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22-090
22-090RESOLUTION NO. A RESOLUTION OF THE CITY OF DENTON ADOPTING AN AFFORDABLE HOUSING STn\TEGic TOOLKIT; AND PROViDrNG AN EFFECTIVE DATE. WHEREAS, housing affordability is a key driver to sustaining the high quality-of-life that attracts people to live, work, and play in the City of Denton; and WHEREAS, the City of Denton’s desire for growth requires focused housing development efforts by all City stakeholders; and WHEREAS, in February 2020 the City executed a contract with Reinvestment Fund, Inc. (RF) for an Affordable Housing Assessment for the City of Denton and, in May 2021, extended the contract to a second phase for the development of an Affordable Housing Strategic Toolkit; and WHEREAS, RF worked with community stakeholders to develop a set of strategies and actions that will set the stage for the development of more housing options and opportunities in the City of Denton, incorporating feedback from various discussions with stakeholders, interviews, and a survey; and WHEREAS, the Affordable Housing Strategic Toolkit attached as Exhibit “A“ includes actionable recommendations that guide the next five years of affordable housing creation and preservation in the City of Denton; and WHEREAS, the City Council finds that this Affordable Housing Strategic Toolkit is in the best interest of the community and its citizens, and outlines goals, strategies, and tasks tofurther housing affordability in the City of Denton; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. The recitals contained in the preamble of this resolution are hereby incorporated into the body of this resolution as if set out fully herein. SECTION 2. City Council hereby approves and adopts the Affordable Housing StrategicToolkit, which is attached hereto as Exhibit “A“ and incorporated by reference herein. SECTION 3. This Resolution shall become effective upon its passage and approval. The motion to approve this Resolution was seconded by ntis,a [\l„bDirc by the following vote n - D made by Bfi+n Beck and ' The Resolution was passed and approved AyeJ Nay Abstain Absent Mayor Gerard Hudspeth: Vicki Byrd, District 1:V/ Brian Beck. District 2: Jesse Davis. District 3 : Alison Maguire, District 4 : Deb Armintor, At Large Place 5 : Paul Meltzer, At Large Place 6: ,/ V/ V/ \// PASSED AND APPROVED this the IS’- d,y,f (,bfu6fy J 2022. €£g£„” ATTEST ROSA RIOS, CITY SECRETARY ]B!II IIrr : Jg1M 2na2:+) 1\\\It 111111 APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY gH% W;?'';;'"”BY• O '06'oo I':xhibit A Affordable HousingStrategic Toolkit PrepaTed for CITY OF DENTON Research and Analysis by REINVESTMENT FUND AND ATRI A PLANNING Publlshecl DECEMBER 2021 REINVESTMENTFUNDD'ENTQa Draft City of Denton Affordable Housing Strategic Toolkit Affordable Housing Strategic Toolkit Prepared for the City of Denton Reinvestment Fund and Atria Planning, 2021 Contents Introduction.......................................................................................................................................3 Using the Market Value Analysis to Guide Housing Strategies............................................................5 ToolkitOvervbw ................................................................................................................................7&Program Details................................................................................................................................12 Strategy l: Infill ............................................................................................................................12 MVA Guidance .......................................................................................................................... 14 Case Studies..............................................................................................................................15 Strategy 2: Zoning Relief/Variances................................................................................................17 MVA Guidance . ......................................................................,.................................................. 17 Case Studies. ............................................................................................................................. 18 Strategy 3: Increase capacIty and resour as for affordable housing development............................. 19 MVA Guidance .........................................,................................................................................ 20 Case Studies..............................................................................................................................21 Strategy 4: Preserve and expand existing housihg affordability........................................................ 23 MVA Guidance ..........................................................................................................................24 L Case Studies......................................................:.......................................................................25 Strategy 5: Increase access to information and assistan a ............................................................... 27 MVA Guidance ..........................................................................................................................28 Case Studies..............................................................................................................................29 Integrating Toolkit Strategies: Identifying [>velopabb Lots Under Revised Zoning............................... 31 Housing Production Goals.................................................................................................................32 Implementation Actions....................................................................................................................33 YEAR 1 .........................................................................................................................................34 Action I. Increase Staff Capacity ...............................................................................................34 Action 2. Consulting Services to Create Affordable Housing Overlay District ............................... M Draft City of Denton Affordable Housing Strategic Toolkit Action 3. Interactive online mapping tool . ...... Action 4. Rental Maintenance Grant..... Action 5. Landlord Education Program ................................... YEAR 2 .................. Action 6. Land banking......................................................................... Action 7. Non-Profit Capacity Building Grant .., Action 8. Affordable Housing Incentive Package ... Action 9. Pre-Dewloprrent Finandng Program...................................................................., Action 10. Create marketing materials and outreach to developnent community ................. Action ll. Staff training ............................................. Action 12. Consulting Servi as to develop Small Hone Communities Program...................... , Action 13. Consulting Servi as to develop Accessory Dwelling Units (ADU) Program . ............ , Action 14. Landlord/Tenant Eviction Prevention Program and Education Campaign ............ , YEAR 3 .................................................... Action 15. Housing Trust Incentive Program ........................................................................, Action 16. Low Income Homeownership Program................................................................ Action 17. Consultant Services to Develop Employee Homeownership Program ..................., Action 18. Down Payment Assistance ProgramLBudget Estimates........................................... How do these Activities Work Together?... Hypothetical Project: Sunrise Cottages .IConclusion .................................... .. . . 35 ,.35 ,.35 .36 ,.36 ,.36 . 37 . 37 . 37 . 38 . 38 39 ,. 39 . 40 . 40 . 40 . 41 , . 41 . 42 .44 .44 47%LI Draft City of Denton Affordable Housing Strategic Toolkit Introduction This Affordable Housing Strategic Toolkit (“toolkit") provides the City of Denton with a set of strategbs and actions that will set the stage for the development of more housing options and opportunities. The toolkit directly addresses the residential market demands identified in Denton’s Affordable Housing Needs and Market Value Analysis report which Reinvestment Fund and Atria Planning completed for Denton in January 2021. The housing needs assessment (HNA) examinedthe challenges Denton residentsand workers experienced in the housing market, including paying too much for housing, living in overcrowded or inadequate conditions, or being unable to enter the homeownership market, and identified income thresholds needed to afford market rate housing. The report also estimated housing demand overthe next ten years, categorized by tenure ( rent vs. own), income, number of bedrooms, and included considerations for the needs of particular groups such as older adults with mobility challenges, persons with disabilities, and households at risk of homelessness. The HN A identified five main housing needs forthe City of Denton: 1. 2. 3. 4. 5. Rental housing affordable to households earning less than 8(M of Area Median Income (AMD, with the greatest need for households earning lessthan 5CY% of AMI Homes for sale affordable to households earning lessthan median income Housing support for seniors (including rental housing, assistance for home repairs, living-in-place retrofits, and integrative services) Permanent supportive housing and transitional housing forpersonswtth disabilities and homebss Housing opportunities for low-income households in areas of opportunity. Similar to most cities in the U.S., Denton’s home prices and rents have risen significantly in recent years, and the city currently has a shortage of moderately priced housing. This has caused a financial strain among the community’s lower wage workforce and young professionals, who are challenged to find housing affordable to them. To put this in perspective, a renter would need to earn $45,m per year to affordable a market-rate one-bedroom unit; a household would need to earn $75,CXX) to afford a median-priced home. Households who earn less than this (which includes retail workers, hospital staff, city employees, and many professionals) cannot afford market prices in Denton as of 2021. Unfortunately, the construction boom taking place in Denton is not addressingthis need, with most new homes priced above $3CX),CXX) and very few rental housing units slated forconstruction. Because demand is high at all price points, private developers are building higher-priced units with higher returns. To create lower priced units, the market will require some degree of public and non-profit support through the use of incentives, grants, technical assistance, and other tools that are described in this toolkit. For this reason, the toolkit presented here specifically focuses on the future demand for housing units affordable to low- and moderate- income households, assuming the private market will address demand for middle and upper income families. According to the HNA demand model forecast and subsequent update from July 2021, the City of Denton can anticipate demand for approximately 4,3CX) moderately priced units between 2021 and 2030. (See Figure 1) Draft City of Denton Affordable Housing Strategic Toolkit Area Median Income (AMI) Very Low (<50%} 604 Low (50-80%) 1,429 Moderate (80-100%) 330New Units Rental Housing 2,363 New Units Home Ownership 1,941 Figure 1: Estimated Housing Demand 2021 – 2030, City of Denton Source: Atri a Planning To address housing needs effectively, the City will need to find ways to increase production with theresources and powers it currently has, creating a foundation for the private market and non-profit developer partners to address need. In gene raI, the City may seek to: LOWER CONSTRUCTION COSTS BY USING COST-EFFECTIVE BUILDING MODELS (PREFABRICATED HOUSING, SMALLER RENTAL HOUSING COMPLEXES, SMALL-HOME MODELS). INCREASE THE CAPACITY FOR HOUSING DEVELOPMENT By £MPOWERING LOCAL BUILDERS (CAPACITY BUILDING, DEVELOPER INCENTIVES/ ADVOCACY) AND MARKHING TO NATIONAL DEVELOPERS. FIND WAYS TO USE EXISTING LAND AND UNUSED BUILDINGS (ZONING CHANGES, INFILL DEVELOPMENT, MARKFHNG AVAILABLE PARCELS). INCREASE LEVERAGE FOR HOUSING DEVELOPMENT THROUGH PUBLIC PRIVATE PARTNERSHIPS, INCLUDING PARTNERING WITH THE HOUSING AUTHORITY (VOUCHER PROGRAM) AND/OR OTHER QUASI-GOVERNMENTAL HOUSING PROVIDERS. PRESERVE THE EXISTING STOCK OF MODERATELy PRICED HOMES (REHABILITATION, LONG-TERM AFFORDABIUTY AGREEMENTS). Draft City of Denton Affordable Housing Strategic Toolkit Using the Market Value Analysis to Guide Housing Strategies As part of the HNA, Reinvestment Fund conducted a Market Value Analysis (MVA), a tool that uses statistical analysis of administrative data to inform housing and development strategies. The MVA classified Denton’s residential markets into seven categories according to their general characteristics, strengths, and any signs of stress, from the strongest “A“ markets to the more distressed “G“ markets. (See Map 1 and Table 2) . The MVA can be used to guide appropriate investments and strategies for each type of market. Some tools are most effective in specific neighborhood conditions and, when geographically targeted, can leverage multiple funding sources and generally promote inclusive growth and economic opportunity. For example, distressed market strategies may include increasing the income diversIty of residents through mixed-income development and infrastructure/amenity improvements, transitional market approaches include repairs to existing housing stock and increase homeownership, and middle and strong markets represent opportunitiesto increase housing choices including the creatbnof smaller units. Each of the toolkit strategies features considerations for using the MVA in implementation. Reinvestment Fund also produced a Displacement Risk Ratio analysis (DRR) for the HNA. The DRR can guide land banking/land trust activities and other strategies to help moderate income households remain in weak or transitional neighborhoods that are undergoing rapid price appreciation, so that they can benefit from neighborhood improvement. The DRR found that longtime residents of Southeast Denton are at risk of displacement due to hype rgrowth in market overall and upward pressure on prices close to the center of the city in particular. Draft City of Denton Affordable Housing Strategic Toolkit Denton NVA, 2020 Land Use SteadyBMiddleC D TransitionalE r: ][ :?hi' I U - %A..'CemeUy––l &-Hidm Ud%rWty / WageNm Rnidontid REINVESTMENTFUND Figure 2: 2020 Denton Market Value Analysis, Reinvestment Fund Median Sales Price, 18-13 Alteration Permits Building Residential Violations Parcel Area Vacancy Foreclasures 5402,684 7 5279,371 5278,238 $257,951 E 5 3201,447 F 19 5195,718 G 11 5138,808 CitywIdeAverage $229,778Block Group Figure 3: Average Values for Denton MVA Model Inputs, Reinvestment Fund 0.25 75.0% 72.196 2.2%1.0% 0.28 90.5%0.496 3.8% 0,9% 4.5% 2.8%5.8%>0.1% 0.8% 0.2% 0.7% 5.3% 2_0% 5.6% 25.1% 84.7% 43.1% 26.3% 31.196 61.1% 30.5% 0.1% 1.0% 0.3% 0.4% 6.7% 1.9% 2.6% 0.4% 1.3% 1.4% 1.1% 5.2% 1.2% 0.2% B 0.19 79.7% 2.9% 2.0% 1.6% 28.2% 0.35 17.4% 37.496 3.0%1.3% 2.4%0.36 36.0% 6.2% 1.0% 0.48 0.36 10.4%1.2%0.8%0.9% 0,36 55,5%5.8%1.7%2.8%1.7%36.6%1.596 1.096 Draft City of Denton Affordable Housing Strategic Toolkit Toolkit Overview The toolkit consists of five strategies, each with a subset of activities that together will help foster the development of an array of housing options for Denton households overthe next decade (see pages 11- 22). There is not enough subsidy to address all the housing needs for low-and-moderate income households; therefore, the intention of this toolkit is to enable the development of moderately pri ad housing with minimal to no subsidy where feasible, and to leverage available tools in a coordinated and tactical way to maximize the number of units built. This includes a combination of tools related to funding land, partners, zoning, building methods, and the regulatory powers the city possesses. In effect, this toolkit establishes the foundation for the private market to engage in moderately priced homeconstruction. This approach will also ensure that existing incentives and sources of subsidy (e.g., repair programs, tax credits, and federal and state subsidies) are used more efficiently and creatively through: zoning changes that allow more flexibility; building the capacity of area non-profits; attracting new developers to the area; and incorporating new innovations in building practices that lower construction costs. While the proposed strategies will not fully meet future housing demand, the tools will further housing production more than relying on existing programs alone . This approach delivers housing interventions reflective of local housing market conditions while leveraging the mix of resources available from private and non-profit developers, the City, and other housing stakeholders. I. In HIt Development • Increase infill development using vacant land and repurposing lots and buildings 2. Zoning Relief & Variances q ::I:I • Provide zoning relief and variances to incentivize targeted development 3. Increase Capacity & Ft'eso.u'rces • Expand the capacity of the building community and resources available tothem 4. Preservation • Preserve and expand existing housing affordability 5. Increase Access to Information • Provide education and information to aid in development of low- and moderately priced housing Draft City of Denton Affordable Housing Strategic Toolkit e I C cn. aL)-ZLL ECDL=bO0La g;a g= i }::: g ::-+ =[ n al laC JB LU\i f: wOcaLf)SHSa al CD tEa<?b+ g TooaJ ChD aUSun (TL= BoBO E & 'a { >+'0CDal +Cgi L)CmLE rD};i ZUn=•n•< 'SrOaD 83{}{Ii i ; LL-aLUZ Z;(==n•Hll•zagg e/)LU> L)2 IZU.J beggodEgo 8 + g) '7aQFC)a)a)Toaa)CrD3a;Ea)rD(aIE HE <CBea)aB>1aaLaa bZLHEa0ILII>Laa -J-J 11Z A brief description of the activities within each strategy is provided below. Addttionaldetail is provided in the next section of this report. Strategy 1: Use Existing Land and Buildings - Infill Development Description Revisions to Zoning Code Create guidelines and requirements from a land use and zoning perspective to allow for an expanded Small Homes and Accessory Dwelling Unit (ADU) Homes Program. Small Home Communities Program Create guidance and resource materials for a Small Homes Program. Make necessary zoning changes and amend the permitting process outside of Planned Unit Development (PDU) regulations to encouragethe use of Small Homes for infill devetopment (can be one or more units per lot).J JCR Accessory Dwelling Unit (ADU) Program Expand the existing program to incentivize homeowners to add backyard rental cottages to their property using prototype housing models, participating lenders, and streamlined permitting. Strategy 2 - Zoning Relief and Variances Zoning Relief Create affordable housing overlay districts with associated zoning relief/variance options for developers interested in building or substantially rehabilitating homes priced affordably for low- and moderate- incomehouseholds. Incentive Package Create guidance, resource materials, and additional staff support for projects that meet criteria (fall within an affordable housing overlay district and help meet housing goals). Draft City of Denton Affordable Housing Strategic Toolkit Strategy 3: Expand Developer Pool - Increase Capacity and Resources for Development Description Capacity Building MatchGrant for Local Non-Profits Provide match funding to non-profit developers to increase their capacity for affordable housing development. May include funding for grant writing, pre-development costs, technical assistance, and/or site control. Affordable Housing Incentive Package Package financing, land options, technical assistance, and streamlined permitting incentives for target properties and market to developers. Identify priority sites for development, Low Income Homeownership Program Create a model for homeownership catering to families earning less than 50% of AMI in partnership with the Housing Authority using a combination of Housing Choice Vouchers, low-cost construction methods, down payment assistance, and favorable lending terms. Strategy 4: Maintain existing affordability - Preservation Sponsor Development of Housing Trust Provide technical assistance and grant funding to non-profits interested in creating a housing trust, a legal mechanism that preserves long-termaffordability for homes rehabbed or newly constructed for low and moderate income homeownership. Create a Landlord Rental Create a funding pool and program, where landlords receive funding to rehab Maintenance Grant in Exchange properties into rental units and agree to a period of affordability in exchange for for Affordability repayment from future rents or loan forgiveness. Create a City of Denton Employee Home Buying Program Create a home loan and down payment assistance program for City of Denton employees (potentially in partnership with university employees) that may include counseling services and partnership with a developerfor the infill housing program. Create a Land Bank for Affordable Housing Through the public housing authority, partner non-profit, or newly created quasi-governmental development arm, acquire or obtain site control for vacant lots and underutilized buildings for affordable housing development Draft City of Denton Affordable Housing Strategic Toolkit Strategy 5: Empower the private market -Increase access to information Description Landlord/Tenant Eviction Prevention Program and Education Campaign Create guidance documents, outreach, and training assistance for Denton landlords to deter eviction; provide grant funding for non- profit eviction prevention services. Develop tools to support land banking including an interactive online mapping tool to identify available sites/land Create an interactive web portal to identify vacant parcels and underutilized buildings that may be available for repurpose. Increase Housing Choice Voucher usage in Areas of Opportunity with a Landlord Education Program Work with the public housing authority to developa Housing Choice Voucher Program education campaign and online training modules to increase Housing Choice Voucher usage in Areas of Opportunity. Draft City of Denton Affordable Housing Strategic Toolkit Program Details Strategy 1: Infill Infill development refers to the construction of new buildings on vacant orunderutilized land in previousy developed areas of the City. This includes using smaller home models for very small lots; increasing the variety of housing within more urban neighborhoods to increase walkability and support more neighborhood retail services, and supporting more backyard cottage, garage apartments, and other infill development that can bring new housing options into the community. Revisionsto the zoning code can make it easier to produce units and also provide guidance that will result in the types of units the city needs most; these revisions will facilitate the full launch of both a Small Home and Accessory Dwelling Unit (ADU) programs. Infill Housing Types Description DnV Homes Prefabricated homes of approximately 400 square feet or less that meet housing needs for formerly homeless, provide cost- effectivetransitional housing and permanent supportive housing options. Can be designed as a community with supportive services, communal facilities, and workforce training. Backyard Cottages/Accessory Dwelling Units/Granny Flats Typically studio or one-bedroom cottages or converted garages discreetly placed within a single-family lot to provide housing options for guests, aging parents, young adult age children, or other renters seeking reasonably priced rental housing integrated into a neighborhood setting. Cluster Cottages A cluster of small cottages (usually eight units or less, usually 800square feet or less) within a U-shaped or similar pattern to create a rental housing community that visually complements a residential neighborhood, provides rental housing options to scale with walkable single-family neighborhoods, and utilizes larger single-family lots. Small Homes A smaller home model intended for young professionals to enter the homeownership market at a reasonable price point. Similar to cluster cottages, but can be stand-alone, and offers amenities young homeowners desire in exchange for a smaller square footage and lot size. Small homes are usually 900 square feet or less, and include oneto two bedrooms, limited outside maintenance, and flex space like a small office orworkout room. Infill Townhomes and Doubles/Duplexes A small cluster oftownhomes orduplexes (usually eight units or less) using lots too large for single family development but too small for larger development. This can be for rental housing or homeownership. Draft City of Denton Affordable Housing Strategic Toolkit •W If A‘@ UV }.Wig :’ ; ’j= } =,;did A B1- = grD El ]E To IEg < E8 ES g g ,g g I!!a) ?'- Flg 1::i g a on The Small Home Communities Program and ADU Program will work with community development, planning, and outside vendors to identify appropriate lots for this activity and create guidelines and regulations that will enable the private market and/or non-profit partners to develop housing for households earning less than 80% of AMI with less subsidy than traditional homes. MVA Guidance The developmentof cottages and small homes is best suited to markets where larger parcels are available at a relatively low cost but where there is not pervasive vacancy or other instability. The predominantV renter markets of E and F may see increased stability around small home developments, especially when there are ownership opportunities. Infill in markets may be appropriate in the more distressed G markets where there is access to certain amenities or support services. The proposed ADU program is designed to bring smaller units to higher-priced markets and bring income-earning potential to homeowners with minimal public sector intervention or funding. Considerations , I Middle 1 Transitional }Distressed (G)(B/ C)(D)(E/ F)= Cluster Infill housing in areas with Cottages/Small I larger vacant parcels butHome Infill not highest vacancy rates In somecases Opportunity areas with single family homes on larger lots, rising displacement rIsk ADUs Draft City of Denton Affordable Housing Strategic Toolkit Case Studies Infill Development Dallas I'rI this ex8rnp:Ie froFrn Datlas, a private developer buliElt a R>u:r-urlit townhouse devet©'pmlent within a silnglleT farnily lot, without the use of subsidy. Eaeh unFit incl;u.des :L,700 square feet, ,private outdoor spate and 4 ;be.dr©©fm§. Priced at $275,a'DO each„ these Fi©HI.es are aWordaib IIe to rmi'dd IIe litr,torRe house+l©llds, This :private wlarket Belt:iv’itV wit:h lower price p.oilnts was rrla:de p©5siibil.e ib'e'cause of . z©milng cfrartges. This ease i:Illustrates that when an area has zoo:tIng tfl@t allows for SInailer urrit ,d eve+©jprvre:nt, §ut}sli.di'es nta'v not be necessary to reach affordaib,it,ity goats. The Cottages at Hickory Gras§i Ing, DallasTiny Holmes: lr;his srnal il h©u§ilng pI=©gra irlr ihig'hligtr ts h©rrle©wnerstr Iiip opp'©:rtu nities for for rner ly !h©fvtel.ess irrdividuats. This ' c§ev@loprn©:nt by the n©inpr©Ht eity§quare was cornpl©ted ait :half o:r ev©.n o:me f;hir'd of t:he cost of traditi©tl®$ rtl.ultifafrr lily supportive ho:using (about §50,:000 per url:it), t§©tn©n§trating that :is p©§siib!!,e t:o achieve a larger mu,mr:be:r of ufrlit§ fo:r the saIrn@ nulrnber of dollars - even wh@rl e©rnp:Iyiing witt3 L:EED Certimed :EM€i©rleyDes,ig in St®rldar:ds. Each of the SO umlits of p@rrvra,ment aW©rd®bl€ !housing is 350 §qualr© feet, a,mid t:hey are ;l©eat ed across the street from title Citv§quar,e :Opportunity 'C€trt©r Oirts:ite :17redieal afld II\©n£af ih©ait:h services are provided f© tr ag 're§i:deints, re'duci:lrg ’hig:her cast irrterventi© irIS, and creating a sav:irt:gs for b'call g®vernrrlerrt. These pr©graFvrs eBm work weill for partnerships with in©mlpr©fits 1liike eitysquare #' aInd t:hey pan I\::HI :H + + PIiI caIn be 8e§tih©ti€alllv appealing Draft City of Denton Affordable Housing Strategic Toolkit ADUs in Portland, Oregon This example from Oregon shows the success of using A,DUs for owners to add value to th,e'ir properties. T’h'e C’ity rnanag'es arl At:)'U Prograrn with staff resources and ofFers waivers for afFo lr’dab:Ie ,rental housing. Theprogranr a:Ito"ws for ba.c'ky aIr d cottages using pre-a,pip'rowed designs and connects o'wne'rs to financing tihrou:g:h Ba'ckHome A:D'U and Craft3, which provide low Interest loans (3.5%) for 240 months fo,r $130,000, or §772 pe:r rnonth to ho:me.owners 4Homeo'w'n'ers also have the option to gr.o',un'd lease their property to a non- rece'ives a portion of the reve;nae strea:rn . An owner eall a:Iso go to the City for assistance developer, a:IiI at no cost to city ot,her than the staff ,person ,prov'i'ding gui'dance. Silrnil,ar prograwl s have been intro.du;c:e:d i in Austin an(i other ,c:it i;es , Draft City of Denton Affordable Housing Strategic Toolkit Strategy 2: Zoning Relief/Variances This strategy combines adjustments to regulations with targeted, multifaceted incentives to enable the private sector to produce lower priced units. An affordable housing overlay district would revise the zoning for specific sites that are appropriate for targeted infill development and provide incentives to developers who include lower priced homes in their projects. The Denton Development Code establishes procedures and standards to allow the creation of Overlay and Historic Districts in Denton “to protect and enhance specific lands and structures which, by virtue of their type or location, have characteristics which are distinct from lands and structures outside such special districts." An overlay would encourage the production of affordable homes through incentive-based policy. This strategy also includes a marketing and outreach component to encourage housing development at a variety of price points. Marketing and outreach tools would be developed to reach out to a specific target audience like the development community, including national non- profit developers with experience in mixed-income, mixed-use development, developers experienced in infill development, and national non-profits that may serve as a supportive services partner. MVA Guidance Overlay districts should aim to create lower-cost housing in high opportunit/ neighborhoods such as the Steady (B, C) and Middle (D) markets. The price of housing (and land) in A market is too high for the development of affordable units and without overlays, new development in B, C, and D markets would also likely be priced beyond the means of households earning less than 100% AMI. But home prices in B and C markets are about 44% lower than in A– a large enough difference to make incentives reasonably effective. D markets would require even shallowerincentives to achieve lower price points but are still quite stable enough (with 72% homeownership markets and the highest share of reinvestment in existing properties) to absorb new, mixed income housing options without changing the overall market. Transitional markets that are seeing surging prices may also be appropriate locations for incentives. Considerations Transitional ISteadyStrong'nniddle {D-)(A )tEr F)(G)IB/ c) XX POTENTIAL Draft City of Denton Affordable Housing Strategic Toolkit Case Studies Mixed Use Zoning Districts, San os, TX The 20:17 Developrnent Code in San Marcos created Neighborhoo:d and Character D'ist,ri'cts with a range of al:l'o’wab ile uses. These pro:rnote diverse housing tVlp.'es, i,ncl''u,ding cottage e©:.urts, Ebive-work spaces, and mixed-use spaces w'itth retail below, a,partrn,ents alb love. Sma;l'ter density Character Districts al:low for corner retail. The City offers 10% density boln uses for affordable housing within designated areas. + $# [ L Shreveport o:ice - Dev'e’lol)er Solicitation The City of Shreveport initiated a large=scale dev'e#oprn,ent on the downt©'w,n fIr.i:ng,e th'roug ih arl iIi:FQ for a deve,Ioprnent tearn. The initiative was corl.d:ucted in partners;hip Vou:clhers, and support from\ the baa~yor’s Office for e©;r7rpet;it-iv:e 13:i'ets for tax c:r'edits. The use afFordalbIle :housing developmrent, ilnc; Itu id,i:ng Mee©lrrna,c:k B.alron Salazar a In:d ,Pennrose D'eveIoprnent. in exchange for public support, the City and PFI A required rob,ust cornwrunity engagerne'nt incl,ucling c:harrettes art.d ,resident preference surveys a;to In:g with significant afFo.rdaib'ility of future .units Draft City of Denton Affordable Housing Strategic Toolkit Strategy 3: Increase capacity and resources for affordable housing development Much of this toolkit requires the development community to increase housing production, and while Denton has several non-profit developers active in the city, they generally lack capacity to increase operations without support. Similarly, the Housing Authority and its non-profit affiliate has the license to construct new housing for low- and moderate-income households but may lack the capacity and partners to do so. Therefore, the city may provide incentives, grant assistance, and technical assistance to the existing affordable housing development community to increase the output of new low-cost units. A Non-Profit Capacity Building Grant program would provide fundingto increase real estate development capacity within the Denton area's non-profit development community. The technical assistana, educational, and financial activities enhance the capacity and ability of eligible organizationsto carry outcommunity development and affordable housing activities benefitting low- and moderate-income households. In particular, the grant is intended to increase the funding available to non-profits through grant writing assistance; technical assistance associated with the Low Income Housing Tax Credit and othergovernmental subsidy applications; and professional services grants (e .g., legal fees) to develop and administer innovative housing programs. Additionally, the program includes a revolving loan fund for pre-development costs, which the development community cited as one of the major challenges to affordable housing development. The Pre- Development Financing Program provides predevelopment capital to finance the start of low-income housing projects. Assistance may be provided for feasibility analysis, fees associated with grant applications (e.g. legal fees, architectural fees, engineering fees) and acquisition expenses for any costs associated with obtaining control of the site. Small developers and non-profits have difficulty financing these activities and are at a disadvantage in competing with large-scale developers, who predominantV build larger complexes in greenfield sites. Obtaining financing for these expenses can be difficult, especially for small developers and non-profits. The loan can provide this additional support, and may be repaid at closing for construction, sustaining a funding poolfor future development. Similarly, an Affordable Housing Incentive Package provides incentives to developers – like reduad parking requirements, waived permit fees, reduced setbacks or Floor Area Ratio (FAR) requirements– in exchange for affordable housing development. By reducing the cost of construction per unit, developers will be able to lower prices and still maintain profitability. This mechanism also allows the City to work with any selected developer team to negotiate beneficial terms when prospective developments arbe using one of the higher profile “target sites." This may include long-term ground leases and infrastructure investment from the city in exchange for a shared revenue structure, additional community investment in parks/recreation, or a contribution towards an affordable housing funding pool. Finally, the city and the public housing authority have the opportunity to partner to create homeownership opportunitiesfor very low income, HUD-assisted families. This can be accomplished by combiningthe city’s current Homebuye rs Assistance Program with the public housing authority’s Housing Choice Voucher ( HCV) homeownership program. Through this type of partnership, the housing authority or non-profit partner can build Small Homes (or duplexes, infill, or townhomes) using prefabricated building techniques, thereby lowering the price of construction, and sell to a voucher holder, who may use the value of the voucher as payment towards a mortgage . This model is one of the few that increases homeownership among low-wage workers and should be utilized to reach this underserved market. Draft City of Denton Affordable Housing Strategic Toolkit MVA Guidance Similar to affordable housing overlays, incentive packages should create lower-cost housing options in high opportunity areas– adjacent to jobs, quality retail, and other amenities. In contrast, low income homeownership programs can stabilize distressed neighborhoodsthat are not seeing much market activity. The E block groups, which are clustered in Southeast Denton, are predominately renter markets (83%), and 36% of all rental units are subsidized, the highest share of any market. F markets are also majority renterand have the highest share of homes built before 1980. Ge markets have the highest rates of code violations, vacancy, and foreclosure. Homeownership programs in these markets can introduce a greater mix of incomes, help longtime households build wealth, and increase property maintenance, which can have a spillover effect. Considerations Steady tBl c) Middle Transitional Distressed (G)(E, F)I'D) X POTENTIAL Areas with moderateLow Income and/or decliningH omeownership homeowners hipProgram Draft City of Denton Affordable Housing Strategic Toolkit Case Studies Cass eornmunity, Detroit: Tiny Homes Homeownersh'ip Model for Forrnerly Horneless This exarnpi© it;lost:rates the su,eeess of pairing nonprofit capaeity conduet ilnfiil fir©:Irl §45,000 - $'55,'(H30 to corlstr tact. Project furldilng carrIe tlhroug:h e'ha:ritat}IIe ;{W. = h } i E. ==; ':t:f=+ =gF7VIIi:':' ;''’ : ; +'T??p_l ' J .' == - - +;b_ q: I;-;J;a $==#: Draft City of Denton Affordable Housing Strategic Toolkit Housing Authority of El Paso IIn 2012, tlhe Housing Authority of t:he City of El Paso (HACE'P) d'evelope61 the first NetZero, fossil fuels free, LEED P+ati;nur:n affordable housing cornrnunity in the U.S. The property, .Paisa:no Green Corn*nn’.urt'ities, consists of 73 url'its for low-incorwe senior renters, allolng with 18 Single R©owr Occupancy (SR'O} ulnits, a corn:rnunity center, a rooftop terrace and ga'rderl trails. IHACEP so:lieitec# the project thro:u'gih a design cornpetitioJn, select'img WORKSHOP8 arId Pav:iII:ion C©mstr'uct'io in as developer atrl;d b'u'iIIdar respect h,dy. The project was built in compliance wit:h th'e Buy A.rn'erica Act, with 'nnater:i,als sourced from U.S. co,rnp8nies, and was cowl Ip:let,ed and ful:ly occupied within 18 ,nrt'ont.hs. The totail cleve'l©pmremt cost was S:t4.8 rrtitili©,n Olr 5203,'.ciao per umit Draft City of Denton Affordable Housing Strategic Toolkit Strategy 4: Preserve and expand existing housing affordability The HNA identified several concerns related to the loss of moderately priced housing in the Denton housing market. The city could once claim more affordable housing options that other parts of the regbn, combined with a high quality of life, that together attracted many families. However, that dynamic has changed in recent years. In particular, the housing prices from the onset of the Coronavirus Pandemicto today have escalated housing prices significantly. (insert graphic) This is especially true for Southeast Denton, the neighborhood that has historically been the home of Denton’s Black and Latino communities, where home prices have risen significantly in recent years. This upward pressure in home prices may lead to long-term residents no longer being able to afford the neighborhocxl. Additionally, the rising housing prices are limiting housing options for many of the city’s workers and may lead to challenges in worker retention if homeownership or even decent affordable rental housing options are no longer available. To counteract this growing trend, Housing Trusts are a low-cost solution. They are agreements made between the buyer and a community organization that limits the appreciation of a home over time to maintain long-term affordability. The non- profits who build or rehabilitate housing for low- and moderate- income homeowners may include Housing Trust agreements to avoid displacement of existing househokis in areas expected to increase in value overtime, like Southeast Denton. Additionally, the City, public housing authority, and/or non-profit partners may establish Land Banks, which are properties held under receivership for the purpose of housing development. They may be vacant, abandoned, and/ortax delinquent properties, and may be held in ownership (through a tax sale, for example) or reserved for housing development in partnership with the existing owner over a perkxi of time. The goal of the Land Bank is for the City and its partners to have access to properties for moderately priced housing development, and to leverage these properties to attract development andadditional resources. Draft City of Denton Affordable Housing Strategic Toolkit MVA Guidance Housing trusts can be used to improve and create new housing in transitional and distressed markets through ownership by entities that are committed to responsible stewardship and have the means to honor that commitment. Trusts are also effective tools for providing critical permanent affordability in areas where prices are rising rapidly, enabling communities to retain a mix of household income leveE. Landbanks are able to acquire and strategically transfer land for different purposes. In steady and middb areas, properties can be used for infill and in transitional and distressed markets, they can be used to support housingtrusts and otherstabilizing activities. Transitional E (E! F) 61 e ratio BI Transitional and Distressed areas with or adjacent to areas with rising prices Housing Trust X X Target parcels in high opportunity neighborhoods for infill; side yards and assembly of parcels for larger scale development in Transitional/Distressed Land Bank x Ix Draft City of Denton Affordable Housing Strategic Toolkit Case Studies Holus'i'ng Trust Dud:ley Street Neighborhood Initiative, Boston,MA The Dudley Street Neighborhood Initiative is one of the o:lde5t aInd most successful rn©de is of a Housing Trust in t=he U.S. The prograrn b,egan IIn the ear'ly 1980s when neighk)or:h©©cl a§s©ciatiom expanded irrto a non-profit dev.e:Iop.er and s,ucees§fully t:han 225 'holmes were built ulnder the pr©grarn, along with a reta'i+ corridor, corn rnulnity Q.’5% app;ree:i.at;ion ,per year for the first te in ye,arg, and 5% t:her.eafter. This in:at only risk and iam id §peeuii-.ati=on. DIuri ing the f6r'wlo§ur@ cri§is ©f 2007 + 20;08, a in:ly :0.4% of ;From es went into foreclosure, €©mpar'c'-d to 4.6%.in th-e Boston housing -malrk:et . 1\ A Draft City of Denton Affordable Housing Strategic Toolkit Pancratia HaII Dormitory This adaptive reuse project transformed a vacant forrner college dormitory and board;ing school for Catholic girls into a 72-unit affordable multifa'mily project targeting farni ties with inco'mes between 30% to 80% A.Mi. Westside 'l;nvestrnent Part'neFrs purchased the 'b,uiid.ing, w,ithirl a 75-acre parcel horn Co;lo:rado Heights U'niversity. The effort was sponsored by a private d:eveloper, the 'D.enver Housing Authority, and the City and County of Denver. It was funded by 4% tax credits, bonds, FH A-back,ed loans, tax a:baternerlts, Hous.ing Authority.: Denver, CO iT&& Baudt=if US ,& ...=1 d _ :e+=. Draft City of Denton Affordable Housing Strategic Toolkit Strategy 5: Increase access to information and assistance Another method for addressing moderately priced housing shortages is by providing more information and guidance to low income families and to the existing landlord and development community. This includes eviction prevention services, a landlord engagement program forSection 8, and online access for developers to see available properties and programs to support more affordable housing development. Subsidized rental housing is concentrated in one area of the city, southeast Denton. To encourage more affordable housing options in other areas of the city, especiallythose nearjobs, retail services, neighborhood amenities and schools, Denton can work with the public housing authority to increase landlord participation in the Housing Choice Voucher Program. This program, which provides vouchers to low-income familiesto find rental housing in the private market, is limited to landlords willing to participate in the program. Unfortunately, many landlords choose notto participate due to unfounded fears regarding HUD-assisted families. To counteractthis perception, the program may include an initial assessment of voucher utilization and landlord perceptions, followed by the development of strategies that encourage orincentivize landlord participation in areas of opportunity. Similarly, an Eviction Prevention Program seeksto educate renters and landlords about laws and regulations surrounding landlord-tenant rights and provide services and funding support to mitigate potential evictions where possible . Very low-income renters face a high risk of homelessness, and it is farcostlier for the city and non-profits to re house a homeless family than to avoid the outcome in the first place. Most low-income renters work, but due to low wages compounded by unexpected costs (like a medical emergency orcar repair) or a sudden loss of income, they may face the risk of homelessness. Eviction prevention programs–which may include legal assistance, mediation programs, funding assistance, and case management services, can help residents avoid eviction and stay in their homes, thereby reducing homelessness. While a significant amount of emergencY Eviction Prevention funding due to COVIDexists now, it is not permanent funding. Homeless prevention programs will be an ongoing need for residents in the City. The need forfinancial rental assistance funds includes the ability to educate the public on the availability of the fundsand the capacity to administerthe program. Draft City of Denton Affordable Housing Strategic Toolkit MVA Guidance Transitional and distressed markets should be targeted for eviction prevention outreach and services because they have the largest shares of renters, and because evictions tend to be strongly associated with incomes. The median incomes in E, F, and G market ranged from about $27,cm to $42,cm, much lowerthan in the next market category of D, where the median income was $81,m. A web-based GIS parceltool can help guide acquisition and disposition of vacant land in steady, middle, and distressed markets, helping to differentiate strategies used by a land back for different markets, and by private sector developers Research has shown the positive effects on families of using housing choice vouchers to relocate to more opportune areas of a city, where there is not concentrated poverty. There is also extensive research documenting the difficulty voucher holders often face trying to secure units in areas of opportunity. The City and Housing Authority can work with landlords in B, C, and D marketsto make units available to voucher holders. Program Considerations Strong Steady (A )(Bl C) Transitional Landlord/Tenant Eviction Prevention Program GIS Parcel Tool & Vacant Land for Acquisition Priority Housing Development for LMI Households POTENTIAL Increase Housing I Areas of Choice Voucherusage I Opportunity Draft City of Denton Affordable Housing Strategic Toolkit Case Studies Cleveland Land Bank Tool The City of Cleveland launched an interactive web map showing the Land Bank’s more than 13,000 vacant panels in its inventory that are for sale to the public for new hOWIe co Inst,ruct'i.ons or as side yards to current horneowners. The m.alp :Ii:n:ks use;rs dliJrectly to the Land Ba,n:k app'l'ication s'u:brnissi:on portal. The rnap is u,p'Clated every two weeks l-§Cleveland hnd Bank Inventor:dewhnd I gis Land Bank Program Website App{icatiul Submisdon Portal Downloadable List of Lots Fhc1 ad(Ire= or pbce Address: 0 ABBa An CLWELAND, OHal 13 Appliadon StatusLeeal Front: 8Legel DeF}\: 132LeGal ABe [SOFT}: 1 ')57A&aired aaa: 12/3 1/1899. I'£f} PMWard 3 SDA?: ( 1 =Yes. G=No) 1 1. {!©lr©IBW a C B S n \\ ,. i ++ JH+, Cuyahoga Valley$ 1: Tremont Draft City of Denton Affordable Housing Strategic Toolkit PolicyMap Platform Additional context and data can help public sector decision makers and prospective The Po}icyMla,p platform includes thousands of indicators from the Census a;n;d ottr’er secondary ,data sources as weN as a cu§torn data io adimg feature for p© limIts ($'uc;h as parcels or iLltiTC projects) arId 8malty:tic layers sue:h as the MVA, POLICYM APpD tfl a IEPER M C\ Ma hvrnesa':93 pub’ic scbd Locdjon y ALlan: S car, Coun IF STale /;F Cr Ui Lang BOUNDARIES Demographics Incornes & Spending Housing Lending Quality of Life Economy Educalion e POIXTS (-)OX braDevloe Reinvtstrnart Funds 2019 Maket Value Analysis (NVA) otbvilUTX (DCI SCHfC€: FdnTfstTD£nt Fund o + uarc{r997b2ng} O (X)a Scxrcc HUD VariableYear 2019 +Type el C€selectalaInsufficient DataaA BaCaDaEaaG Search point data ! 'S a Po bItS lb + +;1 +BB££--!%; + R r - I Eubss 6 USData +- TaR,I, ' @Dr-bRavE f! -= i– -- -– Draft City of Denton Affordable Housing Strategic Toolkit Integrating Toolkit Strategies: Identifying Developable Lots Under Revised Zoning One illustration of how Denton can integrate toolkit strategies is identifying developable lots under potential revised zoning. Reinvestment identified vacant residential parcels that could be targeted for revised zoning and/or incentives to encourage the development of affordable housing, including small houses and cottages on infill parcels. Figure 4 below shows all vacant parcels zoned Rl, R2, R3, R4, R5, and R6, which are largely single-family residential designations with setback and lot coverage rules that would not currently allow for cluster development. Figure 4: Vacant Parcels with Rl, R2, R3, R4, R5, and R6 Zoning by MVA Category. Reinvestment Fund. Vacant Res Zoned Rl-R6 B • Residentiala Builder’s Lot@ Altogether there were 1,661 vacant parcels with one of these zoning designations. They were concentrated in D markets (653 parcels, 4CPX of the total), which this report notes are suitable for nearly all of the affordable housing tools: small homes, ADUs, and affordable housing incentives and overlays. C and F markets also have substantial supplies of these parcels; in C markets these parcels would be ideal for overlays and incentives while parcels in F markets could be targeted for small homes and low-income home ownership. Figure 5: Count of Parcels with Rl, R2, R3, R4, R5, and R6Zoning by MVA Category Market Value Analysis Count ofResidential Zoned Vacant Land Parcels Draft City of Denton Affordable Housing Strategic Toolkit Housing Production Goals The City of Denton has established preliminary goals for housing production using a combination of activities described in this toolkit. Together, these strategies have the potential to provide more than 1,700 units over the next ten years to households earning less than ICXP4 AMI. (See Figure 6). The goal number of units is based on the combined and coordinated activities that are projected to take place among the for-profit, non-profit, individual resident, and foundations once the City establishes the foundation for more moderately priced housing production. While the activities described here are not anticipated to meet the full need for moderately priced housing, it will address a substantial share of expected demand and decrease pressure on the public sector for more direct involvement in low-cost housing production. Figure 6: Housing Production Goals. SummarY – Unit Goals Over Next Ten Years LowVery Low Moderate Very LowLow AllAll(SO-80%)(8CFIOO%)(<50%)(<50%)(80-la0%)(50-80%) Need (2021-2030) Cluster Cottages, Small Home Infill ADUs 604 20 50 60 1,429 25 60 100 600 330 25 20 2,363 50 100 150 600 60 458 942 120 541 1,941 40 160 0 0Infill Development, Smaller Scale Rental UHTC Rental Developments {3*200) Non-profit CapacIty Building + Incentives for PSH Non.profit Capacity Building + Incentives Repair/Rehab/Infill Homeownership for Very Low & Low Income Households (PHA Partnership) Housing Trust Incentive Program Landlord Repair Program {11 units +$25,000) 0 60040 80 20 SO 0 0 150 0 80 160 50 0 100 SO 80 260 344 50 20 855 574 50 Employer Incentive Program (households not units)25 105 353 75 315 627 Expand Housing Choice Voucher Usage in Areas of Opportunity (new landlords, not units) Goal Total 100 1,210 1,153 0 530 1,411 95 235 110 431Remaining Need Source: Atria Planning Draft City of Denton Affordable Housing Strategic Toolkit Implementation Actions This section presents a proposed chronology of specific actions required to implement the strategies and activities of the toolkit, along with funding source options. Projected costs for each action are summar hdat the end of this section. Although the toolkit describes the strategies and actions as discrete pieces, each component is interrelated and mutually reinforcing of the other components. The proposed phasing of the programs reflects this. (See Figure x). For example, increasing staff capacity is a critical first step to providing the coordination of all activities, and developing the affordable housing overlays will support the targeted roll-out of multiple interventions including small home infill, landlord repairs, and incentive packages. ACTIONS YEAR # 1 s# 1 DescrIption 2l3l4l5l6l7l8l9 Ilo 1 1 0 llncrease Staff Capacity 2 3 2A I Affordable Housing Overlays 5.B 1 Interactive online mapping tool 4 1 4.B I Landlord Rental Maintenance Grant 5 5.C Denton Housing Authority Landlord Education Program 6 1 4.E 1 Land banking 7 1 3.A 1 Non+roth Capacity Building Grant 8.1 1 e 2.B/C } Financing/marketing & outreach 12-131 1.NB Develop Requirements for Small Home & A DU Program 14 5 .A 1 Eviction Prevention Program 15 1 4.A 1 Housing Trust 16 1 3D IHomeownership Program with housing authority/non-profit partner ,, ,,1 4.c ! Employee Homeownership Program ''-''’I 4.D I Down Payment Assistance Program Dletner3tat id Several of the proposed activities recommend the use of consultants who provide specialized, temporary expertise where long-term staffing is not required. Consultants provide the benefit of short-term investment by paying only forthe services needed white receiving a targeted service because a consultant team will be able to focus attention on the single task and not be diverted by urgent other tasks. Several strategies are complementary to existing City programs and can be expanded within those programs with adequate investment of time and resources. The program evaluation for some of these activities will include a full assessment to ensure the activity is within applicable law and assessed of any risks. Draft City of Denton Affordable Housing Strategic Toolkit YEAR 1 Action 1. Increase Staff Capacity An on-staff coordinator will need to oversee planning and implementation of the affordable housing strategies described in this toolkit. City staff already requested a position through a supplemental budget request for FY 2021-22. If funded, the Housing Services Coordinatorwill advise and coordinate delivery of a diverse set of affordable housing programs, services, and grants with other City departments, outskle agencIes, developers, and housing funders. A©ivity Det ive rab le nIne line One-Till@ /Ongoingh Ongoing Funding Hire one FT staff person to oversee Affordabte Housing Special Programs 4 Months General Fund Action 2. Consulting Services to Create Affordable Housing Overlay District .Y,_/{d Develop regulations and policy guidelines in affordable housing-related land use regarding zoning variance options for parking requirements, density bonuses, and buildingtypes, etc. i {}y#e-T'i:rw@ 9abit@Tim@ tir@ /Ongoing F©in;£ling Engage a zoning consultant,12 Months One-Time General Fund Foundations/ G rants CDBG/HOME TIF Draft City of Denton Affordable Housing Strategic Toolkit Action 3. Interactive online mapping tool M Secure consulting services (or can also be done in-house with dedicated time and expandedresources*) to develop a GIS web portal with parcel-level data combined with assessor records; staff can work with a real estate broker to identify properties for site control and owners interested in redevelopment and assist with negotiations with select properties to enter into option to purchase agreements with city or designated party for affordable housing development plus option payments. Activity Deliverable Funding*One-Time SourceTimeline /Ongoing IT Consulting Firm to develop GIS platform CDBGOne-time12 Months for parcel leveldata; real estate brokerage General Fundfees $50,000 Action 4. Rental Maintenance Grant S4.B : Launch a loan program for landlords who lease to low-income households for a repair and rehabilitation program targeting 1-4 unit properties to make needed improvements and preserve affordable housing. Action 5. Landlord Education Program :iB© Procure a consultant or use staff to work with the Housing Authority to develop a Housing Choice Voucher Program education campaign and online training modules to increase Housing Choice Voucher usage in Areas of Opportunity. Activity Deliverable One-TimeTimeline Funding+Source /Ongoing Public Housing Consultant $40,00012 Months I One-time PHA HUD Draft City of Denton Affordable Housing Strategic Toolkit YEAR 2 Action 6. Land banking S4.E: Establish a landbank that will reserve specific properties for affordable housing development. Activi{v Deliverable One-TimeHrn€iine /Ongoing Source CDBG Funding Funding pool appraisal for 10 properties and site control for 5 years. ($7,5CX) for appraisal and $25,cm for 5-year site control agreement, on average) 12 Months One-Time 5 Years $570, 000 Action 7. Non-Profit Capacity Building Grant FS . : i Implement a grant program designed to Increase the ability of local nonprofits to build andpreserve low-cost housing, which may Include nonprofits new to development as well as those who are interested in expanding their output. Activity Deliverable Orte-Time /'€)ngoing Source CDBG HUD Funding =(4 Grants x $25, m) * As alternative, for year, provide TA support for grant writing and business plan 6 Months One-Time $100,000 Draft City of Denton Affordable Housing Strategic Toolkit Action 8. Affordable Housing Incentive Package M Retain a real estate development technica1 advisor to develop and market incentive packagesto developers, work with developers and public and private funding sources to secure gap funding for priority projects, and structure projects for maximum city benefit. The advisor would be on call to support projects in pre-development as part of Action 9. Activity Deliverable One-Time SourceLe /Ongoing Action 9. Pre-Development Financing Program (i I Provide seed funding for a Revolving Loan Fund for pre-development costs including costs associated with LIHTC applications, environmental, and other requirements forfederaland state housing programs. Activity Deliverable CIne-Time SourceTimeline /Ongoing Funding Action 10. Create marketing materials and outreach to development community ' Design a strategy and create and disseminate marketing materials. Activity I)e'liverab:Ie Tirrl e,lime Q:tIe-TI iite /Omg©:i;ng So:u:r.c@ Funding* New website page and content; email 3 Months One-Time General Fund brochures, email blast to national development community, press releases,etc. *Could be done in-house Draft City of Denton Affordable Housing Strategic Toolkit Action 11. Staff training p,’ - } The city has invested in necessary affordable housing analysis with projected housing needs anddevelopment of tools for policy making, enhancing collaborative cross-sector partnerships, and determining resources to support affordable housing. Dedicatedteam training will help ensure successful implementation of approved strategies. Activity Deliverable One-Time SourceTimeline /Ongoing Funding One-Time General FundOne-day retreat for Community 3 Months Development and Planning/Land Use Staff to review new guidance and regulationsand build collaborative structure for mplementing programs $5,000 Action 12. Consulting Services to develop Small Home Communities Program :' ,q Engage a consultant to create guidelines for small home infill development and largeraffordabk housing infill development using "tiny" and "small" home structures, including requirements from a land use and zoning perspective to allow for small homes such as housing quality standard documentatbn, infrastructure requirements, landscape and drainage requirements, management and oversight, and creating a preapproved list of approved vendors and manufacturers.i '?{{%$:1ine One-Tir&e /aRM agActivity Be Source Funding =WW Engage consultant to create Small Home guidelines, General Fund Foundations G rants CDBG HOME Draft City of Denton Affordable Housing Strategic Toolkit Action 13. Consulting Services to develop Accessory Dwelling Units (ADU) Program ,„d Procure a consultant to develop financing models, relationships with contractors, and guidelinesfor the ADU program including requirements from a land use and zoning perspective to expand the program. This will include building relationships wIth manufacturers and local contractors for stock prototypes and relationships with local lenders for loan guarantees. A consultant can help structure program to include revenue sharing or another income-producing element for city. Activity Deliverable SourceOne-TirneTimeline /Ongoing Funding $100,000General FundEngage a consultant for detailed program 12 Months One-Time design and sustainable funding structure Foundations Grants CDBG/HOME Revenue Permit Fees Action 14. landlord/Tenant Eviction Prevention Program and Education Campaign M Provide grant funding to a non-profit who provides tenant protection services (e .g. legal aid) to develop and administer an eviction prevention program and emergency loan fund. FundingOne-TimeTinl'e !i.ne Source /Ongoing Activity Delive'-abie == G rant funding for eviction prevention program (2 years x $25,0CX)) plusemergency loan fund $100,000One-Time TDHCA6 Months Foundations Grants CDBG/HOME Draft City of Denton Affordable Housing Strategic Toolkit YEAR 3 Action 15. HousingTrust Incentive Program S4.A: Provide grant funds to non-profits fortechnical assistance in the creation of housing trusts. AaivityDeHverabt€Fund RIgOne-TinieTime line Soura /O'%©ing Action 16. Low Income Homeownership Program ! !a Procure a technical consultant with expertise in mixed finance (with PHA as developer or aDeveloper Solicitation through PHA) to develop a low- income homeownership model using infill development, prototype "Small Homes", Housing Choice Vouchers, and secured land . FurldiTimelineOne-Time Source /Ongoing Activity Deliverable Draft City of Denton Affordable Housing Strategic Toolkit Action 17. Consultant Services to Develop Employee Homeownership Program S4.Ci Engage consultant to develop he guidelines and funding plan for an employee homeownership program for full-time eligible employeesto purchase homes located in the City. Partnership with lender, legal documents for loan products, financialand compliance monitoring system for program. Also partner with HUD homeownership counseling services. ACt'ivity Deliverable One-T:irwe SourceTimeline /Ongoing Funding $200,000General FundHire consultant to develop program 24 Months One-Time guidelines, secure lender partner, draft Universities3 Yearsmonitoring requirements, Action 18. Down Payment Assistance Program S4,D Similar program to the City's Homebuyer Assistance Program (HAP) but with a different sourus of funding, the program provides funding assistance for down payment towards home ownership purchase. Activity Deliverable Funding Fundingfor ICD homes (§10,CXX) down payment plus 3.5% closing costs; down payment can be reimbursed at time of resale) n 12 Months I One-Time CDBG 5 Years $1, 850,000 Draft City of Denton Affordable Housing Strategic Toolkit Budget Estimates Laying the groundwork for private sector investment in moderately priced housing will require city staff and supporting consultants to design the parameters, design guidance, compliance and monitoring procedures, and any marketing and outreach that may be required. This up-front investment of public sector resources may be a one-time expenditure, with the expectation that once the program is established, other funding sources ( private, charitable and state/federal) will be utilized by the developing partners to create the target housing. The table below present the estimated costs of each action along with the type of expenditure (one-time or ongoing),estimated timeline for implementation, and potential funding sources. These estimates are subject to change as city staff further develop the programs and build a better understanding of the requirements for implementation. ActivityNo. Strategy I II A Strategy 2 2.B 2,C Strategy 3 3.A 3.8 ne-time/PossibleBudgetTimelineActivity Description ngolrlgimplement SourcesEstimate Infill Increase infill development using vacant land and repurposing lots and buildingsHI Zoning Relief,Variances & Incentive Package . Provide zoning relief and variances to incentjyjze target development=1 Increase Capacity & Resources - Expand the capacity of the building community and resources available to themin n== aFe +Funding sources may include HUD - CDBG, HOME, HousingTrust, General Funds (GF), Other federal, sute, local or private foundations and grant 0 Increase Staff Capacity Immediately $85.Qaa 4 ma Ongoing GF Consulting Services to develop Small Home Communities Program W,000 1 2 mo. One-time GF, HUD. Other Consulting Services to develop ADU Program $ i GO,000 1 2 mo. One.time GF. Other 2 A Consulting Services to Create Affordable Housing Overlay District $75,acn 1 2 mo. One-time GF, HUD. Other Crute marketing materials and outreach to development community $ 1 aw) 3 mo. 3 Years GF SS.(X>0 3 mo. One-time GFSuff training Non-ProFit Capacity Building Grant (4 gnnu/$25.000)$ 1 00,000 6 mo. I Year Developer Affordable Housing Incentive Package 1 8 mo. 3 Years PrbDwelopnnnt Financing Program $500,acn 1 8 mo. 3 Years 3.D Low Income Homeownership Program w/DHA, Housing Partner $400.O€X) 24 mo. 3 Years HUD, Other Draft City of Denton Affordable Housing Strategic Toolkit ActivityNo.Activity Description Budget Timeline One-time/Estimate Implement Ongoing +Funding sources may include HUD . CDBG. HOME, HousingTrust Genera1 Funds (GF), Other federal, state. local or private foundations and grant. Strategy 4 Preservation - Preserve existing housing affordability Housing Trust Incentive Program Landlord Rental Maintenance Grant City of Denton Emplqree Homeownership Program Employee Homeownership Down Payment AssisQnce Program Land Banking She Control for Select Properties (Small and Large Projects) $ 1 00,000 $2,500,000 $200.000 $ 1 ,850,000 $570.000 6 mo. 1 2 mo. 24 mo. 1 0 Years 12rno‘ 3 Years 5 Years One-time Ongoing 5 Years GF, HUD. Other HUD, Other GF, Other Revolving Loan GF, HUD, Other Suaegy 5 p=n=;a:::n=s to InformatIon - PH)wide education and infom]ation tQ aid in development of Iow- and moderately S.A Landlord/Tenant Eviction Prevention Program & Education Campaign GIS PropertyTool for Housing and Economic Development Property analysis Platform DHA Landlord Education Progrlm for Housing ChoiceVoucher Participation in Areas of Opportunity $ 1 00.000 $50,000 6 mo. 1 2 mo. Ongoing Other HUD, GF+in-house5.B S.C $40,000 12 mo Ongoing HUD, Other Draft City of Denton Affordable Housing Strategic Toolkit How do these Activities Work Together? The toolkit’s activities are not stand-alone actions but rather should work together as appropriate for each real estate deal or housing program. Indeed, a developer may layer ten or more actIvities for one project. Following is a hypothetical scenariothat illustrates how this might work. Hypothetical Project: Sunrise Cottages i Draft City of Denton Affordable Housing Strategic Toolkit A regional non-profit affordable housing developerwould like to build a cluster of 40 cottages to provkie homeownership opportunities to households earning less than 5(M of Area Median Income (roughV $40,m per yearfor a family of three) . The non-profit developer searches for available vacant parcels in the city using an online GIS tool and finds an ideal site currently prioritized by the city for affordabb housing. The non-profit developer also partners with a university, who owns the land and will provide a ground lease to the non-profit in exchange for giving priority to the university’s income-qualifying workers (e.g. university staff in food se rvices, hospitalemployees, maintenance staff). The development will use a modular "small home" model that is pre-approved by the City, lowering construction costs, and will follow the design standards developed for Small Home Communities within the Affordable HousingOverlay. The homes will be designed as two U-shaped "cottage” or “bungalow" configurations. Each home will be approximately 800 square feet, with two bedrooms, and priced between $130,m - $150,m, with private rear patios and a shared front greenspace . Because the site falls within an Affordable Housing Overlay District, it will receive priority assistance from the city’s Planning and Community Development Departments, who will work in tandem to ensure the project moves forward . This includes access to a predevelopment loan to conduct due diligence, with loan payable at time of closing, and additional funding for infrastructure costs. Staff will also provide ongoing technical assistance to the project, including additional variances if needed. Draft City of Denton Affordable Housing Strategic Toolkit The developer has partnered with another local non-profit, who has expanded its capacity under the city’s capacity building grant, and now offers HUD homebuying counseling services for low and moderate income families. Prospective families will be required to attend homeowner counseling services in exchange for a down payment and closing cost assistance grant, along with favorable loan terms, using a city-funded revolving loan fund for affordable homeownership. To ensure long-term affordability, the homes will also be subject to capped appreciation of 5% annually undera Housing Trust. Activities Used : Identify Sites for Project - GIS Property Tool Acquire Site Control of university-owned site - Employer-Assisted Housing Program Conduct Due Diligence on Property - Pre-Development Financing Program Save on construction using alternative housing models - Small Homes Communities Program Allow for more units per site if an affordable housing project - Affordable Housing Overlay District Work with non-profit to provide homebuye r counseling - Non-Profit Capacity Building Grant Provide grant assistance to homeownersh ip – Down payment and Closing Cost Assistance Ensure long-term affordability of homes- Housing Trust Fund Draft City of Denton Affordable Housing Strategic Toolkit Conclusion The overarching goal of this plan is to breaksilos, worktogether, and free up capacity fordevelopment using flexibility in funding, land use, building models and partners. This plan is a living document that reflectsthis goal and from which the city and its partners can build. Moving forward, city staff within Denton’s Department of Development Services – Planning, Community Services, Economic Development, and Finance will refine these tools and incorporate them into daily operations once feasible. Once the tools are in place, city staff will conduct annual, biannual, and five- year reviews to track progress and revise programs, or add new programs as housing needs and resources change . There is also a need for regular and ongoing “temperature checks" on market conditions (home prices, rents, building activity) to see if the private market is increasing supply further for low and moderate-income households, or if there are non-profit partners supporting the mission. If and when the situation arises, the City will revise, eliminate, or add new activities to reach long-term housing goals. Draft City of Denton Affordable Housing Strategic Toolkit 11 REINVESTMENTFUNDiDENTON Draft City of Denton Affordable Housing Strategic Toolkit