boardname
PLANNING AND ZONING BOARD
Meeting Date: JUNE 28, 2023
title
AFFORDABLE HOUSING RELATED POLICY AND CODE AMENDMENTS
projectinfo
Request: Proposed Policy and Text Amendments
P&Z# N/A
Owner: N/A
Project Location: N/A
Folio Number: N/A
Land Use Designation: N/A
Zoning District: N/A
Commission District: N/A
Agent: N/A
Project Planner: Jean Dolan (954-786-4045 / jean.dolan@copbfl.com)
otherinfo
Background and 2023 Calculation:
In September of 2013, the City Commission directed the City Manager to have staff hire a consultant to develop a standard in lieu of fee methodology for affordable housing buyouts. This was accomplished and the resulting fee of $2,333 was developed based on a “gap analysis” which looks at the difference between what families making 60% of median income can afford and the average market price per unit based on a 3-year average. At that time, the total “gap” was $15,556 per affordable unit (which when multiplied by 15% equates to the $2,333 fee for every unit versus $15,556 for just the 15% affordable units). This in lieu fee was then adopted in Chapter 154 via Ordinance 2014-19.
The same methodology has been applied to the average market price presented in the 2021 Lambert Affordable Housing Study which included a market analysis from the first quarter of 2021. The re-evaluation of the in lieu fee using 2022 median income, 2021 median sales price and current interest rates results in an in lieu fee of $27,708 per unit (total gap between “affordable” and median sales price is $184,720).
Though median income increased 46% between 2013 and 2022, the median price of for-sale housing increased 84% and interest rates increased 44% in the same period. The increased percentage of the affordable monthly payment that must be used for taxes and insurance has also increased significantly further reducing the amount of an affordable mortgage. The resulting gap between affordability and the housing market, therefore, increased over 10 fold.
Areas That Could Buyout:
The map of our ½ mile buffer areas where we require mixed income housing (no more than 50% deed restricted affordable) is attached. With the exception of the Downtown Pompano Transit Oriented Corridor (DPTOC) and the East Transit Oriented Corridor (ETOC), within these circles, the buyout is not applied because no affordable housing is required. This removes a large percentage of the City from ever having to consider paying a buyout fee.
Within the two transit oriented corridors, every project is required to provide some affordable housing and could still consider buying out. To date, the average project size in the Downtown and ETOC is 167 units. The buyout for this average size project would be $4.6+ million based on the $27,708 per unit buyout. It is unlikely any developer could afford to buyout at this amount. If the Applicant was committed to buying out but needed a lower in lieu of fee, they could use County Policy 2.16.4 for their mixed use project in either of the TOCs and then buyout of the affordable for $10,000 per unit (established by the County in Policy 2.16.4). The City would receive half of this buyout amount and the County would receive the other half (167 units X 10,000 = $1.67 million).
Excluding the TOCs, Citi Center residential and the LIVE! project residential, all of which have 15% affordable requirements through their individual land use plan amendments, only those projects that:
(1) request 50 or fewer flex or redevelopment units; and
(2) are located outside the ½ mile buffer areas; and
(3) are not eligible for or not required to use County Policies 2.16.3 or 2.16.4;
will be subject to affordable housing requirements that can be bought out. This greatly reduces the number of projects that will have the option to buyout using the City’s buyout fee.
Expected Outcome and Trade-Off:
The outcome of raising the buyout fee to $27,708 per unit may eliminate all revenue into the Affordable Housing Trust Fund from this revenue source. Our mixed income housing regulations have already limited the revenue potential from the in lieu of fee source because we require the use of policy 2.16.3 as a condition of receiving flex units whenever a project is eligible. For example, the two market rate projects that required flex units that would have bought out their affordable requirement if we did not require the use of Policy 2.16.3 (Gateway and 2050 MLK) would have paid a total of $907,537 into the Affordable Housing Trust Fund at the current in lieu fee of $2,333 per unit. Because of our required use of Policy 2.16.3, however, we will have 57 moderate income housing units built instead of the single-family homes that OHUI would have built if those funds were deposited into the Affordable Housing Trust Fund.
The trade-off, therefore, of requiring the use of the County’s mixed income policies while also raising the affordable housing in lieu fee is we will get more affordable, moderate income units built but it is unlikely any of them will be single-family homes built with the help of the City’s Affordable Housing Trust Fund.
Recommendations
To mitigate the impact of raising the in lieu fee, the following approach is recommended:
(1) Expand the current flex policy to require the use of 2.16.3 and 2.16.4 to include the Downtown and ETOC - this has two benefits, it reduces the expectation of a buyout and increases the number of affordable units built while also reducing the number of units taken from the limited basket of rights related to these two transit oriented districts.
(2) Adopt the County’s in lieu fee (per Policy 2.16.4) of $10,000 per unit escalated 3% annually on January 1st of each year - this approach has several benefits, it provides a lower in lieu fee than that based on the “gap” methodology; it mirrors the County’s approach and thus is defensible on multiple levels; and it is automatically increased annually without staff intervention or City Commission action.
(3) Apply the updated in lieu fee to projects approved after September 30, 2023. This makes the rule “prospective” which is legally “safer” than making it retroactive to include already approved projects. This also provides a phasing out of the revenue stream to the AHTF from this source. This vests projects such as KOI and WH Pompano which are partially built and have already paid the $2,333 in lieu fee for a majority of their total units. It also vests project such as: LIVE!, Hillsboro Shores, Hidden Harbor, and Falcone (Wabash). A total of 1,356 units plus the up to 4,000 units that could be built at LIVE! will remain eligible for the in lieu fee in place when their development orders were issued.
The proposed policy and code amendments to implement these recommendations are attached.
Recommended Motion
The Planning and Zoning Board recommends approval of the amendment to Chapter 154 to increase the affordable housing in lieu fee to $10,000 escalated 3% annually on January 1st of each year for projects eligible to buyout of affordable housing requirements and to adopt a policy and associated code changes to require the use of the County mixed income housing density bonus policies 2.16.3 and 2.16.4 in the ETOC and DPTOC.