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Fort Collins Inclusionary Zoning and Linkage Fees Position Paper from NoCo HBA

NoCo HBA’s Guiding Principles


1. Fort Collin’s lack of affordable housing affects our entire community. It’s a deep-rooted, complex issue that will take many, diverse solutions from stakeholders including residents, visitors, municipalities/government, water/utility suppliers, business owners and the homebuilding industry.


2. New construction can’t be the only source of affordable housing. New construction is the most expensive housing stock available due to price inflation, increased regulations/fees, labor increases and more. The only way new construction becomes affordable is when these variables are artificially manipulated to defy market norms to reduce market costs.


3. Inclusionary zoning has far-reaching impacts and unintended consequences due to the lack of planning, oversight, management and enforcement upfront by all stakeholders, but primarily by the municipalities who are mandating the practice. Inclusionary zoning is rarely proven effective and productive. In fact, it can worsen the shortage of affordable housing. It often provides far less affordable housing and in a more cumbersome way than many of the traditional affordable housing programs.


4. While inclusionary zoning and/or fees-in-lieu may work in some markets to provide affordable housing, they are often paired with other tools to allow success. In the Fort Collins market, this mandate may provide some housing for lower AMI residents, at the expense of the remaining missing-middle, market-rate housing in the development. The ripple effect would be less move-ups, and less availability of lower-rate housing. NoCo HBA advises investigating all available tools and options available, and not solely relying upon inclusionary zoning and fees-in-lieu of inclusionary zoning.


5. Increasing affordable housing is an economic benefit to citizens, employers and municipalities. Development infeasibility results in hundreds of millions of lost tax revenue, qualified employees and a strong local economy. Denying affordable housing is denying a thriving community in all aspects.


Tools for Consideration/Recommendations


1. Development Tools


A. Occupancy limits could positively impact the utilization of the existing inventory if the city would look at restructuring or rewriting the current code. The current occupancy limit negatively impacts lower-income citizens that don’t have any other choices in living options, including families, senior citizens and young professionals.


B. Opportunity zones in unique areas will enable the development of mixed-use nodes across the city over time. These nodes can support affordable housing in clustered development.


C. Accessory dwelling units, especially in urban areas that support walkability.


D. Density bonuses and urban development patterns.


E. Metro districts with affordability goals across the entire spectrum of the need.


2. Funding Sources


A. Shared funding sources like sales tax that is shared across existing, future and commuting population.


B. Continued use of the land bank system.


C. Property tax on existing residents.


D. Seeking taxpayer support would be a more reliable, sustainable and impactful revenue generator for affordable housing when compared to fees based on a diminishing volume of new construction/development.


E. Commercial linkage fees and residential linkage fees or offsets by providing affordable housing by other means.


F. Maximize federal and state funding sources like low income tax credits, private activity bond allocation, local HOME/CDBG, tax-increment financing.


G. Recalculating the Capital Improvement Fee stacking to encourage the construction of smaller units, thus allowing the better utilization of land.


3. City Assistance


A. The current building defect laws and regulations have killed the construction of new condominium complexes since 2008. One possible option would be for the city to self-insure and underwrite the next housing catalysis project, potentially reducing the liability insurance cost of the project by several thousand dollars per unit. The liability is cut on the housing catalysis project since there will only allow for owner-occupied units to reduce the risk of investor purchasing multiple units with the intent to find defects.


B. Development of a Land Trust Partnership.


C. Reduce impact fees for affordable units and/or delay payments for impact fees that allow the projects to pay the fees out of cash flow.


D. Create a “managed pipeline.” The City could require any project that was chasing resources for which the City had control to come through the City, and the City could then order the projects accordingly.


E. Prioritization of affordable projects in the development review process speeding up time to market.


F. Inclusion of city land assets that can enable mixed-use development and inclusionary affordable housing and service.


G. Reduce parking requirements.


H. Incentives for smaller footprint space efficient housing.


I. Creating a city insurance program to help offset the risk of attached housing.


J. The city recently reduced the water pressure down to 0.8 PSI for interior fixtures for new builds it would make sense to stagger the water tap costs for small units that would naturally use less water than the current standard used to calculate usage.


Conclusion


Fort Collins City Council has directed city staff to add inclusionary zoning and linkage fees to all new developments in the City of Fort Collins. We believe this should be part of the discussion to provide more affordable housing, but we also believe strongly that this should not be the only items discussed.


NoCo HBA believes additional development tools are necessary, like revised occupancy limits on current homes, opportunity zones for higher density development as well as metro districts with affordability goals.


We believe the city should look at additional funding sources beyond development like sales tax and land bank state and federal funding for low income. The City of Fort Collins has the ability to add to the discussion as well through land trusts and building defect laws.

Before solely placing the burden on builders and developers, there needs to be several discussions to find the best way to move forward with an effective and efficient plan to provide affordable housing.

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Phone970.686.2798  Emailinfo@nocohba.com

1907 North Boise Avenue Unit 1, Loveland, Colorado 80538

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