HomeMy WebLinkAboutAgenda_HAB_03.19.2019Notice of Meeting for the
Housing Adv isory B oard
of the City of Georgetown
March 18, 2019 at 3:40 P M
at Historic L ight and Waterworks B ldg, 406 W. 8th Street Georgetown, T X 78626
T he C ity of G eorgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you
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O ffic e, at leas t three (3) days prior to the sc heduled meeting date, at (512) 930-3652 or C ity Hall at 808 Martin
Luther King Jr. S treet, G eorgetown, T X 78626 for additional information; T T Y users route through R elay
Texas at 711.
P ublic Wishing to Address the B oard
O n a s ubjec t that is posted on this agenda: P lease fill out a speaker regis tration form whic h can be found at the
Board meeting. C learly print your name, the letter of the item on which you wish to speak, and pres ent it to the
S taff Liais on, preferably prior to the start of the meeting. You will be c alled forward to speak when the Board
cons iders that item.
O n a s ubjec t not posted on the agenda: P ersons may add an item to a future Board agenda by filing a written
request with the S taff Liais on no later than one week prior to the Board meeting. T he reques t must include the
s peaker's name and the spec ific topic to be addres s ed with sufficient information to inform the board and the
public . F or Board Liaison c ontact information, pleas e logon to
http://government.georgetown.org/c ategory/boards -commissions /.
A At the time of posting, no persons had signed up to speak on items not on the agenda.
L egislativ e Regular Agenda
B Nomination and selec tion of Vic e-chair and S ec retary for the 2019/20 Board. S usan Watkins, AI C P,
Hous ing C oordinator
C Disc ussion and review of Bylaws and attendanc e polic y. S usan Watkins, AI C P, Hous ing C oordinator
D Disc ussion and possible action to approve meeting time for 2019/20 Board. S usan Watkins, AI C P,
Hous ing C oordinator
E C ons ideration and possible action to approve the minutes from the January 29, 2019 meeting. S us an
Watkins, AI C P, Hous ing C oordinator
F P resentation and dis cus s ion of the application process to Williams on C ounty for C DBG funding for
F Y19-20. S us an Watkins , AI C P, Housing C oordinator
G Disc ussion on Home R epair program eligibility and management with Habitat for Humanity of Williams on
C ounty. Linda S loan, C ommunity Involvement Direc tor, Habitat for Humanity of Williams on C ounty
H P resentation and dis cus s ion on res earch c ompleted by Univers ity of Texas graduate students on hous ing
polic y tools. S us an Watkins , AI C P, Housing C oordinator
I C ons ideration and possible recommendation to the 2030 S teering C ommittee on propos ed housing
polic ies for the 2030 Housing Element Update. S usan Watkins, Hous ing C oordinator
J Update on the 2030 P lan Update proc es s . Nat Waggoner, AI C P, Long R ange P lanning Manager and Lou
S nead, Board C hair
Page 1 of 120
Adjournment
C E RT IF IC AT E O F P O S T IN G
I, R obyn Densmore, C ity S ecretary for the C ity of G eorgetown, Texas, do hereby c ertify that this Notic e of
Meeting was pos ted at C ity Hall, 808 Martin Luther King Jr. S treet, G eorgetown, T X 78626, a place readily
ac cessible to the general public at all times, on the ______ day of __________________, 2019, at
__________, and remained so pos ted for at least 72 continuous hours preceding the sc heduled time of s aid
meeting.
____________________________________
R obyn Densmore, C ity S ecretary
Page 2 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
Nomination and s election of Vice-c hair and S ecretary for the 2019/20 Board. S us an Watkins , AI C P,
Housing C oordinator
IT E M S UMMARY:
T he Board will selec t a Vice-c hair and S ecretary for the 2019/20 year.
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
Page 3 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
Dis cus s ion and review of Bylaws and attendance policy. S us an Watkins , AI C P, Housing C oordinator
IT E M S UMMARY:
T he board will review the Bylaws and attendance expec tations for the year. T he P urpos e of the Board as
s tated in the Bylaws is :
T he Board is es tablished for the purpos e of ensuring that the C ity has affordable hous ing for
res idents at all inc ome levels . T he Board is res ponsible for providing long-range hous ing researc h
and policy rec ommendations with the housing element of the C ity’s comprehensive plan. T he Board
is also res ponsible for reviewing and making recommendations regarding housing developments that
request C ity s upport for s tate and federal funding. S ee O rdinance C hapter 2.116.
S taff will dis cus s this purpose s tatement in c ontext of the Board's upcoming activities for the 2019/2020
year.
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
AT TAC H ME N T S:
Description Type
Attachment 1 - Hous ing Advis ory Board Bylaws Backup Material
Attachment 2 - Attendance Policy Backup Material
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SEC 2.36.010 DUTIES OF COMMISSION, COMMITTEE & BOARD MEMBERS
Attendance by Members is integral to success of the commission, committee or board. It is
Council policy to require a minimum of 75 percent attendance of each Member at each
regularly scheduled meeting including subcommittee meetings. A Member shall be allowed
two excused absences for the Member's personal medical care, required medical care of a
Member's immediate family member (as defined by City Ordinance), or Member's military
Service that shall not count against the 75 percent attendance requirement. Written notice
shall be sent to a Member and the Member's City Council representative when it appears the
Member may violate the attendance policy by being absent from more than 25 percent of
regularly scheduled meetings, including subcommittee meetings. Excessive absenteeism may
result in the Member being replaced by the Council. If a Member is removed from a committee,
commission or board, that position shall be considered vacant and a new Member shall be
appointed to the Board in accordance with Section 2.36.040
Page 12 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
Dis cus s ion and pos s ible ac tion to approve meeting time for 2019/20 Board. S us an Watkins , AI C P,
Housing C oordinator
IT E M S UMMARY:
T he Board will disc uss and pos s ibly approve a new meeting time for the 2019/20 year.
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
Page 13 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
C onsideration and pos s ible ac tion to approve the minutes from the January 29, 2019 meeting. S usan
Watkins , AI C P, Housing C oordinator
IT E M S UMMARY:
Meeting minutes from the January 29, 2019 Housing Advis ory Board meeting.
F IN AN C IAL IMPAC T:
None.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
AT TAC H ME N T S:
Description Type
Attachment 1 - Meeting minutes Cover Memo
Page 14 of 120
Housing Advisory Board Page 1
Minutes January 29, 2018
City of Georgetown, Texas
Housing Advisory Board
Minutes
January 29, 2019, at 4:00 p.m.
Historic Light and Waterworks Building, 406 W. 8th Street
Georgetown, Texas 78626
Members present: Nathaniel Bonner; Nikki Brennan; Mary Calixtro; Randy Hachtel; Jennyce
Hume; Bob Weimer; and Lou Snead, Chair
Staff present: Susan Watkins, Housing Coordinator; Sofia Nelson, Planning Director; Nat
Waggoner, AICP, Long Range Planning Manager; and Karen Frost, Recording Secretary
Public Wishing to Address the Board
A. As of the deadline, no persons were signed up to speak on items other than those posted on the
agenda.
Legislative Regular Agenda
B. Consideration and possible action to approve the minutes from the November 19, 2018
meeting. Karen Frost, Recording Secretary
Motion by Weimer, second by Bonner to approve the minutes as amended to correct a
typographical and attendance error. Approved 7 – 0.
C. Consideration and discussion on Home Repair program partnership end of year report. Susan
Watkins, AICP, Housing Coordinator
a. Chair asked for Habitat for Humanity to provide answers to:
i. How are applications awarded?
1. Does HfH consider neighborhood needs?
ii. When will application window be open?
iii. What are HfH communication strategies to let community know about money?
Staff responded they will request a representative from HFHWC to attend the next HAB
meeting.
D. Presentation and discussion on gap analysis of 2030 Housing Element update. Susan Watkins,
AICP, Housing Coordinator
Watkins provided a presentation on the gap analysis. Snead provided comment that there is a
general agreement with the 2030 Steering Committee that there is an affordable housing issue.
Weimer said there is lack of available affordable units and a need for the rest of the community
to understand the impact of those seeking housing Snead and Hume said the findings of SC#5
recap were not surprising. Snead asked if there is a way of identifying the economic impact of
affordable housing for workers earning income at or below median area income. Watkins said a
Page 15 of 120
Housing Advisory Board Page 2
Minutes January 29, 2018
presentation will be made to City Council and the Council will be asked for a priority level on
where future housing work should take place. Snead asked why a chart grouped all households
earning more than $75K into a larger group. He asked that the group of households making
between $75,000 and $100,000 be broken out and for charts to demonstrate Area Median Income
(AMI) + 120% of AMI.
E. Review and evaluate 2012 Housing Element recommendations. Susan Watkins, AICP, Housing
Coordinator
The board evaluated the recommendations found in the Housing Element adopted in 2012
using the SMART acronym as outlined below:
a. Specific. Is it focused?
b. Measurable. Will we be able to determine when the policy has been
accomplished?
c. Achievable. Is the policy realistic to achieve by 2030?
d. Relevant. Does the policy reflect the vision statement and public input
themes?
e. Time-bound. Will we be able to set a timeframe for accomplishing the policy?
The 2030 Plan goal for housing is: Ensure access to diverse housing options and preserve existing
neighborhoods, for residents of all ages, backgrounds and income levels. The themes of
Affordability, Preservation and Diversity will each have policies that support achieve the
goal. The board was also asked to determine which 2030 Plan goal theme is reflected in
each 2012 Housing Element recommendation.
The results of the evaluation exercise are in the table below:
2012 Recommendation Affordability (A)
Preservation (P)
Diversity (D)
SMART
1. Develop a program through which workforce
housing developers can receive incentives to
provide new units.
A SMART
2. Determine suitable multifamily zoning locations
with sufficient services and land use compatibility
for an appropriate mix of housing variety within
the city.
D SMART
3. Continue the Housing Diversity density
incentives for new residential construction.
A Concerns about
measurability
Page 16 of 120
Housing Advisory Board Page 3
Minutes January 29, 2018
2012 Recommendation Affordability (A)
Preservation (P)
Diversity (D)
SMART
4. Prioritize the use of HUD CDBG funds for
affordable housing
A SMART
5. Strengthen home buyer counseling and support
services.
D Concerns about
relevancy,
measurability,
timely
6. (a) Seek out County CDBG funds and State
HOME funds in support of affordable housing
initiatives; (b) subcontract with local nonprofits to
implement projects.
A SMART
7. Identify revitalization areas for concentrated
investment.
P SMART
The board stated:
- There is value in home buyer counseling, but it may not be the City’s role
- Revise UDC to reduce standards to allow for more affordable housing
- Preservation needs to be more present in the policies
Within the next week board is to email Watkins any policy themes that they would like staff
to draft for the next meeting.
F. Update on the 2030 Plan Update process. Nat Waggoner, AICP, Long Range Planning Manager
and Lou Snead, Board Chair
Waggoner gave an update on the 2030 Plan update schedule. The Board decided to cancel the
February meeting and hold the next meeting on Monday, March 18, 2019.
Adjournment
Motion by Hachtel, second by Weimer to adjourn. The meeting was adjourned at 6:30 pm.
__________________________________ _______________________________________
Approved, Lou Snead, Chair Attest, Randy Hachtel, Secretary
Page 17 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
P res entation and disc ussion of the applic ation proc es s to Williamson C ounty for C DBG funding for
F Y19-20. S usan Watkins, AI C P, Hous ing C oordinator
IT E M S UMMARY:
S taff will pres ent an overview of Williams on C ounty's C ommunity Development Bloc k G rant (C DBG )
program. T he C ity of G eorgetown is a s ub-rec ipient of C DBG funds through a C ooperation Agreement
with Williams on C ounty.
Williams on C ounty is currently updating its 2019-2023 C onsolidated P lan, the planning document that
identifies and prioritizes affordable hous ing and c ommunity development needs in the C ounty over the next
five years. C DBG funding rec eived by the C ounty is to be used to addres s the needs identified in the
C onsolidated P lan through loc al projec ts. S takeholders are enc ouraged to provide input in assisting
Williams on C ounty with needs identific ation. S takeholder works hops and public meetings were held on
Marc h 6th and 7th, 2019. T he C ity of G eorgetown attended and provided information from the recent
hous ing study that was c onducted in 2018.
T he C ounty has opened a c ommunity survey to assist with assessing community needs that will close on
Marc h 31, 2019. T he survey link can be found at:
https://www.s urveymonkey.com/r/2019-23-c p-williamson-eng
T he applic ation for C DBG F Y19-20 funding will open in April 2019 and the deadline to submit an
application is May 22, 2019. Eligible activities include:
Acquis ition of property
Housing and hous ing rehabilitation
P ublic fac ilities and improvements
Homeowners hip as s is tance
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
AT TAC H ME N T S:
Description Type
Attachment 1 - Pres entation Pres entation
Page 18 of 120
Community Development
Block Grant (CDBG)
Program FY20
March 18, 2019
Page 19 of 120
Purpose
•Inform board on CDBG application
process and Consolidated Plan input.
2Page 20 of 120
Agenda
•PART I
–CDBG Overview
•PART II
–2019-2023 Consolidated Plan
•PART III
–Williamson County Application
3Page 21 of 120
PART I
CDBG Overview
Page 22 of 120
CDBG overview
•Entitlement communities
–Non entitlement communities can be sub-
recipients
•Low to Moderate Income (LMI) areas
–At least 47% of households have incomes at
or below 80% of the area median income
(AMI)
5Page 23 of 120
6Page 24 of 120
CDBG overview
•Eligible activities
–Acquisition of property
–Housing and housing rehabilitation
–Public facilities and improvements
–Homeownership assistance
7Page 25 of 120
Past use of funds
•2013
–$79,400 Wastewater line for Georgetown Project’s
NEST Homeless Teen Center (completed 2014)
–$38,000 Engineering for sidewalks along MLK/3rd
and 2nd Street
•2014
–$160,000 Sidewalk along the south side of E. 2nd
Street from Austin Avenue to College Street
8Page 26 of 120
Past use of funds
•2015
–$87,120 Sidewalk along MLK/3rd Street from Scenic
to Austin
•2016
–$135,500 Scenic Drive Sidewalk
•2018
–$206,824 17th Street Sidewalk and bus shelters
9Page 27 of 120
Past use of funds
10Page 28 of 120
Past use of funds
11Page 29 of 120
FY 2018 Project
17th St Sidewalk and Bus stops
•In eligible Census tract
•$155-180K
•Near Stone Haven
development
•Priority 2 for Sidewalk
Master plan
•Connects and provides
accessibility to two
GoGeo stops
•Public park
12Page 30 of 120
13Page 31 of 120
PART II
2019-2023 Consolidated Plan
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Consolidated Plan
•Planning document that identifies the
affordable housing and comm. dev. needs
•Update every 5 years
•Used to evaluate projects as County
receives CDBG funds annually
15Page 33 of 120
Consolidated Plan
•City is submitting information from
technical study identifying needs in
Georgetown
16Page 34 of 120
Consolidated Plan
•Community survey –closes 03/31/19
–https://www.surveymonkey.com/r/2019-23-cp-
williamson-eng
17Page 35 of 120
PART III
Williamson County
CDBG Application
Page 36 of 120
CDBG Application Process
Project
identification
Project
selection
Application
submission
to Wilco
Wilco
project
selection
Agreement
between
City &
County
March 2019 Fall 2019 May 2019
Page 37 of 120
Internal Project Selection
•Eligible tracts
•Master plan implementation
20Page 38 of 120
Old Town Southeast Project –
possible project
•In eligible Census tract
•Total project approx. $600K
•Priority 1 for Sidewalk Master
Plan
•Connects and provides
accessibility to three GoGeo
stops
•Access to Annie Purl Elementary
•Access to San Jose Park
21Page 39 of 120
22Page 40 of 120
NEXT STEPS
•Project identification
•4/9 or 4/23 Council Workshop for possible
projects for application
•5/14 Council consent agenda for
application approval
Page 41 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
Dis cus s ion on Home R epair program eligibility and management with Habitat for Humanity of Williamson
C ounty. Linda S loan, C ommunity Involvement Director, Habitat for Humanity of Williamson C ounty
IT E M S UMMARY:
Linda S loan, C ommunity Involvement Direc tor, for Habitat for Humanity of Williamson C ounty will be
pres ent to ans wer questions as ked at the January Hous ing Advisory Board meeting about the Home R epair
program administration, inc luding:
1. How are applic ations awarded?
2. Does HF HW C c onsider neighborhood needs ?
3. How long will the application window be open?
4. W hat are HF HW C c ommunication s trategies to let the c ommunity know about the Home R epair
program?
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
Page 42 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
P res entation and disc ussion on researc h completed by University of Texas graduate s tudents on housing
policy tools . S usan Watkins, AI C P, Hous ing C oordinator
IT E M S UMMARY:
As part of the 2030 P lan update, s taff as ked Univers ity of Texas C ommunity and R egional P lanning
graduate s tudents to researc h nine affordable hous ing strategies and six peer cities to help determine bes t
practices towards implementing affordable housing policies. A team of graduate students analyzed eac h
tool and peer c ity to develop a s et of rec ommendations for the C ity of G eorgetown to use when
addres s ing housing affordability issues in the future.
T he analysis of affordable hous ing strategies found that tax exemptions , fee
waivers , and development agreements require low to moderate administrative c apacity to implement, while
T I R Zs , C LTs, and development regulations require greater levels of tec hnical capac ity and resources to
carry out. Land banking and homestead preservation districts are the only tools not available to the C ity of
G eorgetown due to current restrictions under Texas s tate law.
T he six c as e studies identified failed to provide s ignificant insight into many of the
tools s elected by G eorgetown. However, the cases offer good examples of how
municipalities us e federal funds and development fee waivers for affordable housing.
T he C ities of P lano, F risc o, and Leander use fee waivers to inc entivize affordable
hous ing. F urther, the C ities of P lano, F risc o, and R ound R oc k use federal funds for
mortgage/rent assistanc e and housing rehabilitation for low inc ome residents.
F IN AN C IAL IMPAC T:
None.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
AT TAC H ME N T S:
Description Type
Attachment 1 - Pres entation Pres entation
Attachment 2 - UT Student Res earch on Hous ing Policies Backup Material
Page 43 of 120
2030 PLAN UPDATE
HAB | UT Student Research on Housing Policies | March 18, 2019 Page 44 of 120
POLICY TOOLS EVALUATED
1.Community Land Trusts
2.Land Banking
3.Development Regulations
4.Tax Exemptions
5.TIFs/TIRZ
6.Homestead Preservation Districts
7.Preservation of Affordable Units
8.Fee Waivers and Exemptions
9.Development Agreements
Page 45 of 120
CONCLUSIONS
•Tax exemptions, fee
waivers, and development
agreements require
•TIRZs, CLTs, and
development regulations
•Land banking and
homestead preservation
districts
Low to moderate administrative
capacity to implement
Require greater levels of technical
capacity and resources to carry
out
Not available due to current
restrictions under Texas state law
Page 46 of 120
AFFORDABLE HOUSING POLICY:
HOUSING POLICY TOOLS FOR GEORGETOWN, TEXAS
December 10, 2018
Kris Donaldson
David Saustad
Kyle Smith
Page 47 of 120
TABLE OF CONTENTS
Executive Summary 2
Introduction 3
Affordable Housing Tools 5
Community Land Trusts 5
Land Banking 7
Development Regulations 9
Tax Exemptions 11
TIF/TIRZ 14
Homestead Preservation Districts 16
Preservation of Affordable Units 18
Fee Waivers and Exemptions 20
Development Agreements 22
Conclusion 24
Peer City Case Studies 25
Frisco 25
Plano 26
Sugar Land 27
Cedar Park 28
Leander 29
Round Rock 30
Conclusion 31
Recommendations 32
Development Agreements 33
TIF/TIRZ 34
Fee Waivers 35
References 36
Appendix-Matrix 43
1
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Executive Summary
The City of Georgetown is currently in the process of updating its Comprehensive
Plan. As part of this update, the City is including a “housing element” that will guide City
policy when housing issues due to population growth and rising property value and
rents. To address this challenge, City planners developed a list of nine affordable
housing strategies and six peer cities to help determine best practices towards
implementing affordable housing policies. A team of graduate students at UT Austin
analyzed each tool and peer city to develop a set of recommendations for the City of
Georgetown to use when addressing housing affordability issues in the future.
The analysis of affordable housing strategies found that tax exemptions, fee
waivers, and development agreements require low to moderate administrative capacity
to implement, while TIRZs, CLTs, and development regulations require greater levels of
technical capacity and resources to carry out. Land banking and homestead
preservation districts are the only tools not available to the City of Georgetown due to
current restrictions under Texas state law.
The six case studies identified failed to provide significant insight into many of the
tools selected by Georgetown. However, the cases offer good examples of how
municipalities use federal funds and development fee waivers for affordable housing.
The Cities of Plano, Frisco, and Leander use fee waivers to incentivize affordable
housing. Further, the Cities of Plano, Frisco, and Round Rock use federal funds for
mortgage/rent assistance and housing rehabilitation for low income residents.
The City of Georgetown could use development agreements, TIRZs, and fee
waivers to incentivize affordable housing development. Development agreements can
be utilized to allow development that supports local goals while providing developers
with the security of long-term agreements despite future land use changes. Attaching
affordability standards to TIRZs will provide a secure funding source for affordable
housing development. Lastly, waiving fees can incentivize market rate developers to
include affordable units and lower the financial burden on nonprofit developers.
2
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Introduction
The City of Georgetown is located in Central Texas, approximately 25 miles
North of Austin. In recent years, the city has seen significant growth due to Austin’s
outward development, resulting in the city being named one of the fastest growing cities
in the country. Significant growth combined with increasing property values have placed
pressure on existing housing stocks across all income groups. Georgetown is currently
in the process of developing an update to the City’s Comprehensive Plan. As part of this
update, the City is including a “housing element” to help plan for projected growth in the
face of an uncertain future. To address current and future housing affordability
problems, the City is looking for information on tools it can use to preserve and/or
develop affordable housing. City planners have developed a list of nine strategies that
have been determined to be potential best practices, and are particularly interested in
determining which tools could be feasibly and effectively implemented in Georgetown.
The affordable housing tools identified are as follows:
1. Community Land Trusts
2. Land Banking
3. Development Regulations
4. Tax Exemptions
5. TIFs/TIRZ
6. Homestead Preservation Districts
7. Preservation of Affordable Units
8. Fee Waivers and Exemptions
9. Development Agreements
In order to better understand how these tools can be implemented in
Georgetown, City planners have identified a number of peer cities that have historically
faced similar growth pressures or have similar demographic or community
characteristics. Peer city case study analyses can help inform local officials of the
possible effects of implementing affordable housing tools in Georgetown. The list of
identified peer cities is as follows:
1. Plano
2. Frisco
3
Page 50 of 120
3. Sugar Land
4. Cedar Park
5. Leander
6. Round Rock
The intention for including Frisco, Plano, and Sugar Land was to see how municipalities
that have already experienced large population growth developed affordable housing.
Further, the main motivation for including Cedar Park, Leander, and Round Rock was to
see how regional municipalities that are currently experiencing similar growth to
Georgetown are implementing affordable housing policies.
In order to better understand how the identified affordable housing tools function,
and their effects on peer cities in Texas, graduate students at the University of Texas at
Austin have developed a four step work plan: (1) researching existing literature
surrounding the nine affordable housing strategies; (2) creating a simple, accessible
matrix of identified strategies; (3) completing six peer city case studies, and; (4)
providing actionable recommendation for the City of Georgetown. The following
analyses and case studies will provide the City of Georgetown with the necessary
information to create and implement affordable housing policies.
4
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Affordable Housing Tools
Community Land Trusts
Community Land Trusts (CLT) are one type of tool used in communities across
the country to produce affordable housing and preserve long-term housing affordability.
CLT programs are operated by non-profit organizations that purchase property and
provide ground leases to prospective homeowners in an effort to reduce the costs of
purchasing a home. By owning the land and providing ground leases to prospective
homeowners, the non-profit organization shares equity with the homeowner without any
direct government assistance (ULI, 2018). Under the CLT model, property
improvements-the housing unit built on property-is owned by the homeowner while the
non-profit organization maintains ownership of the land itself. In order to keep housing
costs low, the non-profit organization restricts the resale price of property improvements
and reinvests any profits earned back into the community through land and property
improvements (Platts-Mills, 2018).
The structures of CLTs can vary widely depending on the communities’ political
and regulatory framework, as well as the housing goals developed by communities and
non-profit organizations. In Texas, CLTs are currently designated in state statute and
have been implemented in a number of ways in both Austin and Houston to provision
affordable housing (ULI, 2018). Under Texas State law, CLTs must be operated by a
non-profit organization, but a variety of models have been proven successful. In Austin,
three non-profit organizations have utilized CLT programs; two CLTs utilize traditional,
pre-existing non-profit organizations, while one CLT program was developed using a
joint public-private partnership with the City of Austin to create a publicly-funded
non-profit organization. Further, one CLT program exists in Houston that utilizes a
similar partnership model to Austin. In this case, the City of Houston developed and
funded the non-profit organization to manage delinquent properties. The non-profit also
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partners with housing developers to develop and sell property improvements.
(Platts-Mills, 2018).
CLTs offer a variety of benefits to both prospective homeowners and the
communities in which they operate. CLTs provide benefits to individuals by providing a
low-cost path to homeownership, while reducing ongoing costs including property
taxation and property upkeep. Communities benefit from CLTs because all public
funding and subsidization utilized to develop and implement the CLT will be available to
current and future homeowners and remain in the community in perpetuity (Platts-Mills,
2018). Although CLTs provide a wide variety of benefits, these types of programs face
challenges to implement and operate. CLT programs require significant financial outlays
from public entities and non-profit organizations in order to develop properties. Further,
maintaining affordability in the long-term requires ongoing administrative resources to
ensure property resales benefit homeowners and the non-profit organization.
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Land Banking
Land banks are governmental or nonprofit entities that acquire foreclosed and/or
abandoned properties. Most of the units that land banks acquire are tax-foreclosed
properties. These entities then convert foreclosed units into productive ones often by
selling them to nonprofit and for-profit developers usually with restrictions to ensure the
property stays “affordable.” For instance, a land bank can use deed restrictions on the
units it sells to ensure households with gross annual incomes no greater than 50 to 60
percent of Area Median Family Income (AMFI) are always able to access that unit,
regardless of the owner.
The Texas Legislature first allowed land banking in 2003 with legislation that
allowed the City of Dallas to bypass the tax foreclosure process to more easily acquire
tax delinquent properties (CDC UT School of Law, 2010). The City of Dallas created the
Urban Land Bank in 2004 with the goal of acquiring tax delinquent properties to sell to
affordable housing developers. The State of Texas then expanded the land bank
program to include the City of Houston in 2005. The City of Houston followed Dallas
with the creation of the Land Assemblage Redevelopment Authority. Since then, the
State has not expanded the law to include any other Texas municipalities. However, the
State of Texas created the Texas State Affordable Housing Corporation in 1994. This
corporation has the ability to land bank properties across Texas (TSAHC, n.d.).
Moreover, under Texas State law, there are three criteria for acquiring properties: the
property has a value less than the amount of taxes and non-tax liens, the property has
at least 5 years of delinquent taxes, and the unit(s) is zoned residential (CDC UT School
of Law, 2010). Also, nonprofit housing developers have a right of first refusal to land
banked properties. To ensure units stay affordable, the Urban Land Bank in Dallas and
the Land Assemblage Redevelopment Authority in Houston use deed restrictions when
they sell properties (City of Dallas, 2018).
Further, the main benefits of land banking include stabilizing communities with a
large number of vacant properties, developing affordable housing, and expediting the
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development of unproductive properties. In urban areas with vacant or tax-delinquent
properties, land banking can be used to redevelop areas. For instance, the bank can
acquire vacant properties, make the necessary repairs, and sell the units to developers.
This process can also improve older housing stock in low-income neighborhoods. In
addition, land banking expedites the redevelopment process, by allowing municipalities
to acquire tax-delinquent properties at little to no cost. In short, this expedited process
allows for a streamlined development of affordable housing units.
Nevertheless, there are drawbacks to using land banks in Texas. First, only the
Cities of Dallas and Houston can use land banks under Texas State law. Smaller cities,
like Georgetown, or even large municipalities like San Antonio and Austin can’t develop
land banks. However, cities without access to their own land banks could partner with
the Texas State Affordable Housing Corporation. Second, there have been numerous
scandals with Dallas and Houston’s land banks. A report by the Houston Chronicle
found that poor oversight of the Land Assemblage Redevelopment Authority resulted in
overgrown land bank owned lots, unenforced income eligibility requirements, and the
purchase of land that was eventually deemed unsuitable for development (Morris,
2018). Further, the Urban Land Bank in Dallas sold lots intended for low-income families
to an entrepreneur who ended up transferring the properties to his family members
(Chiquillo, 2018). Both of these reports show the large administrative burden in
overseeing a land bank. In short, without adequate oversight, land banking can turn into
an inefficient tool in developing affordable housing
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Development Regulations
Development regulations are affordable housing tools that come in a wide variety
of forms to help local governments produce or preserve affordable housing in their
communities. Local governments can provide density bonuses to affordable housing
developers, change zoning regulations to allow for smaller lot sizes, or allow individual
property owners to develop accessory dwelling units (ADUs). A density bonus is an
incentive-based affordable housing tools that can allow developers to exceed zoning
requirements like height restrictions or building type in exchange for building affordable
housing units. Changing zoning requirements to reduce or remove minimum lot sizes, or
allow property owners to build ADUs are two tools that can help to incentivize affordable
housing production. Smaller lot sizes can reduce the cost to develop individual housing
units, thereby reducing barriers to developing affordable housing (ACDDC, 2016).
Changing zoning regulations to allow homeowners to build ADUs serves a similar
purpose by reducing minimum lot sizes (Brookings, 2003). By adjusting their zoning
regulations, local governments can leverage individual homeowners and housing
developers to increase housing density by reducing per-unit housing development
costs. Although they can help to reduce the costs of producing affordable units,
development regulations do not guarantee affordable housing. These types of tools
must be paired with affordability requirements to ensure new and existing housing units
remain affordable (Wilson, 2012).
Development regulations can be a useful tool to develop affordable housing
because they provide myriad benefits to landowners, developers, and local
governments. Landowners benefit from development regulations through increased
income. This income is generated from the creation of additional housing units (Wilson,
2012). Developers see benefits from the heightened demand for residential property
development that is generated from density bonuses, reduced lot sizes, or allowance of
ADUs (Brookings, 2003). Local governments may receive the greatest benefits from
development regulations in the form of a larger tax base, enhanced economic
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development from new residential housing development, and more efficient public
service provision due to increasing housing and population density (ACDDC, 2016).
Although development regulations can be largely beneficial, they require significant
administrative resources and political will in order to codify changes in zoning
regulations or property use law. Furthermore, because inclusionary zoning is currently
not allowed in the State of Texas, ensuring affordability of new housing stock requires
substantial administrative effort and financial outlays in order to incentivize landowners.
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Tax Exemptions
Municipalities can use tax exemptions to preserve and incentivize affordable
housing by decreasing the financial burden on homeowners and developers. There are
two main tax levers that municipalities can use to lower financial burden: property tax
exemptions and tax abatements. Under current Texas law, municipalities can provide
property tax exemptions for homeowners through homestead exemptions, senior and
disability exemptions, and veterans exemptions. While the property tax exemptions can
help low-income homeowners pay their property tax bills, none of the exemptions
explicitly target low-income residents. For instance, current law only allows cities to offer
a homestead exemption that equals a percentage of the appraised value of the
property. This policy ensures that homeowners with high assessed values benefit more
than homeowners with low property values (City of Austin, 2018).
In its Austin Strategic Housing Blueprint, the City of Austin advocates for a
Multifamily Property Tax Exemption and a flat dollar homestead exemption. A flat dollar
homestead exemption would benefit those homeowners who need it the most, while a
Multifamily Property Tax Exemption would incentivize developers to include affordable
units (City of Austin, 2018). Neither of these options are currently available under Texas
state law, but municipalities can create reinvestment zones that can use policies similar
to a Multifamily Property Tax Exemption.
Municipalities can use tax abatements to attract affordable housing
developments by creating reinvestment zones. Under current Texas law, municipalities
can only abate taxes within a reinvestment zone. These zones are usually set up
through Tax Increment Reinvestment Zones (TIRZ) or Neighborhood Empowerment
Zones (NEZ). However, Texas law doesn’t require that municipalities use these tools to
create a reinvestment zone. The Tax Code outlines three criteria for an area to become
a reinvestment zone; the zone is located in an area that meets federal assistance
requirements, the area is impairing the growth of the city, and the area is likely to see
substantial improvement from being designated as a reinvestment zone (Way, 2018).
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Once the zone is created, municipalities can adopt guidelines and criteria for awarding
tax abatements.
The City of Fort Worth has one of the most extensive reinvestment zone
programs in the state. The City uses twenty NEZs to abate taxes, waive fees, and
release liens in an effort to attract economic development and incentivize affordable
housing. Furthermore, the City offers 100 percent tax abatement for five years for
multifamily developments that set aside 10 percent of the units for residents with
incomes at or below 80 percent of Area Median Family Income (AMFI) and another 10
percent of units for residents with incomes at or below 60 percent of AMFI. This policy
also applies to mixed use developments that have at least 20 percent of the “Gross
Floor Area” dedicated for residential use. However, developers can opt out of this
criterion by paying the City $200 annually for each unit (City of Fort Worth, 2017). The
City’s policy also does not outline the affordability period of the units. In short,
reinvestment zones can be used to attract both economic development and affordable
housing, but the zone’s criteria for awarding abatements will determine the extent of
affordable housing units provided by developers.
The main benefit of using tax exemptions or abatements in preserving or
developing affordable housing is that it can directly lower the financial burden on
low-income homeowners and developers. By lowering this financial burden, low-income
homeowners are more likely to keep their homes, and developers are incentivized to set
aside affordable units in new developments. Nevertheless, there are several challenges
and drawbacks to using these tools. First, many low-income homeowners aren’t aware
of property tax exemptions and/or do not understand how to apply for the exemption
(Way, 2018). Second, using tax exemptions and abatements will lead to fewer revenues
for the city, which could put pressure on the city’s budget. Third, municipal tax
abatements can only occur in reinvestment zones. This requirement can increase the
administrative burden on municipalities, as they have to operate zones and establish
abatement criteria. Lastly, establishing a reinvestment zone in a low-income area with
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“loose” affordability incentivizes could lead to displacement, which could in turn
exacerbate the city’s affordability problems.
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TIF/TIRZ
Tax Increment Financing (TIF) sets aside property tax revenues due to assessed
valuation growth to use for public investments that help stimulate development. Under
Chapter 311 of the Texas Tax Code, municipalities are allowed to use TIFs through the
creation of Tax Increment Reinvestment Zones. Texas legislation also requires that
cities only create TIRZs in areas that would not otherwise attract economic development
(Lord, n.d.). In short, TIRZs should usually be made in districts that are in distress.
Cities can use the increment between the original assessed value (at the time of the
TIRZ’s creation) and the new assessed value to finance bonds, public improvement
projects, and affordable housing. Most TIRZs in Texas have only been used to develop
public improvement projects in that area, however, some large municipalities have used
them to create affordable housing.
The Cities of Dallas, San Antonio, and Houston are known for their use of TIRZs
to redevelop areas, while also developing affordable housing. The City of Dallas
requires that 20 percent of housing units built in a TIRZ be affordable. The City deems
“affordable” units as 80 percent of Area Median Family Income and requires that the
units stay affordable for 15 years (Dallas Economic Development, 2016). Further, the
City of San Antonio can require that a percentage of up to 20 percent of the housing
units built in a TIRZ be deemed “affordable” by City guidelines (City of San Antonio,
2015). Lastly, TIRZs created in Houston by petition are required to give one-third of their
increment to develop affordable housing. However, the development of affordable
housing does not need to occur in the petition created TIRZ. As of 2016, there were ten
petition created TIRZs in Houston (City of Houston, 2016).
The main benefit of using a TIRZ to redevelop areas, while also creating
affordable housing, is that it doesn’t require a large amount of financial stress. By using
a TIRZ, cities can redevelop areas without using general fund monies. Further,
developing affordable housing with a TIRZ is not as politically salient as other affordable
housing tools, such as issuing general obligation bonds. The creation of a TIRZ does
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not need a public referendum, while issuing GO bonds requires voter approval, which
can delay or even inhibit the creation of affordable housing. Lastly, requiring affordability
standards on TIRZs helps combat any displacement that might occur from the creation
of a TIRZ in a low-income area. Once a TIRZ is created and property values begin to
rise due to economic development, low-income residents might be displaced from the
rising rents and property taxes. In short, affordability standards can help offset this
displacement.
Nevertheless, challenges remain when using TIRZs with affordability standards.
The current standards in Dallas and San Antonio only require that 20 percent of units be
available to residents with 80 percent of Area Median Family Income. These
affordability standards also only last 15 years. This requirement leaves out the poorest
residents from accessing units in TIRZs. In short, the standards don’t go far enough in
ensuring that residents aren’t displaced from rising property taxes or rents due to the
creation of the TIRZ. Lastly, administering a TIRZ requires a certain amount of
administrative burden. For instance, the City of Houston “lost track” of bond proceeds
and increment funding from their TIRZs. Between 2001 and 2004 two of Houston TIRZs
sent a combined $13 million in bond proceeds to the City to be used for affordable
housing. The City has failed to spend these funds in a timely manner and has failed to
spend any of the funds since 2013, which has resulted in unnecessary principal and
interest payments (Morris and Elliot, 2017). The City claims to have no recollection of
these bond proceeds. In short, administering a TIRZ will require strong administrative
oversight to ensure funds are being spent in accordance with city guidelines.
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Homestead Preservation Districts
A Homestead Preservation District (HPD) is a tool that Texas municipalities can
use to combat gentrification. HPDs use Tax Increment Reinvestment Zones (TIRZ) to
generate funding for affordable housing. HPDs use the increment property tax revenue
to develop, construct, and preserve affordable housing in the district. Currently, Texas
law only allows municipalities with a population of more than 750,000 and occupied
housing units of less than 550,000 to use HPDs (State of Texas, (n.d.). HPDs can also
only be implemented in areas with the following criteria: the area must have fewer than
75,000 residents, the area’s poverty rate must be at least two times the municipality’s
overall poverty rate, and each census tract in the area must have a median family
income that is less than 80 percent of the municipality’s overall median family income
(City of Austin, n.d.). Further, State law requires that revenue from the TIRZ in the HPD
be reinvested in the area to support households at or below 70 percent of median family
income. Lastly, only 10 percent of revenue from the TIRZ can be spent on
administrative costs (Housing Works Austin, 2015).
The City of Austin is the only municipality in Texas to create a HPD. The City
created a HPD in East Austin, an area that has been rapidly gentrifying. As described
above, the City uses the HPD’s TIRZ to fund affordable housing in the area to prevent
displacement. The City expects the HPD in East Austin to generate over $17 million for
affordable housing over the next 20 years (Clifton, 2017). Further, the City had plans to
expand HPDs to areas in North and Southeast Austin, but the City no longer meets
Texas occupied housing unit requirements. Some State Reps and Senators attempted
to increase the occupied housing unit cap, but Governor Abbott vetoed the bill.
The main benefit of a HPD is that it provides a secure source of funding to
combat displacement. All funds generated from the TIRZ must be spent on maintaining
or developing affordable housing in the district, which, unlike a normal TIRZ, ensures
that funding will be spent on low-income residents. Further, HPDs must fund affordable
housing for households at varying levels of Area Median Family Income. The current
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law dictates that at least half of the revenue generated benefit households at or below
50 percent Area Median Family Income (AMFI) and at least 25 percent of the revenue
generated benefit households at or below 25 percent of AMFI (City of Austin, n.d.). This
policy, unlike the TIRZs in Dallas and San Antonio, ensures that the poorest residents
have access to housing in HPDs.
The biggest drawback of HPDs is that they are increasingly becoming an
unviable option for Texas municipalities. The State of Texas has refused to allow
smaller municipalities, like Georgetown, and even some large municipalities to create
HPDs. This tool would “lock-in” funding for affordable housing in rapidly gentrifying
neighborhoods, yet the Governor’s Office sees HPDs as interfering with the housing
market (Clifton, 2018). In short, it unlikely that Texas municipalities will be able to
access this tool in the near future.
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Preservation of Affordable Units
Texas municipalities can use many of the tools outlined in this paper to preserve
affordable housing. Cities can work with nonprofits to create Community Land Trusts
(CLTs), in which the nonprofit owns the land and leases it to homeowners to keep
housing costs low in perpetuity. Municipalities can use land banking to purchase tax
delinquent properties and sell them to developers with deed restrictions to lock in
affordability for the long term. Further, some Texas municipalities can use Homestead
Preservation Districts that use Tax Increment Reinvestment Zones to fund the
preservation of affordable housing in the district. Cities can also create reinvestment
zones, which allow Texas municipalities to abate property taxes for developers that
keep units affordable and/or for homeowners that make improvements to their property.
In addition, there are tools available to Texas municipalities that haven’t been
discussed in this paper that include using general obligation bonds, federal grants, and
issuing resolutions of support for tax credit applications. Cities can issue general
obligation bonds to use public funds to directly fund the preservation of affordable
housing. For instance, the City of Austin recently issued $250 million in general
obligation bonds to be used for affordable housing. The City plans on using these funds
for land acquisition, rental housing development assistance projects, funding the
Acquisition and Development Homeownership program, and funding a home repair
program (City of Austin, 2018). While some of the primary goals of these programs are
to develop affordable housing, the home repair program can help low-income
homeowners stay in their homes, and land acquisition can lead to the development of
long-term affordable housing. Nevertheless, using general obligation bonds to preserve
affordable housing has significant drawbacks including political saliency and cost.
Issuing a general obligation bond requires voter approval and possible tax rate
increases or reductions in other public programs. In short, municipal governments will
have to convince their residents that issuing debt for affordable housing is a good use of
taxpayer money.
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Further, municipalities can issue resolutions of support for developers applying
for Low Income Housing Tax Credits (LIHTC) to both redevelop affordable housing
properties and keep units affordable. Cities have to issue resolutions of support, no
objection, or no support for developers that want to use tax credits to develop or
redevelop affordable housing units within its city limits. By issuing resolutions of support
or no objection, cities can aid developers in receiving the necessary tax credits to
preserve affordable housing.
Lastly, cities can use federal grants, like Community Development Block Grant
(CDBG) and HOME Investment Partnerships Program (HOME) funds to preserve
affordable housing. HOME funds are restricted to affordable housing programs, while
CDBG funds can be used for both affordable housing and other programs that benefit
low-income residents. Municipalities can access CDBG funds if they are principal cities
of Metropolitan Statistical Areas (MSAs) and/or they have a population of at least
50,000 (HUD Exchange, n.d.). Cities can acquire HOME funds if they are a metropolitan
city and can meet two funding thresholds: they must be eligible for a minimum amount
of the funding, usually $500,000, and they must dedicate at least $750,000 to affordable
housing activities. If a municipality can’t receive the full $750,000 in HOME funds, the
city can use general funds to make up the difference or partner with other local
governments to reach the minimum funding threshold (Jones, 2014). Cities can use
these federal grants to fund rehabilitation programs to help homeowners and renters
stay in their affordable units. They can also use the funds to purchase land to lock in
long-term affordability through deed restrictions. Finally, while using federal grants to
fund affordable housing does not (usually) require using the municipality’s general fund,
it does require significant administrative capacity. Cities have to oversee funded
projects and develop Annual Action Plans and Consolidated Plans that detail how the
funds will be used.
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Fee Waivers and Exemptions
Fee waivers and exemptions are another important tool local governments can
utilize in order to reduce the cost of producing affordable housing units. Municipalities
require developers to provide monetary payments to subsidize infrastructure systems
and the provision of public services as a condition for receiving permission to move
forward with development (Been, 2005). Some of the fees frequently imposed on land
development include permitting and development fees to subsidize government
administration costs and impact fees to mitigate the effects of development on
infrastructure systems and public services. By reducing or removing impact fees,
municipalities can help make affordable housing developments more financially feasible
(Evans-Cowley, 2006).
Fee waivers and exemptions are an integral component of provisioning
affordable housing development in Texas. Texas was the first state in the nation to
adopt legislation enabling impact fees to offset the costs of growth (APA, 2008). Since
then, local governments throughout the state have implemented impact fee programs to
plan and facilitate the provision of infrastructure. A recent study found that almost forty
percent of home-rule cities assess impact fees for a variety of infrastructure
investments. Under Texas state law, impact fees can only be imposed for the specific
improvements that they were exacted (Evans-Cowley, 2006). For instance, road impact
fees must be used to enhance the transportation system and water impact fees must be
used to provision water infrastructure.
Fee waivers and exemptions can be a useful resource to assist in the production
and preservation of affordable housing, but may have significant consequences. Recent
research has found that impact fees can result in significant increases to home values,
as developers pass these costs onto homebuyers (Evans-Cowley, 2006). By reducing
impact fees charged to developers, local governments can make development more
attractive by reducing investment costs and decreasing the value of property
improvements for future landowners. Fee waiver programs are relatively easy to
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implement in Texas and require minimal administrative effort to implement and maintain
(APA, 2008). However, reducing impact fees can put undue burden on local
governments to provide infrastructure and public services without private investment. In
short, significant financial resources are required to provision services to private
development.
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Development Agreements
Development agreements are legally-binding contractual agreements between
local governments and landowners relating to the development of property
improvements on a project-by-project basis. Project-specific development agreements
have become common throughout Texas because they allow municipalities to
encourage specific types of development to achieve local and regional goals including
the provision of affordable housing (Wilson, 2012). Municipalities look favorably upon
development agreements because they generally allow for the expedited development
of property without changing zoning regulations or local land use law. Development
agreements are best utilized when the proposed development would otherwise not
occur, or would occur elsewhere without the support and encouragement of local
governments (ULI, 2014).
The State of Texas currently allows municipalities to enter into development
agreements with landowners specifically to promote affordable housing (Wilson, 2012).
For instance, following Hurricane Ike in 2008, the City of Galveston entered into a
development agreement with private developers to rebuild and redevelop public
affordable housing projects throughout the city (City of Galveston, 2012). Without a
development agreement, the City may not have been able to rebuild and renovate
public housing citywide due to the extreme costs associated with development paired
with other rebuilding efforts. The City of Austin has also used development agreements
extensively in recent years to negotiate the inclusion of affordable housing in market
rate developments, and to maintain affordability in the long term. The Mueller Airport
Redevelopment is one example of a successful development agreement in which the
City eased zoning restrictions and helped streamline development in exchange for the
provision of approximately 1,200 units that must remain affordable for at least twenty
years (ULI, 2014).
Development agreements targeting affordable housing can provide direct
benefits to local governments, land developers, and future residents in a variety of
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ways. Local governments can realize benefits of an increased tax base, enhanced
economic development, the provision of public infrastructure and community amenities,
and the ability to leverage the private market to achieve public affordable housing goals.
In return, developers can receive reimbursements or waivers of development costs, the
reduction or removal of land development regulations, and the long term security of a
contractual obligation with local government despite future policy changes (Wilson,
2012). As a result of development agreements, future residents benefit from the
development of affordable units that may not have occurred otherwise, and the security
of requiring affordability over long time periods.
Development agreements can be a useful resource for local governments to
provide affordable housing, but there are a number of drawbacks including the potential
for abuse, future revenue losses, public opposition, and the need for administrative and
technical requirements to enforce successful agreements. Development agreements
have the potential for abuse of bargaining positions due to the exercise of political
power from local developers or small segments of the community (Wilson, 2012). In
addition, local governments may face significant public opposition if residents perceive
the development agreement as giving away public benefits or future revenues to private
developers (ULI, 2014). Finally, although development agreements do not generally
require significant administrative or financial resources, an intermediate level of
administrative and technical capacity is required to ensure development agreements are
lawful and legally binding over the long term.
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Conclusion
The City of Georgetown can use a number of the tools identified above to
preserve, produce, or incentivize affordable housing in the city. Tax exemptions, fee
waivers and exemptions, and development agreements require low to moderate
administrative and technical capacity to implement. TIRZs, CLTs and development
regulations require greater levels of technical and administrative capacity to develop
and codify these types of tools, but can better incentivize affordable housing
development within Georgetown. Under the current regulatory and political structure in
Texas, Georgetown is not eligible to participate in land banking or homestead
preservation districts, but could lobby the State Legislature to change current laws to
allow smaller cities to take advantage of these types of tools. The next section will
identify how some of these tools have been implemented in peer cities throughout
Texas and provide a framework for implementation in Georgetown.
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Peer City Case Studies
Frisco
Frisco utilizes a variety of tools and policies to incentivize affordable housing
development and preservation. As an entitlement city that receives federal block grant
funding, the City of Frisco must submit a Consolidated Plan which outlines city
strategies to carry out federally funded programs. In the most recent Consolidated Plan,
Frisco has identified five programs aimed at supporting affordable housing throughout
the city: housing rehabilitation; homeless support; homeless prevention; public service
programs for the elderly, youth, and disabled; and public improvements and
infrastructure. The city prioritizes CDBG funds to be utilized in low and moderate
income neighborhoods, and has historically used up to 70 percent of their CDBG funds
for rehabilitation of public housing (The City of Frisco, 2018).
In addition to directly funding affordable housing programs, the City of Frisco has
also adopted a city-wide policy to waive all permitting and development fees for
non-profit developers of affordable housing projects. Furthermore, Frisco has assisted
in purchasing land and provided ground leases at little to no cost for non-profit
affordable housing developers to maintain long term affordability (The City of Frisco,
2018). One successful affordable housing development in Frisco, the North Court Villas
property, is a mixed-income multi-family property with 150 affordable units. The
development utilized 4 percent Low Income Housing Tax Credits in addition to being
granted utility hook up fee waivers, park dedication fee waivers and building and
development fee waivers to provide affordability. Although the development faced some
opposition from nearby property owners, the affordability tools used to fund the
development were enough to make the project financially feasible (Wigglesworth, 2015).
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Plano
The City of Plano provides several affordable housing programs through
Community Development Block Grant (CDBG) and HOME Investment Partnerships
Program (HOME) funds. These programs include a homeless prevention program that
provides short term rent, mortgage, and utility assistance, a housing rehabilitation
program for low to moderate income renters and owners, and the construction of
affordable housing units. The City also provides home rehabilitation through its Great
Update Rebate and Love Where You Live programs. The Great Update Rebate
provides repairs to homes that are 35 years or older, and the Love Where You Live
program is a neighborhood revitalization initiative that also provides home repairs (City
of Plano, 2018). Both of these programs are funded through the City’s general fund.
Other than these programs, the City provides resolutions of support for affordable
housing developments. Those developments that receive resolutions of support are
granted commitment of development funding in the form a fee waiver (City of Plano,
n.d.). The City also provides development fee waivers in its Neighborhood Revitalization
Zone. This zone, located in downtown Plano, waives all development-related fees for
single and multifamily housing. These fee waivers are provided to both affordable and
non-affordable housing developers. The City can also abate property taxes in this zone
(City of Plano, n.d.). The City created the Zone in 1999, but has continued to expand it,
with its most recent expansion in 2017. In short, these incentives help attract both
economic development and affordable housing to the zone.
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Sugar Land
The City of Sugar Land receives Community Development Block Grant funds, but
only spends 25 percent of its grants on affordable housing. The majority of these funds
go towards senior services, employment training, and park improvements. However, the
City provides home rehabilitation for low-income residents throughout the city (City of
Sugar Land, 2018).
Further, the city contains no public housing within its city limits, nor does it have a
public housing authority serving the area. Low Income Housing Tax Credit (LIHTC)
projects have also not been proposed in Sugar Land. The City’s Annual Action Plan
cites the community’s perception of affordable housing as one of the biggest deterrents
of developing affordable units. Nevertheless, the City recently updated its
Comprehensive Plan and notes that the City is attempting to integrate more diverse
housing types into the city to give people a place to live in all chapters of life. While
affordable housing is not explicitly mentioned in the new Comprehensive Plan, this
update could provide a path towards considering LIHTC projects in Sugar Land. Finally,
the City is also updating its Land Use Plan, which the City hopes will spur more
development of rental housing units (City of Sugarland, 2018). It is possible that
developing more rental units will have a filtering effect on the rental market, which in
turn will lead to more affordable rental units for low to moderate income residents.
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Cedar Park
The City of Cedar Park does not directly receive Community Development Block
Grant Funding (CDBG), nor does it have any explicit affordable housing policies. Like
the City of Georgetown, the City can apply for CDBG funding through Williamson
County. However, it does not appear that Cedar Park has applied and received funding
in recent years. Nevertheless, the City’s Comprehensive Plan includes language on
providing housing for people at different ages, family sizes, and socio-economic levels
(City of Cedar Park, 2017). The City does not outline any affordable housing policies in
the Comprehensive Plan, but it discusses using brochures and pamphlets to advertise
affordable housing programs that its residents can access.
Further, there are six affordable housing developments in Cedar Park. Each
development used Low Income Housing Tax Credits (LIHTC) to aid in financing the
units. Three of these developments are exempt from all property taxes due to meeting
Texas Property Tax Code criteria. This criteria is determined at the State level
(exemption is not a municipal policy) and developers can apply for this exemption (State
of Texas, 2018). The other three developments did not receive property tax relief from
the Tax Code or the City of Cedar Park (Mckee, 2015). However, it should be noted that
the City of Cedar Park provided resolutions of support or non-opposition for each of
these developments.
28
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Leander
The City of Leander does not directly receive CDBG funds, nor does it have
policies in place to provide funding to preserve or provide affordable housing. The City
does have a policy to distribute affordable housing to match job opportunities (City of
Leander, 2017). Leander utilizes some of the previously identified affordable housing
tools, but to a limited degree and on a project by project basis. Leander has signed
development agreements with Tax Credit recipients to provide property tax exemptions
over the affordability period. Leander also offers limited fee waivers and exemptions for
affordable housing developers. Fee waivers are determined on a project-by-project
basis and include limited reductions in building and permit fees, and waivers for a
variety of impact fees.
The Hills at Leander is an affordable housing development currently under
construction that has utilized local government support to provide over 180 affordable
units to senior populations. The project received a 4% Low Income Housing Tax Credit
in addition to permit fee reductions and property tax deferments for the length of the
bond (Perrone, 2017).
29
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Round Rock
The City of Round Rock provides affordable housing programs through its
Community Development Block Grant (CDBG) funds. These programs include housing
rehabilitation and mortgage and rent assistance. Currently, the City will provide up to
$10,000 in minor home repair for low-income residents and up to $100 in mortgage and
rent assistance (City of Round Rock, 2017). In the past, the City has worked with
Habitat for Humanity to purchase and develop housing lots to create affordable housing.
Further, the City of Round Rock provides resolutions of support for developer
applications of state tax credits. The City Council and Mayor also appoint the Round
Rock Housing Authority Board (RRHA, n.d.). However, the City has no jurisdiction of the
actions of the Board.
Lastly, it does not appear that the City uses any of the nine affordable housing
tools discussed in the previous section nor does it provide any programs through its
general fund. For instance, in 2017 the Waters at Sunrise, an apartment complex in
Round Rock with 80 percent of units listed as affordable, was completed. The nonprofit
developer received 4 percent Housing Tax Credits to help fund the project, but received
no incentives or funding from the City of Round Rock (Thomas, 2015). In short, Round
Rock provides an example of how to use CDBG funds, but does not provide insight into
other methods of developing or maintaining affordable housing.
30
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Conclusion
The City of Georgetown’s peer cities did not use many of the tools outlined in the
previous section. The most common tools used were grant funds from the federal
government and development fee waivers for affordable housing. The larger suburbs,
Frisco, Plano, and Round Rock, all use Community Development Block Grant (CDBG)
funding for home repair and mortgage/rent assistance programs for low-income
residents. Further, the Cities of Frisco, Leander, and Plano waive various development
fees for affordable housing. The City of Plano only waives development fees in their
Neighborhood Revitalization Zone, while the Cities of Frisco and Leander waive fees
throughout the whole city. In short, the case studies fail to provide insight into most of
the tools Georgetown is seeking to learn more about. However, some of the cases
present possible development fee waiver policies that Georgetown could implement in
the near future.
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Recommendations
This analysis of affordable housing tools began with an assumption that there
was a critical need to address growth pressures and the dynamic landscape of housing
affordability in Georgetown. Through a literature review of national, statewide and local
research on the efficacy of affordable housing tools and case studies of a selection of
comparable cities’ efforts to address similar issues, this paper has arrived at three
recommendations that address both the assumption and the political, regulatory and
financial realities facing housing affordability within Georgetown. Georgetown could
utilize the three affordable housing tools outlined below to leverage growth and
development pressure to provide and preserve affordable housing now and into the
future.
32
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Development Agreements
The City of Georgetown could use development agreements to incentivize the
production or preservation of affordable housing within the city, and preserve
affordability in the long term. The city has extensive experience implementing
development agreements in the form of Planned Unit Developments (PUDs) and can
use this experience to leverage private developers to include affordable housing in
future developments. Although Georgetown has not historically included affordability
requirements, the rapid population and development growth throughout the city could
increase the City’s bargaining power when entering into future development
agreements. Georgetown could also look to peer cities like Frisco to better understand
the long term impacts of limiting local land use regulatory power in exchange for the
provision of affordable housing. When entering into development agreements with
private developers, the City should prioritize achieving public goals, including providing
affordable housing, that may not otherwise be achieved without private investment.
Although development agreements can be a useful tool to incentivize affordable
housing, there are a few potential drawbacks. The City should be aware of public
opposition or possible legal challenges to trading public benefits or future revenues to
private developers for providing affordable housing. In addition, City staff should take
care to ensure any changes in land use or regulatory power do not affect the City’s
ability to implement policies to achieve local and regional goals. Finally, Georgetown
needs to maintain the administrative and technical capacity of City staff to successfully
implement development agreements in the long term.
33
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TIF/TIRZ
The City of Georgetown should use Tax Increment Financing (TIF) to preserve
and/or develop affordable housing throughout the city. Georgetown already has
extensive experience in using Tax Increment Reinvestment Zones (TIRZ). However, the
City has not added any affordability standards to its TIRZs nor does it have a policy in
place to require affordability standards. While none of Georgetown’s peer cities use
TIRZs to develop and/or preserve affordable housing, Georgetown can look to larger
municipalities like Dallas and San Antonio for examples on how to use TIRZs for
affordable housing. Both cities require that 20 percent of units built with TIRZ funding be
designated as “affordable” by city standards (Dallas Economic Development, 2016).
This policy ensures that low-income residents will have access to high opportunity
areas, while also combating potential resident displacement.
When developing these standards, the City should keep in mind possible political
challenges to affordability standards. Developers and current property owners in a
potential TIRZ may challenge these standards. For instance, developers may argue that
forcing them to designate a portion of their units as affordable is an unnecessary
financial burden. Property owners could also argue that designating units as affordable
would negatively impact their property values. The City of Georgetown will have to
combat these claims if it wants to create affordability standards for future TIRZs.
34
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Fee Waivers
Fee waivers or exemptions can be used to incentivize affordable housing
production or preservation by lowering the cost of development and property
improvements. Permitting, development, and impact fees generally account for a small
share of overall development costs. Waiving and exempting these costs can incentivize
market-rate developers to include affordable units in proposed developments and
reduce the financial burden on non-profit developers when siting projects within the city.
Georgetown could follow the model identified in the Frisco case study to define a city
policy to provide fee waivers or exemptions for developments which include affordable
housing units.
Although permitting, development, and impact fees account for a small share of
project costs, they can be an important aspect of city revenues and budgets. Waiving or
exempting these types of fees can reduce the Georgetown’s ability to plan and provision
new infrastructure and public services. Any revenue lost due to fee waivers or
exemptions may have to be replaced by city funds already allocated to other projects or
programs. Although Texas state law does not currently require these types of
allocations, the City may face opposition to reducing funding for public projects and
programs in an effort to incentivize affordable housing developments.
35
Page 82 of 120
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42
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Affordable Housing Tool Matrix
Tool Tool Type
Administrative
Responsibilities
Number of Units
Produced
Types of Housing
(Single-/Multi-Family)
Type of Units
(Owner/Rental)
Targeted Household
Income
Incentivize, Produce
or Preserve Affordability Term
Political/Legal Issues or
Opportunities
Unintended
Consequences Example Cities
Community Land
Trusts Public/Non-Profit Incentive
High at first - requires
CHDO Designation, fiscal
impacts low to minimal later Variable Both Ownership
80% AMI and at least 25%
at 60% AMI Produce Long-Term
CLTs already designated in State
Statute. Gtown can use Texas
CLT Property Tax Exemption
Reduced homeowner benefits
(equity generation and
generational wealth) Austin, Houston
Land Banking Public/Non-Profit Incentive
High admin. burden to the
authority, but not directly to
municiplaity Variable Both Both
Dependent on the land
bank or municpality Incentivize and Produce Short & Long-Term
Only large municpalities can use
land banking in Texas
HIgh admin. burden can lead to
oversight problems
Dallas, Houston, State of
Texas
Development
Regulations Development Requirements
High admin. and political
burden to codify Variable Both Both Dependent on municpality Incentivize Short & Long-Term
Placing restrictions on
development could decrease
future development oportunities.
NO incl. zoning in TX
No clear best practices in TX,
US. Long term benefits to
municipalities TBD
Austin, Houston, Dallas, San
Antonio
Tax Exemptions Development
Requirements, Funding
Creating tax abatement
criteria, administering
reinvestment zone Variable Both Both Variable Incentivize and Preserve Short & Long-Term
Reduced revenue, low-income
residents aren't aware of tax
exemptions, tax abatement only
allowed in reinvestment zones
Weak affordability standards
could lead to displacement in
reinvestment zones
Fort Worth, limited exemptions
in Leander
TIFs/TIRZ Funding
Admin. burden in
overseeing TIRZ Variable Both Both
Dependent on TIF/TIRZ.
Can be used to provide
deeply affordable units
Incentivize, Produce, and
Preserve Short & Long-Term
Under Texas law, TIRZ should be
used in areas that would not
otherwise attract economic
development.
Affordability standards don't
include the poorest residents.
TIRZ will still lead to some
displacement. Dallas, San Antonio, Houston
Homestead
Preservation
Districts Public/Non-Profit Incentive
Admin. burden in
overseeing TIRZ Variable Both Both
Less than 70%, 50%, and
30% of AMI Preserve Long Term
Only allowed in municipalities
with a population greater than
750,000 and less than 550,000
occupied housing units.
Possible reduced property
valuation, property taxes
received by municipality. No
clear best practices in TX, short-
and long-term benefits TBD Austin
Preservation of
Affordable Units Public/Non-Profit Incentive
Different strategies have
different requirements N/A Both Both
Variable, generally must be
at least 80% AMI Preserve Long-Term
Each strategy will face different
political and/or legal challenges
Political, community opposition
to the use of public dollars for
affordable housing Austin
Fee Waivers and
Exemptions Funding
Low administrative burden,
possible low to moderate
fiscal impact Variable Both Both Dependent on municipality Incentivize Short and Long-Term
Low potential for community
opposition to developments
Discontinuous development
conditions (infrastructure,
design). Blanket waivers may
not induce desired effects;
case-by-case waivers may
better address this issue
Frisco waives all permit fees
for nonprofit developers and
has assisted in purchasing
and donating lots to
developers
Development
Agreements
Development
Requirements, Funding,
Profit/Non-Profit Incentive
Moderate administrative
and technical
responsibilities to develop,
low burden to monitor and
implement Variable Both Both
Dependent on project by
project agreement. Can be
used to provide deeply
affordable units
Incentivize, Produce, and
Preserve Short and Long-Term
Texas laws preventing
inclusionary zoning and TIFs;
partnerships create increased
political power, in-lieu fees can go
towards other tools
Sudden drop in affordability
after period of development
agreement, could be seen as
trading away public resources,
benefits to private developers
Austin, Dallas, Galveston,
Frisco
Page 90 of 120
City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
C onsideration and pos s ible rec ommendation to the 2030 S teering C ommittee on proposed hous ing
policies for the 2030 Hous ing Element Update. S us an Watkins , Housing C oordinator
IT E M S UMMARY:
T he Board will review the draft housing policies pres ented at the Marc h 7, 2019 S teering C ommittee
meeting. T he hous ing polic ies are categorized by themes (affordability, pres ervation and diversity) taken
from the hous ing goal of the updated 2030 P lan goals :
E nsure access to diverse housing options and preserve existing neighborhoods, for residents of all ages,
backgrounds and income levels.
T he proposed policies als o include a s et of polic ies that c oordinate housing across different c ity func tions ,
plans and s trategies.
T he Board will evaluate eac h policy us ing the S MART method, spec ifically the "s pecific " and
"achievable" metric .
a. S pecific. Is it foc used?
b. Measurable. Will we be able to determine when the policy has been accomplished?
c. Achievable. Is the policy realistic to ac hieve by 2030?
d. Relevant. Does the policy reflect the vis ion s tatement and public input themes ?
e. Time-bound. Will we be able to s et a timeframe for accomplishing the policy?
After the initial evaluation, the Board will disc uss:
•W hat aspec t of the policy requires more s pecific ity?
•W hat aspec t of the policy is not ac hievable?
T he Board will prepare a rec ommendation to the S teering C ommittee of the 2030 P lan update.
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
AT TAC H ME N T S:
Description Type
Attachment 1 - Pres entation Pres entation
Page 91 of 120
2030 PLAN UPDATE
HAB | Housing Policies | March 18, 2019 Page 92 of 120
CHALLENGE
I.Review housing policy statements that
represent 3 themes -preservation, diversity
and affordability
Page 93 of 120
OUTCOME
I.Prepare recommendations to the Steering
Committee
Page 94 of 120
AGENDA
•Part 1 –Recap from previous meeting
•Part 2 –Council Direction on Housing Goals and Policies
•Part 3 –Policy evaluation activity
•Part 4 –Preparing recommendation for Steering Committee
•Part 5 –Public Comment, Next Steps
Page 95 of 120
PART 1
Recap from previous meeting
Page 96 of 120
HOUSING ADVISORY BOARD FINDINGS
OF 2012 RECOMMENDATIONS –1.29.2019
2012 Recommendation Affordability
Preservation
Diversity
SMART
1. Develop a program through which workforce housing developers can receive
incentives to provide new units.
A SMART
2. Determine suitable multifamily zoning locations with sufficient services and land
use compatibility for an appropriate mix of housing variety within the city.
D SMART
3. Continue the Housing Diversity density incentives for new residential construction.A Concerns about
measurability
4. Prioritize the use of HUD CDBG funds for affordable housing A SMART
5. Strengthen home buyer counseling and support services.D Concerns about
relevancy,
measurability,
timely
6. (a) Seek out County CDBG funds and State HOME funds in support of affordable
housing initiatives; (b) subcontract with local nonprofits to implement projects.
A SMART
7. Identify revitalization areas for concentrated investment.P SMARTPage 97 of 120
PART 2
•Housing Goal
•City Council Direction
Page 98 of 120
HOUSING ELEMENT
Policies
Affordability Diversity Preservation
Goal
Ensure access to diverse housing options and
preserve existing neighborhoods, for residents of all
ages, backgrounds and income levels.
Page 99 of 120
COUNCIL DIRECTION 2.26.19
•Council seeks policy statements
encouraging a diversity in housing
options and a range of density
•Council seeks policy statements with
the identified elements of
preservation (aging in place, naturally
occurring affordable housing, home
rehabilitation)
•Council seeks policies that address
the needs of low income, workforce
and seniors
Affordability
DiversityPreservation
Page 100 of 120
PART 3
Policy evaluation
Page 101 of 120
EVALUATION SEQUENCE FOR EACH POLICY GROUP
Activity A –Individual policy evaluation (Mentimeter)
•Is policy specific?
•Is policy achievable?
Activity B –Discussion on policies identified as not specific or
achievable. Staff will take comments to 4/4 Steering Committee
meeting
•What aspect of the policy requires more specificity?
•What aspect of the policy is not achievable?
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ACTIVITY A –INDIVIDUAL POLICY EVALUTION
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DRAFT POLICIES -COORDINATION
C1 Actively seek and build partnerships to leverage resources and
promote innovation.
C2 Align housing goals with other city policies and strategic
plans.
C3 Ensure opportunity for stakeholder community engagement
through outreach and communication.
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ACTIVITY B –GROUP DISCUSSION
•What aspect of the policy requires more
specificity?
•What aspect of the policy is not achievable?
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ACTIVITY A –INDIVIDUAL POLICY EVALUTION
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DRAFT POLICIES -DIVERSITY
D1 Encourage and incentivize new housing to provide a mixture of housing
types, sizes and price points.
D2 Ensure land use designations and other policies allow for and encourage
a mixture of housing types, densities, and price points.
D3 Provide the opportunity to create complete neighborhoods with goods
and services that contribute to the quality of life. Create complete
neighborhoods across Georgetown that have a mix of housing types and
land uses, affordable housing and transportation options, and access to
healthy food, schools, retail, employment, community services, and parks
and recreation options.Page 107 of 120
DRAFT POLICIES -DIVERSITY
D4 Support housing options and services that provide the opportunity for
aging residents to stay in the community. Support choice to age in the
community.
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ACTIVITY B –GROUP DISCUSSION
•What aspect of the policy requires more
specificity?
•What aspect of the policy is not achievable?
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ACTIVITY B –INDIVIDUAL POLICY EVALUTION
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DRAFT POLICIES -PRESERVATION
P1 Preserve existing housing stock that contributes to
diversity and affordability.
P2 Support owner choice to remain in their existing
neighborhood.
P3 Maintain and promote neighborhood identity and
quality.
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ACTIVITY B -GROUP DISCUSSION
•What aspect of the policy requires more
specificity?
•What aspect of the policy is not achievable?
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ACTIVITY A –INDIVIDUAL POLICY EVALUTION
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DRAFT POLICIES -AFFORDABILITY
A1 Support existing rental choices for low-income households.
A2 Increase rental choices for workforce households.
A3 Increase rental choices for senior households.
A4 Increase homeownership choices for workforce households.
A5 Support community housing choices for all residents.
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ACTIVITY B -GROUP DISCUSSION
•What aspect of the policy requires more
specificity?
•What aspect of the policy is not achievable?
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PART 4
Prepare a recommendation to the Joint Session
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RECOMMENDATION
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PART 5
Public comment, next steps
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NEXT STEPS
•Phase 2 Outreach –Survey #2 closes before next Steering
Comm. meeting
•Steering Committee –4/4/2019 –review Preservation &
Affordability goals
•Joint Session #2 –4/10/2019
•Public Meeting #2 –5/2019
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City of Georgetown, Texas
Housing Advisory Board
March 18, 2019
S UB J E C T:
Update on the 2030 P lan Update process. Nat Waggoner, AI C P, Long R ange P lanning Manager and Lou
S nead, Board C hair
IT E M S UMMARY:
S taff will brief board members on the recent and upc oming ac tivities related to the c omprehens ive plan
update.
F IN AN C IAL IMPAC T:
None at this time.
S UB MIT T E D B Y:
S usan Watkins, AI C P, Hous ing C oordinator
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