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HomeMy WebLinkAboutStaff Memo_Pace and Scale and AH_Final Draft MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Ben Anderson, Principal Long-Range Planner Phillip Supino, Community Development Director MEMO DATE: March 10, 2022 MEETING DATE: March 14, 2022 RE: Central Questions requiring Council Direction on the Moratorium Response in the areas of: • Pace and Scale of Residential Development • Affordable Housing Opportunities REQUEST OF COUNCIL: Following previous discussions with Council related to the moratorium on overall scope, problem statements, and potential areas for policy action, and in response to input received from the public and technical stakeholders, staff requests direction from Council on a few specific topics as this work proceeds. Staff poses specific questions in the memo below and will facilitate a discussion with Council on these questions at the Work Session on March 14th. The response to these questions will provide more precise shape to staff’s work in the coming weeks. SUMMARY AND BACKGROUND: In a previous memo to Council on February 1, 2022 (Exhibit A), staff provided summaries of previous discussions with Council and staff’s thinking related to high-level policy consideration of the residential development and affordable housing aspects of Ordinance 27. Council provided support for the identified issues and the framing of possible responses. Using this previous summary as the guide, staff and our consultant team continue to evaluate this list of topics as we analyze and prioritize the responses that are necessary to be completed during the moratorium and those that are important but could instead be finalized after June 8th. As staff works through this prioritization exercise, a few policy choices have emerged as foundational and need direction at this stage in the process. STAFF DISCUSSION: In the range of topics identified in Ordinance 27 and subsequent discussions, staff requests direction in the following areas: Staff Memo, Policy Direction – 3/14/22 Page 2 of 9 Pace and Scale of Single-Family and Duplex Residential Development This is an expansive topic that has been identified for several reasons: • The physical mass and scale of many of these residences are perceived to be contrary to community character and the AACP. • The frequency of demolition and the overall size and energy use of these residences are contrary to Aspen’s climate and environmental goals and commitments. • The intensity and duration of construction activity is having negative impacts to neighbors and neighborhoods. • The extent of new construction and the nature and operation of new residential properties is straining community infrastructure and undermining community climate action. • The intensity of residential development and redevelopment is not managed as intended by the current provisions in GMQS. • Residential development and redevelopment are not providing affordable housing mitigation proportionate to their employee generation impacts. Staff is evaluating the best path to respond to several of these issues. Some solutions may be found in amendments to the Land Use Code, others in adoption of new building and energy codes, or in the creation of new provisions in other areas of Aspen’s Municipal Code (example: construction waste standards). A central policy choice has emerged: 1) Do we intend to address some of these impacts by reducing the size of new or redeveloped homes by limiting floor area below existing allowable dimensions? OR 2) Do we intend to change mitigation requirements to better reflect the impacts that this type of development is having on the community? This option could be done in combination with other alternatives that do not reduce floor area. The following discussion is not intended to launch an evaluation on specific tactics, but to provide examples, some level of detail, and context for the larger policy choice. Floor Area Reducing the floor area in a home is perhaps the most direct linkage to the impacts of residential construction that have been identified in the larger conversations around employee generation, construction intensity and duration, and importantly, energy consumption. Reducing floor area would reduce the size of any new homes built in the community, thereby reducing its impacts to the community as described above. Depending on the amount of the reduction, it would also change the economics around redevelopment of existing residential properties. Existing homes larger than the revised floor area amounts are more likely to be remodeled than demolished, so as to retain the existing house size. Staff Memo, Policy Direction – 3/14/22 Page 3 of 9 As staff and our consultants have talked with the development community since the moratorium came into effect, this is the topic that is causing the most concern, uncertainty, and anxiety. When a single square foot of gross floor area in a single-family home is conservatively valued at $3,000, reducing floor area by even minimal amounts will have definitive effect on the entire valuation of a project or real estate transaction. Any proposal to reduce either net or gross floor area would have significant impacts across the real estate and development economies and could potentially have unintended consequences for resident homeowners. If limiting the allowed floor area were to be pursued, there are at least three things that could be done. Any of these three options would functionally reduce the size of homes in development or redevelopment scenarios: 1) Limiting the net, allowable floor area as established in chapter 26.700 of the LUC that sets the dimensions for each Zone District. 2) Eliminating or reducing the floor area exemptions that are established by Section 26.575.020. Most impactful are the current exemptions for sub-grade areas (basements) and garages. 3) Establishing a new calculation that would create a maximum allowable gross square footage – that would include our current net allowable floor area with some addition of currently exempted area (basements, garages, etc.) that would be allowed under this threshold. At this point in the process, staff does not recommend reducing floor area – whether net or gross, for the following reasons: 1) Any discussions (both current and historic) about proposed reductions in house size in Aspen or in Pitkin County have been very contentious, and to use a cliché – is a topic that “extinguishes all of the oxygen in the room”. More directly, staff believes that this tactic would preclude the community from finding areas of agreement on other important issues under consideration during the moratorium. 2) The reduction of floor area – either net or gross, unless substantial, would not likely translate into the outcomes that Council is seeking with respect to community character, climate and environmental protection, or development regulation. 3) Calculating a reduction in floor area that is based on a defensible rationale for the specific quantity of the reduction would require a lengthy and complex study, particularly given the likelihood of litigation over such a change. 4) There are other potential strategies that could be as impactful towards the outcomes that Council is seeking and may be more likely to generate a cooperative atmosphere. Staff Memo, Policy Direction – 3/14/22 Page 4 of 9 Non-Floor Area Options Staff has identified a variety of potential alternative responses that could effectively lead to outcomes envisioned by Ordinance 27. As we have had initial conversations with stakeholders, it is staff’s view that while there may be some reluctance within the real estate and development community, and property owners, these policy alternatives may be less contentious overall. It should be noted that these ideas have not been decided on but are examples of the kinds of policies that could be an alternative to directly reducing floor area. 1) AH Mitigation – Already contemplated by Ordinance 24 of 2021 (currently tabled), this would reassess how residential development mitigates for their employee generation impacts – particularly in redevelopment scenarios. Council has approved a contract to update the study on which residential mitigation is based. 2) Changes to Calculations and Measurements, 26.575.020 – While some areas of this section of the code could be changed to have the direct effect of reducing floor area (example: sub-grade exemptions), staff believes that other areas of this section could be altered to reduce the perceived mass and scale of a home without limiting floor area. Examples of this type of change could be new calculations for how the code measures height, or how grade is defined. Changes could be made to the types of development that are allowed in setbacks, or to how the code calculates decks and other outdoor areas. A positive outcome across the board that could be a result of these efforts – is bringing improved simplicity, clarity, and consistency to topics that often confound staff and the design community. 3) Changes to Growth Management rules to include residential demolition – the general idea in this area is to use the GMQS to create allotments and performance standards for residential projects that trigger demolition. This approach would likely place a governor on the volume of residential demolition/redevelopment and ensure those activities support, not undermine, community character, climate action, and environmental protection policies. 4) Identifying performance standards, and possible incentives or impact fees related to energy consumption and construction waste. This would be a direct way to ensure residential redevelopment supports climate action and environmental protection policies. It could also produce revenue to support programs in those policy areas. 5) Adoption of building code and energy code updates to bring as much efficiency as possible to Aspen’s residential development context. These efforts are already underway, and staff has initiated conversations with the building department and design community to identify changes to the Land Use Code that will be necessary in support of these efforts. Staff Memo, Policy Direction – 3/14/22 Page 5 of 9 6) Working with other City departments in a very intentional way to bring consistency and clarity to city rules and requirements in support of the issues raised by Ordinance 27 and to ensure that we are not working at cross purposes. An example of this could be improvements to aspects of the required Construction Management Plan (CMP). It is important to note that in staff’s view, some aspects of these alternatives are likely necessary to implement under the moratorium, while others are not. Additionally, several of these alternatives would require coordination across City departments, beyond Community Development. In evaluating this policy choice of physically limiting house size (floor area reduction) versus mitigation for impacts and other alternatives, staff recommends impact mitigation and other alternatives. It is staff’s belief that a combination of a recalibrated mitigation calculation and other tactics (examples identified above), could be equally or more effective than reducing floor area. This approach has the significant added benefit of likely reducing community conflict over the moratorium code amendment process. Staff seeks direction from Council on the majority preference between these two approaches. Affordable Housing Opportunities At the policy level, staff and Council have identified several areas for evaluation of policies to facilitate the creation of additional affordable housing units (example: improvements to the AH Certificates Program). While staff believes that a whole suite of tools, enhancements, and incentives will be necessary to really move the needle in this area, central policy choices have emerged. It is staff’s view that the direction from Council in these specific topics are foundational to our work on the affordable housing topic during the moratorium and beyond: 1) Does Council wish to bring more certainty and predictability to the development of affordable housing projects by making the development review process more streamlined? Policies in this area would allowing qualifying projects that met certain performance standards be reviewed administratively or proceed directly to building permit. Council and staff have previously called this “by right” AH development. 2) Does Council wish to promote the opportunity for AH development across all Zone Districts – residential and commercial? 3) If Council wishes to provide the opportunity for AH development across Zone Districts: • Should all dimensions for affordable housing, other than the number of units, remain consistent with the underlying Zone District? (floor area, height, setbacks, etc.) OR Staff Memo, Policy Direction – 3/14/22 Page 6 of 9 • Should projects that are 100% affordable, be granted additional dimensional flexibility beyond the limitations of the underlying Zone District? In more direct words, should 100% AH projects have different dimensions than the free-market uses in a particular Zone District? In staff’s outreach discussions, it is clear that there is general support of the idea that affordable housing is appropriate across all neighborhoods in town, but with an important caveat – that it must be of an appropriate scale and character to fit into the neighborhood fabric. Question 1, above, asks about a streamlined or “by right” process for 100% AH development. In staff’s view this would be a positive foundation on which to build other tactics and incentives in support of affordable housing. Council should note however that AH projects currently require at least a review with the P&Z or Historic Preservation Commissions in a public hearing that gives the public and neighbors a chance to weigh in. Moving this review to an administrative or “straight to building permit” process would make development projects that meet performance standards much more predictable, and certain, but would remove public involvement from the review of specific projects. With direction from Council on these topics, staff does believe that some of the potential changes in this area would be best addressed during the moratorium – and will be a subject of our work in the next several weeks. CONCLUSION AND NEXT STEPS: As staff and our consultant team continue to analyze the issues and data and talk with an increasing number of members of the public and experts in the development community, we are engaged in a funneling and prioritizing exercise to identify the most necessary and effective actions to pursue during the moratorium. The direction received on the questions posed above will allow staff and our consultants to fully process and integrate the ideas gathered during our initial public engagement efforts as we shape possible policy and regulatory responses to Ordinance 27. As staff work progresses, we will compile of running list of policies, code amendments, and programs which are important responses to Council’s desires for the moratorium project but are not essential to complete under the protection of the moratorium. That list will be included as an exhibit in upcoming Council packets and form the basis of the ComDev and other departments work plan discussions with Council in the coming months and years. In the coming weeks, staff will continue to explore policy choices with Council and will begin crafting code changes. In early to mid-April, staff will be re-engaging with the public and technical stakeholders to discuss any policy or regulatory proposals before finalizing any Amendments for Council’s eventual consideration. Staff anticipates first and second reading hearings to be scheduled for late April and early May, in advance of the May 7th deadline for ordinance approval, the 30-day effective period for ordinances, and the June 8th expiration of the moratorium. Staff Memo, Policy Direction – 3/14/22 Page 7 of 9 FINANCIAL IMPACTS: N/A ENVIRONMENTAL IMPACTS: N/A. ALTERNATIVES: N/A RECOMMENDATIONS: Council provide direction during the Work Session discussion in response to the policy questions posed by the memo. CITY MANAGER COMMENTS: EXHIBITS: A – Policy Area Summary, Excerpt from Staff Memo, 2/1/22 Staff Memo, Policy Direction – 3/14/22 Page 8 of 9 EXHIBIT A – Policy Area Summary; Excerpt from February 1, Work Session Memo 1) The pace and scale of free-market residential development and redevelopment  Development allotments – analyze the current system of development allotments to: a.) manage development, b.) mitigate environmental impacts, c.) support concurrency of infrastructure in accordance with the intent of GMQS, d.) address unmanaged development types, STRs, and annual allotment amounts, and e.) address residential energy and resource consumption from development and operation of structures.  Demolition - assess the effectiveness of the definition of demolition at: a.) triggering compliance with GMQS standards b.) mitigating environmental and community impacts from development, c.) restraining or eliminating non-conformities and delivering quality design outcomes.  Zoning and Calculations - analyze residential development allowances and the methods for calculating building mass and scale metrics to assess alignment with community character. 3) Promotion of Affordable Housing Opportunities  Credits Program – amend the AH credits program to support clarity in project financing, increase utilization, and realize more units from the program over time.  Residential Generation and Mitigation Study – conduct a generation and mitigation study which accounts for the current conditions of the residential development sector.  Zoning – assess opportunities to use zoning tools to reduce obstacles to and incentivize the development of more AH.  Review Procedures – assess by-right, administrative, and board review standards and procedures to ensure they support community AH policies. 4) Development Procedures within the Land Use Code  Demolition – analyze the definition of demolition & non-conformities to align regulatory standards with AACP policies and mitigate new community impacts. Staff Memo, Policy Direction – 3/14/22 Page 9 of 9  Zoning Standards – assess Land Use Code regulations to ensure permitted, conditional, and prohibited uses support AACP policies.  Review Procedures – assess by-right, administrative, and board review standards and procedures to ensure they support community development and climate and environmental policies.