CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date: 5/2/17
Staff Contact:	Casey Toomay
Recommendations/Options/Action Requested:
Receive report from the Affordable Housing Advisory Board (AHAB), identifying five funding sources outside of those currently reflected in the Capital Improvement Plan for the Affordable Housing Trust Fund. Consider a work session with the AHAB to discuss these funding options along with the results of the Housing Study in the fall of 2017.
Executive Summary:		One of the goals of the Affordable Housing Advisory Board (AHAB), adopted at their retreat in 2016, is to “identify five funding sources for the affordable housing trust fund, not including those already in the CIP, by the end of the first quarter of 2017.” Staff provided the attached memo outlining a number of options for the board to discuss at their meeting on March 6, 2017. The memo focused on two of the action steps related to this goal - “research other peer cities for existing models” and “establish proactive incentive policy that automatically applies if certain triggers are met.” The Board would like the Commission to consider a work session to discuss these recommendations further, in conjunction with the results of the Comprehensive Housing Market Study, later this year. The attached memo discusses all of the funding options the Board considered in more detail but the funding sources AHAB is recommending are as follows: 1. Sales Tax. The Commission should consider asks voters to renew but repurpose the 0.05% sales tax that will no longer be needed for transit expansion. 2. Voter Approved General Obligation (G.O) Bonds. Many communities have issued debt to provide funding to construct affordable housing units. The Commission should maintain the amount of funding currently identified in the Capital Improvement Plan for affordable housing from G.O. debt. The Commission could also redirect bonds from other projects identified in the city’s Capital Improvement Plan to be funding with G.O. debt. The Board supports exploration of this idea because it spreads the responsibility of addressing affordable housing across all tax payers in the city, including business and industry. 3. Transient Guest Tax on AirBnB. While the Board recognizes transient accommodations are not currently permissible by zoning code, the Board understands the Commission may be taking up this conversation soon. Studies indicate that short term rentals impact affordability, and therefore the Board supports using the guest tax generated by these properties to offset some of that impact. 4. Voluntary Donations on Utility Bills. The Board is supportive of establishing a voluntary donation as part of the City’s utility bill. The Board is aware that there are software limitations that may need to be worked out before this option is possible, but they feel strongly that this program would be supported by many in the community and would generate funding for affordable housing. A donation of $5/month by 10% of customers would generate over $180,000 annually. 5. Pay for Density. The attached staff memo outlined a proposal where a base density would be established and any project seeking additional density would pay a fee toward affordable housing. However, at their meeting on April 17, 2017, the Board modified this proposal and instead recommends the City Commission establish a policy requiring any residential or commercial project requesting upzoning to pay a per unit fee that would go to the Affordable Housing Trust Fund. The project would still go through the regular public land use entitlement process. 6. Incentives. The Board is supportive of continuing to provide incentives in the form of tax rebates, tax abatements, waiving fees, or completing infrastructure improvements at city’s cost. These contributions to affordable housing, which are individually considered by the City Commission as they are requested, should be acknowledged and included in the Board’s annual report of affordable housing efforts in the City. The recently updated economic development policy requires affordable housing units if the project is a mixed-use project with four or more residential units. The Board expressed support for a new policy under which certain development fees (i.e. system development charges, building permit fees, etc.) for affordable housing projects would be waived or rebated automatically, without additional review by AHAB or the City Commission.
Strategic Plan Critical Success Factor		Effective Governance/Professional Administration Safe, Healthy, and Welcoming Neighborhoods Sound Fiscal Stewardship Collaborative Solutions Economic Growth and Security
Fiscal Impact (Amount/Source):		The fiscal impact to the City is unknown at this time and would depend on which of the funding options the Commission approves. Affordable Housing was included in the city’s Capital Improvement Plan.
Attachments:		Funding Memo Minutes from 3/6/17 AHAB meeting Draft minutes from 4/17/17 AHAB meeting

Reviewed By: (for CMO use only)

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