City of Lawrence, Kansas

City of Lawrence, Kansas

Housing Needs Task Force

October 18, 2006

MEMBERS PRESENT:		Rebecca Buford, Commissioner Dennis “Boog” Highberger, Barbara Huppee, Gwen Klingenberg, Bill Yanek
MEMBERS ABSENT:		Dennis Constance, Jim Dick, Mary Grob, Aline Hoey, Bob Santee, Lavern Squier, Phil Struble
STAFF PRESENT:		David Corliss, Lesley Rigney, Margene Swarts
PUBLIC PRESENT:

Highberger called the meeting to order at 8:35 am.

Approval of July 19, 2006 minutes

Klingenberg moved to approve the July 19, 2006 minutes. Buford seconded the motion, which passed.

Presentations

Modular Housing – There was a discussion about the differences in modular homes and manufactured homes as related to local code standards. City staff and Buford visited the Kan Build plant in Osage City, Kansas and were impressed with the building process. The energy efficiency standards were greater than many homes. It would be most cost-effective if there was a large area available for development and there was a benefit to having homes built quickly. The finish in modular homes does not look cheap – the walls in the model home were textured, backsplashes were tiled, and floors were wood laminate. They were very nice homes; however the actual cost savings are minimal.

Klingenberg said the CHAT report said the city needs 160 homes per year priced under $130,000 – can these be built for that amount?

Swarts said no – not with current Lawrence land costs.

Buford said the end cost would probably be around $70/ square foot, which is what Tenants to Homeowners is currently doing and Habitat is doing it for much less with their volunteer labor.

Corliss said with regard to the modular housing, there may be private regulatory issues such as restrictive covenants and he would want to confirm whether or not there are any code issues.

Highberger asked if the city has the authority to prohibit future restrictive covenants.

Corliss said they could choose to not allow certain restrictive covenants. Some covenants apply minimum square footage requirements – that will mean all homes are going to be of a certain cost. The covenants are generally not for discrimination purposes, the developers want a “quality” neighborhood and they are defining quality by the size of the home. It is a fairly common restriction. Also common is restricting roofing materials, what is allowed in yards, etc. He said it is a legitimate discussion to have in this group.

Highberger said it is an important issue – these things can impact affordability. He requested that staff place this on a future agenda for discussion.

The group agreed to take no other action regarding modular housing.

Inclusionary Zoning – Buford said she would speak about her recent partnership with Harris Construction with the Penn Project. Tenants to Homeowners (TTH) was invited to the discussion as a result of meetings with the ELNA. This is a case of voluntary inclusionary zoning and it may have worked because of pressure coming from the neighborhood. She stated that Harris was willing to sign an agreement that said that 10% (rounded up) of units will be affordable. Buford said she was concerned with the project progressing and prices going up, but they used the 80% MFI benchmark and said the units will have to be affordable at 30% of that income. She feels that everyone has to contribute to the affordable housing issue – the community cannot depend only on federal dollars for all of the funding. From her research on inclusionary zoning she has found that it is important that the exterior of affordable units not be distinguishable from the others. The interior does not have to be as high-end, but there should be standards.

Huppee asked about the size of Harris’ units.

Buford said there would not be any family units and none of the units will be accessible in this project.

Regarding the regulatory versus voluntary issue of inclusionary zoning, Buford said there would need to be an ordinance. There are reasons that Harris agreed to try this and it had to do with pressure from neighborhoods and allowable density.

Corliss said there is a spectrum of policy options when it comes to inclusionary zoning – from voluntary set-asides to mandatory requirements that require every building permit to have an affordability component or to contribute to a housing fund. He can see density incentives or bonus-zoning working in Lawrence where in exchange for something a developer wants, they can contribute something to affordable housing.

Buford agreed and stated that successful models have bonuses that have to do with density and affordability.

Klingenberg said in her discussions with Harris, it seems developers would respond better to incentives than to requirements.

Yanek said the worst case scenario is that developers will go elsewhere. He recommends not starting off too drastic. The Harris project will be able to show that it did not kill the project and hopefully he will be able to talk about the successful outcome.

Huppee said it is an interesting discussion to talk about what other contributions can be made by developers.

Buford said that many ordinances do allow for trade-offs.

Huppee said that when LDCHA was developing in the late-90’s they would endeavor to design houses to fit with existing homes and despite all the criticism they were always able to say the home does not carry a value any less than others on the block. Keeping that in mind as we go forward will be important – we have to work around those issues.

Buford said if they were going to draft an ordinance the group should look at incentives and how the design process could work.

Klingenberg asked if it would allow for different lot sizes as well.

Buford said that is one way to create affordability. Delaware Street is a good example of this – two bedroom flats are going in next to larger three bedroom town homes – it is a good mix.

Highberger stated he would like to see some sample ordinances and he would like to have some help from Planning on this. The group seems to be leaning toward incentive based ordinances. He wants to consider trade-offs as well as other possible incentives.

Buford said she found a site on best practices for inclusionary zoning. It was so helpful – she will e-mail the link to the group.

Highberger said a summary of what others’ have done would be useful. He wants something that the TF can look through and send forward to staff to draft an ordinance. He will speak with members to make sure they know that a policy recommendation will be made at the next meeting – he would like more than a simple majority present.

Housing Trust Fund (HTF)– Swarts said the question was if the group wanted to explore ways to fund a Housing Trust Fund. She visited with Corliss about using mortgage registration tax revenue. To increase the tax would require a legislative process. If the group wants to pursue that, they could forward a recommendation to the City Commission to direct staff to pursue such a change.

Corliss said if you make the policy assumption that you do not want to use existing sources, then the group obviously has to consider new sources of funding. The mortgage registration tax is a major source of income for the county. It is going to be very difficult for the City to tap into that revenue source. He would encourage the City to pursue the authority to levy development excise taxes – essentially tax collected for platting property. They could have an excise tax for housing needs such as for every square foot of home, this amount will go toward an affordable housing fund. They can also look at impact fees but those funds would have to be spent in relation to where the impact will be. If you want to have a continuing source of money for a HTF, the group has to look at a new source.

Klingenberg said that with the inclusionary zoning ordinance, there could be an “in-lieu of” fee.

Corliss said that would be a good option. If a developer wanted to build a development without low-mod housing they could pay a fee that would go toward creating affordable homes elsewhere in the city.

Highberger asked Corliss to talk more about the mortgage transfer tax.

Corliss said the mortgage transfer tax is handled by the Register of Deeds. A land transfer tax would work the same way for anyone filing a new deed. It is used elsewhere but not in Kansas.

Buford said Kansas is the only state without a HTF.

Yanek said Kansas is the only state without a HTF but that Kansas had some private entities step in and fill that gap. Regarding excise tax, he understands there is need to gain legislative authority but is there a need for legislative authority to collect impact fees?

Corliss said the City already has the authority to collect impact fees but thinks we need legislative authority to levy excise taxes.

Yanek said if the excise tax is out of our hands at the moment, impact fee is where the focus should be.

Corliss said he hopes it will be a discussion at the City Commission level during the discussion about the development process.

Klingenberg moved to direct staff to pursue options to fund a HTF. Buford seconded the motion, which passed.

Yanek said he attended the Partners for Smart Growth conference and there was a Philadelphia developer who talked about inclusionary zoning. He had numbers to show which percentages were doable – he will try to find out more.

Miscellaneous/Calendar

Members agreed to meet next on Wednesday, November 15, 2006 at 8:30 am in the CC Room.

Public Comment

There was no public present.

Adjourn

The meeting adjourned at 9:40 am.