended as well, to bring clarity or to make sure that definitions align with the altered policy or regulation. 11 Staff Memo – Moratorium, Residential Building Final Work Session Page 11 of 14 To respond to proposed changes elsewhere in the LUC, staff is recommending changes to the Definitions section identifying new terms and revising definitions on three topics: floor area, demolition, and affordable housing. It is staff’s intension that these changes will bring needed clarity to topics that are often confusing for customers and staff and will support important the other amendments. Floor Area – Under current regulations and definitions, staff uses the same calculation for Floor Area to determine both compliance with dimensional limitations and to calculate affordable housing mitigation. With the policy proposal to include subgrade and other areas that are currently excluded from Floor Area calculations for affordable housing mitigation related to residential development, new or modified terms and definitions are needed. Demolition – In support of the use of the GMQS allotment system for projects that trigger Demolition, existing terms needed to be better defined and new terms were identified. These definitions are supported by a new section of Code, 26.580, that is further described below. Affordable Housing – There are three new terms added related to AH development: • 100% Affordable Housing – this is a term that is necessary to give definition to the types of projects that qualify for new zoning flexibility – and includes both Category and RO units. • Triplex – a three-unit multifamily project that could be located in residential zones that are currently limited to single-family and duplex, if 100% affordable. • Fourplex – a four-unit multifamily project that could be located in residential zones that are currently limited to single-family and duplex, if 100% affordable. 26.212 – Planning and Zoning Commission Planning and Zoning Commission would be the review body to consider an appeal of the Community Development Director’s determination that a project has triggered Demolition. 26.312 – Non-Conformities The proposed changes to the Non-Conformities chapter are relatively minimal, but impactful in bringing clarity to the differentiation of projects that trigger the 40% Demolition threshold versus projects that simply destroy a non-conforming portion of a building. 26.312 – Appeals The proposed change aligns the Appeals chapter with the change to 26.212, Planning and Zoning Commission, described above. Gross Floor Area this is where architects start – includes all horizontal areas of a home Allowable Floor Area This excludes basements, portions of garages, vertical circulation, etc. for calculation of conformance with zone district dimensional limitations Mitigation Floor Area This includes basements, garages, vertical circulation for calculation of affordable housing mitigation 12 Staff Memo – Moratorium, Residential Building Final Work Session Page 12 of 14 26.430 – Special Review If a project was pursuing a Demolition allotment and proposed a variation from any of the identified standards, an application could request a Special Review by the Planning and Zoning Commission. 26.540 – Certificates of Affordable Housing Credits Under current code, the issuance of Certificates of Affordable Housing Credit requires review by P&Z or HPC in spite of the very formulaic nature of the review criteria. There is very little or no discretion. Staff proposes changing this to an administrative review – consistent and in conjunction with the GMQS administrative review for 100% affordable housing projects. 26.575.020 – Calculations and Measurements There are three primary changes proposed to this section of the code that serves as the basis for how staff and the design community measure our built environment. 1) First, there is new text that supports the definitional changes to floor area that were described above in 26.104.100. Again, these definitional changes are necessary to distinguish the calculation of a homes area for the purpose of aligning with allowable floor area in the zone district standards (mass and scale) versus the calculation for the determination of AH mitigation. 2) The second changes are in support of the goal of encouraging remodels and upgrades to existing homes, rather than full demolition. Under current code, if a home or a portion of a home was built to the limits of their setbacks or their height, it would not be possible to upgrade the insulation in the wall or roof assemblies for improved energy performance without requesting a Variance – and the criteria for getting a Variance are difficult to cross. The proposed code changes would allow existing homes to exceed their setbacks or height limitations by a maximum of 8 inches to accommodate insulation upgrades (increased R-value) and/or to add materials that make the home more resistant to wildfires. The 8 inches dimension was identified to provide the flexibility to allow an addition of up to 6 inches of additional insulation. This could help to increase the wall or ceiling assembly performance of an existing structure by R-20 to R-30. Similarly, staff proposes additional flexibility for upgrades to mechanical equipment and related screening for existing homes where the site conditions and current regulations preclude mechanical equipment that is getting increasingly larger and taller as it becomes more efficient. 3) Lastly, the current code allows for some flexibility for dimensional standards in order for a project to comply with building codes or in the pursuit of energy efficiency. The changes give additional flexibility and streamlines process when the Community Development Director applies discretion to situations that cannot meet dimensional limitations, but where building code compliance or improved energy efficiency is in the best interest of the community or the project. 26.580 – Demolition This new section of the Land Use Code applies to demolition of all use types within the City. However, emphasis is given to Residential projects by outlining important requirements in the measure of demolition, the 40% Demolition threshold, review processes – including appeals, and importantly the adoption process for the Residential Demolition and Redevelopment Standards (RDRS) that are at the heart of the review for the allocation of a GMQS Demolition Allotment 13 Staff Memo – Moratorium, Residential Building Final Work Session Page 13 of 14 (described earlier in this memo). The RDRS will live outside of the Land Use Code much like our Historic Preservation Guidelines, Commercial Design Guidelines, and Aspen’s Wireless Telecommunications Facilities Design Guidelines. This allows these documents to be more flexible over time as the process to amend them, while requiring Council approval, would not require the process for a full amendment to the Land Use Code. CONCLUSION AND NEXT STEPS: During the Work Session, staff intends to have a structured discussion on the proposed policy. The discussion will provide space for Council questions, individual Council member comments, and an opportunity for staff to gauge Council consensus on difficult topics. In addition, throughout the memo, a series of policy questions have been raised. Restated below, these specific questions have arisen since the last Work Session on these topics. Demolition • What should the total number of allotments for Demolition be in a given year? • Does Council agree with the staff recommendation to utilize an administrative review for the issuance of Demolition Allotments? Mitigation • Given that generation rates and the amount of square footage included in AH mitigation calculations may increase, should the mitigation calculation (which is currently mitigating at 100% of employees generated) for residential redevelopment and additional floor area, be instead calculated at 65%, consistent with lodge and commercial development? Or, as an alternative should the proposed calculation (at 100%) be phased in over time? Deferral Agreement • Does Council agree with staff’ recommendation to use CPI as the mechanism for determining future mitigation requirements within a deferral agreement? And the ability to meet future mitigation requirements via fee-in-lieu? Affordable Housing Review Process • How does Council desire to balance the policy outcome that review of AH projects becomes more predictable and streamlined with the important role of HPC review for designated properties and properties in the historic district? Following discussion and direction from Council, staff will finalize draft code language. Proposed Ordinances will be reviewed and considered in the following meetings: Planning and Zoning Commission for Recommendation: June 7th City Council, Regular Meeting – First Reading: June 14th City Council, Regular Meeting – Second Reading June 28th RECOMMENDATIONS: Staff recommends a robust discussion that includes questions and comments from Council, direction from Council on the specific policy questions, and any requests for additional information for Council consideration at First Reading. 14 Staff Memo – Moratorium, Residential Building Final Work Session Page 14 of 14 EXHIBITS: A – Community Case Studies B – Residential Development Impacts C – Buy Down and Fee-in-Lieu Analysis D – Affordable Housing Zoning Analysis 15 Page 1 of 19 MEMORANDUM To: City of Aspen From: Design Workshop Date: February 28, 2022 Project Name: City of Aspen Moratorium Project #: 6829 Subject: Relevant Code Analysis Summary Introduction: Design Workshop completed a review of several case study Development Codes related to issues involved in the moratorium, including sections pertaining to Administrative Procedures, Affordable Housing, Growth Management and Demolition Reviews. This analysis is intended to inform how the City of Aspen might incorporate certain ideas and policies into Land Use Code updates and completes deliverables for Task 1.5. Affordable Housing (AH) codes in Cambridge, MA, San Francisco, CA, and Berkley, CA. Growth management codes in Santa Monica, CA, Mount Pleasant, SC, and Thornton, CO were analyzed for the way in which they limit the pace and scale of development. Demolition provisions were reviewed based on an area’s complexity as well as its environmental constraints and mitigation measures. Telluride, CO and Berkley, CA codes were analyzed under this section. Lastly, administrative procedures in Glenwood Springs, CO and Malibu, CA were reviewed related to public hearings and overall review processes. The case studies provide examples that can be implemented into Aspen’s code, reveal where the code may be lacking and give considerations of what to avoid. It should also be noted that these ideas and requirements are reflective of the overall regulatory environment in each community. Scaling to Aspen’s needs should not only reflect Aspen’s goals and vision, but also its staff capacity, ability, and willingness to perform the duties necessitated by these review requirements. Affordable Housing Communities across the country are seeking to address affordable housing needs. The case studies focus on affordable housing overlays and zoning tools that can be used to increase the amount of affordable housing in a community. 1.Cambridge, MA A.Definitions Cambridge includes two specific zoning tools to increase affordable housing. The first, “Inclusionary Housing Projects,” focuses on creating new affordable housing throughout the city. This type of project can be anywhere and may include single-family, two-family, multifamily and townhouse housing, elderly oriented congregate housing, and lodging or mixed-use housing. This type of housing must create “at least ten (10) dwelling units or at least ten thousand (10,000) square feet of residential Gross Floor Area on one (1) lot or Development Parcel or two (2) or more adjoining lots in common ownership or under common control at any time within five (5) years following the first date of application for any special or building permit for development on the lot or lots or at any time within the twelve (12)months immediately preceding the first date of application for any special or building permit”. For the purpose of this definition, development must include at least one of the following: Landscape Architecture Planning Urban Design Strategic Services 120 East Main Street Aspen, Colorado 81611 970.925.8354 designworkshop.com Exhibit A 16 Page 2 of 19 1. Construction of new buildings or additions 2. Increasing the number of dwelling units or amount of residential Gross Floor Area within an existing residential building 3. Occupancy of existing buildings which have not been used for any residential use for a period of at least two (2) years 4. Conversion of gross floor area in existing buildings from non-residential to residential use. A developer of fewer than ten (10) dwelling units and fewer than ten thousand (10,000) square feet of residential gross floor area can choose to voluntarily comply with the provisions. All Inclusionary Housing Projects are required to be sold to “eligible households,” defined elsewhere in the code. The second type of affordable housing is within an Affordable Housing Overlay (AHO). This overlay allows construction of 100% affordable four (4) story apartments anywhere in the city by-right. The overlay offers flexibility and relaxation to zoning codes for residential developments that are permanently affordable to households earning up to 100% of the area’s median income. An AHO Dwelling unit is defined as the construction of new development and/or the modification of an existing structure resulting in single-family, two-family, townhouse, or multifamily dwellings that comply with Cambridge’s AHO standards. It is important to note that an AHO Project that meets the standards within its section are not required to comply with Inclusionary Housing Requirements. B. 11.200, Incentive Zoning and Inclusionary Housing I. 11.202, Calculation of Housing Contribution The code states that the developer or owner of an “Incentive Project” must make a housing contribution. This contribution is calculated by multiplying the gross floor area of the project by the housing contribution rate in effect when the first building permit is issued. The rate is subject to annual escalation based on the Consumer Price Index (CPI) Housing Index. Table 1 below shows the adjustment of this rate over time. Table 1: Housing Contribution Rate Effective Date Housing Contribution Rate September 28, 2015 $12.00 per square foot. September 28, 2016 (Annual Adjustment) $13.00 per square foot. November 16, 2016 (CPI Adjustment) $13.50 per square foot. September 28, 2017 (Annual Adjustment) $14.50 per square foot. October 18, 2017 (CPI Adjustment) $14.95 per square foot. September 28, 2018 (Annual Adjustment) $15.95 per square foot. November 18, 2019 (CPI Adjustment) $17.10 per square foot. January 28, 2020 (City Council Amendment) $20.10 per square foot. Source: Cambridge Municipal Code, 11.202.b The housing contribution rate and the incentive zoning provisions must be reevaluated on a three-year minimum rate from the time of City Council’s last amendment. II. Section 11.203.1, Applicability The requirements apply to all zoning districts throughout the city. For Inclusionary Housing Projects, twenty percent (20%) of the total dwelling unit net floor area is required to be affordable dwelling units. This requirement must be reevaluated at least every five (5) years. Reevaluation is based on factors including demographic characteristics, residential development activity and housing trends. III. Section 11.203.3-.4 Standards This section of the code contains standards for Affordable Dwelling Units to make them uniform to market rate units. They require similar elements such as being in the same location within the development, having 17 Page 3 of 19 a proportionate size and bedroom number, and possessing the same amenities (common areas, facilities, and services). The standards contain three calculations related to the number of Affordable Dwelling Units provided in a building. 1. A ratio of family-sized (units with two or more bedrooms) Affordable Dwelling Units to all Affordable Units must be equal or more than the same ratio of family-sized and all market rate units. 2. Townhouse or multifamily residential projects above thirty thousand (30,000) square feet in net floor area. These projects must provide family-sized Affordable Dwelling Units of at least one per every six thousand (6,000) square feet of the project’s required Affordable Dwelling net floor area. 3. The rental to owner-occupied Affordable Dwelling Units must equal the same ratio of market rate units. If the CDD finds that these ratios result in a total net floor area required for Affordable Dwelling Units that is less than the required twenty percent (20%) set in Section 11.203.1 (above), a payment equal to the unmet area is required. IV. Section 11.203.5, Incentives The dimensional requirements of any zoning district, including base or overlay zoning districts, will be flexible to Inclusionary Housing Projects as-of-right. These include an increase of thirty percent (30%) to the number of permitted dwelling units or a thirty percent (30%) increase to the gross floor area. This additional area must be used for residential uses not including hotel or motel use. C. Section 11.207, Affordable Housing Overlay An AHO Project is permitted by-right within any zoning district if it meets all of the AHO standards, which override the requirements of the project’s zoning district and special permits. Any development that does not meet all of the standards of the AH Overlay will be subject to the requirements in the zoning district, including any requirements for special permits. I. Section 11.207.3-4, Standards and Use AHO Dwelling Units can only be rented or sold to AHO Eligible Households guaranteed by a recorded convenance, with preference given first to Cambridge residents. AHO Projects may contain single-family, two-family, townhouse or multifamily dwellings by-right without the need for special permit procedures. Active, commercial ground floor uses that provide are allowed if the base zoning district or applicably overlay allows it. II. Section 11.207.5 – 11.207.6, Development Standards An AHO Project that conforms to the following development standards are generally not subject to other limitations found within the Zoning Ordinance. Standards that are relaxed for AHO Projects include dimensional district development standards, residential density, yard setbacks and open space. Table 2 displays the code’s District Dimensional Standards compared to the AHO standards. Table 2: District Development Standards vs Affordable Housing Overlay Standards District Development Standards AHO Project Standards Dimensional Standards and Stories Above Grade Residential building height of 40 (or less) feet maximum Residential building height of 45 feet maximum - 50 feet maximum for projects containing an active non- residential ground floor Maximum of four stories above grade Residential building height of 40 - 50 feet Residential building height of 65 feet maximum - 70 feet maximum for projects containing an active non- residential ground floor 18 Page 4 of 19 - Portions of the project that abut a nonresidential use and are within 35 feet of a district with a maximum of 40 or less are subject to the above standards. Maximum of six stories above grade Residential building height of 50 feet and above maximum Residential building height of 80 feet maximum - Portions of the project that abut a nonresidential use and are within 35 feet of a district with a maximum of 40 or less may be a maximum of 60 feet or five stories Maximum of seven stories above grade Residential Density Floor area ratio (FAR) of less than 1.00 Maximum FAR of 2.00 No minimum lot area per dwelling unit * This table was developed by Design Workshop and is not contained within Cambridge’s code In addition to dimensional district development standards and residential density, more relaxed standards include provisions for yard setbacks, redevelopment or reconstruction, biking and parking, and transportation. The codes most relevant to Aspen are “Standards for Existing Buildings.” An existing building that does not conform to the dimensional standards for AHO may be altered, reconstructed, extended, relocated, and/or enlarged for use as an AHO Project as-of-right. One allowed adjustment includes the construction occurring entirely within an existing structure that may violate or further violate the permitted FAR. Other allowed adjustments are those to openings to the exterior of a building, the addition of insulation to improve energy efficiency, the instillation of features to improve accessibility, and the repair, reconstruction, or replacement of preexisting nonconforming portions of buildings. Though AHO standards apply over others, the projects must still conform to the city’s Environmental Design Standards. III. Section 11.207.8, Advisory Design Consultation Procedure. While AHO projects are intended to be by-right, certain board level reviews are still required. An “Advisory Design Consultation Procedure” provides the opportunity for non-binding input by the Planning Board and community. This is intended to promote design outcomes that are compatible with the current neighborhood development and advances the City’s current and future goals. This procedure includes at least two (2) community meetings. The Community Development Department (CDD) will be notified of the time and location and must give notification to neighbors surrounding the property or those who ask to be notified. • Meeting #1: The purpose of the first community meeting is intended for the developer to share the site and street context analysis with the community prior to building design and receive feedback from community members. Within 65 days of receipt of a complete set of materials by CDD, the Planning Board will schedule a design consultation at a public meeting. During the consultation, the Planning Board will evaluate the proposal for general compliance with the requirements of the AHO Standards and appropriateness with other development activities in the area. The Board may also suggest specific project adjustments and alterations to further the purposes of this Ordinance. Up to 20 days after the design consultation, the Planning Board must communicate its findings in a written report provided to the developer and CDD. • Meeting #2: The purpose of the second meeting is for the developer to share preliminary project designs, answer community questions, and receive feedback on the design. If necessary, the developer may make revisions to the design in consultation with the CDD staff and submit a new set of documents. The Planning Board will then review and discuss the revised documents at a second design consultation meeting. Following the second design consultation, the Planning Board may submit 19 Page 5 of 19 a revised report prior to a final report (the "Final Report"). The Final Report from the Planning Board to the Superintendent of Buildings certifies compliance with the procedural requirements. • Subsequent Meetings: At subsequent meetings, the developer will prepare materials including, but not limited to, distances and dimensions, context analysis, existing conditions of the site and a design statement on compatibility. Any additional design consultations to review further revisions may occur only at the discretion and on the request of the developer or the Cambridge Affordable Housing Trust. IV. Section 11.207.10-11, Enforcement and Review of Affordable Housing Overlay The Community Development Department (CDD) is required to provide an annual status report to the City Council containing the following information: 1. List of sites considered for affordable housing development under the Affordable Housing Overlay, to the extent known by CDD, including site location, actions taken to initiate an AHO Project, and site status; 2. Description of each AHO Project underway or completed, including site location, number of units, unit types (number of bedrooms), tenure and project status; and 3. Number of residents served by AHO Projects. A five-year progress report that assesses the effectiveness of the Affordable Housing Overlay in increasing the number of affordable housing units in the city, distributing affordable housing across City neighborhoods, and serving the housing needs of residents is required. The report must also assess the effectiveness of the Advisory Design Consultation Procedure in gathering meaningful input from community members and the Planning Board and shaping AHO Projects to be consistent with the stated Design Objectives. CONSIDERATIONS FOR ASPEN: 1. These provisions allow for 100% affordable housing by right in every zoning district. The use of a single overlay may make individual neighborhoods feel less singled out as opposed to picking and choosing specific zone districts or neighborhoods. 2. Although the community consultation procedures provide an opportunity for public comment prior to building permits, the consultation meetings may also lengthen the process that is supposed to be by-right. 3. The overlay requires at least four-story apartment buildings. While by-right multi-family development is effective, a four-story building may not be compatible in all areas of Aspen. 4. Reviewing the progress of AHO is a beneficial component. The information required can help establish how the system is working and how it may be adjusted in the future. 2. San Francisco, CA San Francisco has adopted a program called HOME-SF that allows affordable housing development in certain zone districts. Development in the city’s single family and duplex zones are not permitted to participate in the program. As a result, only the section on development bonuses will be analyzed for the purpose of this case study. An applicable project must contain three or more dwelling units, must not demolish any residential units, will consist of new construction only and must not demolish or significantly alter a historic resource. HOME-SF projects are required to have twenty to thirty percent (20-30%) of units designated for affordable, middle and moderate-income residents. They are also required to have either forty percent (40%) of the units as two bedrooms or larger or fifty percent (50%) of all bedrooms must be two (2) or more bedrooms. A. Section 206.3, Housing Opportunities Mean Equity Any HOME-SF project can receive any or all of the offered bonuses summarized below: 1. Form based density: Includes height, bulk, setbacks, required open space, exposure and unit mix in addition to design guideline and review elements 20 Page 6 of 19 2. Height: Up to twenty (20) additional feet of the designated height restriction. This height must be used to provide two additional ten (10) foot stories or one additional ten (10) foot story. 3. Ground floor ceiling: Projects with active ground floor uses may receive up to a maximum of five (5) additional feet in addition to the twenty (20) feet listed above. The additional five (5) feet must be used at the ground floor to provide a fourteen (14)-foot ceiling for nonresidential units. 4. Zoning modifications include reductions in rear yard setbacks of up to twenty percent (20%) of the lot depth, or fifteen (15) feet. Dwelling unit exposure requirements are also allowed to be met through qualifying windows facing an unobstructed open area that is no less than twenty five (25) feet in dimension. Additional modifications include no off street loading spaces necessary, a seventy five percent (75%) reduction in parking requirement and reductions to the open space and in inner court requirements. 5. Priority processing and planning commission approval In addition to the incentives listed above, the code also has three different tier-based incentives that an applicant may request. These provide different levels of relaxation for ground floor ceiling height, building height and form, illustrated in Table 3. Table 3: HOME-SF Tiers Tier Description Zoning Modifications Additional height On-site affordability requirement Tier 1: Relief from density limit and seven zoning modifications N/A 20-30% Tier 2 1 story, 10 feet 25% Tier 3 2 stories, 20 feet 30% B. Section 206.4, The 100% Affordable Housing Bonus Program Also relevant to this analysis is San Francisco’s 100% affordable housing provisions. A 100% affordable housing bonus project is defined as a project that contains three (3) or more units, allows residential uses, and is not in their single-family and duplex zone districts. These projects may not seek a density or development bonus from another program, and it cannot demolish any existing units. I. Development Bonuses: Similar to HOME-SF standards, a 100 Percent Affordable Housing Bonus Project can receive development bonuses as well. In addition to the zoning modifications (the same as those listed above in paragraph A. Section 206.3, Housing Opportunities Mean Equity) any or all bonuses including priority processing, form based density, thirty foot (30) height increases and ground floor ceiling height increase by five feet (5). CONSIDERATIONS FOR ASPEN: 1. The tiers provide flexibility for those who want to develop affordable housing. This flexibility encourages more people to develop this type of housing. 2. There are many incentives that this code provides that may motivate developers to create affordable housing. 3. The scale of building in San Francisco drives the incentives, which may be inappropriately scaled for Aspen. 3. Berkley, CA A. 23.328, Inclusionary Housing I. Section 23.328.010, Chapter Purpose and Applicability Applicable to this chapter are residential housing projects constructing five or more dwelling units or one to four units when added to a four-unit property (resulting in five or more units). 21 Page 7 of 19 II. Section 23.328.020, General Requirements Inclusionary housing projects are required to include at least twenty percent (20%) of the total number of dwelling units within the project as inclusionary units. In applying this percentage, any decimal fraction above a whole number of dwelling units must be paid through a fee-in-lieu. II. Section 23.328.030, Payment of In-Lieu Fees as an Alternative to Providing Inclusionary Units As an alternative to providing inclusionary units required in an ownership project, the applicant may provide a fee in-lieu. This fee is calculated as sixty two and one half percent (62.5%) of the difference between the permitted sale price for inclusionary units and the amount for which those are sold. The fee must only apply to units in a project that are counted in determining the required number of inclusionary units in a project and will not apply to any units provided as a density bonus. III. Section 23.328.040 Requirements Applicable to All Inclusionary Units. All units must be reasonable dispersed, the same size and number of bedrooms (on average) as the non- inclusionary units, and comparable to the design of non-inclusionary units. Where the applicant shows that the direct construction and financing costs of the inclusionary units exceeds the sales prices allowed for inclusionary units, the Zoning Adjustments Board may approve one or more of the following measures to reduce costs or increase profitability. 1. Reduce the floor area or the interior amenities of the inclusionary units, provided that such units conform to applicable building and housing codes. 2. Increase the number of bedrooms in the inclusionary units. 3. In a home ownership project, construct rental units in a number required to meet the inclusionary provisions of this chapter applicable to rental housing projects. 4. Waive the in-lieu fees for fractions of units. B. Chapter 19.62, Priority Permit Processing for Housing for Low and Moderate Income Persons This section provides the opportunity for relaxed regulations for low income households (a household with income less than 80% of the median income in Oakland PMSA). The City Manager has the ability to waive or defer the payment of any permit fees, as well as expedite the permitting process, for any housing project in which at least 25% of the units are low and/or moderate income housing. C. Chapter 22.20, Mitigation and Fees--Conditions for Approval of Development Projects I. 22.20.065.A.3-6 Affordable Housing Mitigation Fee This section of the chapter states findings of the financial constraints of developing affordable housing in Berkley. Though the City has Housing Trust Funds, which play a key financial role, they are unable to single-handedly cover the current costs of affordable housing. Affordable housing developments also leverage multiple federal and state funding sources. Even when the financial aid and the finance from the Housing Trust Fund are combined, affordable housing still is not able to meet the housing needs for lower income households. Nonetheless, the adoption of the Inclusionary Housing Ordinance altered the ability to develop affordable housing in Berkley. The ordinance (described above in paragraph A, 23.328 Inclusionary Housing) requires a percentage of all new rental developments with five (5) or more units to provide below market rates. This was a transformative tool to create affordable housing. Similarly, the City also created an affordable housing linkage fee on commercial development. This fee mitigates the need for the affordable housing that it creates. Another finding in this section is that despite both of these ordinances, even when in combination with other funding sources, the City is financially unable to sufficiently address local housing needs. Another financial tool for the City, according to section 22.20.65.C, is that the City can require impact fees on new rental housing. Developers have flexibility to avoid the fee by providing twenty percent (20%) of the 22 Page 8 of 19 units at their “low income” and “very low income” levels. All units must be reasonably dispersed throughout the project and be comparable to the size, bedrooms, appearance and quality of market rate units. For projects that provide more than one unit for low or very low income households, at least fifty percent (50%) must be for very low income households. When there is an uneven number of units, a majority must be very low income. Applicants who feel that they have been aggrieved by any mitigation or fee required in this chapter may make an appeal of the decision to the Zoning Adjustments Board. Appeals to decisions made by the Planning Commission or Zoning Adjustments Board will go to the City Council. CONSIDERATIONS FOR ASPEN: 1. Applicants are required to pay a fee-in-lieu if the calculation for dwelling units results in a decimal. This standard sets consistent measures for the calculation and also ensures all that all benefits from the affordable dwelling units are being realized. 2. Applicants are able to have a reduced requirement if they can show that the construction costs for the units will exceed what they would be able to sell the unit for under the city’s housing price limitations. This could be a consideration for Aspen related to the Housing Credits Program. The city could provide a process that enables a developer to include a single free-market unit or an RO unit as part of a housing credits project to drive the rest of the project. Or the city could provide other fee reductions or reductions in requirements to enable a housing project to financially pencil. 3. Berkley’s findings about the financial struggles of providing affordable housing is an important analysis. According to both Zillow and the US Census Bureau, the median annual income of Berkley is $85,530 and the typical home value is $1,626,505. For Aspen, the median annual income is $78,292 and the typical home value is $2,659,788. While the income of Aspen residents is lower, the home value is almost $1,000,000 more than in Berkley. This means that the need to provide low income housing is even greater and the struggle to do so without several tools for significant financial aid is nearly impossible. However, the population and development potential in Berkley should be considered in this as well. 4. When the cost of developing inclusionary units is greater than the profitability of those units, adjustments may be made to adjust the outcome. This is a way to ensure that developing inclusionary units is attractive. Affordable Housing Summary Cambridge and San Francisco both have quality standards to encourage the creation of affordable housing and deter the demolition of it. A key concern for Aspen is the development of affordable housing. By allowing 100% AH in each district by right, such as Cambridge does, developers will have greater opportunities to develop housing units. This may also lessen the potential for districts and “NIMBY” homeowners to feel individually selected. While Cambridge includes a public review process for affordable housing developed by-right, this appears to have the effect of lengthening the review. Allowing for public comment and consultation before the application is turned in and money/time is spent, will help to ensure that each opinion from those surrounding the project is heard. However, if too many meetings are allowed then the process may be unnecessarily extended. If Aspen considered adopting this type of process, careful consideration should be given to what is truly by-right. The land use and permit process should be optimized to easily process the types of development Aspen wants to encourage. Aspen should consider what incentives, if any, should be provided for the development of affordable housing. The additional height, density, and floor area permitted in Cambridge and San Francisco may be out of scale with Aspen’s small mountain town character. However, these or financial incentives may be needed to help jump start private sector development of affordable housing. Smaller scale incentives could be more appropriate, such as setback variances or nominal height increases to allow taller ceiling heights. Incentives that enable reduced parking could be meaningful if implemented in Aspen. The prioritization of affordable housing permits is a benefit that could be replicable in Aspen. 23 Page 9 of 19 The Berkely example that allows the Board of Adjustment to vary requirements for Inclusionary Housing Units if the project’s construction costs exceed the unit sales prices is a potential opportunity for Aspen. This process could be useful in Aspen as a way to try and prioritize the development of housing units. There is potential to tie this to the credit program. Growth Management 1. Santa Monica, CA A. 9.37.110, Construction Rate Program Santa Monica prohibits projects involving the new construction or alteration of two or more dwelling units in certain residential zone districts from within a 500-foot radius where a development application was deemed complete. This limitation applies for 15 months after the issuance of a building permit. Unless the owner of the previously permitted project has given away the building permit for that project or received a Certificate of Occupancy, a project may only begin construction in the area after 15 months. The building permits are given on a first-come first-served basis. The code states that if the Building Officer determines that another permit has been issued less than 15 months prior, then the applicant is placed on a waiting list in order of the date and time that the permit application and all approvals have been received. Exemptions apply to projects including 100% affordable housing units, structures that are subject to City-mandated upgrading, vacant sites or those that are unhabitable and projects that serve the purpose of historic preservation. CONSIDERATIONS FOR ASPEN: 1. This system does not use allocations or rollovers, which creates efficiency in the system from an administrative tracking perspective. 2. This code relates to both alterations and new construction. Therefore, it is limiting the impact of both types of development within one area. 3. The code exempts 100% affordable housing, which could have the effect of helping to encourage upgrades to existing units, or the creation of new units. 2. Mount Pleasant, SC A. Residential Building Permit Allocation System, § 156.070 – 156.083 This section limits new units of residential development (one-family, duplex, townhouse, multifamily, and accessory dwelling unit [ADU]) for a five-year period which began in January 2019. Exemptions are provided for renovations, replacement (including demolition), and affordable housing. Available allocations for single family dwellings (one-family, townhouse, and duplex) are limited to 480 per year, with half (240) made available in January, and half (240) in July, resulting in a maximum of 2,400 new single family units over the five-year period. Available allocations for ADUs are limited to 20 per year, with half (10) made available in January, and half (10) in July, resulting in a maximum of 100 new ADUs over the five-year period. Available allocations for multi-family units is set at 500 for the entire five-year period. Annual multi-family allocations do not appear to be set explicitly, though § 1256.076 (B) (1) alludes to a total annual allocation of 600 dwelling units (480 single-family + 20 ADU + an assumed 100 multi-family). Any unused allocations are rolled over to the following 6- month cycle. No separate allocation application is required – the building permit application serves both purposes. A maximum of 25 allocation units may be applied for by any single development in a given 6-month cycle. Allocations are awarded on a first-come, first-served basis. If applications exceed available allocations, such applications are held as “first in line” for the subsequent 6-month cycle. 24 Page 10 of 19 CONSIDERATIONS FOR ASPEN: 1. The straightforward allocation limits (no calculations) and a first-come, first-served system make this an easy to implement ordinance. 2. Bi-annual allocation structure (and program evaluation) allows for real-time development phasing and assessment of what’s working and what isn’t. 3. The focus is purely on new residential development, which is targeted to fit the issue faced by this community. Aspen may want to consider this for redevelopment rather than net new residential development given the current growth and development patterns. 4. The program includes exemptions for renovations, replacements, and affordable housing, which Aspen may want to consider. 3. Thornton, CO A. Article VIII, Residential Growth Pacing System This Article establishes a system for limiting the construction of new residential units through “residential development allocations.” While this code section exists, it was unclear in our research if it has been activated, and calls requesting information were not returned. The framework is instructive so is summarized here. Renovations of existing residential developments are exempted, unless they result in an increase of the number of units on the site. Additional exemptions are provided for nonresidential development, multifamily residential development with a minimum density of 25 units per acre located within the City Center Area, development in certain annexed areas, individual homes, and residential development determined to be of “Special Merit” (e.g. for expanding the economic base, for providing infrastructure beyond the needs of the specific development, for fulfilling community goals, for property in a special district, for multifamily residential development that meets certain design requirements, or for reducing on-site water usage by one-third). Annual allocations are established for the following categories: 1. Single-family (defined as residential of < 5 units per acre), 2. Medium density (5-12 units per acre), 3. Multifamily (> 12 units per acre), 4. Manufactured home parks, and 5. Housing mix (special category to assign allocations to housing types that have limited availability in the city’s current inventory). Annual single-family and medium density allocations are further broken down into even fourths, made available by quarter. The total number of citywide annual allocations is not a set amount but is instead up to council discretion based on their review of such things as: projected revenues and economic base, traffic and school occupancy, growth trends, allocation application trends, and staff recommendations. Single-family allocations must be at least equal to the trimmed mean of the past five years of issued building permits (removing the lowest and highest years in that period). Single-family and medium-density allocations must be applied for no later than 30 days prior to the first day of the calendar quarter for which a building permit is sought. Applications are to include a proposed schedule of additional estimated allocations sought for the next five years as part of any multi-unit / subdivision developments. The maximum annual allocation request per project, per phase is 120 units. If all application and eligibility criteria are met, awarding of requested allocations is administrative. If the number of allocations applied for exceeds the number available in a given quarter, awarded allocations are prorated amongst all qualifying applicants. Applicants looking to close out a subdivision phase in which ten or fewer lots have not yet received allocations are given priority. Any unused allocations from a given quarter are rolled to the next quarter, but unused fourth quarter allocations cannot be rolled over to the following year. Instead, these are awarded on a first-come, first-served basis once the original fourth quarter application period ends. 25 Page 11 of 19 Multi-family, manufactured home, and housing mix category applications are reviewed on a rolling basis annually (not quarterly). Manufactured home and housing mix allocations are awarded first-come, first-served until the citywide annual allocation limit is reached. For multi-family allocations, first priority is given to applications that did not receive allocations in the previous calendar year and that were placed “on file” (in the queue) by the department. Any remaining multi-family allocations are awarded on a first-come, first-served basis. In addition, the overall annual allocation limit may be raised to allow the “last in line” project to be completed, provided that the additional allocation does not exceed 10% of the proposed project’s unit count. CONSIDERATIONS FOR ASPEN: 1. Focus is purely on residential resulting in additional units (new construction and renovation) – targeted to fit the issue faced by this community 2. Exemptions for high-density multi-family and projects of “special merit” – allowing discretionary pass through when needed (could become difficult to manage, or an avenue for loopholes; but also incentivizes compliance with other planning / design goals). 3. Single-family allocations awarded quarterly, which seems administratively tedious. Could be more impactful if quarterly allocation limits were dynamic and adjusted to new information. 4. Pro-rated distribution of single-family allocations exceeding a given quarter’s limit adds staffing certainty to the process (no rush to process requests as in first-come, first-served systems). 5. Innovative approaches to multi-family applications that exceed current limits: a. Opportunity for increase of annual limit to allow that “last project” to squeak through the door b. Placement of projects that don’t make the cut on a “first in line” waitlist for the following year Growth Management Summary Santa Monica’s approach to growth management is hyper-local, limiting development within 500ft of recent development for a period of 15-months. While this ensures no neighborhood experiences a “sea of cranes,” it may prove inappropriate in situations where the City may desire more intensive development. It also would appear difficult for the development community to track, and likely causes City staff to feel intense pressure to process applications, as being the first application through the gate in a given area is paramount. Mount Pleasant and Thornton and take a more citywide approach, leveraging annual, semi-annual, or quarterly allocation limits to pace development. This allows for a smooth application process and establishes certainty for the development community. Thornton’s quarterly application process for single-family units, in particular, seems to prove administratively efficient, substituting a pro-rated distribution for the first-come, first-served approach used in other processes. All three communities have built in exemptions for affordable housing or other community planning and design goals, either through explicit exception or through discretionary review. Critically, Mount Pleasant and Thornton do not exempt single-family units, as they have found that these developments are just as impactful, if not more so, to their built and natural environments. As Aspen considers the potential to evolve the Growth Management Quota System, it may be helpful to consider implementing the following practices: 1. Require allotments for single-family residential development 2. Replace first-come, first-served processes with procedures for pro-rating and the creation of “first in line” queues to reduce pressure on staff review 3. Establish a review and assessment schedule to adjust allotment limits to respond to recent trends Demolition 1. Telluride, CO 26 Page 12 of 19 A. Division 3, Relocation and Demolition I. Definitions Telluride regulates two types of demolition. The first, partial demolition, is limited demolition of a structure which occurs solely as part of a remodel, alteration, or addition to an existing structure. The second is full demolition. This is defined as “destruction, disassembly, dismantling, damage, razing, or tearing down of fifty percent (50%) or more of an existing structure (prior to commencing development) as measured by the finished surface of all exterior wall and roof area above finished grade and associated assembly and components necessary for the structural integrity of such wall and roof area.” For demolition related to designated employee housing units, the code states that no demolition, removal, or relocation of any structure which contains a designated employee dwelling unit is permitted unless first approved by Planning and Zoning. II. Section 7-306, Standards for Review of Demolition The demolition standards are applicable to non-rated or non-designated structures. The demolition may only be approved if: 1. The historical integrity and architectural character will not be compromised 2. Development will add to the architectural character of the area 3. The demolition mitigates impact on historical importance of the surrounding structures 4. The demolition mitigates the impact on the architectural character of the structure 5. The applicant has agreed to redevelop the originating site after demolition pursuant to a redevelopment plan which is compatible with/enhances the integrity of the immediate area and neighborhood III. 7-308, Measurement of Demolition Applicants are required to submit a diagram that highlight the surface of all existing exterior walls and roofs. Existing fenestration (doors, windows, skylights, etc.) are not counted in the measurement. Also required to be included in the diagram is the exterior surface area to be removed. The wall and roof area that is being removed to accommodate new or relocated fenestration is counted as exterior surface area being removed. Lastly, each exterior wall and roof segment as a flat plane with an area tabulation is also required and counted in the measurement. CONSIDERATIONS FOR ASPEN: 1. The town defines both partial and complete demolition. This can help to set proper mitigation impacts that reflect the amount of demolition being done. 2. While the code deals mostly with mitigating historical and architectural character, the purpose behind each of them may be used in Aspen’s demolition codes. 2. International Existing Building Code A. Section 501-50, Classification of Work This section of the Building Code defines classifications of demolition. It applies to alteration, repair, addition and change of occupancy of existing structures. The International Existing Building Code defines three (3) levels of alteration: • Level 1: The removal and replacement or the covering of existing materials, elements, equipment or fixtures using new materials, elements, equipment, or fixtures that serve the same purpose. • Level 2: The reconfiguration of space, the addition or elimination of any door or window, the reconfiguration or extension of any system, or the installation of any additional equipment. • Level 3: In level 3, the work area exceeds fifty percent (50%) of the building area. This section requires projects with different levels, or a change in occupancy, to comply with different chapters of the applicable building codes. The higher the level, the more current regulations apply to the project. 27 Page 13 of 19 B. Section International Residential Code appendix AJ501.3, Extensive Alterations This section uses the term “alterations” but has the same meaning as demolition in the land use code. It defines when an extensive alteration as situations when the entire scope of work will change 50% or more of the floor area in a dwelling unit. In these situations, the project is considered “reconstruction” and subject to upgrade requirements in the current applicable building codes. CONSIDERATIONS FOR ASPEN: 1. Taken together, these building code provisions require compliance with current codes when 50% or more of a dwelling unit or building is being remodeled or upgraded. This takes the full scope of work into account, rather than relying on the impact only to exterior walls and roof assemblies. Using this measurement may be more restrictive than the land use code’s current threshold of 40% of the walls and roof being removed. 3. Berkley, CA A. Section 23.326, Demolition and Dwelling Unit Control There are two sections for eliminating dwelling units through demolition. The first is for buildings constructed before June 1980 with two or more units. The Zoning Adjustments Board (ZAB) will approve a demolition permit to these properties if they are considered hazardous or unusable, if the building will be moved with no net loss to units and no change in affordability, if the demolition is necessary to permit construction of special housing needs facilities, and if the demolition is necessary to permit construction of at least the same number of dwelling units. The applicant is required to pay a fee set by the City Council for each demolished unit to mitigate the loss of affordable housing. An alternative to the fee is a unit in the new project designated to a below market rate household. Through this fee in lieu, the applicant will enter into a regulatory agreement with the City of Berkley. With the exception of one hundred percent (100%) affordable housing projects, the applicant is required to provide assistance with moving expenses, subsidize the rent differential for a comparable replacement unit in the same neighborhood, if feasible. The second set of restrictions are for buildings constructed before June 1980 with only one dwelling unit. Demolition on these buildings is prohibited if the building was removed from the market under the Ellis Act, there have been verified cases of threats or illegal eviction within the last three years. I. Affordable Housing Mitigation Fee According to this section, any project for the conversion of housing units to condominiums is subject to an affordable housing mitigation fee. The sum of such fees will go to the Housing Trust Fund program. This fee is nexus-based and is calculated by: 1. The sum of monthly mortgage payments, taxes and homeowners’ association fees, multiplied by 12. Mortgage payments will be the current average fixed rate 30-year mortgage as reported by the Federal Housing Administration applied to 95% of the purchase price. 2. Rental costs shall be the current rent of the unit at the time of filing an application for conversion under this chapter, also multiplied by 12. If the unit is owner-occupied or has not been rented within the previous 12 months, the rental costs shall be the monthly rental rate for comparable recently rented dwelling units within a reasonable radius of the property. 3. The difference between the condominium ownership costs of the unit less the rental costs shall then be divided by the current fixed mortgage rate as set by the Federal Housing Administration to determine this fee. II. Exemptions Inclusionary housing units are exempt from the affordable housing fee. This fee may also be reduced to either four (4%) or eight percent (8%) depending on units, if the owner converting the property has agreed 28 Page 14 of 19 as part of the application to limit future rent increases for any resident to no more than sixty five percent (65%) of the increase in CPI. CONSIDERATIONS FOR ASPEN: 1. This code is very specific and emphasizes direct citations to California law. We recommend the City’s legal consultants, White and Smith review the code to confirm if it is legally enforceable in Aspen. 2. This zoning code sets valuable provisions for affordable housing mitigation. Aspen may consider adding a provision to require applicants to pay a fee as part of the multi-family replacement program for each demolished unit to mitigate the loss of affordable housing. Demolition Summary The demolition calculations in Telluride and in the IBC are instructive for Aspen. Telluride uses similar methodology as Aspen does but has some specific criteria that can be used to evaluate the demolition. This could be instructive if the city implements a permitting / allotment system for demolitions. Aspen could consider if the current 40% threshold is appropriate, or if a 50% threshold that aligns with the IBC and Telluride makes more sense. The Berkely example may be most useful when considered int eh context of Aspen’s multi-family replacement program and could be a post-moratorium work product. Considerations for displaces owners is an interesting component that does not exist in Aspen’s code today. The system appears to be deeply rooted in California law, so review by the city’s legal team is recommended. Administrative Procedure The administrative procedures review focuses on how communities complete their general review processes, which types of authorities are granted to the Community Development Director and how interpretations of code are completed. 1. Glenwood Springs, CO: A. Title 070, Article 070.060 Administration and Procedures: I. 070.060.020 , Summary Table of Development Review Procedures The relevant section of code includes in its introduction a table that summarizes Development Review Procedures. It is categorized by procedure and lays out the code reference, type of notice and meetings necessary, and the reviewing/decision-making body/bodies. Depending on the type of application there are different legislative bodies who may review, recommend revisions, review, issues a decision or hear an appeal. These legislative bodies include City Administration, Development Review Committee, Planning Commission and City Council. A neighborhood may also act as another reviewing entity during a Pre- Application Neighborhood Meeting. The reviewers and/or decisions making bodies for each procedure are summarized in Table 4 below. 29 Page 15 of 19 Table 4: Summary Table of Development Review Procedures (Glenwood Springs Municipal Code, 070.060.030.a - Figure 060 1: Summary of Common Review Procedures) Table 060.1: Summary of Development Review Procedures KEY: R= Review and Recommendation D= Review and Decision A= Appeal ✓ = required Procedure Code Reference Notice Pre-App. Neigh. Meeting Pre- Application Conference Review and Decision-Making Bodies Published Mailed Posted Staff DRC Planning Comm. City Council ORDINANCE AMENDMENTS Rezoning 070.060.040(a) ✓ ✓ ✓ ✓ ✓ R R R D Rezoning to Planned Unit Development (PUD) 070.060.040(b) ✓ ✓ ✓ ✓ ✓ R R R D Code Amendment (Text) 070.060.040(c) ✓ R R R D Annexation 070.060.040(d) Per Colorado statutes DEVELOPMENT PERMITS Site/Architectural Plan Review Admin. 070.060.050(a)(3) Note [1] ✓ D R A Minor 070.060.050(a)(4) ✓ ✓ ✓ ✓ R R D A Major 070.060.050(a)(5) ✓ ✓ ✓ ✓ ✓ R R R D Optional Master Plan 070.060.050(b) ✓ ✓ ✓ ✓ ✓ R R R D Construction Final Plans 070.060.050(c) ✓ D R[2] A Location and Extent 070.060.050(d) ✓ ✓ ✓ optional R R D Special Use Permit 070.060.050(e) ✓ ✓ ✓ ✓ R R D[4] A[4] SUBDIVISION PROCEDURES Minor Subdivision 070.060.060(a) ✓ D R A Preliminary Plat 070.060.060(b) ✓ ✓ ✓ ✓ ✓ R R R D Final Plat 070.060.060(c) ✓ D R A Condominiumization 070.060.060(d) Procedure depends on number of condominium units. See Subsection 070.060.060(d). Vacation of ROW 070.060.060(e) ✓ ✓ ✓ ✓ R R R D FLEXIBILITY AND RELIEF PROCEDURES Variance 070.060.070(a) ✓ ✓ ✓ ✓ R R D Administrative Adjustment 070.060.070(b) optional Considered by decision-maker for associated application. Appeal 070.060.070(c) ✓ ✓ ✓ optional R According to previous rows in this table. Notes: [1] Administrative Site/Architectural Review involving five or more units is required to follow public noticing procedures in Subsection 070.060.030(f)(3). [2] Director has discretion to refer the application to the DRC. [3] Director has approval authority for non-permanent right-of-way encroachments. All others require Council approval. [4] Special Use Permits involving Medical Marijuana Business, Retail Marijuana Business, and Marijuana Cultivation uses require hearings before the Planning and Zoning Commission and City Council. The Planning and Zoning Commission has review and recommending authority and City Council has review and decision making authority. 30 Page 16 of 19 Figure 1 and Table 5 below summarize two of the processes for review procedures. The code section contains a figure similar to Figure 1 for multiple procedures including ordinance amendments, subdivision procedures and flexibility and relief procedures. Table 2 summarizes the thresholds for each reviewing body based on the development type. Figure 1: Summary of Common Review Procedures Source: Glenwood Springs Municipal Code, 070.060.030.a - Figure 060 1: Summary of Common Review Procedures Table 5: Site/Architectural Plan Review Thresholds Source: Glenwood Springs Municipal Code , 070.060.030.a - Figure 060 1: Summary of Common Review Procedures II. Procedure Timeline The Glenwood Springs code outlines specific timelines for different application types, which are summarized in Table 6 below. 31 Page 17 of 19 Glenwood Springs includes a number of key thresholds related to administrative applications. • The applicant must be notified through a written notification, of the final decisions within ten (10) days of it being made. • If given an approval, the applicant has up to three (3) years before the approval expires. However, the Director may grant extensions for up to one (1) year. • For all applications other than administrative site/architectural plans that were subject to staff decision, the Director's decision is immediately final. The Planning Commission and City Council must be notified within three (3) business days of the administrative decision. • For administrative site/ architectural plans, the Director may refer the final decision to Planning Commission. The Commission will vote for a final decision or refer the application to City Council. Table 6: Summary of Procedural Timeline* Time Action 10 days prior to pre-application meeting Application must be submitted with all requirements 5 days after application submittal Director determines completion 6 months after staff recommendations If no resubmittal, application is abandoned 10-15 days prior to a hearing Public notices are sent out and posted notices go up 7 days after the first notice Second public notices are sent out 10 days after public hearing Applicant must be notified of a decision 3 days after administrative approval Planning Commission and City Council are notified of decision 3 years after approval Expiration of approval 1 year after denial Decision-making bodies are unable to decide on significantly similar applications * This table was developed by Design Workshop and is not contained within Glenwood Springs’ code III. Interpretation The Director is responsible for interpretations of applicability or design requirements during the Site/Architectural Plan Review Process. An applicant may appeal the Director’s interpretation to the designated body listed under “Administrations and Procedures.” For the review of an interpretation, the review body may affirm, reverse, or amend the interpretation. The decision of the review body must be based on several factors. These include the facts stated in the application, the requirements and intent of the applicable standards compared to the appealed decision, evidence related to how the applicable standards have been interpreted in the past, and consistency with the Comprehensive Plan. The ten (10) day notice period in Table 6 applies to the applicant’s notification of this decision. IV. Neighborhood Meetings A Pre-Application Neighborhood Meeting serves as a way to allow the surrounding community in the area to comment on a project early on in the process. This avoids significant funds being spent on the project prior to receiving feedback from the public which can potentially lead to costly revisions. This type of meeting is required for a Rezoning, Rezoning to PUD, Site/Architectural Plan Administrative review, Major Site/Architectural Plan Review, Optional Master Plan and Preliminary Plat. Neighbors within three hundred feet (300’) of the project will receive a mailed or electronic notification in advance of the meeting date. The Pre-Application Neighborhood Meetings may be required in addition to a Public Hearing. VI. Development Permit Exemptions: Section 070.060.050.a.2 lists the application types that are exempt from site/architectural plan review procedure. These include a change in use that does not require other development, conversion of non- residential building area into up to five (5) units without a change in building area or footprint, alterations that are less than a twenty-five percent (25%) increase in area, tenant improvements that do not impact 32 Page 18 of 19 area, height, density, or development standards, construction of, additions to, or accessory structures for a single or two-family detached dwelling, and construction of accessory buildings, fences, or walls. In order to be exempt from the review procedure, they must comply with the standards of Glenwood’s code. CONSIDERATIONS FOR ASPEN: 1. Glenwood Springs has a clearly defined process for administration procedures. The code contains a number of flow charts and a summary table for development review procedures which help to clearly explain the review process. Such visual illustrations should be considered for inclusion within revised section of the Aspen code. Although the code helps describe the overall process, a flowchart or other visual aids could be used to show the timeline for each process. 2. The Pre-Application Neighborhood Meetings are a resourceful tactic within Glenwood Springs. Aspen requires some neighborhood outreach prior to the first public hearing for certain application types. It may be worth considering if a neighborhood meeting should be included as a step prior to the submission of an application, as is the case in Glenwood Springs. Given that Aspen typically has a longer land use review process than Glenwood Springs, this addition may further complicate or extend the existing process. 3. Currently, Aspen’s Community Development Director is responsible for interpretations of the code, with appeals going to Council. It may make sense to have some appeals of interpretations go to the Planning and Zoning Commission for areas that are typically in their realm of review. 2. Malibu, CA A. Chapter 17.04 Administration and Enforcement: I. 17.045.060-.090, Interpretations, Conflicting Regulations and Enforcement When interpreting the provisions under this chapter, they must be held to the minimum requirements. However, when conflicts occur between the regulations under this title and the building code or other regulations, the more restrictive regulations apply. Another standard in this section states that nothing in Title 17, Zoning, serves the purpose of amending any city regulation requiring a permit and/or license or entirely repeal the City’s building code. In order to enforce the standards within this Title and conditions made on approvals, the planning department is responsible for inspecting city properties to monitor compliance. II. 17.04.220, Appeal of Action A person may request an appeal on decisions made for site plan review, variance, stringline modification, conditional use permit, reasonable accommodation request, determination of permitted use, sign permit, cultural resources review, highway dedication or improvement, or temporary use permit applications. An appeal for a decision by the Director is made to the Planning Commission and to the City Council for appeals to a decision made by the Planning Commission. An appeal is limited to only being reviewed based on matters raised within it. In the event of a deadlock vote decision, the original decision is final, unless appeals to Planning Commission are reappealed to City Council. CONSIDERATIONS FOR ASPEN: 1. There are specific regulations for both code and deciding body conflicts. These are helpful in avoiding clashing and confusion. 2. The factors that appeal decisions are made upon are limited. This limitation offers adequate notice to both the decision-making bodies, the community and applicants. This also helps to eliminate the necessity of rehearing matters not subject to challenge. 33 Page 19 of 19 3. Malibu does not state when the public hearings are required within the public hearing section. Although the processes can be found individually in other chapters, it may cause confusion. For ease of usability, requirements relating to specific topics should be kept under that topic’s section. Administrative Procedures Summary Both Glenwood Springs and Malibu have similar complexities that their development applications must deal with. These include environmental concerns, worries concerning sprawl and complex residential development. Out of the two case studies, Glenwood Springs was significantly more user friendly in both its online application and in the way that the code itself reads. One concern of Aspen is the complexity of the code and the way in which it contradicts itself. By adding flowcharts and tables, users would be able to more easily understand the process in which they will go through. Both Malibu and Glenwood Springs have certain appeals reviewed by the Planning Commission, which could be beneficial for Aspen to consider. 34 Page 1 MEMORANDUM To: City of Aspen From: Design Workshop Date: April 8, 2022 Project Name: Aspen Moratorium Support Project #: 6829 Subject: Review of Residential Development Impacts Introduction To assess the impacts of residential development on Aspen and its neighborhoods, Design Workshop completed a review and analysis of trends related to the Pitkin County Landfill, construction and demolition, residential sales and property transfers, building and permitting, assessment rates, and affordable housing mitigation. This analysis is intended to inform how residential construction has impacted the City of Aspen and how city staff might update policies within the Land Use Code to respond to current challenges driven by new residential development. The data used to inform this memorandum was reviewed and confirmed for accuracy by City of Aspen staff. This memorandum completes the deliverables for Task 3.3. Housing in Aspen Today Within the City of Aspen there are 6,197 housing units, 3,540 (57%) of which are occupied, meaning that “the persons living in the unit must consider it their usual place of residence or have no usual place of residence elsewhere.”12 The city’s remaining 2,657 units are classified as vacant, meaning that the unit is “entirely occupied by persons who have a usual residence elsewhere ” or that no one was living in the unit at the time of the interview.3 This excludes occupants that are temporary absent.4 Of the city’s 6,197 housing units, 2,176 (35%) are deed restricted units managed by the Aspen Pitkin County Housing Authority (APCHA). These 2,176 units are comprised of 963 owner-occupied units and 1,213 renter occupied units.5 APCHA does not require that tenants work in the same city as their unit is located in, only that tenants work a minimum of 1,500 hours in Pitkin County, use the unit as their primary residence (at least nine month per year), and own no other developed residential property in the Ownership Exclusion Areas.6 Because APCHA does not require that that tenants work in the same city or area as their unit is located in, it is difficult to determine what fraction of APCHA tenants work full-time in Aspen. According to Census data, Aspen’s 2020 population was 7,004 persons. The city has an estimated 1,191 businesses employing 13,920 individuals. The City of Aspen has established housing targets over the years, which has been reflected in the city’s growth management requirements.7 1 U.S. Census Bureau, Subject Definitions. 2 U.S. Census, 2021 ACS 5-year Estimates 3 U.S. Census Bureau, Subject Definitions. 4 Ibid. 5 City of Aspen Maps, Arc GIS. 2022. 6 APCHA, Basic Eligibility Requirements. 7 Chapter 26.470, Growth Management Quota System requires 65% housing mitigation for commercial and lodge development Landscape Architecture Planning Urban Design Strategic Services 120 East Main Street Aspen, Colorado 81611 970.925.8354 designworkshop.com Exhibit B 35 Page 2 Landfill Trends & Impacts The Pitkin County Solid Waste Center, also known as the Pitkin County Landfill, is the primary destination for municipal solid waste and construction and demolition debris generated in Aspen. Due to the pace and scale of construction and demolition (C&D) in Aspen, more than half of what ends up in the landfill each year is generated by construction and demolition activities.8 As a result, the landfill’s usable space and air rights are quickly diminishing, with the landfill expected reach its capacity in the next two to four years. The rate of landfill use is also rising, with the annual number of landfill visits increasing 13% between 2019 and 2021.9 The rise in use has been accompanied by increases in the amount of waste deposited, with C&D debris and concrete seeing the largest increase in tonnage since 2019, increasing 17% and 41%, respectively.10 Figure 1 illustrates the gross tonnage of construction and demolition debris and municipal solid waste deposited in the landfill since 2015. While the total tonnage of waste buried from construction and demolition debris has decreased by 24% since 2015, it still remains greater than the total amount of municipal waste produced by of Aspen businesses and residents.11 A 2016 analysis of C&D loads sent to the landfill determined that 35% of those materials could have been diverted through existing recycling and reuse programs at the Solid Waste Center.12 While there has been an effort amongst the Aspen development community and Solid Waste Center to divert re-use materials where possible, a significant amount of construction waste is unable to be re -purposed or re-used. Figure 1. Tons of Waste Buried by Type. Source: Pitkin County Landfill. Given current usage trends, the Landfill’s usable space is anticipated to be capable of accommodating waste for approximately two to four more years. Following the consumption of usable space, the landfill could repurpose the current compost area, measuring scales, and road from the landfill to the operations facility to stretch the useable life of the landfill to 2031.13 Once the landfill is completely full, waste from Aspen will have to be transported to other landfill facilities in Garfield County, Grand Junction, or to communities throughout the front range with the additional cost of transporting waste being absorbed by Aspen residents and businesses.14 8 Pitkin County Landfill, Construction and Demolition Debris. 9 Pitkin County Landfill 10 Ibid. 11 Ibid. 12 Ibid. 13 Ibid. 14 Interview with Pitkin County Solid Waste Center staff. February 16, 2022. 36 Page 3 Demolition Trends15 The City of Aspen defines demolition as razing, disassembling, or destroying 40% or more of an existing structure as measured by the surface of all exterior wall and roof area above finished.16 A project that passes the 40% threshold for demolition is required to remedy structural non-conformities and is typically more impactful to the community due to the project’s duration, waste generation, and required labor force. Residential demolitions have accounted for approximately 81% of all real estate related demo litions since 2013. The demolition of single-family homes has been specifically prevalent in Aspen, with single-family homes accounting for 66% of all real estate related demolition. The rate of demolition for residential projects has also increased, with the number of demolitions in 2021 being more than double the previous two years. Table 1 provides a breakdown of real estate related demolitions by structure type since 2013. Table 1. Demolition by Structure Type. Source: City of Aspen. As a result of the permitting and cost implications of passing the demolition threshold on a project, many projects work to demolish near or up to the threshold of 39.9%. This results in situations whereby a project may have a significant construction impacts on a neighborhoods but not be subject to the same level of review or mitigation as a demolished project. Between 2019 and 2021, there were 85 projects that were valued over $200,000, but did not require a demolition permit. Additionally, the number of projects above $200,000 that do not require a demolition permit has increased 41% between 2019 and 2021. Table 2 illustrates the number of residential projects since 2019 that have not passed the demolition threshold. Table 2. Changes in the Rate of Demolition for Residential Development Projects. Source: City of Aspen. Residential Transaction & Sales Trends Since 2018, there has been a steady increase in the pace and value of residential sales in Aspen. Both the number of sales and details on sale amounts can be examined and quantified using Real Estate Transfer Tax (RETT) data. The City of Aspen’s RETT is equal to 1.5% of the property’s closing price and assessed 15 Data obtained from the City of Aspen’s Community Development Department. 16 City of Aspen, City Municipal Code. Year Single Family Duplex Mixed Use Multi-Family Commercial Hotel/Lodge Total Residential Demolition Total Demolitions Residential Share of Total Demolitions 2013 3 2 3 5 60% 2014 4 1 1 5 6 83% 2015 2 1 1 3 4 75% 2016 3 4 2 7 9 78% 2017 3 1 3 4 75% 2018 9 1 9 10 90% 2010 5 1 1 1 7 8 88% 2020 5 2 1 7 8 88% 2021 14 1 1 3 15 19 79% Total 48 10 2 1 6 6 59 73 81% 2019 2020 2021 Total Residential Building Permits 114 178 231 Number of Residential Projects that Trigger Demolition 7 7 15 Number of Residential Projects that Do Not Trigger Demolition 107 171 216 Number of Residential Projects Over $200,000 that Do Not Trigger Demolition 34 45 58 37 Page 4 against the purchaser of the property.17 The 1.5% RETT is distributed amongst two uses, with 1% going to towards the city’s affordable housing trust fund and 0.5% going towards the Wheeler Opera House.18 Not all properties that are exchanged in Aspen are subject to the RETT. For example, in cases where a property is deed restricted, or gifted to another and where no monetary consideration other than love and affection is present, a RETT payment would not be required by the recipient of the property. A full list of exemptions can be found on the City of Aspen’s website. Table 3 illustrates a breakdown by year of non- fractional residential property sales and transfers. These numbers are inclusive of both properties that did and did not pay Real Estate Transfer Taxes. Sales and transfers for fractional ownership properties were omitted from this analysis. Table 3. Residential Property Sales & Transfers. Source: City of Aspen. The City of Aspen has experienced a 34% increase in the number of residential transactions since 2018. In 2021, 913 non-fractional and non-deed restricted dwelling units exchanged ownership, the equivalent of approximately 15% of all dwelling units and 23% of all non-deed restricted dwelling units within the city. While an increase in residential transaction has occurred in most neighborhoods, The Maroon Creek & Five Trees neighborhoods have experienced the most significant increase, with the number of transactions increasing 55% over the past four years. Increases in the number of residential transactions in Aspen have been accompanied by a significant increase in the total value of sales recorded. The total value of residential sales in Aspen increased by 58% in four years, increasing from approximately $689,000,000 in 2018 to $1.6 billion dollars in in 2021. All neighborhoods have seen an increase in sales value, with Downtown and the Maroon Creek & Five Trees neighborhoods seeing the largest increases of 59% and 85%, respectively. Table 4 illustrates the total value of sales in Aspen neighborhoods from 2018 through 2021. Table 4: Value of Sales by Neighborhood. Source: City of Aspen. As the total value of sales have increased so has the median and average sale price per dwelling unit. The median sale price for a market-rate residential unit in Aspen in 2021 was $2,650,000, 33% percent higher than the 2018 median sale price of $1,757,000. Similarly, the average sale price for a market-rate residential unit in 2021 was $4,922,000, 36% higher than the 2018 average sale price of $3,160,000. Almost all neighborhoods have seen increases in the median & average sale price of homes, with the West 17 City of Aspen, Finance Department. 18 Ibid. Neighborhood 2018 2019 2020 2021 Percent Change: 2018-2021 Maroon Creek & Five Trees 77 75 144 171 55% Cemetary Lane 24 26 43 39 38% West End 90 85 124 139 35% Smuggler's Run 88 75 82 78 -13% Downtown 304 320 341 455 33% East End 19 37 38 31 39% Total 602 618 772 913 34% Neighborhood 2018 2019 2020 2021 Percent Change: 2018-2021 Maroon Creek & Five Trees $32,925,000 $87,872,641 $129,711,050 $223,496,001 85% Cemetary Lane $70,550,000 $62,193,190 $202,566,696 $141,276,687 50% Downtown $253,342,970 $255,881,110 $630,427,781 $625,172,762 59% East End $52,602,500 $90,881,759 $122,949,333 $113,657,510 54% Smuggler $86,485,500 $78,058,500 $178,991,133 $114,439,187 24% West End $192,959,404 $166,119,603 $400,704,323 $424,287,795 55% Total $688,865,374 $741,006,803 $1,665,350,316 $1,642,329,942 58% 38 Page 5 End, East End, and the Maroon Creek and Five Trees areas seeing the largest increases in both median and average sale prices. Table 5 and Table 6 illustrates the median and average sale price shifts in neighborhoods from 2018 through 2021. Table 5: Median Sale Price by Neighborhood. Source: City of Aspen. Table 6. Average Sale Price by Neighborhood. Source: City of Aspen. Building & Permitting Trends19 The rapid increase of construction activity in Aspen is visible when examining building permits from 2019 through 2021. Between 2019 and 2021, the total number of building permits issued has increased 51%, while the total number of permits related to physical construction activities (i.e., Building Permits, Interior Finish and Fixture Removal, and Building Repair) has increased 44%. As a result of the Building Department’s tracking software transition during 2019, the number and value of permits during 2019 are an approximation based on the best available data. As the number of building permits has increased, so has the estimated value of permits. While there is no mechanism during the permitting process to determine a project ’s construction and environmental impacts on the surrounding area, a building permit’s estimated value can serve as type of proxy to assess the impact of a project, with permits with a larger valuation having more significant impacts. Between 2019 and 2021 the valuation of building permits increased 45%, from $83.7 million to $152.8 million. The total value of building permits over the three-year period was approximately $369,336,000. For the purpose of this analysis, the number of building permits with a valuation of over $200,000 was quantified for the years 2019 through 2021. The amount of $200,000 was chosen as a threshold to filter out smaller projects that are likely to require less time to complete and create fewer substantive impacts for a neighborhood. From 2019 through 2021, residential building permits with a value over $200,000 made up approximately 32% of all building permits and increased by 44% over the three period. Despite accounting for only 32% of all building permits, projects valued over $200,000 accounted for 96% of the total value of residential permits from 2019 through 2021, totaling approximately $353,447,000. Table 7 illustrates building permit and valuation data from 2019 through 2021. 19 Data obtained from the City of Aspen’s Community Development Department. Neighborhood 2018 2019 2020 2021 Percent Change: 2018-2021 Maroon Creek & Five Trees $3,840,000 $6,825,000 $5,837,500 $7,825,000 51% Cemetary Lane $4,000,000 $3,612,500 $6,325,000 $4,660,000 14% Downtown $1,252,500 $1,660,000 $2,650,000 $2,312,500 46% East End $3,275,000 $4,675,000 $4,325,000 $6,675,000 51% Smuggler $840,000 $925,000 $890,875 $923,465 9% West End $2,195,000 $3,237,500 $3,647,000 $4,672,667 53% Neighborhood 2018 2019 2020 2021 Percent Change: 2018-2021 Maroon Creek & Five Trees $3,658,333 $9,763,627 $7,206,169 $11,174,800 67% Cemetary Lane $4,409,375 $3,887,074 $6,985,058 $6,727,461 34% Downtown $2,435,990 $2,460,395 $4,740,059 $3,512,207 31% East End $4,782,045 $5,345,986 $4,728,821 $8,118,394 41% Smuggler $2,982,259 $2,691,672 $6,392,540 $2,934,338 -2% West End $3,640,743 $5,191,238 $5,489,100 $7,071,463 49% 39 Page 6 *As a result of the Building Department’s tracking software transition during 2019, the number and value of permits during 2019 are an approximation based on the best available data. Table 7. Building Permit Amount & Valuation. Source: City of Aspen. Assessment Trends20 To assess how new construction and recent increases in sale prices effect home valuation within Aspen, Design Workshop analyzed current and historic Pitkin County Assessor’s data. Using Assessor’s data, the median and average Actual Value, meaning the total value in which a home’s appraised value is calculated, was calculated for both market-rate single-family homes and condominiums. Residential properties that were deed restricted or were categorized by the Assessor’s office as Lodge properties were omitted. For single-family dwelling units, the 2021 median Actual Value was $6.93 million while the average Actual Value was $7.76 million. For condominium dwelling units, the 2021 median Actual Value was $1.92 million while the average Actual Value was $2.74 million. To examine how changes in the residential real estate market effected property values throughout Aspen’s neighborhoods, changes in actual values from 2018 through 2021 were analyzed. Market-rate residential and condominium properties throughout Aspen’s six major neighborhoods, listed in Table 8, were chosen at random and the rate of Value change from 2018 through 2021 was recorded. The largest increased in Actual Values were present in the East End and Downtown, which increased 26% and 19%, respectively. The smallest increase in Actual Values were present in the Smuggler’s Run and Cemetery Lane Neighborhoods, which both increased 9% between 2018 and 2021. Newly constructed properties on pre- established lots were also examined to assess the rate of Actual Value change for new residential buildings. These properties experienced, on average, a 60% increase in Actual Value chan ge between the old and new structures. Existing residential properties adjacent to newly developed residential properties were also analyzed to determine if proximity to newly built homes had an effect on their Actual Value. While in most cases adjacent properties experienced an increase in Actual Value, it is not possible to determine if that increase was caused by the newly constructed property, or market dynamics. 20 Data obtained from the Pitkin County Assessor’s Office. 2019 2020 2021 Change: 2019-2021 Total Residential Building Permits 114 178 231 51% Total Building, IFFR, & Roofing Permits 106 119 188 44% Total Residential Building Permits with a Value over $200,000 41 53 73 44% Percent of Residential Permits with a Values over $200,000 35.96%29.78%31.60%N/A Total Value of Building Permits 83,711,155$ 132,779,707$ 152,845,152$ 45% Value of Permits over $200,000 80,325,195$ 128,128,699$ 144,993,776$ 45% Percent of Value Generated by Projects Over $200,000 95.96%96.50%94.86%N/A 40 Page 7 Table 8. Actual Value Change by Neighborhood, 2018-2021. Source. Pitkin County Assessor's office. Affordable Housing Mitigation Trends21 Building projects, including both new development, redevelopment, and remodels/renovations that expand the floor area of dwelling units are required to pay affordable housing mitigation. The degree to which mitigation is required is determined by the number of Full-Time-Equivalents (FTEs) generated by the project’s net new square footage. The City of Aspen provides five options for providing affordable housing mitigation: 1. Record a deed restriction on the project itself; 2. Provide a deed restricted unit within the Aspen Infill Area; 3. Extinguish a Certificate of Affordable Housing Credit; 4. Make a fee-in-lieu payment; or 5. Enter into a Deferral Agreement with the City of Aspen and APCHA. As the city’s land use code is currently written, houses that are demolished and rebuilt receive a credit for existing floor area and do not pay mitigation for sub-grade square footage. This has resulted in few building projects contributing to affordable housing mitigation. Out of the 413 residential building permits issued over the past three years that involved physical construction (i.e., Building Permits, Interior Finish and Fixture Removal, and Building Repair) only 85 projects, or 21%, provided some type of affordable housing mitigation. Additionally, while the number of overall building permits has increased 51% since 2019, the number of projects providing affordable housing mitigation has decreased 160%, with only 15 projects providing affordable housing mitigation in 2021. As the number of projects providing affordable housing mitigation has decreased since 2019, so has the amount of mitigation fees collected by the City of Aspen. In total, only $3,939,000 in affordable housing mitigation in fee in lieu and affordable housing credits has been collected since 2019. The amount of affordable housing mitigation collected has progressively decreased year over year from since 2019, with total 2019 mitigation equaling approximately $2.58 million, total 2020 mitigation equaling approximately $1.37 million, and year to date 2021 mitigation equaling $410,000. The average mitigation by project has also decreased, decreasing from $55,343 in 2019 to $27,386 in 2021. It should be noted that all 2021 affordable housing mitigation has not yet been collected, meaning that the current 2021 number of $410,000 is likely to increase. When considering that the median sale price for a dwelling unit in Aspen in 2022 is approximately $2.65 million, mitigation collected from 2019 through 2021 would not be sufficient to purchase two market -rate 21 Data obtained from the City of Aspen’s Community Development Department. Neighborhood Actual Value Change: 2018-2021 Maroon Creek & Five Trees 13% West End 14% Smuggler 9% Downtown 19% East End 26% Cemetary Lane 9% New Construction 60% 41 Page 8 dwellings. When considering the current costs of developing new affordable housing, estimated to be approximately $1 million per unit, the $3.9 million in mitigation collected would barely be sufficient to construct four new dwelling units. Table 9 illustrates the number of building permits issued, the number of projects that provided affordable housing mitigation, and the total mitigation collected from 2019 through 2021. *The number of permits during 2019 are an approximation based on the best available data. ** Total 2021 affordable housing mitigation has not yet been collected. This number is anticipated to increase. Table 9. Affordable Housing Mitigation Generated, 2019-2021. Source: City of Aspen. Conclusion The pace and value of residential development in Aspen has rapidly increased since 2019. While the city has experienced a surge in the number and value development projects, the amount of these projects providing any type of affordable housing mitigation has decreased, along with the value of mitigation collected. The repercussions of this are substantial, in that homes that generate significant employment within Aspen are not providing sufficient mitigation to fund the acquisition and/or development of new employee housing. It is recommended that that the City of Aspen pursue substantive changes to its land use code to ensure that current and future employees are able to find price and size appropriate housing within the city. 2019 2020 2021 Change: 2019-2021 Total Residential Building Permits 114 178 231 51% Total Building, IFFR, & Roofing Permits 106 119 188 44% Number of Residential Projects that Pay Mitigation 39 31 15 -160% Total Mitigation Collected (FIL & Credits)2,158,374$ 1,370,396$ 410,784$ -425% Total Mitigation Collected (FIL Only - Projects under 0.10 FTEs)181,577$ 219,263$ 23,839$ -662% Average Mitigation Fee Per Mitigating Projects 55,343$ 44,206$ 27,386$ -102% 42 Page 1 MEMORANDUM To: City of Aspen From: Design Workshop Date: May 18, 2022 Project Name: Aspen Moratorium Support Project #: 6829 Subject: Buy-down Feasibility Analysis Introduction To assess the feasibility of a buy-down program, Design Workshop completed a review and analysis of current affordable housing mitigation funds, potential funds resulting from the elimination of the existing floor area credit, and sale prices for single-family, condominium, and townhomes in both Aspen and communities down valley. This analysis is intended to inform how mitigation collected could be used to fund a buy-down program, and the extent to which such a program could provide affordable housing to residents. This memorandum partially completes the deliverables for Task 3.4. Following receipt of updated Full-Time-Equivalent rates from RRC and EPS, additional analysis will be performed to measure the impact of rate changes to affordable housing mitigation and a buy-down program. Affordable Housing Mitigation: Current Vs. Proposed Exemptions Currently, building projects, including both new development, redevelopment, and remodels/renovations that expand the floor area of dwelling units are required to pay affordable housing mitigation. The degree to which mitigation is required is determined by the number of Full-Time-Equivalents (FTEs) generated by the project’s net new square footage. A project is required to mitigate 0.16 FTEs per 1,000 square feet of Floor Area for the first 4,500 square feet of Floor Area. Projects in which the net new square feet of Floor Area exceed 4,500 square feet are required to mitigate 0.36 FTEs per 1,000 square feet over the 4,500 threshold. As the city’s land use code is currently written, houses that are demolished and rebuilt receive a credit for existing floor area and do not pay mitigation for sub-grade square footage regardless of if they previously provided mitigation. This has resulted in relatively few residential building projects contributing to affordable housing mitigation. Since 2019, affordable housing mitigation valuing only $3,939,000 has been received through a fee in lieu payment or affordable housing credits. The amount of affordable housing mitigation collected has progressively decreased year over year from since 2019, with total 2019 mitigation equaling approximately $2.58 million, total 2020 mitigation equaling approximately $1.37 milli on, and year to date 2021 mitigation equaling $410,000. The average mitigation by project has also decreased, decreasing from $55,343 in 2019 to $27,386 in 2021. It should be noted that all 2021 affordable housing mitigation has not yet been collected, meaning that the current 2021 number of $410,000 is likely to increase. To assess the implications of removing the credit for existing floor area, an analysis was performed that examined the amount of mitigation that could be collected on projects that were permitted and received a certificate of occupancy between 2019 and 2021. This analysis assumed that that projects had not provided affording housing mitigation in the past. To calculate potential mitigation, a project’s total new floor area Landscape Architecture Planning Urban Design Strategic Services 120 East Main Street Aspen, Colorado 81611 970.925.8354 designworkshop.com Exhibit C 43 Page 2 was used to calculate FTE generation, and no credit was given to existing floor area. The result of this analysis was a substantial increase in funds generated through affordable housing mitigation in fee-in-lieu and affordable housing credits, with the amount of affordable housing mitigation increasing from $3,939,000 to an estimated $17,404,141. Table 1 illustrates total mitigation collected from 2019 through 2021 with current exemptions and FIL rate and potential mitigation collected with the elimination of the existing floor area credit. Table 1. Mitigation Collected 2019-2021. Source: City of Aspen. Buy-down Program Feasibility A Buy-down Program is a program in which an entity (i.e., housing authority or municipality) purchases free-market homes for that are for sale, places a deed restriction on the property, and then sells or rents the property to qualified renters or buyers at a reduced price. To determine the viability of a Buy-down Program, and how such a program may be most impactful to the creation of affordable housing, an impact analysis was performed to determine the relative impact of using affordable housing mitigation funds to purchase and deed restrict residential properties. Because of the high cost of housing within Aspen, the analysis explored the cost of purchasing properties in Aspen, as well as other communities throughout Pitkin County and Garfield County, including Basalt, Carbondale, Glenwood Springs, and Snowmass Village. The first step in analyses was to determine the price, size, and type of homes for sale both in Aspen and down valley communities. To filter out exorbitantly high prices properties that would not be feasible to purchase through a buy-down program, and maximum price filter of $2 million was applied. Using Realtor.com, currently for-sale and pending single-family homes, condominiums, and townhomes were recorded. In total, 109 homes were cataloged as part of the analysis. The following section details the findings of the Buy-down analysis and provides guidance as to its feasibility as a method to produce affordable housing for Aspen residents. Housing Sale Price Analysis: Aspen and Down Valley Communities Aspen Aspen only had five free-market residential properties for sale or recently sold or pending at or below $2 million. Each of the five properties were condo units, and consisted of studio, one -, and two-bedroom units. The average price of a condo unit was approximately $1,280,000 and the average size of a unit was 484 square feet. 2019 2020 2021*Total Mitigation Total Mitigation Collected (FIL & Credits)2,158,374$ 1,370,396$ 410,784$ 3,939,554$ Average Mitigation Fee Per Mitigating Projects 55,343$ 44,206$ 27,386$ N/A Total Mitigation Collected (FIL & Credits)6,776,176$ 7,885,138$ 2,742,827$ 17,404,141$ Average Mitigation Fee Per Mitigating Projects 173,748$ 254,359$ 182,855$ N/A *2021 has several outstanding certificates of occupancy. Mitigation has not been collected on these projects. Mitigation Collected with Current Exemptions and FIL Rates Mitigation Collected without Existing Floor Area Credit and Current FIL Rates 44 Page 3 Basalt Aspen had eight properties for sale or recently sold or pending for under $2 million. Properties included three condos, nine townhomes, and 20 single-family homes. The average sale price for a home in Basalt was approximately $1,270,000 with an average home size of 1,721 square feet. Carbondale Carbondale had 32 properties for sale or pending for under $2 million. Properties included three condos, three townhomes, and 26 single-family homes. The average sale price for a home in Carbondale was approximately $1,356,000 with an average home size of 2,028 square feet. Glenwood Springs Glenwood Springs had 43 properties for sale or pending for under $2 million. Properties included three condos, one townhome, and 39 single-family homes. The average sale price for a home in Glenwood Springs was approximately $659,000 with an average home size 1,718 square feet. Snowmass Village Snowmass Village had 18 properties for sale or pending for under $2 million. Properties included 17 condos, and one single-family homes. The average sale price for a home in Snowmass Village was approximately $1,400,000 with an average home size 1,756 square feet. Table 2 provides a breakdown, by community and home type, of average beds, baths, prices, and square footage of properties for the buy-down analysis. Table 2. Breakdown of properties for buy-down analysis. Source: Realtor.com Buy-down Strategy: Purchase & Deed Restrict Most buy-down programs use dedicated affordable housing funds to purchase for-sale free-market homes, place a deed restriction on the property, and then sell the property to qualified buyers at a reduced price. City Home Type Total Units Average Beds Average Baths Average Price Average SF Condo 3 1 1 1,287,600$ 484 Townhome 9 N/A N/A N/A N/A SFH 0 N/A N/A N/A N/A Dwelling Unit Average N/A 1 1 1,287,600$ 484 Condo 3 2 2 1,312,333$ 1,254 Townhome 9 2 2.5 1,211,633$ 1,560 SFH 20 3 2.5 1,300,000$ 2,350 Dwelling Unit Average N/A 2.33 2.33 1,274,656$ 1,721 Condo 3 2 2 531,667$ 1,195 Townhome 3 3 2.5 1,172,444$ 2,172 SFH 26 3 2.5 1,364,900$ 2,717 Dwelling Unit Average N/A 2.67 2.33 1,023,004$ 2,028 Condo 3 2 2 444,967$ 1,087 Townhome 1 3 2.5 635,000$ 1,578 SFH 39 3 2.5 898,074$ 2,489 Dwelling Unit Average N/A 2.67 2.33 659,347$ 1,718 Condo 17 2 2.5 1,008,235$ 1,270 Townhome 0 N/A N/A N/A N/A SFH 1 3 3 1,795,000$ 2,243 Dwelling Unit Average N/A 2.50 2.75 1,401,618$ 1,756 Aspen Basalt Carbondale Glenwood Springs Snowmass 45 Page 4 To determine the impact of a buy-down, and analysis was performed to determine the number of units by community that could be purchased, and deed restricted using affordable housing mitigation funds. To analyze the number of the units available for purchase by community, the total amount of available affording housing funds from 2019-2021 were divided by the average unit cost. Figure 3 illustrates the number of units available for purchase assuming current mitigation from 2019-2021 was available to purchase units. In total, the $3,939,000 in funds could be used to purchase three units in Aspen, three units in Basalt, four units in Carbondale, six units in Glenwood Springs, or three units in Snowmass. To calculate the number of local residents that may housed through a buy down program, the number of units available for purchase by community was multiplied by the average number of bedrooms in that community for for-sale properties. The number of residents housed varies by community, with the least number of residents being housed in Aspen and the most in Glenwood Springs. Table 3. Number of units available for purchase by community with current mitigation. Figure 4 illustrates the number of units available for purchase assuming the elimination of the existing floor area credit for projects occurring between 2019 and 2021. In total, the $17,404,141 in mitigation collected could be used to purchase 14 units in Aspen, 14 units in Basalt, 45 units in Carbondale, 70 units in Glenwood Springs, or 12 in Snowmass. To calculate the number of local residents that may housed through a buy down program, the number of units available for purchase by community was multiplied by the average number of bedrooms in that community for for-sale properties. The number of residents housed varies by community, with the least number of residents being housed in Aspen and the most in Glenwood Springs. Table 4. Number of units available for purchase by community with the elimination of the existing floor area credit. Conclusion The elimination of the existing floor area credit will greatly increase the amount of affordable housing mitigation that the City of Aspen is able to collect. The extent to which these funds may be used to finance a buy-down, and the success of such a program, is greatly dependent on where homes are purchased through the program. Based on home prices, the number of homes available for purchase through a buy - down program increases down valley, with the most affordable homes being in Glenwood Springs. City Dwelling Unit Average Cost Max. Number of Units Purchsed with Available Funds Average Local Residents Housed* Aspen 1,287,600$ 3 3 Basalt 1,274,656$ 3 7 Carbondale 1,023,004$ 4 10 Glenwood Springs 659,347$ 6 16 Snowmass 1,401,618$ 3 7 *Calculation based on max number of units available for purchase multiplied by average unit size (bedrooms). City Dwelling Unit Average Cost Max. Number of Units Purchsed with Available Funds Average Local Residents Housed* Aspen 1,287,600$ 14 14 Basalt 1,274,656$ 14 32 Carbondale 1,023,004$ 17 45 Glenwood Springs 659,347$ 26 70 Snowmass 1,401,618$ 12 31 *Calculation based on max number of units available for purchase multiplied by average unit size (bedrooms). 46 Page 5 Pursuing a buy-down program that purchases homes far the city is a double-edged sword in that while more homes may be available for purchase, owners working in Aspen will have to travel greater distances to reach their employers, adding to traffic and adverse environmental impacts. Additionally, while a buy- down program that aims to purchase homes in other communities may help Aspen residents, it can exacerbate affordability and housing issues in communities that are already struggling to provide sufficient affordable housing for their own residents. It is important to note that the analysis assumes that all mitigation is provided as fee in lieu rather than through housing credits. The code does not currently allow the payment of fee in lieu by right for al l projects. If the city chose to pursue a buy down program, a review of the implications for supporting fee in lieu versus other mitigation measures would need to be discussed. While this memo provides an initial understanding of the potential housing that could be deed restricted for local working residents, balancing these policy implications will be of critical importance. For this reason, Design Workshop recommends more policy discussion on the pros and cons of a buy down program following the moratoriu m. 47 Page 1 MEMORANDUM To: City of Aspen From: Design Workshop Date: May 19, 2022 Project Name: Aspen Moratorium Support Project #: 6829 Subject: Affordable Housing Zoning Feasibility Analysis Introduction To quantify how changes to existing zoning conditions in the R-6, R-15, and R-30 zone districts may enable the development of affordable housing, Design Workshop completed an analysis of the number of affordable housing units that could be built in residential zone districts given existing dimensional requirements. The analysis informed how many units may be developed, the number of Affordable Housing Credits that could be generated as a result of the development, as well as the anticipated financial performance of the project. This memorandum completes the deliverables for Task 3.5. Affordable Housing & Existing Zoning Requirements As the City of Aspen’s Land Use Code is currently written, multi-family affordable housing within the R-6, R- 15, and R-30 Residential Zone Districts is not a permitted use. Instead, single-family and duplex developments are allowed. A significant amount of the land within the City of Aspen is located in these zone districts, so this analysis explores potential opportunities to allow affordable multi-family housing within these areas. Based on feedback collected during public engagement, the community has indicated a preference that any multi-family affordable housing developed in residential zone districts should conform to the existing dimensional standards and scale of the current neighborhood. Under this idea, the overall floor area and height allowed on a parcel would not change, only the total allowable units per lot would be subject to change. Table 1 summarizes existing density and dimensional standards for Aspen’s R-6, R-15, and R-30 zone districts Table 1. Current Density and Dimensional Standards. Zone District Permitted Residential Uses Minimum Lot Size Maximum Site Coverage FAR: Single Family FAR: Two Dwellings or One Duplex Max Height Total Allowable Units per Lot 2,700 SF for 6,000 SF lot With TDR for extinguishment of historic property: 2,950 SF for 6,000 SF lot 4,920 SF for 15,000 SF lot With TDR for extinguishment of historic property: 5,200 SF for 15,000 SF lot 2 2 225 ft. 50% N/A N/A 4,590 SF for 30,000 SF lot 5,010 SF for 30,000 SF lot -Detached residential dwelling -Two detached residential dwellings -Duplex dwelling -Accessory dwelling units/carriage house -Detached residential dwelling -Two detached residential dwellings -Duplex dwelling -Accessory dwelling units/carriage house -Detached residential dwelling -Two detached residential dwellings -Duplex dwelling R-6 R-15 -30,000 SF single family -15,000 SF duplexR-30 -6,000 SF 2,400 SF for 6,000 SF lot 25 ft. 25 ft. 4,500 SF for 15,000 SF lot -15,000 SF single family -7,500 SF duplex Landscape Architecture Planning Urban Design Strategic Services 120 East Main Street Aspen, Colorado 81611 970.925.8354 designworkshop.com Exhibit D 48 Page 2 Affordable Housing Financial Model In order to test the financial and development feasibility of affordable housing in the R-6, R-15, and R-30 zone districts, a financial model was created for each zone district. To ground the models in reality, each model was based off of an existing parcel within the city, one each of the R-6, R-15, and R-30 zone districts. Assumptions for each model, including development and sale costs per square foot, unit sizes, the category and type of unit tested, and subgrade unit allowances were reviewed and confirmed with staff. It was assumed that all units would be for-sale units and that units, once built, would be deed restricted and managed by the Aspen Pitkin County Housing Authority (APCHA). The models were designed to be used to generally gauge the overall cost of new development, the maximum number of units and bedrooms able to be developed given floor area limitations, net revenue, return on investment (ROI), and the number and value of Affordable Housing Credits created . Sale prices and unit sizes were set using APCHA guidelines, while Fee-in-Lieu used to set Affordable Housing Credit value and Full-Time-Equivalents (FTEs) per unit type were set using the City of Aspen’s Land Use Code. At the direction of Staff, Category 3 one- and two-bedroom units were prioritized in the modeling. The model included the ability to test how sales to Aspen area employers my effect the financial performance of the development. The analysis that follows identifies the maximum number of units that may be developed in the R-6, R-15, and R-30 zone districts given existing dimensional standards for a duplex, the number of Affordable Housing Credits created, as well as the financial performance of the project. Due the high cost of development in Aspen, current value of credits in the market, and predesignated APCHA unit sale prices, no development scenario resulted in a profitable development. While the profitability of development is a result of the number, type, and category of units developed, the allowable density of development plays a significant role in improving the financial performance of a project by offsetting land costs. Inversely, as the number of units in a project decreases, the financial feasibly diminishes. R-6 Density Analysis Under the existing dimensional requirements of the R-6 zone district and APCHA minimum unit sizes, a developer could potentially build six units of affordable housing on the test R-6 parcel. The units would be a mix of one and two bedrooms and combine for a total of 10 bedrooms within the development. The total cost of construction is estimated to be $6,718,010. With units set at Category 3 pricing, total project revenues, including both unit and credit sales, are estimated to be $5,611,138. The projected net profit of the development is -$1,106,873, with an estimated ROI of -16%. The anticipated building program and pricing are illustrated in Figure 1. Project Assumptions & Performance • Zone: R-6 • Lot Size: 6,000 SF • Max. Floor Area Duplex: 3,240 SF • Max. Height 25 FT • FAR: 0.60 • Credits Generated: 12.50 Category 3 credits. • Total Project Cost: $6,718,010 • Total Project Revenues: $5,611,138 • Net Profit: -$1,106,873 • ROI: -16% 49 Page 3 Figure 1. R-6 Building Program. R-15 Density Analysis Under the existing dimensional requirements of the R-15 zone district and APCHA minimum unit sizes, a developer could potentially build eight units of affordable housing on the test R-15 parcel. The units would be a mix of studio, one, and two bedrooms and combine for a total of 1 2 bedrooms within the development. The total cost of construction is estimated to be $8,328,412. With units set at Category 3 pricing, total project revenues, including both unit and credit sales, are estimated to be $7,014, 211. The projected net profit of the development is -$1,314,202, with an estimated ROI of -16%. The anticipated building program and pricing are illustrated in Figure 2. Project Assumptions & Performance • Zone: R-15 • Lot Size: 10,055 SF • Max. Floor Area Duplex: 4,574 SF • Max. Height 25 FT • FAR: 0.45 • Credits Generated: 15.50 Category 3 credits. • Total Project Cost: $8,328,412 • Total Project Revenues: $7,014, 211 • Net Profit: -$1,314,202 • ROI: -16% Building Program Program SF / Unit Bedrooms / Unit Employer Sale Subgrade FTE Category Sale Price / Unit Total Units Studio 500 1 No No 1.25 3 $175,000 Studio 500 1 No Yes 1.25 3 $175,000 1 Bedroom 700 1 No No 1.75 3 $191,000 1 1 Bedroom 700 1 No Yes 1.75 3 $191,000 1 2 Bedroom 900 2 No No 2.25 3 $227,000 2 2 Bedroom 900 2 No Yes 2.25 3 $227,000 2 3 Bedroom 1200 3 No No 3 5 $621,000 3 Bedroom 1200 3 No Yes 3 1 $81,000 4 Bedroom 1300 4 No No 3.5 3 $277,000 4 Bedroom 1300 4 No Yes 3.5 RO $750,000 Single Family Home Detached 1500 4 No No 3.5 1 $101,000 Total Units 6 Total Subgrade 3 Total Above Grade Units 3 Total Bedrooms 10 Subgrade Unit Credit 12% Lot Size (sf)6000 Total Above Grade Floor Area 2500 Total Subgrade Floor Area 300 Total Floor Area 2800 Over / Under Allowable Floor Area Under Total Livable Area 5000 Net-to-Gross Ratio 90% Total Project Size (GSF):5500 Total FTEs Generated 13 Parking Ratio / Bedroom 100% Parking Spaces 10 50 Page 4 Figure 2. R-15 Building Program R-30 Density Analysis Under the existing dimensional requirements of the R-30 zone district and APCHA minimum unit sizes, a developer could potentially build 11 units of affordable housing on the test R-15 parcel. The units would be a mix of studio, one, and two bedrooms and combine for a total of 16 bedrooms within the development. The total cost of construction is estimated to be $11,415,016. With units set at Category 3 pricing, total project revenues, including both unit and credit sales, are estimated to be $9,610,934. The projected net profit of the development is -$1,804,082 with an estimated ROI of -16%. The anticipated building program and pricing are illustrated in Figure X. Project Assumptions & Performance • Zone: R-30 • Lot Size: 30,280 SF • Max. Floor Area Duplex: 5,837 SF • Max. Height 25 FT • FAR: 0.19 • Credits Generated: 21.25 Category 3 credits. • Total Project Cost: $11,415,016 • Total Project Revenues: $9,610,934 • Net Profit: -$1,804,082 • ROI: -16% Building Program Program SF / Unit Bedrooms / Unit Employer Sale Subgrade FTE Category Sale Price / Unit Total Units Studio 500 1 No No 1.25 3 $175,000 1 Studio 500 1 No Yes 1.25 3 $175,000 1 Bedroom 700 1 No No 1.75 3 $191,000 2 1 Bedroom 700 1 No Yes 1.75 3 $191,000 1 2 Bedroom 900 2 No No 2.25 3 $227,000 2 2 Bedroom 900 2 No Yes 2.25 3 $227,000 2 3 Bedroom 1200 3 No No 3 5 $621,000 3 Bedroom 1200 3 No Yes 3 1 $81,000 4 Bedroom 1300 4 No No 3.5 3 $277,000 4 Bedroom 1300 4 No Yes 3.5 RO $750,000 Single Family Home Detached 1500 4 No No 3.5 1 $101,000 Total Units 8 Total Subgrade 3 Total Above Grade Units 5 Total Bedrooms 12 Subgrade Unit Credit 12% Lot Size (sf)10055 Total Above Grade Floor Area 3700 Total Subgrade Floor Area 300 Total Floor Area 4000 Over / Under Allowable Floor Area Under Total Livable Area 6200 Net-to-Gross Ratio 90% Total Project Size (GSF):6820 Total FTEs Generated 16 Parking Ratio / Bedroom 100% Parking Spaces 12 51 Page 5 Figure 3. R-30 Building Program. Conclusion With current dimensional standards there is significant opportunity to development multi -family affordable housing projects within the R-6, R-15, and R-30 zone district. Given current land and development costs no development scenario resulted in profitable projects. However, enabling affordable multi-family development in residential districts is a critical first step in incentivizing more affordable housing development within the City of Aspen. As a next step following the Residential Development Moratorium, it is recommended that the City of Aspen investigate the possibility of using Affordable Housing Mitigation funds, or some other source of city revenue, to financially subsidize these types of affordable housing projects. The amount of subsidy provided could be determined based on the type and category of unit development, enabling predictably on the amount of subsidy available and p utting the responsibility on the development sector to manage costs in order to reach their targeted level of profitability. There may also be an opportunity to leverage the housing credits program to support additional affordable housing development on th ese properties. Building Program Program SF / Unit Bedrooms / Unit Employer Sale Subgrade FTE Category Sale Price / Unit Total Units Studio 500 1 No No 1.25 3 $175,000 1 Studio 500 1 No Yes 1.25 3 $175,000 1 Bedroom 700 1 No No 1.75 3 $191,000 3 1 Bedroom 700 1 No Yes 1.75 3 $191,000 2 2 Bedroom 900 2 No No 2.25 3 $227,000 3 2 Bedroom 900 2 No Yes 2.25 3 $227,000 2 3 Bedroom 1200 3 No No 3 5 $621,000 3 Bedroom 1200 3 No Yes 3 1 $81,000 4 Bedroom 1300 4 No No 3.5 3 $277,000 4 Bedroom 1300 4 No Yes 3.5 RO $750,000 Single Family Home Detached 1500 4 No No 3.5 1 $101,000 Total Units 11 Total Subgrade 4 Total Above Grade Units 7 Total Bedrooms 16 Subgrade Unit Credit 12% Lot Size (sf)30280 Total Above Grade Floor Area 5300 Total Subgrade Floor Area 384 Total Floor Area 5684 Over / Under Allowable Floor Area Under Total Livable Area 8500 Net-to-Gross Ratio 90% Total Project Size (GSF):9350 Total FTEs Generated 21 Parking Ratio / Bedroom 100% Parking Spaces 16 52