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HomeMy WebLinkAboutagenda.council.joint.20150407 CITY COUNCIL & JOINT WORK SESSION April 07, 2015 4:00 PM, City Council Chambers MEETING AGENDA I. Joint Work Session with BOCC JOINT WORK SESSION OF THE ASPEN CITY COUCIL AND BOARD OF COUNTY COMMISSIONERS April 7, 2015 4:00pm, City Council Chambers MEETING AGENDA 4pm Follow-Up on Proposed Housing Guideline Changes 4:20 Uphill Economy Update and Video 4:40 State Water Plan Discussion 5:00 Open Discussion P1 I. Amended Guideline Changes Page 1 MEMORANDUM TO: Board of County Commissioners Mayor and City Council FROM: Mike Kosdrosky, Executive Director, APCHA Cindy Christensen, Operations Manager, APCHA DATE OF MEMO: April 3, 2015 DATE OF MEETING: April 7, 2015 RE: REVIEW OF AMENDED GUIDELINE CHANGES RECOMMENDED BY BOCC AND CITY COUNCIL AT JOINT WORK SESSION HELD FEBRUARY 3, 2015 SUMMARY & BACKGROUND: APCHA Guidelines are the policies and procedures published annually to operate the employee affordable housing program. At its February 3rd joint work session, the BOCC and City Council reviewed and recommended approval of the first three policy recommendations below, but requested additional modifications and consideration of the fourth and fifth. 1. Standardization of square footage (recommended for approval); 2. Requiring HOAs to conduct capital reserve study and have capital reserve fund (recommended for approval); 3. Requiring educational component for all new workforce housing applicants entering the lottery system (recommended for approval); 4. Adding “in-program” priority to lottery process to address changing household sizes (general consensus to approve with suggested modifications); and 5. Requiring non-compliant affordable housing homeowners to accept reasonable sales offers otherwise accept at least 95% of original purchase price if home not sold within 180 days (request to modify out of concern for being too punitive as written). DISCUSSION: Policy recommendations #4 and #5 have been reconsidered and modified by the APCHA Board for your review and acceptance. The Board has approved the following modifications:  Policy Recommendation #4 relates to the policy located under Part VI (APCHA Purchase and Sale Policies and Procedures), Section 3 (Bid Process), Paragraph C (Bid Priority) #3 (Other Deed-Restricted Property Owner Priority). P2 I. Amended Guideline Changes Page 2 The purpose of this policy is to allow households currently in the affordable housing program a more effective way to readdress their changing household size by allowing an “in program” priority. This policy was amended to add the requirement that an owner must own their existing affordable housing unit for two years prior to requesting an “in-program" priority while also trying to readdress their household size by either upsizing or downsizing (i.e. no lateral moves). Below is the recommended modification to this policy: 3. Other Deed-Restricted Property Owner Priority A qualified owner(s) of another deed restricted ownership unit (not in-complex) may receive priority as described above and shall have first priority after in-complex applicants. Such bids are accepted only at the listed sale price and must be submitted during the first week of the two-week bid period to have this priority. In-APCHA bids submitted after the first week of the bid period shall not have this priority. All applicants requesting this priority must meet the minimum occupancy requirements, be within the designated category or lower, have at least a four-year work history prior to application, continue to not own any other property within the OEZ, have owned their existing unit at least two years prior to requesting this priority AND are readdressing their household size. Their existing unit must come up for sale within 30 days of closing on the newly acquired deed-restricted unit. Two or more qualified in-complex bids with second priority shall be further prioritized according to employment/work history or other criteria. Bids from applicants with one year or more of ownership shall be decided by lottery. IN ALL CASES, THE SUCCESSFUL APPLICANT’S CURRENTLY OWNED PROPERTY MUST BE LISTED FOR SALE BY APCHA THROUGH THE LOTTERY SYSTEM WITHIN 30 DAYS UPON CLOSING.  Policy Recommendation #5 relates to the policy located under Part VI (APCHA Purchase and Sale Policies and Procedures), Section 7 (Sale of an Ownership Unit/Listing a Unit for Sale), and Paragraph E (Maximum Sale Price). The goal, as stated by APCHA legal counsel, Tom Smith, is to deal with owners that are in violation of their deed restriction and/or APCHA Guidelines and are forced to sell, but fail to do so because they refuse to accept reasonable purchase offers made within the first 180 days of a required listing agreement. This policy is estimated to affect only a handful of cases each year. APCHA Board Chairman Ron Erickson explained that without this recommended policy change, APCHA would have (and has had) no leverage with affordable housing owners who are in violation of their deed restriction and/or the APCHA Guidelines. At the joint work session on February 3rd, The BOCC and City Council agreed that the proposed policy change as written was too punitive and asked APCHA to give it more consideration. The BOCC and City Council directed staff and the Board to revisit the issue with a policy more reasonably spelled-out, including a stepped-down approach requiring non-compliant owners to P3 I. Amended Guideline Changes Page 3 accept a reduced percentage sales price based on their eligible maximum resale price instead of the original purchase price. Below is the recommended modification to this policy: E. Maximum Sale Price Unless otherwise stated in the deed restriction applicable to the unit, the Maximum Sale Price for an APCHA ownership unit meeting minimum standards shall be calculated as follows:  Seller’s purchase price;  Plus three percent (3%) simple appreciation for each year owned, or a multiple of the Consumer Price Index (CPI) between date of purchase and date of sale, whichever is lower;  Plus cost, at present value, of approved, permitted capital improvements, not to exceed ten percent (10%) of purchase price, less depreciation;  Plus cost at present value of approved exempt capital improvements required to meet health and safety standards. Where the sale of a unit is required by the deed restriction, these Guidelines, a court order, or an enforcement action (i.e., an invalidated sale), and the property listed for sale has not sold within 180 days of the listing agreement, the Owner must accept any valid contracts of at least ninety-five percent (95%) of the maximum sales price. If the home has still not sold after another 30 days at or above 95% of the maximum sales price, the Owner must accept any valid contracts at or above ninety percent (90%) of the maximum sales price. For each additional month the home has not sold, the minimum bid price that must be accepted will decrease by an additional five percent (5%). For RO homes that do not have an appreciation cap, the same shall apply based on the appraised market value of said home. DIRECTION/ACTION: APCHA has scheduled 1st reading of the changes to the Guidelines for May 6th with a public hearing for May 20, 2015. APCHA will post updated Guidelines to its website and place ads in newspaper to inform community and will also send e-mails to all current owners with an accurate e-mail address on file. APCHA will provide update to the BOCC and City Council on any public comment received. The BOCC and/or City Council has a 60-day call-up period after APCHA Board resolution approval and notification. After 60 days, the recommended policy changes will go into effect. P4 I.