HomeMy WebLinkAboutItem 11- Land Acquisition for Affordable HousingAGENDA ITEM SUMMARY
SPRINGFIELD
CITY COUNCIL
Meeting Date:
Meeting Type:
Staff Contact/Dept.:
Staff Phone No:
Estimated Time:
Council Goals:
6/20/2023
Regular Meeting
Katie Carroll / DPW
Erin Fifield / DPW
541.726.3660
10 Minutes
Promote and Enhance
our Hometown Feel
while Focusing on
Livability and
Environmental Quality
ITEM TITLE: LAND ACQUISITION FOR AFFORDABLE HOUSING
ACTION
Approve a request to Lane County to transfer two Lane County tax foreclosed
REQUESTED:
properties, tax lot # 1703274105200 and tax lot # 1702333400800, to the City for
purposes of low-income housing development. Authorize the City Manager to
negotiate and execute all documents needed to formalize the request and to take
ownership of the properties.
ISSUE
City Council has directed staff to identify land suitable for low-income housing
STATEMENT:
development and use federal funds to acquire or help developers acquire land.
Lane County has two tax -foreclosed properties available in Springfield that could
be developed for low-income housing. ORS 271.330(2) permits counties to transfer
county -owned property without consideration (payment for the property) to
municipal corporations for the purpose of providing low-income housing. To
initiate a request to transfer, the City must submit a plan to the Lane County Board
of County Commissioners for using the properties for low-income housing.
ATTACHMENTS: 1: Draft Letter to Lane County Board of Commissioners with:
• Springfield's Proposal for Two Tax -Foreclosed Properties and
• Springfield Housing Strategy
DISCUSSION/ As part of the City's Housing Strategy, first developed in 2017, Council has
FINANCIAL directed staff to acquire land for low-income housing. Lane County has two
IMPACT: residentially zoned tax -foreclosed properties in Springfield which the City could
take ownership of for purposes of low-income housing development. The City has
conducted due diligence on the properties and determined the lots are suitable for
this purpose.
The transfer process for County -owned foreclosed property is laid out in Lane
Manual 21.010.025(D). The City must request transfer of the properties from the
Board of County Commissioners and present a plan for making the properties
available for low-income housing development. If the Board approves the proposal,
there is a $400 administrative fee to process the transfer request, in addition to any
recording fees.
The City would not own these lots long-term, but would make them available to
developers for development as low-income housing as outlined in the attached draft
transfer plan.
SPRINGFIELD
7t
OREGON
DATE
Lane County Board of County Commissioners
c/o Kellie Hancock, Property Management Officer
RE: Transfer of Lane County Tax Foreclosed Properties in Springfield
Dear Commissioners,
I am submitting this proposal on behalf of the Springfield City Council. The City
proposes that Lane County transfer two residential properties of approximately .17 and .25 acres
to the City for purposes of development as low-income housing as allowed under ORS
271.330(2) and the Lane Manual 21.010.025. The tax lots requested for transfer are
1703274105200 and 1702333400800.
The City is working to address the community's housing needs by supporting several
efforts to increase the supply and affordability of housing across the housing continuum. The
City's Housing Strategy, originally developed by Council in 2017, includes the efforts the City is
focusing on to help meet housing needs. Land acquisition for the development of low-income
housing is one effort the City has undertaken as part of its Housing Strategy. Transfer of these
properties fits within the City's existing housing work and expertise and will help the City and
County meet the housing needs of vulnerable populations in the community. If the County
approves this request, the City is committed to making sure the properties are available for
efficient and prompt development.
The City appreciates the Board of County Commissioner's consideration of this request
and looks forward to partnering with the County on this and future housing -related efforts.
Sincerely,
Mayor Sean VanGordon
Encl: Springfield's Proposal for Two Tax -Foreclosed Properties
Springfield Housing Strategy
SPRINGFIELD'S PROPOSAL FOR TWO TAX -FORECLOSED PROPERTIES
CITY OF SPRINGFIELD EXPERTISE
The City of Springfield is working to address the community's housing needs by supporting
several efforts to increase the supply and affordability of housing across the housing continuum.
In 2016 the City conducted a comprehensive analysis to evaluate housing challenges in
Springfield, and to identify efforts the City could undertake to address the community's needs.
Using this information, the Council created the City's HousingSgy, which includes the
efforts the City is focusing on to help meet housing needs. Land acquisition for the development
of low-income housing is one of the efforts the City has undertaken as part of its Housing
Strategy. The City is actively searching for land to acquire or help developers acquire in
Springfield for development as low-income housing. Transfer of these Lane County tax
foreclosed properties will help the City meet this goal.
The City is a Department of Housing and Urban Development (HUD) entitlement community,
receiving annual allocations of both Community Development Block Grant (CDBG) and HOME
funding for community development, including affordable housing. As such, the City has
expertise in working with developers of affordable housing, including by awarding funding for
low-income housing development through competitive request for proposal (RFP) processes and
monitoring projects for conformance with affordability requirements.
If the County transfers these properties for low-income housing purposes, the City does not plan
to own the properties long-term. The City would award the properties to developers through
competitive RFP processes. Additionally, the City has other incentive programs and funding
sources that could be paired with each property to help ensure their successful development as
low-income housing.
DUE DILIGENCE CONDUCTED
The City has been working to identify land to acquire for affordable housing for several years.
Previous efforts focused on lots that can accommodate multi -unit apartments with at least 40
units to make projects competitive for State funding. However, with the adoption of
Springfield's updated Development Code in 2022, which incorporates State middle housing
requirements, the City has also begun to consider acquiring land for small-scale infill projects.
Given the size of the tax -foreclosed lots, the City determined it should conduct additional due
diligence to determine their feasibility for development as low-income housing before requesting
transfer from the County. The City worked with University of Oregon architecture students who
envisioned multi -unit middle housing developments that would be feasible on each lot and used
this information to interview 14 local service providers, non-profit developers, and small private
developers about their interest and ability to develop the lots for this purpose.
The City's proposal for each lot is based on the information collected during its due diligence,
along with existing City resources that can be paired with each lot.
2
PROPOSAL
1577 Laura Street (tax lot # 1703274105200)
Kenzie Ri`* I
The Laura Street property is an R-1 zoned lot of 0.17 acres with an existing single-family home
onsite that would need to be razed. The lot could accommodate four units.
The City requests transfer of this property for development as low-income rental housing. The
City has federal HOME Investment Partnership Program — American Rescue Act (HOME -ARP)
funds of $745,728 for development and $200,000 for supportive services to serve people
experiencing homelessness, people at -risk of homelessness, and people who are
fleeing/attempting to flee domestic violence, including priority special needs populations as
identified in the Eugene -Springfield's 2020 Consolidated Plan. The City would award this
property to a developer as part of the HOME -ARP RFP process through the Eugene -
Springfield HOME Consortium along with HOME -ARP funds for development and supportive
services. The City's due diligence suggests that the available HOME -ARP development funds
will likely be sufficient to cover most, if not all development costs for a project of this scale.
HOME -ARP funds require a 15 -year affordability period; however, the City would require 20
years in alignment with the requirements of ORS 271.330(1). In order to pair HOME -ARP funds
with this property, the City would need to complete a federal Environmental Review prior to
taking transfer of the property.
The City has a Low -Income Rental Housing Property Tax Exemption (LIRHPTE) program
which a developer could apply for to help offset ongoing operational costs of a project by
exempting property taxes for up to twenty successive years. To qualify for the LIRHPTE, a
developer must create at least four new units of rental housing reserved for households with
incomes at or below 60% of the area median income (AMI).
367S52 d Street (tax lot # 1702333400800)
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The S 52nd Street property is an R-1 zoned vacant lot of 0.25 acres. The lot could accommodate
four to five housing units, such as townhomes or a cottage cluster.
The City requests transfer of this property for development as low-income home ownership
housing. Home ownership is a priority of the Council, and while the City does not have
development funds available for home ownership housing to award with this property, there are
other City housing incentives that could be used to make the project pencil.
To reduce upfront development costs, the City has a program to waive City system
development charges (SDCs) for affordable home ownership housing which is sold
affordably to low-income buyers at or below 80% AMI for a period of five years. The City also
has the Springfield Home Ownership Program (SHOP) which provides no -interest loans of up
to $25,000 for first-time low-income homebuyers earning at or below 80% AMI. These funds
can be used to help reduce the subsidy a buyer needs to make a home affordable by helping with
down payment and other purchase costs, such as closing fees and buying down interest rates.
Multiple developers interviewed by the City said that the award of the land and City incentives
would likely be enough to make a project pencil for low-income homeownership.
The City would create a competitive RFP process to accept proposals for development of low-
income homeownership units on the property, or a similar open and competitive selection
process. The proposals would be required meet an affordability period of at least 20 years to
match the requirements of ORS 271.330(1).
Transfer Conditions
The City Attorney's Office has identified concerns about the original foreclosure proceedings
that would prevent underwriting of title insurance for the county lots, specifically the method of
service of the prior owners and lienholders.. This situation poses a barrier to awarding these
properties for development as low-income housing. If the County transfers the properties to the
City, the City will need to file a proactive lawsuit in Lane County to quiet title in favor of the
City. If the City is unsuccessful in this effort, it would return the properties to Lane County.
The City requests that the County transfer the properties with a deed restriction requiring
affordability, rather than a reversionary clause. The City proposes that the deed restriction
4
provide that the property owner compensate Lane County if the 20 -year affordability
requirement of either property is not met.
After the transfers takes place, if the City is successful in quieting title to the properties in favor
of the City, the City will make the properties available through competitive RFPs or similar
process, as discussed above. The City will make its best effort to make these properties available
to developers and ensure timely development. If the City is unsuccessful in finding a qualified
developer through an RFP or similar process within a reasonable time, it will return the property
to Lane County. If a qualified developer is awarded the property but does not make progress on
the development within a reasonable time, the property owner will be required to compensate
Lane County.
Summary of Proposal
Property
Proposed Use
Proposed Terms
Springfield Resources
1577 Laura Street
. 4 units
• 20- year affordability requirement
• HOME -ARP funds-
• Low -Income
with repayment to County if unmet
development and
Rental Housing
• Return to County if unsuccessful in
operation
quieting title
• Low Income Rental
• Return to County if unsuccessful in
Housing Property
finding a qualified developer
Tax Exemption
through the RFP process
• Property owner compensates the
County if not making progress on
the development or using the
property for another purpose
367 S 52nd Street
• 4-5 units
0 20- year affordability requirement
• SDC waiver for
• Low -Income
with repayment to County if unmet
affordable home
Home
9 Return to County if unsuccessful in
ownership
Ownership
quieting title
9 Springfield Home
Housing
• Return to County if unsuccessful in
Ownership Program
finding a qualified developer
buyer assistance
through the RFP process
• Property owner compensates the
County if not making progress on
the development or using the
property for another purpose
In 2016, the Springfield City Council directed staff to evaluate housing needs and to build on strategies to both increase
the supply of housing and the accessibility of housing across the housing continuum. The result is the Springfield
Housing Strategy, which includes the actions the City is taking to address the community's housing needs.
We want Springfield to be a welcoming community for all people in every phase of life, whether it's just starting out
with a new family or downsizing to a smaller home.
Allow for temporary sheltering options.
Overnight Parking Program
Allow religious and social institutions and industrial sites to host up to
3 vehicles/campers/trailers. Provide $37,000/yr in City general funds to
support non -profits running the parking program. STATUS: ONGOING
RVs as Temporary Housing
Temporarily allow RVs to be occupied on private property
to address regional shortage of affordable temporary
housing options. STATUS: ONGOING
Shelter Sites
Assist with siting emergency shelter as needed. Work with Mainstream
Housing Inc to continue operation of a temporary emergency pallet shelter
site. Award one-time federal ARPA funds toward acquisition of a house to
shelter unhoused women in Springfield. STATUS: IN PROGRESS
=qan Warming Center
Continue looking for a long-term solution to ensure a cold weather
emergency shelter is available in Springfield. Use State general funds to
help meet this need. STATUS: IN PROGRESS
Incentivize and fund development of income -
restricted housing.
Income -Restricted Affordable Housing Development
Award federal HOME funds and other one-time funds toward new
Affordable Housing projects. Help develop a new Manufacturered Dwelling
Park with $3 million in State general funds. STATUS: ONGOING
Land Acauisitior
Identify land suitable for Affordable Housing development and use federal
funds to acquire or help developers acquire land. STATUS: IN PROGRESS
Development Fee Waiver for Non-profit Affordable
Housing Providers
Waive development fees for affordable homeownership and Rental
Housing developed by non -profits. STATUS: ONGOING
Low -Income Rental Housing Property Tax Exemption
Allow property taxes to be exempted for 20 years for income -qualified
Rental Housing. STATUS: ONGOING
SDC Waiver for Homeownership
Implement temporary program to waive System Development
Charges (SDCs) for housing that is sold affordably to low-income
homebuyers. STATUS: IN PROGRESS
RenAssistance
Assist agencies supporting low-income renters
in Springfield.
Rent Assistance for Low-income Households
Award one-time Community Development Block Grant (CDBG) coronavirus
relief funds to the County to distribute to local non-profit agencies to
provide emergency household assistance. STATUS: IN PROGRESS
Springfield Euaene Tenants Association !SETA)
Award one-time CDBG coronavirus relief funds to SETA to support
their tenant hotline to assist, educate, and empower renters on housing
rights issues. STATUS: IN PROGRESS
ership Assistance
Provide assistance to prospective and current
low-income homeowners.
Home Repair Program
Provide up to $10,000 over 5 years in financial assistance with CDBG funds
(as a grant) to help very low-income homeowners with home repairs that
address health, safety, or accessibility needs. STATUS: ONGOING
Springfield Home Ownership Program
Provide up to $25,000 in financial assistance with CDBG funds (as an
interest-free loan) to help first-time low-income homebuyers purchase
a home. STATUS: ONGOING
�Rousllna Diversity & Production
Increase the supply and diversity of housing
at all levels.
Springfield Development Code Update
Updated Development Code to support efficient, timely, clear development
review. Implement State middle housing laws (House Bill 2001) to allow
more diverse housing types in residential zones. STATUS: COMPLETED
SDC Waiver for ADUs
Waive System Development Charges (SDCs) for Accessory Dwelling Units
(ADUs) through June 2027. STATUS: ONGOING
Housing Diversity Tax Exemption
Consider multi-year waiver of property taxes for multiple unit housing
to incentivize development in some areas of Springfield.
STATUS: IN PROGRESS
The status for each action listed above indicates how far along the City is in implementing that action.
What is housing affordability?
Housing is considered affordable if a household spends less than 30% of its
income on housing -related costs, including utilities.' Housing affordability
is a term applicable to households at a range of incomes.
How is that different from Affordable Housing?
Affordable Housing is housing priced so that a household at or below
the median income pays no more than 30% of its total gross income
on housing and utilities.10
�prleld'shousing market ousmg mix & deve opmen
Springfield's population will grow by almost 300 people
per year, through 2040. The population within the urban growth
boundary was 70,337 in 2020 and is estimated to be 76,042 by 2040.'
Housing is hard to find in Springfield's housing
Springfield, due to a very low inventory is aging.
vacancy rate.2
SPRINGFIELD �%
�
Vacancy Rate •
inventory is decreasing.' paid in Springfield in 20202
EUGENE dd %
VacancyRatA
of housing
in Springfield
OREGONo 0
is more than
Vacancy Rate •
20 yrs. old .2
Springfield needs to build about 296 dwelling units
per year to keep up with population growth from 2010 to 2030.1
The average sale price of Springfield homes has increased.'
2022 Q2 average home sale: $443,000 > difference of $72,000
2021 Q2 average home sale: $371,000
2020 Q2 average home sale: $315,000 > difference of $56,000
2020 Fair Market Rent in Springfield:'
1 Bedroom $893 2 Bedroom $1,176
Springfield's housing mixt
5 6.5 % Detached single unit
16.2% Multi -family (5+ units)
14% Attached single unit or duplex
7.6% Mobile home
5.3% 3-4 units
0.4% Boat, RV, van, etc.
The City has issued building permits for over
1,000 new dwellings in the last 5 years .4
300
250 Single -Family
200
150 Multifamily
100 _ Manufactured
50 _ Duplex
0 ADU
2017 2018 2019 2020 2021 2022
Springfield UNEMPLOYMENT Rate 8 9% 2
Springfield POVERTY Rate 18.301° 2
At some point
Springfield Poverty Rate for RENTERS 23'x° 2 in 2022.
Springfield UNHOUSED residents 1,055 people'
Tenant -based vouchers IN SPRINGFIELD 932 households
Wait list for HOUSING CHOICE VOUCHERS 3,699 households
Lane County's home sales Gross monthly rent
Median income'
Springfield households
inventory is decreasing.' paid in Springfield in 20202
I
53.8%
12
10
are homeownersz are rentersz
8
6
4
SU $1M $2=0 $30M $4 fsww $60M $7M
Spfld.median
25% 46%
2
Oregon median
of homeowners of renters are
are cost burdened' cost burdened'
0 o o o
8 �^ 8 Y ^ =
Iryoti�otiti0�ti
Spfld. renters
Households are cost burdened if they
�o1ryo1�oltio1�o1�o1h ID o�ryo�A 'b
Spfld. homeowners
pay 30% or more of income on housing.
SOURCES:' PSU Population Research Center, a US Census ACS
5 -year (2020),' 2011 Residential Land & Housing
Needs Analysis,' City ofSpringfield (2022), 5 RMLS,' HUD,
' Lane County Homeless by Name List (Oct. 2022), 1 CHAS (2015-2019), 1 Homes for Good (Sept. 2022), 10 Eugene -Springfield Metro Plan