City of Lawrence, Kansas

Housing Needs Task Force

December 13, 2006

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

Highberger called the meeting to order at 8:45 am.

Approval of November 15, 2006 minutes

Klingenberg moved to approve the November 15, 2006 minutes. Buford seconded the motion, which passed.

Inclusionary Zoning Discussion

Swarts summarized the discussion from the November meeting. The task of the group today is to decide whether or not to pursue inclusionary zoning (IZ) as a recommendation.

Highberger is reluctant to proceed without Struble and Santee. He asked Grob her thoughts.

Grob said she had been taken by surprise by the discussion of IZ. She has some serious concerns – she doesn’t want to address her own interests, but is having trouble with this recommendation. She thinks the goal should focus more on establishing a Housing Trust Fund. There are some other things we should look at before we recommend an IZ ordinance. She believes that if we focus on putting this on the builders or on housing, it is going to affect the price of housing in general, which will defeat our purpose. Now we read about impact fees that will be shouldered by new development as well. This has to get spread out. We are in a downturn and the housing stock is such that there are some other things we could look at – not necessarily supported by new development. She would like to see us use up some of the stock that we have. She isn’t necessarily against it; but she isn’t in favor of just supporting an IZ ordinance.

Highberger said they had jointly concluded that there is no silver bullet – it is going to necessitate a series of actions. IZ will not necessarily entail subsidies but more of a mixed income focus for development. It would be workable in neighborhoods where there is more of a range of homes.

Grob said it seems, from what she has read, IZ has been successful off-site – not trying to mix it up with $400-500,000 homes. There would be greater bang for the buck ; it is not for the purpose of segregation.

Klingenberg said that by the end of the last meeting, we were talking about sending forth a toolbox for the community to use, based on current market conditions and other things. It is more of a toolbox of things we have created to use.

Buford said it will provide incentive for the developers to do more. When asking the question “Where can we come up with resources from the entire community?” – some of those resources have to come from the development community. She agrees with the consensus that there cannot be one tool that rests only on developers. We need to have a set of tools, but we need to be careful not to throw IZ out of the box. We could structure something like what Struble talked about in November (it was the best idea of the meeting). That is how we come up with a creative solution. His idea was, instead of fitting affordable housing into a $400-500,000 home neighborhood, builders could use their resources to rehab existing stock that is falling down and could be resold for affordable housing. It isn’t just taking from them. There is a bonus and someone is making money. When you are talking about offering some resources to people who have none, you have to get it from those who have some (government, developers, etc.). She is feeling a little frustrated – if we are going to refuse to take resources from anyone then this is not going to be a fruitful discussion.

Klingenberg said we need the toolbox available so that it will be there to use later.

Buford agreed and stated that if that is something that is going to hurt developers in a soft market then at that time we look to something else.

Torres said that was the idea of the last meeting. We talked about having options for development where you could consider IZ, consider the HTF, and depending on the size of the project and to comply with the requirement, you could look at a combination of items. We talked about the market and the affordable housing stock that exists in the community. If there is a formula, based on a trigger (such as the availability of affordable housing stock…) it would protect developers from being over-burdened during economic downturns.

Klingenberg said there seems to be a lot of housing under a certain price at the moment but it might not be acceptable, it might be substandard.

Grob said she realizes all stock doesn’t meet standards but some does and we need to find a way to access those. She doesn’t know how we build that into IZ. If we recommend a policy that is based on the market, we still haven’t figured a way to go out and access that housing stock that is currently available. That is where the HTF comes into play.

Dick said he missed the last meeting but he is strongly in support of IZ. The CHAT indicates solidly that affordable housing is at a real premium in Lawrence. He thinks the HTF and IZ are two very different ideas that don’t necessarily go together in terms of one policy but would follow along beside each other as two very different policies. He has observed a lot of housing that is in need of work. From an IZ policy, doing work in existing neighborhoods – that is fair. Maybe we need to rethink this – why are we so afraid of mixed neighborhoods? Old West Lawrence for instance was built before zoning regulations. Now we need to think of not having these highly developed areas that aren’t mixed. Segregating economic lines of neighborhoods is not a healthy thing for Lawrence to do. Mixed developments make for a healthier city. IZ helps to slow that segregation process down. He lives on the East side and he doesn’t pay as much attention as he should but he looks at Prairie Park and that is an area where if we would have had IZ it could have been something good. We have a duality of ideas and strong division on the Committee and we aren’t ready to initial off on an IZ ordinance yet.

Highberger said he is supportive of IZ and the purpose of this committee is to solicit opinions from all sides of the issues. He would like to have the option of IZ that requires developers to mix types in developments and the alternative of contributing to the HTF and the alternative to rehab existing housing, etc. The models he has seen around the country are combinations of requirements and incentives – some minimal requirements for participation is necessary.

Yanek said he believes the housing and development industry is under siege – this committee could take the step to put out an informational piece of what IZ is and recognize this isn’t the time to make it a requirement. The piece could state that the group has already done some initial research and it would only take three CC votes to enact an ordinance. We could recommend embracing incentive approaches first. He believes the committee should come forth with something that was reached by consensus.

Klingenberg clarified that Yanek does not think IZ should be available as a tool.

Yanek said it is already available with three votes from the CC. If this group could send forth some innovative ideas such as Struble’s, that would be ideal.

Swarts clarified that if there was some sort of IZ ordinance that was strictly incentive based and that included a rehab component it would have some more universal support. She likes the idea of giving it a shot and seeing what might happen in the market place and the argument could be made that if it didn’t go anywhere, the group could come back and look at requirements later.

Grob said she had stated earlier that we need to ease into something like this. She would like to see an incentive based program. There has to be a way to draw the existing stock into the mix. A lot of people have gone to the idea that it has to be new – why do we need to provide new?

Buford said that it costs more to rehab but we don’t have to provide new. It is an issue that it is really challenging to go in and do rehab. Swarts can speak to the rehab program that is currently in place.

Grob said working with TTH she knows that. But there are some houses out there that only need a little bit of rehab. Those homes may now be available at affordable prices.

Klingenberg asked if it was strictly incentive-based will we see developers become involved or will they just continue on the same path?

Yanek said he would like to give it a shot. It gives developers a chance to put their money where their mouth is and it would create a lot of good will.

Buford said the idea of education is appealing – if the TF takes the time to make it a more incentive based package we will have to take some time to educate the community about how it would work.

Yanek said IZ requirements are only an ordinance away – it could be pointed out in the TF Final Report. The industry does appreciate Highberger’s invitation to participate in these discussions.

Highberger said the Traditional Neighborhood Design code will allow for more flexibility although many tools are already in place to provide for mixed-type developments.

Grob said the new code is so new and she knew of a development that may have taken advantage of it and didn’t because of the current market.

Torres asked what the incentives would be.

Yanek said everyone has mentioned density bonuses; he also likes the idea of a stream-lined development process. They don’t have to be monetary in nature.

There was a brief discussion about the lengthy development process.

Grob said the City could waive impact fees or some other development fees. She asked if the group should discuss the details now?

Highberger asked if the group provided a general policy outline, could staff draft something in the way of an ordinance.

Klingenberg asked if in the incentives there would be a “provide” section.

Highberger said we are recommending starting with an incentive based IZ package that would ask developers to either include a certain percentage of affordable units or rehab a number of existing units and in exchange there will be some process-based or density-based incentives. We will revisit after one year and if it is making an impact we will leave it alone – if not, we can look at a requirement based system.

The group agreed.

Highberger asked staff to supply some options for next time.

Housing Trust Fund Discussion

Buford said there has been group consensus about the need to establish and fund an HTF. She asked if anyone has ideas on how to create the fund with resources from every member of the community.

Highberger said the CC has added to its agenda asking for legislative authority to increase the mortgage registration tax.

Grob said that is paid by everyone taking out a new mortgage – refinancing, home equity, etc. It comes closer to being funded by the community at-large.

Staff will send a link to the group with ideas for funding streams.

Yanek asked if a density bonus would be an incentive to build affordable units into developments.

Buford said there is a new development code that we haven’t been able to see work yet. The new TND will allow for more mixed types. This incentive-based system is a good trial run. Maybe it will get us our affordable housing.

Highberger said at the CC level, the CC would have to attach IZ requirements to the density requests.

Klingenberg asked that with the TND, would we lose that density-bonus incentive?

Buford said it may help developers with planning to know exactly what will be available and at what price versus going through an uncertain process.

Highberger asked if the group can pass on a recommendation to the CC to pursue the mortgage registration tax and to research revenue streams to raise a potential $500,000 annually.

Klingenberg asked if impact fees are approved, could they be waived as an incentive.

Highberger said that could be added to the incentive package.

Squier said it is difficult to see pieces and parts fit – could we talk about the assemblage at the January meeting?

Highberger said that is what he had in mind.

Miscellaneous/Calendar

It was agreed to meet Wednesday, January 24 at 9:00 am in the City Commission Room.

Public Comment

Flory said she supports the idea of incentive-based but the group is still only discussing what new development can do. What can the whole community do to address this issue? Hopefully before this committee dissolves she would hear ideas about this. She is also willing to do some research.

Grob said she hoped the group would continue on after this in order to address the wider range of needs related to affordable housing.

Klingenberg said that is where the toolbox idea comes in – we can handle these two items quickly.

Adjourn

The meeting adjourned at 10:55 am.