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HomeMy WebLinkAbout02/01/1993 Work Session ".' . . . J City of Springfield Work Session Council Meeting MINUTES OF THE WORK SESSION OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY, FEBRUARY 1, 1993 The City of Springfield Council met in York Session in the Springfield City Hall, Meeting Room 2, Springfield, Oregon, on Monday, February 1, 1993 at 5:35 p.m. with Mayor Morrisette presiding. ATTENDANCE Present were Mayor Morrisette, Councilors Schanz, Walters, Berg, Maine, Burge and Adams. Also Present were City Manager Michael Kelly, Assistant City Manager Gino Grimaldi, City Recorder Eileen Stein, and members of staff. 1. Draft Springfield Comprehensive Housing Plan Development Services Director Susan Daluddung introduced the Draft Comprehensive Housing Plan. She explained the plan will go through a citizen involvement process, as well as review by the Planning Commission, but the housing staff wanted review by the "policy making" Council first. Ms. Daluddung described how this plan covers the many aspects of the Development Services Department by coordinating the divisions of planning, community development, building safety and property management. Ms. Daluddung stated this plan is a top Council priority goal for 1993. She highlighted some of the overall geographic data discussed in the plan, specifically pertaining to the definition of affordable (meaning affordable for all income levels). She introduced Management Analyst Lynn Nakamura who would provide the staff report. Ms. Nakamura explained three aspects of the plan would be highlighted: 1. Home Ownership Opportunities 2. Rental Housing for Very Low Income Households 3. Policy Direction for Non-Profit Organizations Ms. Nakamura indicated Council was requested to provide input on the citizen involvement process. She explained the process the plan will follow discussed in Attachment II of the staff report. 1. Home Ownership Opportunities: Councilor Burge stated is he concerned that housing values data on the matrix in the staff report are outdated. Ms. Nakamura said the information is based on 1988/89 census data, but relative percentages are the same in comparison with Eugene, as well as the State of Oregon. Mayor Morrisette said he would like the $100,000+ five year goal figure of 6% to be higher. He believed in five years the number of homes over $100,000 will be higher simply due to inflation. Councilor Maine stated it is more important to think in terms of percentages and relativeness, than . . . 1 City of Springfield Work Session Council Meeting Page two absolute value. The Council discussed this plan as a Council goal, and said it is not 'ambitious enough. Some ideas included increasing the threshold to $120,000 or adding a new category of over $150,000. Ms. Daluddung explained factors used in determining the 6% in five years goal. The Council discussed whether this plan will accomplish that objective because it was felt 6% is too modest. Ms. Daluddung replied many factors, such as more aggressive annexation policy, could impact this figure. . Mr. Kelly clarified the direction of Council regarding the upper end of housing. Councilor Walters suggested using 3% of the median index versus the 6% goal in five years, so the city would stay current. Councilor Schanz asked the Councilors how they would achieve high end housing, since builders/contractors have the control. Mayor Morrisette responded by saying certain areas of the city would need proper zoning, by annexing other areas, as well as the city's property management staff promoting lots up in the hills. Councilor Adams said this plan needs to reflect the images that the city would like to project, as far as housing needs and policies. The Council decided that policies need to be in place that will facilitate development of higher end housing. 2. Affordable Rental Housing: Ms. Nakamura explained that according to HUD standards, "affordable" rental housing is 30% of income spent on housing, and a "severe burden" is categorized by spending 50% or more of income on housing. She gave details regarding Springfield's housing needs as presented in Matrix 2 of the staff report. Council asked questions and discussed the goals and how they were derived. Ms. Nakamura replied the goals are based on an assessment of rental housing needs in Sproingfield, as studied by the Lane Council of Governments in 1988. Councilor Berg expressed frustration over the federal HOME program and the fact that funds are not readily available to purchase homes. Ms. Nakamura replied it is due largely to insurance issues covering mortgages. Councilor Burge stated it would take 75 years at this current level to provide enough affordable housing for those in need. There was a , discussion regarding changing federal regulations and low federal support for the HOME program. Councilor Berg suggested building homes for people needing affordable housing versus providing rentals. Council discussed other ways to utilize the private and non-profit sectors to provide adequate affordable housing. 3. Policy Direction for Non-Profit Organizations: Ms. Nakamura discussed proposed policies for facilitating housing development by non-profit organizations. She explained the procedure for organizations to pay reduced fees based on the income level of target home buyers/renters. Councilor Burge asked what happens if a non-profit sells property to a private party, and how is the money recapped. Mayor Morrisette replied that homes built by Habitat for Humanity can not be sold for twenty years. . . . , City of Springfield Work Session Council Meeting Page three Mr. John VanLandingham replied the city has a program in place in conjunction with the Oregon Bankers Association to recapture equity in those circumstances. Councilor Berg questioned why the city is subsidizing affordable housing, when the city already has a 40% level of low income housing now. He feels we need to promote a more balanced housing structure. Mr. Kelly reviewed the funding matrix and explained how the city will be spending more money over the next five years on upper ending housing, and how the goals intermingle. Councilor Berg said he will be satisfied if our goal is to increase affordable housing that is owner occupied, not rental. 2. Property Tax Exemption Programs for the Development of Low Income Housing Development Services Director Susan Daluddung introduced this item and stated it was developed in response to Council direction based on the request of Mr. Dan Desler, Good Neighbor Care Centers. Ms. Nakamura explained the twenty year property tax exemption proposal for low income housing developments. She clarified one ordinance will give tax exemption to non-profit developers and one will give exemption to private developers. She stated a public hearing would be held in the regular session meeting later in the evening to adopt supporting ordinances. Councilor Maine asked how the previous Council stood regarding this issue, and if any promises were agreed to or implied. Mayor Morrisette responded the only prior commitment made was that the Systems Development Charge (SDC) would not be waived. Ms. Daluddung reviewed the history of Mr. Desler's request regarding his Springwood development project. She said Mr. Desler provided the Council with a list of assistance requests and reviewed the list, which included property tax exemption status. Mr. Kelly explained that this program has been postponed until the Comprehensive Housing Plan could be developed. He told the Council after their review of the housing plan, they could evaluate the Springwood Development proposal with regards to the housing policies. He added other needs of Mr. Desler, such as infrastructure, would be addressed at another time. Councilor Yalters asked how the McKenzie Meadows project could be developed with affordable units without any city assistance. Mr. Desler replied there is a competition for tax credits, and Bowen Corporation had access to a greater percentage of tax credits that he does. He said the difference is 4 percent versus 9 percent, and at the present time there are no longer any credits available. Mr. Al Johnson added the developer must build within the same year that the tax credits are sold. Due to the Springwood appeal process, Mr. Desler was not able to begin construction within the same year. Mr. Desler further explained the occupants of the Bowen development are at 80 percent of the median income, and the targeted people for the Springwood development project are at 50 percent of the median income. "1. . . . .. City of Springfield York Session Council Meeting Page four Mr. Desler also provided information regarding elderly people wishing to cash out their capital gains money and apply the funds to an affordable housing project. Mr. Desler said if an elderly person sells their home to live in his affordable housing, it then makes available housing stock for younger first home buyers. Council discussed the tax exemption program in relation to the Springwood development proposal, specifically in regards to finding affordable housing for the elderly. Councilor Maine asked if the Council supports the program, if they will have defeated their own goals with regards to the housing policy. He added that any policy implemented will not just affect the Springwood project, but all low income housing projects in Springfield. Council discussed the amount of tax exemption needed to assist the Springwood development ($83,000), if a cap should be placed per annum on exemptions, and the length of the exemption period (20 years). Mr. Desler commented the exemption would be passed on to the consumer, and not his company. Mr. John VanLandingham spoke about other developers and projects such as Mr. Terry McDonald with St. Vincent De Paul, and their possible interest in the tax exemption program. Mr. Kelly explained his reasoning for suggested a per annum cap. He gave details about the city's $10.00 tax rate cap due to Ballot Measure 5 and how the city will not lose money until the $10.00 cap is reached. Mr. Kelly stated a $100,000 tax exemption over a twenty year period would have some impact on the city, but would not be a significant burden. On the other hand, if the Council allowed a five year exemption, then the city would suffer no financial impact. Councilor Maine said the Council has reached consensus to provide a total $100,000 tax exemption for incentive to developers of low income housing, either for profit or non-profit. Ms. Daluddung said Mr. Desler would need to come to the Council with an application for his tax exemption request. Council members understood that Mr. Desler's application would probably consume about $85,000 of the $100,000 total program. Mr. Desler commented the tax exemption would be the only financial request he would ask of the city, except for support on traffic signals, obtaining County road fund money, etc. ADJOURNMENT The work session was adjourned at 7:25 p.m'6id~Ai Mayor ' Minutes Recorder - Eileen Stein ATTEST: ~~L- Ci ty Recorder #3475