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Home My WebLink AboutWS - IC Affordable Housing Action PlanItem: WS STAFF PRESENTATION TO FOLLOW: 1 r i cm; tia tui , + mom Iii II CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (319) 356-5000 (3I9) 356-5009 FAX www.icgoV.org IOWA CITY AFFORDABLE HOUSING AUIIUN PLAN CITY OF IOWA CITY UNISCO CI, Or LITRATURI Affordable Housing Steering Committee Members Jessica Andino Residential Construction Iowa City Homebuilders Association Human Rights Commission Simon Andrew The Housing Fellowship Johnson County Affordable Housing Coalition Sara Barron Johnson County Affordable Housing Coalition Local Homeless Coordinating Board Manufactured Housing Task Force Heath Brewer/Scott Hawes Iowa Valley Habitat for Humanity Crissy Can�anelli Shelter House Local Homeless Coordinating Board Johnson County Affordable Housing Coalition Denise Fuller Horizon's Financial Wellness Center i 4 111r'''1 CITY OF IOWA CITY UNESCO CITY OF LITERATURE Ellen McCabe Housing Trust Fund of Johnson County Johnson County Affordable Housing Coalition Peter Nkumu Housing & Community Development Commission Melissa Schooley Financial Institution Greater Iowa City Homebuilders Association Multiple Non -Profit Housing Related Boards Mark Signs Realtor Planning & Zoning Commission Terry Vargason Realtor Property Manager Ryan Wade Developer Property Manager PREPARED BY THE CITY OF IOWA CITY Geoff Fruin, City Manager Tracy Hightshoe, Neighborhood & Development Services Director Erika Kubly, Neighborhood Services Coordinator Danielle Sitzman, Development Services Coordinator Nov. 2020 City Council requested staff to create a Steering Committee to aid in the development of a new affordable housing plan Feb. 2021 March - Oct. 2021 Committee formed and held first meeting Monthly meetings. Reviewed community/housing data, initiated public comment, formulated recommendations Public Outreach (summer2021) included: • American Rescue Plan Act Citywide Survey & Listening post • Outreach activities: Wetherby National Night Out, Fairmeadows Party in the Park, CommUnity Crisis Services & Iowa City Compassion Food Bank Distributions • Meetings with various stakeholders: University of Iowa Student Government leadership, Disability Services Coordinating Committee • Input from the Greater Iowa City Home Builders Association and Iowa City Area Association of Realtors April 2022 Plan completed, submitted to City Council for review 2 Hourly Rate FTE DEFINITION OF AFFORDABLE HOUSING Generally defined as housing in which the occupant pays no more than 30% of gross income for gross housing costs, including utilities. City, State and Federal programs typically limit government subsidized assistance to those householcs under 80% of median income. v Household Size 30% Median Income(MI) Hourly Rate FTE 50% Median Income(MI) Hourly Rate FTE 60% Median Income(MI) Hourly Rate FTE 80% Median Income(MI) Hourly Rate FTE 100% Median Income(MI) 2 3 4 $20,950 $23,950 $26,950 $29,900 $10.07 $11.51 $12.96 $14.38 $49,850 $23.97 $34,900 $16.78 $39,900 $19.18 $44,900 $21.59 $41,880 $47,880 $53,880 $59,820 $20.13 $55,850 $23.02 $63,800 $25.90 $71,800 $28.76 $79,750 $26.85 $30.67 $34.52 $38.34 $69,800 $33.56 $79,800 $38.37 $89,800 $43.17 $99,700 $47.93 Iowa City Metropolitan Statistical Area Rent Limits — Effective 6/1/2021 HUD Homeownership Sales price limit is $247,000, effective 6/1/2021. 3 SRO Efficiency 1 BDR 2 BDR 3 BDR 4 BDR Fair Market Rent (FMR) $551 $735 $803 $1,036 $1,483 $1,794 HUD Homeownership Sales price limit is $247,000, effective 6/1/2021. 3 MAJOR TAI(EAWAYS 1. Iowa City Households are Cost Burdened 4,322 cost burdened, 8,116 severely cost burdened renters 2,742 cost burdened, 1,252 severely cost burdened homeowners 2. Rents have increased substantially. We have had slower growth in income than in housing value. Rents increased 11.3% in Johnson County between 2014 and 2019 after adjusting for inflation. 3. Sparce or no available housing for those at 30% of MI or Tess 5,234 householders over age 25 make less than $29,999. Affordable rent to them is at most $750. Private market does not typically supply housing for these households. 4. Johnson County housing market is expensive Iowa median home value: $147,800 Johnson County: $227,600 Iowa City: $215,100 Coralville: $227,700 North Liberty: $220,800 5. Lack of affordable homes for those under 50% MI In 2021, only 113 homes sold for less than $150,000 in Iowa City. A household at 50% MI can afford to pay about $1,100 for housing. If minimal debt and one car payment, this translates to about a $150,000 home. 6. Full impact of pandemic and economic recovery is not fully known. New home construction experiencing rising cost of building materials and a severe shortage of labor. Local companies report 20-30% cost increase from 2020 to 2021. 4 Lack of Supply of Platted Residential Lots We anticipate 10,240 new residents by 2030. If platted lot and building permit activity continues at our current pace, we can only accommodate 4,973 new residents. 300 250 200 150 100 50 0 ■.■ Iowa City Market Data, No. of Listings - Sold Iowa City Area Association of Realtors III III dl iil iil o O tioo 41)1'oo'Y�oo°• tt‘000 ■ 2019 ■ 2020 ■ 2021 Income Iowa City Total households below Iowa City's median income, • • • Under 25 25.44 45-64 65+ Less than $10,000 2761 735 528 155 1,418 $10,000 to $19,999 1686 818 386 582 1,786 $20,000 to $29,999 947 895 569 566 2,030 $30,000 to $39,999 589 1034 494 488 2,016 $40,000 to $49,999 332 1135 524 328 1,987 $50,000 to $59,999 $60,000 to $74,999 221 245 1019 1196 481 704 373 498 $75,000 to $99,999 209 1292 1102 589 $100,000 to $149,999 79 1604 1320 784 $150,000 or more 19 935 1730 616 • Over 9,000 households in Iowa City with householders over age 25 make less than 549,999 a year • 9% of Iowa City homes sold for less than 5150,000. Over 54% of the homes sold in Iowa City are over 5250,000 6/9/2022 5 Recommendations provided based on three categories (29 Total): Recommendations for existing policies and programs Recommendations for development regulations Recommendations for programs and policies based on household income 6 Recommendations for existing policies and programs (11) Discontinue Affordable Housing Location Model and consider incentives or prioritization policies that that encourages affordable housing in all neighborhoods. Allocate funds to the Affordable Housing Fund with a goal of a 3% annual increase. Require staff analysis and funding recommendations of CDBG/HOME housing applications before HCDC review. Affordable Housing Fund: Include the LIHTC reservation with the 'HTFJC allocation. If no LIHTC projects apply during annual allocation or does not proceed if awarded funds, allow the HTFJC to make those funds available for general applications. Further define how CDBG/HOME funds will be allocated to improve transparency. Implement the Risk Mitigation Fund. Recommendations for existing policies and programs (continued) Enact policy that prioritizes partnerships with not-for-profit affordable housing developers/organizations to preserve affordable housing units in all housing programs. Allow non-profit affordable housing developers to apply for additional funds to support ongoing operations (Opportunity Fund, HOME CHDO funds, etc.) Encourage, but not mandate permanent affordable housing in new residential annexations. With future annexations explore partnerships and funding opportunitiesto secure permanent affordability when possible. Allow developers of affordable housing to apply for technical assistance needs from a variety of programs, including but not limited to, the Affordable Housing Opportunity Fund and Climate Action grants. Increase efforts to educate all tenants about tenant rights and responsibilities and how to address housing issues. 8 Recommendations and Required Actions for Development Regulations (8) App ica • eto Single- and Multi -Family: • Encourage infill development flexibility by reducing the minimum amount of land eligible to apply for a planned overlay zoning. • Create form -based code regulations for additional neighborhoods, focusing on growth areas first and then infill locations. App Hca ing e amity: • Allow by right more types of dwelling units H single family zoning districts such as duplexes and zero -lot line structures in more locations. (Comprehensive Plan amendment may be required) • Increase the allowable number of bedrooms in duplex and zero -lot line structures in all single family zoning districts. • Allow accessory dwelling units (ADUs) under more circumstances and in more locations. 9 Recommendations and Required Actions for Development Regulations (continued) plicable to Multi -Family: Is • Facilitate multi -family development by purchasing land to be developed. • Concuct a City initiated rezoning to allow multi -family housing or mixed use in areas supported by the Comprehensive Plan. (Comprehensive Plan amendment may be required.) • Allow multi -family dwelling units with more than three bedrooms when required to meet local, state or federal affordable housing funding parameters such as the Low -Income Housing Tax Credit (LIHTC) Program. 10 If additional funds are allocated, recommendations based on household income (10): 0-30% Median income • Seek proposals for a local landlord risk mitigation funds for hard to house tenants and secure funding to operationalize it annually. Encourage proposals that seek partnerships with regional entities to expand housing options and landlord participation. • Continue to support existing permanent supportive/Housing First projects, expanding into projects for families experiencing chronic homelessness. • Allocate ARPA funds and future City funds to support larger investments in affordable housing assisting those up to 60% median income, prioritizing permanent affordability and households with lower incomes. • Increase funding for those improvements that improve energy efficiency, lower utility costs, supports aging in place initiatives and improves home safety. Provide grants where feasible. 11 If additional funds are allocated, recommendations based on household income (continued): 31-60% Median income 61-100% Median Income • Provide additional funds to support security deposit assistance. • Support and expand eviction prevention programs. • Provide additional grant funding for energy efficiency improvements that lower utility costs. • Support downpayment assistance, including credit and financial counseling to potential homebuyers • Provide additional funding for energy efficiency improvements that lower utility costs. • Support downpayment assistance, including credit and financial counseling to potential homebuyers. 12 Next Steps Council feedback Staff will combine the following to create an Implementation Plan for Council review and adoption: • Afforcaole Housinc Action Plan recommendations • Uroan P anninc Housinc/Deve oement Priorities; anc • Locan Simpson (Invest Heath Collaooration crant) recommencations STAFF PRESENTATION CONCLUDED 1 1 imospaqr CITY OF IOWA CITY 4 1 0 East Washington Strect Iowa City, Iowa 52240-1826 (319) 356-5000 (319) 356-5009 FAX www.icgov.org