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2019-07-25 Info Packet
I t i IP ALIN CITY O IOWA CITY www.icgov.org City Council Information Packet July 25, 2019 Council Tentative Meeting Schedule IP1. Tentative Meeting Schedule Miscellaneous IP2. Letter from Assistant City Attorney to Al Kazyjak & Steven and Kitty Highly: Request for special session IP3. Memo from City Clerk: KXIC Radio Show IP4. Memo from Housing & Community Development Commission Chair: Aid to Agencies Recommendations IPS. Article from Assistant City Manager: Homeward Bound - The Road to Affordable Housing IP6. Article from Assistant City Manager: State of the Nation's Housing 2019 IP7. Joint Entities Meeting Minutes: July 15 IP8. Bar Check Report: June 2019 IP9. Civil Service Entrance Examination: Building Inspector IP10. Civil Service Entrance Examination: Landfill Operator IP11. Civil Service Entrance Examination: Maintenance Worker 1: Wastewater Treatment IP12. Civil Service Entrance Examination: Maintenance Worker - Wastewater Draft Minutes IP13. Board of Adjustment: July 10 IP14. Community Police Review Board: July 11 IP15. Housing and Community Development Commission: July 11 July 25, 2019 City of Iowa City Page 1 July 25, 2019 Tentative Meeting Schedule ATTACHMENTS: Description Tentative Meeting Schedule Item Number: 1. ME CITY OF IOWA CITY Date City Council Tentative Meeting Schedule Time Subject to change Meeting July 25, 2019 Location Tuesday, August 6, 2019 4:00 PM Executive Session Emma J. Harvat Hall 5:00 PM Work Session 7:00 PM Formal Meeting Tuesday, August 20, 2019 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, September 3, 2019 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, September 17, 2019 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, October 1, 2019 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Monday, October 14, 2019 4:00 PM Reception City of Iowa City 4:30 PM Joint Entities Meeting Emma J. Harvat Hall Tuesday, October 15, 2019 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting July 25, 2019 Letter from Assistant City Attorney to Al Kazyjak & Steven and Kitty Highly: Request for special session /,1%aETON Pi1 11,kM Description Letter from Assistant City Attorney to AI Kazyjak & Steven and Kitty Highly: Request for special session July 25, 2019 Mr. AJ Kazyjak Mr. Steven Highly Ms. Kitty Highly Via email only: acx-operations@earthlink.net Dear Mr. Kazyjak, Mr. Highly, and Ms. Highly: This is in response to your letter to me dated July 18, 2019. � r III ]LI CITY OF IOWA CITY City Attorney's Office 410 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 356-5030 (3 19) 356-5008 FAX www.lcgov.org In your letter, you request a 'special session," and you also reference a City Council meeting on July 10, 2019. To clarify, the meeting was a Board of Adjustment (BOA) meeting, not City Council. The BOA has the authority under the City Code to grant special exceptions to certain zoning provisions, and on July 10, the BOA did grant a special exception requested by MidAmerican Energy to allow a basic utility in a Commercial Office (CO -1) zone. At the July 10 meeting, the BOA chair opened and closed the public hearing, and the BOA passed a motion 3-0 (two members were absent) approving the special exception. Under Section 13 of Article VI of the BOA's Operational Rules, Roberts Rules of Order shall be used to conduct hearings. Under Roberts Rules, a motion can be reconsidered, but the motion must be made by someone who voted in the negative within 10 days of the original vote. Because all members votes to approve the special exception, no one can move to reoonsider the vote. The City Council does not have jurisdiction to hear an appeal of a BOA decision, and no special meeting with the City Council will be scheduled. An appeal of a BOA decision goes to the district court. As soon as the BOA decision has been signed by the BOA Chairperson, it will be filed with the City Clerk and recorded with the Johnson County Recorder. I will email you a filed copy when it becomes available. I represent the BOA and cannot advise you on an appeal to district court. You should speak with a private attorney regarding your legal options. Sincerely, Susan Dulek Assistant City Attorney Copy w/ July 18 letter to: City Council Board of Adjustment City Manager City Clerk City Attorney Jesi Lile, Planner Tracy Hightshoe, NDS Director July 18, 2019 RECEIVED BY Aft: Ms. Sue Dulek, Assistant City Attorney JUL 24 2019 City of Iowa City 410 E. Washington St. / ffrow$ off+a Iowa City, laws 52240 319-35$-5030. �ttir x RE: REQUEST FOR SPECIAL SESSION: Steve and Kitty Highly Residence, 1a23 Prairie Da Chien Rd, Iowa City, G4 vs. MidAmedwn Energy Dear Ms. Dulek, As a fallow up to the July 10s', 2019, City Council meeting, the Highly's and I would like to request a time to meet with you, the City Council members and the MidAmedcan Energy representatives, and if possible, Adam Wright, CEP of MidArnerkan Energy. It appears, MWAmerican Energy is no longer conducive to proceeding with the original "good faith" ofFerthat they Indicated would be "doable" terms regarding the property at 1823 Prairie Du Chien Rd. We also request the opportunity to discuss additional concerns adversely affecting 1823 Prairie Du Chian Rd and the !surrounding developmu,nt that were not previously addressed by MkJAmerkan Energy during the July 10th meeting. We look forward to the opportunity to meet with you and the City Council members In person to discuss this extremely important information In a conscientious effort to ensure bath the safety of all of our neighbors and to keep our communities safe and strong. We are able to be llexlbie far both the time and place of the nreedng based on your schedule, however, due to the 30 -day preliminary approval period, the meeting must occur prior to August 09, 2019. In the Interim, should you have any questions or If I can be of service, please do not hesitate to contact me at your convenience. (cell phone: 540-271-2457 or via email: am-overatlonsPearthlink.net Sincerely, AJ Kasyjak Date 2 Steven Highly and Kitty Highly Date Item Number: 3. July 25, 2019 Memo from City Clerk: KXIC Radio Show ATTACHMENTS: Description Memo from City Clerk: KXIC Radio Show -r_, ---r.-4 CITY OF IOWA CITY 1p MEMORANDUM Date: July 22, 2019 To: Mayor and City Council From: Kellie Fruehling, City Clerk Re: KXIC Radio Show At your July 16 work session, Council Members agreed to the following schedule for the Wednesday 8:20 AM radio show. Wednesday July 24 — Jane Wilch and Jen Jordan - Rummage in the Ramp July 31 — LaTasha DeLoach — Senior Center August 7 — Throgmorton August 14 — Teague August 21 — Thomas August 28 — Cole September 4 — Taylor September 11 - Mims ** Please remember that KXIC is very flexible with taping the sessions ahead of the show. &CIk/Council KXIC Radio Schedule/radioshowasking.doc Item Number: 4. It i r = _ 12ft Z % r"=0 CITY OC IOWA CITY www.icgov.org July 25, 2019 Memo from Housing & Community Development Commission Chair: Aid to Agencies Recommendations ►_1AG_T67:ILvi14zk1&-5 Description Memo from Housing & Community Development Commission Chair: Aid to Agencies Recommendations r -�..® CITY O F IOWA CIT Y .,- MEMORANDUM Date: July 15, 2019 To: Iowa City City Council From: Vanessa Fixmer-Oraiz, Housing and Community Development Commission Chair Re: Aid to Agencies Recommendations Introduction At our July 11, 2019 meeting, Housing and Community Development Commission (HCDC) discussed different ways to modify the Aid to Agencies (A2A) process. That discussion was largely in reaction to two memos which proposed modifications. The first was from City of Iowa City Neighborhood Services staff dated July 3, 2019, and second was from the Agency Impact Coalition dated July 10, 2019 (both attached). HCDC voted to recommend for consideration both memos to Council with the following changes and clarifications. Recommendations For the staff memo, HCDC recommends supporting staff recommendations with the exception that the City should continue funding for emerging agencies up to 5% of the A2A budget. While the City allocates CDBG/HOME, Climate Action Grants, and Social Justice and Racial Equity Grants, these do not necessarily fund general operational expenses. HCDC encourages less established agencies to apply for project grants, but believes it is important to provide general operational funding in addition to project -based funding to help these organizations establish themselves. For the Agency Impact Coalition memo, HCDC recommends supporting all points in addition to the following staff suggestions on how to implement two of the items. First, each Commissioner will serve as a liaison for 2-3 funded agencies to help schedule annual site visits and improve familiarity with funded agencies. Second, staff and HCDC will establish annual meetings with agencies as part of the timeline review process for City Steps. This will provide an opportunity for HCDC, agency executives, and City staff to have discussions outside of the funding cycle. Specifically, this would allow HCDC to receive updates from agencies on trends, gaps, and needs and to review and debrief City Steps and other relevant plans guiding annual allocations processes. Next Steps Many of these changes can be incorporated this fiscal year for the FY21 funding round while others will take time. Immediate steps that HCDC would like to implement are as follows: • Determine liaisons for currently funded agencies • Schedule a timeline City Steps review for this summer with agency leaders • Have staff provide a funding recommendation for FY21 using HCDC-approved criteria • Provide HCDC questions in advance for FY21 applicants prior to meetings HCDC hopes that these recommendations and changes will help the Commission, staff, and agencies to work more collaboratively to face the challenges and opportunities ahead and to meet the increasing needs of those within our community who require it most. Please let us know if you have any questions as you consider these recommendations. r CITY OF IOWA CITY Pgot MEMORANDUM Date: July 3, 2019 To: Housing and Community Development Commission From: Erika Kubly, Neighborhood Services Coordinator Kirk Lehmann, Community Development Planner Re: Aid to Agencies Recommendations Introduction: Iowa City has historically funded a portion of the operating costs of local non -profits that serve low income residents through the Aid to Agency (A2A) fund. Last year, the City Council adopted recommendations made by the Housing and Community Development Commission (HCDC) to provide stable funding for existing nonprofits and to also provide new opportunities for developing agencies to receive funds through the A2A allocation process. After this past allocation cycle, Council asked HCDC to review their processes and determine the best way to move forward with funding recommendations. This memo contains staff recommendations to modify the A2A process based on historical precedent and feedback from HCDC and agencies. History/Background: The goal of A2A has historically been to provide a stable source of operational funding for human service agencies serving low- and moderate -income (LMI) residents. Council first began having HCDC recommend A2A allocations in 2010 to align funding recommendations with the priorities set in CITY STEPS, the City's five-year federally mandated consolidated plan for housing, services and jobs for LMI residents. Prior to that point, a committee of City Council members and staff allocated the funding to a core group of agencies. New applicants typically were not funded; however, this began to change once HCDC started making funding recommendations. On July 17, 2018, City Council adopted policies revising the process based on HCDC input. There were three main changes. First, 5% of A2A funding was set aside for "emerging" agencies, defined as agencies that have not existed as a legal entity for at least two years or have not received A2A in any of the last five years. Second, the remaining funds were available to "Legacy" agencies, defined as those who have existed as a legal entity for at least two years and have received A2A funding in any of the last five years. Allocations to Legacy agencies were awarded over a two year period to provide stability. Finally, HCDC created a goal of providing 70% of funds to High priority agencies, 25% to Medium priority agencies and 5% to Low priorities agencies with an intent of spreading funding between priority groups and reducing competition to receive a High priority designation. This revised process was first used for the FY20 funding allocation. The City estimated a budget of $355,000 for Legacy agencies and $19,000 for emerging agencies. At their January 17, 2019 meeting, HCDC noted thatA2Afunds had remained stable over the last several years while needs increased. In addition, more agencies were applying and receiving funds. As such, HCDC recommended that Council fully fund the requests of FY20 Legacy agencies, totaling $625,500, and requested a work session with Council to discuss why they recommended funding over their budget estimate. After meeting together on February 5, 2019, Council agreed to fully fund the Legacy requests for a single year with the condition that HCDC revisit the A2A process to avoid future unexpected budget recommendations. HCDC has had ongoing discussions about how to revise the process at their monthly meetings since April 2019. Because the FY21 Joint Funding Applications will be released on August 1, 2019, changes related to the process must be determined at the July HCDC meeting in order to be incorporated into the next funding cycle. July 3, 2019 Page 2 Staff Recommendation Based on the feedback received, staff recommends A2A return to its original intent of providing a stable funding source for human service agencies serving LMI residents based on the funding priorities set in CITY STEPS for public service agencies. Every five years, the priorities in CITY STEPS are reviewed and a new plan is adopted. City staff is currently working on the new five- year CITY STEPS plan, which will need to be adopted by the City Council and accepted by the federal government by July 1, 2020. During the new plan development process, staff recommends identifying and limiting A2A applicants to a core group of service providers which meet the established priorities. These identified agencies would then apply on a competitive basis based on identified priorities, history of funding, and capacity. Beginning with FY22, agencies would apply on a two-year cycle. This process would provide stable funding for agencies with demonstrated capacity to effectively utilize A2A dollars. The priorities and agencies allowed to apply would be reevaluated with each new five-year plan to address changing priorities or gaps of service as identified in CITY STEPS. If needed, there would also be a mechanism to modify the number of eligible agencies during the five-year planning period through the federally defined Consolidated Plan amendment process. Because the FY21 Joint Funding Application process will begin before the adoption of City Steps 2025, staff recommends limiting FY21 A2A applications to those agencies who applied for Legacy funds in FY20. This is consistent with the expectation of a two-year funding cycle when Legacy agencies applied last year. For the remaining fiscal years covered by City Steps 2025 (FY2022 through FY2025), staff recommends that the 2021-2025 Plan identify a set of 15-20 core agencies to be funded through A2A for public service funding. This will help focus funds in a strategic manner and provide the stability desired by agencies. A2A applicants will continue to apply through the United Way Joint Funding process. Every two years, HCDC will review and approve the ranking criteria for evaluation of the public service applicants. With the FY21 allocation cycle, staff will rank applications based on these criteria and make a funding recommendation for HCDC to consider. HCDC can recommend changes to staff's recommendation. The HCDC recommendation would be submitted to City Council for their consideration and adoption. Staff also recommends discontinuing the emerging agencies set-aside due to alternative funding opportunities that are now available. The City has allocated $25,000 in Climate Action Grants and $75,000 in social justice and racial equity grants. These grants are expected to continue, and both have equity components and an emphasis on serving disadvantaged populations. Project -based CDBG/HOME grants are also available for emerging agencies or those who have not received grant funds in the past. These different sources are a good fit for emerging agencies and can help agencies build capacity and establish a track record. As an agency becomes more established and can demonstrate the ability to meet priority needs and grant requirements, they may be eligible to be incorporated into the A2A funding cycle based on their ability to address City Steps 2025 priorities. Proposed Timeline August 1, 2019: FY21 A2A applications are released to agencies that were awarded funds last year through the United Way Joint Funding process. September 12, 2019: FY21 A2A applications due. September 19, 2019: HCDC receives copies of FY21 A2A applications for review. HCDC will compile questions for agencies regarding their applications ahead of the November meeting. November 21, 2019: HCDC discusses questions for agencies at their November meeting. Staff will compile and send out questions to agencies in preparation for HCDC's December meeting. July 3, 2019 Page 3 December 19, 2019: Question & Answer session with A2A applicants. Agencies are provided questions in advance and invited to attend HCDC's December meeting. December 2019: Draft of City Steps 2025 complete. Draft will include updated priorities and identification of core agencies who are eligible for A2A funding for FY22 through FY25. January 16, 2020: Staff provides FY21 A2A funding recommendations to HCDC at their January meeting. HCDC considers modifications and makes an FY21 A2A funding recommendation to Council. April -May 2020: HCDC reviews, considers changes, and recommends City Steps 2025 to Council. Council holds a Public Hearing and considers changes and adoption of City Steps 2025, in addition to HCDC's FY21 A2A funding recommendation. August 2020: FY22-23 A2A applications are released to eligible agencies identified in City Steps 2025. August 2022: FY24-25 A2A applications are released to eligible agencies identified in City Steps 2025. Summers 2021-2024: Annual timeline review of City Steps 2025 priorities and core agencies who are eligible for A2A funding. If modifications are needed, the Consolidated Plan would be amended in accordance with the Citizen Participation Plan. To: Housing and Community Development Commission From: Agency Impact Coalition Re: Aid to Agencies Process Date: Julv 10. 2019 The Housing and Community Development Commission's leadership and determination demonstrated throughout the FY20 Aid to Agencies funding process compelled and inspired local agencies identified by the City of Iowa City as Legacy Agencies to form a coalition, the Agency Impact Coalition. The Coalition has been meeting regularly with much of the initial discussions focused on how to better advocate for the work of our organizations and the collective impact we have throughout the community. HCDC is continuing its drive to improve the Aid to Agencies process and recently sent out a survey to solicit feedback from funded agencies. However, the survey questions did not get to the heart of the recommendations and concerns that have consistently been articulated during Coalition meetings and we realized the majority of our feedback fell under the category of "other." As a result, we are submitting this single response. The suggestions below are made in the spirit and hope of creating a better informed and more participatory, collaborative process for both Aid to Agencies and CDBG/HOME awards: ■ Inclusion of annual site visits to the funded agencies and/or as part of the orientation and on - boarding for HCDC members. Local not-for-profit executives bring decades of experience and are themselves subject -matter experts. We are eager for our community to understand the complexity and nuances of our services, the constituencies we serve, and the challenges we face. This may be time intensive, but it would set an entirely different foundation and context from which to work. ■ Joint meetings outside of the funding cycle for HCDC, not-for-profit executives, and Neighborhood Services Department staff to thoroughly debrief CITY STEPS, the Annual Action Plan, and other relevant plans underpinning and guiding the allocations process for both Aid to Agencies and the annual CDBG/HOME competitions. Components of these conversations could include updates on trends, gaps, and needs. ■ Better leverage the professional experience and practical knowledge of the Neighborhood Services Department staff. City staff add valuable perspective which is not being fully integrated into the process and dialogue. ■ Create a data driven process that aligns with CITY STEPS and reorients the dialogue to be driven by need as opposed to managing scarcity. ■ Our collective impact has substantial economic multipliers and significant public benefits that positively impact our community. Is there a method to more formally recognize this to better inform policy makers and as a component of the City's annual budget process? ■ Specific to the application(s) and review therein, ensure additional questions to applicants are standardized and made available to everyone in advance. In addition to these suggestions we support staff recommendations made in their July 3, 2019 memo to HCDC and the approaches recommended to reorient the process back to the original intent of, "providing a stable funding source for human service agencies serving LMI residents based on the funding priorities set in CITY STEPS...". Please know it is with the highest regard that we write. Members of this Commission have approached their charge with determination, integrity, compassion, and empathy. You have anguished over the decisions to be made and taken an unprecedented and bold position to which our Council responded. Please know that you have inspired and motivated us. We are eager to work more collaboratively to face the challenges and opportunities ahead and recognize that we come with the common intention of improving the health, safety and well-being of our community. MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JULY 11, 2019 — 6:30 PM SENIOR CENTER, ROOM 202 MEMBERS PRESENT: Megan Alter, Charlie Eastham, Vanessa Fixmer-Oraiz, John McKinstry, Maria Padron MEMBERS ABSENT: Matt Drabek, Lyn Dee Hook Kealey, Peter Nkumu, [vacant] STAFF PRESENT: Kirk Lehmann, Erika Kubly OTHERS PRESENT: Delaney Dixon, Nicki Ross, Adam Robinson, Amy Greazel, Ellen McCabe, Ron Berg, Michelle Heinz, Missie Forbes, Crissy Canganelli, Christi Regan, Heath Brewer, Ellie Paxson, Genevieve Anglin RECOMMENDATIONS TO CITY COUNCIL: By a vote of 5-0 the Commission recommends to City Council modifications to the Aid to Agencies process and approve FY21 Aid to Agencies forms as with changes as discussed. CALL MEETING TO ORDER: Fixmer-Oraiz called the meeting to order at 6:30 PM. APPROVAL OF THE JUNE 20, 2019 MINUTES: McKinstry moved to approve the minutes of June 20, 2019. Eastham seconded the motion. A vote was taken and the motion passed 5-0. PUBLIC COMMENT FOR TOPICS NOT ON THE AGENDA: Crissv Canganelli (Shelter House) submitted correspondence dated July 2, 2019 to provide corrected information from the minutes of the Human Rights Commission heard by the Commission at their previous meeting. Lehmann read the correspondence: Good Morning: l am writing to provide a correction to information provided to the Human Rights Commission during its May 15, 2019 meeting. The draft Meeting Minutes which are available to the public indicate that County Supervisor Porter reported to the Commission that, "Johnson County just gave Shelter House $630,000." The Johnson County Board of Supervisors allocated a total of $630, 000 to the Housing Trust Fund of Johnson County which was made available for affordable housing initiatives over the past fiscal year. Of the funds awarded to Shelter House by the HTFJC, $250, 000 came from Johnson County. Funds were awarded as a loan, are repayable to the HTFJC, and were restricted for a new construction project at 820 Cross Park Avenue. The Human Rights Commission minutes were included in the June Housing and Community Development Committee Meeting packet, as such, I request this correction in fact be provided to both the Commission and relevant Iowa City staff. Housing and Community Development Commission July 11, 2019 Page 2 of 12 l am deeply grateful for the partnership and support of the City of Iowa City in all aspects of Shelter House programming and would be happy to provide any additional information that would be helpful. Please do not hesitate to contact me by phone or email. Crissy Canganelli, Executive Director of Shelter House RECOMMEND TO CITY COUNCIL MODIFICATIONS TO THE AID TO AGENCIES PROCESS AND APPROVE FY21 AID TO AGENCIES FORMS: Kubly began by summarizing a memo from staff regarding Aid to Agencies (A2A) recommendations dated July 3, 2019. Overall, staff recommends returning A2A to its original intent of providing stable funding for human service agencies serving low- and moderate -income residents based on the priorities set in CITY STEPS. Every five years, these priorities are reviewed. Staff is currently developing the new five-year plan, to be adopted by Council and the federal government by July 1, 2020. During the planning process, staff recommends limiting A2A applicants to a core group of service providers which meet its established priorities. These agencies would then competitively apply based on these priorities, their history of funding, and their capacity. Beginning with FY22, agencies would apply on a two-year cycle. The priorities and agencies allowed to apply would be reevaluated with each new five-year plan to address changing priorities or gaps of service as identified. If needed, the City could modify eligible agencies during the five- year period as well through the Consolidated Plan amendment process. Kubly continued that because the FY21 Joint Funding Application process will begin before the adoption of City Steps 2025, staff recommends limiting FY21 A2A applications to agencies who applied for Legacy funds in FY20, consistent with the expectation of a two-year funding cycle when Legacy agencies applied last year. For the remaining fiscal years covered by City Steps 2025, staff recommends that the Plan identify 15-20 core agencies to be funded through A2A. Applicants will continue to apply through the United Way Joint Funding process. Every two years, HCDC will review and approve the ranking criteria for evaluation of the public service applicants. With the FY21 allocation cycle, staff will rank applications based on these criteria and make a funding recommendation for HCDC to consider. HCDC can recommend changes to staff's recommendation. The HCDC recommendation would be submitted to City Council for their consideration and adoption. Kubly noted staff also recommends discontinuing the emerging agencies set-aside due to available alternative funding opportunities, such as Climate Action Grants and the Social Justice/Racial Equity grants. Project -based CDBG/HOME grants are also available These sources can help agencies build capacity and establish a track record. As an agency demonstrates its ability to meet priority needs and grant requirements, they may be incorporated into the A2A funding cycle based on addressing priorities. Eastham noted that the staff recommendation does not discuss the budget and asked if the Commission can recommend a higher budget amount. Kubly noted the City Manager is leading that discussion and has invited agencies to meet this month prior to the establishment of next year's budget. Fixmer-Oraiz stated that the alternative project grants discussed are unclear as to whether they allow operational funding. She noted it is important for the Commission to show support for agencies to help them get off the ground, and operational funding is often the first step. Eastham added that he would like more discussion with agencies to see how they would like to see newer agencies gaining access to the newer larger agency funding during the five-year City Step timeline. Alter added that in the memo it does note as an agency becomes more established and demonstrates they meet grant priorities and requirements they may be eligible to be incorporated. Alter asked how an emerging agency would be able to prove that if they don't have access to funds to help them. Fixmer-Oraiz suggested the Commission discuss the Agency memo and then take comments from the audience. Fixmer-Oraiz read the memo the Commission received from the Agency Impact Coalition regarding the Aid to Agencies process dated July 10, 2019. Housing and Community Development Commission July 11, 2019 Page 3 of 12 The Housing and Community Development Commission's leadership and determination demonstrated throughout the FY20 Aid to Agencies funding process compelled and inspired local agencies identified by the City of Iowa City as Legacy Agencies to form a coalition known as the Agency Impact Coalition. The Coalition has been meeting regularly with much of the discussions focused on how to better advocate for the work of our organizations and the collective impact we have throughout the community. HCDC is continuing its drive to improving the Aid to Agencies process and recently sent out a survey to solicit feedback from funded agencies. However the survey questions did not get to the heart of recommendations and concerns that have been consistently articulated during Coalition meetings and we realize the majority of our feedback fell under the category of other" As a result we are submitting this single response, the suggestions below are made in the spirit and hope of creating a better informed and more participatory collaborative process with Aid to Agencies and CDBG/HOME awards. • Inclusion of annual site visits to the funded agencies and more as part of the orientation and onboarding for HCDC members. Local not-for-profit executives bring decades of experience for the complexity and nuances of our services, the constituencies they serve and the challenges we face. This may be time intensive but would create an entirely different context for which to work. * Joint meetings outside the funding cycle for HCDC, not-for-profit executives and neighborhood services development staff to thoroughly debrief City staff on the Annual Action Plan and other relevant plans underpinning and guiding the allocations process for both Aid to Agencies and the annual CDBG/HOME competitions. Components of these conversations can include updates on trends, gaps and needs. • Better leverage of professional experience and practical knowledge of the neighborhood services departmental staff. City staff add valuable perspective which is not being fully integrated into the process and dialogue. • Create a data -driven process that aligns with City Steps and reorganize the dialogue to be driven need as opposed to managing scarcity. • Our collective impact has substantially economical multipliers and substantial benefits that positively impact our community. Is there a method to more formally recognize this to better inform policy makers and as a component of the City's annual budget process. • Specific to the applications and review therein, assure additional questions to the applicants are standardized and made available to everyone in advance. In addition to these suggestions we support staff recommendations made at the July 3, 2019 memo to HCDC and the approaches recommended to reorient the process back to the original intent of `providing a stable funding source for human aid agencies serving LMi residents aligning funding with priorities set in City Steps". Please note it is with the highest regard we write, members of this Commission have approached their charge with determination, integrity and compassion and empathy. You have languished over the decisions to be made and taken an unprecedented and bold position to which the Council responded. Please note you have inspired and motivated us, we are eager to work more collaboratively to face the challenges and opportunities ahead and recognize we come with a common intention of improving the health, safety and wellbeing of our community. Fixmer-Oraiz stated for the record she is deeply moved by this memo and thanked the Coalition for putting it together, HCDC appreciates and recognizes the absolute impact the agencies have on our community which is why HCDC feels so passionate about making this work. Eastham would appreciate hearing overall thoughts on the question of setting an amount for Aid to Agencies in the City's budgeting. He wants to understand what the agencies are actually interested in, is it the overall amount of agency funding or if it is a single, reliable process for knowing how much funding the City is going to provide from year to year for each agency. Crissy Can,aq nelli (Shelter House) responded by saying they are interested in both. The City Manager reached out to the agencies and asked if they would be able to meet as Kubly mentioned before the end of the month. Canganelli added that this cannot be separated into parts, it is all connected, and they want to build relationships and have more of a participatory and collaborative process which allows all groups Housing and Community Development Commission July 11, 2019 Page 4 of 12 to learn from one another. She noted that the City has never looked at funding as to what is the need versus managing scarcity. In the past it has been approached from the managing scarcity end. She added they need to understand they all want to do good and do the good work well, they don't understand what the baseline is yet, so they need to work better together to inform that, she has every confidence they will be able to move that line item up. There are other parts of the conversation as well, they need to look at how agencies could manage resource differently, and open things up in a different way. Eastham said the process staff proposed says the annual amount of Aid to Agencies funding is going to be determined through negotiations between agencies and the City Manager directly. He notes that might work out well but wants to know if agencies have an idea for the role of the HCDC in that process. Canganelli said the Commission brings the balance to the conversation, it should be a combination of all three parts. She doesn't feel is it up to the agencies to define who plays what role or how much of a part, but they want to segment out the different voices within this process to avoid excluding them, so the combination would be City staff, HCDC, and nonprofits informing the conversation from an early point. Not only in the budgeting process but also for the Commission to get to know the agencies a little more before they are at the point of reviewing and analyzing applications. Alter said it is a relief to hear of a desire for a more collaborative process, it is too much to shoulder on one part. She loves the idea of annual site visits and would like to increase those. The site visits HCDC did recently really helped make everything fall into place for her and makes it real. They got to have candid conversations with residents, staff, and executive directors. Fixmer-Oraiz liked adding to the conversation the trends, gaps, and needs to take into consideration. She feels it will be important to learn what agencies are seeing and experiencing versus an application. She notes there is a need for collaboration and everyone having a better understanding of one another. Fixmer-Oraiz wonders when the Agencies meet with the City Manager if it would be beneficial to have a member of HCDC present. Eastham agrees it would be helpful. Eastham liked the memo, the name Agency Impact Coalition, and the points about creating a data -driven process and looking at collective impact. The collective impact point is intriguing, Padron put together a data -filled PowerPoint presentation which helped persuade Council, so the more data the better. Fixmer-Oraiz wants to look at short- versus long-term goals, things that could be accomplished easily such as increasing site visits, and wants to discuss actionable items to take from this conversation. Lehmann said staff has discussed some of these ideas in terms of short- and long-term items. He said the idea of having liaisons to schedule site visits is a good one, with nine commissioners there would be two or three agencies per person, and that could be accomplished early into this fiscal year and have the liaisons schedule visits for the different sites. Padron said the liaison would schedule the visit but every commissioner would have the freedom to go on the visit. Lehmann said that would be correct, and if they could avoid having more than four at one visit it would help logistics to avoid having trips be a formal meeting. Lehmann said with regards to the timeline review, he likes the idea of joint meetings outside of the funding cycle for nonprofit executives, staff, and HCDC to meet at one of the HCDC's meeting for an agency debrief and discussion. Eastham would like site visits and the conversational get together but also likes the idea of staff making a funding recommendation which has not been done in the past. Lehmann agreed and noted he matched the questions on the application to a point system staff would use to make recommendations. He wants there to be transparency on how decisions are being made for staff recommendations. Alter asked if there has been discussion amongst staff or the agencies regarding the prioritization of high, medium and low priority, because it has been something they have struggled with. Lehmann said for the Housing and Community Development Commission July 11, 2019 Page 5 of 12 next year's funding cycle, where the new City Steps will not be done yet, it will be incorporated into one of the questions on the scoring criteria under community need, the need has to be listed as a high priority to get all 15 points, but the difference from a high to medium priority throughout the whole application however is only a difference of two points out of 100. In the future the City Steps will discuss how to prioritize or reallocate priorities based on the survey, which explicitly mentions priorities, and try to use the general public input rather than just HCDC. Lehmann feels there needs to be some sort of prioritization. Alter said often high priorities are at crisis level with high need and high impact but the flip side low priorities are often preventative or helping to avert crisis so she would hate to lose those. It will be important to remember that when looking at data and the results from the survey. Fixmer-Oraiz read a comment received on the survey. `7 believe the choices made regarding low, medium and high priority are somewhat subjective, children services are important as are women services, aging services and mental health. My fear is when start segregating groups in this way it minimizes growth opportunities for programs and hurts populations in our community that simply don't have access to other resources. Maybe if there was more clarity in how/why the rankings came to be it wouldn't be as much of a concern." Fixmer-Oraiz just wanted to put that quote out there because it speaks to the subject at hand. Fixmer-Oraiz asked where the rankings came from, she assumes City Steps. Lehmann believes they came from HCDC after City Steps was adopted. Genevieve Anglin (United Action for Youth) noted that it has been difficult that her agency does a lot of different things but because they have the word youth in their title they have always been classified into youth services. Over half their budget is used for homeless services and mental health services, so that complicates how they answer the questions on the application. Fixmer-Oraiz feels there needs to be a discussion on what questions should be on the application, a discussion between the Commission and the agencies so they don't miss the mark. However they are at the point now where the funding cycle is upon them so they will have to put up with some of the issues, there won't be time for a total overhaul. McKinstry stated he was pleased the Agency Impact Coalition was supportive of the staff recommendations and staff is supportive of the agencies so that is a good basis to proceed, looking at the points both have made and fuse them together. Fixmer-Oraiz asked if it is as simple as to adopt the Agency Impact Coalition's and staff memo recommendations. Lehmann said what would be good to go through the main framework in the staff memo and add in the items (maybe all) from the Coalition memo and then go through the ranking criteria so there is a basis for ranking this year and next year it can be tweaked after City Steps is complete. Kubly added they will need to adopt the draft application or make suggestions for changes so it can be given to The United Way to be released. Fixmer-Oraiz suggested they discuss from the staff memo the emerging agency funds, and asked if the two new funding sources were project based grants or could they be operational. Lehmann said they are project based but believes an agency could pay for staff. Fixmer-Oraiz noted keeping the emerging agency funds would be good because there just aren't a lot of funds available for operations and the category was created with an amount based on staff salary. Lehmann said the $15,000 for legacy funding was created due to staff salary needs — not the $5,000 minimum for emerging agency funds. Eastham suggested a recommendation that the other two sources of funds, social justice grants and climate action grants be available for operational needs. Kubly said they could make that recommendation but they do not have the authority to make that change. Lehmann suggested that HCDC send a representative to each of those commissions to make that recommendation during their public comment process. Lehmann said from staff perspective it is nice to have the distinction between project based and operational grants because project based grants have very concrete accomplishments whereas operational funding is harder to evaluate success. Fixmer-Oraiz said that is why most grants won't fund operations and why perhaps HCDC should keep the emerging agency funding set-aside. Housing and Community Development Commission July 11, 2019 Page 6 of 12 Lehmann said if HCDC is adopting the staff memo as their recommendation the Commission will need to add something about having Council look for funding sources, perhaps the two listed or others, to fund operational costs for newer agencies to help them get off the ground. Fixmer-Oraiz noted the survey had a few comments supporting the emerging agency funding and others that said it wasn't enough funding to even help. Fixmer-Oraiz feels they need to keep the emerging agency funds and perhaps with this data - driven process they can show the need for increasing the amount of funding to emerging agencies. Padron asked overall how this new process will be more permanent or secure for the legacy agencies. Is the only difference the five years? She thought there would be a group of agencies, older agencies, who will get money for sure every year, but if there is a process of ranking and voting then how are we assuring them they will get the money every year. Lehmann said with staff recommendations, there should be more consistent viewpoints over time, whereas with HCDC every year the membership changes by at least three people and that can change the direction. Additionally concrete ranking criteria should provide more stability. Padron said in the few years she has been on the Commission even with clear ranking criteria people find a way to rank differently so she would like to ask Council to commit to a certain amount for some agencies. Fixmer-Oraiz said that is the hope of the meeting between the Coalition and the City Manager to come to an agreement for stabilization. Padron asked if it was possible to just promise some agencies an amount of money for several years, they would still have to apply and have applications reviewed, but less ranking and more like an entitlement grant. Lehmann said theoretically that is possible, but that is very different from what has been done. Padron doesn't feel the process described in the staff memo is different than what is being done now, other than the five years of funding, but could be stuck for five years with a low amount of funding. Fixmer-Oraiz said that is why she wanted to focus on short-term and long-term goals, changes they could make tonight and then others that would need further discussion. McKinstry added this is a political process, new City Council members are elected all the time, HCDC members change, needs in the community change, there are many variables so there needs to be some flexibility. He appreciated the Agencies noted that part of their job is to inform the community about what they do so Council members could have the correct information and create relationships with agencies and make decisions. He feels getting started in the process earlier and being more collaborative will help. Alter stated there are however some constants, need is there, the executive directors and people working in these agencies are subject matter experts and know best what the needs are and how to best use the funds. She added having stability would help agencies do the work they need instead of going through this process every year or couple of years. And then if there is a spike in trends or crisis moment agencies can modify or amend ongoing needs to show the new needs. Alter agrees with Padron that doing this would be radical but having bureaucracy not be a barrier. Fixmer-Oraiz stated the only real answer moving forward is to be more collaborative and to have open communication to make sure changes are made and informed. She feels a recommendation at this time would be to adopt the staff memo with the additions from the Coalition memo, she added she would like to keep the support of the emerging agency funds. Eastham agreed and added the City Manager needs to hear clearly what amount of funding Aid to Agencies needs to be. The recommendation is the staff memo recommendation, paragraphs one through four, plus the Agency Impact Coalition memo points integrated, with the addition of a HCDC liaison to each agency for site visits recommended in bullet point one, paragraph five from the staff memo would be edited to note HCDC recommends continuing the emerging agency funding at its current 5% set aside. Eastham agrees but adds Council should still look at the other two sources of funding for emerging groups. With regards to the application, staff is interested in asking for LMI breakdowns in question six, which says "provide us with succinct specific description of your primary target population, describe client groups in terms of their primary needs and strengths, what barriers do they face. If the agency serves a regional area provide percent of overall clients that are Johnson County residents." Lehmann said the way they have graded that in the past is specific to 30% area median income or equivalent, 50% AMI or equivalent or 80% AMI or equivalent. He said they could potentially include that in a separate question in the appendix for agency demographics, knowing not all agencies have this data so they could say "or provide strong evidence of AMI served" or leaving it open to have "or those at similar standard of income level such as Housing and Community Development Commission July 11, 2019 Page 7 of 12 poverty line" leaving it open for the agency describes their services. Fixmer-Oraiz is curious of the agency perspective on this question of providing LMI demographics and the points assigned to the LMI. Having the data helps HCDC with their deliberations but she knows not all track the data, such as Free Lunch Program or Table to Table. Chelsey Markle the Arc of Southeast Iowa) said it is complicated for them, they do disability services and it is not necessarily a large LMI population but the funding received goes 100% towards the ones who can use the services. Fixmer-Oraiz asked if there was any way to just offer a comment box for the agencies to allow agencies to explain special situations. A member of the audience who was a former Table to Table board member stated a comment box would be very helpful so they could explain they do not keep actual statistics on the people who are eating the food, however they do their due diligence with the organizations who are giving out the food. Lehmann said adding a comment box to every question would double the number of questions which complicates the application. McKinstry suggested just one extra question at the end that is an open comment box to address in detail answers to questions above. Fixmer-Oraiz feels that could get complicated and would rather have a comment box after each question and go for quality and not worry about quantity of questions. Alter noted the LMI in particular, time and time again is hard to quantify when filling out the scoring if there isn't LMI data and it is such a large chunk of points and the comment box would be useful. Fixmer-Oraiz noted there was a comment in the survey about the funding question and the way it is asked in the application doesn't fit every organization. Lehmann said there have been questions/issues with the financial fee structure question as well as Form C and the auto calculations also causes hiccups. Kubly believes those hiccups have been resolved but will check with United Way to make sure it is taken care of. Lehmann said the Commission discussed cutting down the financial section, he as staff would primarily look at agency revenues, expenses and in-kind support, that he doesn't look as closely at fund balances or restricted funds so that may simplify the application. Padron is interested to see how much goes out to the programs and how much is salaries and operations. Lehmann said that is split out in the expenses. The Commission agreed they would only need a comment box for question six regarding the LMI served or benefits to LMI populations. Fixmer-Oraiz also noted they would need to be clearer moving forward to let the agency partners know when they needed to attend meetings for questions/answer periods. Kubly asked if they will be doing a memo to Council with all these recommendations included. Fixmer- Oraiz agreed it would be best, have staff put together a memo and the chair will sign it. Lehmann said the final piece is the scoring criteria. First is taken directly from question one "what specific need of the community is being addressed" so the first criteria is community need. 15 points describes a high priority need the completely addresses the community need and will solve the need; 10 points is high priority which addresses the community need and would have a major impact; 8 points would then be medium or low priorities that completely address the community need and have impact; 3 points for indirectly supporting the need or no supporting documentation or statistics, significant areas are missed in addressing the area; 0 points if it is not identifying a need described in City Steps. McKinstry stated there are high quality agencies and people who provide good documentation and while it may be hard to differentiate high from medium or low priorities (they are all priorities) he doesn't have any recommendation for a better system. Housing and Community Development Commission July 11, 2019 Page 8 of 12 Fixmer-Oraiz feels this is an area the Commission needs to work on, it's not perfect, so maybe keeping it as is for this round but digging into it in the future. Lehmann said with this new system staff will score all the applications, provide a rationale for the scores to the Commission and then the Commission will decide if they accept the staff recommendations or wish to make changes. Lehmann reviewed the rest of the other questions and scoring and the Commission agreed it was a good range of scores and criteria to move forward. He also noted they would look at the previous year's applications to note progress and outcomes from the agencies on previous awards. Fixmer-Oraiz noted that outcomes questions can be quantitative and some are qualitative, for example Habitat for Humanity does great work, but serves less people than other agencies. Eastham noted it must be looked at by individual agency, how their outcomes benefit the people they serve and compare to similar agency, such as did this Habitat chapter serve the same number of people that another Habitat chapter did and that is what they should be asking for. Lehmann liked that idea, they struggle with the depth of service versus the breath of service. Alter felt there is no need for some many categories or ranges of outcomes, it should be an either you are doing it or not. Lehmann agreed and noted staff can use its knowledge of other agencies to know what is happening. They also look at the success and experience of working with agencies in the past. Fixmer-Oraiz suggested combining the last two scoring criteria into a single question. McKinstry moved to recommend to City Council modifications to the Aid to Agencies process and approve FY21 Aid to Agencies forms as with changes as discussed. Alter seconded the motion. A vote was taken and the motion passed 5-0. REVIEW AND DISCUSS THE SOUTH DISTRICT HOME INVESTMENT PROGRAM: Kubly updated the Commission, noting staff went back to Council in May because staff was having trouble locating properties. Since then, they located a property and have a purchase agreement out that will go to Council next week (1232-1234 Sandusky Drive). The purchase price is $124,000 for the duplex so they are excited about the affordability of the property. It is currently vacant because it sustained fire damage earlier this year and tenants were relocated after the fire. Eastham asked if there were any insurance proceeds used to repair the fire damage. Kubly assumes there were for the property owner at that time. Lehmann added one of the units was already stripped down to the studs so that will make the renovation on that unit easier. After the fire, the owners replaced the roof and furnace. This is a side-by-side duplex so it will be two units. Of the two tenants that were renting the units, one left the state but the other might be interested in purchasing one of the units. Kubly stated even with the fire damage they are confident they can repair and rehab the units within the budget. They will have to condo the units so they can sell them separately and there is a building code/fire requirement that may have some additional costs. Eastham asked if staff was proposing to proceed with selling the units to a program qualified buyer under the requirements of the South District Home Investment Program, which was already approved by Council but now the purchase has to go back to Council. Lehmann said Council directed staff to reach out to property owners to locate properties based on the staff South District memo from December. Kubly said this specific acquisition will go before Council next week. Eastham asked the Commission to discuss the modifications to the Program as proposed by Habitat. Heath Brewer (Executive Director, Iowa Valley Habitat for Humanity) stated in terms of the purchase of property and the larger portion of investment the City would have to make is to stabilize the neighborhood by balancing affordable homeownership opportunities with affordable rental options and they understand Item Number: 5. CITY OC IOWA CITY www.icgov.org July 25, 2019 Article from Assistant City Manager: Homeward Bound - The Road to Affordable Housing Description Article from Assistant City Manager: Homeward Bound - The Road to Affordable Housing NLC NATIONAL LEAGUE OF CITIES CENTER FOR CITY SOLUTIONS 4 r } h F r .. t a J NLCNATIONAL LEAGUE OF CITIES CENTER FOR CITY SOLUTIONS About the National League of Cities The National League of Cities (NLC) is the voice of America's cities, towns and villages, representing more than 200 million people. NLC works to strengthen local leadership, influence federal policy and drive innovative solutions. Acknowledgements Special thanks to the housing specialists, scholars, real estate developers, city staff and task force members whose participation and contributions to the task force made this work possible. Photo credits: All photos Getty Images, 2019, unless otherwise noted. Staff to the Task Force and Primary Authors James Brooks Michael Wallace Gideon Berger Jess Zimbabwe Elisha Harig-Blaine Polly Donaldson Richard Livingstone Danilo Pelletiere Brooks Rainwater Contributing Authors and Editors Laura Cofsky Domenick Lasorsa Aliza Wasserman Rita Ossolinski Leon Andrews Kristen Vinculado Terrah Glenn Kitty Dana Sue Polis Laura Furr Andrew Moore Anthony Santiago Cooper Martin Anna Marandi Task Force Members Chair: Mayor Muriel Bowser, Washington, D.C. Councilmember Lana Wolff, Arlington, TX Mayor Keisha Lance Bottoms, Atlanta, GA Councilmember Brandon Scott, Baltimore, MD Mayor Cyndy Andrus, Bozeman, MT Councilmember Jesse Matthews, Bessemer, AL Mayor Vi Lyles, Charlotte, INC Mayor Alfred Mae Drakeford, Camden, SC Councilmember Albus Brooks, Denver, CO Councilmember Greg Evans, Eugene, OR Mayor John Giles, Mesa, AZ Mayor Francis Suarez, Miami, FL Mayor Libby Schaaf, Oakland, CA Councilmember Denise Moore, Peoria, IL Mayor Lovely Warren, Rochester, NY Mayor Ron Nirenberg, San Antonio, TX Councilmember Teresa Mosqueda, Seattle, WA Mayor Jamael Tito Brown, Youngstown, OH Carolyn Coleman, League of California Cities Daniel P. Gilmartin, Michigan Municipal League Mayor Karen Freeman -Wilson, Gary, IN (ex -officio) Clarence E. Anthony, National League of Cities (ex -officio) 2019 O National League of Cities he United States has a housing crisis. In cities and towns nationwide, access to housing — particularly access to safe and affordable housing — continues to be a major concern and increasingly serves as one of the biggest barriers to economic prosperity for American families. Because of stagnant wages, rising real estate prices, higher interest rates, and strict lending standards, housing has become an outsized cost for more and more working families. And not just for homeowners. Nearly 40 percent of households in the U.S. are rented homes, and of these households, half are "cost burdened," meaning they spend more than 30 percent of their income on housing. Too many Americans are forgoing basic necessities just to pay rent or make their mortgage payment. This crisis is affecting the quality of life for people throughout our nation, and the time to act is now. All levels of government need to face this housing crisis head-on. We know: When cities come together and focus on an issue, we get the work done. Cities are incubators for innovation and places where rhetoric translates into action. But cities cannot do this work alone. The federal government must step up, treat our nation's housing needs seriously, and recognize that housing is infrastructure. Together, we must double -down on solutions that are working. We must think bigger and bolder to address our most persistent challenges. And when we have solutions, we must fund them. A safe and stable home is the first step to a safe and stable life. Together, we must act with urgency to end our nation's housing crisis. MURIEL BOWSER Mayor, Washington, D.C., and Chair, NLC's Housing Task Force 2 ousing is the single biggest factor impacting economic mobility for Americans .1,2 When residents have stable living conditions, the benefits are apparent — students do better in school and health outcomes improve .3 Communities benefit as a whole from this stability. Opportunities for investment growth and economic prosperity develop when sustainable housing serves the needs of residents across generations and income levels. It's up to local governments to make the right housing decisions to create positive outcomes for residents and communities. Stable housing is a prerequisite for: Economic mobility. Federal investment in affordable, stable housing is also an investment in children and their future. Student achievement is maximized when students can go home to stable, affordable housing. Low-income children in affordable housing score better on cognitive development tests than those in unaffordable housing.' Younger low- income children in families using housing vouchers to move to neighborhoods with better opportunities earn an average of $302K more in their lifetime. And affordable housing options in high opportunity neighborhoods create economically diverse schools, which are 22 times more likely to be high performing as high -poverty schools.5 Job security. The construction of 100 affordable homes generates on average $11.7 million in local income, 161 local jobs and $2.2 million in local taxes .6 Conversely, involuntary housing loss, like forced moves and evictions, is strongly correlated to involuntary job loss.' Health and well-being. Young children in families who live in unstable housing are 20 percent more likely to be hospitalized than those in stable housing.8 In addition, households with poor housing quality had 50 percent higher odds of an asthma - related emergency -room visit during the period of the study.' Other research indicates that "five percent of hospital users who are responsible for half of the health care costs in the U.S. are, for the most part, patients who live below the poverty line and are housing insecure.10 'The Links Between Affordable Housing and Economic Mobility, Reid, Carolina, The Terner Center, University of California at Berkeley, May 2018. 2 Housing Policy Levers to Promote Economic Mobility, Blumenthal, Pamela and McGinty, John, the Urban Institute, October 2015. ' The Positive Impacts of Affordable Housing on Health: A Research Summary, Lubell, Crain, and Cohen, Enterprise Community Partners, 2007. 4 Housing Affordability and Child Well -Being, Newman, Holupka, Bloomberg School of Public Health, Johns Hopkins University, January 2015, 5 High -flying schools student disadvantage and the logic of NCLB Harris, American Journal of Education, 113(3), 367-394. (2007). 6. Housing Investments Spark Economic Stimulus and Job Creation, Fact Sheet, Opportunity Starts at Home Campaign, 2019. Who gets evicted? Assessing individual, neighborhood, and network factors, Desmond, Gershenson, Harvard University, Social Science Research, 1-16, 2016. 'Housing as a Health Care Investment: Affordable Housing Supports Children's Health, Sandel, Cook, Poblacion, Sheward, Coleman, Viveiros, Sturtevant, National Housing Conference, Children's HealthWatch, 2016. 9 Pediatric Asthma Health Disparities: Race Hardship Housing and Asthma in a National Survey, Hughes, Matsui, Tschudy, Pollack, Keet, Academic Pediatric Association, November 2016. 10Tailoring Complex Care Management for High -Need High -Cost Patients, Blumenthal, Abrams, JAMA, October 2016. 4 Homeward Bound: The Road to Affordable Housing The task force settled on a set of five They also settled on five local national housing policy recommendations: recommendations: 1. Immediately stabilize and stem M 1. Establish local programs by the loss of public and affordable combining funding and financing housing. streams to support housing goals. 2. Follow emergency intervention 2. Modernize local land use policies, with passage of a long-term, stand- including zoning and permitting, alone federal housing bill that to rebalance housing supply and authorizes ten years of new funding demand. for pilot programs that advance housing for all. 3. Identify and engage broadly with local stakeholders; and coordinate 3. Support innovation and IIIII�I across municipal boundaries, to CJet,'- modernization of land -use and develop a plan to provide housing planning at the local and opportunities for all. regional level. i 4. Support the needs of distinct 4. Fix inequities in housing sub -populations including the development and the housing homeless, seniors and persons with "YN finance system. conviction histories. jJS. Support scalable innovation S. Prioritize equitable outcomes in and financing for cities, towns and housing decision as it is an essential An, villages. — component for success. Our goal is to ensure that safe and quality housing will be viewed as a right, not a choice. In order to make real progress in narrowing the gap in access to quality, affordable and safe housing, local leaders must take on the status quo and make significant structural alterations. The most obvious route to address historic inequities would be to institute new policies that consider housing affordability, housing stability and the gap in availability of safe, healthy housing in all communities. City governments must provide tenants with legal support, prevent foreclosures, prioritize control over zoning by communities of color and create independent equitable development entities that put decision-making power over public investment in the hands of communities most at risk for displacement. 5 G;L a Every American deserves the opportunity for housing, because stable housing is a prerequisite for economic mobility, job security, and health and well-being. resident Lyndon Johnson signed The Housing and Urban Development Act into law in 1965. With the stroke of his pen, he transformed the way government approaches housing. The new law established a national goal to "make sure that every family in America lives in a home of dignity and a neighborhood of pride, a community of opportunity and a city of promise and hope"" The Act would reshape American cities, towns, and villages by vastly expanding housing and homeownership opportunities — for some. Official policies of residential segregation and housing discrimination, including mortgage redlining, made their own mark on cities and tribal lands in ways we still haven't overcome. Early Federal Policy American's attitudes and biases about housing are changing; local governments are changing in response. Today's housing crisis is rooted in the bedrock of America's founding and the seizure of land for development by new settlers. Fast forward to the 1930s: America was building on existing racist deed restrictions with the introduction of redlining, which was the overt practice of restricting the neighborhoods in which homebuyers could get federally -backed home mortgages based on race and ethnicity. National policy sanctioned by the Federal Housing Administration included color -coded lines drawn on maps to delineate areas where financial institutions should or should not invest. The federal government built redlining into its developing federal mortgage system, transforming American cities. Local government was complicit in redlining through its role in using the federal guidelines. In the 1930s, redlining converted clear racist action into structural racism that has resulted in long-lasting negative impacts. The practice shaped the geography of American cities, towns and villages, and embedded drastic racial bias into both institutional policy and implicit associations by setting the precedent that spaces associated with people of color are risky investments. Historically, decisions made by local government leaders have in many cases exacerbated this crisis. While there is increasingly strong leadership by mayors and councilmembers, the problems with the current -day housing crisis are often the outcomes of past restrictive local policies, such as the movement in the post -World War II era toward suburbanization and housing policies dependent on automobiles. "HUD at 50: Creating Pathways to Opportunity, Khadduri, U.S. Department of Housing and Urban Development, Office of Policy Development and Research, 2015. 8 Homeward Bound: The Road to Affordable Housing Adding to this history of inequitable outcomes in the housing market are choices made by local government officials to protect incumbent homeowners rather than newcomers through "NIMBY" politics. This trend has grown over the last 70 years. Even though some trends are reversing on sprawl, NIMBYism is still a potent force. In addition to impacts on housing and geography, the legacy of redlining facilitated the racial wealth gap. Since most Americans build wealth through homeownership, the provision of higher value government - backed loans to white families that were denied to families of color subsidized the intergenerational accumulation of wealth differentially by race. People of color were systematically denied loans and forced into devalued properties. Unfortunately, these patterns of racial discrimination in lending continue as, even today, real estate and financial industries deny low-interest loans to people of color at higher rates than they do to white people. Racialized zoning has permanently altered America's cities. It embedded legally recognized segregation into our geography and social relationships. Today's housing crisis is a descendant of these destructive, 90 -year old policies. Addressing today's housing crisis requires us to examine our past. It also requires city leaders to address those residents most impacted by the housing crisis today. These efforts may help rebuild the trust that communities of color have lost in their local governments due to centuries of policies, practices and procedures that caused differential outcomes by race. Changing Urban Patterns Urban decline, characterized by "white flight" (a term coined in the mid -20th century to describe the departure of white people from places largely populated by people of color), and residential segregation, mortgage discrimination, and federal disinvestment in legacy infrastructure, has made its way to the towns, villages and suburbs beyond city limits. Problems once concentrated in large urban areas have sprawled. But there's another problem. Local leaders in the suburban and rural areas don't have federal programs tailored to their municipalities. Instead, their only choice is to address these challenges using set federal programs established with large cities in mind. Suburban sprawl is resulting in problems once relegated to urban spaces. Such problems include those associated with maintenance and replacement of decades - old, federally -funded legacy infrastructure and public housing. And no matter the location or size of a city, village or town, challenges like these are too big to solve alone. Local elected officials are hearing the message loud and clear that all residents are ready for a new direction on housing. Local governments, having contributed to the present state of housing affordability, are changing their approaches to housing. Many are adopting practices that reduce costs and limit other barriers to housing development. Experimentation and innovation at the local level, free from the threat of federal preemption, is the appropriate response at this time. Despite abundant research and evidence supporting the importance of housing stability, the growing demand for housing assistance, and the demonstrable need for greater policy interventions, federal housing assistance is poised to fall to its lowest level in 40 years .1,2 For many reasons, the federal budget and appropriations process has failed to create opportunities for Congress to intervene sufficiently before a housing crisis, past or present. The housing foreclosure crisis precipitated The Great Recession that finally spurred Congress into action with a recovery act, and a new set of quickly -assembled programs to mitigate foreclosure and eviction. In the end, these efforts did not live up to expectations. The federal budget and appropriations processes are also subject to constant and growing uncertainty, even in years when the government avoids shutdowns. Uncertainty over program funding and subsidy availability weakens potential for federal intervention in the housing market, where lenders and developers alike crave and reward certainty. Furthermore, most public housing in the U.S. is at least 40 years old and in need of repair. Despite a clear need, years of funding cuts, uneven management and oversight have jeopardized the longevity of about a million units of permanently affordable public housing. The primary residents of public housing — families with children, the elderly and people with disabilities — will strain public services if their housing becomes distressed to the point where they have to be involuntarily removed. New Budget Deal Needed to Avert Cuts, Invest in National Priorities, Parrott, Kogan, Taylor, Center on Budget and Policy Priorities, 2019 'Chart Book: Cuts in Federal Assistance Have Exacerbated Families' Struggles to Afford Housing, Rice, Center on Budget and Policy Priorities, 2016 NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES • ousing affordability issues can be particularly harmful for more vulnerable populations like the homeless, senior citizens and residents with incarceration histories. However, improvements over the past decade serve as evidence that positive change will continue. �g Q Rwi mu The Homeless Housing and other issues, such as homelessness, have been viewed as intractable urban policy issues for decades. But the nation's housing -affordability crisis has only been around since the 1970s, with the modern experience of homelessness emerging in the early 1980s. As cities grappled with unsheltered homelessness, a variety of responses developed around the idea of emergency shelter. In the ensuing decade, a shelter and transitional housing -based system developed with budding federal resources. At the start of the 1990s, homelessness became less of a priority. Additionally, the homeless were often required to demonstrate medication and sobriety compliance before being considered for permanent housing placement. Introduction of the U.S. Housing and Urban Development's Housing First strategy, built on the premise that the answer to homelessness is housing, turned this framework around in the early- to mid-1990s. The strategy placed people into housing, regardless of sobriety and medication compliance. It also provided client -tailored case management services. As efforts built, these services began to include clinically -proven case management techniques based on harm -reduction and trauma -informed care. In 2010, the federal government's plan, Opening Doors, amended its plan to prioritize specific sub -populations for the first time. By then, many communities had developed plans to end homelessness, and since 2010, veteran homelessness in the U.S. has declined 48.8 percent. �J Senior citizens With an estimated 50.8 million people aged 65 and older in the U.S., addressing the issue of home repairs and modifications so that residents can age in place can seem daunting for local leaders. But these modifications are necessary to reduce emergency responder calls for injuries resulting from homes not having things like ramps and grab bars. To strategically meet this growing need, city leaders can standardize the assessment of needs, improve resource targeting, enhance service provider coordination, increase client - 12 Homeward Bound: The Road to Affordable Housing level data -sharing and persistently engage local decision makers. Home repair programs administered by local government (and often funded with resources from the CDBG program) can be targeted to support low-income seniors. Capturing these data and targeting information about these households allows cities to address various housing challenges. Residents with incarceration histories Cities and towns of all sizes need to consider their roles in policy, services and support for the nine million Americans who get released from jail each year, as well as the more than 600,000 persons released annually from state and federal prisons. Even a few days spent in jail can cause housing issues. In addition, challenges to finding housing often worsen after prison reentry. In 2013, HUD noted that "Incarceration and homelessness are highly interrelated as the difficulties in reintegrating into the community increase the risk of homelessness for released prisoners, and homelessness in turn increases the risk for subsequent re -incarceration." (Notice PIH 2013-15 (HA)12 To cut down on the risk of homelessness for these residents and improve their access to housing, city leaders must commit to reviewing, and modifying if necessary, local fair -housing policy related to landlords' ability to deny rental applicants based solely on conviction history. Prison and pre -arrest diversion also rank high on the list of city policy options. Some city leaders may also have the ability to influence local public housing authority (PHA) policies. PHA can also contribute to other inequities, as described in 2015 HUD guidance: "Because of widespread racial and ethnic disparities in the U.S. criminal justice system, criminal -history -based restrictions on access to housing are likely disproportionately to burden African-Americans and Hispanics." (Notice PIH 2015-19)13 City leaders who can influence PHA policy should dig further and ask themselves if the local PHA places additional restrictions on access to public housing beyond those restrictions required by Federal regulations (which are limited to one's name appearing on the lifetime sex offender registry or convictions for manufacturing methamphetamines on government property). If such additional restrictive layers exist, city leadership should look into whether or not the restrictions meet a "reasonable and necessary" test of producing tangible evidence of improved public safety. If they don't, actions should be taken to remove those additional layers. "Guidance on housing individuals and families experiencing homelessness through the public housing and housing choice voucher program,, U. S Dept.o.f_Housing and Urban Development Washington D.C. June 10 2013 "Guidance for Public Housing Agencies and Owners of Federally -Assisted Housing on Excluding the Use of Arrest Records in Housing Decisions U.S. Dept. of Housing and Urban Development Washington D.C. Nov. 2 2015 13 merican municipalities represent a huge variety of sizes, places and circumstances, each with their own housing challenges. For many cities, especially those smaller in size or those with a legacy of growth driven by industrial manufacturing or family farms, stagnant economic trends have led to an excess of homes and/or residential lots. Cities in this situation show a distinct pattern of economic changes that diminish the earning power of workers, often starting with increasing global competition, the loss of major employers or natural disasters such as draught or flood. In the absence of jobs and with reduced opportunities, populations decline, and tax dollars for new municipal investments designed to spur growth decrease. Efforts to boost economic growth do not directly address vacant and abandoned housing, one of the greatest challenges for cities in this bucket. The 2018 report, The Empty House Next Door, 14 suggests that small cities and rural areas have levels of vacancy comparable to, or higher than, even the most distressed central cities. Other problems can include rental property owners who fail to maintain their property in habitable condition, inadequate building inspection and code enforcement, and limited protections for tenants facing eviction. Problems can extend to the leveraging of public lands through land trusts or land banks, and effectively using the Community Reinvestment Act to advance private sector investment. 14 Guidance on housing individuals and families experiencing homelessness through the public housing and housing choice voucher program U. S. Dept. of Housing and Urban Development Washington D.C. June 10 2013 16 Homeward Bound: The Road to Affordable Housing The first step is accruing data on vacant property. Gary, Indiana, through its Gary Counts initiative, has inventoried more than 58,000 parcels, leading to the identification of more than 25,000 empty lots and 6,500 vacant buildings. More than 200 volunteers, plus partners from Indiana University, University of Chicago, The Knight Foundation and the Legacy Foundation, supported the effort. The goal of this exercise, according to Gary Mayor Karen Freeman -Wilson, was to "make smarter, more calculated decisions on how to best address demolition and redevelopment." The city made this a community -wide priority. Although demolition of a dilapidated house is often the safest course of action, the cost of demolition and the backlog on such projects remain a challenge. Once a lot is cleared however, an increasing number of policy options emerge, like greening empty lots, side -lot annexations, land banking and land trusts. Additionally, many cities create opportunities for vacant lot annexations as part of a wider neighborhood stabilization plan. In this case, existing homeowners may annex an adjacent vacant lot, thus increasing the size of their individual lot. This usually comes with an incentive, such as a property tax waiver for some fixed period on the value added to individual's property. This technique keeps land on the tax rolls over the long-term, brings stability to the neighborhood and provides a tangible benefit to the homeowner who acquired the extra land. Another alternative is to reinvent vacant lots as open space, especially in neighborhoods with few parks and playgrounds. Open space can also be turned into neighborhood gardens. Maintaining open space around a neighborhood has an added environmental benefit: Open land absorbs rainfall instead of contributing to runoff that clogs sewer pipes. For land that is neither immediately commercially viable for sale nor useful for parks and open space, land banks and land trusts present the most useful options. A land bank acquires and holds land for future investment and development. Often these properties were the subject of foreclosure proceedings and may be tax -delinquent properties. Land banks are separate institutions from local governments but work hand -in hand to establish strategic long-term goals for real estate development. A land trust (or community land trust), on the other hand, is a form of shared equity ownership to ensure permanently affordable housing. The largest and most well-known in the U.S. is the Champlain Housing Trust in Vermont. The second largest is the Dudley Neighbors Inc. property in Boston's Roxbury neighborhood. The trust manages real estate pulled from the private marketplace. Home prices are kept at below market rates because the land is kept by the trust and the appreciation of the property is shared from owner to owner over time. Each owner can buy into the trust at a below-market price in exchange for sharing the appreciated value of the property with the trust at the time of sale. This mechanism guarantees long-term affordability in perpetuity. The best strategy is for cities to use an "upstream approach." This means preventing vacancy before it happens. This approach requires coordination of several strategies including temporary or emergency mortgage/ rental assistance, vigorous code enforcement including rental inspection ordinances, incentive funds for improvements to homes and apartment buildings (going to owner - occupants or to building owners), and protections for tenants from evictions that aren't just -case. Seniors on fixed incomes, for example, are a perfect target for programs that offer financial assistance for home maintenance and improvement toward the goal of helping residents age in place. For smaller communities that lack capacity for such preemptive measures, a shared regional housing authority (or even shared code inspection and enforcement) may prove to be an appropriate mechanism to manage such tasks. Finally, because housing is such an important component of community prosperity, investments in nurturing or simplifying the creation of new small businesses is an essential task for city government. The U.S. Small Business Administration indicates that there are more than 30 million small businesses, which account for more than 99 percent of the U.S.' businesses" These businesses are the drivers of economic churn in American communities and hire locally. 152018 Small Business Profile, U.S. Small Business Administration, Washington, D.C., 2018, https://www.sba.aov/sites/default/ files/advocacy/2018-Small-Business-Profiles-All.r)df. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES P� L merican cities have varying levels of authority and different combinations of housing -related policy tools at their disposal. Even more important to note is that each city faces unique conditions in its local housing market. These varying conditions call for a diverse array of approaches to reach successful outcomes especially for "missing middle" housing for average income Americans. When it comes to cities providing housing for low and very low income residents, the efforts contributed by local governments must be supported by robust federal housing subsidy programs such as HUD's HOME and CDBG programs. Local housing market factors include: 1. Fluctuations in job and population growth or loss 2. Labor costs 3. Building material costs 4. Availability and cost of credit for consumers and for investors S. The presence and capacity of real estate developers 6. The presence and capacity of Community Development Corporations and Community Development Financial Institutions 7. Availability, cost and regulation of land 8. The type, location and quality of existing housing 9. State preemptions 10. Building codes and inspections policies 11. Tenant protections (such as just -cause eviction, rent control, rental inspections) 12. Federal housing supports 20 Homeward Bound: The Road to Affordable Housing 13. History of real estate lending practices, including disparities by race, gender, etc. 14. History of restrictive covenants and discriminatory zoning practices like redlining 15. Perceived quality of schools 16. Perceived value of housing stock production compared to other policy goals (such as community character, building height, setback requirements and other aesthetics) Some of these conditions are beyond local government control. Others, such as use of federal housing supports, land regulation, and how a city manages its permitting and real- estate development processes can be greatly influenced by local governments. In cities with hotter markets, skyrocketing housing prices are often the result of mismatches between supply and demand. A growing economy paying good wages to an expanding high -skill workforce attracts more residents. Those residents in turn compete for a limited pool of housing. Thus, supply of housing for middle income working families remains insufficient. Meanwhile, older housing stock that might otherwise be affordable remains out of reach for many lower- and middle-income residents because consumer demand keeps rents high overall. This is an example of downward market pressure. In cooler -market cities where employment numbers are flat or declining and population may also be declining, property values tend to be stagnant. This happens when properties fail to appreciate, which means homeowners don't accumulate wealth even though tax rates often increase. Existing residents — many of whom may be on fixed incomes, 21 like seniors — experience greater and greater economic strain. These cities in economic transition often have little capital to make strategic investments to keep decay, blight and abandonment at bay. The spiral continues until land prices drop so low that they entice private sector speculation. This trend has severe consequences, like the potential loss of existing affordable housing due to abandonment, neglect and ultimate demolition, and displacement of existing residents who will not reap the benefits associated with new investments. Local Case Studies Different cities have handled these challenges differently. Members of the housing task force have shared their stories to help their peers think through their own housing challenges, and consider what tools might help solve them. Homeward Bound: The Road to Affordable Housing Case Study: Washington, D.C.'s Housing Preservation Fund Key strategies learned in Washington, D.C.: • Make preserving existing affordable housing a priority. • Partnerships outside local government are essential to secure the necessary capital. Washington, D.C.'s, population and economy have grown in recent years, causing an increased demand for affordable housing for low and moderate income households. In addition, the current affordable -housing stock is at risk because: • Between 2006 and 2014, at least 1,000 subsidized housing units became less affordable. • An additional 13,700 units have subsidies that will expire by 2020 and may also become less affordable. Following the recommendations of the DC Housing Preservation Strike Force (an 18 -member team of housing experts and members of the public created in 2015 by Mayor Muriel Bowser to address the issue of affordable housing), the city created a "Preservation Unit" within the Department of Housing and Community Development. The unit launched in 2017 and focuses on preserving affordable units with and without government subsidies. It also collects and maintains data on all affordable housing opportunities in the city. Its specific duties include: • Reaching out to property owners, investors and others associated with real estate and housing advocacy in the District to establish relationships and gather information. • Discussing specific options with owners and other interested parties with the goal of coming to agreement on preservation outcomes, even when the threat to affordability is not in the immediate future. • Providing financial and technical assistance in real-time so preservation emerges as the most efficient and effective method for the city to provide affordable housing. Mayor Bowser invested $10 million in local funds for the unit's Housing Preservation Fund in fiscal years 2017 and 2018. Along with additional private and philanthropic investments, the fund will grow to about $40 million. The money will be used to help finance eligible borrowers intending to purchase and maintain occupied multi -family housing with more than five units, half of which must be affordable to households earning up to 80 percent of the median family income. As of this writing, more than 800 units have been preserved as affordable housing since the start of fiscal year 2018. Targeted programs that address challenges in the housing market are aligned with the funding. For instance, the Small Buildings Grant Program will provide funds for limited systems replacement and other key repairs to eligible property owners of multi -family rental housing of five to 20 units. Repairs are expected to improve substandard housing conditions, including safety and environmental hazards in D.C. as required by other regulatory agencies. The Tenant Opportunity to Purchase Act gives tenants in buildings for sale the first opportunity to buy the building. The following services are available to support tenant groups seeking to purchase a building and convert the units into cooperatives or condominiums: 1. Financial assistance such as seed money, earnest money deposits and acquisition funding; 2. Technical assistance; and 3. Specialized organizational and development services, to include structuring the tenant association, preparing legal documents, and helping with loan applications. More than 1,000 units have been preserved as affordable housing since fiscal year 2002. Other targeted programs, like the Single - Family Rehabilitation program and the Safe at Home program, assist seniors with home repairs to alleviate D.C. building -code violations, remove health and safety hazards, and improve accessibility for residents with mobility or other physical impairments. The city is also instituting a new Housing Assistance Program for Unsubsidized Seniors that provides modest housing assistance to low-income seniors who do not otherwise receive housing assistance. Case Study: Safeguarding Affordable Homes, Oakland 17K/17K Key strategies learned in Oakland: • Set realistic targets. • Back the initiative with local resources. • Secure community support. Oakland, California, rode the crest of a great economic wave in 2015. Years of growth in both higher -wage and lower -wage jobs had helped to make the city a haven for tech entrepreneurs and others seeking to share in the growing prosperity and Bay Area lifestyle. But the large numbers of businesses and people pouring into the city strained the local housing market. Limited housing supply and rising prices contributed to the growing number of Oaklanders unable to purchase or rent affordable homes. In addition, local housing dynamics led to the displacement of generations of vulnerable residents, including many residents of color and low-income families who initially established the vibrant and diverse culture of the city. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Mayor Libby Schaaf decided to guard these communities. In September 2015, she convened the Oakland Housing Cabinet, an assembly of city councilmembers, housing experts and community stakeholders. The Housing Cabinet quickly established a set of shared values and criteria for evaluating the feasibility of the city's strategic options on housing affordability, with help from the city's Roadmap Toward Equity: Housing Solutions for Oakland. 16 The following year, the Housing Cabinet released its Oakland at Home" report. The report outlined a new goal: to protect 17,000 households from displacement and building 17,000 new and affordable homes by 2024. Mayor Schaaf called the plan "17K/17K." Strategies included using funds from the city's $600 million infrastructure and affordable housing bond called "Measure KK" and reforming the city's permitting process. By 2019, nearly 13,000 Oaklanders now benefited from new tenant protections and the number of evictions had declined by more than 30 percent.1' In addition,10,000 new homes have been built, representing a 34 percent increase in the number of affordable homes over the previous three years. Case Study: A Fight for Housing Affordability in Atlanta Key strategies learned in Atlanta: • Partner with the private and nonprofit sectors. • Set a bold vision. • Commit local resources. When it comes to affordable housing, Atlanta is battling a serious crisis. The rising cost of owning or renting a home has become a serious barrier, and eighty percent of city households spend 45 percent or more of their annual income on housing and transportation expenses. About 1,500 homes are lost each year to deterioration. Mayor Keisha Lance Bottoms recognized the need for funding and a comprehensive policy agenda to address the situation. HouseATL, a taskforce funded by the Arthur 11 Policy Link & City of Oakland, "A Roadmap Towards Equity: Housing Solutions for Oakland, California" https./ www. olicvlink. orgy ites/ default files/pl report oak housing _07071 df, (2015). 17City of Oakland & Enterprise Community Partners, "Oakland at Home: Recommendations for Implementing A Roadmap To- ward Equity..." htto:/Lwww2.oaklandnet.com/w/OAK057411,(2016). 18City of Oakland & Enterprise Community Partners, "Oakland at Home Update: A Progress Report..." ham://www2.oaklandnet. com/w/OAK057411, (2019). M. Blank Family Foundation in partnership with Urban Land Institute Atlanta and others, developed a set of 23 tactical recommendations to improve housing affordability. The recommendations focused on households earning less than 120 percent of the area's median income (AMI). HouseATL committed to raising $500 million from local private and philanthropic resources, and another $500 million from local public resources.19 HouseATL's strategy for leveraging private and philanthropic resources calls for raising between $20 and $50 million annually from local social impact funds and other charitable organizations over a period of eight years. An additional $50 to $75 million in private capital will be raised from individual and corporate investors through the use of New Markets Tax Credits. Private sector investments in the production of affordable homes will also be facilitated through regulatory reforms to Atlanta's zoning and building codes. This will allow for greater innovation, cost savings, and increased production within the housing sector. Case Study: Connecting Health and Housing in Portland Key strategies learned in Portland: • Leverage investments by local healthcare organizations to expand affordable housing. • Prevent displacement to improve residents' health. Five local healthcare organizations in Portland, Oregon, recognized the connection between housing and health and got together to do something about it. They donated $21.5 million to a nonprofit organization called Central City Concern (CCC). The organization was created decades ago by the city of Portland and Multnomah County to administer local grant money, since the Oregon Constitution prohibits cities from partnering directly with private organizations. 19"Investing In an Affordable Atlanta" https://houseatl.org/recommendations/, 2019. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Other contributors, including the city, have given a total of $90.9 million to CCC's Housing is Health project. The money will fund three housing developments that will result in 379 units for residents with high medical needs and other residents who are either homeless or at risk of homelessness. Creating these affordable housing units is intended to stop further trauma, like displacement, as it would make residents' recoveries and long-term health outcomes more difficult. Each of the three buildings is located in an area of the city identified as at risk of gentrification. The three buildings provide support services, such as recovery support and life skills training, and are designed to serve residents with particular needs. For example, the Eastside Health Center will provide affordable supportive housing units for people in recovery and respite housing, and a small number of units will be for palliative care. One building includes a federally -qualified health center. Case Study: Weathering Compromise in Seattle Key strategies learned in Seattle: • Plan for increasing densities. • Include developers in the planning. • Prepare for neighborhood push -back. Seattle's population growth has been explosive. Estimates from 2009 for the Puget Sound region suggested that the area's total population would top 5 million by 2040, an increase of nearly 40 percent. In 2009, there was already substantial competition for a relatively limited supply of available and affordable homes. The increased competition for homes drove prices upward and exacerbated a persistently limited supply of income- and rent -restricted affordable homes. Inclusionary zoning had been a priority for affordable housing advocates in Seattle for decades. But the politics around mandatory affordability requirements had stymied progress on the policy. Seattle's city council identified the need to build more affordable units in late 2014. Affordable housing advocates and community groups, and faith, labor and environmental organizations, agreed. The council began the process of reviewing proposals to impose mandatory linkage fees on every square foot of multifamily residential and commercial development citywide. The proposal excluded the 65 percent of the city zoned exclusively for detached single-family houses. As proposed, the linkage fee policy would require payments ranging from $5 to $22 per square foot developed. There was also an option for builders to set aside three to five percent of units built for affordable housing that would be accessible to households that earn up to 80 percent of the area's median income. In contrast to an earlier incentive -zoning effort, this proposed linkage fee did not include a provision for additional up -zoning capacity for developers. Area developers opposed this plan with such force that Seattle city leaders enlisted the Housing Affordability and Livability Agenda (HALA) committee to help come up with a compromise. HALA put together its leading recommendation in July 2015. The recommendation was for a policy of Mandatory Housing Affordability (MHA), a "both/and" approach to inclusionary zoning. The policy would, for the first time, require new multifamily and commercial development to contribute to affordable housing and increase development capacity wherever requirements were imposed. The program was designed to create 6,000 new rent- and income -restricted homes over a decade while allowing for the creation of more housing options to meet the growing need. The program mandated that all new multi- family housing developments reserve between 5 and 11 percent of planned units as rent restricted housing for low-income families. The alternative was to contribute between $5 and $34.75 per square foot of development to the Seattle Office of Housing fund to build affordable housing .20 MHA also changed zoning laws in 27 of Seattle's urban villages to allow for increased height and density of buildings for developers. In many ways, this was the more politically challenging aspect of the policy, given longstanding local pushback on efforts to increase zoning capacity in Seattle neighborhoods. Over the next four years, several rezone packages triggering MHA were passed for some of the fastest- growing urban center neighborhoods. In March 2019, "citywide" MHA implementation was signed into law. "City of Seattle, "Implementing Mandatory Housing Affordability (MHA) Citywide" http://www.seattle.gov/Documents/De- partments/HALA/Policv/MHA_Overview.pdf. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Case Study: Evolution of Neighborhoods in Charlotte Key strategies learned in Charlotte: • Use data in planning and decision making • Partner with private sector specialists. • Anticipate that land use priorities are not static. The overarching goal of Charlotte, North Carolina's, Housing Locational Policy (HLP) was to distribute affordable housing investments into more affluent communities to limit the concentration of poverty within distressed neighborhoods. In 2011, city leadership took the policy a step further, targeting the city's investments towards subsidized multi -family housing developments. The city started by conducting a comprehensive analysis of Charlotte's neighborhood statistical areas. The analysis identified neighborhoods as "permissible" or "non -permissible" areas for multi -family housing development. Over time, local housing conditions in Charlotte began to change for the better. The city's ability to locate and maintain affordable housing development also improved. Within five years, market conditions had noticeably evolved. Under the existing HLP rules, many neighborhoods where affordable housing had occurred naturally became designated as non -permissible areas for new subsidized -housing development. Furthermore, many of the residents of these historically affordable neighborhoods were at risk of displacement. Based on community feedback and input from the city council, city leadership determined that the HLP should change course and focus on three goals: First, the HLP should provide clear guidance for investments that create and preserve affordable and workforce housing in areas near employment, commercial centers, existing and proposed transit hubs, and the center city, and within gentrifying neighborhoods. 2. Second, the policy should support the city's revitalization efforts. 3. Third, the HLP21 should promote diverse neighborhoods. To meet these goals, city staff proposed "site scoring." The city's housing operations manager, along with the data -analytics team, used public data to power an online tool. The tool scored proposed development sites against four criteria: ""City of Charlotte Affordable Housing Location Guidelines" httr)s://charlottenc.Qov/HNS/Housing/Strategy/Documents/Af- fordable%20Housing%2OLocation%2OGuidelines CouncilApproved 01.14.19.ndf, (Jan 16, 2019). 1. Proximity to current and/or planned transit assets and amenities, 2. Income diversity, 3. Access to jobs within a reasonable distance, and 4. Level of neighborhood change or risk of displacement in historically lower- income neighborhoods. Development sites were allocated a maximum of ten points in each scoring criteria and scored based on proximity to transit assets and amenities like grocery stores, medical facilities, schools, banks and parks. Full points were awarded to proposed sites within half a mile of transit or other designated amenities. Fractional points were awarded to sites at distances greater than a mile from transit or amenities. City councilmembers assessed site scores independently or in aggregate with higher scores, indicating greater alignment with HLP policy. The scoring methodology returned consistent and useful information, so the city approached its longstanding partner and a local software company, Esri, to automate its manual processes into an online geographic information system application. Case Study: Rethinking Vacant Land in Peoria Key strategies learned in Peoria: • Leverage city -owned land for permanent affordability since it is an unmatched real estate development asset. • Utilize land banks and land trusts since they contribute to permanent affordability. Peoria's Southside neighborhoods are a microcosm of the city's housing market crisis. The historic area's commercial and residential buildings have deteriorated so much so that very little market demand exists. A typical single-family home sells for less than $20,000, making new construction impossible without deep subsidies. In addition, downward pricing pressures make renovation of older housing financially infeasible. With so many Southside homes lost to structural deterioration, and in some cases abandonment, the affordability and availability of the community's remaining housing stock has been negatively affected. In response, Peoria's Community Development NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES • Homeward Bound: The Road to Affordable Housing Department established a plan for city -owned vacant land. The plan emphasized three main strategies: 1. Land banking (breaking up lots for future sale), 2. Development, and 3. Side -lot transfer to interested adjacent owners. Peoria leadership leveraged the land - banking program for city -owned parcels in neighborhoods with weak real estate markets and a high density of city property. In other neighborhoods, leadership made city -owned parcels available to developers if they could demonstrate verifiable plans, financing and familiarity with the development process. In most of these cases, subsidies, tax credits or in-kind donations from partners such as Habitat for Humanity facilitated development. Parcels suited for side -lot transfers typically had limited development potential and were offered to adjacent property owners with limited or no history of code violation or delinquency. Through these and other steps, the city intends to divest itself of ownership of many vacant properties while facilitating a more equitable share of residential development within the capitalized Southside neighborhoods. Case Study: Bozeman's ADU standardization Key strategies learned in Bozeman: • ADUs provide immediate density increases while maintaining the form of traditional single-family neighborhoods. • ADUs offer greatly decreased cost per unit. A strong local job market, in part, has driven Bozeman's recent housing challenges. In recent years, the city has boomed with 11,000 new jobs and now has an unemployment rate of 2.5 percent.22 With nearly all of Bozeman's local workforce employed, local employers have been forced to look outside the city for skilled workers to fill the open positions. The influx of new residents and job seekers has strained Bozeman's limited housing supply. The city recently conducted a Community Housing Needs Assessment. It concluded that the city needed an additional 1,460 housing 22Wendy Sullivan & Christine Walker, Bozeman, Montana Community Housing Needs Assessment. City of Bozeman, 2019. https'.//www.bozeman.net/home/Showdocument?id=8773. units to catch up to current demand, and as many as 6,340 new units by 2023. But Bozeman would need a range of housing units including both rental and for - sale homes for families, employees filling vacant and newly created jobs, and retirees. To help ensure affordability, at least 60 percent of the new housing supply would need to be subsidized. Early on, city leaders recognized that making a wider and more diverse selection of housing types available could ease Bozeman's tight housing markets. It would also have a positive impact on affordability. Residential developments with a greater density of smaller, less-expensive homes, featuring innovative design rose, to the top of the list. Bozeman's Unified Development Code (UDC) had recently changed, making accessory dwelling units (ADUs), and duplexes easier for homeowners to utilize. The city's planning division worked with a group of college students from Montana State University's College of Architecture in late 2018 to promote the use of ADUs to property owners. Students worked with city planners to ensure that designs were code compliant. They also addressed issues related to parking requirements and fitting designs into the 600 square -foot ADU size limit.2a The students presented their final ADU designs to homeowners and the City Commission. Designs received official agency review by the Chief Building Official for UDC and building code compliance. City officials hope that designs will serve as a model for wider community use. In a separate effort to address housing affordability, Bozeman partnered with the Trust for Public Land on the Bridger View Redevelopment Project (BVR) to create a dense community of more than 60 modest, well-designed homes on an eight -acre parcel in northeast Bozeman. Homes had one to three bedrooms, ranged in size from 800 to 1500 square feet, and were clustered in layouts that emphasized shared common spaces and outdoor living. More than half of the homes cost between $175K and $250K.24 These prices were well below the city's median sale price of approximately $375K.25 Revenue from the sale of market -rate units subsidized the sale of the below-market value units. To increase the feasibility of the project, the city split the cost of infrastructure and impact fees for the project. 21 Policy Link & City of Oakland, "A Roadmap Towards Equity: Housing Solutions for Oakland, California" https://www.policylink. org/sites/default/files/pl-report-oak-housing-070715.pdf, (2015). 24 City of Oakland & Enterprise Community Partners, "Oakland at Home: Recommendations for Implementing A Roadmap Toward Equity..." http://www2.oaklandnet.com/wZOAK057411, (2016). 21 City of Oakland & Enterprise Community Partners, "Oakland at Home Update: A Progress Report..." http://www2.oakland net. com/w/OAK057411, (2019). NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Case Study: Envisioning a New Future in Minneapolis and single family zoning elimination Key strategies learned in Minneapolis • Confronting historic patterns of housing inequity should be a significant local priority. • Aggressive and creative community engagement is essential to a positive outcome. Minneapolis has set ambitious goals for improving the city's focus on housing affordability and choice, as well as racial equity and climate change. The plan, called Minneapolis 2040, reflects two years of public feedback which includes voices from historically underrepresented groups.26.27 New provisions for up -zoning (expanding residential zoning to more dense use) will allow duplexes and triplexes to be built in all residential areas (formerly R-1) and thus allow denser development, particularly connected to transit zones. Other policy innovations include data -focused research to guide and evaluate housing priorities. These policy changes also support different housing types, like prefabricated and manufactured housing, ADUs and tiny houses .28 A variety of local Yes in My Backyard (YIMBY) activist groups and city officials have contributed to the success of these fledging efforts. Conversations about the history of discriminatory housing practices perpetuated by single-family zoning (about 50-60 percent of Minneapolis is zoned for single-family homes), as well as the need for "missing middle" type homes,29 influenced change. Housing advocates and city leaders organized Housing advocates and city leaders organized walk -and -talk tours in every ward, inviting residents to explore their communities while envisioning a better future .30 Street fairs and neighborhood events engaged residents rather than traditional neighborhood meetings.31 This extensive community outreach effort is intended to minimize the potential disruptions within the city's neighborhoods. zs https://minneapolis2O4o.com/overview/ 27 httos://minneapolis2O4O.com/planning-process/ 28 https://minneapolis2O4O.com/topics/housing/ 29 https://www.nvtimes.com/2018/12/13/us/minneapolis-single-family-zoning.htmi 30 https://www.curbed.com/2019/1/9/18175780/minneapolis-2040-real-estate-rent-development-zoning 31, Case Study: Making Boise Work for All Residents Key strategies learned in Boise: • Addressing housing affordability for residents all incomes requires embracing denser, more walkable neighborhoods and housing of all types. • It's imperative to secure financial commitments from the public and private sector. Boise is the most populated city in Idaho and, with a three percent growth rate in 2017, is among the fastest growing areas in the U.S. But despite strong job growth, close to half of renters in Boise are considered "cost - burdened," spending more than 30 percent of their income on housing. The city estimates needing 1,000 new housing units annually for the next 20 years. To meet this challenge, the city's Grow Our Housing initiative embraces dense, walkable neighborhoods, access to housing at all income levels, and financial commitments from both the public and private sectors. The initiative seeks to: • Create new mixed-use and other urban zones that emphasize higher residential densities, • Reduce minimum lot size and increase maximum density in most common residential zones, • Grant density bonuses for small footprint housing developments (with homes of less than 700 square feet), • Increase allowances for ADUs including two-bedroom units, • Expand incentives to developers who build housing for residents at 80 percent or below the area's median income, and • Create a land trust to conserve affordable housing financed by public and private dollars. Despite the clear direction and commitment of local leadership, Boise faces significant challenges, including anti -growth groups that advocate for slower change. In addition, state government prohibits the city from making use of inclusionary zoning or issuing a voter -approved tax levy for the expansion of local bus services linking residents to jobs in the area. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Case Study: Greensboro's Safe Homes for Kids with Asthma Key strategies learned in Greensboro: • Both small and large interventions can improve community health. • Community partners can bring significant capacity to help cities achieve their health goals. The Greensboro Housing Coalition has worked with the Kresge Foundation on its Advancing Safe and Healthy Homes for Children and Families Initiative (ASHHI) to improve rental housing conditions in the city since 2012. The coalition's "Removing Asthma Triggers and Improving Children's Health" project involved working with partners at the University of North Carolina at Greensboro, Triad Healthcare Network and Cone Health to improve housing conditions in the homes of 41 pediatric asthma patients between 2013 and 2015. As a "demonstration project" — one intended to promote innovation and serve as a basis for analysis — the work included home interventions such as repairing leaks and improving ventilation. These interventions led to patients sleeping better, having an easier time working at school and home, using their asthma medications less, and needing fewer medical visits. Households that received follow-up visits showed a 50 percent reduction in hospital bills. Since the ASHHI project, the Greensboro Housing Coalition has taken an even broader approach to asthma prevention. Now, leadership looks beyond the physical home environment to neighborhoods most impacted by asthma, like Cottage Grove, which was built on the site of the old city dump. Collaborative Cottage Grove is a grassroots effort that seeks to improve housing and neighborhood conditions by working with the community and local leaders to prioritize initiatives that promote better health. Case Study: Reshaping More than Milwaukee's Skyline Key strategies learned in Milwaukee: • Focusing on people at risk of displacement helps preserve community stability. • This focus can become the key to further investment, both commercial and residential. Downtown Milwaukee has undergone a nearly decade-long construction boom that has reshaped its skyline. Some estimate that the boom has enabled Milwaukee's builders to boost the local housing supply with nearly 12,000 new units of market -rate housing. But, the trend in prosperity belied challenges in nearby neighborhoods. These communities suffered from lingering issues of vacancy and abandonment as well as rising foreclosures and evictions. They also faced a severe shortage of affordable housing units for low income families. In fact, Milwaukee has one of the worst shortages of affordable housing in America. Only 25 affordable housing units are available in the city for every 100 extremely low-income households.32In a key finding from Milwaukee's 2018 Anti -Displacement Plan (ADP), the Department of City Development noted that the City's ability to preserve and protect housing choices for its low-income families at risk for displacement, would require production of new affordable housing units.33 In response, Mayor Tom Barrett announced his 10,000 Homes Initiative. The goal is to build or improve 10,000 housing units over ten years in neighborhoods throughout the city. The 10,000 Homes Initiative will rely on funding from developer -financed tax -incremental districts — an economic development tool infrequently used to fund residential development. In early 2019, city leaders drafted guidelines governing the use of tax increment financing (TIF) assistance for multi -family residential developments. The new TIF -assistance guidelines prioritized residential development projects in three types of neighborhoods: those at risk for displacement, those where robust market -rate housing development has exponentially outpaced affordable housing development, and those that lack current affordable housing options. In order to be eligible for TIF assistance, a proposed building or improvement project must have at least 20 percent of its proposed units at prices affordable to households earning 60 percent or less of the AMI and 25 percent of units must be affordable to households earning 50 percent of the AMI. All projects were required to yield a minimum of 20 affordable housing units that will remain affordable for at least 15 years. 31 Nusser, Susan. "Can Milwaukee Really Create 10,000 Affordable Homes?" CityLab. https://www.citylab.com/equity/2018/10/ can -miIwaukee-really-create-10000-affordable-homes/570742/. l' Department of City Development, A Place in the Neighborhood. City of Milwaukee, 2018. https://city.milwaukee.gov/lmageLi- brary/Groups/citvDCD/planning/plans/Anti Displacement/Anti-DisplacementPlan.pdf. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Case Study: Redefining "Affordability" in Rochester Key strategies learned in Rochester: • AMI is a straight -forward HUD metric. • City policy makers and developers must use it effectively to address the needs of residents in specific neighborhoods. According to HUD, the AMI in the Rochester Metropolitan Statistical Area for a family of four is $74,000. The area median income in the city of Rochester alone is half as much. Previously, housing that was affordable for a family earning $88,800 was considered affordable, even though it was not at all affordable to the one-third of Rochester's cost -burdened families that spend more than half of their income on housing. City leaders redefined the term "affordability" using the HUD guidelines. The idea was to do a better job creating, preserving and restoring housing to fit the income needs of Rochester residents and safeguard the definition of affordability in the city's charter. Now, to encourage the development of more affordable housing units, the city awards more support to development proposals that include plans for some units to be 50 percent AMI and below. Under the new charter provisions, low and moderate income will be categorized as follows: • Extremely low or less than or equal to 30 percent AMI. • Very low, or more than 30 percent and less than or equal to 50 percent AMI. • Low, or more than 50 percent and less than or equal to 80 percent AMI. • Moderate, or more than 80 percent and less than or equal to 120 percent AMI. Case Study: Closing the Affordability Gap in Boston Key strategies learned in Boston: • Steady, long-term attention to housing affordability and securing buy -in from constituents for targeted housing goals. Boston is part of Suffolk County, which has one of the most narrow housing affordability gaps in the U.S.34 But, housing affordability is still pressured by the city's growing population. In the recent past, Boston projected a population growth of 91,806. Now, the city expects 142,133 more residents by 2030.35 Mayor Martin Walsh and his administration are focusing on housing disparity and increasing housing stock by implementing the Housing Boston 2030 Plan (HB30).36 The plan sets goals for housing production, including income -restricted housing designed to be affordable to a range of incomes. It also includes plans for strategic growth that increases homeownership, promotes fair and equitable access to housing and preserves and enhances existing neighborhoods to prevent displacement. In 2018, the updated Housing Boston 2030 plan increased the city's overall housing target from 53,000 to 69,000 new units, including 15,820 income -restricted units by 2030. Bostonians are supportive of affordable housing creation. Voters passed the Community Preservation Act in 2016 which would create a Community Preservation Fund financed by a one -percent property tax - based surcharge on residential and business property tax.37 The revenue will fund initiatives in affordable housing creation, historic preservation and maintenance of open space for public recreation. Case Study: Resilience in San Antonio Key strategies learned in San Antonio: • Environmental factors frequently create added costs for occupants of low-income housing when it comes to utilities, maintenance and even health costs. "The Urban Institute, "The Housing Affordability Gap for Extremely Low -Income Renters in 2013." 35"2018 update on Housing Boston 2030", found on Boston.Gov. 36"Mayor Walsh releases "Housing a Changing City: Boston 2030,"" https://www.citvofboston.gov. 37"Community Preservation Act," https://www.boston.gov/community-preservation-act. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing • Local climate change impacts exacerbate existing problems. • Efforts to improve sustainability in housing saves residents money and improves quality of life for the whole community. Housing affordability is about more than the list price of a home. San Antonio, for example, is one of the fastest growing large cities in the United States. The region's rapid economic and population growth has caused local housing costs to increase faster than AMI for nearly two decades.3' For residents, that means homes are increasingly difficult to afford. And there are other associated rising costs, like utilities, maintenance and even healthcare. San Antonio has always been hot, but climate change has caused temperatures to spike. In recent years, the city's development boom has generated a growing urban heat island .39 At night, the central urban core can be up to 20 degrees warmer than rural areas in the northern part of Bexar County.40 These higher temperatures reduce air quality as the sunlight and heat react with pollutants to generate ground level ozone, exacerbating dangerous smog. The city has taken a holistic approach through San Antonio Green and Healthy Homes programs, which "provide assistance to owners and landlords of residential properties (both single-family and multi- family) in creating healthy, safe, energy- efficient and sustainable homes for families and children." One of the flagship initiatives is the Under 1 Roof program. Launched as a pilot in 2016 with just $200,000, and serving just ten families, the program identified and replaced failing roofs with free, energy-efficient "high -reflectance roofs." These "cool roofs" helped address a range of health, energy and environmental issues.41 In fiscal year 2018, San Antonio's city council approved a $2.25 million budget to expand Under 1 Roof to include five other districts. At the time, Councilman Roberto Triveno noted that, "What started out as a District 1 pilot program with a sliver of funding has grown into a multi -million -dollar program that assists folks across the city and helps combat rising urban temperatures while saving residents money." The program, he said, saves participating homeowners an average of $1,200 per year in energy costs. In addition, the city's municipal utility (CPS Energy), developed a cool -roof rebate program to incentivize other residents to install new roofs with high -reflectance materials. Programs like this can dramatically extend the lifespan of a city's affordable housing stock, and help reduce the need for demolition. "The City of San Antonio, "Housing Policy Framework." August 2018. https://www.sanantonio.gov/Portals/O/Files/HousingPol- icv/Resources/SA-Housing PolicvFramework.r)df. 39 Gibbons, Brendan. "Climate Change Will Make Life Hotter, Harder in San Antonio." San Antonio News Express. httos://www. expressnews.com/news/loca I/article/CI imate-change-wil I -make -I ife-hotter-harder-in-12221130.)hhr). 41 Huddleston, Scott. "Heat Map of San Antonio Conveys What's at Stake in Climate Plan." San Antonio News Express. htt s: www.exoressnews.com/news/local/article/Heat-map-of-San-Antonio-convevs-what-s-at-stake-13414579.oho. 41Trevino, Robert. "City By Design." https://citvbvdesian.or REFLECTIONS ON THE CASE STUDIES These examples show us that cities need holistic, integrated housing strategies to improve housing affordability. Strategies must connect opportunities for employment and new business creation with land -use decisions. They must also have focus on two critical factors: making a variety of dwellings available to meet the needs of diverse groups of residents and ensuring access to transportation options so residents can get to work and meet other needs like health care, shopping and recreation. City leaders must explore key questions, including: What are my city's local housing goals and does the comprehensive plan reflect those goals? 2. What are the economic conditions of my city's local housing market? 3. What are the regulatory conditions of the local housing market for development and redevelopment (zoning, permitting, fees)? 6. Do residents understand the trade-offs in land use decisions that come from a restricted housing supply on matters like taxes, job growth, investment attraction? 7. How do city leaders confront and push- back against NIMBYism (The "Not in my backyard" phenomenon where residents don't want affordable housing in their neighborhoods) in housing decisions? 8. How can good decisions that increase 4. What policy tools and options are housing quality across a range of housing available to cities in my state to address choices be accomplished for the benefit these conditions to improve quality and of existing residents without the collateral affordability? damage of displacement? 5. What is the local political environment for decision making on housing? NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES • Federal Policy Agenda National polls overwhelming support greater federal investment in housing. The vast majority of the public (85 percent) believes that ensuring all residents have safe, decent, affordable homes should be a "top national priority."42 This view is strong across the political spectrum: 95 percent of Democrats agree it should be a top national priority, along with 87 percent of unaffiliated voters and 73 percent of Republicans. Eight in ten voters also say that both the president and Congress should "take major action" to make housing more affordable for low- income households. Local elected officials overwhelmingly support greater federal investment in housing, and recognize that housing is extremely costly for working families. Those leaders are also making changes to reduce the wealth and housing affordability gap. According to NLC's 2019 State of the Cities report, local governments are taking bold action to improve housing stability and affordability through land and housing trusts, eviction assistance resources and fair housing ordinances. As noted by the task force chair, Washington, D.C., Mayor Muriel Bowser, in D.C., "affordable housing isn't just a problem for our most vulnerable residents — it affects our entire community." NLC Calls on the federal government to enact housing legislation that: 1. Immediately stabilizes and stems the loss of public and affordable housing. Historic unmet demand for units of affordable and workforce housing has created a national housing crisis. Emergency or supplemental appropriations are an appropriate and necessary federal response to quickly intervene in the immediate crisis of housing supply. • Approve emergency funding to address the nation's highest priority housing needs. Funding could take the form of a stand-alone emergency bill, or as a piece of any larger infrastructure package. • Emergency funding should include $30 billion to address the immediate crisis. Of that amount, $15 billion for the public housing capital program, $5 billion for the Community Development Block Grant program, $5 billion for the HOME program and $5 billion for the National Housing Trust Fund. 42National Housing Survey, HART RESEARCH ASSOCIATES, Study #12590, February/March 2019. 42 Homeward Bound: The Road to Affordable Housing 2. Authorizes ten years of new programs and funding to provide housing opportunities for all. Now is the time to rethink and modernize housing policy at every level of government. Although cities value current HUD programs, it's clear that existing resources are insufficient to stem the growth of the affordable housing crisis. • Reauthorize and restore the HOME Investment Partnership Program and the Community Development Block Grant Program. The HOME program is the only federal grant program aimed at construction of affordable housing in support of local governments. Unfortunately, funding cuts have significantly reduced the impact of the program which, today, serves mostly to cover gaps in financing of tax -credit housing projects. HOME should be reauthorized to support the construction of small and medium multifamily units that create greater housing options for multiple income levels. The CDBG program, the largest single federal grant program available to local governments, is bloated with regulatory and reporting requirements and is ripe for review to increase efficiencies and reduce burdens on grantees. • Increase funding for the National Housing Trust Fund and authorize a pilot allocation to regional councils of government. The pilot would determine if lessons learned from regional allocations from the Highway Trust Fund can be applied to the National Housing Trust Fund. It would also foster the blending of federal funding for construction of affordable housing and transportation infrastructure. • Commit to a new vision for public housing and public housing agencies as the nation's stewards of permanently - affordable housing. Public housing is the nation's largest source of permanently - affordable housing. More than 3,000 large and small public -housing agencies assist families and individuals at the bottom rung of the economic ladder by providing housing stability. A well-maintained stock of permanently -affordable housing would help cities manage swings in the housing market and weather economic downturns. • Protect and improve underserved and affordable housing and homeownership requirements on the private market. The policies adopted by mortgage finance giants Fannie Mae and Freddie Mac shape neighborhoods and economic opportunity. Federal regulatory requirements should recognize and leverage these forces which have the power to improve access to affordable and workforce housing. That includes regular allocations to the National Housing Trust Fund and products that support the market for construction of workforce housing and small -dollar mortgage loans. 3. Support innovation and modernization of land -use and planning practices at the local and regional level. Cities, towns and villages across the U.S. are already reevaluating local land use and planning practices to make them more equitable and to address past discriminatory practices. These municipalities are also already working to establish codes that reflect a need for resilience in the face of extreme -weather events. Different approaches may make higher -opportunity neighborhoods more — or less — accessible, but the impacts are not always clear. Moreover, inequities exist regionally between the cities, towns and villages just as they exist between neighborhoods. • Provide federal grants for local housing, planning, land use and community engagement. The cost of developing and administrating changes to local land -use policies and practices puts quick action out of reach for many, if not most, of the 19,000 cities, towns and villages in the U.S Federal funding and technical assistance would speed the development and adoption of best practices among local governments. • Offer renter tax credit. A federal tax credit for renters, which does not currently exist, would expand the availability of federal rental assistance in the form of a refundable tax credit targeted to lower- income, rent -burdened households. A new balance of renter -tax credits and direct subsidies has the potential to improve equity and economic mobility opportunities at the local level. • Increase funding, landlord incentives and mobility for HUD's Choice Voucher Program. Given the fundamental importance of housing stability for nearly every measure of well-being for residents, it is unreasonable to place arbitrary funding limits on the HUD Choice Voucher Program and administer housing assistance as a lottery. Rather, in conjunction with a well -regulated housing market, federal housing assistance should meet the demand for housing for all. Short of that, the federal government should increase funding annually by significant and predictable margins until the lottery aspect of the program is nullified. • Fix the market for small -dollar mortgage lending and entry level homeownership. Recent research from the Urban Institute has shown that, even for credit -worthy borrowers, financial institutions are generally not approving small -dollar mortgages. As a result, three quarters of homes purchased for $70,000 or less in 2015 were purchased with cash, indicating risky property speculation. The unavailability of small -dollar mortgages puts housing out of reach for homebuyers at lower -incomes, and revitalization out of reach for communities in distress. 4. Fix inequities in housing development and the housing finance system. The long history of federally -sanctioned housing discrimination and racial segregation is embedded in the development of America's cities, towns and villages. This legacy continues to have profound impacts on people of color and other vulnerable groups to this day. According to Brookings, on average in metropolitan areas, homes in neighborhoods that are 50 percent black are valued at roughly half the price of homes in neighborhoods without black residents. It is incumbent upon all elected officials to understand how the present housing inequities came about. It is also their responsibility to make fully -informed policy choices that stop the perpetuation of these inequities, unintentionally or otherwise. • Reform of the Community Reinvestment Act (CRA) to increase public accountability of banks to serve every community. CRA assessment areas need to be updated to include areas with considerable bank lending and deposit gathering outside of bank branch networks. This would result in more NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing loans and investments reaching low and moderate income (LMI) borrowers and communities. Regulators should also improve public data around community development lending and investments in order to provide greater clarity to lenders about what qualifies for CRA and to help identify areas around the country in need of greater community development lending and investing. Conversely, federal regulators should not adopt a one -ratio or single -metric approach to CRA exams, and should not adjust bank asset thresholds solely for making exams easier for banks to pass, or otherwise dilute attention to LMI borrowers and communities. • Eviction prevention and mitigation grants. In 2016, 2.3 million eviction filings were made in U.S. courthouses — a rate of four every minute. That same year, one in 50 renters was evicted from his or her home. The federal government should partner with local governments and other stakeholders to help residents overcome events that place them at risk of eviction. • Expand Fair Housing to include sexual orientation, gender identity, marital status and source of income. A growing number of local governments are enacting fair housing protections beyond those required by federal statute to ensure housing opportunities for every resident. Unfortunately, various state preemptions of local authority over land use and protected classes has created an uneven and inequitable marketplace for housing across the country. The federal government should level the field by expanding fair -housing protections. • Targeted investment and access to credit for neighborhoods and residents impacted by redlining and reverse - redlining. As documented by the Economic Policy Institute, the Federal government's general failure to intervene in discriminatory mortgage lending practices is one of the root causes of racially segregated, impoverished neighborhoods. For such communities, to overcome decades of unfair treatment, new targeted federal resources should be enacted to restore housing stability and rates of homeownership. This would also serve to stabilize impacted neighborhoods overa 11. • Fair housing and anti -displacement in federally -designated opportunity zones. NLC's 2018 City Fiscal Conditions survey indicates that local tax revenue growth is experiencing a year -over -year slowdown, as it is outpaced by growth in service costs and other expenditures. For cities and city leaders, opportunity zones represent a chance to overcome such slowdowns and associated neighborhood decline, in new and innovative ways. Within opportunity zones, private investment supplements public spending to advance public policy goals. It follows that public and private investment within Opportunity Zones should be in alignment according to key performance measures of fair housing and equitable economic development. 5. Supports scalable innovation and financing for cities, towns, and villages. Every U.S. city, town and village relies on strong regional partnerships with HUD and the United States Department of Agriculture (USDA) for capacity building and access to capital to better serve the housing needs of their residents. The federal government is often the only feasible source of technical assistance and access to capital for the 20 percent of the U.S. population that lives in small and rural communities. The Housing Assistance Council, in Congressional testimony, put it best: "Rural housing markets are not just smaller versions of urban ones, and [federal housing programs] do not necessarily translate to the benefit of rural places. The few programs and modest federal spending on rural -specific programs are simply not enough to maintain a level playing field with other parts of the country." • Increase funding for USDA rural -rental programs and improve alignment with HUD rental -assistance programs. For many rural communities, housing instability and unavailability are compounding broader economic crises that have been decades in the making. These situations require a variety of approaches to overcome. At the same time, economic recovery cannot begin without housing stability. • Increase coordination between public housing agencies regionally. The number of affordable housing units administered by Small Public Housing Agencies may be small compared to large PHAs, but there is nothing more important to the community. In addition to housing, small PHAs often serve as a hub for residents to access a far broader range of support services. More capacity building and technical assistance for small PHAs is necessary so that they can coordinate regionally and connect service providers across jurisdictional boundaries. • Offer federal assistance to rural homebuyers. Homebuyers in small and rural communities often face challenges similar to impoverished urban neighborhoods, like inadequate access to mortgage credit, aging and declining housing stock and higher costs for housing construction and rehabilitation. Federal -homebuyer assistance should be available and flexible for use in both urban and rural communities. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Establish local programs by combining funding and financing streams to support housing goals. Among the means available to most cities are: • Housing trust funds, • First-time home buyer supports, • Housing rehabilitation and preservation grants or loans and • Tax incentives. Modernize local land use policies, including zoning and permitting, to rebalance housing supply and demand. Focus on: • Data management to set development priorities; • Increased density allowances and ADUs; • Land trusts, banks; and • Streamlined development permitting, transparent fees and time-limited review procedures. • Data to understand the local housing market conditions, • Partnerships with private- and non-profit sector actors, • Development of a comprehensive housing strategy based on a set of community- wide values that also identifies the consequences that may accrue when making choices among competing values. Support the needs of distinct sub -populations including the homeless, seniors and persons with conviction histories. Cities should: • Look to the success stories on fighting chronic homelessness, • Prioritize specific sub -populations, • Target wrap-around support services and • Maintain existing affordable housing stock and support rehabilitation efforts, reduce or eliminate restrictions on access to public housing that go beyond federal mandates for those with conviction histories. Prioritize equitable outcomes in housing decision as it is an essential component for success. This means: • Ensuring enforcement of Fair Housing laws, • Putting decision making about public investments in the hands of communities most at risk for displacement and Identify and engage broadly with local • Rebuilding trust between local stakeholders; and coordinate across government and communities of color. municipal boundaries, to develop a plan to provide housing opportunities for all. To that end, utilize: 48 F -i L -A Immediately stabilize and stem the loss of public and affordable housing. • Historic unmet demand for units of affordable and workforce housing has created a national housing crisis. • Emergency or supplemental appropriations are an appropriate and necessary federal response to quickly intervene in the immediate crisis of housing supply. • Crisis -response funding should include at least $15 billion for the public housing capital program, $5 billion for the CDBG program, $5 billion for the HOME program, and $5 billion for the National Housing Trust Fund. Follow emergency intervention with passage of a long-term, stand-alone federal housing bill that authorizes ten years of new funding for pilot programs that advance housing for all. • The housing crisis, and ongoing housing inequities, have been decades in the making; long-term corrective action is necessary for success. • Long-term stand-alone housing bills could transform housing in America, just as the highway bill has done for transportation and the farm bill has done for nutrition and health. • Program objectives should include capacity building for local governments, regional coordination across jurisdictional bounds, support for permanently affordable housing, and achievement bonuses for existing programs like CDBG. Support innovation and modernization of land -use and planning at the local and regional level. • Local leaders recognize that change is necessary to create housing opportunities for all, but local budget and capacity constraints put quick action out of reach for many of the 19,000 cities, towns, and villages across the U.S. • Federal grants to support modernization of local housing, planning, land use, and community and regional engagement would speed adoption of best practices among local governments • Innovations that could foster additional change include rental voucher mobility, affordable and small -dollar mortgages so Homeward Bound: The Road to Affordable Housing for first-time homebuyers, and support for small multi -family units that can fill multiple needs in different housing markets. Fix inequities in housing development and the housing finance system. Support scalable innovation and financing for cities, towns and villages. • Increase funding for USDA rural rental programs and improve alignment with HUD rental assistance programs. • Increase coordination between public housing agencies regionally. • Government failures to intervene in discriminatory mortgage lending practices, • Maintain federal support for first-time including redlining and predatory lending, homebuyers in cities, towns, and villages is a root cause of racially -segregated, of every size and circumstance. impoverished neighborhoods today. • Federal resources should be enacted to restore housing stability and rates of homeownership for historically segregated and disadvantaged communities and their residents. • Federal fair housing protections should be extended to include sexual orientation, gender identity, marital status and source of income. I_ 51 hile a wide variety of housing challenges faces American cities, two stand out. In fast-growing cities, wages lag behind housing costs, leading to a scarcity of affordable housing. In legacy cities with slower growth, a persistent high rate of vacant and blighted housing exists due to the ongoing after-effects of the foreclosure crisis and general economic disruption. As part of NLC's path forward, we will continue to do research, focus on education, provide technical assistance and capacity building, push for advocacy goals that benefit all communities, and bring stakeholders together. NLC's research will: • Continue to share quantitative and qualitative data on housing quality and affordability; • Dive more deeply into urban -rural, small and legacy city questions including the integration of housing strategies with economic growth initiatives; • Seek partnerships with the Urban Institute and the New York University Furman Center (among others) to advance mutual research priorities; • Identify tested as well as promising practices that increase affordable housing and • Further investigate the emerging intersection between climate resilience and housing affordability. NLC's focus on education will: • Lift up the lessons from cities captured by the task force and by countless other cities, towns, and villages that are implementing both tested and innovative techniques to address community housing needs; • Make use of NLC's many constituency and member groups and partners to engage local stakeholders and • Enhance the leadership training and skills building programs available through NLC University. NLC will continue its technical assistance and capacity building work to coordinate technical assistance efforts across the organization including those targeting: • Homeless veterans, • Seniors seeking to age in place, • Equitable wealth creation, • Shared equity housing models, • Sustainable and healthy housing and • Our Cities of Opportunity: Healthy People, Thriving Communities pilot program. NLC will continue advocacy work to: • Advance a strong voice at the federal level to push for implementation of recommendations contained in this report and • Exercise leadership in coalitions including Opportunity Starts at Home and Mayors & CEO's for U.S. Housing Investment, among others. City leaders are working to make a difference but all city residents, and all levels of government, have more to do. This report and the subsequent work to come are meant to provide a resource for city leaders, a platform for community conversation, and an action plan for solutions. 54 Homeward Bound: The Road to Affordable Housing Appendix A: Summary of the Task Force Work NLC's President Karen Freeman -Wilson, mayor of Gary, Ind., announced the formation of the National Housing Task Force in November 2018, under the leadership of chair Muriel Bowser, mayor of Washington, D.C. "Every American deserves a place to call home. But in cities across the country, serious shortages of adequate housing means that too many residents don't have the security of a stable home," said Freeman -Wilson at the time of the task force's formation. Local leaders are on the front lines of ensuring that residents have safe, affordable housing. Through the formation of this task force, NLC sought to leverage its members' collective experience to help solve this urgent challenge. Comprised of 18 other elected city leaders representing a diversity of city sizes, geography, roles in their respective regions and market types - plus the executive directors of two state municipal leagues (California and Michigan) - the task force was charged to develop a set of best and promising practices at the local level, as well as policy recommendations to federal and state governments. Reflecting on her own city, Mayor Bowser said, "The affordable housing crisis is one of the most critical issues we are facing in this country, and one on which we are effectively working to tackle in Washington, D.C. From investing hundreds of millions of dollars for affordable units in new developments to building creative livings spaces like grand - family housing for seniors raising their grandchildren, we know that mayors will lead the way in providing innovative solutions." The task force kicked off with an introductory call on December 19, 2018, but the work began in earnest with their first in-person convening January 22-23, 2019 in Washington, DC. At that meeting the members worked with and learned from partners in the non-profit and private sectors. These included: • Carlton A. Brown, Principal, Direct Investment Development, LLC • Sarah Brundage, Senior Director of Public Policy, Enterprise Community Partners, Inc. • Lorraine Collins, Director of Public Policy, Enterprise Community Partners, Inc. • Chris Herbert, Managing Director, Joint Center for Housing Studies of Harvard University • Mike Koprowski, National Campaign Director, Opportunity Starts at Home Campaign • Marion McFadden, Sr. Vice President, Public Policy, Enterprise Community Partners, Inc. • Christopher Ptomey, Executive Director, Terwilliger Center for Housing, Urban Land Institute • Adrianne Todman, CEO, National Association of Housing and Redevelopment Officials • Margery Austin Turner, Senior Vice President, Urban Institute Common Themes and Priority Topics A series of common themes emerged from the first convening that the task force members shared, as listed below. • The regional nature of housing policy issues contrasts with the local controls cities have over land use and funding. • The need to address housing holistically because of its intersections with neighborhood economic development, household wealth creation, access to jobs and services, placemaking, public health, race and equity, etc. • The need to address housing not just from the supply side but also from the demand side via focusing on access to economic opportunity and income growth. • The levers cities have over housing through local land use policies and regulations including their development review processes and comprehensive plans. • The need for the federal and state governments to be better partners for cities and have more defined roles (such as the federal role on low-income housing). • The need for cities to unlock the production potential of the private market and better partner with the private development community. • The need for a toolkit of practices that cities from a variety of market types can utilize. Through their deliberations, the task force also settled the following five priorities. 1. Identifying housing funding and financing resources cities have at the local level, (such as housing trust funds and land banks and trusts, etc.). 2. How to address special populations in local housing policy such as (seniors, the homeless, and people with conviction histories). 3. Levers cities can exercise on housing utilizing local land use policies and regulations as well as their development review processes. 4. Federal housing resources. S. Role of comprehensive planning in building a shared vision and collective action for housing. The task force next met via webinar for a staff forum on February 20, 2019 to share local innovations. This discussion and subsequent follow-up with NLC staff identified case studies for sharing in this report based on the four categories of local actions prioritized in the first meeting: local funding, land use policy and regulation, comprehensive and strategic planning and engagement and housing for distinct and vulnerable populations. The second and final in-person task force meeting took place on March 11, 2019 during NLC's City Congressional Conference in Washington, D.C. The meeting included reflections by Boston Mayor Martin Walsh on the efforts he has implemented to address housing in one of the highest -cost cities in the U.S. These efforts include: • Creating a housing plan for 69,000 units by 2030, of which 29,000 units have already been built or are in construction, • Emphasizing low- and middle-income housing including for seniors and students, • Streamlining approval processes, • Pushing back on input from neighborhoods that don't want to see growth and • Opening a new Office of Housing Stability, to deal with evictions and displacements NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Mayor Walsh also emphasized the need for more federal support for public housing as well as for vouchers for low-income households. City Leaders' Housing Aspirations At the March 11 task force meeting, Mayor Bowser also facilitated an aspirational discussion around a question: what would task force members do to solve this problem if they "weren't afraid to fail?" Their answers revealed insights into what cities could and should be doing to address their housing challenges. Responses fell into the four categories of local actions: Local funding • Create a fiscally sustainable local housing trust fund. • Offer more rental subsidies and where permitted some forms of rent control. • Require every corporation in city to establish a workforce training fund/ program. Land use policy, regulation and development process • Ask residents in all neighborhoods to agree upon their share of citywide housing, production and preservation goals as a way of combatting resistance to growth and NIMBYism (Not in My Backyard attitudes). • Ensure that affordable housing is built along new transit lines, especially along routes that connect to employment centers. • Reduce barriers such as onerous development regulations especially on distressed property. • Require that every annexation includes a percentage of affordable housing with community amenities (such as grocery stores and parks). • Require developers to provide and subsidize more affordable housing. • Tie economic development incentives for corporations to affordable housing production. • Spread affordable housing around to deconcentrate poverty. Planning • Conduct a comprehensive housing assessment and a timeline to accomplish the city's needs and goals. • Define displacement and create a strategy to prevent it as part of growth. Distinct and vulnerable populations • Create a new equity housing fund to address the legacy effects of redlining. • Bolster anti -poverty programs like workforce training and only attract employers that pay living wages. • Increase the minimum wage to help households afford better housing. • Implement policies to address the related costs that impact housing affordability (like transportation). • Require building owners to notify tenants when they intend to sell a property, giving tenant coops an opportunity to purchase. At the City Congressional Conference, NLC staff took advantage of the gathering of more than 2,000 city leaders in Washington, D.C. to engage with them directly about the task force's work and seek their input on the same questions the task force members were addressing. Staff met with the following groups: • NLC Board of Directors • Advisory Council • Community and Economic Development Policy and Advocacy Committee • Large Cities Council • Small Cities Council • Young Municipal Leaders Valuable feedback from each of these constituencies was incorporated into the report and helped shape its direction. A Federal Housing Policy Agenda for Cities After the City Congressional Conference, task force members convened a final time remotely via webinar on April 10, 2019 to discuss a federal policy agenda for NLC to advocate for on behalf of cities. The proposals were organized according to five distinct policy outcomes (although there was some overlap among those outcomes). The five outcomes identified by the task force are: • Housing Affordability: policy proposals addressing the growing gap between rising rents and flat incomes. • Housing Availability: policy proposals to preserve and expand the number of units of affordable housing. • Housing Stability: policy proposals to stabilize those in financial distress related to housing, and preventing eviction. • Fair Housing: policy proposals to address historic injustices and ongoing inequities, and anti -displacement proposals. • Housing for Small, Rural and Legacy Communities: policy proposals aimed at towns and villages below 30,000 in population or in a state of economic transition. Task force members discussed nearly 30 proposals responding to the following questions: 1. Are there any priorities identified by members of the task force, or that are important to your city, that are missing from this list? 2. Are you able to identify a single top priority within each of the five policy outcomes? 3. Are you able to identify three top priorities overall? 4. If the federal government could enact one single housing policy proposal this year, which proposal would have this most immediate significant impact for your city? From this process, the task force developed the federal policy agenda section of the report. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES Homeward Bound: The Road to Affordable Housing Appendix B: The State Regulatory Context Local Tools to Address Housing Affordability: A State -by -State Analysis, shows the following. Given the diverse landscape of housing affordability, cities must build and maintain the proper tools and flexibility to meet the needs of their residents. To that end, cities have implemented solutions such as inclusionary housing, rent control, fair housing and housing trust funds. They have also leveraged programs like their states' tax incentive programs to expand housing affordability and access. NLC conducted an assessment of all 50 states and the District of Columbia to show how states and cities interact in each of these policy areas and provide details about cities' implementation authority. In the pages of Local Tools to Address Housing Affordability: A State -by -State Analysis, data for each policy comes from existing research, state legislation and relevant court decisions. Among the highlights are the following: • Cities in 20 states and the District of Columbia are expressly permitted or face no legal barriers to inclusionary housing. • Cities in 13 states and the District of Columbia are permitted, have some barriers, or have limited control to implement rent control. Oregon is the only state to mandate rent control. • Cities in 25 states and the District of Columbia have either state law protections or local protections for those using housing vouchers as a source of income. • Cities in 35 states and the District of Columbia have established housing trust funds. The local housing context varies by regional housing market types and by the tools available to cities, towns and villages to address the needs of their communities. Based on our assessment of inclusionary housing, rent control, housing voucher holder protections, housing trust funds and state tax incentive programs, cities in New York, California and the District of Columbia have more tools to address housing affordability than others. Cities in Idaho, Indiana, Kansas, Texas and Virginia have fewer. In addition to the number of tools available to cities, the way these policies play out locally varies significantly by state. For example, in some states with local inclusionary housing, rent control restrictions limit the authority of cities to implement mandatory programs, whereas in other states, this is not the case. A new example of rent control can be seen in Oregon. In February 2019, it became the first state in the U.S. to enact mandatory statewide rent control. Cities in Oregon must adhere to the statewide rent control laws and are preempted from passing their own. This has created a new dynamic, the impacts of which will need to be evaluated. Despite these variations, one thing is clear: The significant housing problem facing our country is compelling cities and states to rethink how they address the issue, and to adapt the relationship they have with each other to meet the scale of the challenge. Cities can take several steps to achieve the careful balance of local flexibility and mutual housing affordability goals, including the recommendations outlined below. Review, strengthen and update tools to improve housing affordability. Nearly all cities have control over local planning, zoning and development regulations and can carefully examine these tools to improve housing options across income levels. For example, cities can relax density requirements in areas designated as single family, modify parking requirements and streamline development processes for projects with an affordability component. Fill a policy vacuum. Cities in 23 states do not have state or local sources of income protections for housing voucher holders. These states also do not have explicit restrictions on local fair housing, meaning that many cities could create policies to limit discrimination and help extend housing options to those using housing vouchers. Leverage state programs for local investment. Cities should leverage state tax credits and state housing trust funds to maximize their ability to provide affordable housing at all income levels. Proactively engage state partners. For example, cities Utah have been working with the state legislature and state Commission on Housing Affordability to craft a bill that not only accelerates affordability in regional housing markets across the state, but also offers cities flexibility to do so in ways that meet their individual needs. NATIONAL LEAGUE OF CITIES NATIONAL LEAGUE OF CITIES • • NLCNATIONAL LEAGUE OF CITIES Item Number: 6. jr ;;rw®J� CITY OC IOWA CITY www.icgov.org July 25, 2019 Article from Assistant City Manager: State of the Nation's Housing 2019 ATTACHMENTS: Description Article from Assistant City Manager: State of the Nation's Housing 2019 A ii 0 go] 0 M*M MMIO _�Aw IIIII LI4ffwdi= i� : 2 CONTENTS Executive Summary 1 Housing Markets 7 JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY Demographic Drivers 13 HARVARD GRADUATE SCHOOL OF DESIGN Homeownership 19 HARVARD KENNEDY SCHOOL Rental Housing 25 Principal funding for this report was provided by the Policy Advisory Board of the Joint Center for Housing Studies. Additional support was provided by: Housing Challenges 31 AARP Foundation Additional Resources 37 Federal Home Loan Banks Habitat for Humanity International Housing Assistance Council LeadingAge MBA's Research Institute for Housing America National Apartment Association National Association of Home Builders National Association of Housing and Redevelopment Officials (NAHROI National Association of REALTORSO National Council of State Housing Agencies National Housing Conference National Housing Endowment National League of Cities National Low Income Housing Coalition National Multifamily Housing Council NeighborWorks America © 2019 by the President and Fellows of Harvard College. The opinions expressed in The State of the Nation's Housing 2019 do not necessarily represent the views of Harvard University, the Policy Advisory Board of the Joint Center for Housing Studies, or the other sponsoring organizations. With the economy on sound CONTINUING SHORTFALL IN SUPPLY Just as the recent housing downturn was longer and deeper than footing and incomes ticking u p, any other since the Great Depression, the residential construction household growth has finally rebound has been slower. Since reaching bottom in 2011 at just 633,000 new units, additions to the housing stock have grown at an returned to a more normal pace. average annual rate of just 10 percent. Despite these steady gains, completions and placements totaled only 1.2 million units last Housing production, however, year—the lowest annual production, excluding 2008-2018, going has not. The shortfall in new back to 1982. homes is keeping the pressure on The sluggish construction recovery is in part a response to persis- tently weak household growth after the recession. On a three-year house prices and rents, eroding trailing basis, the number of net new households dropped below 1.0 million in 2008 and held below that mark for seven straight years, affordability—particularly for including a low of just 534,000 in 2009. By comparison, even through modest -income households the three recessions and large demographic shifts that occurred between 1980 and 2007, household growth still averaged 1.3 million in high-cost markets. While annually and only dipped below 1.0 million once demographic trends should With the economy finally back on track, household growth support a vibrant housing market picked up to 1.2 million a year in 2016-2018, close to expected levels given the size and age composition of the population. But over the coming decade, realizing new construction was still depressed relative to demand, with additions to supply just keeping pace with the number of new this potential depends heavily on households (Figure 11. As a result, the national vacancy rate for both owner -occupied and rental units fell again in 2018, to 4.4 whether the market can provide percent, its lowest point since 1994. a broader and more affordable Although there have been brief periods when residential construc- ra n g e of housing options for tion was similarly constrained, the duration of today's tight condi- tions is unprecedented. Since 1974, annual additions to the housing tomorrow's households. supply exceeded household growth by an average of 30 percent to accommodate replacement of older housing, additional demand for second homes, population shifts across markets, and some slack for normal vacancies. According to Joint Center for Housing Studies estimates, annual construction should now be on the order of 1.5 million units, or about 260,000 higher than in 2018. Several factors may be contributing to the unusually slow construc- tion recovery. For one, the housing boom in the early 2000s created an excess supply of homes. The vacancy rate for housing units for JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY rent or sale began to climb after 2000 from its long-term average of 4.5 percent to a peak of 6.2 percent in 2009, and it took most of the ensuing decade to work off the surplus. With memories of these conditions still fresh, builders and lenders alike are wary of specula- tive development that would expand the housing supply too rapidly. Labor shortages are another possible explanation. The residential construction sector has struggled for years to fill job openings, given that its traditional labor pool—younger men without college educations—is shrinking. With the economy near full employment, competition for workers has intensified, limiting the ability of the construction sector to ramp up quickly. Meanwhile, the housing that is being built is intended primarily for the higher end of the market. The relative lack of smaller, more affordable new homes suggests that the rising costs of labor, land, and materials make it unprofitable to build for the middle market. By restricting the supply of land available for higher -density development, regulatory constraints and not -in -my -backyard (NIMBI) opposition may also add to the challenges of supplying more affordable types of housing. HOMEOWNERSHIP ON THE REBOUND After falling for 12 consecutive years, the US homeownership rate edged up in both 2017 and 2018, to 64.4 percent. Although last year's increase was just 0.5 percentage point, this translates into a 1.6 million jump in the number of homeowners, bringing growth since 2016 to 2.8 million. The largest increase was among households in the key age group of 25-39, whose homeownership rate was up by 2.0 percentage points or some 1.1 million owners in 2016-2018. This rebound in homeownership comes amid worsening affordabil- ity. In the wake of the recession, falling home prices and historically low interest rates produced the most affordable homeownership conditions in decades. After adjusting for inflation, the monthly pay- ment on the median -priced home was just $1,176 in 2012-45 percent below the peak in 2006 and 36 percent below the level in 1990. Since then, interest rates have remained low but home prices have climbed steadily. Indeed, real prices were back within 2 percent of their 2006 peak at the end of 2018, according to the FHFA Home Price Index. As a result, the monthly payment on a median -priced home stood at $1,775 last year, just 3 percent below its 1990 level and within 17 percent of its 2006 high. Strong income gains among younger households helped to counter the increase, however, with median incomes of households aged 25-34 and 35-44 both growing more than 11 percent in real terms between 2013 and 2017. The ratio of median home price to median household income is a common yardstick for measuring affordability, indicating how dif- ficult it is for would-be buyers to qualify for a mortgage and save for a downpayment. Nationwide, this ratio rose sharply from a low of 3.3 in 2011 to 4.1 in 2018, just shy of the 4.7 peak in 2005. But conditions for would-be buyers vary widely across the country, with home val- ues more than 5.0 times incomes in roughly one in seven metro areas (located primarily on the West Coast) compared with less than 3.0 times income in about one in three metros (located primarily in the Midwest and South) (Figure 21. In the 100 largest metros with price -to - income ratios above 5.0, the median -income household could afford just 36 percent of recently sold homes on average in 2017. In metros where the ratio is under 3.0, however, the median -income household could afford 84 percent of recently sold homes. Housing Construction Has Barely Kept Pace with Household Growth for an Unprecedented Eight Years Units (Millions) 2.50 2.25 2.00 1.75 1.50 1.25 .. 1.00 0.75 0.50 0.25 r�rr«.«I�r�l ni ; ;....... ...�____Wi�l�!!!!!I I !!I III rI�o�z��e • Household Growth • Completions & Placements of New Units Notes: Household growth estimates are based on three-year trailing averages. Placements refer to newly built mobile homes placed for residential use. Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys and New Residential Construction data. THE STATE OF THE NATION'S HOUSING 2019 Although Homebuying Is Still Affordable in Many Markets, Price -to -Income Ratios Are Back Near Peak Levels Home Price -to -Income Ratio • Under 3.0 • 3.0-3.9 4.0-4.9 • 5.0-5.9 • 6.0 and Over Notes: Home prices are the median prices of existing homes sold in the metro area in 2016. Incomes are the median household incomes for each metro. Sources: JCHS tabulations of National Association of Realtors INARI, Metropolitan Median Area Prices; Moody's Analytics Estimates. The ability to purchase a home depends largely on access to mort- gage financing. Both the Urban Institute and Mortgage Bankers Association indexes show that credit conditions tightened signifi- cantly after the crash, particularly for loans to borrowers with less than stellar credit histories. By this measure, conditions in the last few years have remained tight. But there has also been a significant increase in loans with debt -to -income (DTI) ratios above 43 percent. According to a recent Urban Institute report, the share of Fannie Mae loans with such high DTI ratios more than doubled from 13 percent in 2013 to 29 percent in 2018, while the share of Freddie Mac loans was up from 14 percent to 25 percent. A 43 percent DTI ratio is the cutoff set by the Consumer Financial Protection Bureau for qualified mortgages—loans that borrowers are more likely to be able to afford. This limit does not, however, apply to loans insured by the Federal Housing Administration (FHA) and, at least for the time being, to loans insured by Fannie Mae and Freddie Mac under a temporary exemption. Given the significant growth in mortgage loans exceeding the 43 percent limit, expiration of the exemption in 2021 could result in a substantial shift in lend- ing volumes from Fannie Mae and Freddie Mac to FHA at a higher cost for borrowers or a sharp reduction in credit access for those with these high debt -to -income ratios. In the years ahead, demographic trends should support growing demand for homeownership as more members of the large mil- lennial generation age into their 30s when homebuying peaks. According to the latest joint Center projections, if age-specific homeownership rates remained at the same level as in 2018, household growth alone would add roughly 8.0 million home- owners between 2018 and 2028. And if, consistent with recent trends, the overall homeownership rate rises by 1.6 percentage points from the 2018 level, growth in the number of homeowners could reach 10.1 million for the decade. At the same time, a rise in interest rates and home prices plus a tightening of credit, on top of the limited supply of entry-level housing, could put homeownership out of reach for many more households. The sensitivity of the market to changes in home- buying conditions was evident at the end of 2018 when a jump in interest rates was followed by a slowdown in home sales. Although a retreat in interest rates in early 2019 helped to stabilize the mar- ket, the near-term outlook for homeownership still depends on how trends in house prices, interest rates, household incomes, and credit availability affect affordability for first-time buyers. RENTAL MARKETS STEADY AMID SLACKENING DEMAND According to the Housing Vacancy Survey, the number of renter households fell again in 2018. Although down by just 239,000 over two years, even this modest dip is in stark contrast to average annu- al increases of nearly 850,000 renter households in the preceding 12 years. The declines were widespread, with 31 states losing renters from 2015 to 2017. However, estimates show an uptick in early 2019, in keeping with Joint Center projections of about 400,000 net new renter households annually over the coming decade. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY Trends in rents and vacancy rates indicate that rental markets are still on solid footing. The Consumer Price Index indicates that over- all rents rose at a 3.6 percent annual rate in early 2019, or twice the pace of overall inflation. Meanwhile, rents for professionally man- aged apartments were up more than 3.0 percent in more than half of the 150 metros that RealPage tracks, with growth exceeding 5.0 percent in 25 of those markets. Low and falling vacancy rates are keeping the pressure on rents, with the national vacancy rate sliding from 7.2 percent in 2017 to 7.0 percent in the first quarter of 2019. Tightening occurred in all regions of the country and in about two- thirds of RealPage metros. These conditions seem somewhat at odds with the falloff in demand and the continued strength of rental construction. Indeed, rental completions were near a 30 -year high at 360,000 units last year, while starts rose 5.0 percent to 392,000 units. But even as overall demand cooled, higher -income households kept up demand for new apartments. Indeed, even after adjusting for inflation, the number of renters earning at least $75,000 increased for eight consecutive years, rising by 311,000 households in 2017-2018 alone and by some 4.6 million households since 2010. Changes in the rental stock have also offset some new construction, keeping absorptions in line with supply. Of the 338,000 unit decline in rentals in 2017, most were single-family homes and apartments in two- to four -unit buildings that likely converted to owner occu- pancy. Thus, even if homeownership rates continue to increase, low vacancy rates and shifts in the existing stock are likely to prevent a significant softening of rental markets. In fact, weaker overall rental demand could help to ease conditions at the low end. With most new construction targeting the high end of the market, there has been some potential for excess supply to filter down to lower rent levels. But with rental demand far outpacing additions to supply through 2016, this has not happened. In fact, CoStar reports that the vacancy rate for lower -quality rentals was only 4.8 percent at the beginning of 2019, down from 6.7 percent at the end of 2011. This tightness reflects a substantial drop in the supply of low-cost units as overall market rents climbed. The number of units rent- ing for under $800 fell by 1.0 million in 2017 alone, bringing the total drop in 2011-2017 to 4.0 million (Figure 31. Half of all metros posted declines of more than 10 percent over this period. The falloff was largely concentrated in the West, where the majority of metros lost over 20 percent of their low -rent units. But with rental demand now easing and new supply holding steady, more downward filtering of units could help to slow the shrinkage of the nation's low-cost stock. COST BURDENS IMPROVING OVERALL, BUT RENTERS STILL PINCHED The share of US households paying more than 30 percent of their incomes for housing, the standard definition of cost burdens, declined for the seventh straight year in 2017. The latest American THE STATE OF THE NATION'S HOUSING 2019 Community Survey reports that the share of cost -burdened house- holds inched down 0.5 percentage point to 31.5 percent -some 5.7 percentage points below the 2010 peak. The total number of cost - burdened households in the US also fell by 4.9 million in 2010-2017, to 37.8 million. Much of this progress was among homeowners, whose overall cost - burden rate declined by nearly 8.0 percentage points in 2010-2017, to 22.5 percent -its lowest level this century. At the same time, however, 47.4 percent of renter households remained cost bur- dened, with the share improving just 0.1 percentage point in 2016- 2017 and 3.4 percentage points from the peak in 2011. As a result, cost -burdened renters now outnumber cost -burdened homeowners by more than 3.0 million. In addition, renters make up 10.8 million of the 18.2 million severely burdened households that pay more than half their incomes for housing. Public concern about a rental affordability crisis has increased in many areas of the country as cost burdens have moved up the income scale. Households with incomes under $15,000 continue to have the highest burden rates, with 83 percent paying more than 30 percent of income for housing, including 72 percent paying more than 50 percent. These shares were largely unchanged between 2011 and 2017, while cost -burden rates climbed 4.6 percentage points among households earning $30,000-44,999 and nearly 2.9 points among those earning $45,000-74,999 (Figure 4). The spread of renter cost burdens is most evident in expensive met- ros such as Los Angeles, New York, San Francisco, and Seattle. In the nation's 25 highest -rent markets, some 46 percent of renter house- holds with incomes of $45,000-74,999 were cost burdened in 2017, The Low -Rent Stock Has Shrunk by Four Million Units Since 2011 Units (Millions) Percent 24....................................................................................................................................................... 65 23....................................................................................................................................................... 60 22....................................................................................................................................................... 55 21....................................................................................................................................................... 50 20....................................................................................................................................................... 45 19....................................................................................................................................................... 40 18 35 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Number of Units Renting for Less than $800 Share of Units Renting for Less than $800 (Right scale) Note: Contract rents are adjusted to 2017 dollars using the CPI -U for All Items Less Shelter. Source: JCHS tabulations of US Census Bureau, American Community Survey 1 -Year Estimates. Although Improving Nationally, Renter Cost -Burden Rates Are Still Rising Across Most Income Groups Share of Renter Households with Cost Burdens (Percent) 90 80 70 60 " 50 40 30 20 10 0 — 2001 2006 2011 2017 2001 2006 2011 2017 2001 2006 2011 2017 2001 2006 2011 2017 Under $15,000 $15,000-29,999 $30,000-44,999 $45,000-74,999 Household Income • Severely Burdened • Moderately Burdened Notes: Household incomes are adjusted to 2017 dollars using the CPI -U for All Items. Moderately (severely) cost -burdened households pay 30-50% (more than 50%) of income for housing. Households with zero or negative income are assumed to have severe burdens, while households paying no cash rent are assumed to he without burdens. Source: JCHS tabulations of US Census Bureau, American Community Survey 1 -Year Estimates. compared with only 30 percent of same -income households across all 100 largest metros. Severe cost burdens are also more common in the 25 highest -rent markets, affecting 28 percent of renters with incomes of $30,000-44,999 and 7 percent of those with incomes of $45,000-74,999. The comparable shares across all 100 largest metros are substantially lower at 16 percent and 4 percent, respectively. HOMELESSNESS ON THE RISE IN HIGH-COST STATES There have been notable reductions in homelessness over the past decade. According to HUD's annual point -in -time counts, the number of people experiencing homelessness fell by 87,000 from 2008 to 2018 and by some 38,000 in the last five of those years. This progress reflects an expansion of permanent sup- portive housing and the widespread adoption of the "housing first" model that provides housing without preconditions for changes in behavior. The improvements have been most evi- dent among populations that have received targeted efforts and resources—veterans, families, and the chronically homeless. Despite this progress, however, the unsheltered population is on the increase—particularly in certain high-cost Western states. The problem is most acute in California, where the number of unsheltered homeless grew by 25 percent in 2014-2018, to 89,500. Other states with sharp increases in their unsheltered homeless populations are Washington (up 80 percent over this period, to 10,600), Colorado (up more than 100 percent, to 4,300, and Oregon (up nearly 50 percent, to 8,900). 2001 2006 2011 2017 All Renter Households With thousands more individuals living on the streets, the highly vis- ible problem of homelessness has prompted significant commitments of state and local funds for new housing options. In California, voters passed a statewide proposition to provide $2 billion in funding for homelessness prevention initiatives for individuals with mental health issues. In addition, San Francisco raised taxes on the city's largest businesses to fund housing and social services for the homeless, and Berkeley voters approved a $135 million municipal bond to fund hous- ing for both middle-income households and for those most at risk of homelessness. Although these measures provide much-needed funds to get people off the streets and into stable housing, a near -record number of renters in these high-cost areas still face significant housing chal- lenges. Meeting the need for decent, affordable housing in these markets will require a targeted and sustained strategy supported by both the public and private sectors. THE OUTLOOK Although subject to short-term ups and downs in the economy, housing markets are largely shaped by longer-term demographic trends. Over the next decade, two generations will dominate popu- lation growth—the millennials (bom 1985-2004), with members now clustered around age 28, and the baby boomers (born 1946- 1964), with a leading edge now age 73 but with a large share still in their late 50s (Figure 51. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 5 Over the Next Decade, the Millennial and Baby -Boom Generations Will Swell the Populations in Key Age Groups US Population (Millions) 0 5 10 15 20 25 30 35 40 45 • 2019 2029 Source: JCHS tabulations of US Census Bureau, 2017 National Population Projections. These two large generations will propel growth in 35-44 year-olds and lift the number of older adults to new heights. The Joint Center projects that the number of households in their mid-30s to mid-40s will increase by 2.9 million over the decade, while those age 65 and over should grow by an astounding 11.1 million. Meanwhile, the number of 45-64 year-old households will fall by 1.9 million as the smaller gen-X generation (born 1965-1984) replaces the baby boom- ers in this age range. Under these assumptions, the aging baby boomers will add some 8.4 million households that are either single persons or married couples without children living at home. While this surge in one- and two - person households might imply strong demand for smaller homes, most older adults plan to remain in their current homes as they age. To do so, though, many of these households will need to modify their homes to accommodate the physical limitations of aging, fuel- ing strong growth in the remodeling market. But even if a minority of this large age group does choose to relocate, demand for smaller, more accessible homes should also increase significantly. Within the 35-44 year-old age group, nearly two-thirds of the growth in households over the next 10 years will be among families with chil- dren. Given high homeownership rates at this stage of life, demand for owner -occupied housing is projected to grow substantially over the decade. Since many of these households will be first-time buy- ers, demand for entry-level homes should be especially strong. But today's relatively low homeownership rates for this age group also imply continuing demand for rental housing, with overall growth in renters projected to average 400,000 per year in 2018-2028. 6 1 THE STATE OF THE NATION'S HOUSING 2019 50 55 60 65 70 75 80 85 90 95 100 Age Whether these projections come to pass depends on a number of factors. Certainly, economic conditions will play a role, since the ability to form independent households is strongly associated with income. The pace of foreign immigration is also critical. As natural increase (births over deaths) in the native-born population declines over the decade, current projections call for the foreign-bom popu- lation to drive an ever -larger share of household growth. If efforts to curtail immigration prevail, however, future housing demand will be much lower than projected. Another big question is whether the market can supply housing that is within the financial reach of most households. If housing costs continue to rise faster than incomes, growth of households—and of housing demand—is likely to slow. As it is, the market has only produced enough homes to match the pace of household growth, let alone cover replacement and second -home demand and allow normal levels of vacancies. If current housing supply trends persist, house prices and rents will continue to rise at a healthy clip, further limiting the hous- ing options for many. To ensure that the market can produce homes that meet the diverse needs of the growing US popula- tion, the public, private, and nonprofit sectors must address constraints on the development process. And for the millions of families and individuals that struggle to find housing that fits their budgets, much greater public efforts will be necessary to close the gap between what they can afford and the cost of producing decent housing. Housing markets lost steam at the end of 2018 as interest rates rose and new construction, home sales, and price appreciation all slowed. But even as rates came back down in early 2019 and helped to stabilize markets, the national housing supply remained constrained by more than 10 years of historically Low production levels. The tight supply of homes for sale is keeping the pressure on prices in much of the country, while high land prices, labor shortages, and restrictive land use policies limit development of moderate -cost housing. LATE -YEAR SLOWDOWN IN CONSTRUCTION Housing construction grew modestly for the year in 2018, with starts increasing 3.9 percent to 1.25 million units. The number of comple- tions totaled 1.18 million, a gain of only 2.8 percent from 2017—the slowest annual growth rate since the recovery began in 2012. Although up 3.2 percent last year to 875,800 units, single-family housing starts remained below the 1.0 million mark for the 11th con- secutive year (Figure 61. Until this cycle, single-family construction had been below current levels only once in the preceding 25 years. Moreover, single-family activity slowed sharply over the course of 2018, downshifting from an average of 6.2 percent year -over -year growth in the first nine months to 7.4 percent declines in the last three months. The slowdown continued in the first quarter of 2019. Meanwhile, multifamily starts picked up after two years of decline, ris- ing 5.6 percent to 374,100 units. With the exceptions of 2015 and 2016, multifamily construction was higher in 2018 than in any other year since 1988. Given the previous two-year dip in starts and the lengthy construction process for larger apartment buildings, the number of multifamily completions fell 3.6 percent last year, to 344,700 units, the first annual decline since 2012. With the slow pace of single-family construction, real residential fixed investment (RFI) was down 0.3 percent in 2018. This was the first decline in RFI since 2011 and produced a slight drag on real GDP growth for the year. In addition, RFI accounted for only 3.9 percent of GDP, nearly a full percentage point lower than the annual aver- age from 1987 to 2006. In fact, RFI's share was lower only once in the 20 -year period preceding the housing bust. Similarly, the 3.2 percent real increase in residential construction spending was the smallest gain since 2011. Combining Census Bureau estimates of the value of single-family and multifamily con- struction and Joint Center estimates of homeowner improvement and repair spending, construction spending totaled $658 billion in 2018. Single-family construction accounted for just 43 percent of this amount, well below the 57 percent share averaged in 1995- 2006. In contrast, homeowner improvement and repair spending drove 48 percent of construction outlays last year, compared with 36 percent on average before the housing downturn. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 7 THE LOCATION OF NEW CONSTRUCTION The national numbers mask wide variation in homebuilding activity across regions in 2018. Relative to 2017, total starts increased in the West (up 7 percent) and South (up 5 percent), but declined in the Northeast (down less than 1 percent) and Midwest (down 4 percent). Single-family starts alone rose a solid 9 percent in the West and a more moderate 4 percent in the Northeast and 3 percent in the South, but fell 5 percent in the Midwest (Figure 71. However, compared with annual averages in 1980-2016, pro- duction of single-family homes was down 13 percent nation- ally and in every region of the country last year, but especially in the Northeast (off 40 percent) and Midwest (off 35 percent). Construction levels were only 6 percent lower in the West and 2 percent lower in the South. In contrast, multifamily construction was significantly above long -run averages in the West (up 19 per- cent) and the Northeast (up 18 percent), and more modestly in the South (up 7 percent). In the Midwest, however, multifamily starts were 14 percent below historical averages. Over the long run, residential construction should exceed house- hold growth to provide some margin for replacement of older units, demand for second homes, geographic shifts in the population, and a normal amount of vacancies. But housing production, including manufactured housing placements, barely kept pace with house- hold growth for most of the past decade. About 100 new units were added to the housing stock for every 100 new households formed in 2010-2018, compared with 146 units for every 100 households added on average in the 1990s and 2000s. Although Slowing at the End of 2018, Housing Construction Was Up for the Year Housing Starts (Millions of units) 1.6 1.4 1.2 1.0 0.8 0.6 0.4 - 0.2 0 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 • Single -Family • Multifamily Note: Housing starts are based on 12 -month trailing averages. Source: JCHS tabulations of US Census Bureau, New Residentiat Construction data. THE STATE OF THE NATION'S HOUSING 2019 A look at new construction in the nation's 50 largest markets in 2007-2017 provides some general insights about which markets have seen the biggest gap between demand and new supply. When measured by the ratio of housing permits to household growth, construction has lagged the most in Western metros and the least in Southern metros, even though production in both regions is near long-term averages. In eight of the 50 metros, the growth in households exceeded the number of housing permits. San Francisco topped the list with only 79 permits issued for every 100 net new households, followed by San Antonio (80), Boston (82), Sacramento (88), Columbus (89), San Diego (94), Denver (97), and Phoenix (99). Vacancy rates in these markets fell about 2 percentage points on average over the decade, exacer- bating already tight conditions in some areas. LIMITED SUPPLY OF NEW MODEST -COST HOUSING With millions of millennials moving into their prime homebuying years, demand for smaller, more affordable homes seems poised for a surge. So far, however, construction of modest -sized single-family homes has been particularly weak. Despite increases in 2017, small homes under 1,800 square feet represented just 22 percent of single- family completions, down from 32 percent on average in 1999-2011. Indeed, completions of large homes with more than 3,000 square feet outnumbered those of small homes for the first time in 2013 and have continued to do so for five straight years. The median sales price for small homes was $197,000 in 2017, less than half the price for large homes. The addition of other lower-priced housing options has also been limited. Manufactured housing shipments increased 4 percent in 2018, to 96,600 units. Although the highest level since 2006, this is still less than half the 235,000 unit annual average in 1987-2006. In 2018, manufactured housing units sold for $78,600 on average, excluding land costs. Construction of multifamily condominiums and co-operatives also held near post -recession lows last year, with completions of just 27,000 units. Moreover, many condos are even more expensive than single-family homes because of their locations, with a median ask- ing price of $521,200 for units completed in 2017. At the same time, construction of townhomes (attached single-family units) rose sig- nificantly over the past year, up 8 percent to 108,000 units—nearly double the level in 2011. Again, though, the number of new town - homes was still well below levels in the early 2000s. CONSTRAINTS ON NEW DEVELOPMENT High land prices are one explanation for the lack of middle -market housing. Land costs rise when demand is strong and land use regulations limit the number of new units that can be built and/or impose significant costs on developers through fees and protracted approvals. According to Joint Center analyses of the Federal Housing Finance Agency (FHFA) data, the median price per acre of residen- Single -Family Construction in the Midwest and Northeast Remains Particularly Weak Single -Family Starts (Thousands) Multifamily Starts (Thousands) 500 450 400 350 300 250 200 150 100 50 0 - South West Midwest Northeast • 1980-2016 Annual Average • 2017 • 2018 Source: JCHS tabulations of US Census Bureau, New Residential Construction data. tial land used for existing single-family homes nationwide jumped from $159,800 in 2012 to $203,200 in 2017. Residential land values climbed in 80 percent of counties across the country, with the larg- est increases concentrated in the West (Figure 81. Of the 46 states where land values per acre rose over this period, the largest increases were in Nevada (158 percent), Colorado (96 percent), California (88 percent), Arizona (81 percent), and Utah (81 percent). In contrast, land values in Delaware, North Carolina, and Wisconsin declined slightly, while those in Mississippi dropped 14 percent. Land values on much of the East Coast rose less rapidly but from already high levels, with prices reaching $487,000 per acre in Massachusetts and $641,000 in New Jersey. In addition to rising land costs, labor shortages are a growing concern for housing developers. According to the latest National Association of Home Builders survey, 82 percent of respondents expect the cost and availability of workers will be among the most significant problems they face in 2019. On a 12 -month rolling basis, the number of construction job openings topped 275,000 at the end of 2018, up 39 percent from a year earlier. With no discernible uptick in hiring, the unemployment rate for the industry fell from 6.0 percent in 2017 to 5.1 percent in 2018, its lowest level since at least 2000. The construction industry relies on an increasingly limited labor pool where one out of three trades workers are immigrants and 11 out of 12 do not have bachelors degrees. Today, however, grow- ing shares of both foreign- and native-born workers are college educated and choosing other occupations. Labor shortages are likely to continue unless developers, contractors, and others in 200 150 100 50 South West Midwest Northeast the construction field find ways to appeal to workers who are not traditionally drawn to these jobs. For example, women comprise nearly half the nation's labor force but only 3 percent of the cur- rent construction workforce. FOR -SALE INVENTORIES ON THE RISE Home sales slowed last year after several years of moderate but steady growth. About 5.3 million existing homes were sold in 2018, down from 5.5 million in 2017. Sales of existing single-family homes fell 3.1 percent, to 4.7 million units, while sales of condos and co-ops dipped 2.9 percent, to 601,000 units. New single-family home sales rose to 617,000 units, or by just 0.7 percent in 2018—a fraction of the 12.0 percent gains averaged over the previous three years. Sales rose 5.6 percent in the Midwest and 2.7 percent in the South, partially offsetting the 20.0 percent drop in the Northeast and 1.8 percent decline in the West. The slowdown reflects a shift in consumer confidence in the face of rising interest rates and a sharp stock market drop at the end of 2018. According to the University of Michigan Survey of Consumers, 32 percent of respondents thought that homebuying conditions were bad in the fourth quarter of 2018, up 5 percentage points from a year earlier and the highest levels since 2008. Sentiment was essentially unchanged in the first quarter of 2019, even after inter- est rates retreated. With this softening, the inventory of existing homes on the mar- ket increased at the end of 2018 for the first time since 2015, to 1.53 million units—a jump of 4.8 percent from a year earlier. At the same time, the average months of supply edged up from 3.9 JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 9 Residential Land Prices in Many Areas Have Risen Sharply Since 2012 Change in Median Land Value, 2012-2017 (Percent) • Decline • 0-24 • 25-49 • 50-99 • 100 and Over Nate: Prices are far land occupied by single-family homes. Source: JCHS tabulations of Federal Housing Finance Agency [FHFA), The Price of Residential Land for Counties, ZIP Codes, and Census Tracts in the United States. Despite Recent Increases, Inventories of Both New and Existing Homes for Sale Remain Tight Months of Supply 14 12 10 8 6 4�� 9. N 2002 2004 2006 2008 2010 2012 2014 2016 2018 • New Units • Existing Units Notes: Months of supply are based on three-month trailing averages for single-family homes only. Months of supply measure how long it would take the number of homes on the market to sell at the current rate, where six months is typically considered a. balanced market. Sources: JCHS tabulations of NAR, Existing Home Sales; US Census Bureau, New Residential Sales. 10 1 THE STATE OF THE NATION'S HOUSING 2019 in 2017 to 4.0 in 2018. The number of single-family homes for sale alone climbed from 1.29 million (3.9 months of supply) to 1.34 million units (4.0 months). Even so, for -sale inventories remain historically low (Figure 91. In fact, the number of existing single-family homes for sale never fell below its current level between 1982 and 2016. Tight inventories pushed the vacancy rate for the owner -occupied stock down again last year to just 1.5 percent, the lowest rate since the mid-1990s. At the same time, however, the inventory of newly built homes for sale was up 18 percent year -over -year at the end of 2018, to 348,000 units. With sales slowing, the average months of supply of new homes was 6.1 through 2018, up from 5.4 in 2017 and the highest level since 2011. Although inventories declined somewhat in early 2019, the supply of newly built homes is still in line with or above average levels in the 1980s and 1990s. According to Joint Center tabulations of Zillow data, 46 percent of the for -sale inventory at year's end was in the top third of homes by value within each market, while 31 percent was in the middle tier and only 23 percent was in the bottom tier. However, supplies of more affordable units may be turning a corner. After declining for four straight years, the number of homes for sale in the bottom and middle price tiers increased by 4 percent, while supply in the top tier continued to fall by 4 percent. MODERATION IN HOME PRICE GROWTH According to the FHFA All -Transactions Home Price Index, year - over -year home price growth slowed nationwide from 6.9 percent on average in the first three quarters of 2018 to 6.0 percent in the last quarter. Price appreciation was only 5.5 percent in the first quarter of 2019 (Figure 10). The S&P/Case-Shiller National Home Price Index shows an even sharper slowdown, with price increases falling from a high of 6.5 percent in early 2018 to 4.6 percent in December, and then to 4.0 percent in early 2019. Nevertheless, home prices have risen year -over -year for more than 80 consecutive months. Nominal prices climbed 5.9 percent in 2018 as a whole, slightly faster than in 2016 and 2017. At the end of last year, nominal home prices stood 11.0 percent above the 2006 peak, 53.0 percent above the 2012 bottom, and 105.0 percent above the 2000 level. In inflation-adjusted terms, however, home price appre- ciation slowed from 4.9 percent to 3.8 percent in 2016-2018. As a result, real prices were 7.6 percent below the pre -crisis high at year end, but up 45.8 percent from the bottom and 44.4 percent from the level in 2000. Home price growth decelerated in nearly two-thirds of the nation's 120 largest metro areas and divisions at the end of 2018, compared with a little over a quarter of markets a year earlier. In the nation's 10 most expensive housing markets, year -over -year home price appreciation slowed from 8.0 percent in the fourth quarter of 2017 to 6.7 percent at the end of 2018. Prices in these markets rose only 4.9 percent in early 2019. Price growth eased the most in Seattle, where appreciation fell from 14.4 percent at the end of 2017 to 6.8 percent at the end of 2018. Other high-cost metros where home price increases slowed include Sacramento (from 10.2 percent to 6.4 -5 -10 percent), New York (6.3 percent to 4.8 percent), and Los Angeles (8.5 percent to 7.6 percent). Meanwhile, home prices in the 10 least expensive markets rose 4.3 percent on average in 2018, up slightly from 4.0 percent in 2017. Home price increases in non -metro areas also picked up pace from 4.4 percent to 4.8 percent at the end of last year. Even with the slowdown in much of the country, nominal home prices at the end of 2018 were up more than 8.0 percent from a year earlier in nearly a quarter of all 404 US housing markets tracked by FHFA, and by double -digits in 10 percent of markets. Among the 100 largest markets, the biggest price increases last year were in the Western metros of Las Vegas (17.6 percent), Boise (16.7 percent), and Spokane (13.1 percent). In contrast, home price growth was under 2.0 percent in eight metro areas, primarily smaller markets includ- ing El Paso (0.4 percent), Hartford (0.5 percent), and Bridgeport (0.9 percent). PERSISTENT AFFORDABILITY CHALLENGES Slower home price appreciation did little to improve affordabil- ity. Prices for lowest -cost homes rose the fastest again last year. According to CoreLogic, prices for more affordable homes (priced at or below 75 percent of the metro area median) rose 6.9 percent on average in the last quarter of the year -nearly double the rate for more expensive homes (priced at or above 125 percent of the metro area median). The National Association of Realtors reports that the median sales price of existing single-family homes rose from $253,800 in 2017 to After Trending Up for Six Years, Home Price Appreciation Began to Slow Across Market Types in Late 2018 Year -over -Year Change in Home Prices (Percent) -20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 • 10 Lowest -Cost Metros • 10 Highest -Cost Metros • Non -Metro Areas • US Total Notes: The 10 lowest- (highest-) cost metros are in the bottom (top) decile of the 100 largest metros for median home values in 2018, based on Zillow estimates. Non -metro prices are weighted averages of all state non -metro prices, with each state's value weighted by the share of detached single-family homes. Sources: JCHS tabulations. of FHFA, All -Transactions House Price Index: ZiHow median home values. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 11 In Many Large Metro Areas, Home Price -to -Income Ratios Are Approaching Mid -2000s Levels Number of Metro Areas US Ratio 100 5.00 90 4.75 80 4.50 70 4.25 60 4.00 50 3.75 40 3.50 30 3.25 20 3.00 10 2.75 0 2.50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Price -to -Income Ratio • 6.0 and Over • 5.0-5.9 • 4.0-4.9 • 3.0-3.9 • Under 3.0 • US Ratio (Right scale) Note: Price -to -income ratios are for the 100 largest metro areas by population. Sources: JCHS tabulations of NAR, Metropolitan Median Area Prices; Moody's Analytics Estimates. $261,600 in 2018 after adjusting for inflation, outpacing growth in the median household income for the seventh straight year. Home price -to -income ratios, a key measure of affordability, indicate whether household incomes are in line with home values. In 2018, the national median sales price for an existing home in 2018 was more than 4.1 times the median household income—somewhat higher than the 3.7 ratio averaged in 1990-2018. Although low inter- est rates have kept monthly costs relatively manageable in many markets, buyers of higher -priced homes must have substantial incomes to cover downpayment and closing costs. At the metro level, price -to -income ratios rose in 85 of the nation's 100 largest markets last year. Home prices were at least four times higher than incomes in 41 metros and six times higher than incomes in 8 (Figure Ill. Ratios were highest in several Western metros, including San Jose (11.0), Honolulu (9.6), and Los Angeles (9.4), and lowest in parts of the Midwest and Northeast, including in Toledo (2.3), Syracuse (2.4), and Akron (2.4). In a third of the top 100 metros, price -to -income ratios were even higher in 2018 than during the housing boom. This is true not only in places where ratios are consistently high, such as San Jose and Honolulu, but also in many fast-growing Southern and Western markets, such as Atlanta (3.2), Dallas (3.7), Nashville (3.9), Salt Lake City (4.4), and Denver (5.6). Price -to -income ratios also reached new peaks in traditionally low-cost markets in the Midwest, such 12 1 THE STATE OF THE NATION'S HOUSING 2019 as Grand Rapids (3.0), Indianapolis (3.0), and Kansas City (3.1). Although these markets remain relatively affordable, increases in price -to -income ratios have raised concerns that potential buyers are being priced out of homeownership in much of the country. THE OUTLOOK The housing market cooled nationwide in late 2018, with evidence of weaker prices, sales, and construction volumes in metros across the country. This slowdown is somewhat surprising given how the strong economy has fueled growth of both incomes and households. The primary culprit appears to be the lack of affordable housing. New additions to the housing stock are also concentrated at the higher end, reducing the options available to first-time buyers. The limited supply of smaller, more affordable homes is also a product of rising costs for land and labor in the construction industry. Going forward, the strong economy and the aging of the millennial generation should support robust demand for both rental units and starter homes. To meet this demand, however, the supply of more affordable housing will have to increase significantly. But develop- ers can only produce middle -market housing profitably if some of the restrictions on land use are relaxed and the construction sec- tor is able to attract a larger labor force. Indeed, if the residential construction industry can overcome these constraints, it could help grow the economy at a time when other sectors are slowing. Supported by rising incomes, household growth is now back to levels more in keeping with adult population growth. Even so, high housing costs have prevented many young adults from living on their own, especially in expensive metros. Growing income inequality is another serious drag on household formations. Over the next decade, the fastest- growing household types will be younger families and older empty-nesters—households with very different housing needs. The growing share of foreign -born households will also add to the increasing diversity of demand. PICKUP IN HOUSEHOLD GROWTH All three Census Bureau surveys that provide household growth esti- mates point to an upturn. The Housing Vacancy Survey (HVS) puts the increase in the number of households in 2017-2018 at 1.5 million, while the Current Population Survey reports similarly strong growth of 1.4 million. Meanwhile, the American Community Survey shows a solid 1.2 million increase in 2017. Given the volatility of annual data, averaging household growth over three years provides a more reliable picture of trends. Based on HVS estimates, the number of net new households slightly exceeds 1.2 million annually—in line with JCHS projections for 2018-2028 (Figure 12). While lower than the 1.4-1.5 million in 2005 and 2006, the current pace of household growth is comparable to annual aver- ages in the 1990s and early 2000s. With the aging of the US population, the number and share of older households have already set new records. The number of house- holds headed by adults age 65 and over grew by more than 800,000 per year on average in 2012-2017. The 70-74 year-old age group led this growth with a 25 percent increase, while the number of house- holds headed by 65-69 year olds rose by 20 percent. By comparison, the total number of households grew just 4 percent over this five- year period. As a result, more than a quarter of all US households were headed by adults age 65 and over in 2017. In addition to being older on average, US households are becoming much more racially and ethnically diverse. The younger adults who are now forming households are much more likely to be minorities than their predecessors. In 2018, fully 46 percent of the 18-34 year- old population was Hispanic or nonwhite, compared with 37 percent of 35-64 year olds and just 24 percent of adults age 65 and over. Indeed, given strong growth among younger minority households and increasing losses among older, native-born white households, the minority share of US households is projected to rise from 34 percent in 2018 to 37 percent in 2028 and to 41 percent in 2038. THE ROLE OF MILLENNIALS Millennials, the largest generation in history, are moving steadily into their mid-20s and early 30s—the age groups most likely to JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 13 Household Growth Has Stabilized at Early 2000s Levels Household Growth (Millions) 1.6 . 1.4 .. 1.2 1.0 .. 0.6 .. 0.6 .. 0.4 .. 0.2 .. 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Note: Household growth estimates are three-year trailing averages. Sources: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys: JCHS 2818 Household Projections. The Number of Young -Adult Households Is Finally Increasing in Line with Population Growth Population (Millions) Households (Millions) 46 .. _ _ 20.0 45 4419.5 43 42 19.0 41 40 18.5 39 38 18.0 37 36 17.5 2002 2004 2006 2008 2010 2012 2014 2016 2018 • Population Aged 25-34 • Households Headed by 25-34 Year Olds (Right scale) Note: Population and household estimates are three-year trailing averages. Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys and National Population Estimates. form new households. Household growth among these young adults has recently begun to increase in line with population growth, with annual gains of nearly 200,000 on average since 2015 (Figure 131. Measured as a three-year moving average, the US population aged 25-34 grew by 14.7 percent in 2002-2018 to a record high of 45.3 million, while households headed by someone in this age group increased by just 1.3 million (7.1 percent) over this period -about half the number that population growth alone would imply. 14 1 THE STATE OF THE NATION'S HOUSING 2019 2018-2028 Projected Annual Average The recent pickup in young -adult household growth reflects a firming of, but not a rebound in, the household headship rates of 25-34 year Olds (the ratio of households to people), which have trended down since the mid -2000s. Census data indicate that their headship rates dipped again in 2018, down 0.1 percentage point to 43.1 percent. The Current Population Survey reports similarly low rates for both the 25-29 and 30-34 year-old age groups. And by the latest American Community Survey count, headship rates for 25-34 year olds hit a record low of 40.2 percent in 2017. Part of the explanation for this decline is that more young adults still live at home. In absolute terms, 10.2 million adults aged 25-34 lived with their parents or grandparents in 2017, or more than twice the 4.8 million in 2000. The share living in their parents' or grand- parents' homes also hit a new high of 22.8 percent in 2017, nearly double the 12.1 percent in 2000. Their record -low headship rates put millennials on a much lower trajectory for forming independent households than previous gen- erations. The question remains whether they will continue along this lower path as they age. If history is any guide, though, head- ship rates of generations that have been slow to form households eventually catch up to those of their predecessors by age 40. What is different today, however, is that housing in many areas has become so expensive. THE HOUSING AFFORDABILITY BARRIER Although down across the country, household formation rates for young adults have fallen the most in the nation's highest -cost mar- kets. Between 2006 and 2017, headship rates for 25-29 year olds -the age group hardest hit by the Great Recession -dropped 9.1 percent- age points in the 25 largest metros with the highest rents, but just 4.9 percentage points in the 25 largest metros with the lowest rents. By comparison, the average decline in headship rates for this age group was 6.4 percentage points across all 100 largest metros and 5.6 per- centage points across all other metros. Even in non -metro areas, the drop in headship rates was still substantial at 4.1 percentage points. The average household headship rate for the 25-29 year-old popu- lation ranges widely from just 31 percent in the 25 highest -rent metros up to 41 percent in the 25 lowest -rent metros (Figure 141. Headship rates for younger adults living in smaller metros (40 per- cent) and non -metro areas (39 percent) are comparable to those in lowest -cost large metros. The differences in headship rates across high- and low-cost metros are smaller among older age groups, suggesting that affordability challenges may delay but not ultimately deter household forma- tions among today's younger adults. Still, headship rates for all age groups are lower in high-cost metros than in less expensive mar- kets. Indeed, doubling up in nontraditional households—such as multigenerational households or unrelated adults sharing space—is more common in expensive housing markets regardless of race, ethnicity, or nativity. For example, 22 percent of native-born whites aged 25-34 living in high-cost metros reside with parents or grandparents, compared with 18 percent in low-cost metros. Individuals aged 35114 of all races and ethnicities, whether native- or foreign -born, are also between 1 and 4 percentage points more likely to live with an unre- lated adult if they reside in a high-cost metro. Shares of households with multiple workers, particularly lower -wage earners, are also higher in expensive metros. High housing costs thus have an impact not only on household growth rates but also on the types of housing that are in demand. INEQUALITY RISING ALONG WITH INCOMES The Current Population Survey reports that median per capita income, measured as a three-year rolling average, rose 2.9 percent in real terms in 2016-2017. This marked the fifth consecutive year of growth. While all age groups posted gains during that period, the largest increases were for 25-34 year olds (up 11.3 percent) and 35-44 year olds (up 11.1 percent) (Figure 15). As a result, incomes for younger households were close to or above previous highs in 2017. For example, the real median income for households headed by 25-34 year olds, at $60,800, stood just 2.5 per- cent below the peak in 2001, while the median for 35-44 year olds, at $75,800, was 1.1 percent above the previous peak. Although up by some 12.2 percent since 2012, to $78,400, the real median income of households aged 45-54 was still 5.0 percent below the peak in 2000. The real median income for households aged 55-64, at $66,500, is back within 1 percent of the previous peak. Meanwhile, incomes of older households remained on a steady upward trajectory. In fact, rising labor force participation rates boosted the median incomes of households age 65 and over to all-time highs. High Rents Delay the Ability of Younger Adults to Form Independent Households Average Household Headship Rates (Percent) 60 50 40 30 20 10 .. 20-24 25-29 30-34 35-39 Age Group • 25 Lowest -Rent Metros • Middle 50 Metros • 25 Highest -Rent Metros Note: Household headship rates are for the 100 largest metro areas by papulation in 7017, ranked by median rents. Source: JCHS tabulations of US Census Bureau. 2017 American Community Survey 1 -Year Estimates and Missouri Census Data Center data. Income Growth Among Younger Adults Has Been Particularly Strong Median Real Per Capita Income (Thousands of 2017 dollars) 45 40 35 30 25 20 15 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Age Group • 25-34 • 35-44 • 45-54 • 55-64 • 65 and Over Note: Incomes are based an three-year trailing averages, adjusted to 2017 dollars using the CPI for All Items. Source: JCHS tabulations of US Census Bureau, Current Population Surveys via IPUMS CPS. Measured on a three-year trailing basis, the real median household income increased 3.0 percent in 2016-2017 to a new high of $59,700. Broad-based gains since 2013 raised the number of households earning over $100,000 by 6.3 million and reduced the number earn- ing under $25,000 by 1.7 million. The US median household income thus grew 9.8 percent in 2013-2017 while average household income rose 10.3 percent in real terms. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 15 In sharp contrast, the average incomes of households in the bottom quartile have improved relatively little during the recent recovery— up just 8.0 percent in real terms from the 2014 low, compared with 12.1 percent among households in the top income quartile. Given this disparity in growth and the fact that bottom -quartile incomes fell more than top -quartile incomes during the downturn, the gap between high- and low-income households continued to widen. Adjusting for inflation, the average income in the top quartile rose 38.5 percent between 1987 and 2017, while the average income in the bottom quartile increased just 2.3 percent. Over the three decades, the average top -quartile income therefore increased from 9.2 times the average bottom -quartile income to 12.4 times. Notes: Recent immigrants in 1990 and 2008 entered the US within the previous five years. Recent immigrants in 2010 and 2017 arrived within the previous year. Data include only foreign -born aduIts age 25 and over. Source: JCHS tabulations of US Census Bureau, Decennial Censuses and American Community Survey 1 -Year Estimates via IPUMS USA. ...and Originated from a Different Mix of Countries Share of Recent Immigrants by Birthplace (Percent) The geographic concentration of poverty differs sharply by race and ethnicity. Fully 70 percent of poor blacks and 63 percent of poor Hispanics live in high -poverty neighborhoods, compared with just 35 percent of poor whites and 40 percent of poor Asians. But the overrepresentation of various racial/ethnic groups in high -poverty tracts is not confined to the poor. Some 48 percent of all blacks and 41 percent of all Hispanics live in high -poverty neighborhoods, com- pared with just 16 percent of all whites and 21 percent of all Asians. 25 THE CRITICAL CONTRIBUTION OF IMMIGRATION 20 The latest Census Bureau estimates show that net international immigration increased 2.7 percent in 2018, to 980,000 just shy of 15 the 1.0 million average annual rate projected for the next 10 years. Although slightly below levels in 2015 and 2016, net annual inflows 10 nevertheless remain well above the 2011 low of 790,000. 5 .. Mexico China India South& Other Asia Europe Africa Other Central America • 1990 • 2017 Notes: Recent immigrants in 1990 and 2000 entered the US wHhin the previous five years. Recent immigrants in 2010 and 2017 arrived within the previous year. Data include recent immigrants of all ages. South & Central American numbers include Cuban and Caribbean immigrants. Other birthplaces include Australia, New Zealand, Canada. Atlantic and Pacific Island countries, Puerto Rico, and other US territories. Source: JCHS tabulations of US Census Bureau, Decennial Censuses and American Community Survey 1 -Year Estimates via IPUMS USA. 16 1 THE STATE OF THE NATION'S HOUSING 2019 Immigrants are a major source of household growth and therefore of housing demand. Despite making up only 13.7 percent of the population in 2017, foreign-bom households were responsible for 37 percent of household growth from 1990 to 2017. The immigrant share of homeowners increased from 7 percent to 12 percent over this period, while the immigrant share of renters increased from 12 percent to 20 percent. The mix of immigrants continues to evolve. Recent arrivals are more likely to have advanced education, with the share over age THE INCREASING CONCENTRATION OF POVERTY Income inequality across neighborhoods is also increasing. Although down slightly in 2016-2017, the US population living below the offi- cial poverty line jumped by more than 35 percent between 2000 and 2017, to 44.8 million. The share of the population living in poverty Recent Immigrants Today Are Better Educated also rose from 12 percent to 14 percent over this period. than Their Predecessors... Share of Recent Immigrants by Educational Attainment (Percent) At the same time, the number of poor people living in high -poverty 60 census tracts (with poverty rates of 20 percent or more) increased by 8.3 million in 2000-2017, to 22.7 million. As a result, the share of the 50 nation's poor living in high -poverty neighborhoods climbed from 43 percent to 51 percent. In addition, the number of high -poverty cen- sus tracts rose by 46 percent over this period, to 19,600—more than 30 a quarter of all tracts in the country. 20 While the largest shares of both poor people and high -poverty tracts are in the highest -density neighborhoods of metro areas, the fast- 10 est growth in poverty is now occurring at the metropolitan fringe. 0 Indeed, in the lowest -density third of all neighborhoods, both the 1990 2000 2010 2017 number of high -poverty census tracts and the number of poor people living in high -poverty tracts doubled between 2000 and 2017. • College Degree or Higher • Less than High School Notes: Recent immigrants in 1990 and 2008 entered the US within the previous five years. Recent immigrants in 2010 and 2017 arrived within the previous year. Data include only foreign -born aduIts age 25 and over. Source: JCHS tabulations of US Census Bureau, Decennial Censuses and American Community Survey 1 -Year Estimates via IPUMS USA. ...and Originated from a Different Mix of Countries Share of Recent Immigrants by Birthplace (Percent) The geographic concentration of poverty differs sharply by race and ethnicity. Fully 70 percent of poor blacks and 63 percent of poor Hispanics live in high -poverty neighborhoods, compared with just 35 percent of poor whites and 40 percent of poor Asians. But the overrepresentation of various racial/ethnic groups in high -poverty tracts is not confined to the poor. Some 48 percent of all blacks and 41 percent of all Hispanics live in high -poverty neighborhoods, com- pared with just 16 percent of all whites and 21 percent of all Asians. 25 THE CRITICAL CONTRIBUTION OF IMMIGRATION 20 The latest Census Bureau estimates show that net international immigration increased 2.7 percent in 2018, to 980,000 just shy of 15 the 1.0 million average annual rate projected for the next 10 years. Although slightly below levels in 2015 and 2016, net annual inflows 10 nevertheless remain well above the 2011 low of 790,000. 5 .. Mexico China India South& Other Asia Europe Africa Other Central America • 1990 • 2017 Notes: Recent immigrants in 1990 and 2000 entered the US wHhin the previous five years. Recent immigrants in 2010 and 2017 arrived within the previous year. Data include recent immigrants of all ages. South & Central American numbers include Cuban and Caribbean immigrants. Other birthplaces include Australia, New Zealand, Canada. Atlantic and Pacific Island countries, Puerto Rico, and other US territories. Source: JCHS tabulations of US Census Bureau, Decennial Censuses and American Community Survey 1 -Year Estimates via IPUMS USA. 16 1 THE STATE OF THE NATION'S HOUSING 2019 Immigrants are a major source of household growth and therefore of housing demand. Despite making up only 13.7 percent of the population in 2017, foreign-bom households were responsible for 37 percent of household growth from 1990 to 2017. The immigrant share of homeowners increased from 7 percent to 12 percent over this period, while the immigrant share of renters increased from 12 percent to 20 percent. The mix of immigrants continues to evolve. Recent arrivals are more likely to have advanced education, with the share over age Over the Next Decade, the Fastest -Growing Household Types Will Be Younger Families with Children and Older Single Persons and Empty -Nesters Projected Change in Households, 2018-2028 (Millions) 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 ., -1.0 Under35 35-44 45-54 55-64 65-74 75 and Over Age Group Household Type • Single Person • Married without Children • Married with Children • All Other Note: Children are under age 18. Source: JCHS 2018 Household Projections. 25 with college degrees nearly doubling from 28 percent in 1990 to 52 percent in 2017 (Figure 16). At the same time, the share with less than a high school education fell from 36 percent to just 18 percent. The main countries of origin have also shifted, with fewer new immigrants arriving from Mexico and more from China, India, South and Central America, and Africa (Figure 17). As the native-born population ages over the coming decades, the number of deaths will rise faster than births and increasingly cut into adult population growth. Immigrants will therefore pro- pel a larger and larger share of both population and household growth in the years ahead. Even assuming that immigration is unchanged, the foreign born are projected to account for a major- ity of household growth in 2018-2028 and a majority of popula- tion growth by 2030. THE ADDED IMPACT OF DOMESTIC MIGRATION ON GROWTH According to the American Community Survey, 7.5 million people made interstate moves in 2017, slightly higher than the 7.2 million annual average from 2010-2017. The number of households making those interstate moves totaled 2.5 million, also slightly above recent annual averages. Like international immigration, domestic migration can contribute significantly to household growth in certain markets. Indeed, on average, interstate migrants accounted for at least half of household growth in six of the nation's ten highest -growth states in 2010-2017, with shares reaching as high as 63 percent in Colorado and 82 per- cent in Arizona. Even in states with net domestic out -migration, the numbers of households moving in were still significant. For example, even though about 30,000 more households moved out of California each year in 2010-2017 than moved in, in -migration still averaged 165,000 households annually. This made California third only to Florida and Texas in terms of gross household moves into the state. In contrast, while 85,000 households moved to New York each year on average during this period, 148,000 households moved out, gen- erating a large net domestic out -migration from the state. Even so, both California and New York still gained households over- all in 2010-2017 thanks to strong inflows of international migrants and household formations among their large resident populations. In fact, California had the third-highest level of household growth in the nation, with an average increase of 85,500 households per year during this period. Of that total, 62,900 resulted from household formations by current residents outnumbering losses of households through dissolutions. Given the aging of the population and the increasing losses of older households, California and other states will therefore have to rely more on domestic and international migrants to generate household growth in the decades ahead. ONGOING SLOWDOWN IN RESIDENTIAL MOBILITY Although the interstate migration rate was stable, within -state or local moves continued their long-term decline in 2017, reducing the US residential mobility rate by 0.2 percentage point, to 14.3 percent. With this latest drop, the national mobility rate now stands a full 2.5 percentage points below the level in 2006 when recordkeeping began. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 17 Roughly 80 percent of all moves in a given year are in-state. According to the American Community Survey, the local mobil- ity rate slipped from 11.5 percent in 2016 to 11.3 percent in 2017 because of fewer in-state moves by renters, who make up the majority of domestic migrants. The population living in rental housing that reported a local move within the previous year fell slightly from 24.8 percent in 2016 to 24.1 percent in 2017. Meanwhile, the domestic mobility rates of people living in owner - occupied housing increased modestly from 7.8 percent to 8.0 per- cent over the year. Population aging explains some of the slowdown in domestic migra- tion over the last 20 years, given that older adults are more likely to own homes and less likely to move. However, domestic mobility rates have dropped across all age groups, and particularly among young adults and renters. Moreover, despite relatively low mobility rates, older adults now account for a growing number of domestic migrants. Because of the strong growth in the population age 65 and over, the number of older -adult movers increased from 1.5 million in 1998 to 1.8 million in 2018, raising their share of all movers age 18 and over from 4.9 percent to 7.4 percent over the decade. THE OUTLOOK The latest JCHS projections, incorporating Census Bureau data through 2018, put average annual household growth in 2018-2028 at 1.2 million households, in line with recent averages. The aging of the population will lift the number of households age 65 and 18 1 THE STATE OF THE NATION'S HOUSING 2019 over by 11.1 million, which in turn will increase the number of households consisting of either single persons or married couples without children by 8.4 million over the decade (Figure 18). Some 2.9 million millennial households will move into the 35-44 year- old age group, contributing to the 1.6 million increase in the number of married couples with children and driving up demand for family housing. Factoring in replacement and second -home demand plus a minimum vacancy rate, these household growth projections imply baseline demand for new housing of 15.1 mil- lion units in 2018-2028. In 2028-2038, however, current JCHS projections indicate that household growth will decline to 9.6 million, or less than 1.0 million per year. Nevertheless, new household formations among younger adults will remain strong, given that the generations following the millennials are nearly as large. This will help to offset growing losses of baby -boomer households over the decade. The expected slowdown in natural increase (births over deaths) among the native-born population will make immigration an even more critical factor in future housing demand. But unlike natural increase, which tracks the aging of the current population, immigration flows are difficult to predict. Indeed, the Census Bureau's latest population projections cut net annual immigration by roughly 20 percent from previously projected levels, equivalent to 27 million fewer immigrants over the next ten years. Such large increases or decreases in immigra- tion could dramatically alter the outlook for the quantity and diversity of housing demand in the United States. The number of US homeowners increased again in 2018, lifting the national homeownership rate for the second consecutive year. With demand picking up, real home prices are approaching pre -crisis levels, helping to build substantial equity for current owners but also eroding affordability for first-time homebuyers. Indeed, affordability is an increasingly serious challenge for would-be homeowners in several high- priced metros. UPTICK IN THE HOMEOWNERSHIP RATE The US homeownership rate edged up again last year. After fall- ing 5.6 percentage points between 2004 and 2016, the national rate increased 0.5 percentage point in 2017-2018, to 64.4 percent— roughly on par with the average rate in 1985-1995 before the latest housing boom and bust. After a robust fourth-quarter increase, however, the homeownership rate dipped slightly in early 2019 but still remained above the year-earlier level. The rebound in homeownership reflects a substantial pickup in homeowner household growth and a slowdown in renter household growth. According to the Housing Vacancy Survey, the number of homeowner households was up by 1.6 million in 2017-2018 to a total of 78.2 million, while the number of renters fell by 110,000 to 43.2 million. This shift is a clear departure from the trend in 2007- 2016, when renter household growth averaged 890,000 per year and homeowner household growth was negative (Figure 19). The recent increases in homeownership rates are entirely among households under the age of 65. Between 2016 and 2018, the homeownership rate rose 1.7 percentage points among house- holds under age 35, 1.5 percentage points among households aged 35-44, 0.8 percentage point among households aged 45-54, and 0.4 percentage point among households aged 55-64. Despite these gains, however, homeownership rates for all of these age groups are still below their levels 30 years ago. Indeed, the home- ownership rate is down 3.0 percentage points for the under -35 age group, 6.8 points for 35-44 year-olds, 5.5 points for 45-54 year olds, and 4.2 points for 55-64 year-olds. In contrast, and despite a modest 0.3 percentage point decline in 2016-2018, the homeown- ership rate for households age 65 and over was 2.9 percentage points higher in 2018 than in 1988. The recent upturn in homeownership rates occurred across all racial and ethnic groups. The rate for Asian/other households increased the most, up 2.6 percentage points in 2016-2018. The rates for both white and Hispanic households were up 1.1 per- centage points, while the black homeownership rate rose just 0.7 percentage point. These increases narrowed the homeowner- ship gap between white and Asian/other households, but left the JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 19 Homeownership Has Gained Some Upward Momentum Households (Millions) 2.00 . 1.75 1.50 • 1.25 1.00 0.75 0.50 0.25 0- -0.25 -0.50 Percent 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Change in Owner Households • Homeownership Rate (Right scale) Note: Change in owner households is the year -over -year change in the number of homeowner households. Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys. white -Hispanic gap unchanged. The white -black homeownership gap, however, widened over the past two years. Over the longer term, Asian and other minorities have made the most progress in narrowing the homeownership gap with whites. Between 1988 and 2018, the white homeownership rate increased 3.9 percent- age points to 73.0 percent while the Asian/other homeownership rate increased 7.3 points to 57.0 percent, reducing the disparity from 19.4 percentage points to 16.0 points. Meanwhile, the Hispanic home- ownership rate rose 6.5 percentage points to 47.1 percent, reducing the gap with whites from 28.6 percentage points to 26.0 points. In contrast, the black homeownership rate was unchanged over the past decade at 42.9 percent, widening the homeownership gap some 3.9 percentage points to 30.1 points. FIRST-TIME BUYER CHARACTERISTICS The pickup in homeownership has direct implications for the housing stock, which must accommodate the diverse housing needs of first-time homebuyers as well as repeat buyers. Indeed, the 3.1 million first-time buyers who purchased homes in 2016 and early 2017 vary widely in age, household composition, and other characteristics that imply different needs and preferences for housing. Compared with all homeowners, first-time buyers are younger, more diverse, and more likely to have children (Figure 20). More than half (54 percent) of first-time buyers in 2017 were under age 35. While 65 percent of first-time buyers were white, 9 percent were black, 15 percent were Hispanic, and 11 percent were Asian/ other. In addition, 26 percent were married with children present and 10 percent were single parents, while 23 percent were mar - 20 1 THE STATE OF THE NATION'S HOUSING 2019 70 69 68 67 66 65 64 63 62 61 60 ried without children present and 22 percent were single. Just under a fifth of first-time buyers in 2017 did not previously head a household. When compared with repeat buyers, first-time buyers are more apt to choose smaller and less expensive homes. For example, 43 per- cent of first-time buyers in 2017 purchased homes with less than 1,500 square feet of living space, compared with 27 percent of repeat buyers. Just 6 percent of first-time buyers bought homes with 3,000 or more square feet, while 21 percent of repeat buyers chose homes of this size. Similarly, 58 percent of first-time buyers paid less than $200,000 for their homes and only 12 percent paid $400,000 or more. The comparable shares for repeat buyers are 37 percent and 24 percent, respectively. More than three-quarters (77 percent) of first-time homebuyers in 2017 purchased detached single-family homes, slightly below the 81 percent share of repeat buyers. The share of first-time homebuyers that purchased attached single-family homes or units in multifam- ily structures (14 percent) was almost the same share of repeat buyers (13 percent). Just 9 percent of first-time buyers opted for mobile homes, manufactured units, or some other type of structure, compared with 6 percent of repeat homebuyers. PRICE PRESSURES ON POTENTIAL BUYERS According to the FHFA Purchase -Only House Price Index, nominal home prices climbed 5.7 percent last year on average, or 3.9 percent in real terms. With this increase, real home prices were up 41 per- cent from 2011 to 2018 and stood within 2 percent of the 2006 peak. The median price for homes in the lowest tier continued to rise more rapidly than those for higher -cost units last year. The National Association of Realtors reports that the real median sales price of an existing home hit $259,300 in 2018, up from $177,400 in 2011. Adding to affordability pressures, the average rate on a 30 -year fixed-rate mortgage also rose 55 basis points last year, to 4.54 percent—higher than any annual reading since 2010. Largely because of this interest rate hike, real homeowner costs for the monthly mortgage payment, taxes, and insurance on a median - priced home jumped 8 percent from 2017 to 2018, to $1,775—a 47 per- cent increase from 2011. But because interest rates are lower than in prior decades, total homeowner costs in 2018 were down 17 percent from 2006 and 3 percent from 1990 (Figure 211. Although the average mortgage interest rate declined again in early 2019, future increases could add noticeably to homeowner costs. For example, a 1 percent- age point rise in the interest rate for a loan on the median -priced home in 2018 would raise the monthly payment by 9 percent or $153. Rising home prices not only determine the size of a mortgage but also the amount of savings required for a downpayment. To put down 20 percent on a median -priced home last year, a potential buyer would have to have saved almost $52,000. Even buyers quali- fying for a 3.5 percent downpayment on an FHA mortgage would need more than $9,000 plus closing costs. Not surprisingly, more than 60 percent of home mortgages issued in the second half of 2018 involved downpayments of less than 20 percent, and more than 40 percent entailed downpayments of less than 10 percent. 100 90 80 70 60 50 40 30 20 10 Modest downpayment assistance programs can help many would- be owners buy homes, particularly in lower-cost markets. A recent JCHS analysis of the 2014 Survey of Income and Program Participation found that some 85 percent of renters and other poten- tial homebuyers lacked the savings for a 3.5 percent downpayment on a median -priced home in their areas. In addition, 80 percent did not have sufficient income to meet a 31 percent payment -to -income ratio. However, downpayment assistance of just $3,500 would more than double the share of potential homebuyers with enough savings and income to buy homes from 7 percent to 17 percent. AFFORDABILITY ACROSS GEOGRAPHIES Housing affordability varies greatly across metropolitan regions. Nationally, a median -income household could afford the monthly payment for 63 percent of homes sold in 2017. And in 265 of the 300 metros with available data, a median -income household could afford the monthly payment for more than half of all recently sold homes (Figure 22). In those areas, that household would be able to search many neighborhoods for a suitably sized home, although it could face affordability constraints in some locations. But in some high-cost areas, affordability challenges are acute. In nine metros, all of which are in California—Los Angeles, Oxnard, Salinas, San Diego, San Francisco, San Jose, San Luis Obispo, Santa Cruz, and Santa Rosa—a household with the median income could First -Time Homebuyers Are Younger and More Diverse than Current Homeowners Share of Homeowners (Percent) All Homeowners First -Time Homebuyers Age Group 65 and Over 35-64 • Under 35 All Homeowners First -Time Homebuyers Race/Ethnicity • White • Asian/Other • Hispanic • Black All Homeowners First -Time Homebuyers Household Type • Married without Children Single Person • Other • Single Parent Married with Children Notes: First-time homebuyers purchased homes in 2016 and early 2017 and did not previously own homes. Black, Asian/other, and white households are non -Hispanic. Other household types include all other family and non -family households. Source: US Department of Housing and Urban Development (HUD), 2017 American Housing Survey. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 21 160 140 120 100 00 60 40 C[0 With Low Interest Rates Offsetting the Rise in Home Prices, Real Homeowner Costs Are Still Lower than in 1990 Index 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 • Median Home Sates Price • Median Household Income • Monthly Homeowner Costs • Mortgage Interest Rate Nates: House prices, household income, and monthly homeowner costs are adjusted to 2018 dollars using the CPI -U for All Items Less Shelter. Monthly homeowner costs assume a 3.5% downpayment on a median -priced, existing single-family home, condo, or co-op, with property taxes of 1.15%, property insurance of 0.35%, and mortgage insurance of 0.85%. Sources: JCHS tabulations of NAR, Existing Home Sales; US Census Bureau, Current Population Surveys: Moody's Analytics Forecasts; Freddie Mac; Primary Mortgage Market Surveys IPMMS) data. afford less than a quarter of homes sold in 2017. In another 26 met- ros—including Boston, Denver, New York, Portland, and Seattle—a median -income household could afford the monthly payments on only a quarter to a half of recently sold homes. In these areas, potential buyers would have to choose from only a limited set of neighborhoods or from units smaller than they might prefer for their families. Rising home prices are increasing the number of areas facing severe affordability challenges. In 39 of the 100 metros tracked by FHFA, real home prices at the end of 2018 exceeded their peaks at the height of the housing boom. Indeed, real home prices in nine of these metros were more than 20 percent above their 2006 levels, with especially rapid price growth from 2006 to 2018 in Austin (55 percent), Denver (54 percent), San Francisco (53 percent), and Dallas (42 percent). Conversely, real home prices in six metros—Bakersfield, Bridgeport, Camden, Cape Coral, Elgin, and New Haven—remained more than 25 percent below their 2006 peaks last year. MIXED SIGNALS ON CREDIT CONDITIONS The credit environment for potential homebuyers in 2018 was mixed, with borrower credit scores and loan -to -value ratios indicating stable and tight conditions, but debt -to -income ratios pointing to some eas- ing. According to the Federal Reserve Bank of New York, the median credit score for new mortgage originations was 758 in the fourth quar- ter of 2018, within the 750-765 range where it has held since 2014, although well above the 720 median at the end of 2005 and 715 at the end of 2000. The bottom decile credit score hovered between 640 and 660 throughout 2014-2018, still significantly higher than the 597 level at the end of 2005 and 574 at the end of 2000. The median loan -to - value ratio for purchase originations has also been largely stable in the post -crisis period, remaining near 95 percent at the end of 2018. 22 1 THE STATE OF THE NATION'S HOUSING 2019 At the same time, however, the share of mortgage originations with total debt -to -income (DTI) ratios above 43 percent has increased sharply. According to a recent Urban Institute report, the share of Fannie Mae purchase loan originations with these high ratios more than doubled from 13 percent to 29 percent in 2013-2016. Similarly, the share of Freddie Mac originations with high DTI ratios rose from 14 percent to 25 percent, the share of FHA loans from 42 percent to 55 percent, and the share of VA loans from 33 percent to 46 percent. Both the Urban Institute and Mortgage Bankers Association indexes of mortgage credit availability reflect these increases, indicating that credit conditions eased somewhat over this period. The growing share of loans with high debt -to -income ratios is also important because of the upcoming expiration of the "GSE patch." Under Dodd -Frank, the Consumer Financial Protection Bureau's qualified mortgage rule established 43 percent as the maximum debt -to -income ratio for new originations for the government spon- sored enterprises (GSEs), but created an exemption through 2021 (or the end of conservatorship, whichever happens first) for loans eligible for purchase by Fannie Mae and Freddie Mac. Given the significant shares of GSE loans that currently exceed the DTI limit, expiration of this exemption could result in a substantial shift in lending volumes from the GSEs to FHA, which does not have the 43 percent DTI cap. Meanwhile, the number of home purchase originations increased each year from 2011 to 2017, rising from 2.1 million to 3.7 million. In contrast, the number of refinances varied widely over this period in response to fluctuations in mortgage interest rates (Figure 23). The GSE share of home purchase originations rose from 50 percent in 2011 to 64 percent in 2017, while the FHA share fell from 35 percent to 23 percent. The VA share moved up from 9 percent in 2011 to 10 percent in 2017. Affordability of Homeownership for Potential Buyers Varies Widely Across the Country Share of Recently Sold Homes Affordable to Median -Income Households (Percent) • 0-24 • 25-49 • 50-74 4175-100 Notes: Median incomes are estimated at the core -based statistical area (CBSA) level. Only CBSAs with at least 30 home sales in 2017 are shown. Recently sold homes are defined as homes whose owners moved within the 12 months prior to the survey date. Monthly payments assume a downpayment of 3.5%, property taxes of 1.15%, property insurance of 0.35%, and mortgage insurance of 0.85%. Affordable payments are defined as requiring less than 31 % of monthly household income. Sources: JCHS tabulations of US Census Bureau, 2017 American Community Survey 1 -Year Estimates; Freddie Mac, PMMS data. Qualifying for one of these mortgage products, however, remains an obstacle for many potential homebuyers. According to the Survey of Consumer Expectations, 67 percent of renters in 2018 would prefer or strongly prefer to own homes, compared with 19 percent who would prefer or strongly prefer to rent. But 68 percent of renters also thought that it would be somewhat or very difficult to obtain a mortgage last year, while just 17 percent thought it would be some- what or very easy. For those who do qualify for mortgages, navigating the home purchase process can also be a challenge. The National Survey of Mortgage Originations found that while 77 percent of buyers that purchased homes in 2016 were very satisfied with their mortgage lenders, 28 percent were only somewhat or not at all satisfied that they received the lowest interest rate they could qualify for, and 45 percent were only somewhat or not at all satisfied that they paid the lowest possible closing costs. Moreover, significant numbers of respondents reported issues with the closing process. Fully 15 per- cent said that they faced an "unpleasant surprise" such as having the closing rescheduled, needing more cash than expected, having mortgage terms change, or being asked to sign blank documents. STRONG GROWTH IN HOME EQUITY BUT NOT EXTRACTIONS Fueled by rapidly rising home prices and modest increases in mort- gage debt, the aggregate value of home equity more than doubled between 2011 and 2018. According to the Federal Reserve's Flow Home Purchase Loans Have Increased Incrementally, While Refinancings Have Varied with Interest Rates Mortgage Originations (Millions) Interest Rate (Percent) 7 .. 7 6 6 5 .. 5 4 4 3 3 2 2 1 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 Home Purchase Loans • Refinancings • Mortgage Interest Rate (Right scale) Note: Mortgage originations are for first -lien loans for home purchase or refinancing of one- to four -family, owner -occupied properties. Sources: JCHS tabulations of Home Mortgage Disclosure Act (HMDA) data; Freddie Mac, PMMS data. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 23 18 16 14 12 10 8 6 4 2 0 Home Equity Is Nearing Its Pre -Crisis Peak, Driven by Rising Home Prices Trillions of 2018 Dollars ......................................................................................................................................................................................................................................................... ......................................................................................................................................................................................................................................................... ........................................................................................................................................................................................................................................I............... 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 • Home Equity • Mortgage Debt Note: Homeowner equity and mortgage debt are adjusted to 2818 dollars using the CPI -U for All Items. Source: JCHS tabulations of Federal Reserve Board, Financial Accounts of the. United States via FRED. of Funds data, the total value of home equity held by households jumped from $7.0 trillion to $15.5 trillion over this period after adjusting for inflation. With this increase, home equity levels are approaching the pre -crisis peak of $17.0 trillion while aggregate mortgage debt remains closer to the post -crisis low (Figure 24). As measured by the Survey of Consumer Finances, the median amount of homeowner equity fell in real terms from $121,600 in 2007 to $83,000 in 2010 before recovering to $100,000 in 2016. In that year, homeowner equity ranged from $43,000 or less in the bottom quartile to $212,000 or more in the top quartile. Some 86 percent of homeown- ers had equity of at least 20 percent of home value, and 61 percent had equity of at least 50 percent. CoreLogic reports that only 4 per- cent of mortgaged properties (2.2 million) had negative equity at the end of 2018, down from 23 percent (11.1 million) at the end of 2011. Significant growth in home equity raises the potential for many owners to cash out some of their housing wealth. However, a 2018 report from the Federal Reserve Bank of New York concludes that there is no evidence so far of a substantial increase in risky equity extraction practices. Although the aggregate volume of cash -out refinances and home equity loans and lines of credit has risen slightly in recent years, withdrawals remain near their 2000 level and well below the peak during the housing boom. In addition, recent equity extractions have been concentrated among older bor- rowers and those with the strongest credit. Results from the National Survey of Mortgage Originations indicate that homeowners that did tap their home equity in 2016 used the funds to pay down higher -cost debt (49 percent of extractions) or 24 1 THE STATE OF THE NATION'S HOUSING 2019 cover home repairs and improvements (40 percent). Smaller shares of respondents reported using all or part of the extracted equity for savings or business investment (23 percent), auto or other major purchases (11 percent), or college expenses (8 percent). THE OUTLOOK Although homeownership demand increased in 2018, the latest estimates show a reversal in the first quarter of 2019, underscoring the uncertain trajectory of the homeownership rate. In the near term, the strength of homebuying will likely depend on home prices and the direction of changes in employment, incomes, and interest rates. Over the longer term, though, homeownership trends will be shaped by a larger set of factors related to affordability, household demographics, tax law and the mortgage finance system, and the supply of homes for sale. JCHS projections suggest that, at current homeownership rates, population growth alone will add about 8.0 million households to the ranks of homeowners in 2018-2028. Over the decade, the aging of the baby -boom generation is expected to boost the number of homeowners age 65 and over by some 8.4 million, lifting their share of all homeowners to 38.1 percent. Meanwhile, members of the millennial generation will drive up the number of homeowner households aged 30-49 by just under 1.9 million, to 30.2 percent. In contrast, the aging of generation -X will reduce the number of homeowners aged 50-64 by 2.1 million, to a share of 27.1 percent. These broad demographic shifts will bring substantial changes in the housing needs and preferences of homeowners that could, in turn, alter the configuration of the owner -occupied stock. Rental markets are basically stable despite the upturn in homeownership. Demand from higher -income households is still on the rise, and construction of rental housing picked up again last year after a slight dip. Low vacancy rates across the board are pushing up the prices of multifamily properties, while also keeping the pressure on rents. Conditions at the lower end of the market are especially tight, with high demand for a shrinking supply of low-cost units adding to affordability concerns. MODEST DECREASE IN RENTER HOUSEHOLDS All three major annual household surveys show a decline in renter households, although the size of the decrease varies. According to the Housing Vacancy Survey, the share of renter households dropped a full percentage point from 2016 to 2018, to 35.6 percent (Figure 25). By the Current Population Survey's measure, the num- ber of renter households fell by 460,000 in 2017-2018, while the Housing Vacancy Survey puts the decline at 110,000, with a slight rebound in the first quarter of 2019. Although a year behind, the lat- est American Community Survey also shows a drop of about 473,000 renter households in 2016-2017. The modest downturn occurred across the country, with the num- ber of renter households declining by an average of 2 percent in 32 states between 2016 and 2017. Similarly, just over half of all metros with populations above 50,000 and micropolitan areas with populations between 10,000 and 50,000 lost renters over this period. In general, the largest and most expensive metros posted the biggest decreases in renter households while smaller areas posted gains. Despite the overall decline in renter households, there was strong growth in the numbers of older and higher -income households that now rent their housing. According to the Current Population Survey, the number of renter households headed by a person age 55 and over rose by about 189,000 in 2018, following gains of 343,000 on average in the prior two years. With these increases, older households now make up more than a quarter of renters. Households under age 35, however, still account for the largest share of renters at 38 percent. Meanwhile, a growing number of higher -income households rent their homes. Consistent with nationwide growth in households with incomes of at least $75,000 in constant 2017 dollars, the num- ber of renters in this income group rose by 311,000 from 2017 to 2018. This was the eighth consecutive annual increase in higher - income renters, lifting their numbers by 4.6 million, or 66 percent, since 2010 (Figure 26). The share of renter households earning at least $75,000 now exceeds 25 percent, up from 19 percent in 2008. The uptick in higher -income renter households reflects a broader shift in renter incomes as the economy continues to improve. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 25 The Number and Share of Renter Households Declined Again in 2018 Households (Millions) Share of All Households (Percent) 1.6 38 1.4 37 1.2 36 1.0 35 0.8 34 0.6 33 0.4 32 0.2 31 0 30 -0.2 29 -0.4 28 2001 2003 2005 2007 2009 2011 2013 2015 2017 • Change in Renter Households • Rentership Rate (Right scale) Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys. Indeed, the number of renter households making less than $15,000 declined by 451,000 in 2017-2018. Despite these positive trends, though, more than half of all renter households still make less than $45,000. In fact, the real annual median renter income fell slightly from $40,850 in 2017 to $40,530 in 2018. CONSTRUCTION STILL GOING STRONG Whether measured by completions, starts, or permits, rental hous- ing construction remained strong in 2018. Even after a 5 percent dip last year, the number of completed rentals was close to a 30 -year high at 360,000 units, including 316,000 in multifamily buildings with at least two units. Rental starts were up 5 percent from 2017, to 392,000 units, with nearly 90 percent in multifamily buildings. Permits for new units in multifamily structures with at least five apartments totaled 427,400 units in 2018, a slight increase from the 424,800 permitted in 2017. According to the Survey of Construction, 53 percent of new multi- family rentals completed in 2017 were in properties with at least 50 units, while only 6 percent were in buildings with less than 10 units. Many newly completed apartments offer added amenities. For example, 71 percent of the units that came on the market in 2017 had access to an on-site swimming pool and almost 90 percent had in -unit laundry. While no doubt desirable, these amenities have helped to lift ask- ing rents. The Survey of Market Absorption shows a median asking rent of $1,670 for new apartments in unsubsidized multifamily buildings completed in the first quarter of 2018. By comparison, the American Community Survey reported a median asking rent in 2017 26 1 THE STATE OF THE NATION'S HOUSING 2019 Growth in Higher -income Renters Has Helped to Sustain Rental Demand Households (Millions) 12 .. 10 ., 9 g .. 7 .. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Real Household Income • Less than $15,000 • $75,000 and Over Note: Income categories are adjusted to 2017 dollars using the CPI -U for All items. Source: JCHS tabulations of US Census Bureau, Current Population Surveys via IPUMS CPS. of just $1,010 for apartments in buildings with at least five units. Nationwide, 29 percent of newly completed apartments in early 2018 had asking rents at or above $2,050 while another 35 percent had rents between $1,450 and $2,049. Median asking rents for new units were highest in the Northeast at $2,260—a full $1,000 above the median in the Midwest. Nearly three-quarters of multifamily rental units completed in 2018 were in the South (43 percent) and West (29 percent), where median asking rents topped $1,500. In addition, American Community Survey 5 -year estimates indicate that 92 percent of occupied rental units built between 2014 and 2017 were located in metropolitan areas with populations of 50,000 and above. Of these units, 56 percent were in suburban neighborhoods and the remainder in core cities. Meanwhile, only 6 percent of occu- pied rental units added in 2014-2017 were in smaller micropolitan areas and 2 percent in rural areas. Compared with the locations of existing rentals, the shares of new units built in urban, micro- politan, and rural areas are slightly lower while the share built in suburban areas is slightly higher. Although the number of renter households declined in 2018, demand for newly constructed units remained steady with the growth in higher -income households. According to the Survey of Market Absorption, 79 percent of apartments completed in 2017 were rented before the second half of 2018—on par with absorp- tion rates in the early 2000s before the housing market downturn. RealPage data for the first quarter of 2019 confirm that demand for professionally managed apartments is closely tracking new rentals (Figure 27). At the regional level, demand early this year modestly exceeded new supply in the Northeast and Midwest, while supply essentially matched demand in the South and West. SHIFTS IN THE EXISTING RENTAL STOCK The nationwide supply of occupied or vacant housing units for rent fell by 338,000 between 2016 and 2017 -the first net reduc- tion in the number of rental units since 2006 and the largest annual decline in the last 15 years. The decrease in rental hous- ing was widespread, occurring in more than half (53 percent) of all 383 metro areas. Single-family rentals accounted for the largest losses, falling by more than 250,000 units in 2017. Even with this sizable decline, though, single-family homes still make up about a third of the national rental stock, or about 15.8 million units. Moreover, since most of these lost single-family rentals were built between 2000 and 2009, it is likely that they were converted to owner occupancy rather than permanently removed from the housing stock. Just under half of the lost single-family rental units were in the South, where sin- gle-family homes make up 38 percent of the rental stock. Although the number of single-family rentals increased in the Northeast in 2017, single-family homes still represent only a fifth of the region's rental supply. Some 142,000 rentals lost in 2017 were in multifamily buildings with two to four units. Like the drop in single-family rentals, conversions to owner occupancy likely explain some of the decline in rental units in smaller buildings. Indeed, the share of households living in these buildings that rented their apartments dropped slightly from 83.4 percent to 82.7 percent in 2017. While rental losses have been concentrated in smaller structures, new construction has continued to add units in larger buildings. The number of rentals in buildings with 20 or more apartments rose Apartment Demand Continues to Grow in Line with Additions to Supply Rental Units (Thousands) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 New Apartments Added • Change in Occupied Apartments Note: Change in occupied apartments, or net unit absorptions, is the change in physically occupied units from one period to the next. Source: RealPage data. by 201,000 from 2016 to 2017, with just over half of these additions in buildings with at least 50 apartments. While somewhat smaller than in previous years, the increase in rental units in buildings with 20 or more units in 2016-2017 was the fourth annual net gain in a row, bringing total additions from 2013 to 2017 in larger buildings to more than 1 million apartments. CONTINUING TIGHTNESS OF RENTAL MARKETS Rents nationwide continued to climb in 2018, up 3.6 percent for the year according to the Consumer Price Index. While this was a slight deceleration from 3.8 percent in 2017, rent growth picked up pace again in the first months of 2019. Year -over -year rent growth hit 3.8 percent in April, more than double the rate of inflation for other items. RealPage data for multifamily apartments in 150 metros also show an acceleration, with nominal rent growth increasing from 2.6 percent in the first quarter of 2018 to 3.3 percent in the first quarter of 2019. Meanwhile, CoreLogic data indicate that rent growth for single-family units increased from 2.7 percent in January 2018 to 3.2 percent in January 2019. RealPage data also show that rents for multifamily units are rising fastest in the West, where year -over -year growth climbed from 3.5 percent at the beginning of 2018 to 3.7 percent in the first quarter of 2019. Rents were also up 3.2 percent in the South in early 2019, but less than 3.0 percent in the Midwest and Northeast. Of the 150 metros tracked by RealPage, 87 posted nominal increases in rents for multifamily units above 3.0 percent from the first quar- ter of 2018 to the first quarter of 2019. In 25 of those metros (includ- ing Eugene, Gainesville, and Phoenix), rents rose by more than 5.0 percent. Nominal rents declined in only three metros (College Station, Fargo, and Santa Rosa) over this period. Rent growth in all segments of the market continued in early 2019. With demand from higher -income households increasing, rent growth for higher -quality properties (with a CoStar rating of four or five stars) rose from 2.1 percent at the beginning of 2018 to 2.9 percent at the beginning of this year. At the same time, rent increases for lower -quality properties (with a CoStar rating of one or two stars) slowed slightly from 3.2 percent to 3.0 percent over this period. This is the weakest growth in that segment in the last four years, coinciding with the drop in the number of lowest -income renter households. Nevertheless, the persistent rise in rents for lower -quality units remains a cause for concern. Low vacancy rates have kept the pressure on rents. The Housing Vacancy Survey reports a further decline in the annualized rental vacancy rate from 7.2 percent in the first quarter of 2018 to 6.9 percent in 2019. Annualized vacancy rates are lowest in the West (4.8 percent) and the Northeast (5.3 percent), although tightening is evident across all regions. In addition, rental vacancies in 94 of the 150 metros tracked by RealPage fell from the beginning of 2018 to the beginning of 2019. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 27 Vacancy rates also dipped across property classes (Figure 28). Rates for CoStar's top-ranked properties declined through 2018 to 8.6 per- cent at the beginning of 2019 after several years of softening. At the same time, the rate for lower -quality properties fell from 5.0 percent in the first quarter of 2018 to just 4.8 percent in the first quarter of 2019, while that for moderate -quality properties edged down from 5.6 percent to 5.4 percent. The Housing Vacancy Survey also shows Rental Vacancy Rates Fell Across the Board in 2018 Share of Units Vacant (Percent) 14............................................................. ........................... ...................... I...................... 12 ........................................ ........... ..........................-...................... 10............................................................................................................................................................. 6.....__...._-.-.___...._........._........_..._...._......._...................._ _.._._... 4............................................................................................................................................................. 2............................................................................................................................................................. 0 2004 2006 2008 2010 2012 2014 2016 2018 • 1 & 2 Star (Lower Quality) • 3 Star (Moderate Quality] 0 4 & 5 Star (Higher Quality) • All Multifamily Rentals Notes: Apartment quality is based on the CoStar Building Rating System. CoStar data include market -rate apartments in buildings with five or more units. Housing Vacancy Survey data include all apartments in buildings with five or more units. Vacancy rates are smoothed four -quarter trailing averages. Source: JCHS tabulations of US Census Bureau, Housing Vacancy Surveys, and CoStar data. a year -over -year decline in single-family rental vacancies from 6.2 percent to 5.8 percent in the first quarter of 2019. HEALTHY RENTAL PROPERTY PERFORMANCE With steady rent gains and low vacancy rates, net operating incomes for multifamily properties remained strong in 2018. The National Council of Real Estate Investment Fiduciaries reports that annualized growth of net operating income jumped from 3.4 per- cent in the first quarter of 2018 to 7.5 percent in the first quarter of 2019. At the same time, National Apartment Association data show a 2.1 percent nominal rise in operating expenses and an 11.3 percent increase in capital expenditures. As a result, annualized returns on investment held steady at 5.9 percent in early 2019— well below the 10.4 percent average in 2013-2016 but still far out- stripping overall inflation. According to the Real Capital Analytics Commercial Property Price Index, apartment prices cooled at the end of 2018 but still posted year -over -year growth of 9.0 percent. Growth in rental property prices continued to slow through the beginning of 2019, but prices were still up 7.1 percent year -over -year in April. The largest price increases in 2018 were in the West at 11.9 percent (Figure 29). The Northeast was the only region where nominal property prices lost ground last year, declining 3.3 percent after averaging 11.6 percent fourth-quarter to fourth-quarter growth for the previous three years. Nationally, prices rose the most for properties in car -depen- dent suburbs and for garden -style apartment buildings. The ongoing rise in property prices has increased the cost of invest- ing. The Freddie Mac Apartment Investment Market Index, measur- ing the relative value of multifamily investments, dropped 7.5 per - Despite Some Slowdown Last Year, Apartment Property Prices Continue to Climb in Most Regions Year -over -Year Change in Prices (Percent) 14 12 10 8 6 4 2 0 - -2 -4 -6 28 Northeast Mid -Atlantic Southwest • 2014-2017 Annual Average • 2017-2010 Note: Price growth is calculated from fourth quarter to fourth quarter. Source: JCHS tabulations of Real Capital Analytics data. THE STATE OF THE NATION'S HOUSING 2019 Southeast Midwest West United States The Low -Rent Stock in Most Metros Has Declined Substantially Since 2011 Change in Units with Rents under $800, 2011-2017 (Percent) • 50% or Greater Decline (Up to 67%) • 25-49% Decline • 5-24% Decline • Unchanged • 5% or Greater Increase (Up to 85%) Nme: nems are aulusreu ro rni r uuuars using me Lrru mr ALL uenis Less aneuer. Source: JCHS tabulations of US Census Bureau, American Community Survey 1 -Year Estimates and Missouri Census Data Center data. cent year -over -year at the end of 2018, indicating that growth in net operating incomes did not offset the rise in prices. Declines in all 13 metros covered by the index suggest that conditions are becoming less favorable for new multifamily investors. The capitalization rate, or annual net operating income divided by property price or value, is an indicator of the rate of return inves- tors can expect over one year. According to Real Capital Analytics, cap rates were largely unchanged from 2017, but stood at just 5.4 percent in the last quarter of 2018—their lowest point in a decade. Meanwhile, CoStar data indicate that cap rates averaged 5.0 percent for their highest-rated multifamily units in the first quarter of 2019 and 5.4 percent for mid- and lower -quality units. Across all property classes, cap rates are lowest in top -tier markets such as Boston, Los Angeles, and New York, and highest in bottom -tier markets such as Cleveland, Memphis, and Oklahoma City. Rising property prices have not slowed transactions, however. Real Capital Analytics reports 9 percent year -over -year growth in apart- ment transaction volumes in the fourth quarter of 2018, following a slight dip in 2017. The mid- and high-rise segment led in deal vol- ume with a 34 percent annual increase, while the garden apartment segment posted a relatively weak 2 percent uptick. Dallas and Los Angeles had the highest sales volumes in 2018, with transactions totaling more than $9.2 billion each. Access to financing has been critical to these property purchases. The Mortgage Bankers Association Originations Index, which tracks origination volumes for multifamily properties, increased 32 per- cent year -over -year at the end of 2018—double the pace at the end of 2017. Multifamily mortgage debt outstanding was at a decade- long high of $1.4 trillion. With returns holding steady, delinquencies for multifamily debt last year were at their lowest level since the Federal Deposit Insurance Corporation began reporting these data in 1991. The noncurrent rate was just 0.14 percent in 2018, almost a full percentage point lower than in 2013. Multifamily financing activity will likely remain stable this year, although credit conditions may tighten. A moderate net share of banks responding to the Federal Reserve's Senior Loan Officer Opinion Survey reported tightening lending standards. At the same time, a small net share of respondents also noted weakening demand for multifamily lending. SHRINKING SUPPLY OF LOW-COST RENTALS The supply of low -rent housing continues to decline in metro markets across the country (Figure 301. In 2016-2017 alone, the stock of units renting for less than $800 fell by 1 million or 4.9 percent. Moreover, the number of units in this rent range decreased every year since 2011, bringing the total net decline to four million (17 percent). Just over three-quarters of all 383 metros with populations of at least 50,000 lost nearly 20 percent of their low-cost stocks on average in 2011-2017. New construction has not made up for these declines. According to the Survey of Market Absorption, only 9 percent of apartments in JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 29 unsubsidized multifamily buildings completed in the first quarter of 2018 had asking rents below $1,050, and only 4 percent rented for less than $850. The National Multifamily Housing Council also notes that new construction has not even served the middle of the mar- ket, with the share of new apartments affordable to median -income renter households dropping to less than 3 percent annually over the last decade. The focus of new construction on higher -cost units has thus shifted the overall distribution of rents upward. Meanwhile, low -rent units are increasingly concentrated in older buildings, which puts them at a greater risk of loss from the stock and their residents at greater risk of displacement. Indeed, the share of units renting for under $800 that are at least 50 years old increased from 35 percent in 2007 to 43 percent in 2017. About half of the households living in low -rent units built before 1970 are single persons, while another 26 percent are families with children. About a fifth are headed by an adult age 65 and over. Moreover, nearly half of these tenants spend more than 30 percent of their incomes on rent and utilities, despite living in the lowest -cost hous- ing that the market has to offer. 30 1 THE STATE OF THE NATION'S HOUSING 2019 THE OUTLOOK The modest decline in the number of renter households over the last two years may deliver some short-term relief from rising rents. Thus far, however, any positive impact of the decline has been off- set by the ongoing increase in higher -income renters, who drive a growing share of market activity, and by low vacancy rates, which are keeping overall conditions tight. Going forward, demographic trends should support strong rental demand. The Joint Center estimates that renter household growth will total 4.2 million by 2028 if homeownership rates remain near their current levels. And even if the homeownership rate rises by 1.6 percentage points over the decade, the high-end projection indi- cates that renter household growth will still total at least 2.1 million given expected increases in the adult population. On the supply side, however, conditions at the lower end of the market will remain challenging as millions of low-income households compete for an already insufficient number of affordable rental units. Despite signs of progress, the shortage of affordable housing remains acute, especially for lowest -income households. While the number of cost - burdened homeowners has fallen substantially since the peak of the housing crisis, the number of cost -burdened renters is still near record highs. After years of declines, homelessness increased slightly in 2018, reflecting widespread housing insecurity. In the absence of any meaningful increase in federal funding for affordable housing, some states and localities are acting to expand the supply and provide new protections for tenants. LITTLE RELIEF FOR COST -BURDENED RENTERS At last measure in 2017, the number and share of households pay- ing more than 30 percent of their incomes for housing—the tradi- tional measure of cost burdens—continued to decline. In that year alone, the number of cost -burdened households fell by 260,000, to 37.8 million, bringing the total drop since the 2010 peak to nearly 5.0 million. The overall burden rate also fell to 31.5 percent in 2017, down 5.7 percentage points from the 2010 peak. At the same time, however, 18.2 million severely burdened house- holds were paying more than 50 percent of their incomes for hous- ing. Although the number of these severely burdened households also fell by 255,000 in 2016-2017, the share was unchanged at 15.2 percent just 2.6 percentage points lower than in 2010. Homeowners have accounted for much of the reduction in cost -bur- dened households, in part because many financially stretched own- ers lost their homes to foreclosure, managed to refinance into lower- cost mortgages, or benefited from the recent growth in incomes. The number of cost -burdened owners stood at 17.3 million in 2017, down nearly 5.5 million from the 2010 peak (Figure 31). With the recent rebound in homebuying, the share of owners with cost burdens fell to 22.5 percent and the severely burdened share fell to 9.7 percent. For renters, however, there are only small signs of improvement (Figure 321. The number of cost -burdened renter households stood at 20.5 million in 2017, just 770,000 below the peak in 2014 and 5.7 million above the level in 2001. As a result, renter households with cost burdens continued to outnumber homeowners with cost bur- dens, as they have since 2012. The cost -burdened share of renter households inched down to 47.4 percent in 2017, 3.4 percentage points below the 2011 high but up 6.8 percentage points from 2001. About a quarter of all renters—some 10.7 million households— faced severe housing cost burdens in 2017. LOW-INCOME AND MINORITY HOUSEHOLDS ESPECIALLY BURDENED Not surprisingly, households with the lowest incomes have the highest cost -burden rates. Indeed, the share of cost -burdened renter households earning less than $15,000 held at 82.8 percent in 2017, down only 0.5 percentage point from 2016. Almost three-quarters JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 31 While the Number of Cost -Burdened Homeowners Has Receded... Owners with Cost Burdens (Millions) 24 .. 22 .. 20 .. 18 .. 16 .. 14 12 •• 10 .. g .. 6 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Severely Burdened • Moderately Burdened Notes: Cost -burdened (severely cost -burdened) households pay more than 30% (more than 50%) of income for housing. Households with zero or negative income are assumed to have burdens, while households paying no cash rent are assumed to be without burdens. Source: JCHS tabulations of US Census Bureau, American Community Survey 1 -Year Estimates. (71.9 percent) of these renters were severely burdened. Similarly large shares of same -income homeowners were cost burdened (83.8 percent) or severely burdened (67.9 percent). Cost -burden rates are also rising rapidly among renters higher up the income scale. The share of burdened renters with incomes in the $30,000-44,999 range increased 2.3 percentage points in 2016-2017, to 53.3 percent—up sharply from 39.0 percent in 2001. Meanwhile, the cost -burdened share of households with incomes in the $45,000-74,999 range increased 1.1 percentage points over the year, to 24.8 percent, or nearly double the 13.0 percent share in 2001. Affordability is particularly challenging in the nation's 25 highest - cost metros, where over three-quarters of renters making $30,000- 44,999 were cost burdened in 2017, compared with just one-third of same -income renters in lowest -cost metros (Figure 33). In addi- tion, more than two-fifths of renters in highest -cost metros earn- ing $45,000-74,999 were cost burdened, compared with less than a tenth of same -income renters in the lowest -cost metros. Note, however, that households in this income range would be considered very low income in some high-cost areas such as San Francisco, where 50 percent of the HUD area median income for a family of four is $80,600. Although declining in 2017, cost -burden rates for minority house- holds were significantly higher than for white households whether they own or rent their housing. The cost -burdened share is highest among black renters at 54.9 percent, followed closely by Hispanics at 53.5 percent. The rates for Asians and other minorities are notice - 32 1 THE STATE OF THE NATION'S HOUSING 2019 ...The Number of Cost -Burdened Renters Remains Close to Peak Levels Renters with Cost Burdens (Millions) 24 .. 22 .. 20 .. 18 .. 16 .. 14 12 .. 10 g .. 6 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Severely Burdened • Moderately Burdened Notes: Cost -burdened (severely cost -burdened) households pay more than 30% (more than 50%) of income for housing. Households with zero or negative income are assumed to have burdens• while households paying no cash rent are assumed to be without burdens. Source: JCHS tabulations of US Census Bureau, American Community Survey 1 -Year Estimates. ably lower at 45.7 percent, but still above the white share of 42.6 percent. Among homeowners, 30.2 percent of blacks, 29.6 percent of Hispanics, and 27.3 percent of Asian/others were cost burdened in 2017, compared with 20.4 percent of white homeowners. The lower average incomes of blacks and Hispanics contribute to, but do not fully explain, this racial/ethnic disparity since black and Hispanic households earning less than $15,000 are still more likely to be cost burdened than whites at that income level. TRADEOFFS FORCED BY HIGH HOUSING COSTS Especially for low-income households, spending an outsized share of income on housing cuts into spending on other basic needs. The 2017 Consumer Expenditure Survey indicates that households with mod- erate cost burdens (30-50 percent of total expenditures) in the bottom expenditure quartile had just $890 in non -housing expenditures each month. Severely cost -burdened households in the bottom quartile spent only $540 each month on all other necessities. Compared with households with housing they could afford, moder- ately cost -burdened households in the lowest expenditure quartile spent 13 percent less on food, 40 percent less on healthcare, and 23 percent less on transportation in 2017. The differences are even starker for severely burdened households, who spent 37 percent less on food, 77 percent less on healthcare, and 60 percent less on transportation. Severe housing cost burdens have serious consequences for health and well-being, particularly for young children or older adults, who especially need adequate nutrition and medical care. Indeed, fami- lies with children in the bottom expenditure quartile with severe cost burdens spent less than $700 on average for all non -housing costs per month in 2017, including just $310 for food—well under the $570 lowest -cost plan recommended by the US Department of Agriculture for a family of four. These families spent 35 percent less on food, 46 percent less on clothes, and 74 percent less on healthcare than unburdened households in the bottom expenditure quartile (Figure 34). Similarly, severely cost -burdened households headed by adults age 65 and over in the bottom expenditure quartile spent about $500 each month on all non -housing expenditures. Compared with same - age adults in the bottom expenditure quartile without housing cost burdens, these older households with severe burdens spent 44 per- cent less on food and 75 percent less on healthcare. THE SQUEEZE ON THE AFFORDABLE STOCK Whether privately owned or subsidized, affordable housing is in short supply. According to the National Low Income Housing Coalition 2019 Gap Report, the biggest shortfall is in housing affordable to extremely low-income renter households (earning up to 30 percent of area median income). In 2017, only 4 million rental units were afford- able and available to the nation's 11 million renters in this income group. This translates to 37 affordable and available units for every 100 extremely low-income renters—a slight improvement from 35 units per 100 renters in 2016, but still a substantial shortage. In Expensive Rental Markets, Even Higher -Income Households Face Cost Burdens Share of Cost -Burdened Renters [Percent] Affordable housing opportunities hardly improve when expanding the group to include very low-income renters (earning less than 50 percent of the area median). The 17.6 million households in this income range make up 40 percent of renters. In this case, the hous- ing shortfall is 7.4 million units, with 58 units affordable and avail- able for every 100 households. These shortages put a strain on the subsidized housing stock. HUD's 2018 Picture of Subsidized Households data indicate that there were 955,000 occupied public housing units, 1.2 million occupied Section 8 project -based units, and 2.2 million Housing Choice Vouchers in use last year. Compared with 2010, the number of voucher -support- ed units was up by about 82,000 and the number of project -based Section 8 units was up by about 28,000. The stock of public housing fell by more than 100,000 units over this period, although a portion of these were converted to Section 8 contracts through the Rental Assistance Demonstration (RAD) program. Meanwhile, the Low -Income Housing Tax Credit (LIHTC) program added 570,000 affordable units between 2010 and 2018, bring- ing total production of low-income units since 1987 under this program to 2.5 million. However, there is a significant overlap of LIHTC and other subsidy programs, given that the tax credits are often used to help preserve existing subsidized developments. In addition, large shares of extremely low-income LIHTC residents receive additional rental assistance to help make their units affordable. When Burdened with High Housing Costs, Lowest -Income Families with Children Spend Little on Other Basic Needs Monthly Expenditures (Dollars) 90 500 00 450 .. 70 400 60 350 50 300 250 40 200 30 .. 150 20 100 10 50 n n Under $15,000 $15,000-29,999 $30,000-44,999 $45,000-74,999 $75,000 and Over Household Income • 25 Lowest -Cost Metros • Middle 50 Metros • 25 Highest -Cost Metros Notes: Cost -burdened households pay more than 39% of income for housing. Households with zero or negative income are assumed to have burdens, while households paying no cash rent are assumed to be without burdens. The 25 lowest- (highest-) cost metros are in the bottom (top) quartile of the 100 largest markets for median gross rent. Source: JCHS tabulations of US Census Bureau. 2017 American Community Survey 1 -Year Estimates and Missouri Census Data Center data. Food Transportation Retirement Healthcare Expenditure Categories • Unburdened • Moderately Burdened • Severely Burdened Notes: Expenditures are averages for households with children under age 18. Low-income families with children are in the bottom quartile of families with children ranked by total spending. Households allocating more than 30% (more than 50%) of expenditures to housing are moderately (severely) cost burdened. Source: JCHS tabulations of Bureau of Labor Statistics, 2017 Consumer Expenditure Survey. JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 33 The 2019 Consolidated Appropriations Act increased HUD funding by nearly 2 percent, to $53.8 billion. This included an additional $583 million for Housing Choice Vouchers (for a total budget of $22.6 bil- lion), $232 million for Section 8 Project -Based Rental Assistance (for a total budget of $11.7 billion), and sustained funding for several other programs. Notably, the spending bill provided new funding for initiatives such as the Housing Mobility Demonstration program, which helps voucher -holders move to opportunity -rich neighbor- hoods with high-quality schools. However, some of these budget increases only help programs keep up with inflation and do not go far enough to close gaps in need. Funding for public housing is a case in point. Operating funds for public housing were increased by $103 million to just under $4.7 billion, and capital funds were raised by $25 million to roughly $2.8 billion. According to a 2010 study, however, the capital spending backlog at that time was already $26 billion and expected to grow by $3.4 billion annually, bringing the projected backlog to $56.6 billion by 2019. Even this high number is likely an underestimate, given that the New York City Housing Authority alone assessed its five- year capital spending need at $31.8 billion in 2017. In addition to rising operating costs and inadequate federal fund- ing, a significant number of housing units are at risk of loss from the affordable stock. According to JCHS tabulations of the National Housing Preservation database, affordability restrictions could expire on about 1.2 million rental units by 2029 (Figure 35). This Affordability Restrictions on Nearly 1.2 Million Rental Units Are Set to Expire by 2029 Cumulative Units with Expiring Affordability Periods (Millions) 1.2 .. 1.0 0.8 .. 0.6 .. 0.4 .. 0.2 . 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Assistance Program • LIHTC • Project -Based Section 8 •Other Notes: Data include properties with active subsidies as of January 1.2019.Other includes units funded by NOME Rental Assistance, FHA Insurance, Section 236 Insurance, Section 2D2 Direct Loans, USDA Section 515 Rural Rental Housing Loans, and units in properties with more than one subsidy type expiring on the same day. Estimates for properties with multiple subsidies with different expiration dates are conservative. The NHPD does not account for state incentives to extend affordability restrictions or for potential early departures from the programs. Source: JCHS tabulations of Public and Affordable Housing Research Corporation and National Low Income Housing Coalition. National Housing Preservation Database. 34 1 THE STATE OF THE NATION'S HOUSING 2019 includes 611,000 units added through the LIHTC program, 352,000 units of Section 8 project -based housing, and 221,000 units under other programs. A recent study by the National Low Income Housing Coalition con- cluded that the LIHTC units most at risk of leaving the subsidized stock are located in desirable neighborhoods where rents are high. In addition, the report pointed out that LIHTC units in less desir- able neighborhoods may remain affordable in the short term but will need more resources than just their rents to cover the costs of necessary repairs and capital improvements. UPTURN IN HOMELESSNESS Although difficult to measure, housing insecurity—whether caused by cost burdens, overcrowding, inadequate housing quality, or other conditions that leave households with only tentative shelter—is all too common in the United States. Over 805,000 renter households were threatened with eviction in 2017, according to American Housing Survey data. When all renter respondents were asked where they would go if evicted, 60 percent said that they would move to a new home, but 34 percent said they would have to move in with family or friends. Another 5 percent said that they would either have to split up their households and move to different places or go to a homeless shelter. And despite considerable progress over the previous decade, homelessness edged up 0.3 percent in 2018, to 552,830. While the number of people in shelters (65 percent of the homeless popula- tion) dropped slightly, the number of unsheltered homeless people rose by 2.3 percent (Figure 36). The most notable increases were in South Dakota (up 23.0 percent), Connecticut (up 17.4 percent), and Massachusetts (up 14.2 percent), compared with an average rise of 7.7 percent in states with increases. Rates of homelessness vary dramatically across states. New York is at the top of the list with 47 people experiencing homelessness per 10,000 residents, compared with an average of 14 per 10,000 across all states. At the same time, however, New York has one of the low- est shares of unsheltered homelessness, with less than 5 percent of its total homeless population living outside of shelters. Homelessness rates are also unusually high in Hawaii (46 per 10,000), Oregon (35 per 10,000), and California (33 per 10,000), as are their unsheltered shares (53 percent in Hawaii, 62 percent in Oregon, and nearly 70 percent in California). At the other extreme, Louisiana, Mississippi, and West Virginia all had homelessness rates under 7 per 10,000 in 2018. Among several states and localities working to reduce homeless- ness, California voters stand out for voting for an initiative allocat- ing $2 billion toward homelessness prevention. In San Francisco, voters also supported a tax on larger businesses (with over $50 million in revenues) to generate $250-300 million per year for homelessness prevention and services. Ballot measures also passed in Berkeley and Oakland that increased or instituted new taxes to generate additional revenue for this purpose. Although Homelessness Is Down Overall, the Unsheltered Population Began to Rise in 2015 Homeless Population (Thousands) 700 600 500 400 ., 300 . 200 - 100 . 9 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Unsheltered • Sheltered Note: Homeless persons are considered sheltered if they are staying in emergency shelters, transitional housing, or safe havens. Source: JCHS tabulations of HUD, 2018 Annual Homeless Assessment Report, Point -in -Time Estimates of Homelessness. At the federal level, the 2019 appropriations act raised homeless assistance grants by $123 million, to a total of $2.6 billion. This includes $80 million for demonstration programs to address youth homelessness, $50 million for domestic violence and homeless- ness programs, and $40 million for HUD-VASH, a partnership between HUD and the Department of Veterans Affairs that provides services and housing vouchers to homeless veterans. After sev- eral years of annual reauthorizations, the US Interagency Council on Homelessness—the federal agency charged with coordinating efforts to reduce homelessness—also received authorization to con- tinue its work through 2028. STATE AND LOCAL EFFORTS TO EXPAND THE AFFORDABLE SUPPLY With federal support falling far short of need, some state and local governments raised funds for affordable housing through ballot initiatives. Among the largest increases in state funding was again in California, where voters authorized $4 billion in bonds for afford- able housing in 2018. In addition, voters in the Portland metropoli- tan area passed a measure allocating $653 million for this purpose. Voters in Austin, Berkeley, and Charlotte also approved ballot mea- sures providing substantial funds for affordable housing last year. Meanwhile, new legislation in Massachusetts authorized $1.8 billion in new capital spending for affordable housing, in addition to $650 million for modernizing and redeveloping public housing. State and local jurisdictions are also finding new ways to leverage private sector resources. For example, Oregon voters recently passed a measure enabling municipalities to use bond revenue to invest in affordable housing owned by public-private partnerships. Some private sector actors are also launching their own initiatives. For example, a consortium of businesses and philanthropic organizations in San Francisco, Partnership for the Bay, plans to raise $540 million to fund affordable housing development. Microsoft also announced a $500 million program to build and preserve low- and middle-income housing in the Seattle area, as well as to fund eviction prevention and homelessness services. Whether these are one-time events or an emerging trend in corporate support remains to be seen. Local governments have also made zoning and other regulatory reforms to help reduce the cost of building affordable housing. For example, Minneapolis passed a plan to allow construction of duplexes and triplexes in areas zoned for single-family homes and to eliminate parking requirements for new housing. Other cities have focused on legalizing and enabling the addition of accessory dwelling units (ADUs), small units located on the same lots as single-family homes. Portland has been a frontrunner in these efforts, issuing per- mits for over 3,200 ADUs in 2008-2018. While these efforts to expand the supply of affordable housing do not require public funding, their passage is often protracted and contentious, explaining in part why more localities do not make these types of regulatory changes. In the face of the ongoing affordability crisis, renter protection laws have gained some traction. In 2019, Oregon enacted legislation cap- ping annual rent increases at 7 percent plus inflation and mandat- ing payments to tenants for no-fault evictions after 12 months of occupancy. However, a ballot measure to repeal California's restric- tions on rent control was soundly defeated. At the same time, voters in Oakland made evictions more difficult by no longer exempting owner -occupied, two- and three -unit build- ings from the city's just -cause eviction law. The US Marshals Service in Washington, DC, and the DC City Council both added new tenant eviction protections, including requiring more advance notice and not removing tenant possessions during evictions. Portland also passed a law requiring landlords to pay relocation costs for tenants in the case of no -cause evictions or large rent increases that lead to tenant departures. In general, though, most jurisdictions do not have these types of renter protection laws. CONTINUED IMPROVEMENTS IN ENERGY EFFICIENCY The latest data from the US Energy Information Administration (EIA) show that home energy consumption declined from 2005 to 2015, with average energy use per household falling from 95 mil- lion Btus to 77 million Btus. In addition, energy use per square foot dropped from nearly 46,000 Btus in 2009 to 38,400 Btus in 2015. As a result, total residential energy consumption was relatively steady for the decade despite growth in the number of households and in the average size of homes. These trends reflect the greater efficiency of newly built hous- ing and energy-related updates to the existing stock, including upgrades of heating and cooling systems, addition of insulation, and replacement of older, less efficient appliances. With these improvements, US residential energy consumption fell in 2009-2015 JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 35 even though use of air conditioning increased substantially in the Northeast and Midwest. Despite the reductions in residential energy use, expenditures for utilities still add to the housing cost burdens of low-income households. According to the 2017 American Community Survey, the typical household earning less than $15,000 per year spent 17.5 percent of that income on energy costs, with shares slightly higher for homeowners (20.6 percent) than for renters (15.3 percent). Even households earning between $15,000 and $29,999 dedicated 8 per- cent of incomes to utility costs, well above the 3.1 percent median for all households. Indeed, the EIA reports that nearly a third of US households faced energy insecurity in 2015, whether because they had difficulty paying their bills, received disconnection notices, or had to keep their homes at unhealthy or unsafe temperatures for at least one month. RISING THREAT OF NATURAL DISASTERS The frequency and intensity of natural disasters are increasing. By the National Oceanic and Atmospheric Administration's count, 14 events in 2018 caused at least $1 billion in damage, with costs for the year amounting to nearly $92 billion. In the 1980s, however, disasters of that magnitude averaged less than three per year while the costs of damage were on the order of $17 billion (Figure 37). The destructive impacts on the nation's housing stock have been pro- found. The CoreLogic 2018 Natural Hazard Report found that flooding and wind from Hurricane Florence alone damaged some 700,000 resi- dential and commercial properties in North Carolina, South Carolina, and Virginia. In California, last year's wildfires destroyed over 18,800 structures in Paradise and another 1,600 in Malibu. In the aftermath of these events, a growing number of homeown- ers have had to spend ever -larger sums to restore their homes. According to the American Housing Survey, real homeowner out- lays for disaster -related improvements have doubled from $7 billion annually in the late 1990s to $14 billion so far in the 2010s. THE OUTLOOK After five straight years of income growth, there are signs that housing affordability has improved. The share of cost -burdened homeowners has retreated to the lowest levels this century, while the share of cost -burdened renters has continued to edge down from its peak in 2011. Compared with a decade ago, the incidence of homelessness has also declined. Still, overall progress since the housing market crash has been mod- est, particularly in light of the strong economy. With rental demand on the rise, the number of cost -burdened renters is just short of record levels and millions higher than in 2001. And while the overall homeless population has fallen for five years, unsheltered home- lessness has ticked up, especially in the Western states with the highest housing costs. 36 1 THE STATE OF THE NATION'S HOUSING 2019 Highly Damaging Natural Disasters Have Become Much More Frequent and Costly Average Annual Number Billions of Dollars 16 120 14 .. 12 10 8 1980-1989 1990-1999 2000-2009 2010-2017 2018 • Number of Billion -Dollar Disasters • Average Annual Cost (Right scale) 105 90 75 60 45 30 15 Note: Values are adjusted to March 2019 dollars using the CPI -IJ for All Items Source: JC HS tabulations of National Oceanic and Atmospheric Administration, Billion -Dollar Weather and Climate Disasters: Time Series. The inability of so many individuals and families to secure afford- able housing reflects the fact that increases in rents and existing home prices have continued to outrun income growth. In addition, the prices of new housing are largely affordable only to households with substantial incomes. Today's tight housing market conditions also represent the cumulative impact of years of inadequate federal funding for rental assistance. While states and localities have begun to devote more (and, in some cases, considerably more) resources to affordable housing, their efforts do not come close to the scale of the problem. Second only to affordability, climate change is an urgent housing - related issue. Natural disasters displace hundreds of thousands of people each year and inflict billions of dollars of damage on the housing stock. In addition to developing disaster response systems that provide timely and effective assistance to affected households, there must be a national commitment to making housing more resilient as well as more energy efficient and carbon neutral. Perhaps now, more than ever, it is time to take decisive steps to meet these challenges. Indeed, private industry is now pursuing innovative solutions with the goal of revolutionizing the design, construction, and financing of housing. For its part, the public sec- tor is seeking out new sources of revenue for housing programs and making regulatory reforms to help expand the supply of affordable housing. Still, further efforts by both the public and private sectors are essential to make development of moderate -cost housing more feasible and to finally fulfill the nation's promise of decent, afford- able homes for all. Table A-1 ........... Housing Market Indicators: 1980-2018 Table A-2........... Housing Cost -Burdened Households by Tenure and Income: 2001, 2016 and 2017 The following interactive maps and data tables are a sample of the additional resources available at www.jchs.harvard.edu. INTERACTIVE MAPS Shares of Cost -Burdened Homeowners and Renters by Metro Area: 2017 Changes in the Low -Cost Rental Supply by Metro Area: 2011-2017 Shares of Recently Sold Homes Affordable by Metro Area: 2017 Changes in Residential Land Values by County: 2012-2017 DATA TABLES Cost -Burden Rates by Tenure for States and Metro Areas: 2017 Cost -Burden Rates by Household Income for States and Metro Areas: 2017 Ratios of Median Home Prices to Median Incomes by Metro Area: 1990-2018 Household Headship Rates by Age Group for Metro Areas: 2006 and 2017 Household Growth and Net Domestic Migration by State: 2010-2017 Rental Units by Real Contract Rent for States: 2011 and 2017 JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 37 Housing Market Indicators: 1980-2018 Notes: All construction values are adjusted to 2018 dollars by the CPI -U for All Items, while the median sales price for new and existing single-family homes are adjusted to 2018 dollars using the CPI -U for All Items Less Shelter. All links areas of May 2019. n/a indicates data not available. Sources 1. US Census Bureau. New Privately Owned Housing Units Authorized by Building Permits in Permit -Issuing Places, http://www.census.gov/constructionlnrc/xis/permits_cust.xts. 2. US Census Bureau, New Privately Owned Housing Units Started, https://www.census.gov/constructionlnrc/xts/starts_cust.xls. 3. US Census Bureau. Shipments of New Manufactured Homes, https:/Iwww.census.gov/data/tables/time-series/econ/mhs/shipments.html and JCHS historicaltables. 4. US Census Bureau, New Privately Owned Housing Units Completed in the United States by Intent and Design, http://www.census.gov/constructionlnrclxts/quar_co_purpose_cust.xts. 5. US Census Bureau, Median and Average Sales Price of New One -Family Houses Sold, www.census.gov/construction/nrs/xis/usprice_cust.xls. 6. National Association of Realtors@a INARI, Median National Sales Price of Existing Single -Family Homes, obtained from NAR and Economy.com. 7. US Census Bureau, Housing Vacancy Survey, https://www.census.gov/housing/hvs/data/annl8ind.htmt. B. US Census Bureau, Annual Value of Private Construction Put in Place, http://www.census.gov/construction/c30/historical_data.htmt and JCHS historical tables. Single-family and multifamily are new construction. Owner improvements do not include expenditures an rental, seasonal, and vacant properties. 9. Joint Center for Housing Studies, Leading Indicator of Remodeling Activity, https://wvm.ichs.harvard.edu/research-areas/remodeling/lira. 10. US Census Bureau, Houses Sold by Region, http://www.census.gov/construction/nrs/xts/sold_cust.xts. 11. National Association of Realtors@', Existing Single -Family Home Sales obtained from and annualized by Economy.com, and JCHS historical tables. 38 1 THE STATE OF THE NATION'S HOUSING 2019 Permits (Thousands) Starts (Thousands) Size •r r Median Single -Family (Thousands of Homes of 1 rr Single -Family Multifamily Single-Family Multifamily 1 Manufactured' Single -Family Multifamily New' Existing" 1980 710 480 852 440 222 1,595 915 180.5 n/a 1981 564 421 705 379 241 1,550 930 175.4 n/a 1982 546 454 663 400 240 1,520 925 166.9 n/a 1983 901 704 1,068 635 296 1,565 B93 174.8 n/a 1984 922 759 1,084 665 295 1,605 871 178.2 n/a 1985 957 777 1,072 669 284 1,605 882 182.6 n/a 1986 1,078 692 1,179 _ 626 244 1,660 876 197.4 n/a 1987 1,024 510 1,146 474 233 1,755 920 217.0 n/a 1988 994 462 1,081 407 218 1,810 940 225.0 n/a 1989 932 407 1,003 373 198 1,850 940 228.8 180.3 1990 794 317 895 298 188 1,905 955 222.3 176.0 1991 754 195 840 174 171 1,890 980 208.4 178.4 1992 911 184 1,030 170 211 1,920 985 205.1 178.1 1993 987 213 1,126 162 254 1,945 1,005 207.4 178.9 1994 1,068 IIIA 303 1,198 ,I 259 304 1,940 1,015 208.1 181.7 1995 997 335 1,076 278 340 1,920 1,040 208.8 182.5 1996 1,069 356 1,161 Jib& 316 363 1,950 1,030 212.4 186.0 1997 1,062 379 1,134 340 354 1,975 1,050 217.0 191.7 1998 1,188 _JR 425 1,271 JIL_ 346 373 2,000 1,020 224.8 200.5 1999 1,247 417 1,302 339 348 2,028 1,041 232.9 204.3 2000 1,198 -10 394 1,231 338 250 2,057 1,039 236.4 206.0 2001 1,236 401 1,273 329 193 2,103 1,104 239.2 213.8 2002 1,333 WF 415 1,359 ,I 346 169 2,114 1,070 254.6 227.4 2003 1,461 428 1,499 349 131 2,137 1,092 258.9 239.2 2004 1,613 �jb, 457 1,611 , 345 131 2,140 1,105 285.7 252.4 2005 1,682 473 1,716 353 147 2,227 1,143 300.1 272.8 2006 1,378 In 461 1,465 336 117 2,248 1,172 297.7 268.0 2007 980 419 1,046 309 96 2,277 1,197 292.2 256.9 2008 576 I. 330 622 284 82 2,215 1,122 261.9 221.8 2009 441 142 445 109 50 2,135 1,113 247.1 196.2 2010 447 in 157 471 116 50 2,169 1,110 246.4 192.3 2011 418 206 431 178 52 2,233 1,124 242.6 177.5 2012 519 MR' 311 535 245 55 2,306 1,098 256.7 185.5 2013 621 370 618 307 60 2,384 1,059 278.5 204.4 2014 640 J1b 412 648 355 64 2,453 1,073 295.6 214.1 2015 1,183 487 715 397 71 2,467 1,074 305.4 232.4 2016 1,207 _q4N 456 782 392 81 2,422 1,101 318.8 243.9 2017 1,282 462 849 354 93 2,426 1,094 329.6 253.8 2018 1,318 do 465 876 374 97 2,386 1,097 326.4 261.6 Notes: All construction values are adjusted to 2018 dollars by the CPI -U for All Items, while the median sales price for new and existing single-family homes are adjusted to 2018 dollars using the CPI -U for All Items Less Shelter. All links areas of May 2019. n/a indicates data not available. Sources 1. US Census Bureau. New Privately Owned Housing Units Authorized by Building Permits in Permit -Issuing Places, http://www.census.gov/constructionlnrc/xis/permits_cust.xts. 2. US Census Bureau, New Privately Owned Housing Units Started, https://www.census.gov/constructionlnrc/xts/starts_cust.xls. 3. US Census Bureau. Shipments of New Manufactured Homes, https:/Iwww.census.gov/data/tables/time-series/econ/mhs/shipments.html and JCHS historicaltables. 4. US Census Bureau, New Privately Owned Housing Units Completed in the United States by Intent and Design, http://www.census.gov/constructionlnrclxts/quar_co_purpose_cust.xts. 5. US Census Bureau, Median and Average Sales Price of New One -Family Houses Sold, www.census.gov/construction/nrs/xis/usprice_cust.xls. 6. National Association of Realtors@a INARI, Median National Sales Price of Existing Single -Family Homes, obtained from NAR and Economy.com. 7. US Census Bureau, Housing Vacancy Survey, https://www.census.gov/housing/hvs/data/annl8ind.htmt. B. US Census Bureau, Annual Value of Private Construction Put in Place, http://www.census.gov/construction/c30/historical_data.htmt and JCHS historical tables. Single-family and multifamily are new construction. Owner improvements do not include expenditures an rental, seasonal, and vacant properties. 9. Joint Center for Housing Studies, Leading Indicator of Remodeling Activity, https://wvm.ichs.harvard.edu/research-areas/remodeling/lira. 10. US Census Bureau, Houses Sold by Region, http://www.census.gov/construction/nrs/xts/sold_cust.xts. 11. National Association of Realtors@', Existing Single -Family Home Sales obtained from and annualized by Economy.com, and JCHS historical tables. 38 1 THE STATE OF THE NATION'S HOUSING 2019 For Sale For Rent 1.4 5.4 1.4 5.0 1.5 5.3 1.5 5.7 1.7 -I 5.9 1.7 6.5 1.6 -[ 7.3 1.7 7.7 1.6 7.7 1.8 7.4 1.7 7.2 1.7 7.4 1.5 7.4 1.4 7.3 1.5 -[ 7.4 1.5 7.6 1.6 7.8 1.6 7.7 1.7 7.9 1.7 8.1 1.6 MI 8.0 1.8 8.4 1.7 -! 8.9 1.8 9.8 1.7 M[ 10.2 1.9 9.8 2.4 9.7 2.7 9.7 2.8 -, 10.0 2.6 10.6 2.6 MIF 10.2 2.5 9.5 2.0 4mm"' 8.7 2.0 8.3 1.9 7.6 1.8 7.1 1.7 Me 6.9 1.6 7.2 1.5 6.9 Homeowner Improvements and Repairs n/a n/a A n/a n/a A n/a n/a n/a n/a n/a n/a n/a n/a n/a 181,376 185,777 195,415 199,134 212,775 235,020 239,650 230,201 238,409 292,314 308,616 344,664 322,470 290,229 260,319 258,922 259,017 256,824 269,137 281,023 294,082 288,422 299,607 313,943 New 11 I Homeowner Single -Family Multifamily 2,973 Improvements 161,257 50,911 623 639 n/a 143,511 48,219 n/a 107,890 40,432 Jdff n/a 182,819 56,592 509 610 n/a 208,835 68,216 it n/a 203,912 66,622 804 BB6 n/a 238,559 71,107 66,, n/a 259,043 56,248 4,732 4,974 n/a 255,003 47,347 n/a 244,953 45,179 4,398 3,665 n/a 216,952 36,996 306 368 n/a 183,321 27,929 n/a 218,285 23,433 ]jI, n/a 243,572 18,752 613 617 99,549 274,967 23,855 'MR' 109,511 252,972 29,479 93,462 273,424 32,537 106,272 274,044 35,797 104,240 307,181 37,855 111,468 337,428 41,356 113,107 345,291 41,208 118,249 353,241 42,977 120,575 371,183 46,001 Ion 136,606 423,942 47,934 136,972 501,936 53,103 T 153,415 557,408 60,815 184,856 518,174 65,772 Eft 173,130 369,601 59,293 163,136 216,670 51,711 150,520 123,292 33,403 133,025 129,631 16,912 132,177 120,763 16,786 134,973 144,385 24,619 'WW' 126,060 184,073 33,954 130,549 205,352 44,075 142,812 234,273 55,654 157,311 253,690 63,923 171,166 276,762 61,409 199,598 284,295 60,117 195,388 Homeowner Improvements and Repairs n/a n/a A n/a n/a A n/a n/a n/a n/a n/a n/a n/a n/a n/a 181,376 185,777 195,415 199,134 212,775 235,020 239,650 230,201 238,409 292,314 308,616 344,664 322,470 290,229 260,319 258,922 259,017 256,824 269,137 281,023 294,082 288,422 299,607 313,943 New 11 I Existing " 545 2,973 436 412 2,419 1,990 623 639 2,697 2,829 688 750. 3,134 3,474 671 676 3,436 3,513 650 534 3,010 2,917 509 610 2,886 dAM 3,155 666 670 _Jff 3,429 3,542 667 757 n® 3,523 3,795 804 BB6 ME 3,963 4,496 860 877 4,650 4,602 908 973 4,732 4,974 1,086 1,203 5,444 5,958 1,283 1,051 6,180 5,677 776 4B5 4,398 3,665 375 323 3,870 3,708 306 368 �� 3,786 4,128 429 4,484 437 i 4,344 501 561 4,646 4,838 613 617 ME 4,892 4,742 JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY 1 39 Housing Cost -Burdened Households by Tenure and Income: 2001, 2016 and 2017 Households [Thousands) Not Moderately Severely Not Moderately I Severely Not Moderately Severely Burdened Burdened Burdened Total Burdened I Burdened I Burdened I Total I Burdened Burdened Burdened I Total Under $15,000 902 787 2,600 4,289 762 773 3,290 4,825 $15,000-29,999 4,058 1,731 1,806 7,595 3,839 1,960 2,081 7,881 $30,000-44,999 5,550 1,997 1,024 8,571 5,676 2,174 1,087 8,937 $45,000-74,999 12,489 3,260 754 16,503 12,750 2,802 739 16,291 $75,000 and Over 30,232 2,496 301 33,029 34,782 2,093 294 37,169 Total 53,231 10,270 6,485 69,986 57,809 9,802 7,492 75,103 790 775 3,303 4,868 3,854 1,972 2,071 7,897 5,675 2,116 1,080 8,871 13,013 2,816 731 16,559 36,141 2,159 285 38,584 59,472 9,837 7,469 76,779 I Under $15,000 1,389 854 4,752 6,995 1,458 973 6,279 8,710 1,449 930 6,038 8,416 $15,000-29,999 2,193 3,066 2,217 7,476 2,022 3,434 3,536 8,991 1,952 3,251 3,493 8,696 $30,000-44,999 4,048 2,228 363 6,640 3,675 2,941 885 7,501 3,406 2,966 927 7,299 $45,000-74,999 7,228 975 109 8,312 7,032 1,895 289 9,216 7,063 2,026 302 9,391 $75,000 and Over 6,800 212 15 7,027 8,797 518 24 9,339 8,914 547 21 9,482 RIW 21,658 7,335 7,457 36,450 22,984 9,761 11,013 43,758 22,784 9,720 10,780 43,284 Im Under $15,000 2,290 1,641 7,352 11,284 2,220 1,746 9,569 13,536 2,239 1,705 9,340 13,284 $15,000-29,999 6,251 4,797 4,023 15,071 5,861 5,394 5,617 16,872 5,805 5,223 5,565 16,592 $30,000-44,999 9,599 4,225 1,387 15,210 9,350 5,115 1,972 16,438 9,082 5,081 2,007 16,170 $45,000-74,999 19,717 4,235 863 24,815 19,782 4,697 1,028 25,507 20,076 4,842 1,032 25,950 $75,000 and Over 37,032 2,707 317 40,056 43,579 2,610 318 46,507 45,055 2,706 305 48,066 Total 74,889 17,605 13,942 106,436 80,793 19,563 18,505 118,860 82,257 19,557 10,250 120,063 Notes: Moderate (severe) cost burdens are defined as housing costs of more than 30% and up to 50% (more than 50%) of household income. Households with zero or negative income are assumed to he severely thundered. while renters paying no cash rent are assumed to he unburdened. Income cutoffs are adjusted to 2017 dollars using the CPI -U for all Items. Source, JCHS tabulations of US Census Bureau. American Community Survey 1 -Year Estimates. 40 1 THE STATE OF THE NATION'S HOUSING 2019 The Joint Center for Housing Studies of Harvard University advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Joint Center also trains and inspires the next generation of housing leaders. STAFF Whitney Airgood-Obrycki Corinna Anderson Kermit Baker James Chaknis Kerry Donahue Angela Flynn Riordan Frost Christopher Herbert Alexander Hermann Elizabeth La Jeunesse Mary Lancaster David Luberoff Daniel McCue Jennifer Molinsky Jonathan Spader Sean Veal Alexander von Hoffman Abbe Will POSTDOCTORAL FELLOWS Hyojung Lee Kristin Perkins STUDENTS Katie Gourley Michael McIntosh FELLOWS Barbara Alexander Frank Anton William Apgar Rachel Bratt Michael Carliner Kent Colton Sheila Crowley Daniel Fulton Joe Hanauer George Masnick Shekar Narasimhan Nicolas Retsinas Mark Richardson James Shen EDITOR Marcia Fernald DESIGNER John Skurchak FOR ADDITIONAL COPIES, PLEASE CONTACT Joint Center for Housing Studies of Harvard University One Bow Street, Suite 400 Cambridge, MA 02138 www.jchs.harvard.edu twitter: faHarvard JCHS JOINT CENTER FOR J u c HOUSING STUDIES fl J OF HARVARD UNIVERSITY Item Number: % July 25, 2019 Joint Entities Meeting Minutes: July 15 ATTACHMENTS: Description Joint (Entities) Meeting: July 15 Minutes of the Joint Meeting of the Johnson County Board of Supervisors, City of Iowa City, City of Coralville, City of North Liberty, City of Tiffin, City of Hills, City of Swisher, City of University Heights, Iowa City Community School District Board, and Clear Creek Amana School District on Monday, July 15, 2019 at City Hall in Coralville; Council Chambers at 4:30 pm. A recorded webcasts of the Joint Meeting is available online at www.coralville.org/coralvision. Mayor John A. Lundell welcomed everyone and had them introduced themselves. Johnson County Board of Supervisors present: Green -Douglas, Heiden, Rettig, Sullivan Iowa City Council present: Mayor Throgmorton, Thomas, Taylor, Coralville Council present: Mayor Lundell, Foster, Goodrich, Gross North Liberty Council present: Mayor Donahue, Hoffman, Smith University Heights Council present: None Hills Council present: Knebel Solon: None Swisher Council present: Mayor Taylor Iowa City Community School District Board: Roesler Staff members from the school districts and local governments were in attendance along with members of the public. Lundell welcomed Brent Smith as the newest appointed official. Joint Climate Resolution. (Iowa City Community School District) Iowa City Community School District (ICCSD) Board Member Paul Roesler reported the ICCSD is working on a resolution to address climate change through education, clean energy and sustainability and he passed out a copy of the resolution. This will affect all the schools in the district. The ICCSD is working with UNI to take a look at their facilities so they know what they need to do. The ICCSD Board will take one last look at the resolution on July 23rd and approve it at the next Board Meeting in August. Updates from Jurisdictions on various climate action efforts. (Iowa City) Iowa City Mayor Jim Throgmorton reported Iowa City will be discussing a climate action resolution tomorrow night at 5:00 pm at City Hall at their work session. It will increase Iowa City's rate of carbon emission reductions from a 26% to 28% reduction by 2025 to a 45% reduction by 2030 and a reduction of 80% by 2050 to a 100% reduction by 2050. This is compatible with the Intergovernmental Panel on Climate Change (IPPC)'s recommendations to keep the global increase in temperatures at 1.5 degrees Centigrade. The big question is how to do this when MidAmerican Energy electric production supplies 42% of the carbon emissions in Iowa City and the University of Iowa is responsible for another 14% to 15% which is 57% from two entities Iowa City doesn't have any control over. Iowa City learned from the State they cannot enact energy standards for new buildings that are stricter than the State Energy Code after being pressured by the Climate Strikers. North Liberty Mayor Terry Donahue asked about the State adopted 2012 Standard. Throgmorton responded the State is currently using the 2012 International Code Standard and they have not adopted the 2015 International Code Standard. The State is working on 2018 International Code Standard. The 2015 Standard calls for a minor decrease and the 2018 standard would help more but it is still lower than the Iowa City's target. Gross asked if they are starting the discussion with a blank slate to achieve these reductions. Throgmorton responded they are starting with their adopted Climate Action Plan based on the Paris Accord signed by President Obama that called for a 26% to 28% reduction by 2030. Iowa City's reductions have already reached 21% primarily because of MidAmerican Energy but they still have a way to go. Gross asked for a copy of the Climate Action Plan so everyone could work to be on the same page. Throgmorton agreed to send a copy to everyone. (Here is the link https://www8.iowa-city.o[g/webiink/O/edoc/1803121/Climate%20ACtion%20PIan odf ) There was a discussion on how to get around the State's restrictions but Throgmorton noted the biggest obstacle to reducing carbon emissions is getting homes and businesses to use less natural gas and Iowa City has some ideas they will discuss to the work session. North Liberty Councilperson Chris Hoffman asked if there were things the City could do without violating State restrictions like solar and Throgmorton responded they have done a lot in regard to activities Iowa City has direct control of including having staff work on solar arrays on top of the new public works facility and near the Terry Trueblood Recreation Area. Iowa City Councilperson Pauline Taylor noted Iowa City was able to install solar panels on top of their bus shelters without going to committee. Iowa City Administrator Geoff Fruin noted there have been some unsuccessful efforts to remove State restrictions on Cities having stricter energy standards and the effort continues. Throgmorton added there are opportunities for local entities to influence the content of the 2021 International Code Standard, which he has signed on to do and hopefully the State will adopt them. Update on Facilities. (Iowa City Community School District) Roesler reported they are working hard to get Grant, Mann and Lincoln Elementary done and they a currently on schedule to open this school year. Alexander Elementary has an addition being added. North Central Junior High School has a big addition being worked on now that includes more class rooms, expands the cafeteria and library, and adds another gym. Southeast Junior High School is moving along with its expansion which includes a new library, new classroom space, new family consumer science space. Tate Elementary construction has started and the students will go to the old Hoover Elementary Building through December and move back in January. Liberty High School's fields are almost done and they include baseball, softball, tennis and soccer fields, which will be ready to go next school year. Improvements to West High School are continuing. They will have bids for the City High School improvements in time for their July 23rd Meeting. They are staring the projects for Grant Wood, Kirkwood, Lemme, Shemik and Horn Elementary and Northwest Junior High School by completing the design phase or getting their plans approved. The ICCSD is getting close to completing its 10 -year plan. Throgmorton added July 24th at 5:00 pm in Iowa City City Hall Opticos Design headed by Dan Parolek will make a presentation to the Planning & Zoning Commission and City Council on the design for the neighborhood around Alexander Elementary, which will address missing middle housing and Alexander Elementary is a core part of the design. Roesler added they have almost completely moved out of Roosevelt Elementary and will put that site up for sale. Proceeds of that sale can now go into the general fund instead of just facilities to help with budget needs Update on Safety Committee Work. (Iowa City Community School District) Roesler reported the ICCSD had their Safety Committee Report come back a month or two ago and the ICCSD decided to move forward with most of their recommendations including having Safety Resource Officers in all the secondary schools and forming a Threat Assessment Team made up of mental health professionals, councilors and police lice like the University of Iowa is currently doing. Those trained staff will come together whenever a student is in need or struggling so they can make sure the right people can get in touch with them for counseling, tutoring or whatever a student needs to make sure they do not fall through the cracks. The ICSSD has applied for a grant to fund a coordinator position in the District or they will look for another way to fund the position if they don't get the grant. Coralville City Councilperson Meghann Foster asked for more information on the Threat Assessment Team and how the police will work with the mental health professionals in the schools. Iowa City Police Chief Jody Matherly responded the Team is multi -disciplined so it will have mental health professionals, school counselors, law enforcement and probation officers so when an event arises they will receive information on the threat, gather the facts as quickly as possible, evaluate the threat including if it happened, and decide what action should be taken. Usually the student involved is already in a program or therapy so if they already have a background the Team can use to determine what should be done and they can work with the correct people to correct the situation ideally before an arrest is made, neutralize the threat and make sure everyone is safe, determine the right course of action to rectify the situation. The key to this is it is done quickly, there is accountability and there is good communication with everybody. Right now, everybody is doing their own separate part and they are not on the same page so this Team will meet often, train often and know each other and each other's role so they know what to do during these incidents. North Liberty Councilperson Brent Smith asked how the chain of command will work and who will have the ability start the process and determine if it is a police issue or internal issue. Matherly responded if there is a threat to someone's safety right now the police are called in and told there is a problem so they normally take the lead and the school is only involved to the point they can be by providing information sometimes limited by FERPA and they do what the can to protect their property, staff, faculty and students and they try to touch base on what the resolution was and try to work together. Many times, they find no one knows what happened after the fact and sometimes the situation soon occurs again in a different arena or avenue and they still do not communicate well as they would if they acted together as a group. With the team they will know who is responsible for what, where the records are and who will follow up so students don't fall through the cracks and in the case of the school district is multi -jurisdictional the team will be made up with the right people in the jurisdiction where the incident occurs. The Team would do the same thing if something involving a student attacking a teacher, parents of a student, an outside intruder or employee who is having issues or been terminated including safe keeping a weapon until things have been resolved. Right now they have to figure a lot of these things out after the event because nothing is in place especial when it come to getting mental health and social services involved which are preventative agencies that really could help keep the person out of jail and getting a criminal record when they go through a crisis situation before something happens or becomes severe. Iowa City Hate Crime Ordinance. (Iowa City) Matherly stated this is to update everyone on a Hate Crimes Ordinance recently passed by Iowa City and handed out a copy of the Ordinance. Matherly explained how Iowa City keeps track of possible hate crime complaints and even though most incidents are considered free speech they have found some of the incidents escalate over time with the same individuals. They found the State law governing hate crimes only covers four types of crimes, which are assault, criminal mischief which is vandalism, arson and trespass that are done to people from a protected class. The law takes the level of an existing crime like a simple misdemeanor and if it happens because the person is from a protected class increases the level of the crime in this case to a serious misdemeanor. The law has become dated and doesn't cover harassment that occurs now because of people becoming bolder and the internet and social media. So, the police have been involved in efforts to add harassment to the State hate crime laws and met locally with groups like the NAACP and the Johnson County Interfaith Coalition (JCIC) to help. JCIC went further and worked with the University of Iowa law students to craft a local ordinance that can make harassment and trespass a hate crime. The Iowa City Police Department helped make sure the ordinance was fair and usable as a tool for law enforcement officers to help someone being harassed because of their protected class. The ordinance states you can't harass someone or trespass without a legitimate purpose because of their protected class. The ordinance protects the person and their property. The State law on harassment states you cannot communicate with someone without legitimate purpose with the intent of frightening them, annoying them and/or threatening them. The ordinance just adds you can't harass a person due to their protected class; this includes trespassing on their property to place a note on their door or take an action like burning a cross in order to harass them. This law does not impinge on a person's free speech, but it does increase the penalty. Since, local jurisdictions are not allowed to increase charges by State law are increasing the penalty by adding 3 to 7 -days jail time for the first offense and 30 -days jail time for another offense. This sends a strong message to everyone that Iowa City is an inclusive community and you don't have to worry about being who you or being part of a protected class and being harassed. There was an additional discussion about the differences between free speech and harassment and how it has been tested in the courts. Matherly noted you can say anything you want until it impinges on another person's rights. Throgmorton asked if it would protect a person from being harassment for their political affiliation and Matherly responded this ordinance does not protect that. Xtream Arena Update (Coralville) Lundell noted Coralville wants to give an update on the Arena project since it will be completed in August of 2020 and it will be used other local entities as well as by Coralville. Lundell introduced the General Manager Brian Hixenbaugh of the Xtream Arena and Fieldhouse who is an employee of Spectra. Spectra is one of the nation's largest arena management firms who have the resources and knowledge to make this facility a success. They manage the Wells Fargo Arena in Des Moines and the facility in Sioux Falls, as well as others nationwide. Hixenbaugh noted every group he has spoken to are excited and can't wait for this project to be done and the content it will bring. Hixenbaugh reported the Arena structure is taking shape and the roof is almost complete. The E. 9t" Street retail building is being framed and they will move on to the Fieldhouse next. Hixenbaugh showed a short video from the project's architect touring a simulated model of the arena and fieldhouse. The University of Iowa Women's Volleyball team is onboard to use the facility and they are open to hosting any type of event that the public will see as a value including athletic events, concerts, comedy and any other event that makes sense for this size facility. Their goal is to be busy 365 days a year in both the Arena and Fieldhouse. Hixenbaugh showed a list of entities that have been involved with the project all along which includes community groups and entities from several different demographics the arena will try to attract and cater to. This includes community-based events by working with the Coralville Parks & Recreation, University of Iowa athletics, departments and student groups that can help with ticket sales, provide internships, lectures, sporting events and commencements. Spectra also wants attract employees from the University, community colleges and schools that can continue to be promoted within the company. They would like to attract commencement ceremonies, seminars, retreats, lectures and speakers from local schools and University of Iowa colleges. Local media outlets will be critical to the Arena's success be it ad time or providing content through partnerships. Other events like basketball, volleyball, wresting, tennis, jump rope could use the arena for main events and the fieldhouse as practice space of overflow for their events. They want to attract trade and craft shows and partner with the Marriott for more event space. The facility can hold 5,200 for hockey and volleyball and between 5,000 to 6,000 form most concerts. Hixenbaugh showed a list of regional and national entities they will work with to attract those events and who Spectra already works with for their Des Moines and Sioux City facilities. Hixenbaugh noted they could attract some of the groups that previously used Carver Arena are looking for a similar local venue to get back into the area. Foster asked for more details on community events. Hixenbaugh responded they meet weekly with the Coralville Parks and Recreation Department to work on hosting programs like youth and adult rec league sports and the community meal in order to free up the Recreation Center so it can provide free facilities and programs to the public. Lundell added the Iowa Antique Car Museum and Johnson County Historical Society Museum will move into the new building adjacent to the Arena. Hixenbaugh noted they want to partner with those attractions and other surrounding businesses by providing people attending the Arena and Fieldhouse reduced rates and deals while using them to attract events. Foster noted as a parent who has kids that travel to participating in youth sporting events and tournaments that already having restaurants, shopping and other venues close by is an attractive feature. Lundell reported on green aspects to the facility including a green roof open to the public and a 10,000 -gallon cistern to harvest rainwater to water all of the Iowa River Landing's plants. Johnson County Supervisor Rod Sullivan asked when the Arena will open. Lundell responded the Arena will open late August of 2020. Rettig asked if the fieldhouse will open at the same time. Hixenbaugh responded yes. Rettig then asked about moving the museums and what will happen to their current locations. Hixenbaugh responded the museums will have a 30 -day window to move, but they may not have all their displays set up in that amount of time. Lundell responded the buildings will be torn down and redeveloped. Rettig asked when the hotel will open. Lundell responded that will be a little later and it will start coming out of the ground as soon as private developer completes the final design work. Other Business. Throgmorton volunteered Iowa City to host the next Joint Meeting on October 14th and if there is a problem with the date, they will let everyone know. Lundell adjourn the meeting at 5:45 pm. Notes taken by Coralville City Clerk Thorsten J. Johnson. CITY OC IOWA CITY www.icgov.org July 25, 2019 Bar Check Report: June 2019 ATTACHMENTS: Description Bar Check Report: June 2019 Item Number: 8. Iowa City Police Department and University of Iowa DPS Bar Check Report - June, 2019 The purpose of the Bar Check Report is to track the performance of Iowa City liquor license establishments in monitoring their patrons for violations of Iowa City's ordinances on Possession of Alcohol Under the Legal Age (PAULA) and Persons Under the Legal Age in Licensed or Permitted Establishments (Under 21). Bar checks are defined by resolution as an officer -initiated check of a liquor establishment for PAULA or other alcohol related violations. This includes checks done as part of directed checks of designated liquor establishments, and checks initiated by officers as part of their routine duties. It does not include officer responses to calls for service. The bar check ratios are calculated by dividing the number of citations issued to the patrons at that establishment during the relevant period of time by the number of bar checks performed during the same period of time. The resulting PAULA ratio holds special significance to those establishments with exception certificates, entertainment venue status, or split venues, in that they risk losing their special status if at any time their PAULA ratio exceeds .25 for the trailing 12 months. Note, while the resolution requires that bar checks and citations of the University of Iowa Department of Public Safety (DPS) be included in these statistics, the DPS ceased performing bar checks and issuing these citations to patrons in Mav of 2014. Business Name Summit. [The] Airliner Sports Column Fieldhouse Bo -James Martini's Union Bar Pints Eden Lounge DC's Previous 12 Months Top 10 Under 21 Citations Visits Citations Ratio Business Name PAULA Citations Visits Citations 98 98 1.0000000 Bo -James 44 23 59 54 0.9152542 Vine Tavern, [The] 13 5 69 63 0.9130435 Summit. [The] 98 31 71 54 0.7605634 Fieldhouse 71 22 44 33 0.7500000 'Union Bar 80 22 45 32 0.7111111 Airliner 59 12 80 56 0.7000000 Eden Lounge 39 7 26 8 0.3076923 Martini's 45 8 39 10 0.2564103 Sports Column 69 9 28 6 0.2142857 DC's 28 1 Only those establishments with at least 10 bar checks are listed in the chart above. Current Month Top 10 Under 21 Citations PAULA Citations Ratio 0.5227273 0.3846154 0.3163265 0.3098592 0.2750000 02033898 0.1794872 0.1777778 0.1304348 0.0357143 Business Name Visits i n Ratio u in Name Visits CitationsRatio Martini's 2 6 3.0000000 aMartini's 2 2 1.0000000 Sports Column 9 21 2.3333333 Airliner 8 17 2.1250000 Fieldhouse 8 14 1.7500000 Bo -James 4 6 1.5000000 Summit. [The] 3 4 1.3333333 Union Bar 9 7 0.7777778 Van B's 2 1 0.5000000 Brothers Bar & Grill, [It's] 5 2 0.4000000 Eden Lounge 5 2 0.4000000 - exception to 21 ordinance Page 1 of 5 Iowa City Police Department and University of Iowa DPS Bar Check Report - June, 2019 Possession of Alcohol Under the Legal Age (PAULA) Under 21 Charges Numbers are reflective of Iowa City Police activity and University of Iowa Police Activity Business Name Monthly Totals Bar Under2l PAULA Checks Prev 12 Month Totals Bar Under2l PAULA Checks Under2l PAULA Ratio Ratio (Prev 12 Mo) (Prev 12 Mo) 2 Dogs Pub 0 0 0 9 0 0 0 0 Airliner 8 17 0 59 54 12 0915254 0.20339 American Legion 1 0 0 5 0 0 0 0 Apres Wine Bar & Bistro 0 0 0 Avocado Mexican Bar and Grill 1 0 0 4 0 0 0 0 Bardot Iowa 0 0 0 3 3 0 1 0 Baroncini— 0 0 0 Basta 0 0 0 Big Grove Brewery 0 0 0 5 0 0 0 0 Blackstone— 0 0 0 2 0 0 0 0 Blue Moose— 0 0 0 7 0 1 0 0.142857 Bluebird Diner 0 0 0 Bo -James 4 6 0 44 33 23 0.75 0.522727 Bread Garden Market & Bakery 0 0 0 Brothers Bar & Grill, [It's] 5 2 0 83 13 2 0.156627 0.024096 Buffalo Wild Wings Grill & Bar— 0 0 0 Cactus 2 Mexican Grill (314 E Burlington) 0 0 0 1 0 7 0 7 Cactus Mexican Grill (245 s. Gilbert) 0 0 0 2 0 0 0 0 Carl & Ernie's Pub & Grill 0 0 0 2 0 0 0 0 Carlos O'Kelly's— 0 0 0 1 0 0 0 0 Chipotle Mexican Grill 0 I 0 0 Clarion Highlander Hotel 0 0 0 Clinton St Social Club 0 0 0 Club Car, [The] 0 0 0 1 0 0 0 0 Coach's Corner 0 0 0 4 0 0 0 0 exception to 21 ordinance Page 2 of 5 Business Name Monthly Totals Bar Checks Under2l PAULA Prev 12 Month Totals Bar Checks Under2l PAULA Under2l PAULA Ratio Ratio (Prey 12 Mo (Prev 12 Mo) Colonial Lanes— 0 0 0 Dave's Foxhead Tavern 0 0 0 1 0 0 0 0 DC's 0 0 0 28 6 1 0.214286 0.035714 Deadwood, [The] 0 0 0 2 0 0 0 0 Donnelly's Pub 0 0 0 3 0 0 0 0 Dublin Underground, [The] 1 0 0 8 1 0 0.125 0 Eagle's, [Fraternal Order of] 0 0 0 Eden Lounge 5 2 0 39 10 7 0.256410 0.179487 EI Banditos 0 0 0 EI Cactus Mexican Cuisine 0 0 0 EI Patron 0 0 0 EI Ranchero Mexican Restaurant 0 0 0 Elks #590, [BPO] 0 0 0 Englert Theatre— 0 0 0 Estelas Fresh Mex 0 0 0 3 0 0 0 0 Fieldhouse 8 14 0 71 54 22 0.760563 0.309859 FilmScene 0 0 0 First Avenue Club 0 0 0 2 0 0 0 0 Formosa Asian Cuisine— 0 0 0 Gabes— 0 0 0 5 0 0 0 0 George's Buffet 1 0 0 0 0 0 0 Graze— 0 0 0 Grizzly's South Side Pub 0 0 0 Hatchet Jack's 0 0 0 1 0 0 0 0 Hilltop Lounge, [The] 0 0 0 2 0 0 0 0 India Cafe 0 0 0 Iowa City Brewlab 0 0 0 1 0 0 0 0 Jimmy Jack's Rib Shack 0 0 0 Jobsite 0 0 0 1 0 0 0 0 Joe's Place 0 0 0 15 0 0 0 0 Joseph's Steak House— 0 0 0 Martini's 2 6 2 45 32 8 0.711111 0.177778 exception to 21 ordinance Page 3 of 5 Business Name Monthlv Totals Bar Under2l PAULA Checks Prev 12 Month Totals Bar Under2l PAULA Checks Under2l PAULA Ratio Ratio (Prev 12 Mo) (Prev 12 Mo) Masala 0 0 0 Mickey's— 0 0 0 3 0 0 0 0 Mill Restaurant, [The]— 1 0 0 3 0 0 0 0 Moose, [Loyal Order of] 0 0 0 Mosleys 0 0 0 Noodles & Company— 0 0 0 One-Twenty-Six 0 0 0 Orchard Green Restaurant— 0 0 0 Oyama Sushi Japanese Restaurant 0 0 0 Pagliai's Pizza— 0 0 0 Panchero's (Clinton St)— 0 0 0 Panchero's Grill (Riverside Dr)— 0 0 0 Pints 6 2 0 26 8 0 0.307692 0 Pizza Hut— 0 0 0 i Quinton's Bar & Deli 0 0 0 2 0 0 0 0 Riverside Theatre— 0 0 0 Saint Burch Tavern 0 0 0 1 0 0 0 0 Saloon— 0 0 0 1 0 0 0 0 Sam's Pizza 0 0 0 Sanctuary Restaurant, [The] 0 0 0 Shakespeare's 0 0 0 7 0 0 0 0 Sheraton 0 0 0 Short's Burger & Shine— 0 0 0 Short's Burger Eastside 0 0 0 Sports Column 9 21 0 69 63 9 0.913043 0.130435 Studio 13 0 0 4 0 0 0 0 Summit. [The] 3 4 0 98 98 31 1 0.316327 Szechuan House 0 0 0 Takanami Restaurant— 0 0 0 TCB 0 0 0 15 0 0 0 0 Thai Flavors 0 0 0 Thai Spice 0 0 0 exception to 21 ordinance Page 4 of 5 Business Name Times Club @ Prairie Lights Trumpet Blossom Cafe Union Bar Van B's VFW Post #3949 Vine Tavern, [The] Wig & Pen Pizza Pub - Yacht Club, [Iowa City]- Z'Mariks Noodle House Off Premise Totals Grand Totals Monthly Totals Prev 12 Month Totals Under2l PAULA BarBar Under2l PAULA Under2l PAULA Ratio Ratio Checks Checks (Prev 12 Mo) (Prev 12 Mo) 0 0 0 0 0 0 9 7 0 80 56 22 0.7 0.275 2 1 0 5 6 1 1.2 0.2 0 0 0 2 0 0 13 2 5 0.153846 0.384615 0 0 0 0 0 0 1 0 0 0 0 0 0 0 Monthly Totals Prev 12 Month Totals Under2l PAULA Bar Under2l PAULA Bar Under2l PAULA Ratio Ratio Checks Checks (Prev 12 Mo) (Prev 12 Mo) 69 82 2 792 439 151 0.554293 0.190657 0 0 0 0 0 0 0 0 2 I 151 exception to 21 ordinance Page 5 of 5 Item Number: 9. jr ;;rw®J� CITY OC IOWA CITY www.icgov.org July 25, 2019 Civil Service Entrance Examination: Building Inspector ATTACHMENTS: Description Letter from Civil Service Commission: Building Inspector ' r 1 _d.. _� —Ps. = ,�, .,yinMM at� 67 CITY OF IOWA CITY 410 Easl Washington Street Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www.icgov.org July 19, 2019 TO: The Honorable Mayor and the City Council RE: Civil Service Entrance Examination — Building Inspector Under the authority of the Civil Service Commission of Iowa City, Iowa, I do hereby certify the following named person(s) as eligible for the position of Building Inspector. Adam Crossett Tyler Klostermann IOWA CITY CIVIL SERVICE COMMISSION Rick W ,Chair Item Number: 10. July 25, 2019 Civil Service Entrance Examination: Landfill Operator ATTACHMENTS: Description Letter from Civil Service Commission: Landfill Operator � r CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 3S6-5000 (3(9) 3S6-5009 FAX www icgov.org July 8, 2019 TO: The Honorable Mayor and the City Council RE: Civil Service Entrance Examination — Landfill Operator — Heavy Equipment Under the authority of the Civil Service Commission of Iowa City, Iowa, I do hereby certify the following named person(s) as eligible for the position of Landfill Operator — Heavy Equipment. Benjamin Johnson IOWA CITY CIVIL SERVICE COMMISSION Rick Wyss, Chair Item Number: 11. July 25, 2019 Civil Service Entrance Examination: Maintenance Worker 1: Wastewater Treatment F-11% a I_1ida-IT,1 11k& I Description Letter from Civil Service Commission: Maintenance Worker 1 - Wastewater Treatment its 4EL1 CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 3S6-5000 (319) 356-5009 FAX WNW'. icgov. or July 9, 2019 TO: The Honorable Mayor and the City Council RE: Civil Service Entrance Examination — Maintenance Worker I — Wastewater Treatment Under the authority of the Civil Service Commission of Iowa City, Iowa, I do hereby certify the following named person(s) as eligible for the position of Maintenance Worker I — Wastewater Treatment. Kyle Coleman IOWA CITY CIVIL SERVICE COMMISSION 1-1 ick Wyss, Chair Item Number: 12. July 25, 2019 Civil Service Entrance Examination: Maintenance Worker - Wastewater ATTACHMENTS: Description Letter from Civil Service Commission: Maintenance Worker - Wastewater I l 1 . I b.IN INcsrr�ll CITY OF IOWA CITY 410 East Washinglon Street Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www.icgov.org July 19, 2019 TO: The Honorable Mayor and the City Council RE: Civil Service Entrance Examination — Maintenance Operator - Wastewater Under the authority of the Civil Service Commission of Iowa City, Iowa, I do hereby certify the following named person(s) as eligible for the position of Maintenance Operator - Wastewater. Brandon Scheer Scott Vandehaar IOWA CITY CIVIL SERVICE COMMISSION 4�• Rick Wyss, Chair July 25, 2019 Board of Adjustment: July 10 ATTACHMENTS: Description Board of Adjustment: July 10 Item Number: 13. MINUTES BOARD OF ADJUSTMENT JULY 10, 2019 — 5:15 PM EMMA J. HARVAT HAZELL, CITY HAZELL MEMBERS PRESENT: MEMBERS ABSENT STAFF PRESENT: OTHERS PRESENT CALL TO ORDER: PRELIMINARY Connie Goeb, Zephan Hazell, Amy Pretorius Ernie Cox, Ryan Hall Susan Dulek, Jessica Lile Chris Pose, Marty Dostalik, Bill Horner, Laureen Ipsen, Barnard Dutchik, Joe Meyers The meeting was called to order at 5:15 PM. ROLL CALL: A brief opening statement was read by Goeb outlining the role and purpose of the Board and the procedures that would be followed the meeting. CONSIDER THE MAY 8. 2019 MINUTES: Pretorius moved to approve the minutes of May 8, 2019. Hazell seconded the motion. A vote was taken and the motion carried 3-0. SPECIAL EXCEPTION ITEM EXC19-05: An application submitted by MidAmerican Energy for a special exception to allow for a basic utility in a Commercial Office (CO -1) zone to build an electric substation located at the southwest corner of the Prairie du Chien overpass of Interstate 80. Lile began the staff report with an aerial view of the subject area. She also showed a zoning map of the area noting the proposed substation area is zone CO -1 (Commercial Office) and the surrounding area is zoned residential. Lile stated some basic utilities are allowed in Commercial Office zones through the special exception process and must meet capability and screening requirements. The purpose of this electric substation is to provide a more reliable base of electric power to the surrounding area. There are currently seven other substations in Iowa City, and substations must be located near the area where they are supplying power so they can tie into existing transmission lines. MidAmerican held a Good Neighbor Meeting on Wednesday, June 26 where ten people attended. Noise and making sure the neighboring property owners at 1823 Prairie du Chien Rd were compensated adequately were the biggest concerns brought up. There were no issues with the proposed screening or landscaping plan proposed by MidAmerican. Board of Adjustment July 10, 2019 Page 2 of 12 Lile stated the role of the Board of Adjustment is to approve, approve with conditions, or deny the application based on the facts presented. In order to approve the special exception the Board must find it meets all applicable approval criteria. In this case it is specific criteria for utilities not enclosed within a building and all the general standards. With regards to Basic Utilities Not Enclosed Within a Building, in all commercial zones the RDP and ORP zones, and the ID -C and ID -RP zones, basic utilities not enclosed within a building are permitted only by special exception. Proposed uses must be screened from public view and from view of any adjacent residential zones to at least the S3 screening standard. In addition, the applicant must provide evidence that the proposed use will be compatible with surrounding structures and uses with regard to safety, size, height, scale, location, and design, particularly for facilities that will be located close to or within view of a residential zone. For uses located in highly visible areas, the board may consider additional design elements such as masonry or brick facades, and walls or fencing to improve public safety and to soften the visual impact of the proposed use. Lile noted the applicant has submitted a landscaping plan that shows screening above the required S3 standard. Staff recommends a condition that the proposed substation must adhere to the landscaping plan submitted, dated June 20, 2019. Lile also stated the proposed site is surrounded by mainly vacant land at the moment with one house currently occupied at 1823 Prairie du Chien Road. There are also other planned and ongoing residential projects going on in the area. Lile showed an image of the landscaping plan submitted on June 20, 2019, at the time of the planning 31 trees will be 6 feet tall with additional shorter plantings. At the time of maturity all plantings will be 8 feet tall or taller with 23 of the trees being over 20 feet tall. The proposed substation would have a 158 x 210 foot footprint, there would be two 50 foot high dead-end structures that would receive transmission lines and 50 foot high shield masts. MidAmerican proposes to surround the substation with seven foot high chain-link fence with three strands of barbed wire which makes the fence eight feet tall in total. The proposed substation fence will be approximately 32 feet from the south property line and approximately 55 feet from the east property line. Lile showed a map of the area around the proposed substation, there is potential development of townhomes to the southwest of the proposed substation and there is a senior living center that is currently being constructed along the Foster Road extension. With regard to the general standards: The specific proposed exception will not be detrimental to or endanger the public health, safety, comfort or general welfare. Lile stated the proposed substation will provide a reliable base of power to the surrounding area. There are other substations in Iowa City near residential areas that have operated without reported health and safety issues. The specific proposed exception will not be injurious to the use and enjoyment of other property in the immediate vicinity and will not substantially diminish or impair property values in the neighborhood. The applicant provided sound estimates at distances from the transformer to the property line, each distance is from 30 to 90 meters with sound levels ranging from 34 decibels to 43 decibels. For comparison, 40 decibels is approximately the level of noise of a library, bird calls, and ambient urban noise. Staff measured noise levels at 1:45 pm on a weekday and sound coming from the interstate from the west side sidewalk along Prairie du Chien nearest the proposed substation location was approximately 65 decibels. While sound in cumulative, the addition of anything that has a difference of more than 10 decibels results in the higher noise level being the total noise level. So one would not be able to hear the transformer over the Board of Adjustment July 10, 2019 Page 3 of 12 sound of the interstate. Additionally there are other current development projects in the area Establishment of the specific proposed exception will not impede the normal and orderly development and improvement of the surrounding property for uses permitted in the district in which such property is located. Past substation projects have shown that residential and other development continues in the area. The substation at 1630 Lower Muscatine Rd was built in 1962, and residences directly next to the substation were built in 1962, 1963, 1964, & 1965. The closest residence is approximately 60 feet from the substation fence. Another example is the substation at 1120 Mormon Trek Blvd built in 1980, and residences directly next to the substation were built in 1987. 1988, 1990, and 1996. The closest residence is just over 20 feet away from the substation fence. In the case considered today, the closest residence to the proposed substation is approximately 100 feet from the substation fence and over 120 feet from the proposed transformer. Adequate utilities, access roads, drainage and/or necessary facilities have been or are being provided. The proposed site would be accessed off of the Foster Rd extension. The proposed substation would be installing electricity to serve the area and improving the utilities. Adequate measures have been or will be taken to provide ingress or egress designed to minimize traffic congestion on public streets. The future intersection of Foster Rd and Prairie du Chien Rd will be controlled by a stop sign on Foster Rd. Post -construction the proposed substation will produce minimal traffic — typically one truck a month and more if there are issues with the substation. What traffic it does produce would be routine maintenance and inspections on site, not a permanent employee presence. Except for the specific regulations and standards applicable to the exception being considered, the specific proposed exception, in all other respects, conforms to the applicable regulations or standards of the zone in which it is to be located. The Commercial Office (CO -1) zone is intended for offices, businesses, apartments, and certain public & semipublic uses. The proposed substation exceeds the minimum setback requirements for the zone and aside from the special exception required for a basic utility, the lot meets all other requirements. The proposed exception will be consistent with the Comprehensive Plan of the City, as amended. The Comprehensive Plan supports Iowa City coordinating with private utilities in order to serve areas under development. Lile noted today she did receive late public comment from the neighbor at 1920 Prairie du Chien Road and passed that onto the Board members. This residence is located across the street from the proposed substation and his concerns were health concerns of putting a power substation close to residences that construction of a power substation would be detrimental to the enjoyment of his property and the addition of a power substation would lower the resale value of his home. The resident also does not believe the construction of a power substation is consistent with the Comprehensive Plan and does not wish the substation be granted. The resident stated if the exception must be granted then he requests sufficient screening which MidAmerican has agreed to already, additionally access to the substation be off Foster Road, which is also the plan. Staff recommends approval of EXC19-05, a special exception to allow a basic utility in a Commercial Office (CO -1) zone to build an electric substation with the following condition: Board of Adjustment July 10, 2019 Page 4 of 12 1. The landscaping and screening around the substation must adhere to the landscaping plan submitted, dated June 20, 2019 prior to the issuance of a Certificate of Occupancy. Goeb opened the public hearing. Chris Pose (Attorney representing MidAmerican Energy) stated they are in full agreement with the staff report, and wanted to take some time to add to the presentation and explain what a substation does. A substation transforms power from the transmission line level, in this case 161 volt transmission lines that have been in the area since 1967, down to a level that is 13,500 volts which can be used as distribution power to run down the city streets and power into businesses and so forth. So substations down -step the power from the high voltage transmission lines to a usable level, which is what the equipment is designed to do. The transmission line is what makes this site unique and site possible for this development. There is a line through the trees parallel with the interstate just south of the substation site, which is where the existing transmission line is and what they are trying to tap into. On the plan submitted shows the transmission lines coming in so the distribution lines can come out of the substation underground. Everything coming out of the substation will be underground and this is why it is a unique location. Pose also stated they had approached the City with this idea of putting in a substation in this corridor because MidAmerican already owns a piece of land that is on the east side of Prairie du Chien, just to the southeast of the present site. City staff had suggested that parcel would not be an appropriate site even though that is a piece of land MidAmerican had owned for a number of years, it is well situated because it is right under the transmission line that runs through on the south part of that location. However City staff felt the zoning aspects of that parcel didn't lend itself to the idea of rezoning to commercial and instead suggested since Foster Road Developers just had a plat approved with rezoning complete for the land across the street and that led MidAmerican to the subject site. MidAmerican has now entered into a purchase agreement with the owners of Foster Road Development to buy a piece of land zoned CO -1 and have this substation put up against the interstate. Therefore MidAmerican followed staff's recommendation to put the substation in this particular location. Pose next addressed the residence at 1823 Prairie du Chien which is zoned as RS -12. The owners of that property are here this evening, MidAmerican Energy is in process of working through good faith negotiations to acquire that particular piece of property, they are keeping those discussion between themselves and the property owners at this time, but have full communication with them concerning this possibility and will continue those discussions even if this exception is approved this evening. MidAmerican has a desire to acquire that property. As for the concerns of the owner of the property at 1920 Prairie du Chien, whose concerns were raised today in a letter, the staff report adequately addressed the concerns. With other substations throughout the City it has shown substations does not impede development of land, people will built around substations. Substations are important, they need to go someplace and they provide a source of power. Staff had asked MidAmerican to provide justification as to why they chose this particular site, there are seven substations in Iowa City and they all rely on each other as part of the grid, the idea being if something happens to one substation another one can pick up the slack and what MidAmerican has identified in this corridor it would be good to have another substation to help with the potential growth that is going to happen in the northern corridor of the city, and in addition will provide stability to the existing systems such as if one substation were to go out for a reason such as storm this substation would be able to pick up the power load. Lastly Pose showed a color version of the landscape plan. He reiterated they are in agreement with the staff report, they believe MidAmerican has met all the conditions, they made whatever changes staff had requested of them, they intend to keep working with the Board of Adjustment July 10, 2019 Page 5 of 12 property owner at 1823 Prairie du Chien if this is approved, and they believe any concerns raised by the property owner at 1920 Prairie du Chien were addressed by the staff report. Hazell asked if the darker green on the landscaping plan were evergreen trees. Marty Dostalik (Civil Engineering Consultants) noted the evergreen trees on the plan are denoted with a star shape symbol on the inside, there is a series of eight of them along the west side, the pink trees are crab apples, underneath were the transmission lines come in and out there are two staggered rows of dwarf evergreens (Dwarf Colorado Spruce) which will get around 20 to 25 feet tall, they are slow growing and need to stay low so they don't get up into the transmission lines. On the east side there are nine evergreens, there are also some overstory trees, a few Swamp White Oak and some hackberry's in addition to all the existing trees on the site, to the west there is brush, shrubs and undergrowth trees. Hazell noted the plan looks good however if they are not using evergreen trees then they are not providing screening year round, but it appears this is comprehensive. Goeb asked how bit the entire property is. Dostalik said it is 3.1 acres. Goeb asked if all the substations have fences with the barbed wire and Dostalik stated that is required by the National Electric Safety Code. Bill Horner (718 Perry Court) has been a resident of Iowa City since 1965 but is moving to 750 East Foster Road, Unit 113 which is in Lot 3 of new Vintage Cooperative. As the Cooperative it has been a three year process of getting the land owners and developers together to create a developers agreement that was approved by the consul on July 17, 2018. It consisted of Foster Road Developers, Vintage Cooperative of Iowa City, and Ewing Development Services of Pella, Iowa to construct this building. The good neighbor meeting records show notice was sent to Foster Road Developers and with the development agreement with Vintage Cooperative and the land owners Horner spoke late this afternoon, after calling the City, and found out this meeting was tonight. Horner called Ray Bisby, the president and CEO of Vintage Cooperative, who also stated he knew nothing of this substation proposal. Horner realized the members of the cooperative are not land owners, and it is listed at the Assessor's Office as Foster Road Developers, but as of Monday this week the last unit has been sold, all 53 have been committed and each owner has approximately $175,000 invested in this property for a total of over $7 million. Horner understands how the good neighbor policy works, notice is sent out to the surrounding land owners but technically the owners in the cooperative are land owners as well and knew nothing about this until they saw the special exception sign on Foster Road. Many of the members he has talked to are not in favor of the location of substation and feel it could have been built on the east side of Foster Road since MidAmerican has owned land over there for years. Horner acknowledged it has been explained tonight the City did not recommend that area. He suggests this approval be pushed back one month so they can have better input. The east/west transmission lines should be put underground rather than have the six high voltage lines over Foster Road and would also recommend at least the west and south chain link fence be a stone or brick wall because there will be several members units in the cooperative that will face that fence. A seven foot chain link fence with barbed wire on top is not attractive. Pretorius asked where the Cooperative will be with respect to the substation. Lile showed a map of the area and pointed out the senior living area, which is the cooperative. Pretorius asked when the rezoning was done from the RS -12 to the current CO -1 for the proposed site. Board of Adjustment July 10, 2019 Page 6 of 12 Lile was unsure, but it was quite a while ago as it has already been through the subdivision phase as well. Pretorius asked when the building was slated to be done with construction. Horner said it will be complete late this year. Third floor is to the point of installing kitchen cabinetry, second floor is being dry -walled and first floor has all the mechanical systems in. Horner added their power is coming from a pole that was set a few months ago on the east side of Prairie du Chien and the MidAmerican subcontractor has buried a six inch diameter tube from that east side all along the road to a transformer pad located to the southwest corner of the building. Their building is not dependent on the substation. He does acknowledge a substation is probably needed in the area with future development. Horner reiterated they are owners since they have paid into the cooperative even though they are not property owners listed on the Assessor's site. Goeb asked for clarification of notifying people in the area. Lile said the good neighbor policy is optional and notification goes to property owners in a 300 foot range, the City posts a sign with information on how to contact a representative as well as a notice posted in the paper about the meeting and items being discussed. In this case the property owner was Foster Road Developers. Laureen Ipsen (1710 Prairie du Chien Road) lives on the east side of Prairie du Chien right next to the property MidAmerican does own. Her major concern is for MidAmerican to come to a good outcome with the people they are negotiating with and if they can't then she is not for this development. If the property next to hers had been suitable she would have been in negotiations and she understands the east side versus the west side but she stresses MidAmerican needs to take care of the property owners at 1823 Prairie du Chien. She also has a cousin moving into the senior living development and alerted her of this item as she knew they would not be notified as property owners. Pose responded to a couple public comments, he apologized for the good neighbor notifications, they followed the City policy and notified only record property owners, they did not intend to exclude anyone. When they met with the residents of 1823 Prairie du Chien he could see out their back window Foster Road goes downhill pretty fast once you make that bend. Therefore the senior living facility will sit much lower than the property at 1823 Prairie du Chien and as a result and what they will be doing is looking up hill at this area and with the tree cover that is there you can see the building proposed on Lot 2 will have the transmission lines cross only a small portion of the eastern edge of their property. The senior living facility is down on Lot 3 quite a ways from this site, the transmission line taps will only encumber the east side so the remaining part of Lot 2 is still available for the use of potential development. It also impacts why the substation is pushed to the east side of the lot and not to the west, if it goes to the west the transmission lines would have to go right through the major portion of Lot 2, which is in conflict of what the City's policy of don't impede the orderly development of property. With regard to the senior living facility, they have to look up hill, they are probably going to be looking at another building that will be built on Lot 2, and they will be looking at the landscaping from down below before they will even see the substation site. Pose added the landscaping that is appropriate for this location is quite simple, landscaping grows, any kind of wall built doesn't, therefore over time landscaping will be a better screen. Pose showed photos of other substations and screenings they had used on properties in Des Moines. Pose noted that deferring for a month is not going to change the plan or how the property sits. Board of Adjustment July 10, 2019 Page 7 of 12 Hazell asked if there were any poles connecting other than those inside the substation on the transmission line. Pose said there will be two poles installed on the transmission line corridor to get the tap wires into the substation, but are in the already existing transmission area. The land which those poles are located is owned by the City. They have been sensitive to all areas around this development, they have worked with the City on solutions in this area, and in discussions with the property at 1823 Prairie du Chien to resolve their issues. Pretorius acknowledged substations are very expensive and are by necessity, not just something MidAmerican wants to do. Pose confirmed they would not make this type of investment if it was not a necessity, MidAmerican's idea is to protect the entire grid and provide power for the areas surrounding it. They do not just take one's land, they must be given the land voluntarily, they try to use areas that minimize impact to existing residents, and also don't impede any future growth and they feel confident they have done that with this particular plan. Staff has help MidAmerican with this by suggesting modifications which they have followed. Ipsen said people have been asking about the health issues and asked if there have been studies to know whether these power lines cause problems for people that are living near them. She will see them from her property, more so than the new development. Pose said the substations they have existing in Iowa City are the best indicators of what types of issues the substations may cause in terms of health. As the staff report indicated, the substation on Mormon Trek Road was built first and houses built around it after, there has never been a reported complaint of a health issues related to those power lines or substation itself. There are sometimes discussions of electromagnetic fields, or EMFs, relating to power lines and power equipment. What EMFs are energy waves or anything that can beam off anything electrical and transmission lines themselves generate more of the EMF discussions as transmission lines are high power and move through the eye of the utilities board to be approved. However there have been no reported incidents of substations in Iowa City, or anywhere else. Pose noted the most operative piece of equipment within the substation is the transformer and that is the thing that does most of the work, that is located as far north towards the interstate as possible and as far away from any further future development in the area. There are no reported problems or issues with substations causing any difficulty to health. Horner would like to remind the Board the rectangle in the upper right hand corner is a building that is 24 foot tall and a lot of the other equipment is in the 20 foot tall range and the substation elevation is higher than the co-op building but the co-op building is all 9 foot ceilings with floor joists that are 2 foot so a 36 foot tall building and questions if the two poles that would have to be located on the south side of Foster Road to feed the transmission lines up north would be wooden or steel poles, wooden ones would require guide wires and steel poles would be self - standing and more appealing. Dostalik said the building in the upper right corner is the power distribution center control building will only be 12 feet high. Most of the equipment is 16 to 24 feet high on average, the highest things will be the two dead-end structures and the two wire poles on the northeast corner. All four of those structures are about 50 feet high and are that high to catch lightening versus hitting the equipment. Pose wanted to reiterate there is a big elevation change from where the substation will be and the senior residence building and over time development will happen and they won't even know Board of Adjustment July 10, 2019 Page 8 of 12 the substation is present. Goeb closed the public hearing. Pretorius asked if the owners of 1823 Prairie du Chien were present then lack of comment from them assumes positive communications with MidAmerican. The Board did receive comment from the property across the street (1920 Prairie du Chien) but knowing the actual property MidAmerican currently owns would place the substation in that individuals back yard and therefore the placement on the east side would be more intrusive. The current proposed location does seem like the best location of all the options. She did add shame on the developers and landowners for not sharing the information about the good neighbor meeting or the exception item with the co-op owners, transparency is always the best policy. Hazell feels the landscaping will be comprehensive and a solid covering of evergreen trees. Goeb also thinks the City and MidAmerican has worked together well on coming to a solution and the notifications did follow policy but is sympathetic to the future co-op residents to not be looped in. Her question would be if it was a reasonable condition to ask for another good neighbor meeting. Dulek said it could be added if it can tie to any of the standards. Goeb noted she feels all the standards have been met. Pretorius moves to approve EXC19-05, a special exception to allow for a basic utility in a Commercial Office (CO -1) zone to build an electric substation with the following condition: 1. The landscaping and screening around the substation must adhere to the landscaping plan submitted, dated June 20, 2019 prior to the issuance of a Certificate of Occupancy. Hazell seconded the motion. Pretorius stated that regarding agenda item EXC19-05 she concurs with the findings set forth in the staff report of July 10, 2019, and conclude the general and specific criteria are satisfied. So unless amended or opposed by another Board member she recommends that the Board adopt the findings in the staff report as our findings with acceptance of this proposal. Hazell seconded the findings of fact. A vote was taken and the motion carried 3-0. Goeb stated the motion declared approved, any person who wishes to appeal this decision to a court of record may do so within 30 days after this decision is filed with the City Clerk's Office. SPECIAL EXCEPTION ITEM EXC19-06: An application submitted by ImOn Communications Company for a special exception to allow for a basic utility in a Community Commercial (CC -2) zone to build a telecommunication hub located at 2211 F St. Board of Adjustment July 10, 2019 Page 9 of 12 Lile began the staff report with a location map of the area as well as a zoning map. The proposed property is in a commercial zone and the surrounding area is mostly commercial with some single family residential across the street. Basic utilities are allowed in a community commercial zone through a special exception process and must meet capability and screening requirements. The proposed telecommunications hub would be located in a 12 foot by 6 foot shelter at the southwest corner of the property. The site is currently nonconforming with regard to screening requirements. The zones require S2 screening between surface parking areas and both the public right-of-way and abutting properties. For the special exception to be approved ImOn would have to bring the site into compliance. All basic utilities are required to conform to S3 screening requirements by themselves and since this is located in the Towncrest Overlay District the hub would have to go through a staff design review process With regards to the specific standards: In all commercial zones, the RDP and ORP zones, and the ID -C and ID -RP zones, basic utilities not enclosed within a building are permitted only by special exception. Proposed uses must be screened from public view and from view of any adjacent residential zones to at least the S3 standard. In addition, the applicant must provide evidence that the proposed use will be compatible with surrounding structures and uses with regard to safety, size, height, scale, location, and design, particularly for facilities that will be located close to or within view of a residential zone. For uses located in highly visible areas, the Board may consider additional design elements such as masonry or brick facades, and walls or fencing to improve public safety and to soften the visual impact of the proposed use. Findings are the proposed project is located in the Towncrest Overlay District and must go through the staff design review process that evaluates material quality, screening, and neighborhood compatibility. The applicant has shown S3 screening and plans to surround the building with a six-foot opaque fence. The proposed structure is not adjacent to any residential zone although the lot is across the street from a residential zone. Lile showed a rendering of the proposed structure, it will have a brick fagade, it will be 10 feet tall and have a smaller footprint then the surrounding structures at 12x16. The proposed structure will be located at the rear of the lot and not highly visible and screened by the abutting 20 foot retaining wall in addition to the other screening required. With regards to the general standards: 1. The specific proposed exception will not be detrimental to or endanger the public health, safety, comfort or general welfare. The proposed communication system is a low voltage (48 volt) system. The system will be enclosed in a structure with a locked door, preventing access to those not authorized and eliminating public health and safety issues. 2. The specific proposed exception will not be injurious to the use and enjoyment of other property in the immediate vicinity and will not substantially diminish or impair property values in the neighborhood. The proposed hub will allow for another internet service provider in Iowa City and increase bandwidth capabilities. The proposed hub would require a small generator to power it. Any noise it gives off would be mitigated by the proposed fence and existing retaining wall. Additionally, this site does not abut residential properties although the lot is across the street from a residential property. 3. Establishment of the specific proposed exception will not impede the normal and orderly development and improvement of the surrounding property for uses permitted in the district Board of Adjustment July 10, 2019 Page 10 of 12 in which such property is located. The lot at 2211 F Street is fully developed, as are the surrounding lots. The structure will follow all setbacks and is proposing landscaping improvements to the site. Lile showed a rendering of the proposed building and landscaping, it is at least three feet off the property line and landscaping and screening proposed surround the parking and the hub itself. 4. Adequate utilities, access roads, drainage and/or necessary facilities have been or are being provided. The area is fully developed with access to utilities and other necessary facilities 5. Adequate measures have been or will be taken to provide ingress or egress designed to minimize traffic congestion on public streets. The proposed structure is located on a lot that has adequate circulation and parking. This use would not increase traffic in the area substantially as it would only need occasional maintenance after construction. 6. Except for the specific regulations and standards applicable to the exception being considered, the specific proposed exception, in all other respects, conforms to the applicable regulations or standards of the zone in which it is to be located. This property is in compliance with the zoning code in all aspects aside from the parking lot landscaping, which the applicant has addressed. This project complies with the Community Commercial (CC -2) standards in all other aspects. 7. The proposed exception will be consistent with the Comprehensive Plan of the City, as amended. The Central District Plan encourages the development of businesses that provide goods, services and amenities to the neighborhood such as internet service. Staff recommends approval of EXC19-06, a special exception to allow a basic utility in a Community Commercial (CC -2) zone in order to build a telecommunication hub located at 2211 F Street. Hazell noted the landscaping plan is ambiguous and will be decided in the future and wondered if it was because the Towncrest Overlay. Lile confirmed it will need to go through a design review and also the S2 standards require certain heights and species. Hazell asked if they needed to follow S2 or S3 for this exception. Lile stated they must follow both, the site needs to be screened S2 and the parking lot for the site is currently not screened, which is why the site is currently non-compliant. The hub will need to screened S3 standards, it would have the S2 screening in front of it and S3 screening would be the fence in front of the hub itself. Hazell asked what the purpose of the generator versus them just using power. Lile believes so it won't go off-line. Goeb opened the public hearing. Barnard Dutchik (ImOn Communications) has been in Iowa City for about two years serving businesses and have now begun serving residential areas using existing hubs. This new hub would be used for continued expansion, roughly a hub can serve 400 homes or addresses. These are self-contained units, all the equipment is inside, the generator is only used when the Board of Adjustment July 10, 2019 Page 11 of 12 power is out for a certain period of time, and they also use battery backups. The goal is to keep internet service on as long as they can if there is a power outage. The hub will contain fiber optic equipment, they would be the first fiber optic internet provider in Iowa City to homes. Goeb asked if hubs were geographically located. Docheck said generally they try to locate a hub centrally to a service area. He corrected that each cabinet serves 400 homes and each hub contains multiple cabinets. So this hub can serve 2000 to 3000 homes, they try to centralize the hubs to not have to run fiber lines to far. They try to balance it by looking for commercial areas to build the hubs and this one made sense as it will abut the /Walgreens property. They will lease the property they build this hub on. Joe Meyers spoke with Thomas Rogers, who is the land owner and had no problem with constructing this hub, there are some benefits to him such as ImOn will take care of lawn care and property upkeep. He added the generator is necessary as there will be active equipment in the structure and a natural gas line will be ran into the structure as well because that is what the generator will run from. Meyers is working with a landscaper and he recommended an Emerald Arborvitae for the space between the two parking lots which will be about 6 feet high. The neighbor did say they push snow into that area so that may be a hindrance to have trees but the neighbor seemed okay. Goeb asked what is on the west side of the property. Meyers said there was a dry cleaning business to the east as well as a small apartment complex or business. Goeb closed the public hearing. Hazell said it appears the applicant meets the requirements and also he is in favor of providing more competition in the internet business as a positive to all residents of Iowa City. Pretorius concurs. Goeb agrees and drove by the site and it looks like a good spot. Hazell moves to approve EXC19-06, a special exception to allow a basic utility in a Community Commercial (CC -2) zone in order to build a telecommunication hub located at 2211 F Street. Pretorius seconded the motion. Pretorius stated that regarding agenda item EXC19-06 she concurs with the findings set forth in the staff report of July 10, 2019, and conclude the general and specific criteria are satisfied. So unless amended or opposed by another Board member she recommends that the Board adopt the findings in the staff report as our findings with acceptance of this proposal. Hazell seconded the findings of fact. A vote was taken and the motion carried 3-0. Goeb stated the motion declared approved, any person who wishes to appeal this decision to a court of record may do so within 30 days after this decision is filed with the City Clerk's Office. Board of Adjustment July 10, 2019 Page 12 of 12 ADJOURNMENT: Pretorius moved to adjourn this meeting. Hazell seconded. A vote was taken and the motion passed 3-0 BOARD OF ADJ USM ENT ATTENDANCE RECORD YEAR 2018-2019 NAME TERM EXP. 2114 519 6113 818 12/12 2113 3113 4110 518 7110 COX, ERNIE 12/31/2020 -- -- - -- - - OIE X X O/E GOEB, CONNIE 12/31/2019 O/E X X X X O/E X X X X HALL, RYAN 12/31/2022 X X X X X X X X X 0/E HAZELL, ZEPHAN 12/31/2021 -- - - - -- X X X X X PRETORIUS, AMY 12/31/2023 -- - - -- - X X X X X KEY: X = Present O = Absent O/E = Absent/Excused NM = No meeting --- = Not a Member Item Number: 14. July 25, 2019 Community Police Review Board: July 11 ATTACHMENTS: Description Community Police Review Board: July 11 DRAFT COMMUNITY POLICE REVIEW BOARD MINUTES — July 11, 2019 CALL TO ORDER: Vice -Chair Galpin called the meeting to order at 5:32 p.m. MEMBERS PRESENT: Sam Conaway, Monique Galpin, Orville Townsend MEMBERS ABSENT: Latisha McDaniel, David Selmer STAFF PRESENT: Staff Chris Olney, Legal Counsel Patrick Ford STAFF ABSENT: None OTHERS PRESENT: Iowa City Police Captain Denise Brotherton RECOMMENDATIONS TO COUNCIL (1) Accept CPRB FY19 Annual Report (2) Accept CPRB report on Complaint #19-01 CONSENT CALENDAR Motion by Townsend, seconded by Conaway, to adopt the consent calendar as presented or amended. • Minutes of the meeting on 06/11/19 Motion carried, 3/0, McDaniel and Selmer absent. NEW BUSINESS FY19 Fiscal Year Report — The Board reviewed the draft annual report, no changes were made. Motion by Townsend, seconded by Galpin, to forward the draft FY19 annual report to the City Council. Motion carried, 3/0, McDaniel and Selmer absent. OLD BUSINESS None. PUBLIC DISCUSSION None. BOARD INFORMATION Townsend reported that he had attended the June 18th City Council meeting to recap the purpose of the Boards proposed amendment to the Ordinance and By -Laws regarding a Council Liaison. Olney added that the requested Ordinance change would be on the July 16th Council agenda to be voted on for first consideration and Board members were welcome to attend. STAFF INFORMATION None. CPRB July 11, 2019 DRAFT EXECUTIVE SESSION Motion by Galpin, seconded by Townsend to adjourn into Executive Session based on Section 21.5(1)(a) of the Code of Iowa to review or discuss records which are required or authorized by state or federal law to be kept confidential or to be kept confidential as a condition for that government body's possession or continued receipt of federal funds, and 22.7(11) personal information in confidential personnel records of public bodies including but not limited to cities, boards of supervisors and school districts, and 22-7(5) police officer investigative reports, except where disclosure is authorized elsewhere in the Code; and 22.7(18) Communications not required by law, rule or procedure that are made to a government body or to any of its employees by identified persons outside of government, to the extent that the government body receiving those communications from such persons outside of government could reasonably believe that those persons would be discouraged from making them to that government body if they were available for general public examination. Motion carried, 3/0, McDaniel and Selmer absent. Open session adjourned at 5:39 P.M. REGULAR SESSION Returned to open session at 6:13 P.M. Motion by Conaway, seconded by Townsend to accept the CPRB report on Complaint #19-01 and forward to City Council as presented. Motion Carried 3/0, McDaniel and Selmer absent. TENTATIVE MEETING SCHEDULE and FUTURE AGENDAS (subject to change) • August 13, 2019, 5:30 PM, Helling Conference Rm • September 10, 2019, 5:30 PM, Helling Conference Rm • October 8, 2019, 5:30 PM, Helling Conference Rm • November 12, 2019, 5:30 PM, Helling Conference Rm ADJOURNMENT Motion for adjournment by Townsend, seconded by Conaway. Motion carried, 3/0, McDaniel and Selmer absent. Meeting adjourned at 6:16 P.M. COMMUNITY POLICE REVIEW BOARD ATTENDANCE RECORD YEAR 2018-2019 (Meeting Date) KEY: X = Present O = Absent O/E = Absent/Excused NM = No meeting --- = Not a Member TERM 8/21/18 9/11/18 10/9/18 11/13/18 12/11/18 1/8/19 2/20/19 3/12/19 4/9/19 4/29/19 5/14/19 6/11/19 7/11/19 NAME EXP. Donald 7/1/19 X X O X X X X X X X X X King Monique 7/1/20 X X X X X X X X X X X X X Galpin Orville 7/1/20 X X X X X X X X X X X X X Townsend Latisha 7/1/21 ------ ------ X O X X O X X X X X O McDaniel David 7/1/21 O X O X O X O X X X X X O Selmer Sam 7/1/23 _ X Conaway F � KEY: X = Present O = Absent O/E = Absent/Excused NM = No meeting --- = Not a Member COMMUNITY POLICE REVIEW BOARD GENERAL RESPONSIBILITIES Established in 1997, by ordinance #97-3792, the Iowa City Police Citizens Review Board formerly known as Citizens Police Review Board and now known as Community Police Review Board (hereafter referred as the CPRB), consists of five members appointed by the City Council. The CPRB has its own outside legal counsel. The Board was established to review investigations into claims of police misconduct, and to assist the Police Chief, the City Manager, and the City Council in evaluating the overall performance of the Police Department by reviewing the Police Department's investigations into complaints. The Board is also required to maintain a central registry of complaints and to provide an annual report setting forth the numbers, types, and disposition of complaints of police misconduct. The Board shall hold at least one community forum each year for the purpose of hearing citizens' views on the policies, practices and procedures of the Iowa City Police Department. To achieve these purposes, the Board complies with Chapter 8 of the Iowa City Code and the Board's By -Laws and Standard Operating Procedures and Guidelines. ACTIVITIES AND ACCOMPLISHMENTS FOR FISCAL YEAR 2019 Meetings The CPRB tentatively holds monthly meetings on the second Tuesday and special meetings as necessary. During FY19 the Board held twelve meetings and one Community Forum. ICPD Policies/Procedures/Practices Reviewed By CPRB The ICPD regularly provided the Board with monthly Use of Force Reports, Internal Investigation Logs, Demographic Reports and various Training Bulletins. The Department also provided various General Orders for the Board's review and comment. A senior member of the Police Department routinely attended the open portion of the CPRB meetings, and was available for any questions Board members had regarding these reports. Presentations In April of 2019 the Board held its eleventh Community Forum as required by the City Charter. Board members were introduced and a summary given of the boards duties. Chair King then introduced Police Chief Matherly. Chief Matherly presented an overview of the police department and spoke about the departments excellence in service mission. Captain Denise Brotherton gave a summary of the responsibilities of the Police Department Support Services Division. She spoke about how the police department is actively pursuing many avenues to reach out to the public through events, brochures, school visits and overall being assessable to everyone in the Community The forum was then opened to the public for questions. There were three members of the public that spoke at the forum. Topics included appreciation to the Chief, deer management issues, concerns regarding School safety and training of Officers, Data Driven Justice Initiative (DDJ Grant). Board members spoke briefly about the complaint process and available informational pamphlets. CPRB Annual Report FY 2019 — Approved 7/11/2019 — 1 Board Members In October 2018 officers were nominated with Don King as Chair and Monique Galpin as Vice -Chair. Latisha McDaniel was appointed in September 2018 to fill the unexpired term of Royceann Porter. COMPLAINTS Number and Type of Allegations Three complaints (18-02,19-01,19-02) were filed during the fiscal year July 1, 2018 — June 30, 2019. Two public reports were completed during this fiscal period (18-01,18-02). Two complaints filed in FY19 are pending before the Board (19-01,19-02). ALLEGATIONS Complaint #18-01 Allegation 1- Failure to perform duties Board's Findings: Allegation 1 — Failure to perform duties - Not sustained The board affirmed the opinion set forth in the report of the police chief and/or city manager. Chief's Report Findings: Allegation 1 — Failure to perform duties - Not sustained Complaint #18-02 Allegation 1- Improper Investigation Board's Findings: Allegation 1 — Improper Investigation - Not sustained The board affirmed the opinion set forth in the report of the police chief and/or city manager. Chief's Report Findings: Allegation 1 — Improper Investigation - Not sustained Allegation 2- Misinformation on collision report Board's Findings: Allegation 2 — Misinformation on collision report - Not sustained The board affirmed the opinion set forth in the report of the police chief and/or city manager. Chief's Report Findings: Allegation 2 — Misinformation on collision report - Not sustained Level of Review The Board decided, by simple majority vote, the level of review to give each report, selecting one or more of the six levels specified in the City Code per complaint: Level a On the record with no additional investigation 2 Level b Interview or meet with complainant 0 Level c Interview or meet with named officer 0 Level d Request additional investigation by Chief or 0 City Manager, or request police assistance in the Board's own investigation Level a Board performs its own additional investigation 0 Level f Hire independent investigators 0 CPRB Annual Report FY 2019 — Approved 7/11/2019. 2 Complaint Resolutions The Police Department investigates complaints to the CPRB of misconduct by police officers. The Police Chief summarizes the results of these investigations and indicates in a report (the Chief's Report) to the CPRB whether allegations are sustained or not sustained. (If complaints are made against the Chief, the City Manager conducts the investigation and prepares and submits the reports.) The Board reviews both the citizens' complaint and the Chief's Report and decides whether its conclusions about the allegations should be sustained or not sustained. The Board prepares a report which is submitted to the City Council. Of the three allegations listed in the two complaints for which the Board reported, none were sustained. The Board did not make any comments and/or recommendations for improvement in police policy, procedures, or conduct. Name -Clearing Hearings The ordinance requires that the Board not issue a report critical of the conduct of a sworn officer until after a name -clearing hearing has been held. During this fiscal period, the Board scheduled no name - clearing hearing. Complaint Histories of Officers City ordinance requires that the annual report of the CPRB must not include the names of complainants or officers involved in unsustained complaints and must be in a form that protects the confidentiality of information about all parties. In the two complaints covered by the FY19 annual report a total of two officers were involved with allegations against them. ICPD Internal Investigations Logs The Board reviewed the quarterly ICPD Internal Investigations Log, provided by the Chief of Police. COMPLAINT DEMOGRAPHICS The following is demographic information from the three complaints that were completed in this fiscal year. Because complainants provide this voluntarily, the demographic information may be incomplete. Aae: 18-25 26-35 36-45 46-55 56-64 (1) 65+ Disability: (1) Physical Mental None Annual Household Income: 100K 75-99K 50-75K 25-49K (1) Under 25K Gender: (1) Female Male Other Sexual Orientation: LGBTQ Heterosexual (1) Other Ethnic Origin: Black/African-American (1) Hispanic American Indian/Alaska Native Asian/Pacific Islander White/Caucasian Other CPRB Annual Report FY 2019 — Approved 7/11/2019 — 3 Were you born in the United States: (1) Yes No Religion: Muslim None (1) Other Marital Status: (1) Married Single Divorced Separated Widowed Other * Information is reported as presented by the person completing the form. BOARD MEMBERS Don King, Chair Monique Galpin, Vice Chair Royceann Porter/Latisha McDaniel David Semler Orville Townsend CPRB Annual Report FY 2019 — Approved 7/11/2019 — 4 COMMUNITY POLICE REVIEW BOARD A Board of the City of Iowa City 410 East Washington Street Iowa City, IA 52240-1826 (319) 356-5041 7/11/2019 To: City Council S Complainant City Manager --" Equity Director Chief of Police �Je Officer(s) involved in complaint �,.. From: Community Police Review Board Re: Investigation of CPRB Complaint #19-01 This is the Report of the Community Police Review Board's (the "Board") review of the investigation of Complaint CPRB #19-01. BOARD'S RESPONSIBILITY Under the City Code of the City of Iowa City, the Board's responsibilities are as follows: 1. The Board forwards all complaints to the Police Chief, who completes an investigation. (Iowa City Code Section 8-8-7(A).) 2. When the Board receives the Police Chiefs report, the Board must select one or more of the following levels of review, in accordance with Iowa City Code Section 8-8-7(B)(1): a. On the record with no additional investigation. b. Interview /meet with complainant. c. Interview /meet with named officer(s) and other officers. d. Request additional investigation by the police chief, or request police assistance in the board's own investigation. e. Perform its own investigation with the authority to subpoena witnesses. f. Hire independent investigators. 3. In reviewing the Police Chiefs report, the Board must apply a "reasonable basis" standard of review. This means that the Board must give deference to the Police Chiefs report, because of the Police Chiefs professional expertise. (Iowa City Code Section 8-8-7(B)(2).) 4. According to Iowa City Code Section 8-8-7(B)(2), the Board can recommend that the Police Chief reverse or modify the Chiefs findings only if: a. The findings are not supported by substantial evidence; or b. The findings are unreasonable, arbitrary or capricious; or c. The findings are contrary to a police department policy or practice, or any federal, state or local law. 5. When the Board has completed its review of the Police Chiefs report, the Board issues a public report to the city council. The public report must include: (1) detailed findings of fact; and (2) a clearly articulated conclusion explaining why and the extent to which the complaint is either "sustained" or "not sustained ". (Iowa City Code Section 8-8-7(B)(3).) 6. Even if the Board finds that the complaint is sustained, the Board has no authority to discipline the officer involved. BOARD'S PROCEDURE The Complaint was initiated by the Complainant on February 11, 2019. As required by Section 8-8-5(B) of the City Code, the Complaint was referred to the Chief of Police for investigation. The Chief's Report was filed with the City Clerk on May 10, 2019. The Board voted on June 11, 2019 to apply the following Level of Review to the Chiefs Report: On the record with no additional investigation, pursuant to Iowa City Code Section 8-8-7(B)(1)(a). The Board was provided with a copy of all audio and video recordings of the incident. The Board met to consider the Report on June 11, 2019 and July 11, 2019. Prior to the June 11, 2019 meeting, the Board reviewed audio and video of the incident. FINDINGS OF FACT On January 10, 2019 Officers served a search warrant at the Complainants apartment to retrieve stolen property. The stolen property was retrieved during the search. On February 11, 2019, the Complainant filed a CPRB complaint on the Officers who participated in the search warrant. As a rult of the CPRB complaint, a formal investigation was initiated. Four allegations were made in the complaint. The board concluded on all of the allegations. �- ALLEGATION 1 — Excessive force against Complainant's Spouse. Based on video/audio recordings from body cam, the Complainant's spouse was;pt pwshed jko a wall. The board affirmed the opinion set forth in the report of the police chief and/or car manager. Board's Findings: Allegation 1 — Excessive force against Complainant's Spouse - Nosustained Chief's Report Findings: Allegation 1 — Excessive force against Complainant's Spouse - Not sustained ALLEGATION 2 — Excessive force against Complainant. Based on video/audio recordings from body cam, no officer drew their weapons or pointed at the Complainant's face. The board affirmed the opinion set forth in the report of the police chief and/or city manager. Board's Findings: Allegation 2 — Excessive force against Complainant - Not sustained Chief's Report Findings: Allegation 2 — Excessive force against Complainant - Not sustained ALLEGATION 3 — Failure to provide a copy of search warrant. Based on video/audio recordings from body cam, the officer provided a copy of the search warrant to the Complainant. The board affirmed the opinion set forth in the report of the police chief and/or city manager. Board's Findings: Allegation 3 — Failure to provide a copy of search warrant - Not sustained Chief's Report Findings: Allegation 3 — Failure to provide a copy of search warrant - Not sustained ALLEGATION 4 — Wrecked the apartment during execution of search warrant. Based on video/audio recordings from body cam, the Officers retrieved the alleged stolen item and did not disturb any other objects in the residence. The board affirmed the opinion set forth in the report of the police chief and/or city manager. Board's Findings: Allegation 4 — Wrecked the apartment during execution of search warrant - Not sustained Chief's Report Findings: Allegation 4 — Wrecked the apartment during execution of search warrant - Not sustained COMMENTS None. e� Fri r,Yk'1 Item Number: 15. July 25, 2019 Housing and Community Development Commission: July 11 ATTACHMENTS: Description Housing and Community Development Commission: July 11 MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JULY 11, 2019 — 6:30 PM SENIOR CENTER, ROOM 202 MEMBERS PRESENT: Megan Alter, Charlie Eastham, Vanessa Fixmer-Oraiz, John McKinstry, Maria Padron MEMBERS ABSENT: Matt Drabek, Lyn Dee Hook Kealey, Peter Nkumu, [vacant] STAFF PRESENT: Kirk Lehmann, Erika Kubly OTHERS PRESENT: Delaney Dixon, Nicki Ross, Adam Robinson, Amy Greazel, Ellen McCabe, Ron Berg, Michelle Heinz, Missie Forbes, Crissy Canganelli, Christi Regan, Heath Brewer, Ellie Paxson, Genevieve Anglin RECOMMENDATIONS TO CITY COUNCIL: By a vote of 5-0 the Commission recommends to City Council modifications to the Aid to Agencies process and approve FY21 Aid to Agencies forms as with changes as discussed. CALL MEETING TO ORDER: Fixmer-Oraiz called the meeting to order at 6:30 PM. APPROVAL OF THE JUNE 20, 2019 MINUTES: McKinstry moved to approve the minutes of June 20, 2019. Eastham seconded the motion. A vote was taken and the motion passed 5-0. PUBLIC COMMENT FOR TOPICS NOT ON THE AGENDA: Crissy Canganelli (Shelter House) submitted correspondence dated July 2, 2019 to provide corrected information from the minutes of the Human Rights Commission heard by the Commission at their previous meeting. Lehmann read the correspondence: Good Morning. I am writing to provide a correction to information provided to the Human Rights Commission during its May 15, 2019 meeting. The draft Meeting Minutes which are available to the public indicate that County Supervisor Porter reported to the Commission that, "Johnson County just ga ve Shelter House $630, 000. " The Johnson County Board of Supervisors allocated a total of $630, 000 to the Housing Trust Fund of Johnson County which was made available for affordable housing initiatives over the past fiscal year. Of the funds awarded to Shelter House by the HTFJC, $250, 000 came from Johnson County. Funds were awarded as a loan, are repayable to the HTFJC, and were restricted for a new construction project at 820 Cross Park Avenue. The Human Rights Commission minutes were included in the June Housing and Community Development Committee Meeting packet, as such, 1 request this correction in fact be provided to both the Commission and relevant Iowa City staff. Housing and Community Development Commission July 11, 2019 Page 2 of 12 l am deeply grateful for the partnership and support of the City of Iowa City in all aspects of Shelter House programming and would be happy to provide any additional information that would be helpful. Please do not hesitate to contact me by phone or email. Crissy Canganelli, Executive Director of Shelter House RECOMMEND TO CITY COUNCIL MODIFICATIONS TO THE AID TO AGENCIES PROCESS AND APPROVE FY21 AID TO AGENCIES FORMS: Kubly began by summarizing a memo from staff regarding Aid to Agencies (A2A) recommendations dated July 3, 2019. Overall, staff recommends returning A2A to its original intent of providing stable funding for human service agencies serving low- and moderate -income residents based on the priorities set in CITY STEPS. Every five years, these priorities are reviewed. Staff is currently developing the new five-year plan, to be adopted by Council and the federal government by July 1, 2020. During the planning process, staff recommends limiting A2A applicants to a core group of service providers which meet its established priorities. These agencies would then competitively apply based on these priorities, their history of funding, and their capacity. Beginning with FY22, agencies would apply on a two-year cycle. The priorities and agencies allowed to apply would be reevaluated with each new five-year plan to address changing priorities or gaps of service as identified. If needed, the City could modify eligible agencies during the five- year period as well through the Consolidated Plan amendment process. Kubly continued that because the FY21 Joint Funding Application process will begin before the adoption of City Steps 2025, staff recommends limiting FY21 A2A applications to agencies who applied for Legacy funds in FY20, consistent with the expectation of a two-year funding cycle when Legacy agencies applied last year. For the remaining fiscal years covered by City Steps 2025, staff recommends that the Plan identify 15-20 core agencies to be funded through A2A. Applicants will continue to apply through the United Way Joint Funding process. Every two years, HCDC will review and approve the ranking criteria for evaluation of the public service applicants. With the FY21 allocation cycle, staff will rank applications based on these criteria and make a funding recommendation for HCDC to consider. HCDC can recommend changes to staff's recommendation. The HCDC recommendation would be submitted to City Council for their consideration and adoption. Kubly noted staff also recommends discontinuing the emerging agencies set-aside due to available alternative funding opportunities, such as Climate Action Grants and the Social Justice/Racial Equity grants. Project -based CDBG/HOME grants are also available These sources can help agencies build capacity and establish a track record. As an agency demonstrates its ability to meet priority needs and grant requirements, they may be incorporated into the A2A funding cycle based on addressing priorities. Eastham noted that the staff recommendation does not discuss the budget and asked if the Commission can recommend a higher budget amount. Kubly noted the City Manager is leading that discussion and has invited agencies to meet this month prior to the establishment of next year's budget. Fixmer-Oraiz stated that the alternative project grants discussed are unclear as to whether they allow operational funding. She noted it is important for the Commission to show support for agencies to help them get off the ground, and operational funding is often the first step. Eastham added that he would like more discussion with agencies to see how they would like to see newer agencies gaining access to the newer larger agency funding during the five-year City Step timeline. Alter added that in the memo it does note as an agency becomes more established and demonstrates they meet grant priorities and requirements they may be eligible to be incorporated. Alter asked how an emerging agency would be able to prove that if they don't have access to funds to help them. Fixmer-Oraiz suggested the Commission discuss the Agency memo and then take comments from the audience. Fixmer-Oraiz read the memo the Commission received from the Agency Impact Coalition regarding the Aid to Agencies process dated July 10, 2019. Housing and Community Development Commission July 11, 2019 Page 3 of 12 The Housing and Community Development Commission's leadership and determination demonstrated throughout the FY20 Aid to Agencies funding process compelled and inspired local agencies identified by the City of Iowa City as Legacy Agencies to form a coalition known as the Agency Impact Coalition. The Coalition has been meeting regularly with much of the discussions focused on how to better advocate for the work of our organizations and the collective impact we have throughout the community. HCDC is continuing its drive to improving the Aid to Agencies process and recently sent out a survey to solicit feedback from funded agencies. However the survey questions did not get to the heart of recommendations and concerns that have been consistently articulated during Coalition meetings and we realize the majority of our feedback fell under the category of `other". As a result we are submitting this single response, the suggestions below are made in the spirit and hope of creating a better informed and more participatory collaborative process with Aid to Agencies and CDBG/HOME awards. • Inclusion of annual site visits to the funded agencies and more as part of the orientation and onboarding for HCDC members. Local not-for-profit executives bring decades of experience for the complexity and nuances of our services, the constituencies they serve and the challenges we face. This may be time intensive but would create an entirely different context for which to work. • Joint meetings outside the funding cycle for HCDC, not-for-profit executives and neighborhood services development staff to thoroughly debrief City staff on the Annual Action Plan and other relevant plans underpinning and guiding the allocations process for both Aid to Agencies and the annual CDBG/HOME competitions. Components of these conversations can include updates on trends, gaps and needs. • Better leverage of professional experience and practical knowledge of the neighborhood services departmental staff. City staff add valuable perspective which is not being fully integrated into the process and dialogue. • Create a data -driven process that aligns with City Steps and reorganize the dialogue to be driven need as opposed to managing scarcity. • Our collective impact has substantially economical multipliers and substantial benefits that positively impact our community. Is there a method to more formally recognize this to better inform policy makers and as a component of the City's annual budget process. • Specific to the applications and review therein, assure additional questions to the applicants are standardized and made available to everyone in advance. In addition to these suggestions we support staff recommendations made at the July 3, 2099 memo to HCDC and the approaches recommended to reorient the process back to the original intent of "providing a stable funding source for human aid agencies serving LMI residents aligning funding with priorities set in City Steps" Please note it is with the highest regard we write, members of this Commission have approached their charge with determination, integrity and compassion and empathy. You have languished over the decisions to be made and taken an unprecedented and bold position to which the Council responded. Please note you have inspired and motivated us, we are eager to work more collaboratively to face the challenges and opportunities ahead and recognize we come with a common intention of improving the health, safety and wellbeing of our community. Fixmer-Oraiz stated for the record she is deeply moved by this memo and thanked the Coalition for putting it together, HCDC appreciates and recognizes the absolute impact the agencies have on our community which is why HCDC feels so passionate about making this work. Eastham would appreciate hearing overall thoughts on the question of setting.an amount for Aid to Agencies in the City's budgeting. He wants to understand what the agencies are actually interested in, is it the overall amount of agency funding or if it is a single, reliable process for knowing how much funding the City is going to provide from year to year for each agency. Crissv Can aq nelli (Shelter House) responded by saying they are interested in both. The City Manager reached out to the agencies and asked if they would be able to meet as Kubly mentioned before the end of the month. Canganelli added that this cannot be separated into parts, it is all connected, and they want to build relationships and have more of a participatory and collaborative process which allows all groups Housing and Community Development Commission July 11, 2019 Page 4 of 12 to learn from one another. She noted that the City has never looked at funding as to what is the need versus managing scarcity. In the past it has been approached from the managing scarcity end. She added they need to understand they all want to do good and do the good work well, they don't understand what the baseline is yet, so they need to work better together to inform that, she has every confidence they will be able to move that line item up. There are other parts of the conversation as well, they need to look at how agencies could manage resource differently, and open things up in a different way. Eastham said the process staff proposed says the annual amount of Aid to Agencies funding is going to be determined through negotiations between agencies and the City Manager directly. He notes that might work out well but wants to know if agencies have an idea for the role of the HCDC in that process. Canganelli said the Commission brings the balance to the conversation, it should be a combination of all three parts. She doesn't feel is it up to the agencies to define who plays what role or how much of a part, but they want to segment out the different voices within this process to avoid excluding them, so the combination would be City staff, HCDC, and nonprofits informing the conversation from an early point. Not only in the budgeting process but also for the Commission to get to know the agencies a little more before they are at the point of reviewing and analyzing applications. Alter said it is a relief to hear of a desire for a more collaborative process, it is too much to shoulder on one part. She loves the idea of annual site visits and would like to increase those. The site visits HCDC did recently really helped make everything fall into place for her and makes it real. They got to have candid conversations with residents, staff, and executive directors. Fixmer-Oraiz liked adding to the conversation the trends, gaps, and needs to take into consideration. She feels it will be important to learn what agencies are seeing and experiencing versus an application. She notes there is a need for collaboration and everyone having a better understanding of one another. Fixmer-Oraiz wonders when the Agencies meet with the City Manager if it would be beneficial to have a member of HCDC present. Eastham agrees it would be helpful. Eastham liked the memo, the name Agency Impact Coalition, and the points about creating a data -driven process and looking at collective impact. The collective impact point is intriguing, Padron put together a data -filled PowerPoint presentation which helped persuade Council, so the more data the better. Fixmer-Oraiz wants to look at short- versus long-term goals, things that could be accomplished easily such as increasing site visits, and wants to discuss actionable items to take from this conversation. Lehmann said staff has discussed some of these ideas in terms of short- and long-term items. He said the idea of having liaisons to schedule site visits is a good one, with nine commissioners there would be two or three agencies per person, and that could be accomplished early into this fiscal year and have the liaisons schedule visits for the different sites. Padron said the liaison would schedule the visit but every commissioner would have the freedom to go on the visit. Lehmann said that would be correct, and if they could avoid having more than four at one visit it would help logistics to avoid having trips be a formal meeting. Lehmann said with regards to the timeline review, he likes the idea of joint meetings outside of the funding cycle for nonprofit executives, staff, and HCDC to meet at one of the HCDC's meeting for an agency debrief and discussion. Eastham would like site visits and the conversational get together but also likes the idea of staff making a funding recommendation which has not been done in the past. Lehmann agreed and noted he matched the questions on the application to a point system staff would use to make recommendations. He wants there to be transparency on how decisions are being made for staff recommendations. Alter asked if there has been discussion amongst staff or the agencies regarding the prioritization of high, medium and low priority, because it has been something they have struggled with. Lehmann said for the Housing and Community Development Commission July 11, 2019 Page 5 of 12 next year's funding cycle, where the new City Steps will not be done yet, it will be incorporated into one of the questions on the scoring criteria under community need, the need has to be listed as a high priority to get all 15 points, but the difference from a high to medium priority throughout the whole application however is only a difference of two points out of 100. In the future the City Steps will discuss how to prioritize or reallocate priorities based on the survey, which explicitly mentions priorities, and try to use the general public input rather than just HCDC. Lehmann feels there needs to be some sort of prioritization. Alter said often high priorities are at crisis level with high need and high impact but the flip side low priorities are often preventative or helping to avert crisis so she would hate to lose those. It will be important to remember that when looking at data and the results from the survey. Fixmer-Oraiz read a comment received on the survey. '7 believe the choices made regarding low, medium and high priority are somewhat subjective, children services are important as are women services, aging services and mental health. My fear is when start segregating groups in this way it minimizes growth opportunities for programs and hurts populations in our community that simply don't have access to other resources. Maybe if there was more clarity in how/why the rankings came to be it wouldn't be as much of a concern. " Fixmer-Oraiz just wanted to put that quote out there because it speaks to the subject at hand. Fixmer-Oraiz asked where the rankings came from, she assumes City Steps. Lehmann believes they came from HCDC after City Steps was adopted. Genevieve Anglin (United Action for Youth) noted that it has been difficult that her agency does a lot of different things but because they have the word youth in their title they have always been classified into youth services. Over half their budget is used for homeless services and mental health services, so that complicates how they answer the questions on the application. Fixmer-Oraiz feels there needs to be a discussion on what questions should be on the application, a discussion between the Commission and the agencies so they don't miss the mark. However they are at the point now where the funding cycle is upon them so they will have to put up with some of the issues, there won't be time for a total overhaul. McKinstry stated he was pleased the Agency Impact Coalition was supportive of the staff recommendations and staff is supportive of the agencies so that is a good basis to proceed, looking at the points both have made and fuse them together. Fixmer-Oraiz asked if it is as simple as to adopt the Agency Impact Coalition's and staff memo recommendations. Lehmann said what would be good to go through the main framework in the staff memo and add in the items (maybe all) from the Coalition memo and then go through the ranking criteria so there is a basis for ranking this year and next year it can be tweaked after City Steps is complete. Kubly added they will need to adopt the draft application or make suggestions for changes so it can be given to The United Way to be released. Fixmer-Oraiz suggested they discuss from the staff memo the emerging agency funds, and asked if the two new funding sources were project based grants or could they be operational. Lehmann said they are project based but believes an agency could pay for staff. Fixmer-Oraiz noted keeping the emerging agency funds would be good because there just aren't a lot of funds available for operations and the category was created with an amount based on staff salary. Lehmann said the $15,000 for legacy funding was created due to staff salary needs — not the $5,000 minimum for emerging agency funds. Eastham suggested a recommendation that the other two sources of funds, social justice grants and climate action grants be available for operational needs. Kubly said they could make that recommendation but they do not have the authority to make that change. Lehmann suggested that HCDC send a representative to each of those commissions to make that recommendation during their public comment process. Lehmann said from staff perspective it is nice to have the distinction between project based and operational grants because project based grants have very concrete accomplishments whereas operational funding is harder to evaluate success. Fixmer-Oraiz said that is why most grants won't fund operations and why perhaps HCDC should keep the emerging agency funding set-aside. Housing and Community Development Commission July 11, 2019 Page 6 of 12 Lehmann said if HCDC is adopting the staff memo as their recommendation the Commission will need to add something about having Council look for funding sources, perhaps the two listed or others, to fund operational costs for newer agencies to help them get off the ground. Fixmer-Oraiz noted the surrey had a few comments supporting the emerging agency funding and others that said it wasn't enough funding to even help. Fixmer-Oraiz feels they need to keep the emerging agency funds and perhaps with this data - driven process they can show the need for increasing the amount of funding to emerging agencies. Padron asked overall how this new process will be more permanent or secure for the legacy agencies. Is the only difference the five years? She thought there would be a group of agencies, older agencies, who will get money for sure every year, but if there is a process of ranking and voting then how are we assuring them they will get the money every year. Lehmann said with staff recommendations, there should be more consistent viewpoints over time, whereas with HCDC every year the membership changes by at least three people and that can change the direction. Additionally concrete ranking criteria should provide more stability. Padron said in the few years she has been on the Commission even with clear ranking criteria people find a way to rank differently so she would like to ask Council to commit to a certain amount for some agencies. Fixmer-Oraiz said that is the hope of the meeting between the Coalition and the City Manager to come to an agreement for stabilization. Padron asked if it was possible to just promise some agencies an amount of money for several years, they would still have to apply and have applications reviewed, but less ranking and more like an entitlement grant. Lehmann said theoretically that is possible, but that is very different from what has been done. Padron doesn't feel the process described in the staff memo is different than what is being done now, other than the five years of funding, but could be stuck for five years with a low amount of funding. Fixmer-Oraiz said that is why she wanted to focus on short-term and long-term goals, changes they could make tonight and then others that would need further discussion. McKinstry added this is a political process, new City Council members are elected all the time, HCDC members change, needs in the community change, there are many variables so there needs to be some flexibility. He appreciated the Agencies noted that part of their job is to inform the community about what they do so Council members could have the correct information and create relationships with agencies and make decisions. He feels getting started in the process earlier and being more collaborative will help. Alter stated there are however some constants, need is there, the executive directors and people working in these agencies are subject matter experts and know best what the needs are and how to best use the funds. She added having stability would help agencies do the work they need instead of going through this process every year or couple of years. And then if there is a spike in trends or crisis moment agencies can modify or amend ongoing needs to show the new needs. Alter agrees with Padron that doing this would be radical but having bureaucracy not be a barrier. Fixmer-Oraiz stated the only real answer moving forward is to be more collaborative and to have open communication to make sure changes are made and informed. She feels a recommendation at this time would be to adopt the staff memo with the additions from the Coalition memo, she added she would like to keep the support of the emerging agency funds. Eastham agreed and added the City Manager needs to hear clearly what amount of funding Aid to Agencies needs to be. The recommendation is the staff memo recommendation, paragraphs one through four, plus the Agency Impact Coalition memo points integrated, with the addition of a HCDC liaison to each agency for site visits recommended in bullet point one, paragraph five from the staff memo would be edited to note HCDC recommends continuing the emerging agency funding at its current 5% set aside. Eastham agrees but adds Council should still look at the other two sources of funding for emerging groups. With regards to the application, staff is interested in asking for LMI breakdowns in question six, which says "provide us with succinct specific description of your primary target population, describe client groups in terms of their primary needs and strengths, what barriers do they face. If the agency serves a regional area provide percent of overall clients that are Johnson County residents." Lehmann said the way they have graded that in the past is specific to 30% area median income or equivalent, 50% AMI or equivalent or 80% AMI or equivalent. He said they could potentially include that in a separate question in the appendix for agency demographics, knowing not all agencies have this data so they could say "or provide strong evidence of AMI served" or leaving it open to have "or those at similar standard of income level such as Housing and Community Development Commission July 11, 2019 Page 7 of 12 poverty line" leaving it open for the agency describes their services Fixmer-Oraiz is curious of the agency perspective on this question of providing LMI demographics and the points assigned to the LMI. Having the data helps HCDC with their deliberations but she knows not all track the data, such as Free Lunch Program or Table to Table. Chelsey Markle (the Arc of Southeast Iowa) said it is complicated for them, they do disability services and it is not necessarily a large LMI population but the funding received goes 100% towards the ones who can use the services. Fixmer-Oraiz asked if there was any way to just offer a comment box for the agencies to allow agencies to explain special situations. A member of the audience who was a former Table to Table board member stated a comment box would be very helpful so they could explain they do not keep actual statistics on the people who are eating the food, however they do their due diligence with the organizations who are giving out the food. Lehmann said adding a comment box to every question would double the number of questions which complicates the application. McKinstry suggested just one extra question at the end that is an open comment box to address in detail answers to questions above. Fixmer-Oraiz feels that could get complicated and would rather have a comment box after each question and go for quality and not worry about quantity of questions. Alter noted the LMI in particular, time and time again is hard to quantify when filling out the scoring if there isn't LMI data and it is such a large chunk of points and the comment box would be useful. Fixmer-Oraiz noted there was a comment in the survey about the funding question and the way it is asked in the application doesn't fit every organization. Lehmann said there have been questions/issues with the financial fee structure question as well as Form C and the auto calculations also causes hiccups. Kubly believes those hiccups have been resolved but will check with United Way to make sure it is taken care of. Lehmann said the Commission discussed cutting down the financial section, he as staff would primarily look at agency revenues, expenses and in-kind support, that he doesn't look as closely at fund balances or restricted funds so that may simplify the application. Padron is interested to see how much goes out to the programs and how much is salaries and operations. Lehmann said that is split out in the expenses. The Commission agreed they would only need a comment box for question six regarding the LMI served or benefits to LMI populations. Fixmer-Oraiz also noted they would need to be clearer moving forward to let the agency partners know when they needed to attend meetings for questionstanswer periods. Kubly asked if they will be doing a memo to Council with all these recommendations included. Fixmer- Oraiz agreed it would be best, have staff put together a memo and the chair will sign it. Lehmann said the final piece is the scoring criteria. First is taken directly from question one "what specific need of the community is being addressed" so the first criteria is community need. 15 points describes a high priority need the completely addresses the community need and will solve the need; 10 points is high priority which addresses the community need and would have a major impact; 8 points would then be medium or low priorities that completely address the community need and have impact; 3 points for indirectly supporting the need or no supporting documentation or statistics, significant areas are missed in addressing the area; 0 points if it is not identifying a need described in City Steps. McKinstry stated there are high quality agencies and people who provide good documentation and while it may be hard to differentiate high from medium or low priorities (they are all priorities) he doesn't have any recommendation for a better system. Housing and Community Development Commission July 11, 2019 Page 8 of 12 Fixmer-Oraiz feels this is an area the Commission needs to work on, it's not perfect, so maybe keeping it as is for this round but digging into it in the future. Lehmann said with this new system staff will score all the applications, provide a rationale for the scores to the Commission and then the Commission will decide if they accept the staff recommendations or wish to make changes. Lehmann reviewed the rest of the other questions and scoring and the Commission agreed it was a good range of scores and criteria to move forward. He also noted they would look at the previous year's applications to note progress and outcomes from the agencies on previous awards. Fixmer-Oraiz noted that outcomes questions can be quantitative and some are qualitative, for example Habitat for Humanity does great work, but serves less people than other agencies. Eastham noted it must be looked at by individual agency, how their outcomes benefit the people they serve and compare to similar agency, such as did this Habitat chapter serve the same number of people that another Habitat chapter did and that is what they should be asking for. Lehmann liked that idea, they struggle with the depth of service versus the breath of service. Alter felt there is no need for some many categories or ranges of outcomes, it should be an either you are doing it or not. Lehmann agreed and noted staff can use its knowledge of other agencies to know what is happening. They also look at the success and experience of working with agencies in the past. Fixmer-Oraiz suggested combining the last two scoring criteria into a single question. McKinstry moved to recommend to City Council modifications to the Aid to Agencies process and approve FY21 Aid to Agencies forms as with changes as discussed. Alter seconded the motion. A vote was taken and the motion passed 5-0. REVIEW AND DISCUSS THE SOUTH DISTRICT HOME INVESTMENT PROGRAM: Kubly updated the Commission, noting staff went back to Council in May because staff was having trouble locating properties. Since then, they located a property and have a purchase agreement out that will go to Council next week (1232-1234 Sandusky Drive). The purchase price is $124,000 for the duplex so they are excited about the affordability of the property. It is currently vacant because it sustained fire damage earlier this year and tenants were relocated after the fire. Eastham asked if there were any insurance proceeds used to repair the fire damage. Kubly assumes there were for the property owner at that time. Lehmann added one of the units was already stripped down to the studs so that will make the renovation on that unit easier. After the fire, the owners replaced the roof and furnace. This is a side-by-side duplex so it will be two units. Of the two tenants that were renting the units, one left the state but the other might be interested in purchasing one of the units. Kubly stated even with the fire damage they are confident they can repair and rehab the units within the budget. They will have to condo the units so they can sell them separately and there is a building code/fire requirement that may have some additional costs. Eastham asked if staff was proposing to proceed with selling the units to a program qualified buyer under the requirements of the South District Home Investment Program, which was already approved by Council but now the purchase has to go back to Council. Lehmann said Council directed staff to reach out to property owners to locate properties based on the staff South District memo from December. Kubly said this specific acquisition will go before Council next week. Eastham asked the Commission to discuss the modifications to the Program as proposed by Habitat. Heath Brewer (Executive Director, Iowa Valley Habitat for Humanity) stated in terms of the purchase of property and the larger portion of investment the City would have to make is to stabilize the neighborhood by balancing affordable homeownership opportunities with affordable rental options and they understand Housing and Community Development Commission July 11, 2019 Page 9 of 12 it will not be easy because the City has struggled to find properties. However, Brewer feels opportunities will come along, but meanwhile the City can partner with Habitat to make homeownership in that neighborhood attainable and Habitat will be in that neighborhood for likely three to five years to have a more holistic neighborhood revitalization plan. They have outlined this all in a three year plan in ways to engage the neighborhood whether they are renters, homeowners, landlords, or any stakeholder in the South District. They hope to not only renovate previous rental properties for homeownership for residents in the South District, but to also use educational classes to prepare families for this transition. Brewer recognized it might take some time but they are willing to make this investment and purchase the properties, rent them out while helping renters to transition to homeownership. Habitat plans to be part of this neighborhood and work with residents to do many different things. They need to look at how to serve the aging population that is many of the homeowners in that area, how they serve homeowners with disabilities, how do they beautify the neighborhood and maintain the space a little better. They are looking at this as a neighborhood revitalization project, there is actually a branded program through Habitat International that gives them guidance. McKinstry stated there was an actual track record showing how this was done in other areas. Brewer acknowledged that there was and there was a neighborhood in Memphis that did similar projects to what they want to accomplish here in Iowa City's South District. He stated they understand the benefits of the neighborhood and how they are accessible, although the bus line is not as accessible as they would like it to be, but there are schools, parks, recreation and lots of opportunities and they can help organize community partners to work with and he sees neighborhood revitalization being a bigger part of what they Will be doing, even if not funded by the City. He stressed it is more than just the buying of the houses, it is a long-term approach to lifting up a neighborhood. Fixmer-Oraiz asked if Brewer could talk through a scenario where they would identify a building currently being rented and what will happen to the renters in the house. Brewer stated one reason they are involved is because Council stated they did not want any involuntary displacement of residents and as they go in and purchase homes they will agree to allow the renter to continue renting, they may need to adjust rents, but the hope is the renter will want to turn into a buyer and Habitat will help them assess their finances and ability to borrow money and how they can help them. As long as the renter wants to stay in a unit they will allow it. Once the renter is either able to purchase or decides to leave on their own accord, then Habitat would sell the property. Fixmer-Oraiz asked what would happen if it is not feasible to do rehab while the renters are living there. Brewer said the renovations will ideally be done when the units are vacant. If they are renovating a home so the current renter can purchase it, they may have to relocate that renter for a bit of time while the renovations are completed. Lehmann asked if there are any renovations Habitat might do while a tenant was living in the space. Brewer said it would depend on the project, they might be able to do some work on the units without disturbing the residents too much. They will need to have vacant units to do some work however, they plan to replace all the systems with high efficiency units, install high rated insulation, the goal being to have a holistically affordable unit when completed. The units need to be affordable not only for purchase but to live in for years to come. Habitat has great partnerships, they get all their appliances donated from Whirlpool, so they don't have to spend their budget on appliances, they get paint donated, etc. Fixmer-Oraiz asked about home maintenance, is there training for the new homeowners on maintaining a home. Brewer said they offer homeowner education that covers minor repairs and home maintenance. He is also hoping for opportunities for the homeowner to help with renovations, obtain some sweat equity. It will not be required however as it is with a traditional Habitat family. The hope is to control the costs enough and keep the renovation costs down and utilize down payment assistance to make it affordable and partner with local lenders so Habitat would not be the mortgage lender. McKinstry feels this is an exciting project and great for the neighborhood and City. Eastham read the proposal carefully and thinks it is a well thought out and a very beneficial plan. He has a couple suggestions of possible changes. One, is to lower the costs or arrange financing so lower income buyers are eligible, many of the renters on Taylor and Davis streets don't have incomes in the $30,000 range and are actually in the less than $25,000 range. Brewer said the number they were Housing and Community Development Commission July 11, 2019 Page 10 of 12 aiming to be below was the average rent for a two bedroom in that area, which is $1100 but understands Eastham's point and will look at their numbers and try to make it work at a lower cost. The other point Eastham wanted to make was he does not agree with the notion of removing rental units from that part of town, many people he has talked to in the area object to removing rental units. Residents may be interested in purchasing houses in other parts of the South District that are not Taylor and Davis. His preference is to not buy rental units and change them to homeownership but to buy units that are already owner -occupied and make them affordable homes. Brewer said the City got involved due to an effort to balance rental and homeownership because studies show homeownership promotes resident stability. Eastham believes those studies are wrong. Brewer also noted that to purchase other homes in the South District, single family homes, the purchase price is higher and therefore might not be as affordable. Eastham surveyed properties using the City Assessor's website looking at houses sold in the last one to two years in the South District and there are a fair number being sold for $150,000 or less. Some may be condominiums or multi -family units but people may have interest in buying those. One of the first comments Eastham heard when this idea was being talked about a year and a half ago was the City is offering people to buy something only on those two streets in the South District and people are looking for more opportunities in the larger area. Eastham feels Habitat is a good organization to work on this because they will work with the residents, find out what they want, and meet their interests. Brewer agreed and stated that is why the proposal includes taking time to work with the residents. They want to earn the trust of the neighborhood, Habitat is here to listen and do what residents feel is best for them. Eastham also believes the City could apply the UniverCity program to this area and supply $60,000 in down payment assistance which would make some of the single family homes affordable for lower income residents. Fixmer-Oraiz has a house purchased though the UniverCity program and there is a 30 year rule that the home must remain owner -occupied (cannot be made a rental) — is that also included in the proposal for this program. Brewer said it will be included, likely to a 21 year restriction (because after 21 years you have to go back and reapply). Fixmer-Oraiz noted this helps with neighborhood stabilization, she has seen it in her neighborhood. Eastham feels neighborhood stabilization is also obtained by giving the people who live in a neighborhood the opportunity to buy houses in their current neighborhood, but not changing the balance of rental versus owner occupied options in the neighborhood. Lehmann said the City chose this area based on complaints. Eastham responded that creating programs off complaints is a mistake as it feeds into racism. Eastham feels Habitat can work with other groups and find what residents really want in terms of homeownership. Brewer said this is a good way for Habitat to show they are trying to help more people, there are different ways they can do that with homeownership, whether supporting the current stock of homeownership or helping find new stock of homeownership. They will work in this neighborhood and gather information to do what they can to support it. They are excited about getting into the neighborhood for revitalization. Eastham said what the residents of the South District want is for the reputation of the area to be improved because the reputation is vastly different then the actually livability of the area. Eastham said there are a lot of people who live in that area who are low income, black and Hispanic and historically excluded from homeownership opportunities and this is an opportunity to change that. Eastham noted the major differences in his proposal from the one Habitat did is the financing, having a larger down payment assistance to allow lower income households to qualify and to expand the area of where purchases could come from. Padron asked if the City contacted Habitat on this project. Lehmann said the City reached out to the South District and to the Affordable Homes Coalition and the Coalition got in contact with Habitat as a partner for this. McKinstry noted that he feels as the President of the Affordable Homes Coalition that he should not vote on this proposal. Lehmann stated that means there is no quorum, so there will not be a vote to Housing and Community Development Commission July 11, 2019 Page 11 of 12 recommend at this meeting. NOMINATE AND ELECT OFFICERS: Padron moved to nominate Fixmer-Oraiz as Chair. Alter seconded the motion. A vote was taken and the motion passed 5-0. McKinstry moved to nominate Padron as Vice Chair. Eastham seconded the motion. A vote was taken and the motion passed 5-0. STAFF/COMMISSION COMMENT: Lehmann said with regards to the Fair Housing Study, based on HCDC recommendation, staff wanted to come back to HCDC with the final version to vote on it, they will also bring Stefanie Bowers in to answer questions directly, so that would mean HCDC would hold a meeting in August, on August 15. Lehmann said they would also do the new member orientation/welcome at the August meeting. With regards to the Comprehensive Plan survey, July 19 is the deadline. They have translated the Arabic survey and that will go out Monday. They are closing FY19 and gearing up for FY20. Lehmann noted they have a tax exemption opinion from the City Attorney also, that could be discussed in August as well. ADJOURNMENT: McKinstry moved to adjourn. Alter seconded the motion. A vote was taken and the motion passed 5-0 Housing and Community Development Commission July 11, 2019 Page 12 of 12 Housing and Community Development Commission Attendance Record Name Terms Exp. 7/11 = Present O = Absent O/E = Absent/Excused -- = Vacant Alter, Megan 6/30/21 X Drabek, Matt 6/30/22 O/E Eastham, Charlie 6/30/20 X Fixmer-Oraiz, Vanessa 6/30/20 X Kealey, Lyn Dee Hook 6/30/22 O/E McKinstry, John 6/30/20 X Nkumu, Peter 6/30/22 O/E Padron, Maria 6/30/21 X {Vacant} --- • Resigned from Commission Kev: X = Present O = Absent O/E = Absent/Excused -- = Vacant