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HomeMy Public PortalAbout6b DOLA Affordable Housing Guide for Local OfficialsI- UVIRM; 17 w-1 0 Ti lob fT Ij ir- - 04 .41 Jr 411 IF IHOUSING co AFFORDABLE HOUSING GUIDE FOR LOCAL OFFICIALS �C0L0R A D0 • Department of Local Affairs TM Colorado is an incredible state that people want to call home, yet our rapidly growing population is presenting challenges for many who struggle to find affordable housing. Over 155,000 low-income households are cost burdened, paying more than 50 percent of their income for a safe place to live. As varied as the factors are that contribute to the state's lack of affordable housing, there is no one solution to the problem. What may be achievable in an urban center might not work for a rural community. The question becomes "where do you begin?" The Department of Local Affairs (DOLA) has been working closely with local governments and municipalities for over 50 years providing resources and assistance that help meet the needs of all Coloradans. Through our Colorado Division of Housing (DOH), we administer state and federal funding, offer rental assistance through local housing authorities and non -profits, and certify all factory and/or manufactured structures built or shipped to Colorado. To provide easy access to important housing resources, DOH has created this edition of the Affordable Housing Guide far Local Officials; a one-stop compilation of funding, programs, housing options, service providers, and terminology available to local communities in Colorado. We believe this guide will be an invaluable tool. DOLA is committed to strengthening Colorado communities. We look forward to working closely with local and statewide agencies in our shared vision that everyone has the opportunity to have a safe place to call home. The Affordable Housing Guide for Local Officials is a resource to help achieve this goal. Iry Halter Executive Director Division of Housing I Affordable Housing Guide for Local Officials AFFORDABLE HOUSING GUIDE FOR LOCAL OFFICIALS TABLE OF CONTENTS AFFORDABLE HOUSING FOR CHANGING COMMUNITIES................1 HOUSING PROGRAMS AND FUNDING...............................................7 AUTHORITY OF LOCAL GOVERNMENT.............................................23 LAND USE POLICIES AND STRATEGIES.............................................29 REDUCING REGULATORY BARRIERS................................................39 CREATING SUCCESSFUL NEIGHBORHOODS.....................................45 Division of Housing I Affordable Housing Guide for Local Officials AFFORDABLE HOUSING FOR CHANGING COMMUNITIES AFFORDABLE HOUSING FOR CHANGING COMMUNITIES Local officials increasingly recognize that the availability and cost of housing has a major impact on their community. A diversified hous- ing inventory supports strong economic devel- opment, attracting new businesses, and ensures that existing employers are able to recruit and retain staff. Lack of affordable workforce hous- ing can force employees to commute significant distances, contributing to traffic congestion and air pollution, and to an increased frequency of employee absences. To meet the challenges of a rapidly changing population, Colorado needs to provide a continuum of housing choices for households with different incomes, and for those needing housing accompanied by supportive services. One of the goals of the Division of Housing is to help Colorado renters become stable homeowners. Still, many Coloradans lack the income or resources to sustain homeownership. A development strategy based on a solid understanding of the housing market and the needs of the community will provide opportunities for young people and single households, as well as ensuring the welfare of the most vulnerable members of the population with safe, decent, and affordable options for the elderly and the disabled. Division of Housing I Affordable Housing Guide for Local Officials Page 1 AFFORDABLE HOUSING FOR CHANGING COMMUNITIES Page 2 CREATING AFFORDABLE HOUSING Developing and operating housing can be chal- lenging. Developers, in the creation of market - rate projects, willingly entertain risks, incentiv- ized by the prospect of achieving a significant return on investment. Projects that provide workforce or affordable housing may be more difficult with limited financial resources to make deals work. It is here that local governments play a critical role in helping their communities achieve a balance of housing types for all resi- dents in the community. SUPPLY AND DEMAND According to the National Association of Home Builders (NAHB), the housing industry gener- ally contributes between 15 and 18 percent of the nation's gross domestic product (GDP). The housing industry is vital to Colorado's state and local economies, creating jobs and generating taxes and wages. As the economy continues to grow throughout the Rocky Mountain region, the demand for home sales is rising in metropolitan areas, creating much tighter markets than are being experienced in many rural areas. According to the U.S. Department of Housing & Urban Development (HUD), Colorado is experienc- ing the fastest job growth in the region, with much of that growth attributable to housing construction. JOBS/HOUSING BALANCE When planning for future economic develop- ment, or when responding to new proposals, it is important for communities to take their local housing market into consideration. A community that has high housing costs but mainly attracts jobs at less than $10 an hour may find that it has a severe lack of affordable housing for new employees. Pre -planning to create affordable housing options for low- and moderate -income households will help keep new workers in safe, quality housing they can TEN TIPS FOR LOCAL GOVERNMENTS 1. Understand your housing market. 2. Set a community housing plan. 3. Develop criteria or definitions of affordable housing. 4. Reduce the impact of regulations on affordable housing. 5. Contribute land to affordable housing. 6. Provide financial assistance. i. Reduce, defer, off -set, or waive development fees for affordable housing. 8. Establish a land banking program to ensure the availability of land for future development. 9. Allow exemptions for property tax or sales and use taxes. 10. Allow "fast tracking' of planning and zoning approval for affordable housing projects. Division of Housing I Affordable Housing Guide for Focal Officials afford. This strengthens communities, enabling families to send their children to local schools and support local business while cutting down on traffic and congestion from commuters. Analysis Of Housing Demand 1. Convert hourly wages to annual incomes for each wage earner: Hourly wage x 2080 (hours per year) = Annual gross income Example: $10/hrx 2080 = $20,800 2. To determine what an affordable housing cost is at these income levels, use the following calculation: Annual gross income / 12 = monthly income Monthly income x.30 monthly housing budget 2080 / 12 = $1,733 monthly income $1,733 x.30 = $520 monthly housing budget This wage earner can afford to pay $520 per month for all housing costs, including rent and utilities. This analysis is based on a one -income household, and assumes full time with benefits. It is importantto note that many minimum -wage earners are working part time with no benefits. After determining what new employees can afford for rental housing, communities need to look at the prices and availability of units in the local housing market. AFFORDABLE HOUSING FOR CHANGING COMMUNITIES According to the National Association of Home Builders (NAHB), the estimated one-year impacts of building 100 rental units in a typical local area include: • $11.7 million in local income. • $32.2 million in taxes and other revenue for local governments. • 161 local jobs. UNDERSTANDING YOUR HOUSING MARKET Housing Needs Assessments and Market Studies are two distinct tools utilized to quantify the scope and housing needs facing a community. The two terms tend to be confused and incorrectly substituted for each other. A Housing Needs Assessment provides a general analysis of the overall condition of the various types of housing in a community and the need for specific types of housing (homeownership, rental, special needs housing). The Housing Needs Assessment is important in determin- ing the type and magnitude of housing issues and needs in a community. In addition, it is an important tool in narrowing the focus of possi- ble housing proposals, and it provides an overall guidance document. A Market Study provides independent confir- mation that a specific housing proposal will be successful in the marketplace. Most lenders require an independent Market Study to confirm assumptions about your housing proposal. The following criteria will be analyzed as part of a market study: project location (shopping, employment, neighborhood, school district and proximityto schools); market area identification Division of Housing I Affordable Housing Guide for Local Officials Page 3 AFFORDABLE HOUSING FOR CHANGING COMMUNITIES (socioeconomic characteristics, physical and political boundaries); demographic data (age, household size, number of households); rela- tionship to existing and anticipated comparable developments; and a statistical analysis of the number of households that will be available for the proposed housing project. According to the National Association of Home Builde,rr the estimated one-year impacts of building 100 single-family homes in a typical local area include: $28.7 million in local income. $3.6 million in taxes and other revenue for local gov- ernments. • 394 local jobs. MARKET ASSESSMENT FRAMEWORK STEP 1: Assembling the Team The first step in the analysis of local housing needs is assembling a team of individuals and organizations to involve in the needs analy- sis process. The goal of this team is to collect and analyze housing related information and to provide the results of this analysis to the broader community. STEP 2: Data Collection Demographic information can be obtained from census data maintained by the federal govern- ment, and from the State Demography Office. Additional housing data — on vacancy rates, average rents, and foreclosures — is available from government sources or the private sector. A community might also want to conduct a "windshield survey" to determine the quality of available housing stock. STEP 3: Compilation and Analysis of the Results The completed assessment is a preliminary evaluation that should give the community a general idea of the size and type of development needed to meet the housing demand in the target area. The next step in the process is determining how to use the information contained in the assessment. An action plan should be drafted to list the steps necessary to achieve the community's housing goals. The purpose of an action plan is to clarify what resources are required, and to formulate a timeline for when specific tasks need to be completed. Page 4 Division of Housing I Affordable Housing Guide for Local Officials AFFORDABLE HOUSING -VOjk HOUSING BRIDGE The Housing Bridge below is a needs assessment tool that may be used to help a community achieve housing balance. Low Income c 60% AM i Housing Bridge Moderate Income 80 -120% AMI 80% 100% 110% AMI AMI AMI First Time Entry Level Home Market Market Buyers Housing/ Rentals I Income Restricted Emergency / Subsidized /�a+c Broad Renter Market 120% AMI I Above Moderate Income 120-150%AMI 150% AMI Step Up\ Upper Moderate Income Market 150-200%AMI IF 200% AM 1 High End Market Used with permission of McCormick and Associates, Inc. Division of Housing I Affordable Housing Guide for Local Officials Page 5 HOUSING PROGRAMS AND FUNDING HOUSING PROGRAMS AND FUNDING While the challenges faced by each community may be distinct, there are a wealth of resources available from federal and state governments, as well as from private enterprises. Depend- ing on the condition of your existing housing inventory, the state of the local economy, or the availability of jobs, this guide will provide an overview of the types of programming and funding sources that can help you respond to change and foster growth. DOLA administers federal funds to construct new housing and rehabilitate existing proper- ties, as well as voucher programs for low- and moderate -income renters. DOLA works in partnership with other government agencies and private enterprises to provide opportuni- ties for first-time homeowners, community service organizations, and affordable housing developers. The programs and organizations described here can guide local jurisdictions to tailor their regulations and policies to promote growth, attracting business to generate income, develop infrastructure, and provide for the social needs of their communities. Division of Housing I Affordable Housing Guide for Local Officials Page 7 HOUSING PROGRAMS AND FUNDING GOVERNMENT AGENCIES The U.S. Department Of Housing and Urban Development (HUD) Housing cost increases are of concern to HUD, as both production costs and the need for rental assistance vouchers escalate. HUD is focused on advancing policies that create opportunity for people across the country, to create a solid foundation for the next 50 years. Their mission is to promote homeownership, support commu- nity development, and increase access to afford- able housing, free from discrimination. The U.S. Department of Agriculture (USDA) Rural Development (RD) funds a variety of programs that promote rural homeownership, including self-help housing; housing repair and rehabilitation; and rural housing direct loans. RD also assists with the development of multi- family rental housing, including farm labor housing; rural rental housing; rural loan guaran- tee programs; housing preservation; and rental assistance programs. Additionally, RD provides opportunities in community development and empowerment, business and cooperatives; and community facilities. Federal Home Loan Banks (FHLB) FHLBs can assist affordable housing projects with loans made at a lower rate than those avail- able through the commercial lending market. These Affordable housing Program (AHP) loans are often the first piece of funding committed to a project, and are available for purchase, construction, rehabilitation or refinancing of very low- to moderate -income rental housing. For rental projects, at least 20 percent of the units must be occupied by and affordable to households at or below 50 percent of the Area Median Income (AMI). Funds may also be used for additional units that target households at or below 80 percent AMI. For ownership housing, households must earn less than 80 percent AMI. Another product of the FHLB system is the Community Investment Program (CIP). Through this resource, banks and thrifts that are member banks may borrow advances at a discounted interest rate or request letters of credit from their regional FHLB. Lenders may then use these advances to fund pre -development costs, purchasing, construction, rehabilitation, or refi- nancing of housing that will serve households earning up to 115 percent AMI. It may include rental units if at least 51 percent of those units serve income -eligible households. Manufac- tured housing subdivisions or parks may also be eligible under the above criteria. The Federal Home Loan Bank of Topeka provides these services in Colorado. Colorado State Housing Board The Colorado State Housing Board was created in 1970 to advise the General Assembly, the Governor, and the Division of Housing on Colorado housing needs. The seven -member State Housing Board reviews financing requests and adopts regulations governing factory - built structures and multi -family housing in counties with no building codes. The Board also sponsors research reports for use by the public, legislators, and the Governor. The Board generally meets on the second Tuesday of each month at 1:00 p.m. at 1313 Sherman 5t., Room 318, Denver, CO 80203. Please .° E website for updates or changes to the schedule. Page 8 Division of Housing I Affordable Housing Guide for Local Officials Colorado Division of Housing (DOH) The Colorado Division of Housing is located within the state Department of Local Affairs, and provides financial and technical support to organizations throughout the state that are committed to serving Colorado's most vulner- able citizens and communities. The mission is to ensure that all Coloradans have access to safe, affordable housing. DOH offers funding opportunities for reha- bilitation and new construction of housing to public housing authorities, local governments, and both non-profit and private developers. It supports, licenses, and regulates the factory - built construction industry, including the provi- sion of building department services where none exist, and the adoption and enforcement of building codes for factory -built structures. In concert with local housing authorities and non-profit service organizations, DOH provides rental subsidies and down payment assistance to bridge the gap between household income and the cost of living by creating a safety netfor those most at -risk with funding for senior and special needs housing and the homeless office. DOH provides gap funding for the acquisition, APPLICATION CYCLES HOUSING PROGRAMS AND FUNDING rehabilitation, and new construction of afford- able housing. DOH provides grants and loans from both state and federal funds. Before applying, please contact your regional Hk.insJQ i who will help you in the planning process and direct your program or project to the right funding source based on timing, avail- ability of funds and Division funding priorities. GRANT AND LOAN PROGRAMS ADMINISTERED BY THE DIVISION OF HOUSING HOME Investment Partnerships HOME dollars provide competitive funding to local government, non -profits and private developers. There are four basic program types: • Homebuyer assistance. • Rehabilitation for owner -occupants. • Rental housing acquisition, rehabilitation and construction. • Tenant -based rental assistance. All application cycles are competitive. DOH accepts applications by the 1 st of every month. Monthly: Rental acquisition, rehabilitation, and new construction. July 1st: Single-family Owner -occupied (SFOO) housing rehabilitation programs September 1st: Community Housing Development Organization (CHDO) operating funds. November 1st: Down payment assistance (DPA) programs, including Homeownership subdivision development. Division of Housing j Affordable Housing Guide for Local Officials page HOME Community Housing Development Organization (CHDO): The CHDO designation was created to carry out the overall goals of the HOME program. A CHDO is a private, non-profit, community-based service organization whose primary purpose is to provide and develop affordable housing for the community it serves. Certified CHDOs receive certification from a Participating Jurisdiction (PJ) indicating that they meet certain HOME Program requirements and therefore are eligible for HOME funding. If an organization becomes a certified CHDO, it is eligible to take advantage of the HOME funds set aside just for CHDOs, as well as additional special technical assistance from HUD. CHDO set-aside funds provide equity for community-based organizations to undertake projects, build their capacity to serve a broad range of affordable housing needs, and provide guaranteed resources for affordable housing development. CHDOs may: • Serve as owners, developers, and spon- sors of projects undertaken with funds from a PJ`s required 15 percent set-aside for CHDOs. • Receive special assistance — such as predevelopment loans, technical assis- tance, or operating funds — that is not available to other types of organizations. • Perform certain services as contractors to PJs. Contract with PJs in the same ways as other non-profit subrecipients to do acquisition and/or rehabilitation of rental property; new construction of rental housing, acquisition and/or reha- bilitation of homebuyer property; new construction of homebuyer property, direct financial assistance to purchasers of HOME -assisted housing sponsored or developed by a CHDO with HOME funds. Community Development Block Grant (CDBG) CDBG Entitlement Communities receive direct funding. Non -metropolitan, non -entitlement areas apply to the state for use of funds on a project -by -project basis. State programs can only fund "non -entitlement" communities. Principle eligible activities: Affordable housing. • Neighborhood revitalization. • Economic development. • Improved community facilities. • infrastructure improvements. Community Development Block Grant - Disaster Recovery (CDBG-DR) DOH works with local communities to ensure that citizens who have been displaced from their homes can access resources that help them rebuild, relocate, and find permanent housing. The CDBG-DR housing programs are adminis- tered through partnerships with local govern- ments, housing authorities, communities, and volunteer -driven non-profit organizations, and are for use by those recovering from specific Presidentially declared natural disasters. Neighborhood Stabilization Program (NSP) DOH administers federal NSP dollars to offset the negative impact of foreclosures on neigh- borhoods. Funds are directed to areas of Page 10 Division of Housing I Affordable Housing Guide for Local Officials greatest need to help stabilize property values and revitalize communities. Private Activity Bonds (PAB) The PAB program funds privately developed projects. The bonds are tax-exempt and the amount of the bonds issued are limited by the IRS based on population. Underwriters use investor money from the sale of the bonds called "bond proceeds," to make a loan to a proj- ect. The project then pays back the loan and the investors are repaid, plus interest. Fifty percent of the state PAB cap is allocated directly to state authorities, and fifty percent is allocated to local governments whose popula- tions warrant allocations of one million dollars or more. These allocations are available to qualifying local governments from January 1 to September 15 of each year and may be used for the following; • Multi -family housing projects. HOUSING PROGRAMS AND FUNDING • Single-family mortgage revenue bonds. Qualified residential rental projects. • Qualified redevelopment projects. • Manufacturing. • Water, sewer and solid waste disposal. • Hazardous waste facilities. Any portion of a direct allocation not used by a state agency or local government to issue bonds for a carry -forward purpose or for a mortgage credit certificate election by September 15 reverts to the Statewide Balance for allocation by the end of the year. Revolving Loan Funds DOH provides grant funds to regional hous- ing organizations to provide Single Family Owner -Occupied repair loans (SFOO) and Down Payment Assistance loans (DPA) to low- and moderate -income families. These loans are set at a low interest rate and can be amortized or deferred depending upon the need of the family. When loan repayment is received, the housing Division of Housing I Affordable Housing Guide for Local Officials Page 11 HOUSING PROGRAMS AND FUNDING agency places the payment into a revolving loan Develop and sustain a network of local fund. These funds are then recycled back into contractors to complete housing repairs the community to provide additional housing and renovations. rehabilitation and down payment assistance. Single Family Owner Occupied (SFOO) Rehabilitation The primary goals of the SFOO Rehabilitation program are to: Preserve, enhance, and maintain afford- able housing stock through repair and renovation within the community. Protect the health and safety of the occu- pants through the correction of housing hazards. Assist homeowners in improving the condition of their homes. Allow homeowners to stay in their homes. Create and maintain a regional revolving loan fund to assist with future housing rehabilitation projects. T •: ` Down Payment Assistance The primary goals of the down payment assis- tance program are to: Provide opportunities for low -and moder- ate -income Coloradans to purchase their own homes. • Increase the number of homeowners in the regional housing organization's service area. • Create and maintain a regional revolving loan fund to assist future families with down payment assistance. • Enhance neighborhoods and communities. • Provide stability for families and achieve lower foreclosure rates by requiring pre - homeownership counseling. IIIii � III r� Page 12 Division of Housing I Affordable Housing Guide for Local Officials Annual follow-up with families is highly recom- mended, as well as the provision of foreclosure counseling, if needed. Housing Development Grant Funds (HDG) The HDG program is a competitive grant that provides funds for acquisition, rehabilitation and new construction. The fund was created by the Colorado State Treasury and consists of monies allocated to the Colorado Afford- able Housing Construction Grants Fund by the General Assembly. HDG funds improve, preserve, or expand the supply of affordable housing; finance foreclosure prevention activi- ties in Colorado and acquisition of housing and economic data necessary to advise the State Housing Board on local housing conditions. Housing Development Loan Funds (HDLF) The HDLF program was originally created to meet federal matching funds requirements and now includes funds for development, redevel- opment, or rehabilitation of low- or moderate - income housing. Loans provided through HDLF require collateral. Colorado Housing Investment Funds (CHIF) The CHIF program was seeded with $36 million of custodial funds through the Colorado Attor- ney General's office with 2012 Mortgage Servic- ing Settlement funds. The CHIF funds can be used two ways: HOUSING PROGRAMS AND FUNDING 2. Short-term loan guarantees for new construction and rehabilitation. Eligible borrowers include non-profit, for-profit, and Housing Authority developers. HOUSING VOUCHER PROGRAMS ADMINISTERED BY THE DIVISION OF HOUSING Housing Choice Voucher Program (HCV) The HCV program, commonly referred to as Section 8, is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses, and apartments. Each year, DOH houses more than 6,000 families statewide in its HCV program, serving Colorado's most vulnerable citizens by providing preference to individuals with disabilities (over 80 percent of DOH vouchers serve persons with disabilities), individuals experiencing homelessness, victims of domestic violence, and individuals exiting institutional settings. Veterans Affairs Supportive Housing Program (VASH) The VASH program is a national initiative spon- sored by HUD and the U.S. Department of Veter- ans Affairs (VA). The goal of the VASH program is to provide HCV rental assistance and intensive case management and clinical services to enable 1. Short-term, low-interest loans to bridge homeless veterans access to permanent hous- the long-term permanent financing ing while leading healthy, productive lives in the sources (a portion of loan may remain in community. the project as permanent debt). Division of Housing I Affordable Housing Guide for Local Officials Page 13 HOUSING PROGRAMS AND FUNDING Family Unification Program (FUP) DOLA partners with the Colorado Division of Child Welfare and local service providers to administer this unique housing choice voucher program to assist homeless youth aging out of the foster care system (ages 18 through 21) and families where available housing is an obstacle to full custody of their children. Permanent Supportive Housing (PSH) Voucher The PSH program (formerly known as Shelter + Care) serves chronically homeless persons with disabilities, prioritizing persons with severe mental illness. The program operates in part- nership with community mental health centers across the state, and is designed for individuals who need services to remain stably housed. Nearly 60 percent of participants have been in the program for 5 years or more. Colorado Second Chance Housing and Reentry Program (C-SCHARP) C-SCHARP provides 24 months of rental assis- tance in combination with intensive behavioral health services for dually diagnosed parolees exiting the state prison system. The program will serve 60 participants annually with recent expansion efforts that will bring additional slots to the Colorado Springs and Denver Metro areas. The program is a collaboration between DOH, the Department of Corrections, the Office of Behavioral Health, and Community Mental Health Centers across the state. Referrals for the program come directly from the Depart- ment of Corrections. Section 811 Project Rental Assistance Program DOH receives funding from HUD through the Section 811 Supportive Housing for Persons with Disabilities Project Rental Assistance (PRA) Program. This program assists extremely low- income people with significant and long-term disabilities to live independently in the commu- nity by providing affordable housing linked with voluntary services and supports. PRA funds provide project -based rental assistance; it is not a financing source for housing construction or acquisition/rehabilitation. Mental Health (MH) Vouchers The MH voucher program was created to assist homeless persons transition smoothly out of state mental health hospitals into permanent housing. DOH administers housing vouchers for approximately 125 persons statewide in partnership with community mental health centers and sees a less than 10 percent turnover annually. Colorado Choice Transition (CCT) Vouchers The CCT voucher program provides housing vouchers for persons with disabilities who require long-term services and support to tran- sition out of nursing facilities. These vouchers help solve systemic barriers to clients moving into a least -restrictive community living environ- ment, to improve their health outcomes. This program also helps people with disabilities who are at risk of being placed in an institution stay in their communities. Page 14 Division of Housing I Affordable Housing Guide for Local Officials INITIATIVES ADMINISTERED BY THE DIVISION OF HOUSING HOMELESS PROGRAMS The Division of Housing is working in partner- ship with local, state, and federal stakeholders, both private and public, to build, promote, and connect Colorado's most vulnerable citizens with housing and services. The Homeless Programs staff works to achieve the goal of making home- lessness rare, brief, and nonrecurring. The following programs and are focused solely homelessness: HOUSING PROGRAMS AND FUNDING Next Step Program Homeless families with school -aged children receive rental assistance allowing families to secure housing and choice of where to live within their community: close to jobs, family, and schools of choice. Maintaining school atten- dance in a specific school can improve academic success and reduce long term social costs. Parents receive job counseling and training and all family members receive supportive services. are administered Emergency Solutions Grants (ESG) Program :)n people facing Office of Homeless Youth Services (OHYS) Created by the Colorado State Legislature through the Homeless Youth Services Act (C.R.S. 26-5.9), the OHYS is a vehicle through which homeless youth services statewide are improved by coordinating current services and facilitating interagency collaboration. The OHYS identifies gaps, removes barriers, and improves access and information sharing. In order to carry out this legislative intent, the OHYS, in conjunction with the Advisory Committee on Homeless Youth, develops and implements the Colorado Homeless Youth Action Plan annually. This statewide plan contains many key preven- tion and intervention strategies designed to collaboratively and comprehensively address the issue of youth homelessness in Colorado. These grants are funded by HUD to allow states, local governments and non -profits assist homeless persons by providing a complete continuum of supportive services at emergency shelters and transitional housing programs. The program also assists in the prevention of home- lessness when households experience a sudden but temporary loss of income that results in an inability to pay rent, mortgage, or utilities. Eligible Activities: • Shelter operating expenses. • Essential services. • Homeless prevention activities. Housing Opportunities for Persons with AIDS (HOPWA) The HOPWA program is funded by HUD and provides states and localities with resources and incentives to create long-term comprehen- sive strategies for meeting the housing needs of low-income persons living with HIWAIDS. These strategies may include Tenant Based Rental Assistance (TBRA), Housing Development Division of Housing I Affordable Housing Guide for Local Officials Page 15 HOUSING PROGRAMS AND FUNDING activities, Supportive Services, and/or Short - Term Rent, Mortgage, or Utility Assistance (STRMU). Homeless Prevention Activities Program (HPAP) Funding for HPAP is made available through the state income tax check -off, which allows Colora- do residents to make voluntary contributions on their state income tax return. DOH administers HPAP annually through a competitive process to non-profit organizations throughout the state. Services provided include but are not limited to direct payments to landlords and/or utility companies, and case management. Approxi- mately 500 households are served annually through HPAP Fort Lyon Supportive Residential Community Fort Lyon provides recovery -oriented transition- al housing to homeless individuals. The program combines housing with counseling, educa- tional, vocational, and employment services for approximately 250 homeless and formerly homeless persons from across Colorado, with an emphasis on serving homeless veterans. The Community is located at the former Fort Lyon Veterans Affairs Hospital in Bent County, Colorado, and is the outcome of a vision to repurpose the facility and to offer a supportive environment to homeless individuals across the state. Residents fully engage in the overall operations of the campus including food services, facilities maintenance, grounds maintenance, Page 16 Division of Housing I Affordable Housing Guide for Local Officials housekeeping, and wastewater management—in conjunction with their daily participation in peer support groups. Educational and vocational opportunities are available through local colleg- es. Residents are also encouraged to participate in creative programs that help build support and community while assisting with recovery, The ultimate goal of this program is for resi- dents to recover from homelessness, find long- term housing stability, and reintegrate into their community of choice. COMMUNITY LIVING COLORADO (CLC) DOH's CLC staff seeks to help people with disabili- ties either move out of institutions or avoid enter- ing them. DOH provides opportunities for people with disabilities to live independently in integrated settings in their communities, with support servic- es available on an as -needed basis. To that end, the CLC staff, by an interagency agreement with the Department of Health Care Policy and Financ- ing (HCPF), administers the CCT Voucher Program (described above), and the Medicaid Home Modi- fications program. People with disabilities who are eligible for Medicaid Home and Community Based waiver services can use the home modi- fication benefit to make their homes accessible, preventing unnecessary institutionalization. The agreement with HCPF is aimed at improving the effectiveness of the home modification benefit through DOH oversight, inspections, and input on improvements to program design. HOUSING TECHNOLOGY AND STANDARDS DOH's Housing Technology and Standards staff supports, licenses, and regulates the residen- tial and non-residential factory -built industry in Colorado. We ensure the health and safety of Colorado residents living in manufactured HOUSING PROGRAMS AND FUNDING homes by providing training and technical assis- tance for the industry, and through plan review and inspection services. HUD Code Manufactured Housing A HUD Code Manufactured Home is a trans- portable home built after dune 15, 1976, of at least 320 square feet, that is constructed to the nationally recognized HUD Manufactured Home Construction and Safety Standards (HUD 3280). It may be used as a dwelling unit with or with- out a permanent foundation when connected to required utilities. HUD Code Manufactured Homes always preempt local building codes and must be accepted into the community for placement. Local governments may not impose additional building code requirements in regards to the construction of the home. The local govern- ment may require additional on-site mitigation for snow loads and wind loads. Repairs, reno- vations, and additions to HUD Code Manufac- tured Homes are under the local government's authority. DOH has participated in the HUD Code Manu- factured Housing Program since 1976 as a HUD approved in -plant construction inspection agency (IPIA) for all homes built in Colorado in compli- ance to the HUD Construction and Safety Stan- dards and as the State Administrative Agency (SAA) that is charged with resolving consumer complaints in regards to HUD code homes. Factory -Built Structures and Modular Homes All International Residential Code (IRC) Modular Homes and Commercial Factory -Built Struc- tures manufactured or sold in Colorado are Division of Housing I Affordable Housing Guide for Local Officials Page 17 HOUSING PROGRAMS AND FUNDING regulated by DOH through the administration and enforcement of the construction standards adopted by the Colorado State Housing Board. DOH ensures that these structures are prop- erly designed and constructed for local climate conditions and meet the adopted construction standards. We work with local building depart- ments to coordinate the on-site inspection process. In most cases, DOH is responsible for the regulation of all factory -completed construc- tion, while the local building department regu- lates on-site construction activity, including the home foundation and on-site constructed garages and other improvements. The Housing Technology and Standards staff is the point of contact for local building departments for all technical concerns, including the resolution of consumer complaints. Manufactured Housing Installation Program (MHIP) DOH regulates the installation of all HUD Code and IRC Modular Homes In Colorado through the Manufactured Housing Installation Program (MHIP), which provides training and on-site home installation inspection services. These inspections are designed to confirm that the home has been installed to the standards adopted by the State. Local governments are encouraged to register as MHIP Participating Jurisdictions, which allows them to act as the exclusive MHIP inspection agency for homes being placed in their communities. Dealer Registration Program Consumer protection against unethical or unlawful manufactured housing sales practices is provided through the Dealer Registration Program. All dealers that sell used or new manu- factured homes in Colorado are required to be Page 18 Division of Housing I Affordable Housing Guide for Local Officials registered and bonded. Local governments are encouraged to forward any consumer concerns in regards to HUD code or Factory-Built/Modular Homes to DOH. Manufactured Housing Parks There are over 1,300 manufactured housing parks in Colorado, which play an important role in the overall supply of housing within a community. Local governments interested in fostering the appropriate preservation or creation of new parks may want to consider the adoption of zoning and planning practice changes that support manufactured housing parks, and the creation of programs that assist in park infrastructure and individual home renovations. Tiny Homes There is no legal definition of a "tiny home.' The term can refer to anything from a 100 square foot miniature cabin on wheels to a house smaller than about 800 square feet. A "tiny home" is either considered a recreational vehicle (RV) or a dwelling unit depending on its defining characteristics. To be considered a dwelling unit, the house must be constructed for year-round occupancy (IRC code compliant) and connected to water, sewer, and electric utilities. Tiny homes in this case will be subject to locally adopted building codes, as well as zoning and subdivision codes. 'Tiny Homes" constructed in a factory to the IRC code are regulated by DOH. HOUSING PROGRAMS AND FUNDING ADDITIONAL HOUSING RESOURCES Colorado Housing and Finance Authority (CHFA) CHFA works throughout Colorado to increase the availability of affordable, decent, and acces- sible housing for lower-income Coloradans, and to strengthen the state's economy by providing financial assistance to businesses. Participating lenders and community partners help CHFA deploy their resources statewide. Together with their partners, CHFA has invested more than $12.2 billion in Colorado's economy. CHFA's work revitalizes neighborhoods and creates jobs. They believe everyone in Colorado should have the opportunity for housing stabil- ity and economic prosperity. Low Income Housing Tax Credits (LIHTC) The LIHTC is a credit against regular federal income tax liability for investments in acquisi- tion and rehab or construction of qualified rent -restricted, low-income rental housing. Regulations require that projects set aside a certain percentage of units for low income resi- dents. Investors then take credits on an annual basis over a 15 -year period, beginning with the year that the project is placed in service. A "compliance period" dictates strict occupancy regulations. Non-profit and for-profit developers apply to CHFA, the State's allocating agency, which then evaluates applications based on federal guidelines and criteria identified in its qualified allocation plan. For more infor- mation about LIHTC, visit CHFA's website. Division of Housing I Affordable Housing Guide for Local Officials Page 1 HOUSING PROGRAMS AND FUNDING Public Housing Authorities (PHAs) Public Housing Authorities were created by the Housing Act of 1937 to develop, own, and manage federal public housing under contract with HUD. PHAs are overseen by a Board of Commissioners or Directors who are either elected or appointed by the local jurisdiction. PHAs administer federal public housing units as well as Housing Choice Vouchers. Federal public housing is developed, owned, and operated by PHAs. HUD provides an operating subsidy to pay for the costs of operating and managing the housing not covered by tenant rents. Public housing tenants typically pay a percentage (usually 30 percent) of their income as rent to the PHA. In addition, the Colorado Department of Local Affairs' Division of Housing and the Colorado Housing and Finance Authority are PHAs that assist communities in accessing federal housing resources, including Housing Choice Vouchers. HUD maintains a complete list of PHAs in Colorado. Colorado Housing Counseling Coalition (CHCC) CHCC promotes affordable housing for low - and moderate -income families through hous- ing counseling and the sharing of knowledge, resources and counseling techniques among members. CHCC member agencies help people improve their housing conditions and meet the respon- sibilities of homeownership and tenancy. Among the many services the member agencies provide are: pre -purchase counseling, foreclo- sure prevention counseling, housing consumer education, debt management, and reverse equity mortgage counseling. Many agencies, including DOLA, sponsor Colo- rado's Foreclosure Prevention Hotline, 1 -877- 601 -HOPE or www.coloradohousingconnects Homebuyer Readiness Becoming a homebuyer is a huge step for most families, and readiness can be determined by several factors, including the following: • Credit history — A family should review their credit report, improve payment patterns and make corrections or updates. • Savings — A household savings account helps establish the discipline required to reduce debt. • Income and employment — Steady income patterns promote successful • Homebuyer workshops — Families should attend a homebuyer workshop to understand the process of buying and maintaining a home. The Colorado Housing and Finance Authority (CHFA) provides a homebuyer education curricu- lum adopted by many agencies offering homebuyer workshops. CHFA EHomeAmerica is an on-line homebuyer educa- tion course. HUD offers a lost of HUD -approved housing counseling agencies serving Colorado. Page 20 Division of Housing j Affordable Housing Guide for Local Officials COLO RADOHOUSINGSEARCH.com Colorado Housing Search is jointly sponsored by the Colorado Housing and Finance Author- ity (CHFA) and DOH as a public service to the residents of Colorado. The site was developed through the collaboration of multiple agencies with a common stake in developing, financing, and preserving affordable housing throughout Colorado. Its goals are to: Help Coloradans find and maintain qual- ity, safe and decent places to live. • Provide a clearinghouse for affordable housing and related services. • Facilitate operating efficiencies in the affordable housing market. Denver Metro Fair Housing Center (DMFHC) DMHFC is a non-profit organization dedicated to eliminating housing discrimination and to promote housing choice for all people through comprehensive education, advocacy, and enforcement of fair housing law. Colorado Civil Rights Division (CORD) The CCRD is charged with enforcing the State's anti -discrimination laws, including housing laws. CCRD works to eliminate and prevent discrimi- nation in housing, as well as in employment and public accommodation, through investigation, education, mediation, and enforcement. New Market Tax Credits (NMTC) NMTCs permit individuals and corporate taxpay- ers to receive a credit against federal income taxes for making qualified equity investments HOUSING PROGRAMS AND FUNDING in Community Development Entities (CDEs). The credits total 39 percent of the cost of the invest- ment and are claimed during a seven-year credit allowance period. A substantial amount of the investment must be used by the CDE in support of business activities in low-income communities. This is not a fund- ing source for housing, although it can support commercial and/or retail uses associated with housing or care facilities. Private Debt Sources Because tax credits and grants are generally not able to fully finance an affordable housing project, private debt sources are usually needed as well. Options include conventional financing from traditional banking institutions together with tax credits and gap financing. Fannie Mae and Freddie Mac are two Government -Spon- sored Enterprises (GSEs) that help by purchas- ing investment -quality mortgages from conven- tional lenders, packaging the mortgages as securities, and selling them on the open market, Contact your lender for additional information. Division of Housing I Affordable Housing Guide for Local Officials page 21 AUTHORITY OF LOCAL GOVERNMENT AUTHORITY OF LOCAL GOVERNMENT In Colorado, local governments are empowered to initiate a number of actions that can affectthe cost and supply of housing in their communities. These actions, which may require a direct or indirect role for local government, encompass land use regulations, building code and design standards, and creation of special -use authori- ties, which can leverage additional resources for developing affordable housing. States maintain the right under the U.S. Consti- tution to regulate land use, health, and public safety issues. in Colorado, state statutes relin- quish that control to local governments who are empowered with the authorityfor adoption and enforcement of pertinent codes, standards and policies. Accordingly, critical steps in housing development such as zoning, building codes and infrastructure requirements all fall within the discretionary control of Colorado localities. This chapter is intended only to raise aware- ness of local legal authority. Specific strategies are found in the Land Use Policies and Strategies chapter. Division of Housing I Affordable Housing Guide for Local Officials Page 23 AUTHORITY OF LOCAL GOVERNMENT DISCRETIONARY CONTROL OF COLORADO LOCALITIES Land Use Regulations are laws that set a juris- diction's land use and development standards in regard to a wide variety of issues, including subdivision, annexation, and allowable land uses. While regulations are an integral part of a community's planning process, regulations may also substantially increase time and costs required to build affordable housing. Zoning Standards are used by local governments as a gauge for land use decisions and to help establish areas of uniform development. These standards, however, may inhibit a jurisdiction from providing a range of housing that meets its housing needs. Building Codes and Standards are adopted by local governments to safeguard health, safety, property, and public welfare of a community. Infrastructure including water, wastewater, sewer, streets, roads, parks, and schools falls under local control. Local officials can proac- tively address environmental issues while also containing the cost of housing in their communities. PUBLIC HOUSING AUTHORITIES A major benefit of housing authorities is the ability to use additional financial resources to devote to critical community projects in light of restrictions imposed on local governments by the TABOR Amendment. After enactment of TABOR in 1992, local government growth was restrained by requiring voter approval for any increases in revenues, spending, and additional debt. Housing authorities can be considered enterprises, rather than local districts, as long as their annual grant revenue from state and local governments is less than ten percent of their total budget. As government-owned businesses authorized to issue their own revenue bonds, housing authorities and urban renewal authorities can make expenditures that won't be counted against the local or county government limits imposed by TABOR. Local interpretation varies, however, as it relates to TABOR restrictions. Creating a Housing Authority A Housing Authority (HA) can be created at the municipal or county level. The process is initiated when a petition sponsored by at least twenty-five residents of a community is filed with the local clerk indicating the need for such an authority. After concluding at a community hearing that an HA is needed, a resolution is adopted and forwarded to the mayor's or county clerk's office. Upon filing a signed certificate by the newly appointed HA hoard with DOLA, the municipal or county governing board can act as the board of directors of the authority, or appoint a board of housing commissioners. These officials and their successors are constituted as a housing authority, which is a body corporate and politic. Once established, an HA may employ a secretary who will act as executive director. Powers of a Housing Authority Determine whether housing conditions are unsafe, unsanitary, or substandard and investigate methods for improving such conditions. Study and make recommendations on plans addressing the clearing, re -plan- ning, or reconstruction where unsafe, unsanitary, or substandard conditions exist. Provide housing accommodations for low-income persons In cooperation with the local jurisdiction. Page 24 Division of Housing I Affordable Housing Guide for Local Officials Prepare, implement, and operate projects including the construction, reconstruction, improvement, alteration, or repair of any project, Assume by purchase, lease, or other means any project undertaken by any government or by the city or county. Act as an agent for the federal govern- ment in connection with the acquisition, construction, operation, or management of a project. Arrange with the city orwith a government for the furnishing, planning, re -planning, opening, or closing of streets, roads, roadways, alleys, property options, property rights, or for the furnishing of property services in connection with a project. Lease or rent dwellings, accommodations, lands, buildings, structures, or facilities included in any project, and establish and AUTHORITY OF LOCAL GOVERNMENT properly to any person, firm, corporation, the city or county, or government. • Receive exemption from the payment of property taxes or special assessments to the state or any subdivision of the state. BENEFITS OF HOUSING AUTHORITIES: 1. Ability to apply for loans, grants, and contributions from government or other sources designed for spe- cific authority purposes. 2. Ability to acquire property by purchase, lease, opera- tions, eminent domain, gift, grant, bequest or devise from any person, firm, corporation or city govern- ment. 3. Ability to borrow money on terms. Multijurisdictional Housing Authorities revise associated rents or charges. Any combination of Colorado cities, towns, Access buildings or property to conduct or counties may, by contract with each other, investigations or to make surveys. establish a separate governmental entity to Sell, exchange, transfer, assign, or pledge be known as a multi jurisdictional housing authority. Division of Housing I Affordable Housing Guide for Local Officials Page 25 AUTHORITY OF LOCAL GOVERNMENT Powers of a Multijurisdictional Housing Authority • Plan, finance, acquire, construct/ reconstruct/repair, maintain, manage, and operate housing projects and programs pursuant to a multi - jurisdictional agreement. • Plan, finance, acquire, construct/recon- struct/repair, maintain, manage, and operate housing projects and programs for employees of employers located within the jurisdiction of the authority. Make/enter into contracts with any person, including contracts with state or federal agencies, private enterprises, and non-profit organizations also involved in providing housing, irrespective of whether such agencies are parties to the contract establishing the authority. Employ agents and employees. • Cooperate with state and federal govern- ments in all respects concerning the financing of such housing projects and programs. • Acquire, hold, lease (as lessor or lessee), sell, or otherwise dispose of any real or personal property, commodity, or service. • Condemn property for public use, if such property is not owned by any governmental entity or any public utility, pursuant to state authority. Receive exemption of property taxes to the state or subdivision of the state for properties owned by the housing author- ity for renters at 50 percent or below median income. Per Statute 29-1-204.5(7.5) a multi-jurls- dictional housing authority may levy, in all of the area within the boundaries of the authority, a sales or use tax, or both, at a rate not to exceed one percent, consistent with sales or use tax levied by the state. The tax imposed is in addition to any other sales or use tax imposed pursuant to law and exempt from the limitation imposed by section 29-2-108. The sales tax will be collected by the Department of Revenue, and must be approved by the eligible voters. Levy an ad valorem property tax (not to exceed five mills), a sales and/or use tax (the rate not to exceed one percent. • Establish development impact fees so long as: no portion of the authority is located in a county with a population of more than one hundred thousand and so long as the fee is not levied upon development, construction, permitting, or otherwise in connection with low or moderate income housing or affordable employee housing, and the rate is two dollars per square foot or less. LOCAL GOVERNMENT AND FAIR HOUSING Local governments are responsible for ensuring their jurisdictions comply with federal laws and regulations regarding Fair Housing. Failure to do so can result in costly litigation from a fair hous- ing or false claims complaint. it may also result in your jurisdiction's being declared ineligible to receive federal community development or housing funds. Fair Housing is defined as the right of all people to be free from discrimination in the rental, sale, or financing of housing. Discrimination consists of any actions, omissions, or decisions made because of race, color, religion, sex, sexual orientation, disability, familial status, or national origin that limit housing choices, or that have the effect of limiting them. Page 26 Division of Housing I Affordable Housing Guide for Local Officials Every jurisdiction that qualifies for its own distribution of federal HUD funds for commu- nity development and/or housing is required to complete an Assessment of Fair Housing (AFH). The AFH is designed to help communities iden- tify, among other things, fair housing issues pertaining to patterns of integration and segre- gation; racially and ethnically concentrated areas of poverty, disparities in access to oppor- tunity, and disproportionate housing needs, as well as the contributing factors for those issues. Upon completion of the AFH, each commu- nity must then incorporate it into subsequent Consolidated Plans in a manner that connects housing and community development policy and investment planning with meaningful actions to Affirmatively Further Fair Housing. Finally, each community should maintain records of actions taken and outcomes towards Affirmatively Furthering Fair Housing to report to HUD. Even those local jurisdictions that do not receive direct funding from the federal government are responsible for ensuring the availability of fair housing. Local regulations that impede fair housing, such as prohibiting rental housing in areas zoned as single-family residential, could result in fair housing litigation. Many means of reducing impediments to fair housing are under the control of local governments, in particular land use regulations and zoning policies. Actions to reduce regulatory barriers to affordable housing often also improve Fair Housing, because racial and ethnic minorities, single -parent households, and disabled households are disproportionately low income. Regulations and policies that reduce impediments to fair housing may permit: • Small houses (no minimum size required). • Small lot sizes. • Multi -family housing. • Manufactured housing. • Group homes for protected classes in residential areas. • Accessory dwelling units. • Mixed-use development. • Lower parking standards for affordable housing, multi -family housing, group housing and special needs housing. • Higher density in multi -family areas; and • Growth management exemptions such as fee waivers. Permitting affordable Dousing options in a variety of zoning areas helps to decrease the concentration of poverty into just a few areas. Such concentrations of poverty often have undesirable economic effects and result in blight; preventing the creation of such areas is essential to the vibrancy and health of a community. Division of Housing I Affordable Housing Guide for Local Officials Page 27 LAIRD USE POLICIES AND STRATEGIES LAND USE POLICIES AND STRATEGIES The State Demography Office projects Colo- rado's population to exceed 5.9 million by the year 2020, and 6.4 million by 2025, with contin- ued peaks and valleys of economic change. This represents a 28 percent increase between 2010 and 2025. Continued growth will impact schools, transportation, air quality, and other public services. In some communities, development pays its own way through fees for open space, parks and recreation facilities, roads, water and sewage treatment, fire and police protection, and trash removal. The cost for these services will then be borne by each new development, rather than being spread among the existing community residents and businesses. In addi- tion to fees for municipal services, developers Ab must also add in the cost of the local standards required to build in each community. These standards can require brick facades, three-inch diameter trees, or minimum lot sizes. Each adds costs that are passed on to the consumer. Local government's greatest impact on housing cost is in regulating land use and building stan- dards. It is when a local government includes affordable housing in its long-term development plans that the community achieves the great- est gains in keeping housing affordable to its residents. Division of Housing I Affordable Housing Guide for Local Officials Page 2 LAND USE POLICIES AND STRATEGIES ATTRACTING AFFORDABLE HOUSING A strategy for attracting affordable housing must be linked with local capital improvement plans. The lack of sufficient infrastructure increases the cost of housing development, limits site options, diminishes long-term economic competitiveness, and aggravates growth -related disputes. The amount of devel- opable land is often dependent on topography, abutment to state or federal lands, or adjacent municipalities. In many towns, construction of market -priced housing has consumed the remaining buildable sites, so planning ahead is important. Create a dialogue with the development community, including real estate agents, devel- opers, builders, architects, engineers, and plan- ners. Allow everyone an opportunity to express their points of view. Look for creative solutions to difficult issues. To reduce costs for affordable housing in your community, include the following in your expe- dited process: building permit, zoning permit, subdivision approval, rezoning, certification, special exception, variance, or any other official action of your jurisdiction having the effect of permitting the development of land. Work/live policies encourage mixed uses in appropriate non-residential or existing mixed-use areas to help achieve a reduction in commuter traffic, create affordability, and provide living space in renovated, redesigned structures. These policies can be used to encourage and support artists, telecommuters, freelancers, and other compatible employment. HOW TO CREATE LAND USE POLICIES THAT ENCOURAGE AFFORDABLE HOUSING STEP 1: Analyze the purpose of land use regulations and building codes The primary purpose of land use regulations and building codes is the health and safety of residents living and working in the community. Local govern- ments should look at the cost of implementing these policies to determine their long-term impact on housing development, considering the origi- nal purpose of the existing code or standard, and updating or changing them as necessary. Page 30 Division of Housing I Affordable Housing Guide for Local Officials LAND USE POLICIES AND STRATEGIES STEP 2: Understand your housing market Assess the overall condition of a community's housing and the need for specific types of hous- ing (i.e., homeownership, rental, and special needs housing). A housing needs assessment examines existing housing stock — its charac- teristics, physical condition, and the number of units — and may make recommendations about the type and quantity of housing required to satisfy future needs. STEP 3: Learn from other Colorado local jurisdictions Colorado communities have many different approaches to affordable housing. Programs range from incentives to requirements, from monetary contributions to donations of land, from deferral of impact fees to fee waivers. Local governments can draw lessons from the experiences of similar communities, exploring how they have responded to the demand for affordable housing, and planning accordingly. STEP 4: Create an affordable housing strategy Opportunities to create affordable housing occur on a frequent basis in local communities, By creating affordable housing goals and strate- gies tied to the housing and economic needs of the community, local governments are prepared to take advantage of opportunities in a consis- tent and rational manner. Division of Housing I Affordable Housing Guide for Local Officials Page 31 LAND USE POLICIES AND STRATEGIES LAND STRATEGIES Strategy Benefit Public Action Zone sufficient land for all Allows market to respond Vacant or under -developed housing types, including to housing needs. Avoids land can be zoned based medium and high zoning delays that increase on projected housing needs densities. the cost of specific housing including single-family, developments. multi -family, affordable, and manufactured housing. Reduce/eliminate Provides for more units per Allow alternative site designs, minimum lot size, acre, thereby promoting based on utility access, soils, efficiency and affordability. topography, and other factors to minimize consumption of land. Increase densities for Ensures that housing Modify zoning ordinances to residential development in is located close to allow increased densities in commercial areas. employment. commercial areas. Allow Planned Unit As a flexible negotiated tool, Modify local zoning or Developments (PUDs). PVDs encourage affordable subdivision ordinances. housing. Enact a parking reduction Increases land use efficiency Examine parking standards and ratio for projects that and reduces cost of housing. compute a reduction formula meet your standards for for affordable housing based on affordable housing. your community's needs. Enact by ordinance. Increase densities for Ensures that workers have Target urban corridors in residential development either proximity to their planning documents as areas of along transportation jobs or access to mass increased density. corridors. transportation. Encourage mixed-use Allows residential to co -exist Modify zoning regulations development. with commercial uses. to allow for mixed-use development. Page 32 Division of Housing j Affordable Housing Guide for Local Officials LAND USE POLICIES AND STRATEGIES LAND STRATEGIES (cont.) Strategy Benefit Public Action Create density bonuses to Provides for an increase in Modify local zoning laws to allow encourage more efficient density over the otherwise density bonuses. land use. maximum developable density when a project incorporates a certain ratio of affordable units to market units and when those units will stay affordable for a designated period of time. Provide a linkage Large-scale businesses Modify local zoning ordinances ordinance. provide affordable units to allow for linkage. during the development process to increase housing units available to their minimum wage workers. Enact a maximum lot size. Decreases sprawl, increases Identify and designate areas for densities and helps promote maximum lot size development production of affordable through the comprehensive housing units. plan. Allow zero lot -line Allows houses to be sited Adopt/modify local zoning laws development. on a common lot line to to allow zero side or rear yard increase the usable space on setbacks. the other side. Allow/encourage Reduces development and Modify subdivision or zoning clustering of housing facility maintenance costs regulations to allow for units. and provides incentives for clustering. efficient development. Division of Housing J Affordable Housing Guide for Local Officials Page 33 LAND USE POLICIES AND STRATEGIES CONSTRUCTION STRATEGIES Strategy Benefit Public Action Enact uniform building Allows builders to use Adopt uniform building codes. codes that are accepted by economies of scale for Limit amendments to local all local governments. construction designs and health and safety issues only. if materials, reduces design amendments to building codes and construction errors. are being considered, the cost of these variations should be considered in the decision. Allow flexibility in Allows rehab and conversion Adopt a scoring system that rehabilitation codes while of buildings to affordable quantifies the overall standard maintaining protection of housing while maintaining of safety by assigning points health and safety. standards for community to each improvement relative health and safety. to each other. This creates an overall safety threshold, but allows cost savings on individual improvements. Assess development Costs for modest homes and Develop and adopt a formula for charges based on square apartments will decrease assessing development fees that footage rather than on a and larger, less land -efficient relates to cost per square foot. per-unit basis. homes will pay more, thus encouraging affordable housing. Promote the use of infill Enhances housing Exempt or defer infill development. affordability by using development areas from some existing infrastructure fees or permit requirements, and services rather than or grant tax rebates or density requiring expensive new bonuses. roads or water and sewer lines. Page 34 Division of Housing I Affordable Housing Guide for Local Officials LAND USE POLICIES AND STRATEGIES CONSTRUCTION STRATEGIES (cont.) Strategy Benefit Public Action Provide an infrastructure Encourages affordable On a case-by-case basis, a local loan or grant (up to a housing by deferring government may provide a loan designated percentage) to extraordinary off-site costs or grant (up to a designated meet off-site infrastructure until the project is able to percentage) to a project that requirements for a recoup some of these costs meets the criteria established by project that meets criteria as other sites develop. the local government. established by the local government. For example, the local government may provide a loan or grant up to 15 percent of any off-site cost deemed extraordinary by both the local government and the developer. Ensure that zoning and Prefabricated homes are Modify zoning and land land use regulations allow constructed under strict use regulations to allow manufactured homes to standards, have many styles, manufactured housing to be installed on permanent and offer an important be installed on permanent foundations. affordable alternative to site- foundations. built homes. Allow innovative New materials and design Modify building code regulations construction methods. elements may contribute to allow innovative construction. Examples include new to housing affordability plumbing or electrical if allowed by a local techniques or materials. government. Division of Housing I Affordable Housing Guide for Local Officials Page 35 LAND USE POLICIES AND STRATEGIES LOCAL PROCESS STRATEGIES Strategy Benefit Public Action Use one-stop or parallel Reduces time delays Develop and implement permit processing, caused by multiple agency common application forms reviews. Such delays add where possible, and provide to the carrying costs of verification and consulting housing development for services throughout the time -sensitive items such planning process, to ensure that as property taxes and permits can be issued as quickly construction loan interest. as possible. The lead municipal agency Set time limits for multiple Reduces time delays and agency review and uncertainties. should transmit a single master approval of building plans. application to appropriate departments giving each a set time for response. Afterjoint hearings with the developer, each department has a limited amount of time for final decision. Provide for waiver or Reduces up -front Establish affordable housing deferral of fees. development costs and criteria for which waivers may retains savings in the be considered. Projects that project. The project becomes meet criteria are eligible for more affordable for current waiver or deferral. and future residents. Allow a Property Tax Encourages affordable Develop affordable housing exemption for those housing. Fewer costs are criteria that affordable projects developments meeting borne by the units. must meet to qualify for a defined criteria. defined term of property tax exemption. Page 36 Division of Housing I Affordable Housing Guide for Local Officials LAND USE POLICIES AND STRATEGIES LOCAL PROCESS STRATEGIES (cont.) Strategy Benefit Public Action Resolve historic and Saves time and money. Requires that historic or natural natural resource Provides more certainty resources be inventoried, protection issues — such in the permitting and evaluated, and protected during as landmarks or open development process. comprehensive plan updates. space -- during the Eliminates second-guessing Resource protection measures planning process, rather or hidden costs during the must be clear and objective. than have these issues development process. delay the permitting process and add cost to the project. Allow for Transfer of Accommodates housing Development rights are Development Rights construction while assigned to land that is (TDRs). protecting environmental designated for open space. resources or open space. These development rights may be sold by the landowner and transferred to other areas where development is more desired. Use development This process works best as Developers enter into an agreements. a public/private partnership agreement with the local where the risk can be borne government which "freezes" the by both sectors. regulations applicable to the development for a period of time specified in the agreement. The Development Agreement includes the savings accrued from regulatory concessions in return for the construction of affordable housing, public facilities, or preservation of environmentally sensitive land or historic structures. Division of Housing I Affordable Housing Guide for Local Officials Page 37 LAND USE POLICIES AND STRATEGIES INCENTIVES AND OTHER STRATEGIES Local Housing Trust Fund Local governments can create a dedicated funding stream for affordable housing in a community through local housing trust funds. Thesetrustfunds can create newgap sourcesfor the development of housing or land banking for future housing needs when sufficient funding is available. Depending upon the proposed source of funding, a new revenue stream or tax could be subject to voter approval under the TABOR amendment. Incentives For Infill Housing Local jurisdictions can create an incentive for infill housing by reimbursing development fees for affordable housing built inside defined boundaries. Developing within a town or city's existing grid utilizes infrastructure already in place and reduces the traffic impact of devel- opment, particularly where public transit exists. Accessory Dwelling Unit An Accessory Dwelling Unit is an additional living unit attached to a primary residence on a single- family lot. Most local governments provide stringent guidelines which detail how and when these units will be allowed. Some communities approach the issue on a case-by-case basis. Other communities utilize conditional use permits and a set of criteria for parcels on which accessory dwellings may be built, such as lot size, setback requirements, access, and parking. k Page 38 Division of Housing I Affordable Housing Guide for Local Officials REDUCING REGULATORY BARRIERS REDUCING REGULATORY BARRIERS Growth management is an ongoing concern for state and local elected officials in Colorado, and every community must determine which approach best serves its unique needs. For some, this may mean closely examining public policies used to guide the creation of trans- portation systems, water supply, open space, and housing, For others, it may mean adopting policies that growth should "pay its own way," resulting in sometimes complex and confusing impact fee structures. Even in an robust economy, wages do not always keep up with the cost of housing. Public policy should control direct development according to a community's wishes. Public policies related to growth control direct development according to a community's wishes. Sometimes, however, those tools inhibit housing that is affordable to current or prospective residents and may affect a community's ability to attract an adequate workforce. It is important that a community examine its growth regulations to understand and lessen their impact on affordable housing. DOH has identified the types of land use regula- tions frequently cited as barriers to affordable housing. Division of Housing' Affordable Housing Guide for Local Officials Page 39 REDUCING REGULATORY BARRIERS ANNEXATION, SUBDIVISION AND ZONING POLICIES Traditional land -use controls such as annexa- tion and zoning ordinances which regulate the general placement and density of land uses in a community and subdivision regulations which govern site-specific development, can have significant impacts on the price of hous- ing. Laws governing annexation and subdivision .,,y The Three "Jejocent to a municipality. • Reinvest in your community's housing stock to help develop affordable housing for local families. • Reform community development policies to help achieve a housing balance. • Renew community housing partnerships that help produce affordable multi -family units for working families. While zoning is generally intended to separate incompatible land uses, the use of exclusion- ary criteria in defining the term "incompatible" can lead to overly strict restrictions or prohibi- tions on housing types that are most likely to be affordable, including multi -family or manu- factured housing. Other examples of zoning matters that affect housing affordability: • Minimum house size, lot size, or yard size requirements. Prohibition of accessory dwelling units. • Excessive subdivision standards. Restrictions on land zoned and available for multi -family housing or manufactured housing. Regulations often present either a cost incurred by the development, or a lost opportunity to balance a community's housing stock. The more regulations, the higher the cost to the community. Ultimately, development costs are passed on to the consumer, whether renter or homeowner, as a higher cost per square foot. The higher the cost per square foot, the less affordable the unit. During times of economic recession, it becomes critical for state and local governments to provide housing opportunities for all income levels as a means to encourage new employ- ment. Employment and housing are inextricably joined together. Across Colorado, more commu- nities are acknowledging the linkage and review- ing their land use and subdivision regulations with a goal of increasing housing affordability. DEVELOPMENT PERMIT PROCESSING AND BUILDING CODES The cost of housing development and construc- tion will also be affected by the local permitting process and building codes. In Colorado, the development permitting process and adopted building codes are approved and implemented at the local level to provide the community with safe and healthy neighborhoods and homes that meet specific design criteria. Housing development permitting may include a number of permit types and activities, including but not limited to; site use and setbacks, utility connections, site drainage, neighborhood design criteria, and subdivision plans that are in place to preserve and protect the land use goals of the jurisdiction. The permitting approval process Page 40 Division of Housing I Affordable Housing Guide for Local Officials can be expensive and may involve multiple local government offices and independent reviews that create challenges and inefficiencies in the process. Local governments are encouraged to review their housing development permitting process to look for opportunities to eliminate redundancies and overlap between approval agencies, to reduce costs, and to speed up the overall approval process. Building codes govern the use and installation of materials, and the design and construction standards for buildings. A locally adopted building code plays a vital role in protecting the health and safety of the occupants of a build- ing, and the value and longevity of the building. A housing project may be subject to building code department fees for the issuance of valid building, electrical, plumbing, heating, and gas permits, as well as building plan review fees to ensure compliance with the locally adopted building code. in return for these fees, the local building department conducts on-site inspec- tions of the building during construction to observe compliance with the adopted building code. In Colorado, the total cost of permit and review fees vary between local communities and may run over $30,000 per single-family house depending on the specific local fees. The effect of permitting and review fees on the overall home price can be significant, as most of this cost is passed from the builder into the final sales price of the home, having a direct impact on the affordability of homes. DECREASING THE COST OF REGULATION Local governments can support affordable REDUCING REGULATORY BARRIERS housing development through a variety of ways, including: A review of their permitting and review fees to consider fee deferrals or reductions in order to reduce the overall development cost of housing. • Coordination of housing strategies between municipalities and counties in planning affordable units. • Streamlining of the permit review process between agencies and jurisdictions for affordable housing projects. Building flexibility into local codes for design standards, There may be adequate but less expensive design alternatives that can reduce costs while still produc- EXAMPIgESMWAAAbANCE LAND USE Mixed Use Allows housing to exist above retail shops or other commer- cial development. Overlay Districts Allow for flexibility of zoning and development standards and could include such things as small building setbacks, garages placed in the rear of homes, narrow streets to calm traffic, and vertical mixed uses. FINANCING PUBLIC IMPROVEMENTS Local comprehensive land use and capital construction plans solidify a communitys long- term vision. In the face of tremendous growth, planning ensures that a community can handle new business opportunities and accommodate future residential development. In times of Division of Housing I Affordable Housing Guide for Local Officials Page 41 slower growth, planning enables local jurisdic- tions to allocate scarce resources in an efficient and consistent manner. Local governments have begun to charge for many of the services they provide, using a "pay-as-you-go" plan to recoup infrastructure costs. These development charges include fees in lieu of payment, impact fees, administrative processing fees, and plant investment fees to pay for service expansion. While increasing revenues to pay for growth, these fees become increased costs for renters and homebuyers. A community may recoup the cost of its infrastructure, but the result may be a reduction in housing affordabiNty. A lack of adequate workforce housing can discourage new potential employers from establishing operations in the community. The best approach is to find a balance that maintains the integrity of a community's infrastructure but eases regulatory cost burdens by incorporating waivers, deferral, or off -set of fees for affordable housing. EFFECT OF ENVIRONMENTAL AND CULTURAL PROTECTIONS ON AFFORDABLE HOUSING Resource protection statutes have a potentially large impact on housing construction. Imple- mentation of some of these major federal laws require significant amounts of time and money for compliance. They may also lack any standard dispute resolution process, other than federal courts. Clean Water Act (CWA) CWA is the nation's primary water qual- ity protection statute and affects planning and development for housing construction in a number of ways. It contains strict prohibitions on any construction activity potentially affect- ing wetlands, and it also controls stormwater runoff and nonpoint source discharges, which can impose additional strict requirements on Page 42 Division of Housing I Affordable Housing Guide for Local officials housing construction. Endangered Species Act (ESA) The ESA protects endangered and threatened species and their habitat. Listing a species as endangered or threatened can in rare circumstances remove thousands of acres from development. In recent years, developers and local governments have begun working cooperatively to avoid standoffs by designing and implementing habitat conservation plans. National Environmental Policy Act (NEPA) NEPA requires environmental impact state- ments (EIS) to be prepared prior to construction for certain projects involving federal funding or approvals. Preparation of an EIS may take months to complete, depending on the size and complexity of the proposed project and the development site. CREATING A COMMUNITY HOUSING TRUST FUND (HTF) An HTF is a flexible, community-based tool that allows local governments to respond to affordable housing or workforce housing opportunities on a case-by-case basis. HTFs generally have a committed, ongoing source of funding such as a dedicated portion of a sales tax or other revenue, or they may be funded from the sale of surplus property or through an annual commitment of general fund dollars. A local jurisdiction may set aside monies for future participation in affordable housing, provide dollars to housing non-profit organizations, or use the dollars to prevent the loss of affordable housing stock. REDUCING REGULATORY BARRIERS EXAMINE YOUR REGULATION Review your cultural and environmental policies and regulations to ensure their reasonability. Review historic preservation ordinances. Allow adaptive reuse or conversion of surplus buildings. REGULATORY BARRIERS CLEARINGHOUSE The U.S. Department of Housing and Urban Development's (HUD's) Office of Policy Devel- opment and Research (PD&R) established the Regulatory Barriers Clearinghoume to collect, process, assemble and disseminate information on the barriers faced in the creation and main- tenance of affordable housing. You can submit your experiences using their online form, to give them a better understanding of the issues facing developers of affordable housing. Division of Housing I Affordable Housing Guide for Local Officials Page 43 CREATING SUCCESSFUL NEIGHBORHOODS CREATING SUCCESSFUL NEIGHBORHOODS Successful housing development projects take the needs of the entire community into consid- eration. Any local government interested in affordable housing should solicit the input of a broad coalition of entities to explore how new projects will affect different segments of the population. Whether your community is promoting infill development, redeveloping existing areas, extending its boundaries, or working on all of these, it is important to create well-functioning, successful neighborhoods that include sufficient safe and affordable housing. Housing choice accommodates differing needs, ages, lifestyles, and family economic factors. Also important to neighborhoods are social and economic infrastructures that strengthen the workforce and provide community support. Attributes of healthy neighborhoods include parks and open space, schools, pedestrian access, commercial or mixed-use areas, and access to transportation, community institu- tions, and the vibrancy of our main streets. Division of Housing I Affordable Housing Guide for Local Officials Page 45 CREATING SUCCESSFUL NEIGHBORHOODS HOUSING PARTNERSHIPS Local government involvement is often needed to intiate affordable housing projects. Active local government participation can lower the risk, reduce costs by streamlining some of the processes, and help to develop the best product to meet local needs. One way to begin a housing project is to form a housing task force. The local government can work with the task force to clearly define its mission, activities, and responsibilities in the development process. The task force should be prepared to address the housing need priorities of the community, and to identify the groups and/or services that currently exist that could assist in meeting the established goals and objectives. In determining how to structure the task force, the roles for each member should be considered, as well as how members can work collectively and individually to remove barriers and facilitate the development process. If the community does not have the capacity, a third party may be needed. The task force can also establish what final product is desired, ensuring that the product or project effectively responds to or fills a gap in the housing needs of the community. Assessing Capacity Rarely does a single entity have the resources and capacity to develop affordable housing independently. Consequently, partnerships bring together the expertise and resources needed to complete the housing development process and may enable a local government to work on solving different aspects of the local housing picture, without pushing any one agency beyond capacity or duplicating services. When deciding on a course of action to address community housing needs, local governments must first determine their internal capacity, deficiencies, and gaps in order to assess where partnerships may be required. The following questions can assist local officials in assessing their capacity: • Should we begin the process with the resources we have or hire professional help? • If we begin on our own, at what point and for what tasks do we hire professionals? • How much time and money are we will- ing and able to invest in exploring our options? • Can we rely on our internal staff and funds to cover the initial expenses? • Are there staff members with time and skills to undertake this process? • Will we need this skill again in the future? • Can community volunteers assist with critical tasks? Will the involvement of these community volunteers increase local support for the project? • Are there other ways to accomplish or fund this project? • Are we the most appropriate entity to get this project done? • If there is funding for the initial project phases, how are these decisions affected? Development Options Use a Request For Proposals (RFP) to publicize needed services for inter- ested parties to submit statements of Page 46 Division of Housing I Affordable Housing Guide for Local Officials qualification, services and prices. • Hire a developer to manage the whole process. • Assemble an initial project team that can carry out earlyactivities without payment. • Form a development committee as part of the project. Selecting The Right Partners No matter the nature of the partnership or housing project, local government officials need to ask questions about the capacity and role of potential partners. The participation of local government is critical for this process. When seeking potential partners be sure to consider these questions: • What is the work history and background of the potential partner? • Do the references confirm what the POTENTIAL PARTNERS CREATING SUCCESSFUL NEIGHBORHOODS partner is saying? Are the financial records organized and well kept? What is the organization's experience in this particular form of development? Does the partner have experience in areas that are lacking by other members of the partnership? Increasingly, non-profit organizations are becoming valuable partners for local govern- ments in each stage of housing development. These organizations often have access to a substantial pool of volunteers as well as funding sources for pre -development costs, operating expenses, and construction activities specifically earmarked for non -profits. When partnering with more than one local government, it is advisable to clearly delineate in a written agreement which is the lead govern- ment agency, what each government's roles and Funding Partner — Provides grants or loans to the project in return for long-term affordability. Project Developer — Manages the team. Construction/Project Manager — Day-to-day project oversight. Service Provider— Provides services for special needs populations once the project is built. Housing Authority— Provides section S vouchers and ability to exempt property taxes. Property Management— Manages the project upon completion. Neighborhood Partners — Engage community members in a positive fashion about the project. Lenders — Provide financing for project. Division of Housing I Affordable Housing Guide for Local Officials Page 47 CREATING SUCCESSFUL. NEIGHBORHOODS responsibilities are, and, most importantly, the expectations of the project outcome. These are especially important in rural areas when a hous- ing project may draw its clientele from many of the smaller communities. Strengthening Neighborhood Dynamics When planning for new or redeveloping areas, look at existing neighborhoods and analyze the characteristics that make them attractive and well-functioning. Determine which features promote successful interactions among the residents. Create neighborhoods that welcome a range of age groups, and ensure that both rental and homeownership opportunities are available. Consider policies that allow for mixed uses, both residential and commercial, with establishments that draw people in and may provide informal meeting space. Churches, service clubs, and other local institutions can help foster community engagement and partici- pation. Non -profits and volunteer organiza- tions can work with you on the development of programs to improve the physical conditions of older neighborhoods through trash pick-up, graffiti removal, landscaping, painting, and building repairs Eliminating NIMBY The "Not In My Back Yard" syndrome, or NIMBY, is the tendency of neighbors to testify against a proposed project, often based on misconceptions or fears that property values, safety, or quality of life will be compromised. For affordable housing projects to be successful, outreach that builds and maintains community support should begin in the early stages of the development process. Local officials should anticipate neighborhood Page 48 Division of Housing I Affordable Housing Guide for Local Officials concerns regarding the project and provide factual information on community issues such as design, density, crime, traffic, and parking. Housing developers should be required to contact and involve all neighborhood groups and constituencies to insure their inclusion in the process. Public discussions can be used as an opportunity to acknowledge and address people's concerns, while promoting housing affordability as a positive and important factor in improving neighborhood conditions. Resis- tance to a development will be mitigated if local officials can demonstrate that affordable housing is a community asset, providing hous- ing for the workforce and local jobs during and after construction, bringing in federal and state subsidies, generating sales tax revenue, and reducing traffic and pollution. Colorado Main Street Colorado Main Street is a program founded by the National Main Street Center (NMSC), a national organization committed to historic preservation -based community revitaliza- tion. The Colorado program is managed by the Department of Local Affairs (DOLA) using the NMSC model to assist communities as they preserve and rejuvenate their downtown and commercial districts within the context of historic preservation. A town's main street says a lot about the community, and bringing to life the history and unique aspects inspire creative energy and pride. Local residents are eager to share their heritage and visitors come to learn and enjoy. Colorado Main Street has a tiered system for local programs to progress through as they achieve greater levels of self-sufficiency and success. The Affiliate tier gets limited services CREATING SUCCESSFUL NEIGHBORHOODS EVENTS AND ACTIVITIES • Hold an affordable housing forum or town hall meeting. • Host an affordable housing breakfast for citizens and housing professionals. • Host a community affordable housing fair. • Request affordable housing as a topic of a Chamber of Commerce retreat. • Host community round tables on affordable housing. • Provide information on the link between affordable housing and other aspects of community life. from DOLA, but it is a great way to connect to the Main Street network and/or begin the process of becoming a Candidate. Communities may remain an Affiliate as long as they desire. Main Street staff can work with your commu- nity to help explore the program and help you decide if it is right for your community. Please see the Colorado _Main Street Pro rn for more information on the prerequi- sites, requirements and available services for each tier Division of Housing I Affordable Housing Guide for Local Officials Page 49 FWGOLA a� co "e