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HomeMy WebLinkAboutminutes.council.19890104Continued_Meetina Aspen Citv Council January 4, 1989 Mayor Stirling called the meeting to order at 5:10 p.m. with Councilmembers Tuite and Gassman present. ORDINANCE #47, SERIES OF 1988 - Affordable Housing/Displacement Councilman Gassman • said his perceived conflict of interest was based on a single family house. Councilman Gassman said if that is not part of the ordinance, he does not feel he should absent himself. Councilman Gassman said he will not discuss that provision. Councilman Tuite agreed Gassman's input is needed on this ordinance. Councilman Gassman said the city attorney did not feel he had a conflict. Fred Gannett, city attorney's office, said Councilman Isaac also has a perceived conflict of interest. The ordinance is set up in such a way that it can be segmented for discussion. A Councilmember could step down for this aspect of the ordinance, have that aspect voted on by the rest of Council, and then vote on the entire ordinance. Alan Richman, planning director, told Council there are some recommended changes to the ordinance which are a result of the last public hearing. Richman said he would like to put the ordinance into a larger perspective of a plan f or affordable housing f or the entire community to share in. Richman said the solution to the affordable housing problems will not come f rom this ordinance alone. The ordinance is one part of a three part strategy, which is preservation of the existing inventory, production of housing, and plan for future demand of housing. (Councilman Isaac came into the Council meeting). Richman said this public hearing and ordinance deals with the production and preservation of housing. After Ordinance #47 is adopted, staff can begin dealing with the third portion of the problem, revising the growth rates. Both the city and county have identified this as a priority item on the planning office's work program. Richman told Council in 1987, staff started work on a housing element of the master plan working with the housing authority on a survey. Richman said the survey demonstrated there are 3300 housing units in the Aspen area, of which about 900 are restric- ted housing. About 70 percent of Aspen's housing is not restric- ted and is subject to demolition or displacement. Richman said the survey also indicated the town could build 250 units, which might meet the existing shortfall but not get at the needs f or future growth. Richman said with an inventory that is capable of being displaced and an existing shortfall, staff sought a strategy that would deal with both preservation and production of affordable housing. Richman said Ordinance #47 does not go far enough in terms of production incentives and may go too far in terms of some of the penalties for demolition. 1 Continued Meeting Aspen City Council January 4, 1989 Richman told Council he met with real estate agents, planners and attorneys and got some solutions from that meeting. Richman said this helped come up with a comprehensive solution, based on a 3 part implementation strategy. Richman said one part of this strategy is code amendments, which are in Ordinance #47. The plan also includes some financial solutions; incentives for production of housing as well as tax options. The plan involves the housing authority and helping them to manage their units. Richman said staff was not intending to single out demolition as the source of the housing problem nor as the solution to the problem; it i s one element of the problem. Councilman Isaac told Council he has had discussions with the city attorney about a possible conflict in Ordinance #47, and the part that deals with accessory units. Councilman Isaac said he will remove himself from discussions about accessory units but will participate in the balance of the Ordinance. Councilman Isaac said the city attorney has said this is reasonable. Richman said the first principle change in the ordinance was that the mandatory accessory dwelling unit built after a home has been demolished has been deleted from the Ordinance. Richman said the ordinance does retain the voluntary portion of the caretaker unit provisions. This is one of the 5 planks that is fundamental to the Ordinance. Richman said previously these units were subject to review by the housing authority only with no notice given to neighbors. Richman said the accessory units have now been designated as conditional uses. Their review will be by P & Z. Conditional uses are always: a public hearing with notice to neighbors and in the newspapers. Richman said by designating these as conditional uses, the staff has an opportunity to identify in which zones these are appropriate and in which zones they are inappropriate. Richman reminded Council at the last Council meeting there were comments from Aspen Grove residents who felt that commitments were made during the annexation process that they would not have duplexes in the neighborhood and that their FAR wouldibe at a certain level. Richman said by excluding R-15B from they conditional use list, this has reinstated the commitments that were made to this subdivision. Richman said this change and making accessory units voluntary rather than mandatory has removed a lot of problems with this proposal. Richman said by voluntary, this means anyone who has a space in their existing home or who wants to make an addition to their home and has avail able FAR can use this accessory dwelling unit provision to create another dwelling unit. This doe s not make the home a duplex; it is a single family house with an accessory unit. Richman told Council in the county, about 7 to 10 people per year have availed themselves of this provision. Richman said there will be no income or price limitations on 2 Continued Meetinct AsAen City Council January 4, 1989 these units. The concern is to house people that live and work in the community. Richman pointed out the focus of the program has been changed to inviting people to build accessory units rather than mandating it. Richman said this will also to be legalize existing bandit units. Richman suggested there be no land use application for this activity. Richman said the other major penalty that has been deleted has to do with FAR. P & 'Z suggested one way of getting dwelling units on to properties was to reduce the FAR available to properties that were exclusively free market units. P &'Z suggested 75 percent allowable FAR f or j ust f ree market; 100 allowable FAR if an affordable housing unit were included. This has been deleted. Richman said a comment at the public hearing was to shift the burden to the commercial sector. Richman reminded Council about 7 months ago, new land use regulations went into effect which imposed a req uirement to provide housing for 60 percent for employees generated. This was increased from 35 percent. Richman said this regulation has had some side effects, like increased rents and increases costs. Richman said staff has heard that this 60 percent req uirement makes historic preserva- tion on site economically unfeasible. Richman said the city should look at the effects of this regulation for some time before it is increased again. Richman said this req uirement has gone from 10 percent in 1981 to 25, to 35, to 60 in 1988. Richman said left in the ordinance is the replacement housing program which effects the multi-family development. Richman said this amendment is crucial. Richman said what happened last summer is a large part of why the city instituted the administra- tive delay and the affordable housing program. Richman said the city was concerned about the demolition in the community to multi-family structures. Richman told Council the housing survey of 1987 demonstrated about 45 percent of the employees that are housed in multi-family dwellings are in non-deed restricted units. Richman said the city has been trying to maintain the balance of f ree market and public sector having a role in producing multi-family housing, which is why the replacement program is so important. Richman said the replacement program is a 1 to 1 replacement ratio and is oriented to replacing mul t i- f amily housing when it is demolished. Richman told Council one change has to do with what happens when the one to one replace- ment ratio requires there be replacement off-site in addition to that on-site. Richman said the regulations state if a one to one replacement means that a non-conformity is created on-site, people will have to go off site. Richman reminded Council t he previous version of this ordinance required the number of bedrooms built on site be a match between free market and 3 ontr~ued Meeting Aspen Citv Council Januarv 4, 1989 employee market. Richman said the revision is now unit for unit; the bedroom ratio was too onerous a requirement and did not give the opportunity for the free market development on-site to provide financing for the employee development. Richman said a change from the meeting with the realtor group was a suggestion the city broaden the area in which to allow off-site housing to occur in the demolition replacement req uirement. The ordinance mandates this be within the city limits. The sugges- tion was made to broaden this to the metro area and perhaps as far as Aspen village. Richman pointed out the further this area is broadened, the lower the land costs are for the developer to produce off-site housing. Richman said the important issue is that there is a multi-f amity replacement program to guarantee the continuing role of multi-family housing in Aspen. Richman told Council this was sent to the city's code consultant to look at the constitutionality. Richman said the consultant feels this program is sustainable. Staff and the consultant do not feel it is necessary to look at individuals who may have speculatively spent a lot of money on land and now f ind the program to be difficult to deal with. Richman told Council this program provides several economic alternatives for developers. Richman said another issue of the program is that new sub- divisions provide 25 percent affordable housing on site. This is a direct response to projects like 700 East Main and 1010 Ute Avenue, exclusive free market developments. Richman said in the past, cash-in-lieu has been at the developers option. The program makes it clear the choice is the city's and that a residential developer is in the business of producing housing and ought to produce some on-site affordable housing. Richman clarified this is 25 percent of the bedrooms. Richman told Council another plank of the program is the density bonus provision. Richman said right now there is a density bonus provision when a project is 50/50. Richman said the suggestion is to look at an increased density bonus when a project is 100 percent affordable housing. Richman told Council staff has come up with a greater scale for projects that are 100 percent affordable housing. Richman clarified that density is the number of units on site, not how big the project can be. Richman said P & 'Z is not recommending increased FAR, increased height, or reduced open space. Richman told Council P & 'Z felt comfortable with increased density. Richman said the last part of the regulations has to do with FAR. Richman said this is a completion of work Council started about a year ago, recognizing buildings were being built out of scale with the community. Richman said this last summer the city has seen the use of the office and C-1 zone for very large single 4 Continued Meeting Aspen__City Council January 4, 1989 family and duplex developments. Richman presented a chart illustrating the existing FARs in 6 zones. Richman said current- ly FARs in some zones are strong incentives for people to build single family and duplexes exempt from GMP, from housing require- ments. Richman said the current FARs are also strong incentives for people to demolish existing small residences and to be using valuable portions of the downtown area. Richman said P & Z concluded these kinds of FARs are wrong and are recommending that these FARs be dropped to the R-6 scale. Richman said this is an important part of the replacement program. Tom Baker, planning office, told Council the housing survey indicated there is a changing situation with the employee base. In 197 9 27 percent of the employees were married ; in 1987 , 42 percent were married. Baker said there is also an increase in the number of children and a trend towards people staying longer in the valley. Baker said another finding is there is a lot of over crowding, especially in the rental housing. Baker said the survey found that 45 percent of all renter households were all unrelated individuals. In 1979, the same figure was 9 percent. Baker told Council the survey calculated a 250 to 300 unit shortfall. Based on historic growth trends, there will be an annual increased need of between 50 and 70 units of affordable housing. The survey indicated many employees need assistance in obtaining financing. There is a distribution problem between unit costs and income levels. Baker said there is a close relationship between the number of low income units and the number of low income households; however, those people were not in those units. Baker said the survey discovered once a person gets into an affordable unit in town, they will stay there because the ability to filter up is very limited. Baker said the units have the potential of becoming unaffordable with programmed rent increases. In mobile home parks, in- dividuals own the units but rent the land. The units available to the M.A.A. have been shrinking. The city has been losing units due to lack of enforcement. Baker said it is clear that if anything is going to be done in the Aspen area, this program needs subsidy because land costs are so high. Baker said a 7 part program has been developed. One is financing/refinancing. The housing authority is investigating ways to finance projects to make sure they remain affordable and ways to provide assis- tance to employees to get financing. Another program is the production of low income/special group housing or dorm housing for winter seasonal employees and M.A.A. and the production of family oriented housing. Baker said staff discovered if low income units and family units are taken care of, the middle will be loosen up and redistributed. 5 Cantrrued Meeting Aspen Citv Council Januarv 4. 1989 Baker said staff is also looking at conversion of mobile home parks and assisting with making these fee simple so the owners can own the property as well as the units. Another aspect is combining resources with Snowmass, combining the funding mechan- isms of the city and county for future developments. Baker said staff is also looking at a potential funding mechanism. The sixth aspect is amending the code, which was discussed earlier. The last aspect is enforcement; the housing office has instituted an enforcement program which has been going the last 6 months with significant results. Baker presented a map of the Aspen area outlining about 20 potential housing sites. The Red Roof and Marolt/Thomas proper- ties have been identified as low income/dormitory housing. Baker said staff has worked with Snowmass to identify their needs; one is to increase their permanent resident population. Baker said there is a joint project that can work for the two communities. Baker presented concept plans for 5 of the potential housing sites. Baker told Council staff has tried to spread the solution evenly throughout the entire valley. Baker said these plans try to give an idea of what can happen at various sites. One site is the Moore property of approximately 120 acres between Maroon creek road and the highway. The concept plan shows a potential mixed development of about 150 units with a lot of open space. Another plan i s for Aspen Village of 140 acres with 110 aff o r- dable units and amenities, like open space, trails and parks. The concept plan for the W/J site is for a small portion of that area, clustering about 36 units in a triplex fashion. The ~Zoline parcel of 100 acres could have mixed development of 120 to 180 units. A concept plan for the Pitkin Iron site shows duplexes and single family houses with 25 to 50 units. These concepts illustrate how different development can be configured on a site and still provide open space recreational amenities. Richman said staff has put a lot of attention into moving forward with cash-in-lieu as well as getting at the housing short fall. Richman said attention has been given to an enhanced funding source. Richman said if the public sector can find large land parcels and assemble them for private sector development, that type of partnership could get at the problem. Richman suggested a funding mechanism be identified to allow the city to purchase some properties. The city, county or housing authority can go out in a planned unit development, identify an appropriate development, and install the infrastructure. The private sector would build the housing. Richman said the cost of the land would be obtained through a funding source. Richman told Council he met with staff and looked at property tax, sales tax, real estate transfer tax, business license taxes. Richman said the city portion of the property tax would have to 6 Continued__Meetinct Aspen Citv Council January 4, 1989 be doubled to generate sufficient funds for this program. Richman said a quarter to half cent in the sales tax would generate sufficient funds to buy a large parcel for housing. Richman said Council needs to make a decision which funding source is most appropriate for this program. Richman brought up the exit survey done after the November 1988 election. Richman told Council a question was asked if peopl e would support a property tax increase for production of afford- able housing. Richman told Council 61 percent county wide agreed or strongly agreed to have a property tax increase for affordable housing. Richman said in the city precincts, the response was 68 percent in favor and if the Centennial/Hunter Creek area is added, there is a 71 percent in favor of a property tax increase. Richman told Council after the changes were made to this or- dinance, he took it back to P & Z . The vote at P & ~Z on Resolu- tion #11 was 4 to 3. Richman told Council the 4 members who supported Resolution #11 felt comfortable with this new approach; 2 of the people who voted against Resolution #11 now feel more comfortable with the changed Ordinance #47. Doug Allen, housing authority, told Council one way to accomplish the production of more employee housing is to let the private sector do it and give bonuses to the private sector to let them produce this housing. This approach would not need tax money. Councilman Isaac said one action that precipitated this or- dinance was demolition of several houses on East Hopkins. Councilman Isaac said the demolition of single family and duplexes has been exempted from this ordinance and the need to replace lost housing. Councilman Isaac asked what happens when several houses in a row are taken as one application, demolished and replaced with expensive townhouse. Councilman Isaac asked if this will be looked at as a multi-family application or will be exempt . Richman told Council by definition if a structure contains less than 3 units, it is not multi-family. Richman said several single family residences being grouped would not bring this ordinance into play. Councilman Isaac said he would like to discourage street wide demolition of houses. Mayor Stirling opened the public hearing. Rick Neiley, representing the owners of the Valley Hi apartments, said it is gratifying to hear the city's plans for development of affordable housing. Neiley said Ordinance #47 is a very small portion of what is on the table and has a dramatic impact on a very small segment of the community. Neiley said most of the demolition in the east end was single family and duplex residen- ces; very little multi-family buildings were part of the demoli- tion process. The ordinance addresses only multi-family build- 7 o ~tinued Meeting Aspen City Council Januarv 4 , 1989 ings. Neiley said this ordinance has lost a lot of the com- prehensive aspect that originally were built into it in an effort to make this a community ordinance. Neiley said this ordinance will now only apply to 10 or 12 buildings in town. Neiley said condominiumized buildings will not be demolished. Neiley said requiring 1 to 1 replacement on site places a huge burden on residential multi-family property owners. Neiley said it is questionable whether many of these buildings would be in a position to create any free market housing along with affordable housing. Neiley said if the purpose of the ordinance is to stop demolition, the Council should enact an ordinance which says no demolition in the city of Aspen, or to limit demolition on a lottery basis. Neiley said demolition of multi-family buildings is a very small portion of the community's problem but puts a great burden on a few property owners. Neiley said the existing owners of property equity in their property will be completely eliminated by this ordinance. The ordinance gives no realistic redevelopment alternatives. Neiley said Council should direct the planning office to work on acquiring land, consider additional taxing proposals, create sites where developers can construct good quality affordable housing. Neiley said Council should consider increasing the permissible FAR on multi-family properties effected by this ordinance. Neiley said there are a variety of solutions short of imposing the full weight of the employee housing problem on the shoulders of a few property owners. Neiley said a comprehen- sive plan for the development of employee housing into the future ought to be adopted. Lawrence Levin, representing the owners of the Valley Hi apart- ments, told Council he was hired to look at the constitution and legal aspects of this ordinance. Levin said Ordinance #47 violates 3 provisions of the U. S. and Colorado constitutions . These are a violation of the substantive due process of the constitution, the equal protection clause, and the inverse condemnation. Levin said for an ordinance to be a legitimate exercise of police power, it must not be arbitrary, capricious or unreasonable. The ordinance also must bear a substantial relationship to a legitimate governmental concern. Levin said the police power should not be overly oppressive on an individual property owner. Levin said the demolition provisions are overly oppressive. Levin said the city has emasculated any pretense that the city has a comprehensive plan regarding demolition. Levin said if the concern is affordable housing, the ordinance puts a freeze on a few apartments and the demolition aspect of the ordinance does not address the concern. Levin said there has been no study of the nexus between the problem of lack of housing 8 Continued Meeting Asper Citv Council Januarv 4 ,- 1989 and the demolition of apartments. Levin said the city's housing element does not deal with the demolition of existing units. Levin said the city ought to look at enforcing their current provisions. Levin said this ordinance is inconsistent with the city's housing master plan. Levin said the proposed ordinance is moving into an unconstitutional taking of property. Levin said there are 3 standards one has to look at before there is a taking of private property for a public purpose; the interests of the public require the state interference, that the means are reasonably necessary for the accomplishment of that purpose, and the regulation is not unduly oppressive on individuals. Levin said putting a freeze on the owners of a few multi-family units, the means do not tie into the accomplishment of saving low income housing. The regulation is unduly oppressive and a regulatory taking can be an inverse condemnation. Levin said his clients are being denied an economically viable use of their property. Levin said the owners of the Valley Hi property did not know a moratorium would be in place , no one told them they would be restricted to multi-family housing in perpetuity. Levin said this ordinance is prohibiting the upgrading and maintaining of the property. Levin said Council granted exemptions in August and there is an equal protection problem. Perry Harvey said in the ordinance there seems to be confusion between units and bedrooms. Harvey said there is a definition of "habitable" which states it may be used for living, sleeping or cooking purposes. Harvey said the ordinance also states a dwelling until will be considered to be demolished when it i s partially or completely dismantled, or razed such that the unit is no longer habitable. Harvey pointed out the kitchen is generally the first thing in a house that gets redone. A strict application of this ordinance would make the house demolished. Harvey said expanding the areas in which housing can be provided is an important thing for Council to consider. Harvey said an funding mechanism is important. Harvey said density is being increased but FAR is not, and suggested Council consider an FAR bonus as a method of producing some housing. Richman said the intention in the demolition definition was to avoid rehabilita- tion ever being considered demolition. Harvey asked if the accessory or affordable units are at the option of the owner of the property. Richman said the middle income guidelines were picked as they are the highest guidelines to try and make this economically feasible. Richman said another alternative is that the units built on site do not have to be restricted in terms of price. Residents occupied units can be sold for what the market will bear but they can only be sold to people who work and live here. Bill Greenwood said he generally supports the idea of dispersed housing throughout Aspen. This retains the old time charm of 9 Cont-intx~d- Meetinq -Aspen City Council - Janusry 4 1989 Aspen and has social and economic advantages. Greenwood said he supports legalizing bandit units . Greenwood said the objectives should be encouraged more by positive rewards then restrictions. Greenwood suggested construction which contains affordable housing should be able to go to the head of the line in the approval process, or waive permit and tap fees as an incentive. Greenwood said the owners must control the rents and who will live in the house. Greenwood said the business core is respon- sible for most of the growth as well as for displacing many employee units. Greenwood said it is unfair to place all the burden on small residential properties. Dick Butera said Council should give thought to the dismal history of government putting disincentives into the housing industry. Butera said disincentives to private ownership of housing has always ended up in failure. Butera suggested Council consider a three-man committee of housing producers to see their suggestions for creating housing without penalties. Mark Tye said he feels the ordinance is unfair as written. Jon Busch said he supports passage of this ordinance. The ordinance will hep maintain the socio-economic mix of people, which Aspen has been noted for. Busch said this ordinance will help spread employees through the neighborhoods. Joe Krabacher said the city has to provide some incentives for the creation of housing. Krabacher recommended allowing condo- miniumization of accessory dwelling units. Krabacher suggested an incentive of floor area for employee housing units in some zones. Marty Schlumberger said the ordinance refers to an exemption for his project for 6 months. Schlumberger requested this exemption be for one year in order to get a project through the city. Dale Potvin said the city has to also look at how they are going to accomplish producing employee housing. Jim Marka- lunas said there is housing in town that does not meet the uniform housing code. Markalunas said Council has to strike a balance between the need to provide employee housing and not to allow sub-standard housing to exist. Markalunas expressed opposition to any type ordinance that would deprive a property owner from being able to renovate or replace their home at a 1:1 ratio. Mick Ireland told Council the survey done in the last election covered 256 voters. Ireland said there was overwhelming support for a property tax and perhaps more support for a sales tax. Ireland said over 60 percent of those surveyed are property owners. Ireland told Council he favors a property tax method for funding employee housing because it is more fair than a sale s tax. Ireland pointed out the property tax burden has been declining over the last decade. John Kelly, representing Rodgers and Butterbaugh, said his clients are exempt from the moratorium 10 Continued Muting Aspen--City Council - January 4 1989 and from this ordinance. Kelly req uested this exemption be a reasonable time in order to comply with the city regulations and get a building permit. Neiley said there seems to be a consensus of citizens that people need to participate in the creation of good employee housing. Neiley said the consensus also is that Ordinance #47 is an unfair ordinance. Councilman Isaac said he would not like to exempt single family or duplexes from this ordinance if they are demolished in a block or half block in a multi-family process. This is changing the nature of neighborhoods as well as displacing employees. Councilman Gassman said this ordinance will not do anything about the demolition of house like the city saw on Hopkins last summer. Councilman Gassman said this is a community problem, and this ordinance is asking one zone to accept a disproportionate burden of the solution. Councilman Gassman said he sees employee housing as a subsidy of commercial interests. Councilman Gassman said the people who benefit should be the people who pay. Councilman Gassman said the city and county have gotten the housing they have by some incentives. Mayor Stirling said growth should pay its own way. Mayor Stirling said the discussion on Ordinance # 47 has been very valuable and legislation is important. Mayor Stirling said he sees this ordinance as only one portion of an overall approach to housing. Mayor Stirling said one goal of this ordinance is to produce affordable residential worker housing in town. Another purpose of this ordinance is to have the developers contribute more than they have to the housing inventory. Other purposes of the ordinance are to slow the pace of new development, and to disperse residential worker housing throughout town. Mayor Stirling said he does not feel any owner has a constitu- tional right to obtain maximum profits for an investment. Reasonable use of the ground does have to be maintained. Mayor Stirling said he feels the current draft of the ordinance is more inequitable in laying the burden on RMF. Mayor Stirling said he feels there has to be a participation from single family and duplexes . Mayor Stirling said the government should not select who is to 1 ive in the accessory dwelling units. Mayor Stirling said this ordinance will allow the demolition of single family and duplexes to continue unabated. Mayor Stirling said Mrs. Cooper very much supports the change of not including single family and duplex in the ordinance. Mayor Stirling said he 1 ike more incentives and less punitive approach to this. Mayor Stirling said if this i s 1 of t to voluntary measure, the city will get no productivity. Mayor Stirling suggested Council move quickly to annex the Airport Business Center which would produce additional tax revenues to 11 Continue-d -Meeting As~e~r. City Council--- January -4 , 198.9 the city. Mayor Stirling said he would like to see the city allow residential development in the commercial area only as a conditional use. Mayor Sti rling said there is a concern about the eq uitabil ity issue in terms of who takes the burden. Mayor Stirling moved to continue the public hearing and final consideration of Ordinance #47 to January 9; seconded by Council- man Isaac. All in favor, motion carried . Council adjourned at 7:55 p.m. ~. Kathryn Koch, City Clerk 12