City Council

May 4, 2017 CITY OF SARATOGA SPRINGS SPA Housing Ordinance Workshop City Council Room 1:00 PM 7:00 PM CALL TO ORDER ROLL CALL SALUTE TO FLAG PUBLIC COMMENT PERIOD / 15 MINUTES CONSENT AGENDA 1. Nothing at this time. MAYOR’S DEPARTMENT 1. Nothing at this time. ACCOUNTS DEPARTMENT 1. Nothing at this time. FINANCE DEPARTMENT 1. Nothing at this time. PUBLIC WORKS DEPARTMENT 1. Nothing at this time. PUBLIC SAFETY DEPARTMENT 1. Discussion: Draft SPA Housing Ordinance SUPERVISORS 1. Nothing at this time. ADJOURN City Council Meeting 5/04/17 May 4, 2017 CITY OF SARATOGA SPRINGS SPA Housing Ordinance Workshop City Council Room 1:00 PM PRESENT: Joanne Yepsen, Mayor Michele Madigan, Commissioner of Finance John Franck, Commissioner of Accounts Anthony Scirocco, Commissioner of DPW Christian Mathiesen, Commissioner of DPS STAFF PRESENT: Meg Kelly, Deputy Mayor Maire Masterson, Deputy Commissioner, Accounts (arrived 2:35 PM) Susan Armstrong, Deputy Commissioner, Finance Eileen Finneran, Deputy Commissioner, DPS Vincent DeLeonardis EXCUSED: Franck Coppola, Jr., Deputy Commissioner, DPW Matthew Veitch, Supervisor Peter Martin, Supervisor RECORDING OF PROCEEDING The proceedings of this meeting were taped for the benefit of the secretary. Because the minutes are not a verbatim record of the proceedings, the minutes are not a word-for-word transcript. CALL TO ORDER Mayor Yepsen called the meeting to order at 1:08 p.m. PUBLIC COMENT Mayor Yepsen said the public comment period is limited to a total of 15 minutes and individuals are limited to two minutes. Mayor Yepsen opened the public comment period at 1:09 p.m. Dave Bronner of Saratoga Springs stated today’s Times Union headline stated “Inclusionary Zoning Isn’t At All Welcoming”. He is not in favor of the inclusionary zoning but is in favor of workforce housing projects. Inclusionary zoning is not going to work in this city and probably won’t find any bankers willing to finance it. In regards to the dam project, the City should revisit the County water system and close down Loughberry Lake. Page 2 of 5 City Council Meeting 5/04/17 John Witt, owner of Witt Construction, stated the National Association of Home Builders published that over the last 10 years the average builder in America’s net profit before taxes is 4%. He doesn’t see how then numbers work with inclusionary zoning. He is in favor of workforce housing. Sonny Bonacio of Bonacio Construction stated he supports John’s comments. He doesn’t feel the for sale product is something should get into initially; but thinks they can make the rental side work. The City also shouldn’t expect the builder to pay full tax for something they are being required to give subsidiary to. He would be happy to continue the conversation. Reverend Joe Cleveland of 624 North Broadway reminded the Council of the core values we want to guide this City. Do we want to include or exclude people….we want to center values on inclusion. Todd Shimkus of the Chamber of Commerce stated he hasn’t had a chance to look at the new draft. The Chamber has proposed a site specific plan which they feel is inclusive. They are trying to find the fastest way for the City to move forward and construct housing units to appeal to people who work here and want to live here. Property for sale doesn’t work; need to work on apartments. Cheryl Perez of Veterans & Community Housing Coalition thanked Todd for the Chamber’s support. Site specific projects are in the works. Inclusionary zoning provides integration and will continue to grow the number of affordable housing. John Safford of Saratoga Springs stated this is an inclusionary city now. Don’t need to do something that forces this especially on the builders. Harry Moran of Sustainable Saratoga stated he sent a letter to the Council this morning. Their investigation has shown there is interest in home ownership. Mark Hogan of Saratoga National Bank stated this is a great opportunity for people who work here to live here. From the lending side the program was difficult to find buyers who fit into the criteria. It was even more difficult when the owner wanted to sell the property; the owner could not get an understanding from the City regarding the criteria of how long they had to wait before being able to sell to someone who is not a workforce housing person. Barry Potoker of the Saratoga Builders Association stated he was there to re-confirm their opposition to the inclusionary zoning as it stands and support the site specific proposal put forth by the Chamber. Geoff Bornemann of Saratoga Springs stated they had a developer run numbers in 2006 and they worked. They have encouraged the developers to come forward with numbers that prove it doesn’t work. John Stafford asked why this was not part of the UDO. Mayor Yepsen closed the public comment period at 1:29 p.m. PUBLIC SAFETY DEPARTMENT Discussion: Draft SPA Housing Ordinance Commissioner Mathiesen stated this is the resurrection of inclusionary zoning that started in 2006. Most of the units built in the last 15 years in Saratoga Springs are not modern income units; they are for people of higher income. They are not doing a good job of serving needs of those with moderate income. A moderate income is considered to be $45,000 - $70,000. The City is losing diversity. He thanked all the people who have contributed to this ordinance. They believe inclusionary zoning has a role in remedying the problem; provide diversity, and changes to neighborhoods. Page 3 of 5 City Council Meeting 5/04/17 Mayor Yepsen thanked Commissioner Mathiesen for doing this workshop. They have been working closely with a number of developers from outside the area; possibly because the numbers don’t work or the experience is elsewhere. The state will be looking at potential funding but community support is needed before that happens. We need to look at all options. Commissioner Scirocco stated he would like to go through the document to get clarity on things in the draft. Commissioner Madigan expressed concerns directly to Commissioner Mathiesen previously. Most of her concern deals with home ownership and the City having a deed interest in a home. She feels working through the red lines would be helpful. Commissioner Mathiesen stated he would like to understand why there wouldn’t be a greater number of future buyers of these units. Why are bankers financing the high end units when they are harder to sell and not financing the moderately priced units. Commissioner Franck stated he does not understand the formula regarding what the seller makes on the sale of a unit. If there isn’t money to be made, why buy a property. The same property can be rented. It appears we are pushing this to the banks and builders. He would also like to know when and how much money we are losing from HUD – Commissioner Madigan stated it is $300,000. Rental units make more sense. Commissioner Mathiesen stated they did speak with Tony Popolizio regarding the 581a which is a different way of calculating property tax for the inclusionary units compared to the market rate units. There should be a lessening of all local taxes – city, county, and school. Tony Popolizio informed him the City is not able to discount city tax for the inclusionary units. Commissioner Franck and Commissioner Mathiesen continued discussion regarding how the formula works for the purchase of a unit. Commissioner Madigan stated she questioned how this program going to be maintained. She is hearing the answer is the Housing Authority. Her concern is the expense to the City. Commissioner Mathiesen advised if after 6 months there is no one on the list eligible and wanting to buy an inclusionary zoning unit, it no longer is an inclusionary zoning unit and anyone is eligible to purchase it. The list is going to be maintained by the Housing Authority. We will negotiate with the Housing Authority what their cost is and the City will reimburse them. Commissioner Scirocco stated the rental units are a ‘no brainer’. His concern is if a unit goes 6 months and the equity now increases, who gets the equity. He asked what the cost is going to be to the City for all this. Commissioner Mathiesen stated they are taking a lot of the responsibility and giving it to the Housing Authority. Brad Birge of the Planning Department stated this was designed a decade ago during the single family boom. They did analysis to determine what their role would be a decade ago. At that time they determined they would need a half a person. Including rental units will require continual monitoring. Paul Feldman of the Housing Authority stated they collect applications for housing; determine eligibility; and verify income year round. They could fulfill the function of marketing this program, formulating a wait list, collecting applications, maintaining a data base, and formulating a waiting list. They could also perform the function Brad mentioned – re-verifying income. Commissioner Madigan asked Paul if he has come up with a fee to do this. Page 4 of 5 City Council Meeting 5/04/17 Paul Feldman advised the first year would be in the $18,000 - $20,000 range. They would adjust the amount annually based upon the increase in units and number of hours needed to maintain the program. Susan Cotner of the Affordable Housing Partnership stated they help to pre-qualify people. The average price of a home purchase was $164,000. The banks have low interest rates and low down payment requirements for first time home buyers. They provide home buyer education counseling which results in a decrease in delinquencies. Brad Birge stated it is a shared equity formula. At the time of original purchase, you establish the market rate and discount rate. That rate continues and the homeowner can recoup that rate. The homeowner will be able to collect the rate of the increased value. The City does not get any of the money. The builder gets a density bonus in exchange for offering an affordable rate. Sonny Bonacio stated this should be revisited every year as our real estate market changes a lot. He requested someone create a sample closing statement. He stated the zoning needs to be changed to accommodate the density bonus. Something should be written strongly to avoid someone getting a win-fall by delaying the sale of a property. Todd Schimkus suggested a sunset provision be added to the ordinance. There should also be an affirmative action by the Council to review this ordinance annually and make sure it is still working. If it is not working it should be done away with. Brad Birge advised currently there is a provision for evaluation every 3 years. Commissioner Madigan stated confusion is still out there regarding pilots and tax incentives. The language also has to be made stronger regarding density and how it may be used. Commissioner Franck asked if there has been any research done on insurance that would put the banks at ease. Mark Hogan of Saratoga National stated they have to service their whole community; there is a need to lend to everyone. The issue with the way the deed was written in the past made it difficult for a bank to foreclose on a property. Make sure lending attorneys are consulted with to make sure the banks are protected. Hopefully some of the problems from the past can be resolved and alleviated with this program. John Witt stated he is not sure how much the need is there for the price point of sale units. He can’t make those numbers work in the City. Geoff Bornemann stated page 11 - b & c allows the Planning Board the flexibility for a percent reduction if the builder can’t get the density bonus in or it is a high price project. Commissioner Mathiesen stated there should be standards sizes for various units. ADJOURNMENT There being no further business, Mayor Yepsen adjourned the meeting at 3:04 p.m. Respectfully submitted, Lisa Ribis Clerk Approved: 5/16/17 Vote: 5 - 0 Page 5 of 5