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Remarks, Press Conference, Affordable Housing, 8.18.2016

Remarks, Press Conference, Affordable Housing
Bloomington Mayor John Hamilton
City Council Chambers, August 18, 2016


Bloomington is a diverse community. As I've said many times, it is essential that our great community work for people from all walks of life. That whatever your economic circumstances, your age, your interests, your abilities, this community is a welcoming and wonderful place to live, work, study, raise a family, retire, you name it.

Affordable housing is a fundamental component of that kind of community. A person or family must be able to own or rent a safe, decent home in order to enjoy our community. We know we have some challenges with that affordability in Bloomington. We're one of the most expensive rental markets in the state, with downtown monthly rents as high as $1,000 or $1,200 for a one-bedroom unit, and occupancy rates of 95% or higher on average. Our average home price in the city is $156,000, which is 33% higher than the Indiana average. According to Zillow, city home prices rose 7.3% last year versus a 0.3% reduction in Indiana average home prices.

Of course, a strong real estate market is a very good thing in many ways, showing interest that people have in investing and living here, and confidence in the strength of the future here. But a downside of that strength and confidence is affordability. That's what we're here to talk about today.

When I talk about 'Affordable Housing' I'm referring to housing serving those whose income ranges from very low up to 130% of Bloomington's median household income of a little under $30,000 (adjusted for family size), and it includes all types of housing, ownership and rental, and from special needs to workforce to senior housing.

We have worked hard in my administration since January to make progress in enhancing housing opportunities for lower and middle-income residents as well as special needs residents. I want to thank the terrific team of folks inside City Hall who have worked so hard to make this progress happen, including Doris Sims, Director of Housing and Neighborhood Development, Linda Williamson, Director of Economic and Sustainable Development, Christy Langley, Director of Planning and Transportation, and all their staff, and many others in city government. Also let me thank the folks outside City Hall, the nonprofits, the developers, the advisers, architects and more, whom I can't mention all by name, but in all these projects, who helped make this progress. I'll itemize a few of the significant steps forward over the past 8 months.

  1. The City is finalizing the agreement with Pedcor Investments to develop a LEED certified multifamily housing complex for low-income eligible residents in the Trades District, providing around 30 residences for low income households earning 50% or less of the area median income, and protecting affordability for at least 30 years and perhaps longer. Groundbreaking is expected in calendar year 2017

  2. In 2016, the city has continued its commitment to home ownership by providing Habitat for Humanity $120,000 in HOME funds to purchase two lots and construction dollars to build new homes for 2 low income families.

  3. To increase affordable workforce housing, the administration cooperated with HM Mac Development Corporation to offer some tax abatement in their recently approved development on the site of the Chocolate Moose to provide 5 units of permanently affordable workforce housing, pending final approval from the City Council. Groundbreaking is expected yet this calendar year.

  4. The administration negotiated and has approved a plan by Evergreen Partners to build on the southeast side of the City a low-income assisted living housing development for special needs seniors, with 115 units for individuals with incomes at or below 60% of area median income who need assisted care. Supported again by some tax abatement, groundbreaking is expected in the fall of 2016.

  5. The administration has committed $400,000 in HOME funds to assist Life Designs with building Crawford II, which is expected to break ground in 2017. This will add 35 additional permanent supportive housing units for individuals experiencing chronic homelessness accompanied with a disability.

  6. Lastly, the owners of the current Dunnhill Apartments at 17th and Dunn Streets are seeking to redevelop their entire parcel of property and significantly increase the overall density at the site beyond current zoning. The developer has agreed to provide financial support toward the development of affordable housing projects in other areas of the City, at more than $1,300 per new bedroom constructed, up to a total of one million dollars, deposited into a to be established new City fund designed for the purpose of providing affordable housing in the City's jurisdiction.

I believe all of these efforts have started to steer our city toward more affordable housing, and that's a good thing.

In the longer term, our basic housing strategies will be incorporated in the Comprehensive Master Plan (CMP) and the Unified Development Ordinance (UDO), as they are discussed, reviewed, and voted on in the coming months, with review by the Plan Commission and the City Council. These documents are designed to steer the City's course for the built environment with a twenty-five year horizon, and will include specific goals, policies and programs for enhancing affordable housing supply. This process is central, important, and I strongly encourage all people of interest to participate actively.

That process is also time consuming. I expect the full new UDO may take 12 months or more to be put into place. What I want to share today is some of the interim steps we should take, in my view, in the shorter term, to keep up our momentum and indeed to help inform the CMP and UDO processes with more information.

Interim Pilot Steps: In the short term, while we work through the public input and approval process for the Comprehensive Master Plan the administration will focus on pilot projects with limited numbers of housing units and/or in limited geographical areas that will allow us to experiment with solutions at a modest scale and refine our current incentives to be able to do more in the area of affordable housing. I also am announcing today the plan to convene a Task Force to advise and steer development of affordable housing approaches in connection with the Plan Commission and Common Council. So to the details:

  1. Accessory Dwelling Units. Accessory dwelling units (ADUs) are a simple and old concept - a second smaller dwelling on the same grounds as a primary residence. Also known as 'granny flats,' 'in-law suites' or other names, they may be an apartment over a garage or in a basement, or a carriage house, tiny house etc. Whatever the physical form, they typically cannot be separated legally from the primary residence. ADUs can allow additional housing stock to be added to the overall housing supply-an added "density without intensity," merging home ownership and rental properties onto single zoning lots, creating more affordability and mixed income levels within neighborhoods, and for example allowing more opportunities for seniors to age in core neighborhoods or in place.

    The administration will ask the Plan Commission and Common Council to amend the Unified Development Ordinance as soon as possible to permit, on a pilot basis and limited to owner-occupied properties, up to 20 accessory dwelling units in certain neighborhoods or areas as well as the Residential Single-Family zoning district.

  2. Tiny Houses. Tiny houses are a national trend of homes that are typically smaller than 400 square feet, and as small as 80 square feet. Their small footprints and square footage make them inherently affordable as well as typically environmentally more sustainable. Permitting tiny houses will allow individuals who may not otherwise be able to afford to own their own homes the opportunity to do so, and may further permit a better mixing of differing socioeconomic classes

    The administration will ask the Plan Commission and Common Council to amend the Unified Development Ordinance as soon as possible to permit, on pilot basis, up to 15 tiny houses in the following zoning districts: Residential Single-Family and Residential Core.

  3. Inclusionary Zoning. Inclusionary zoning refers to an approach that requires or incentivizes private developers of market rate housing to support affordable units as well, by either providing a certain amount of lower-priced, more affordable units within a proposed development, or providing affordable units offsite from the project, or contributing a monetary fee directly to support affordable units created by others.

    In the short term, the administration will work with the Plan Commission and Common Council to employ strategies that encourage developers to include affordable units in their projects, or alternatively, contribute to a city affordable housing fund, based on the intensity and nature of the proposed projects. The administration will also work with the Plan Commission and Common Council to develop and implement an inclusionary zoning ordinance that will balance zoning requirements along with incentivizing developers to provide affordable housing in connection with new developments.

  4. Cooperative Housing. Cooperative housing is membership-based housing programs, with membership granted by way of a share purchase in the cooperative home. Housing cooperatives lets members' pool their resources so that their buying power is leveraged, thus lowering the cost per member of home ownership, which in turn allows for a greater number of individuals to own their own homes.

    Cooperative housing is currently permitted in only very limited locations in Bloomington. The administration will ask the Plan Commission and Common Council to amend the Unified Development Ordinance to permit cooperative housing units in additional locations throughout the city.

  5. Long Term Affordability Covenants. Affordability covenants are legal requirements associated with particular pieces of property that require the subject land to remain at a specified rate for a particular period of time. This administration will encourage the use of very long-term and/or life-of-the-building affordability covenants that range from 50 years to permanently affordable.

  6. Housing Fund. The administration intends to create a new non-reverting fund with Common Council approval in which it can deposit donations or grants, like the one million dollars committed in connection with the Dunhill project, or from other sources such as the Bloomington/Monroe County Housing Trust Fund. To be refined in collaboration with the City Council, this fund can support our community's affordable housing initiatives.

  7. Incentives: The administration will look at all forms of subsidies currently available at the local, state and federal levels.

    Tax Abatements. Tax abatements may continue to be utilized to encourage developers to consider including affordable units in their projects. Projects located within an economic revitalization area are eligible for an abatement of real or personal property taxes. The administration will work with the Economic Development Commission and the Common Council to establish standard guidelines for when the administration will recommend tax abatements be provided to developers if a certain number of affordable housing units are provided.

    Enterprise Zone Investment Deduction (EZID). The administration will use the EZID as an incentive to property owners who wish to develop or redevelop properties and include affordable units in projects that are located within a TIF area. Currently, properties in a TIF zone require Common Council approval in order to file for the EZID. A taxpayer making a qualified investment in the Bloomington Urban Enterprise Zone receives a 100% deduction of the increased assessed value.

    - The administration will collaborate with the Common Council to amend its current EZID TIF guidelines to allow for an EZID to be approved for a housing development if a certain number of affordable units are provided.
    - The administration will work with the Common Council to allow for a waiver of the 9% EZID fee for affordable housing projects that are built within a TIF zone.
  8. Tax Increment Financing. Tax Increment Financing as well as a potential Housing Tax Increment Financing District (HOTIF) may be utilized for the construction, rehabilitation, or repair of residential units within an area, and may further be used to provide financial assistance to enable individuals and families to purchase or lease residential units within an area.

8. Collaborations: The administration will collaborate with developers, both for profit and nonprofit, realtors, financial institutions, property owners, housing providers, and interested citizens to create an Affordable Housing Task Force. The Task Force, to be convened by Doris Sims, will gather and evaluate data on the Bloomington housing market, review affordable housing efforts in other communities as well as our current efforts, and recommend new ideas and initiatives that will inform and guide current efforts and help steer development of the UDO in 2017.

In summary, over the past eight months, a number of tools have been implemented to increase the availability of affordable housing, including tax abatement, inclusion of work force housing in a proposed development, new special needs housing and monetary contribution for affordable housing development. Over the next twelve months, the administration intends to pursue these additional initiatives that I've outlined today to increase the amount of affordable housing during that period and to gain valuable information about what works and what doesn't, while the longer term adoption of the CMP and the UDO is in process.

We have begun to steer our community toward more affordable housing, so that indeed, this wonderful place can work for people from all walks of life. I want to thank all those who have been helping that make happen, and look forward to working together to keep making an ever better Bloomington.


EXTRA MATERIAL:

Specific areas include:

Homeless/Very Low Income Housing. According to the State's Point in Time survey, Bloomington had 353 homeless persons in January of 2016. The lack of housing for these individuals makes their lives more difficult than necessary and they represent a social service cost to the community. Despite the best efforts of existing programs, more work is needed.

  1. Centerstone provides 116 units of affordable housing for individuals with mental illness and/or substance abuse issues.

  2. The Bloomington Housing Authority gives priority to individuals who are experiencing homelessness as it serves residents with very low income. The housing authority administers almost 1,400 Section 8 vouchers (with a waiting list of nearly 800 families) for housing and provides 310 public housing units across the City.

  3. Crawford I Apartments is a 25 bedroom facility that provides immediate housing and access to intensive support services supported by HOME and other federal funds.

Low/Moderate Income Housing. Over the years, the City has utilized its Community Development Block Grant (CDBG) and HOME dollars to assist its citizens who are classified as low to moderate income households. Still this population is still not being adequately served in terms of having appropriate housing. For calendar year 2016, CDBG and HOME funds will be used to provide:

  1. $148,000 to support seven homeowner families in purchasing or rehabilitating their homes

  2. $558,000 to provide rent assistance and support developers with the rehabilitation of housing for low to moderate income individuals and families.

Workforce Housing. There is a need for more affordable workforce housing in the City. Unfortunately this demographic is particularly challenging for the administration to assist as the individuals who need this type of housing do not typically meet the requirements for State or Federal assistance. It is the hope that by establishing a new Housing Fund that the administration can encourage construction of more housing for this segment of the population.

Special Needs Housing. Housing the most vulnerable populations of our community must be a priority, including people with special needs, whether mental or physical, people without homes as well as seniors seeking to age in place.