Affordable housing standard amendments pass first reading
The Ashland City Council unanimously approved the first reading of a series of proposed amendments to the city’s land use ordinance as it pertains to affordable housing standards, during a regular business meeting Nov. 17.
Senior Planner Brandon Goldman said with the initial affordable housing program cresting its first quarter century, land use requirements and price calculations will benefit from review and update.
“After 25 years, there’s opportunity to look back at these programs and make modifications,” Goldman said.
The Planning Department prompted feedback from for-profit and nonprofit housing developers to identify perceived barriers to affordable housing construction, then develop tactics to remove those barriers through the ordinance amendment proposal.
Original affordable housing standards that set household income qualifications, asset limitations and rent and sale price calculations were last updated in 2006, according to a meeting memo. Since then, lending requirements, homeowner’s association fees and local housing market trends have heavily influenced affordable housing unit development in the city.
Housing Program Specialist Linda Reid said evaluation of the affordable housing program was renewed in 2018, with a request from staff to revisit the goal of balancing housing affordability with reasonable rates of return for developers. Stakeholders including home buyers, real estate professionals, lenders and developers contributed to outlining the scope of Ashland’s affordable housing development challenges, Reid said.
“A lot of the work that went into this update was really aimed at removing barriers and making the program simpler to understand, easier to administer, more user-friendly and certainly making it better-able to provide the type of housing that we were wanting to provide,” Reid said.
The Housing and Human Services and Planning Commissions also approved the proposed ordinance amendments earlier in the season, Goldman said.
Among the proposed changes, a “high rent” limit determined by the U.S. Department of Housing and Urban Development would apply to units geared toward households earning between 60% to 80% of area median income as defined in the Medford-Ashland Metropolitan Statistical Area, while the “low rent” limit would apply to households that fall below 60% AMI.
“This provision would not eliminate the potential for a developer to build units at 60% area median income, either for rent or ownership, they would just be qualified under that 80% or less standard,” Goldman said.
Rental rates for affordable housing units suited for households between the low and high rent limits would be capped at the maximum rate set by HUD, based on the number of bedrooms, rather than the existing 23% of monthly income limit. Maximum monthly payments for purchased housing would not exceed 30% of monthly income, including taxes, fees and interest, assuming a 30-year fixed rate mortgage with 5% interest rate.
The term of affordability for rental housing would be set at 60 years and 30 years for purchased housing, based on HUD standards and development requirements, Goldman explained.
To maintain unit affordability over time, maximum resale price would be calculated using the seller’s initial purchase price, adding .125% for each month the unit was owned. Altering the unit resale formula for affordable ownership over a set time period is intended to lend a degree of predictability as far as homeowner equity, Goldman said.
Proposed ordinance amendments remove requirements that affordable housing must be comprised of various unit types in direct proportion to market-rate units in the same development. Goldman said the 2006 rule stemmed from concern over clusters of affordable housing units becoming stigmatized, which hasn’t been as substantial a problem as anticipated.
The proposed ordinance amendments are in line with state goals and intended to achieve objectives within the city’s comprehensive plan more effectively, he said.
“I think that this is a forward step for affordable housing for Ashland,” Councilor Stefani Seffinger said, who made the motion to approve first reading.
The City Council unanimously approved the first reading of land use ordinance amendments related to affordable housing standards Nov. 17, and will revisit the language at the Dec. 1 business meeting.
Contact Ashland Tidings reporter Allayana Darrow at email@example.com and follow her on Twitter @AllayanaD.