N-FBC Affordable Housing Amendments: 1. Area Median Income Limits - PowerPoint PPT Presentation

N-FBC Affordable Housing Amendments: 1. Area Median Income Limits for Ownership Units 2. Cash Contribution for Commercial Uses NAIOP February 26, 2020 1

Background - Guidance for Housing Ownership Affordable Housing Master Plan • Goal 1.2.1 - Incentivize the production of moderately- priced ownership housing through land use and zoning policy • AHMP recommends encouraging the production of 80% to 120% Area Median Income (AMI) units 2

Area Median Income (AMI) – Current Levels (2019) Household 60% of 80% of 100% of 120% of Size Median Median Median Median 1-Person $51,000 $68,000 $85,000 $102,000 2-Person $58,260 $77,680 $97,100 $116,520 3-Person $65,520 $87,360 $109,200 $121,300 4-Person $72,780 $97,040 $121,300 $145,560 5-Person $78,660 104,880 $131,100 $157,320 Source: Median Income as adjusted by US Department of Housing and Urban Development 3

Existing N-FBC Requirements Consistent AMI limits for Rental and Ownership Housing • Affordable units up to 60% AMI • 30-Year term • Alternative AMI options dependent on site location in East or West Columbia Pike 4

Challenges of Limiting Affordable Units to 60% AMI For Ownership Units: Limited pool of eligible purchasers • Tight mortgage credit requirements • Ability to keep pace with yearly increases in condo fees, • utilities, taxes, etc. Ability to pay for unforeseen maintenance/repair expenses • 5

Challenges of Limiting Affordable Units to 60% AMI Example: 3-person Household with income of $65,520 (60% AMI): $65,520/12 months = $5,460 monthly gross income • Assumed Debt: • Car loans and credit cards: $500/month • Student loans: $300/month • Mortgage for 2br condo in Arlington: $1,800/month • (includes condo fees, taxes, etc.) Total Debt: $2,600/month • Resulting Debt-to-Income Ratio (DTI): $2,600/$5,460 = 48% • This household would not qualify for a traditional mortgage • 6

N-FBC (Ownership) Development Projects Pike Development History (2003-2019) Carver Homes • 19 total developments approved • (Sold 2017) Over 3,400 total residential units • Of the 3,400 total residential units, • 6 ADUs up to 60% AMI • only 150 were ownership ( or 4%) Neighborhoods FBC Project Summary 4 total developments approved • Total of 885 residential units • 468 market rate units • 417 affordable units • Of the 417 total affordable units, • only 6 were ownership ( or 1% ) No N-FBC condominium developments anticipated though 2020 • 7

Past FBC AWG Feedback Staff met with the FBC AWG in June 2017 to discuss an earlier version of this amendment: • Original recommendation for ownership units included: • At least half of the units to be up to 100% AMI; and • The remainder to be up to 120% AMI • FBC AWG expressed concerns the proposal limited access to affordable units earning up to 80% AMI • Staff, at the time, was asked to consider lowering the range to capture residents from the lower AMI levels 8

(New) Proposed Affordability Tiers for Ownership Units No less than 1/3 of required units shall be affordable to households earning • up to 80% AMI, no less than 1/3 shall be affordable up to 100% AMI, and the remainder shall be affordable up to 120% AMI. If there is only one required unit, it shall be affordable up to 80% AMI. • If there are two required units, one shall be affordable up to 80% AMI and • one shall be affordable up to 100% AMI. Hypothetical Examples Utilizing This Tiered Approach Total Number of Units Up to Units Up to Units Up to Affordable Units Required 80% AMI 100% AMI 120% AMI 1 1 0 0 2 1 1 0 3 1 1 1 4 2 2 0 5 2 2 1 6 2 2 2 9

(New) Proposed Affordability Tiers for Ownership Units Hypothetical example assuming recent N-FBC project in Arlington View was proposed as market rate condos : Existing Units: 33 • Proposed Units: 77 • “Net Gain” of Density: 44 units • Minimum Affordable Requirement: • 2.3 factor applied to 44 unit ‘net gain’ • Minimum of 11 affordable units • Existing N-FBC Requirements: All 11 units would be at 60% AMI levels • Proposed N-FBC Requirements: 4 units would be at 80% AMI • 4 units would be at 100% AMI • 3 units would be at 120% AMI • 10

Recommendations for Ownership Units Establish equally tiered affordability levels up to 80% AMI, • 100% AMI, and 120% AMI Extend affordability term from 30 years to "life and use of the • existing improvement as a residentialdwelling unit" Affordable OWNERSHIP Units Existing N-FBC Proposed N-FBC Tier at up to 80% AMI, AMI Level 60% AMI 100% AMI & up to 120% AMI For the life and use of Affordability Term 30 Years the existing improvement as a residential dwelling unit Affordable RENTAL Units Existing N-FBC Proposed N-FBC AMI Level 60% AMI 60% AMI (no change) Affordability Term 30 Years 30 Years (no change) 11

Cash Contribution for Commercial Uses 12

Background - Commercial Cash Contribution The N-FBC affordable housing requirement currently does • not address commercial development scenarios. Recent proposal for a site in Foxcroft Heights contemplated a • hotel development (among others) There are seven sites within the N-FBC Revitalization District • that could redevelop as commercial uses. Designated as “Urban Mixed Use” or “Urban Storefront” • frontages in the Building Envelope Standards 13

Recommendation – Commercial Cash Contribution When commercial uses are proposed, the same commercial cash • calculation as required in Site Plan projects - Zoning Ordinance section 15.5.8.C.4 (“base ordinance calculation”) should apply. 2019 Cash Contribution Rates* are: • $2.01/SF of Gross Floor Area (GFA) for the first 1.0 Floor Area Ratio (FAR); • $5.36/SF of GFA above 1.0 FAR. • For mixed-use residential projects, the existing affordable (on-site) • unit contribution would apply to the residential portions of the development. The cash contribution will apply only to the commercial portion of the development. A cash contribution will not be allowed for residential uses. • * Indexed to the Consumer Price Index for Housing in the Washington-Arlington-Alexandria MSA. 14

Recommendation – Commercial Cash Contribution Hypothetical example using 53,300 sq. ft. site in Foxcroft Heights, designated with a “Urban Mixed Use” BES frontage, and currently occupied by 12 residential units Existing aerial image Scenario 1: Mixed-Use Project Hypothetical Foxcroft Heights site on 30,000 sq. ft. of retail & 140 residential units • Orme St and Columbia Pike 39 on-site affordable units required • $60,300 cash contribution required • Scenario 2: Hotel Project 161,000 sq. ft. of commercial space • No on-site affordable units • $684,400 cash contribution • Neighborhoods Area Plan Rendering 15

Next Steps February 2020: Staff work on text amendment language • March 2020: Zoning Committee of the Planning • Commission (ZOCO) and Housing Commission (info item) April 2020: Request to Advertise • May 2020: Planning Commission, Housing Commission • (action item), and County Board meeting 16

Backup Slides 17

Mixed-Use Frontages - NFBC Western Subarea Regulating Plan 18

Mixed-Use Frontages - NFBC Central Subarea Regulating Plan 19

Mixed-Use Frontages - NFBC Eastern Subarea Regulating Plan 20