Better overall housing policy is needed to allow more affordable housing to be built.
Bozeman commissioners greenlight new affordable housing policy by Nora Shelly Bozeman Chronicle Aug 24, 2022
It’s worth trying.
That was the reasoning a few commissioners pointed to Tuesday night when voting to approve a new affordable housing ordinance that focuses on incentivizing developers to build affordable housing by trading them things like reduced lot sizes or parking requirements and increased building heights.
Commissioners voted 4-1 to approve the ordinance.The policy has two buckets: shallow and deep incentives. Under the shallow incentives, 5% of homes would be required to be priced affordably, at 80% of area median income for rentals or 120% area median income for sale units.
Under the deep incentives, 50% of units would be required to stay affordable for 30 years at the same income restrictions for rental and for-sale units as under the shallow incentives.The incentives apply to all types of homes, including townhomes, single-family, and multi-unit homes.David Fine, who works in the city’s economic development department, said they are intended to work as a “subsidy to land,” since, for example, not having to add as much parking will allow for more land to be used for housing.
“(It) makes the land value go further,” Fine said during the meeting.The ordinance replaces the previous affordable housing ordinance, which focused on inclusionary zoning — a policy that required developers to build a portion of affordable homes within a development or pay cash or land in lieu.The practice was outlawed by the state Legislature in 2021.
Fine said they envision the deep incentives would largely be applicable for projects using low income housing tax credit financing or other subsidies.The deep incentives allow for further and expanded relaxations from city codes than the shallow incentives.
A few commissioners asked questions about potential negative impacts of the incentives, and what a development with relaxations from city standards would look like.
Commissioner Jennifer Madgic, who voted against the ordinance, said she was concerned with the “one size fits all” nature of the incentives.
City Manager Jeff Mihelich said there will be tradeoffs, but that he doesn’t think the incentives are “reckless.”
“It’s giving up something to get something else,” Mihelich said. “But if the goal is to create additional housing and affordable housing there are trade offs there.”
Fine said they believe any benefit from the incentives will be “relatively modest,” and they expect it will provide some level of affordable units.
“These code-based levers are the levers we have,” Fine said. “We cannot require affordability and we have limited power at the city over the cost of land, material, supply laborers or other financing conditions that are affecting the housing market.”
Developers would not have to request a variance or go through a special process to make use of the incentives, Community Development Manager Chris Saunders said.
Commissioners voted 3-2 against an amendment that would have removed relaxations from building design standards — like facade widths and building material standards.
“You shouldn’t be able to drive through our community and say that’s an affordable housing building or unit or area because it looks different from another area in our community,” said Mayor Cyndy Andrus, who voted for the failed amendment.
During public comment, Mark Egge, who used to serve on the city’s planning board and is a part of Gov. Greg Gianforte’s housing task force, suggested the city should go further and open up the relaxations offered in the shallow incentives package to all developments.“The time when small, incremental decisions could have materially affected our present circumstances was 20 years ago,” Egge said.