2011 NC Planning Conference Development Recovery Incentives that Support Sustainable Development Asheville, NC Panel Discussion Shannon Tuch - Planning & Development Jeff Staudinger - Community Development Robert Griffin - Building Safety

Objectives & Goals Fulfill City Council’s Strategic Goals Affordable Fiscal Responsibility Job growth & Community Development Green & Sustainable Multi-modal Transportation Fulfill goals and objectives of numerous adopted plans Comprehensive Plan Affordable Housing Plan Wilma Dykeman Riverway Plan Economic Development

Economic Forces & Response 2008 – The economy collapses and lending markets freeze → Leads to a dramatic drop in development activity Permit Extension Act keeps permits alive Planning functions shift from development activity to long range planning Focus → How to support and incentivize development (Not just any development though...)

Strategies Grants Low Interest Loans Cost Sharing for Public Infrastructure Fee Rebates Increased Density Strategies focused on sustainable development projects only!

Grants & Loans Jeff Staudinger Director of Community Development City of Asheville

Land Use Incentive Grants Required elements Energy Star Certification Assume all legal costs if challenged 20% equity participation by party requesting incentive The proposed development must consist of two or more dwelling units Inside city limits, within ¼ mile of the following major highways to the end of the City’s corporate limits

Sustainability Area - Map

Land Use Incentive Grants Green Building/ Energy: Energy Star Certified 5 HB Silver 10 LEED Silver or HB Gold 20 LEED Gold or HB Platinum 30 LEED Platinum40 Public Benefit Points

Land Use Incentive Grants Affordable Housing Must agree to 10 year affordability, with rents at 80% of area medium income: 10%+ affordable 10 20%+ affordable 20 30%+ affordable 30 40%+ affordable 40 Public Benefit Points

Land Use Incentive Grants Workforce Housing Must agree to 10 year affordability criteria for rents at 120% of area medium income: 25%+ workforce 5 50%+ workforce10 75%+ workforce 15 Public Benefit Points

Land Use Incentive Grants Public Benefit Points Family 100% AMI Max rents at 80% AMI Max rents at120% AMI 0 BR139,000 $600 1,110 1 BR241,775 $650 1,176 2 BR344,550 $780 1,242 3 BR557,925 1,627 4 BR664,600 1,792

Land Use Incentive Grants Mixed Use and Transit Orientation Includes a minimum 20% non-residential 5 Within the Sustainability Bonus area 10 Brownfield Redevelopment 15 Public Benefit Points

Land Use Incentive Grants This policy provides that every 10 points can earn one year of economic incentive. Equivalent to city property taxes in excess of currently assessed taxes for one year annually applied. Dated from the date of release of all occupancy permits and certification of all green building/energy standards designated for the project. Formula

Land Use Incentive Grants Every 10 points can also earn a 10% reduction in the following fees and charges: Zoning Permit, Building Permit, Driveway Permit, Grading Permit, Plan review fees and Water service connection fee. This reduction is in addition to the existing fees rebated for affordable housing projects. Affordable housing projects eligible for the 50% fee waiver are not eligible for additional fee waivers for points garnered for housing affordability, although they can benefit from the “green” additional points Formula

Land Use Incentive Grants Proposed mixed use/apartment project Riverside Dr. 200 apartments (180,000 square feet) 40,000 square feet commercial (office and retail) Gold LEED 10% (20 units) “affordable” housing 25% (50 units) “workforce” housing Example

Land Use Incentive Grants Threshold:  Minimum Energy Star  Eligible Area  20% Equity  Two or More Units Example

Land Use Incentive Grants Green/Energy Benefit 30 points: Gold LEED Housing Benefit 15 Points: 10% affordable 25% workforce Mixed Use/Transportation Benefit 10 points: 20% non-residential Sustainability Bonus Area Total Points: 55 Example

Land Use Incentive Grants Pre-development Tax Value: $250,000 Post-development Tax value: $25,000,000 Pre-Development Annual City Tax: $1,050 Post-development Annual City Tax: $105,000 Grant: $103,950 per year for 5.5 years: $571,725 Example

Land Use Incentive Grants Permit Fees: $250,000 Grant: 55% of eligible fees = $137,500 Example

Land Use Incentive Grants Total grant = $709, % of development costs Example

Affordable Housing Trust Fund Created in 2000 $7.7 million loaned 751 affordable rental and homeownership units funded (672 Rental; 79 Homeownership) 617 units have been completed Basic Stats

Affordable Housing Trust Fund $600,000 annual investment in prior years $300,000 annual investment in each of past two years due to budget constraints In FY , closed $600,000 in loans, for the production of 72 affordable units.

Affordable Housing Trust Fund Restructured in 2010 Rental Housing highest priority Single-family housing limited to construction loans only

Affordable Housing Trust Fund Current Goals & Priorities: Rental housing Lower per-unit subsidies Final planning and zoning approval One-bedroom and efficiency (studio) units Multi-family properties Projects along transit corridors Higher density and large-scale developments

Affordable Housing Trust Fund Eligibility: A minimum of 20% of the total project units must be affordable Permanent Financing- The required period of affordability for all long term financing will be directly proportional to the loan term (i.e. Developers requesting a 20 year loan term will be required to keep rents affordable for 20 years).

Affordable Housing Trust Fund Eligibility:

Affordable Housing Trust Fund Terms: Loans are fully amortizing except: Loans for rental housing restricted to families earning less than 60% of the area median income, and with rents affordable to that population, may be amortized at 0.00% interest or interest-only at 2% with principal deferred for up to 20 years. Interest on construction loans may be deferred until the loan principal is due.

Affordable Housing Trust Fund Terms: All permanent financing for rental housing will be in the form of secured loans for a term up to thirty (30) years. The Housing Trust Fund will not make grants, forgivable loans, or indefinitely deferred loans. All construction loans will be due and payable 24 months from the date of closing.

Affordable Housing Trust Fund Terms:

Affordable Housing Trust Fund Housing Trust Fund website

Cost Sharing & Rebates Robert Griffin Director of Building Safety & Development Services Center City of Asheville

Public Infrastructure: Water Two Options for Participation Option 1 50% rebate of water connection fees for “Green” projects Tap & Meter for single family homes Meter for Commercial projects (fees vary based on size of meter)

Public Infrastructure: Water Option 1 Example: Single Family - Tap & Meter = $2, Total rebate = $1, Commercial 2” drop-in meter = $9, Total rebate = $4,906.90

Public Infrastructure: Water Option 2 – Cost sharing for new public water line Infrastructure Water is an enterprise fund and water revenue must be reinvested in water infrastructure $200,000 of water fund money set aside every year, projects must compete for available funds Development must meet 80 points from evaluation form Must include 5 or more residential units Minimum 20 year investment payback 50% of infrastructure cost or $100,000, which ever is less

Public Infrastructure: Water Option 2 Example: New 70 unit apartment building All units are “affordable”, scores 90 points on evaluation form Requires new water line extension from main road along new road New line estimated cost is $220,000 City participation = $100,000

Permit Rebates Two Types of Rebates Offered “Green” Rebates & “Affordable” Rebates

Permit Rebates Green Rebates Upon issue of CO and verification: Healthy Built Home = $100 Energy Star Rating = $100 Geo Thermal installation = $50 Solar installation = $50 Wind Generator installation = $50 Storm water collection for yard sprinkler = $50 Rebates are cumulative (withhold $75 for processing)

Permit Rebates Affordable Housing Rebates Fees are paid in full with 50% rebated upon project completion (CO) & verification: Applies to For-sale, Rental, and Rehab projects Includes Building, Engineering, Sewer, Water, and Zoning fees

Permit Rebates Affordable Housing Rebates – For Sale Units Must meet NC State Building Code ( manufactured housing included only if it is attached to a permanent foundation and titled as real property) Sale Price Restrictions: 0 BR$115,000 1 BR$125,000 2 BR$145,000 3 BR$160,000 4BR$170,000 Must provide copy of settlement statement and appraisal

Permit Rebates Affordable Housing Rebates – Rental Units Can be single family or multi-family Set aside for tenants below 80% AMI Requires affordability for a minimum of 10 years (monitored through a local, state or federal program)

Permit Rebates Affordable Housing Rebates – Rehab Units Applies only to single family or multi-family All single family units must be verified to belong to those with an income below 80% AMI Multi-family structures must include a minimum of 3 units that are occupied by tenants with an income below 80% AMI

Density Bonus Shannon Tuch Assistant Director of Planning & Development City of Asheville

Density Bonus Named: “Sustainable Development Projects” Offers increased density in exchange for affordable and/or green building. Changed from a Conditional Use Permit application to a Use-by-right application. Has eligibility requirements and includes mandatory and optional elements.

Density Bonus Negotiated Process Worked closely with the Mayor’s task force on Affordable Housing to develop concept and standards Draft is shared with other stakeholders (Coalition of Asheville Neighborhoods) Public hearing process provided input from CAN and the larger community – altered final product

Density Bonus Eligibility Requirements Project site must be located within 1/8 mile of key transportation corridors. Must be a minimum of 5 units & must be energy star certified

Density Bonus - Map

Density Bonus – 1 st Draft Map

Sustainability Area - Map

Density Bonus Mandatory elements Good Neighbor Agreement Design compatibility standards Deed restrictions on affordable units Certification of LEED or Healthy Built units Parking Building orientation & design Pedestrian orientation/multi-modal features

Density Bonus Optional Elements Projects may be affordable and/or green Affordable: points assigned based on features of the project Green: based on LEED or NC Healthy Built (NCHB)

Density Bonus Affordable: points = 20% density bonus points = 50% density bonus 100+ points = 100% density bonus

Density Bonus Green Building: NCHB Silver = 20% density bonus LEED Silver or NCHB Gold = 40% density bonus LEED Gold or NCHB Platinum = 60% density bonus LEED Platinum = 80% density bonus

Density Bonus Affordable Housing & Green Building For an affordable housing project, an additional 10% may be added to the affordable housing density bonus for each level of NC Healthy Built or the corresponding LEED Certification achieved. Green Building & Affordable Housing For a green building project, an additional matching percentage of bonus may be added for the percentage of affordable units included in the project.

Density Bonus Other Development Incentives – flexibility for: Lot width Lot size Setbacks Parking requirements Open space requirements Building height Waivers from public hearing process

Summary Five Separate Incentives Can be used individually or in combination with each other All support sustainable initiatives and goals All have a direct economic impact

Summary City of Asheville’s Website ashevillenc.gov

Summary Questions? Jeff Staudinger Community Development (828) Robert Griffin Building Safety & Development Services (828) Shannon Tuch Planning & Development (828)