HomeMy WebLinkAboutItem 03 Developing an Affordable Housing Strategy AGENDA ITEM SUMMARY Meeting Date: 2/13/2017
Meeting Type: Work Session
Staff Contact/Dept.: Sandy Belson, DPW
Staff Phone No: 541-736-7135
Estimated Time: 60 minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Promote and Enhance
our Hometown Feel
while Focusing on
Livability and
Environmental Quality
ITEM TITLE: DEVELOPING AN AFFORDABLE HOUSING STRATEGY
ACTION
REQUESTED:
Provide direction on further development of Springfield’s Affordable Housing
Strategy
ISSUE
STATEMENT:
The City recognizes that there is an affordable housing issue within the community
and is working to address this problem. At work sessions on October 10 and
November 28, the Council discussed staff’s analysis of the current situation to
better understand the extent of the problem. The findings pointed to a shortage of
housing and the expense of housing relative to household incomes.
The supply of housing is very low at all levels: emergency shelter, transitional
housing, subsidized rental housing, market rate rental housing, space in
manufactured home parks, and homes for sale. Rental vacancy rates are very low.
It is a sellers’ market with a low inventory of homes for sale.
Housing costs are increasing faster than incomes. Half of Springfield’s population
struggles to afford basic needs based on United Way’s ALICE1 report. More than
half of the renters and more than one-third of the owners in Springfield are cost-
burdened, meaning they pay more than 30% of their gross income on housing and
basic utilities. Female-headed households, children, those on fixed incomes, and
people with special needs are disproportionately affected.
ATTACHMENTS: 1. Council Briefing Memo
2. Preliminary Draft Strategy: Springfield’s Affordable Housing Strategy
3. Springfield Residential Land Inventory of Vacant, Partially Vacant and
Master Planned Land (December 2015)
DISCUSSION/
FINANCIAL
IMPACT:
The financial impact of implementation will depend on what Council ultimately
includes in the affordable housing strategy. The Preliminary Draft Strategy
includes a high level statement of city role and resource impact for the potential
projects and programs. Based on decisions of what Council wants to achieve and
the financial tools involved, staff can further analyze what resources could be
utilized to foster housing choice and affordability in the short and long term,
thereby achieving the desired outcomes. By setting priorities, the City can be
focused in its efforts to improve housing affordability in the community.
1 The ALICE (Asset Limited, Income Constrained, Employed) Report is a 2014 study of financial hardship.
1
M E M O R A N D U M City of Springfield
Date: 2/13/2017
To: Gino Grimaldi COUNCIL
From: Anette Spickard, DPW Director
Sandy Belson, Comprehensive Planning Manager
BRIEFING
Subject: Developing an Affordable Housing Strategy MEMORANDUM
ISSUE: The City recognizes that there is an affordable housing issue within the community and
is working to address this problem. At work sessions on October 10 and November 28, the
Council discussed staff’s analysis of the current situation to better understand the extent of the
problem. The findings pointed to a shortage of housing and the expense of housing relative to
household incomes.
The supply of housing is very low at all levels: emergency shelter, transitional housing,
subsidized rental housing, market rate rental housing, space in manufactured home parks, and
homes for sale. Rental vacancy rates are very low. It is a sellers’ market with a low inventory
of homes for sale.
Housing costs are increasing faster than incomes. Half of Springfield’s population struggles to
afford basic needs based on United Way’s ALICE1 report. More than half of the renters and
more than one-third of the owners in Springfield are cost-burdened, meaning they pay more than
30% of their gross income on housing and basic utilities. Female-headed households, children,
those on fixed incomes, and people with special needs are disproportionately affected.
COUNCIL GOALS/
MANDATE:
Promote and Enhance our Hometown Feel While Focusing on Livability and Environmental
Quality
BACKGROUND: At the November 28, 2016 work session, Council provided direction on what
it would like included in the Affordable Housing Strategy. Staff has started to formulate a
strategy based on Council’s direction thus far (see Preliminary Draft Strategy, attached). Based
on Council’s discussion and further direction, staff will revise the strategy to bring back to
Council for further review in March.
In addition to providing direction on what to include in the Affordable Housing Strategy,
Council directed staff to:
explore a tiny home pilot project in partnership with a non-profit organization
prioritize allocating Community Development Block Grant (CDBG) funds for housing
investigate development incentives, in particular system development charges waivers
and property tax exemptions
Each of these items is presented in this Council Briefing Memo.
1 The ALICE (Asset Limited, Income Constrained, Employed) Report is a 2014 study of financial hardship.
ATTACHMENT 1, 1 of 13
2
CDBG FUNDS FOR HOUSING
There are two sources of federal funding available to address housing and community
development needs in Springfield. Home Investment Partnership Program (HOME) funds are
targeted for housing that is affordable to low-income households. CDBG funds are more flexible
and provide communities with resources to address a wide range of community development
needs. At its work session on January 23, 2017, Council decided to allocate a substantial portion
of the estimated CDBG funds available for FY 18 toward “increasing the supply of affordable
housing” in the Draft One-Year Action Plan. This Draft Plan will be released for public comment
and come back to Council for final approval in April.
This section explains the potential uses of CDBG and HOME funds for the purposes of increasing
the supply of affordable housing.
Community Development Block Grant (CDBG)
Overview:
The federal CDBG program is administered by the U.S. Department of Housing and
Urban Development (HUD).
Springfield receives an annual, non-competitive grant for the purposes of developing a
suitable livable environment, and by expanding economic opportunities, principally for
low-and moderate-income persons.
The 2015 Eugene-Springfield Consolidated plan is a 5-year strategic plan for housing and
community development, and sets the goals and activities for the use of CDBG and
HOME funds.
Each year, the City must adopt a One-Year Action Plan which identifies the activities to
be carried out that year toward the strategies in the Consolidated Plan
FY 2017-18 One-Year Action Plan:
At the January 23, 2017 City Council work session, Council approved a draft allocation
of $325,000 of estimated CDBG funds to “increase the supply of affordable housing.”
o This estimate includes anticipated revenues in FY2018 as well as the reallocation
of funds from prior years.
While CDBG funds cannot be used directly to finance new housing construction, funds
can be used toward activities which support increasing the supply.
Eligible uses of CDBG funds toward increasing the supply of affordable housing:
Land acquisition – CDBG funds can pay for land provided new low-income housing will
be built on site.
o Projects must be completed within 5 years of land acquisition, so land must be
acquired only when a plan for its use is clear.
o Often, CDBG funds are used for site acquisition and/or improvements, and
paired with HOME funds for new construction of rental housing.
Demolition, clearance – CDBG funds can be used for the removal of a dilapidated
structure or environmental contaminants for the purpose of building affordable housing.
Site improvements – CDBG funds can be used to pay for improvements on a publicly-
owned site that will be used for a homeless shelter, rental housing or homeownership.
New construction – CDBG funds can be used to pay for new construction of a public
facility which targets a specific group of persons, such as a homeless shelter or group
home for persons with special needs.
ATTACHMENT 1, 2 of 13
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Public improvements – CDBG funds can be used to install roads, sidewalks, new
streetlights, paving, and water and sewer mains in the public right-of-way needed for the
new development of affordable housing or a homeless shelter.
Property acquisition, rehabilitation – CDBG funds can be used to:
o Purchase a building (e.g. church, school, factory, warehouse, etc) and convert it
into:
Rental housing (transitional or permanent)
Homeless shelter
o Purchase a house or apartment and renovate it into:
Rental housing (transitional or permanent)
Homeless shelter or group home for persons with special needs
Home Investment Partnership Program (HOME)
Overview:
As a consortium, Eugene and Springfield receive an annual, non-competitive grant from
HUD primarily for the construction of new affordable housing developments and/or
acquisition of housing for low and moderate-income persons.
HUD annually calculates total HOME funds available for a consortium and will set the
amount for distribution in each jurisdiction.
The HOME program is staffed and managed by Eugene and overseen by a governing
body consisting of the two Mayors and a City Councilor from each city.
o Following direction from HUD in 2015, Eugene and Springfield developed a new
structure for the HOME Consortium with Eugene serving as the Lead Entity and
primary administrative staff for projects in both jurisdictions.
o The HOME Consortium governing body oversees the allocation of HOME funds
to specific projects based on qualified applications submitted, reviewed, and
recommended by an Evaluation Committee.
FY2017 and FY2018 funds:
In FY2017, the Eugene-Springfield HOME Consortium received about $1 million,
approximately 24% of which is dedicated, by HUD, for Springfield.
o A portion of this allocation goes toward administrative costs of the program
(capped at 10%), as well 15% toward Community Housing Development
Organizations (CHDOs).
o For projects, Springfield has an estimate $200,000 from FY2017 (plus any
program income received from downpayment assistance loan repayments)
available to put toward projects.
HUD has not yet released the allocation for FY2018. If the Consortium
were to receive the same allocation as last year, Springfield would have
an estimated $400,000 (plus additional program income) to put toward
projects.
Eligible uses:
Property acquisition– HOME funds can be used to:
o Purchase a building (e.g. church, school, factory, warehouse, house or apartment,
etc) and convert it into:
ATTACHMENT 1, 3 of 13
4
Rental housing (transitional or permanent)
Housing for the homeless
Housing for homeownership
New housing construction – HOME funds can be used to construct new housing for
rental or homeownership
Manufactured Home Parks – HOME funds can be used to acquire land for manufactured
housing, to acquire manufactured homes, and to replace existing substandard
manufactured home with a new or standard manufactured home.
DEVELOPER INCENTIVES
Council directed staff to identify development incentives to encourage construction that would
provide public benefits and enable projects to “pencil out”. Typical tools available to the city that
could incentivize development are system development charge (SDC) waivers and property tax
exemptions. Last year, the legislature authorized collection of a construction excise tax for
affordable housing. This tax revenue could be used to pay the SDCs on qualifying projects. It
could also be used fund other aspects of the city’s affordable housing program. This section
explores the various options available for each of these tools.
System Development Charge (SDC) Waivers or Discounts
At the Council Work Session on November 28, 2016, the City Council requested that city staff
explore further the option of granting a waiver or discount of system development charges
(SDCs) as part of the city’s affordable housing strategy. (For purposes of this discussion, a
waiver refers to waiving 100% of the charge while a discount refers to a lesser percentage such as
a reduction of the charge by 75%.) During interviews with people involved in the provision of
housing, both non-profit and for-profit housing developers cited SDC waivers as a way for the
city to assist in increasing the supply of affordable housing.
SDCs fund a portion of the city’s system improvements needed to accommodate new
development. Springfield has the following SDCs:
Storm Drainage – based on the increase in impervious surface
Transportation – based trip generation rate corresponding to the type of housing
City Sanitary Sewer – based on the number of drainage fixture units added
Regional Sanitary Sewer (MWMC) – based on number and type of dwelling units
Parks and Recreation (Willamalane) – based on number and type of dwelling units
The City can only grant a waiver to the city charges, not for those of the Metropolitan Wastewater
Management Commission (MWMC) or of the Willamalane Park and Recreation District.
Objectives
There are three objectives that could potentially be achieved by not requiring full payment of
SDCs:
Objective 1 – Reduce construction costs to make the resulting rents more affordable.
Objective 2 – Reduce construction costs to make the project financially feasible.
Objective 3 – Incentivize development of certain housing types.
Options
Based on these different objectives, staff is presenting three waiver/discount options and one
deferral option for Council consideration:
Option 1 – Waiver or discount for housing meeting affordability requirements
Option 2 – Waiver or discount for accessory dwelling units
ATTACHMENT 1, 4 of 13
5
Option 3 – Waiver or discount for medium and high density residential housing types
Option 4 – Deferral for medium and high density residential housing types
Option 1: SDC waiver or discount for housing meeting affordability requirements
Developers of housing that is affordable by residents with low and very-low incomes require
subsidies. Waivers or discounts of SDCs can be an important and even critical subsidy in order to
make the project financially feasible or to set rents at an affordable level. They could be used to
reduce the amount of upfront capital required or reduce the amount of loan needed which would
reduce the down payment needed or the monthly rents charged. Evidence of local financial
support also makes a project more competitive for other public funding. For example, the state
looks to award tax credits to jurisdictions that have shown local commitment by using all the
tools available locally to make the project affordable. SDC waivers are one of the main tools
available to local jurisdictions to provide that local support. The City has discretion in setting the
criteria for SDC waivers which is recommended to be done through an ordinance or resolution
that would speak to the public benefit gained through the granting of the waiver. In this case, a
public benefit would be the provision of housing for low-income residents.
Option 2: SDC waiver or discount for accessory dwelling units (ADUs)
ADUs have potential to provide small, affordable dwelling units within neighborhoods that are
already served by the city’s transportation and utility systems. This infill approach adds housing
capacity without reducing the city’s vacant land supply. SDC waivers or discounts could be part
of a broader effort (along with development code amendments and public education) to
encourage ADUs. The waivers may also make it financially feasible for a homeowner to legally
construct an additional dwelling. The city could establish a waiver program for one or two years
with the aim of reviewing the waiver to see if it has accomplished its objectives and determining
if there is still a need to actively encourage ADUs.
Since 2008, the city has only processed applications for two ADUs. The table below shows the
system development charges that those two homeowners paid. It also shows the cost for
construction of a small ADU today (with and without addition paving for parking). The ADUs
built in 2012 and 2013 benefitted from a 50% discount on city SDCs to promote development as
part of the SDC waiver program from 2012. These developers would have paid an additional
$3,249 and $3,478 respectively without these waivers.
SDCs for ADUs
ADU 1
2012
ADU 2
2013
ADU Example
2017
Square feet of dwelling 680 1200 300
Additional paved parking
(sq ft) 65.50 272 160**
Storm Drainage SDC $ 234.44*
$ 468.88
$ 462.67*
$ 925.34 $ 322.64
Sanitary Sewer SDC - City $ 1,736.62*
$ 3,473.24
$ 1,736.61*
$ 3,473.22 $ 1,463.93
Transportation SDC $ 1,278.32*
$ 2,556.64
$ 1,278.32*
$ 2,556.64 $ 2,456.42
ATTACHMENT 1, 5 of 13
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Sanitary Sewer - MWMC $ 1,609.44 $ 1,609.43 $ 1,799.24
Willamalane SDC $ 1,750.00 $ 1,705.00 $ 1,698.00
SDC total with waiver
SDC total without waiver
$ 6,608.82
$ 9,858.20
$ 6,792.03
$ 10,269.63 $ 7,740.23
Estimated construction value $ 85,000.00 $ 97,857.20 $ 33,600.00
Ratio of SDCs to value 7.8%
12%
6.9%
10% 23.0%
*SDCs collected based on 50% waiver
**Residential dwellings with an ADU are required to provide space for a total of 3 vehicles
The cost to build an ADU is typically lower than the cost to develop a single family residential
unit. The total cost of SDCs, particularly for modest projects, could make the cost of SDCs
relative to the construction value prohibitively high.
In 2016, almost a dozen Springfield home owners added square footage to their existing home
through the construction or remodeling of a garage. If SDC waivers were possible, these families
might be more inclined to create legal accessory dwelling units that could be added to the housing
stock.
Waiving some SDCs contributed to increased ADU development in Bend and Portland in the last
few years. Portland now annually builds more than ten times what it did before introducing any
SDC waiver in 2010. While growth pressures may not be as significant in Springfield, an SDC
waiver or offset in combination with other efforts may stimulate construction of additional ADUs
in Springfield.
Option 3: SDC waiver or discount for medium and high density residential housing types
Council has recognized the importance of a housing continuum, providing a variety of housing
types to rent or own to meet the range of income levels and demographic needs of Springfield
residents. There has been very limited multi-family development in the past decade, and only one
market-rate project (Fifth Street Townhomes). The following analysis shows the cost of SDCs
relative to the total construction cost for that project.
The developer of the Fifth Street Townhomes project paid approximately $437,000 in SDCs. The
estimated construction value of the project is about $3.6 million, and SDCs account for about
12% of the entire project. The apartment complex includes 38 apartments between 812 and 830
square feet each, making the relative cost of SDCs per apartment about $11,500.
Cost of Fifth Street Apartments SDCs
Number of units 38
SDCs Storm Drainage SDC $ 15,892.03
Sanitary Sewer SDC - City $ 146,725.14
Transportation SDC $ 81,533.88
Sanitary Sewer SDC - MWMC $ 53,824.73
Willamalane SDC $ 139,488.00
SDC total $ 437,463.78
ATTACHMENT 1, 6 of 13
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Estimated construction value $ 3,602,024.80
Ratio of SDCs to value 12.1%
The city sanitary sewer and stormwater SDCs are about 4.5% of the construction value of the
apartments. With transportation SDCs as well, they account for 6.8%. It is not clear if waiving
those charges would be enough reduction to make other potential projects feasible. However, it
may be worth considering as a clear message to encourage certain housing types that are not
currently available. Springfield’s development code already allows many housing types, but
developers are not building them. Examples include rooming and boarding houses, single-family
attached houses (one house per lot), and cottage clusters. The city could establish a set of criteria
that developers must meet in order to qualify for a waiver or discount. As with Option 2, the
waiver would be established for one or two years with the aim of reviewing the waiver to see if it
has accomplished its objectives and determining if there is still a need.
Option 4: SDC deferral for medium and high density residential housing types
Another option that could help developers without decreasing city revenues would be to allow
payment prior to issuing a certificate of occupancy rather than at the time of the building permit
application. Delaying the payment would mean that the developer would not need to cover the
cost of SDCs in the construction loan. They would only be figured into the mortgage.
Impact to City Finances
If the City waives certain SDCs, it cannot increase the SDCs collected on other developments to
compensate. So, the City would either forgo those funds or identify an alternate method for
financing public improvements to serve the waived development. If there are no offsetting funds,
staff recommends against waiving any transportation SDCs given the overall state of the street
fund. In this case the waivers the city would grant would be for city sanitary sewer and
stormwater.
As mentioned previously, the SDC waivers or discounts could be time limited to address the
current affordable housing crisis. Also, to limit the total amount of waivers to be granted, the city
could cap the amount of waiver granted by project and/or the city could cap the amount that could
be waived each fiscal year.
Construction Excise Tax
If the City adopts a construction excise tax, the City could use this revenue source to pay for the
SDC waivers granted to qualifying housing projects. (See page 9 in this memo for more on the
Construction Excise Tax). Paying for SDCs with this tax revenue is one of the developer
incentives allowed by the legislature to increase the supply of housing affordable to households at
or below 80% of the area median income. In this case, the city could waive all the SDCs
including those charged by Willamalane and the MWMC since they would essentially be paid for
by the construction excise tax revenue.
Property Tax Exemptions
There are several local option property tax exemptions available for housing. The city could
decide to allow these exemptions for the city portion of property taxes, or it could request that the
exemption apply to all taxing authorities. If the governing bodies of 51 percent or more of the
total combined rate of taxation on the property agree, then the exemption will apply to all taxing
districts. The table below shows the percentage of the tax rate for each entity of the combined
rate of taxation (these exclude operating levies and bonds).Taxing Districts in Springfield*
ATTACHMENT 1, 7 of 13
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Taxing District % of Total Tax Rate
City of Springfield 35.0
Springfield School District 35.6
Willamalane Park and Recreation District 14.8
Lane County 9.4
Lane Community College 4.6
Lane Educational Service District 1.6
* Some areas of Springfield are within the Eugene School District.
Low-Income Rental Housing Property Tax Exemption (ORS 307.515 to 307.537)
This exemption is not limited to nonprofit organizations but open to those who will be providing
rental housing for households with low incomes. Local governments may add other project
requirements. It provides a 20-year exemption.
Nonprofit Low Income Rental Housing (ORS 307.540 to 307.548)
Nonprofit organizations may be granted an exemption for properties that house low-income
households. Local governments may add other project requirements.
Multi-Unit Property Tax Exemption (ORS 307.600 to 307.637)
The Multi-Unit Property Tax Exemption stimulates construction of multi-unit housing in the city
center and transit-oriented areas. Housing can be for rent or home ownership. This program
allows new multi-family units (five units minimum) and/or certain low-income housing projects
to avoid property taxes on the value of new residential construction for up to ten years. The
property owner continues to pay taxes on the land value and any previous improvements. The
intent of this program is to make a housing project financially feasible by lower operating costs in
the early years. The city could ensure that the exemption is needed by reviewing the pro forma
for the proposed development. The city can also require other public benefits and set design
standards. This approach may add incentive to developers to meet downtown design guidelines.
Since the city would only grant the tax exemption for projects that would not otherwise be built,
the city is increasing its tax base in the long run. Forgoing property taxes for up to ten years may
be worth the increase in property taxes it will bring in to local government for the remaining life
of the building. Studies show that dense development (multi-story buildings) generates more tax
revenue per acre than standard neighborhoods. In Eugene, the 28 properties that have received
this tax exemption generated $133,000 in tax revenue before they were developed. (The property
owners paid $133,000 in taxes on the land and existing improvements.) After the exemption
period when the properties are fully taxed, they will generate approximately $2.5 million per year
in tax revenue2. That is a significant increase without any direct investment from the city. Plus,
adding to the overall housing stock within the city will address the shortage of housing in
Springfield while positively affecting the economic activity in the city center by bringing more
people into close proximity to the local businesses.
2 MUPTE_FactSheetAug_2015.pdf available at https://www.eugene-or.gov/829/Multi-Unit-Property-Tax-
Exemption
ATTACHMENT 1, 8 of 13
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Home Ownership Property Tax Exemption (ORS 307.651 to 307.687)
The Home Ownership Property Tax Exemption stimulates construction of new single-unit
housing for homeownership by low and moderate income families. The city would set a
maximum sale price (no more than 120% of the median sales price in the city), and could set
design standards and require other public benefits as part of the housing development. The
property owner receives a ten-year property tax exemption on the structural improvements (not
the land) as long as the property and owner remain eligible.
Vertical Housing Program (ORS 307.841 to 307.867)
Another option for Council consideration is the establishment of an additional Vertical Housing
Zone. The Vertical Housing program is an economic development incentive tool to encourage
construction or rehabilitation of properties in targeted areas of communities in order to augment
the availability of appropriate housing and revitalize those communities. The program is
administered by the Oregon Housing and Community Services agency (OHCS). The program
encourages mixed-use developments that contain both commercial and residential uses in areas
designated by local jurisdictions. The rents for the residential portion may be set at market rates
or be set below market for lower income households. Qualifying projects receive a partial
property tax exemption up to a maximum of 80% over a 10 year term.
Springfield already has a vertical housing zone in downtown and one certified project receiving a
partial property tax exemption – the Royal Building. Other mixed-use areas that the Council
could consider are the Riverbend, Mohawk, Marcola Meadows, and Glenwood nodes. Once the
zone is established, the authority to decide what projects are eligible to receive the partial
property tax exemption resides solely with OHCS. Any private or public developer can apply to
the OHCS for project certification and once approved OHCS notifies the county assessor to apply
the exemption.
Construction Excise Tax
One funding option available to support Springfield’s affordable housing strategy is the
establishment of an affordable housing construction excise tax. Last year, the legislature allowed
local jurisdictions to fund affordable housing programs by collecting a tax on building permits
issued for new construction or construction adding square footage to an existing structure. The
state distinguishes between residential and non-residential property improvements with respect to
the tax rate and allowable use of tax revenue as shown in the table below.
Construction Excise Tax
Type of Use Tax Rate Allowable Uses of Revenue
(4% allowable off the top to city for administration)
Residential Up to 1% of the
building permit
valuation
50% for developer incentives
35% for the city’s affordable housing programs
15% to state’s down payment assistance programs
Commercial
& Industrial
No cap 50% for the city’s affordable housing programs
50% unrestricted
The city could allow some exemptions to the program based on permit valuation and/or type of
construction (such as public improvements, non-profit facilities, hospitals, schools, housing for
low-income residents, accessory dwelling units). Based on building permits issued in calendar
year 2016, if the city chose to implement a 1% tax on all eligible residential and commercial
building permits, it could expect to see more than $643,867 in revenue which would be available
to use as follows.
ATTACHMENT 1, 9 of 13
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Estimated Revenue*
1% Construction Excise Tax on Residential Building Permits
City Administration $ 9,164
Developer Incentives 50% $ 109,965
City - Affordable Housing Programs 35% $ 76,975
State - Down Payment Assistance 15% $ 32,989
Total Revenue $ 229,093
*Based on all 2016 residential building permits eligible to be taxed
Estimated Revenue*
1% Construction Excise Tax on Commercial & Industrial Building Permits
City Administration $ 16,591
City - Affordable Housing Programs 50% $ 199,092
City - Unrestricted 50% $ 199,092
Total Revenue $ 414,774
*Based on all 2016 commercial building permits eligible to be taxed
Thus, the city would have $109,965 to offer as incentives to developers; $276,067 for the
affordable housing program, and $199,092 to further contribute to the affordable housing
program (for a total of $475,159) or to use support another city program.
TINY HOME PILOT PROJECT
At the work session on November 28, Council requested more information about working on a
tiny home pilot project in conjunction with a non-profit organization. Staff identified the
following potential models for a tiny home pilot project as well as potential partners. There are
many variations and overlaps of these models in terms of the structure types (temporary, semi-
permanent, permanent) and tenure (for rent, owning the home, owning the land and the home),
but what is presented below at least presents some framework for discussion purposes.
Model 1 – temporary structures as transitional housing
People would live in temporary
structures such as the Conestoga Huts
built by Community Supported
Shelter. The structures would be
grouped in a community setting and
provided with port-a-potties. This
situation could be temporary and thus
utilize land that eventually would be
converted to another use. This option
would serve the homeless population
that does not have vehicles but would
require an amendment to the
development code to allow this type of
use. There is potential for CDBG
Eugene Rest Stop Program
http://communitysupportedshelters.org/eugene-safe-spots
ATTACHMENT 1, 10 of 13
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funds to be used for site development and permanent community facilities (sanitation, kitchen,
communal gathering space) as a “public facility”.
Model 2 – semi-permanent structures as transitional housing
These structures would be more
permanent, although not necessarily on
permanent foundations. Structures
could be manufactured and brought to
the site or be wood frame structures
constructed on or off site. They may
not have internal plumbing in which
case there would either be port-a-potties
or more likely a community building
that provided restrooms and kitchen
facilities.
Given the need to address the needs of
the 32 homeless families engaged with
G-Street Oasis, staff proposes a project
to provide transitional housing for some
of those families. This model would
provide individual structures for living and sleeping and centralized sanitation and cooking
facilities. Staff met with Square One Village, a local non-profit organization creating self-
managed communities of cost-effective tiny homes for people in need of housing. Square One
Villages has received funding from Meyer Memorial Trust to provide technical assistance to a
community for project development and fundraising. Their staff could be available to help
Springfield develop a new model for families.
Opportunity Village November Work Party
https://www.facebook.com/OpportunityVillageEugene/photos/
This innovative model for homeless families would require amendments to the development code
to allow this type of use. If Council supports this idea, staff would start the process of
establishing the necessary partnerships, identifying potential sites, and determining necessary
Sleeping pods built by architects & students in Portland
https://www.pdxmonthly.com/slideshows/2017/1/26/the
se-sleeping-pods-provide-safety-and-warmth-for-
portland-s-homeless
ATTACHMENT 1, 11 of 13
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development code amendments to allow this type of use. CDBG funds could be used toward this
model as a “public facility”.
Model 3 – permanent small residences as rentals
These homes could be permanent dwellings
per building code. The city development
code already allows for cottage clusters, the
development of detached single-family
housing in a cluster around a central open
space and these clusters may include shared
common facilities. They could also
potentially developed as a manufactured
home park. Council may choose to offer
development incentives such as a waiver of
system development charges in order to
encourage a market-rate development of this
type. CDBG and HOME funds could be used
to create a cluster of cottages for low-income households.
Model 4 – permanent small residences as owner-occupied
These homes could be manufactured or
site-built. The manufactured homes may or
may not be placed on a permanent
foundation. Ownership models include a
park (as in manufactured home park), land
trust, or condominium. They could be
developed as a cottage cluster.
St. Vincent de Paul has indicated interest in
developing a manufactured home park in
Springfield which could be for targeted to
home owners and/or renters. A “park”
could potentially include “tiny houses” as
well as or instead of traditional
manufactured homes.
NEDCO has indicated interest in developing small houses for ownership using a land trust to
remove the land ownership from the equation in order to reduce the cost of housing.
Both approaches to creating opportunities for home-ownership (NEDCO’s land trust and St.
Vincent de Paul “park”) could be candidates for award of a portion of the city’s allotment of
CDBG and/or HOME funds.
Model 5 – owner-occupied cluster subdivision
These structures would meet code requirements of single-family dwellings. The development
code already allows for cluster subdivisions that emphasize affordability and home ownership.
Cluster subdivision is a process that permits flexibility in dimensional requirements by reducing
lot/parcel size, setback, street width and other development standards to allow a more flexible
design than is permissible under the conventional subdivision process. Council may choose to
offer development incentives such as a waiver of system development charges or allow for a
Home Ownership Property Tax Exemption to encourage this type of development for low and
http://smallhomeoregon.net/wp-content/
uploads/2013/10/SmallHome-1-e13344806018561.jpg
Cavco Park Model
http://parkmodels.com/northwest/
ATTACHMENT 1, 12 of 13
13
moderate income households. CDBG funds could be used to assist with site acquisition and
public improvements.
ACTION REQUESTED: Provide direction on further development of Springfield’s Affordable
Housing Strategy
ATTACHMENT 1, 13 of 13
Preliminary Draft Strategy
Springfield’s Affordable Housing Strategy – Addressing the Housing Continuum
Goal: to increase the supply and accessibility of affordable housing in Springfield
Objectives
Expand transitional housing opportunities for the unhoused
Increase the supply of income-qualified rental units
Continue to provide home-ownership assistance
Assist low-income homeowners with repairs/alterations needed to stay in their homes
Encourage the market to construct housing that is affordable to rent or purchase
Encourage a diversity of housing types including small homes
A. Expand the emergency shelter program
The City allows up to three vehicles to be used as emergency shelter at an approved site
(church parking lots and at industrial sites) per Chapter 8 of the Municipal Code. At this
time, there are five churches participating in this program providing a total of seven
“Conestoga huts” and three parking spaces. The City allocates $5000 annually from the
general fund to pay St. Vincent de Paul to conduct background checks and to reimburse for
costs of port-a-potties and garbage collection. The City does not reimburse St. Vincent de
Paul for staff time.
Expansion of this program could include:
Additional sites
Acquisition of recreational vehicles and/or “Conestoga huts” to provide shelter for those
without vehicles.
Creation of a mentor program that connects volunteers mentors with those staying in
the shelter.
Partners: Springfield Shelter Rights Alliance, St. Vincent de Paul, churches, industrial
property owners
City Role and Resources:
Work with the Springfield Shelter Rights Alliance to explain the program to prospective
churches and industrial property owners.
Expansion of the number of sites could result in an increased cost to be covered in our
contract with St. Vincent de Paul.
B. Create a pilot project - transitional housing for homeless families
G-Street Oasis is a day program providing homeless families with priority access to a
coordinated set of services within the immediate G Street neighborhood. Many of these
families sleep in formal and informal camping areas out of town or doubled-up with other
ATTACHMENT 2, 1 of 8
families and would benefit from a site in town where they could stay until they are able to
secure permanent housing.
This pilot project could be based on:
Tiny Home Pilot Project – Model 2 in the Council Briefing Memo, small structures for
sleeping in a village design and a centralized structure that includes bathrooms, a
community kitchen, and a play area for homeless families involved in G-Street Oasis.
Square One Villages (developer of Opportunity Village and Emerald Village) would be
willing to provide technical assistance in developing the project. Major steps for this
project include site identification, development code amendment to allow this type of
land use, site design, land use approval, and fundraising.
An existing building where the families could be housed on a transitional basis.
Partners: G-Street Oasis, Square One Villages, Springfield School District, Springfield Shelter
Rights Alliance
City Role and Resources:
Work with partners and other public agencies to identify potential sites and create an
organizational structure.
Amend development code to allow the pilot project.
Review and approve plans for site design buildings.
Identify potential funding sources.
C. Establish a property acquisition program for affordable housing
Given quick sales in the current tight real estate market, local affordable housing
developers describe the difficulty in finding or acquiring land or property for a project
without first knowing whether or not they have financial support for that project. Projects
are often determined by what is allowable on a site per zoning requirements and require
approved development plans to determine project feasibility. For developers to keep rents
affordable for low-income residents, developers often must package multiple funding
sources together, and either can’t buy the land outright, or must find a property owner
willing to hold the property for months or years.
If the City were to identify available land for development, either through an inventory of
excess public land, or by purchasing property, the City would be able to control the type of
affordable housing project to be developed. That land could then be sold or conveyed to a
local developer for a targeted housing development. For developers, this model reduces
development costs, inherently brings with it City support, allows for certainty regarding
allowed use, and ultimately makes the project more competitive for funding given the local
support.
Community Development Block Grant (CDBG) funds could be used to acquire property that
would be developed into housing for low-income households (could be owners or renters).
CDBG funds could also be used for streets and utilities to serve the site. Home Investment
ATTACHMENT 2, 2 of 8
Partnership Program (HOME) funds could be used to acquire an existing building that is
converted into housing for low-income households. Obtaining land is an important first
step in creating a pipeline of potential projects that use HOME funds.
Partners: Public agencies including Team Springfield, non-profit housing developers,
private landowners, realtors
City Role and Resources:
Work with public agencies to determine if any properties meet city’s criteria for
affordable housing.
Allocate HUD funds to acquire the property
D. Promote accessory dwelling units
There is a very high demand for studio and one-bedroom apartments within Springfield.
Accessory dwelling units have the potential to help meet this need for small rental units
while providing additional income to homeowners. This approach provides for additional
housing that utilizes existing streets and utility lines and adds housing capacity to existing
neighborhoods.
The City could promote accessory dwelling units by:
Waiving or discounting a portion of the system development charges (SDCs)
amending the development code to remove some of the development requirements
necessary to obtain approval for accessory dwelling units
educating homeowners about options for adding an accessory dwelling unit and
referring them to the Renter Owners Association to assist them in becoming landlords
Partners: Renter Owners Association, homeowners, Lane County Homebuilders
City Role and Resources:
Amend the code
Educate homeowners about development potential
Potentially waive or discount SDCs
E. Build a manufactured home park
Purchasing a home in a manufactured home park is a relatively more affordable entry into
home-ownership for households with low-incomes. However, no new manufactured home
parks have been built in Springfield for a long time. Some of the existing parks face
pressures to redevelop as property values increase and the cost of maintaining antiquated
infrastructure increases. However, given limited space availability there are few options for
people who own these homes to move their home to another park. Also, many of the
homes are not in a condition to be relocated.
St. Vincent de Paul has been purchasing and operating manufactured home parks and would
be interested in acquiring or developing one in Springfield. This development model could
ATTACHMENT 2, 3 of 8
allow for “tiny homes”. Depending on the city’s needs, the park could be targeted to low-
income renters and/or homeowners. The current funding climate for manufactured home
parks is currently favorable with several viable sources. If a site could be identified and
secured this spring, there is a good chance the project would qualify for Affordable Housing
Program funding through the Federal Home Loan Bank of Des Moines.
Partner: St. Vincent de Paul
City Role and Resources:
Identify potential site(s)
Allocated funds for property acquisition or infrastructure improvements
Offer development incentives
F. Continue contributing to development of housing for low-income residents
The Eugene-Springfield Consortium awards HOME funds for qualifying projects that increase
the supply of rental housing available to low-income residents. Some projects providing
housing (for rent and for sale) have also benefited from CDBG funds. The city grants
development fee waivers for non-profit affordable housing providers. The City has
established a vertical housing zone in Downtown in which qualifying housing projects can
receive property tax exemptions.
Many projects have relied on the State’s awarding of low-income housing tax credits to
finance these projects. The current market for tax credits is very uncertain and projects with
tax credit awards such as the Myrtlewood (see below) are struggling to make up the gap in
financing with the drop in value of these credits. Thus, the housing developers are going to
have to rely on other sources of funding or be restricted in how many projects they can build
in this current climate.
The Myrtlewood
The HOME Consortium awarded funds to St. Vincent de Paul for The Myrtlewood, a project
that will provide 35 one-bedroom apartments, seven of which will be for residents with
intellectual disabilities served by MainStream Housing and one for an on-site manager. The
remaining units will be for residents with incomes at or below 50% of the area median
income. The Downtown Urban Renewal Agency will pay the City’s portion of the system
development charges (SDCs).
Glenwood Place
This project of HACSA (Lane County Housing and Community Services Agency) for 150
apartments is currently going through a federal process to determine if the site will meet
federal funding requirements. If so, then CDBG funds could be used for site acquisition and
HOME funds could be used for construction.
Liberty Housing
The Liberty Housing Group would like to purchase and rehabilitate multi-unit housing.
ATTACHMENT 2, 4 of 8
R Street Complex
Laurel Hill’s R Street complex provides transitional housing for individuals leaving psychiatric
residential programs for independent living. This complex currently includes an office and
housing. Building a small office on site would allow conversion of the current office space to
an apartment with two additional beds.
405 A Street
The Neighborhood Economic Development Corporation (NEDCO) has lease with an option to
buy this building in Downtown. NEDCO is considering redeveloping this building to include
ground floor commercial with housing on the upper floors.
Ann’s Heart
A group of people is looking for a house that could provide transitional housing for women
who have been living unhoused.
H Street Cluster
NEDCO owns a lot on H Street on which it plans to build two homes as prototypes for future
cottage cluster developments. NEDCO would maintain ownership of the land, but sell the
homes, thereby reducing the costs for homeownership.
Habitat Houses
Habitat for Humanity relies on the sweat equity of its clients and donations to make home
ownership affordable. Habitat has current and future projects identified to construct 2-3
bedroom, single-family homes in Springfield.
Other tools that the city could use include:
Allocation of CDBG funds for property acquisition or infrastructure improvements
Package HOME, CDBG funds with other development incentives
Provision of property for development or conversion to housing
Other property tax exemptions
SDC discounts or waivers
Developer incentives or program support through funds collected through the
construction excise tax for affordable housing
Partners: Non-profit organizations, HACSA, City of Eugene
City Role and Resources:
Participate in the HOME Consortium to award HOME funds to qualifying projects
Allocate CDBG funds for property acquisition or infrastructure improvements
Offer development incentives or program support
ATTACHMENT 2, 5 of 8
G. Continue the emergency home repair program (EHR)
The home repair program pays for up to $5000 in repairs or accessibility improvements
(such as wheelchair ramps) to improve the housing stock and allow the very low-income
homeowners to be able to continue to safely live in their homes.
Partners: local contractors, managers of manufactured home parks, HACSA, Habitat for
Humanity, Springfield Utility Board, Catholic Community Services, local hospitals
City Role and Resources:
Determine eligibility of homeowner and repair needed
Hire contractors
CDBG funds allocated to the city’s Emergency Home Repair program with potential for
future allocation of the city’s General Fund
H. Continue the down-payment assistance program (SHOP)
The city assists low-income residents with the first-time purchase of a home by providing an
interest-free loan, up to $7000, toward the down payment and related costs of buying a
qualified home in Springfield.
Partners: realtors, mortgage companies, NEDCO
City Role and Resources:
Determine eligibility of potential homeowner and house to be purchased
Process loan
CDBG funds allocated to the city’s SHOP program
I. Promote diverse housing types
The development code allows for a variety of housing types including rooming houses and
boarding houses, single-room occupancy, cottage clusters, and townhouses. However,
many of these housing types that could provide some mid-range market rate housing have
not been built in Springfield over the past decade. These new housing types could be for
sale or for rent.
Tools available:
Public information (presenting options and explaining how to secure approvals)
SDC discounts or waivers
Potential code amendments
Property Tax exemptions
Tiny home pilot project
Partners: property owners, AARP, Lane County Homebuilders
ATTACHMENT 2, 6 of 8
City Role and Resources:
Develop informational brochures and webpages for various housing types
Identify and process needed code amendments
Offer development incentives
J. Ensure appropriate zoning for residential land development
In order to develop housing, there must be zoning that allows the desired residential
development. Questions about whether or not a project will be allowed will slow down the
development process and may even discourage the developer from applying for land use
approval. The attached map, “Springfield Residential Land Inventory of Vacant, Partially
Vacant and Master Planned Land” dated December 2015 shows the land designated for
residential development. The zoning and plan designations are not always consistent, so
those “conflicts” would need to be resolved to match up future plans with what is possible
under current zoning.
Based on adopted policy, the following steps would implement the adopted Residential Land
Use and Housing Element while also making the land supply available for the desired
development:
Resolve the plan/zone conflicts to ensure that land planned for residential development
is zoned appropriately.
As appropriate, change the zoning and/or plan designation of property to allow for the
type of development desired.
Apply the small-lot residential zone to appropriate areas to allow for denser
development.
Coordinate with the development code update to clearly allow for a variety of housing
types with clear and objective approval criteria.
Partners: property owners
City Role and Resources:
Coordinate between city planning efforts to implement adopted policies
K. Maximize the use of partnerships and community support
The City cannot solve the affordable housing issues in Springfield in isolation. Through
partnerships, the City can join with others who are also working to address affordable
housing issues. The City can also help mobilize additional community support.
Partners:
Poverty and Homelessness Board – The mission of this Board (includes Councilor
VanGordon) is to create innovative partnerships and programs that use best practices to
reduce poverty and homelessness in Lane County. The Board works to generate
community and legislative support and other resources for housing and services to
achieve its goals. Strategies in the Board’s Strategic Plan to create additional emergency
shelter and housing opportunities for homeless individuals, families, and people with
ATTACHMENT 2, 7 of 8
particular needs parallel some of what has been included in this Preliminary Draft
Strategy for Springfield.
Human Services Commission – This Commission is comprised of elected officials from the
City of Springfield (Councilor Woodrow), City of Eugene, and Lane County. It is the lead
agency for the Continuum of Care Plan. It provides health, housing and human services
through partnerships with local governments and public, private non-profit, and private
community-based organizations, schools, utilities, and hospitals. The City contributes
CDBG and general fund dollars to support the Commission’s budget.
Team Springfield – The four agencies involved, including the City, share ideas, energy
and resources to deliver projects that benefit the community.
Springfield Community Development Advisory Committee (CDAC) – This Committee is
appointed by the Council (and includes Councilor Woodrow) to provide a means of
citizen involvement in an advisory capacity to the Council in policy decisions regarding
the City’s housing and community development needs. The Council could expand the
role of this committee by using it to further implement the Council’s Affordable Housing
Strategy.
Community Groups – There are various groups that have an interest in addressing the
affordable housing issues. These groups include the Chamber of Commerce, service
clubs, and non-profit organizations.
Citizens – Property owners, business owners, residents, customers, and visitors all
benefit by addressing the lack of affordable housing in the community.
City Role and Resources:
Inform the city’s partners, community groups, and citizens about the City’s Affordable
Housing Strategy.
Mobilize community resources to help create more affordable housing.
Recognize the efforts of those who are contributing to the effort.
ATTACHMENT 2, 8 of 8
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11/15/2016
Plan Designation
Glenwood Residential Mixed Use
Low Density Residential
Medium Density Residential
High Density Residential
Source: Springfield Residential Land Inventory (RLI) from
data originating in July 2008. Data were revised by
ECONorthwest December 1, 2009. In November 2016,
the RLI was updated by City of Springfield with new
housing unit data collected between 2008 and
December 2015.
Springfield Residential
Land Inventory of Vacant,
Partially Vacant and Master
Planned Land
December 2015
Legend
UGBNORTHATTACHMENT 3, 1 of 1