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Home My WebLink Aboutordinance.council.001-13 ORDINANCE NO. (Series of 2013) AN ORDINANCE AMENDING THE ASPEN/PITKIN COUNTY AFFORDABLE HOUSING GUIDELINES, PART VII, SECTION 12, AFFORDABLE HOUSING DEDICATION FEE AND ESTABLISHING A METHODOLOGY FOR CALCULATION OF FEES. WHEREAS,pursuant to Chapter 26.470, Growth Management Quota System, of the City of Aspen Municipal Code applicants may, under conditions specified by the Chapter, pay fees to satisfy requirements to provide affordable or employee housing; WHEREAS,pursuant to prior resolutions and ordinances of the City, the City Council has historically established these fees, referred to in Chapter 26.470 as an affordable housing impact fee, affordable housing mitigation fees and cash-in-lieu payments; WHEREAS, the fees have been specified in Part VII, Section 12 of the Aspen/Pitkin County Housing Authority Guidelines ("Guidelines"); WHEREAS, the fees specified in the Guidelines were established through a methodology created in 2002 with annual updating based on changes in the Consumer Price Index; said fees have not kept pace with increases in land prices, construction costs and the market price of housing; WHEREAS, a report by RRC Associates, Inc. and Rees Consulting, Inc. titled Affordable Housing Fee-in-Lieu Methodology—Aspen/Pitkin County/APCHA described the advantages, defensibility and utilization of a Market-Affordability Gap methodology for calculating housing fees in lieu; WHEREAS, the Board of Directors of the Aspen/Pitkin County Housing Authority voted on December 5, 2012 to recommend that the system historically used for calculating fees be replaced by a Market-Affordability Gap methodology through which fees in lieu can be calculated for Categories 1 through 4 and expressed in amounts per unit, per employee and per square foot; WHEREAS,the City Council desires to adopt said Market-Affordability Gap methodology and to amend the Guidelines to enact this change, and by virtue of the enactment of this Ordinance to supersede and amend all prior resolutions and ordinances of the City pertaining to the calculation of fees or cash in lieu. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section I That the City Council of the City of Aspen hereby adopts a Market-Affordability Gap methodology for calculating affordable and employee housing fees in lieu as recommended by the Board of Directors of the Aspen/Pitkin County Housing Authority. Section 2 That Part VII, Section 12 of the Aspen/Pitkin County Affordable Housing Guidelines shall be amended to read as follows: Section 12 Affordable/Employee Housing Fees This section of the Guidelines specifies the fees that are to be paid when: 1. The City of Aspen allows fees in lieu for affordable or employee housing required by Chapter 26.470 of the Municipal Code; or, 2. Pitkin County imposes an employee housing impact fee on residential and non-residential development in accordance with Chapter 8 of the Land Use Code. These Guidelines describe the methodology for calculating fees, provide current fee amounts and explain how fees will be annually updated. Methodology Fees are calculated based on the difference between the market price of housing and the price that is affordable for households with incomes in the targeted categories. This Market-Affordability Gap method involves a step-by-step calculation of fees utilizing County Assessor data and median income figures published by the US Department of Housing and Urban Development. Instructions for all of the steps involved in the calculation are provided as Appendix_to these Guidelines. Current Fee Amounts City of Aspen Pitkin Category 1 2 3 4 County per Affordable Unit $878,502 $746,274 $638,373 $462,069 $4430298 per Square Foot $976 $829 $709 $513 $493 per Employee $549,064 $466,421 $398,983 $288,793 $277,062 Updating the Fees Fee amounts will be updated annually by the Aspen Pitkin County Housing Authority staff with approval by the APCHA Board. The updates will be completed with sixty(60) days of the publication of the AMI's by HUD. Section 3 That the Guidelines set forth and adopted herein shall supersede to the extent inconsistent with the provisions of the Ordinance, all prior resolutions and ordinances of the City of Aspen. Section 4 If any section, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. Section 5 Nothing in this Ordinance shall be construed to affect any right, duty or liability under any ordinance in effect prior to the effective date of this Ordinance, and the same shall be continued and concluded under such prior ordinances. Section 6 A public hearing on the Ordinance shall be held on the 28th day of January 2013, in the City Council Chambers, City Hall, Aspen, Colorado. INTRODUCED, READ AND ORDERED PUBLISHED as provided by law by the City Council of the City of Aspen on the 14th day of January 2013. Michael C. Ireland, Mayor ATTEST: Kathryn S. Koch, City Clerk FINALLY, adopted, passes and approved this day of Michael C. Ireland, Mayor ATTEST: Kathryn S. Koch, City Clerk Appendix Instructions for Calculating Affordable/Employee Housing Fees in Lieu and Impact Fees The following steps are followed when calculating and updating City of Aspen affordable or employee housing fees in lieu and Pitkin County employee housing impact fees. Income Targets Income targets are based on the Area Median Income (AMI) amounts for Pitkin County two-person households as published annually by the US Department of Housing and Urban Development (HUD). Income Limits Categories Maximum AMI Maximum Income,2012 Aspen 1 50% $41,600 Aspen 2 75% $62,400 Aspen 3 110% $91,520 Aspen 4 175% $145,600 Pitkin County 100% $83,200 The incomes used to calculate affordable prices are the midpoint in the range between the maximum income and the maximum for the next lowest category. In the case of Category 1,the midpoint is between the maximum income amount and zero. For Pitkin County's 100%AMI category, a mid point is not used since the County's code does not specify a range or multiple income categories. The figure for 100%AMI is to be used as the basis for calculating the other AMI estimates. Affordable Price To calculate the affordable price, the following steps are used: • The mortgage interest rate will be determined by requesting quotes from three mortgage lenders in the Aspen area that have historically provided loans for the purchase of affordable/employee units. One percentage point will be added to the average of the quotes received. • A down payment of 5%of the purchase price will be assumed. • The affordable housing payment will equal 30%of gross household income. • 80%of the affordable payment will cover mortgage principal and interest. • The remaining 20%of the affordable payment will cover HOA fees, property taxes and insurance. • The mortgage term is 30 years at a fixed rate. Market Price To determine what the market-price would be for an affordable/employee unit,the following is involved: • Data on sales of condominiums and other improved residential properties from the Pitkin County Assessor are used to determine the market price per square foot. Calculations are based on heated area. Sales for deed restricted units labeled as "housing authority', commercial/residential, mobile homes, exempt units,fractional ownership units, other Assessor property classifications, properties with two or more residential buildings, properties with parcel size of more than 5.0 acres and multiple properties under a single reception number are excluded. • Two different per-square-foot prices are calculated based on different physical boundaries: 1)sales within the municipal boundaries of the City of Aspen for calculation of fees for Categories 1 through 4; and 2)countywide sales for Pitkin County's fee calculation. • An average of the median price per square foot each of the previous three years is used. • The size of the affordable/employee units is assumed to be 900 SF. Converting from Per-Unit to Per-Employee and Per-Square-Foot Fees For applicability to both City and County codes,the per-unit gap/fee amounts are converted into both per-employee and per-square-foot amounts. To convert from per-unit into per-employee amounts,a factor of 1.6 employees per unit is used. Two distinct calculations for per-square-foot fee amounts are provided: 1) A fee per square foot for use when affordable units are required. The per-unit gap fee is divided by 900 square feet to obtain a per-square-foot per affordable unit amount. 2) A fee per square foot for use when housing is to be provided for a specific number of employees, or fraction thereof. The per-unit fee divided by 1.6 employees per unit and then by 400 square feet per employee, a standard in both the City's code and APCHA's Guidelines. Calculations Summarized Formula Components Specifications Income Targets AMI for 2 person households; 100%AMI basis for Maximum Income calculating other categories Mid point between categories; zero assumed to be low Target Income end for Category 1; 100%AMI for Pitkin Co. Affordable Price Affordable monthly payment 30%of gross(pre-tax) household income Affordable principal and interest 80%of the affordable monthly payment HOA dues, property taxes, insurance 20%of affordable monthly payment Mortgage interest rate Average of quotes received plus 1 point Maximum mortgage Fully amortizing calculation Maximum affordable price Assuming 5%down payment Market Price Market Price per SF Heated area; average of median prices for past 3 years Average Affordable Unit Size 900 SF Market Price per Unit Market price/SF - by 900 SF Market-Affordability Gap/Fee per Affordable Unit Market price minus max. affordable price per SF of affordable unit Per unit gap 900 SF per unit per Employee Gap/fee per affordable unit—, by 1.6 employees per unit per SF per employee Per employee gap/fee_400 SF per employee Current Fee Amounts by Category 2012 City of Aspen Pitkin Category 1 2 3 4 County Income Targets Area Median Income (AMI) - 2 person household 50% 75% 110% 175% 100% Maximum Income $41,600 $62,400 $92,520 $145,600 $83,200 Mid Range/Target Income $20,800 $52,000 $77,460 $119,060 $83,200 Affordable Price Affordable monthly payment (30%) $520 $1,300 $1,937 $2,977 $2,080 Affordable principal and interest(80%of pmt) $416 $1,040 $1,549 $2,381 $1,664 HOA dues, property taxes, insurance (20%) $104 $260 $387 $595 $416 Mortgage interest rate 4.5% 4.5% 4.5% 4.5% 4.5% Maximum mortgage $82,102 $205,256 $305,752 $469,956 $328,409 Maximum affordable price-5%down $86,423 $216,059 $321,844 $494,691 $345,694 Market Price Market Price per SF of heated floor area $1,053 $1,053 $1,053 $1,053 $867 \verage Affordable Unit Size 900 900 900 900 900 Market Price per Unit $947,700 $947,700 $947,700 $947,700 $780,300 2%Administrative Charge (1/2 to APCHA; 1/2 to City or County) $17,226 $14,633 $12,517 $9,060 $8,692 Market-Affordability Gap/Fee per Affordable Unit $878,502 $746,274 $638,373 $462,069 $443,298 per SF of affordable unit(per unit gap/900 SF) $976 $829 $709 $513 $493 per Employee (per unit gap/1.6 employees per unit) $549,064 $466,421 $398,983 $288,793 $277,062 Ad Name: 8792593A LEGAL NOTICE ORDINANCE#1,2013 PUBLIC HEARING Customer: A$nen LEGALS City of Ordinance tt,Series of 2013,was adopted first pen � y reading at the City Council meeting January 14, 2013. This ordinance,if adopted,will amend the Your account number: 1013028 affordable housing guidelines,Part VII,Section 12, affordable housing dedication fee and establishing a methodology for calculation of fees. The public hearing on this ordinance is scheduled for January PROOF OF PUBLICATION 2To2see the entire text,golto 130 South Galena. he city's legal notice website http�llwww.aspen,)itkin.com/DeDartments/C/ork/ Legal-Notices/ If you would like a copy FAXed,mailed or e-mailed to you,call the city clerk's office,429-2686. IM:1 Published in the Aspen Times Weekly on January 17,2013. [8792593] STATE OF COLORADO, COUNTY OF PITKIN I,Jim Morgan, do solemnly swear that I am General Manager of the ASPEN TIMES WEEKLY, that the same weekly newspaper printed, in whole or in part and published in the County of Pitkin, State of Colorado,and has a general circulation therein;that said newspaper has been published continuously and uninterruptedly in said County of Pitkin for a period of more than fifty-two consecutive weeks next prior to the first publication of the annexed legal notice or advertisement. The Aspen Times is an accepted legal advertising medium, only for jurisdictions operating under Colorado's Home Rule provision. That the annexed legal notice or advertisement was published in the regular and entire issue of every number of said daily newspaper for the period of 1 consecutive insertions;and that the first publication of said notice was in the issue of said newspaper dated 1/17/2013 and that the last publication of said notice was in the issue of said newspaper dated 1/17/2013. In witness whereof,I have here unto set my hand this 03/15/2013. Jim Morgan,General Manager Subscribed and sworn to before me,a notary public in and for the County of Garfield,State of Colorado this 03/15/2013. �-- Mary E.Borkenhagen,Notary Public Commission expires:September 12,2015 `` go pv 14 TgRY �'.. PUBLIC ' F+PirK�