Planning Commission

Joint Housing Commission and Planning Commission Meeting Tuesday, March 19, 2024 at 6 PM l Attend in person: Winooski City Hall (27 W Allen St) l Attend online: https://us06web.zoom.us/j/88653025010 l Attend by phone: 1 646 558 8656 l Webinar ID: 886 5302 5010 I. Call to Order II. Public Comment This item is reserved for comments and questions on topics that are not included on this agenda. Time for public comment is included by default for each item below! III. Developer Costs in Relation to Incentives for Priority Housing Types Documents: Development Costs Document.pdf IV. Incentives for Priority Housing Types Documents: Article V - Incentives, IZ, and Replacement - v.1 - 03.19.2024.pdf V. Inclusionary Zoning/Replacement Development Regulations Considerations Documents: Development Regulations Considerations- HC Recommendations.pdf VI. Adjourn  City of Winooski 27 West Allen Street Winooski Vermont 05404 Vermont’s Opportunity City 802 655 6410 winooskivt.gov Memorandum March 19, 2024 To: Winooski Housing & Planning Commissions From: Jazmine Hurley, Housing Initiative Director Subject: Development Costs Associated with Structured Parking and Priority Housing The following calculations have been developed through discussions with Nate DaGesse (EIV Technology), Ryan Smith (local business and property owner), Giles Wagoner (Flex Reality), Erik Hokestra (Redstone), Ben Avery (Greenfield Consulting), and David Qian (local property owner and prospective developer). Data/ proformas were collected from internal City sources, Ben Avery, and Nate DaGesse. Structured Parking Cost Data Data from several recent projects in Winooski and Burlington from the past 7 years (Per space additional project cost): Development City # spaces Year built Actual cost Inflation adjusted cost *Cascade Garage Winooski 900 2005 $17,600/ space $28,310/ space City Lights Winooski 35 2017 $36,000/ space $45,474/ space Casavant Winooski 30 2018 $27,800/ space $34,404/ space Overlook Parc Terrace Winooski 28 2021 $29,000/ space $34,007/ space City Gardens Winooski 6 2022 $23,600/ space $25,748/ space City West Burlington 32 2024 $39,400/ space $39,400/ space *Abenaki Garage Winooski 300 Planned $39,000/ space $39,000/ space AVERAGES $32,888/ space $35,191/ space * full structured parking development Current industry standards for more straightforward structured parking ranges from $20,000- $50,000 per space. This can reach up towards $75,000 for more complex parking development such as deep shored excavation or elevated multi-level structures. Apart from the fact that each space can cost around $35,191 in sheer construction costs, there is the opportunity cost to consider as well. Any of these parking spaces could have been combined to be developed into apartment units, or commercial space instead of parking spaces. 3 Bedroom Cost Analysis Incorporating 3-bedroom units into new developments comes with a significant cost. If there's a community or municipal interest in encouraging or mandating such units, it's crucial to explore incentives that match these expenses. This analysis involves a complex evaluation, considering not only construction costs but also factoring in rental income and the potential loss of prime real estate square footage opportunities. Construction Costs The difference in construction costs for 1-bedroom, 2-bedroom, and 3-bedrooms are negligible considering the majority of costs are associated with bathroom and kitchen construction. Studios do cost a bit more per square foot (5-8% more or so). From the data included in the table below, you can see that studios and 1-bedroom units are the most cost- efficient unit types (assuming demand). Analysis moving forward will utilize 1-bedroom units rather than studio units to make the comparisons more straightforward. Rental Income Current Market rate rent from Allen and Brooks December 2023 for new construction: Type Rental price Square Footage Income/ Square Foot Studio $1,590 450 $3.53 1 bedroom $1,825 700 $2.61 2 bedroom $2,220 900 $2.44 3 bedroom $2,500 1200 $2.08 As an example, comparing a 1-bedroom unit to a 3-bedroom unit, the income per square foot per month is $.53/SF per month or a difference of $6.36/SF per year. Market Demand Developers typically refrain from constructing 3-bedroom units without municipal/ state requirements or strong incentives or involvement from other entities. In more “urban” areas like Winooski, it would be typical to assume that the market for 1-bedroom units is much stronger than for a 3-bedroom considering the younger renter-heavy population. It is typical to see slower rental paces, and higher vacancy rates with larger units than in studio or 1- bedroom units. Winooski’s unique population’s needs for larger affordable rental units is difficult to support considering these broader market and financial trends piling against ease of constructing these larger units. Geometric Considerations Figure 1 Another crucial component to consider in the conversation surrounding the real cost of including 3 bedroom units is the value of some square footage over others. This can be visualized when considering the “Bay Effect”. The Bay Effect happens in building that are developed in the very common layout, 60 feet wide, with 27 ft deep units and 12 foot “bays”. A unit generally needs one bay for the kitchen and living room, and one bay for bedroom and bathroom. Figure 1 shows a building plan with these common dimensions, and each bay measuring 12 feet. Each colored box includes 2 bays, and this floor is able to support 8 1- bedroom units. Figure 2 For a two bedroom unit to be built using this model, another bay would need to be included, because for a room to be considered a bedroom it needs a window and therefore an exterior facing wall. Figure 2 shows the two bedroom unit in the bottom right corner taking up 3 bays. What is then left is a unit with only one bay, which ends up needing to be a studio to compensate for the 3 bays making up the 2 bedroom unit. It is common for 2-bedroom units to include another bathroom as that is the only functional use for the inner space in the bay where there is no window.  Figure 3 This issue compounds when considering units over 2 bedrooms. A 3-bedroom unit in this theoretical development would need one bay for living room/ kitchen, and then three bays for each bedroom, totaling 4 bays, or one entire quarter of this diagram. The internal side of each of these bays, being without a window and really only be utilized as additional closet spaces, windowless dens, or additional bathrooms, although it is rare for an apartment to have more than 2. In Figure 3 you can see how much of the “prime” square footage a 3-bedroom takes up. And in this example, a 3- bedroom unit takes the place of two – 1-bedroom units or four studio units. So even if a 3-bedroom unit is 1,200 SF on paper, it may have impacted up to 1,600 SF of usable space by needing the exterior space and therefore using the associated interior (no window) space as well. Figure 5 An additional example of this can be found in Figure 5, which shows plans from the recently proposed 300 Main Street redevelopment. Where 3 three-bedroom units are placed on the first floor, there are 6 one-bedroom units on additional stories highlighting the opportunity cost that comes with developing larger rental units. Rental Income + Geometric Considerations (Opportunity Cost) Taking into consideration the geometric considerations we know it is often the case that two one bedroom units can fit into the space used on one three-bedroom unit. ● The market rent a one-bedroom unit is $1,825, so take $1,825 x 2 = $3,650 is the monthly rental income for two market rate one-bedroom units ● The market rent for a three bedroom unit is $2,500 ○ This above example would result in a $13,800 loss in annual revenue or $345,000 loss over 25 years. Another way to compare the two and get a direct incentive cost: What would the rent need to be of a three-bedroom unit to make it as cost efficient as a one-bedroom unit? ● Multiply the size of a 3 bedroom by the income per square foot of a one-bedroom unit 1200 SF * $2.61 = $3,132 rent per month for a 3 bedroom unit Although that rent price might be manageable for someone in a luxury unit, the market rate rent price for a 3 bedroom is only around $2,500. ● The gap between these two rent prices $3,132-$2,500= $632/ month or $7,584/ year So, an incentive to build market three-bedroom units would need to offset a $7,584 per year loss. Take this over 25 years and this is equivalent to $189,600.00. This would be a rough estimate of what that incentive would need to be worth for a requirement of a market 3- 3- bedroom unit to be on a level playing field with that of a market 1 -bedroom unit. Affordable Cost Analysis New construction market data mentioned above: Type Rental price Square Footage Income/ Square Foot Studio $1,590 450 $3.53 1 bedroom $1,825 700 $2.61 2 bedroom $2,220 900 $2.44 3 bedroom $2,500 1200 $2.08 Comparing these numbers to VHFA’s annual affordable housing matrix allows a fairly simple comparison of rent prices in affordable and market rate units in Figure 4.  Figure 4 Cost to build 1- Cost to build 3- Cost to build affordable bedroom bedroom 3-bed instead of Monthly Rents affordable rather affordable rather affordable 1-bed than market than market 1-bed 3-bed Monthly Annual Monthly Annual Monthly Annual *Market $1,825 $2,500 N/A N/A N/A N/A N/A N/A **80% $1,653 $2,312 $172 $2,064 $188 $2,256 $16 $192 AMI **60% $1,230 $1,723 $595 $7,140 $777 $9,324 $182 $2,184 AMI **50% $1,015 $1,426 $810 $9,720 $1,074 $12,888 $264 $3,168 AMI **30% $590 $836 $1,235 $14,820 $1,664 $19,968 $429 $5,148 AMI * market rents taken from from Allen and Brooks December 2023 for new construction ** affordable rents from VHFA table Affordable 3 bedroom units When considering the priority housing types that are needed for the City of Winooski, while affordable and 3 bedroom units individually are progress, the combination of these two are needed to support the larger low income refugee and immigrant families in the community. Low end of the spectrum Cost of building a three-bedroom at 80% AMI instead of a one-bedroom at 80% AMI ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed) + $192 (annual affordable cost)=$7,776 Medium end of the spectrum Cost of building a three-bedroom at 80% AMI instead of a market one-bedroom ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed) + 11,868 (annual affordable cost)= $19,452 Cost of a three-bedroom unit at 80% AMI v market 3-bed ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed) + $2,256 (annual affordable cost)= $9,840 Cost of a three-bedroom unit at 60% AMI v market 3-bed  ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed) + $9,324 (annual affordable cost) = $16,908 Cost of a three-bedroom unit at 50% AMI v market 3-bed ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed) + $12,288 (annual affordable cost) = $19,872 High end of the spectrum Cost of a three-bedroom unit at 30% AMI v market 3-bed ● $7,584 (annual gap needed to make a 3 bed as cost efficient as a 1 bed)+ $19,968 (annual affordable cost) = $27,552 This means adding an affordable rental unit can range from a cost of $7,776 to $27,552 per year, highlighting the need for incentives from government entities. Building these units is financially viable only with subsidies, typically from either the government (though these are limited and highly competitive) or, more commonly, by raising the prices of market units to compensate for the associated losses. 25 years = $194,400 - $688,800 ARTICLE V – SPECIFIC USE STANDARDS ********** SECTION 5.14 – INCENTIVES FOR PRIORITY HOUSING A. Intent. The intent of these regulations is to provide incentives for the development of dwelling units that meet specific criteria as identified by the City to provide a mix of housing options for current and future residents. The standards outlined herein are optional and not required to be included in any application for land development. B. Applicability. These incentives will apply to any dwelling units as identified under Section 5.14.D in all zoning districts except the Downtown Core. C. Definitions. For the purposes of this section, the following terms shall apply: 1. Affordable Housing – Affordable Housing shall mean housing that is owned or rented by inhabitants whose gross annual household income is not more than 100120% of the HUD Area Median Family Income (HAMFI) for the Burlington-South Burlington Metropolitan Statistical Area (MSA) as defined by the U.S. Department of Housing and Urban Development and the total cost of the housing, including principal, interest, taxes, insurance, and condominium association fees, if owned housing; or the total cost of housing, including rent, utilities, and condominium association fees, if rental housing, is not more than 30% of the gross annual income. 2. HUD Area Median Family Income (HAMFI)1 – HAMFI is the median family income calculated by HUD for each jurisdiction, in order to determine Fair Market Rents (FMRs) and income limits for HUD programs. HAMFI will not necessarily be the same as other calculations of median incomes (such as a simple Census number), due to a series of adjustments that are made. 2 D. Qualifications. To qualify for the incentives identified herein, dwelling units shall meet all the applicable standards listed below for Affordable Housing, Bedroom Count, or both as required to achieve the identified incentive as outlined in Section 5.14.E. 1. Affordable Housing. Where housing affordability is included as part of the identified incentive, the affordable dwelling units shall meet the following requirements: a. Dwelling units shall be continuously affordable to identified households as identified in Section 5.14.DC.1 for a minimum of 20 years regardless if they are offered for sale or rent. b. To ensure income eligibility and rents or sale prices are consistent with Section 5.14.C, when a dwelling unit is newly rented or sold, the owner of the unit shall submit verification of household income and rent(s) or sale price(s) to the City to ensure eligibility and compliance for qualifying units. This provision shall be waived if the management of the qualifying units, including leasing or (re)sale of the units is contracted to, or supervised by, a housing authority, housing trust or other qualified affordable housing provider receiving or managing state or federal housing funds including vouchers where income verification is included as standard practice. c. If the owner of a proposed project is a housing authority, housing trust or other qualified affordable housing provider receiving or managing state or federal housing funds including vouchers, the requirements of Section 5.14.D.1.b shall be waived provided 1 HAMFI definition taken from https://www.huduser.gov/portal/datasets/cp/CHAS/bg_chas.html 2 Methodology on HAMFI adjustments at https://www.huduser.gov/portal/datasets/il/il18/Medians-Methodology-FY18r.pdf 50 Article V – SPECIFIC USE STANDARDS | City of Winooski  ownership in the project is maintained for the duration of affordability as described in Section 5.14.D.1.a. d. Documentation indicating compliance with Section 5.14.D.1.b shall be submitted to the City with the application for development. This shall include but not be limited to: i. A list of units including the number of bedrooms and the rents to be charged including utilities and condominium association fees per unit size or unit type and corresponding median income levels associated with the unit size or type.; or the cost of ownership including principal, interest, taxes, insurance, and condominium association fees. ii. The name, address, and primary contact of the housing authority, housing trust, or affordable housing provider as outlined in Section 5.14.D.1.b if different from the applicant or owner of the project. iii. Draft documents, to be recorded in the City’s Land Records, designating the dwelling units as affordable for the duration identified in Section 5.14.D.1.a. iv. Other information as necessary to ensure the standards of Section 5.14.D.1. have been met. 2. Bedroom Count. Where bedroom count is included as part of the identified incentive, the dwelling units shall have a minimum of three bedrooms per unit. a. The applicant shall provide architectural plans prepared by a qualified design professional or similar entity in a clearly legible format. b. Submissions shall include a level of detail sufficient to ensure the existence of no less than three bedrooms of a size consistent with the minimum housing standards as outlined in Chapter 9 of the City’s Municipal Code or other applicable regulations are included in each unit. E. Incentives. The following incentives may be utilized for projects that propose qualifying dwelling units as described in Section 5.14.D. 1. Planned Unit Developments. Planned Unit Developments, as outlined in Section 6.3, are eligible for the following incentives. a. Multi-unit Buildings. Projects proposed in the Residential A, Residential B, or Residential C Zoning Districts that include dwelling units with three or more bedrooms per unit as outlined in Section 5.14.D.2 may configure these dwellings in multi-unit buildings based on the following. i. Projects in the Residential A or Residential B Zoning Districts may configure buildings with up to four six units per building. ii. Projects in the Residential C Zoning District may configure buildings with up to six units per building. iIiii. A minimum of 50% of the dwelling units included in the overall project or proposal shall meet the qualifications as outlined in Section 5.14.D.2 related to the required minimum number of bedrooms per unit. iviii. All other standards and requirements for Planned Unit Developments, as outlined in Section 6.3 shall still apply. iv. Projects developed under this provision shall be eligible for an increase in lot coverage of up to an additional 15% above what is included in Section 2.5. 51 Article V – SPECIFIC USE STANDARDS | City of Winooski  b. Density. Qualifying projects in the Residential A, Residential B, or Residential C Zoning Districts that are proposed as part of a Planned Unit Development where 100% of the proposed dwelling units meet the qualifications included in Section 5.14.D.1 and Section 5.14.D.2 related to affordability and bedroom count may be eligible for additional density as follows: i. Projects located in the Residential A Zoning District shall be eligible for .5 additional dwelling units per new lot included in the project. ii. Projects located in the Residential B Zoning District shall be eligible for .75 additional dwelling unit per new lot included in the project. iii. Projects located in the Residential C Zoning District shall be eligible for 1.0 additional dwelling unit per new lot included in the project. iv. Dwelling units included under this provision will be rounded up to the nearest whole unit. v. All other standards and requirements for Planned Unit Developments, as outlined in Section 6.3, including dimensional standards outlined in Section 2.5 shall still apply, except lot coverage may increase by up to an additional 25% above what is included in Section 2.5. vi. Bonus units established under this section are not required to meet the affordability or minimum bedroom count standards as outlined in Section 5.14.D unless configured in a multi-unit building as outlined in Section 5.14.E.1.a. 2. Minimum Parking. Qualifying dwelling units in the Gateway, Central Business, or General Commercial Zoning Districts that meet the qualifications included in Section 5.14.D.1 and Section 5.14.D.2 related to affordability and bedroom count shall be eligible for exemptions or reductions to the minimum parking standards outlined in Section 4.12 as follows: a. Up to 20%, but no more than four qualifying dwelling units included in a development will be exempt from the minimum parking standards of Section 4.12. b. Qualifying dwelling units shall not be excluded from having access to parking on-site. 3. Bonus Story. Any project that meets or exceeds the requirements for an affordable housing development as defined in 24 V.S.A § 4303(2) and in Article IX of this regulation, including mixed use developments, shall be eligible for the following incentives: a. Projects may exceed that maximum density permitted in the zoning district where it is located by up to 40%; and b. The project may exceed the maximum permitted height by one additional story or floor, provided the project complies with the Vermont Fire and Building Safety Code and any dimensional standards for the zoning district where the project is located as included in Section 2.5. c. All other dimensional standards as outlined in Section 2.5 and minimum parking requirements included in Section 4.12 must be met. d. Information as outlined in Section 5.14.D.1 shall be provided to confirm the standards for affordability are met to qualify for the bonus story. 4. Owner Occupancy. Individual dwelling units that are offered for sale are eligible for incentives as follows: a. For projects that propose a multi-unit building in the Residential A, Residential B, or Residential C Zoning District, as outlined in Section 2.4, on an individual building lot, 52 Article V – SPECIFIC USE STANDARDS | City of Winooski  where at least 50% of the units have a minimum of two bedrooms and are offered for sale are eligible for the following incentives: i. The project will be administratively reviewed and not require site plan approval as outlined in Section 6.6 or conditional use approval as outlined in Section 6.7; and ii. The project will be eligible for an increase in lot coverage of up to 25% above what is identified in Section 2.5. b. Projects that propose multi-unit buildings as outlined in Section 2.4 as part of a Planned Unit Development as outlined in Section 6.3 which is located in the Residential A, Residential B, or Residential C Zoning District; where at least 50% of the units have a minimum of two bedrooms and are offered for sale are eligible for an increase in lot coverage of up to 25% above what is identified in Section 2.5 provided that: i. No building shall have more than 75% of the units offered for sale, unless 100% of the units in the project are offered for sale. ii. Any proposed bonus units as outlined in Section 5.14.E.1.b shall not count towards ownership percentages. c. For projects in the Gateway Zoning District, Central Business District, or General Commercial Zoning District that propose a multi-unit building as outlined in Section 2.4 where 25% of the total units have a minimum of two bedrooms and are offered for sale, are eligible for a second bonus story in addition to what is offered through Section 5.14.3 or Section 402.F of Appendix B provided that: i. The bonus story does not exceed the height of the story immediately below ii. The floor area of the bonus story does not exceed the floor area of the story immediately below. iii. All other standards, including but not limited to applicable setbacks, parking, and private open area are met. d. To be eligible for the incentives included in Section 5.14.E.4 the applicant shall: i. Record, in the City’s Land Records, deeds or similar legal documents that require the owner to occupy the dwelling; and ii. Record, in the City’s Land Records, any homeowner association documents or similar legal documents that include restrictions on rental of individual units. e. Projects seeking the incentives under Section 5.14.E.4.a shall provide all the necessary information included in Section 6.6 for review by the ZA or other applicable City Departments. f. Planned Unit Developments shall still be reviewed according the Section 6.3, regardless of unit ownership. g. For the purposes of this section, units will be rounded up to the nearest whole unit. F. Incentives outlined in Section 5.14.E may be used collectively or independently. G. The maximum total lot coverage for any project that utilizes incentives listed under Section 5.14.E shall be 75%. ********** 53 Article V – SPECIFIC USE STANDARDS | City of Winooski SECTION 5.16 – INCLUSIONARY HOUSING REQUIREMENTS The City of Winooski has recognized a need for affordable housing opportunities and options that will benefit residents at all income levels but focusing on those making at or below 120% of the Area Family Median Income for the Burlington-South Burlington Metropolitan Statistical Area. A. Intent. Under authority granted by the State of Vermont as outlined in 24 VSA Chapter 117, the City has established these regulations in an effort to ensure an on-going supply of affordable housing is available within the City by establishing mechanisms to support the development of affordable housing. The intent of these regulations is to: 1. Meet the specific mandates of 24 V.S.A. Chapter 117 § 4302 related to housing opportunities for all of Vermont’s resident’s; and 2. Increase the number of housing units in the City of Winooski that are affordable to residents making at or below 80% of the Area Median Family Income for the Burlington-South Burlington Metropolitan Statistical Area; and 3. Provide integrated opportunities throughout the City that reduce barriers to housing for all residents; and 4. Promote the health, safety, and welfare of all residents by expanding the affordable housing options to limit impacts on the existing supply of affordable units. B. Applicability. These regulations shall apply to any development project in the City of Winooski that proposes 10 or more new dwelling units in the same building. 1. If units will be offered for rent, the following percentages for affordable units will be required: Unit Count Affordability Rates 10% of units 50% AMI and below 15% of units 65% AMI and below 20% of units 80% AMI and below 2. If units will be offered for sale, the following percentages for affordable units will be required: Unit Count Affordability Rates 10% of units 80% AMI and below 15% of units 100% AMI and below 20% of units 120% AMI and below C. Exemptions. The following instances will qualify as exemptions to the requirements for affordable housing as identified in Section 5.16.B. 1. Projects that will be developed and owned by an educational institution for the exclusive use as a residential facility to serve the needs of the institution. 2. Projects that are developed for senior housing or age restricted housing that serve specific needs of older populations. 54 Article V – SPECIFIC USE STANDARDS | City of Winooski  3. Projects that propose all new units will be marketed as affordable units and meet the standards outlined in Section 5.14.D. D. Inclusionary Housing Standards. The following standards will apply to any dwelling units required under this section. 1. Affordable dwelling units may differ from market rate units regarding interior amenities provided that: a. The specific differences are not identifiable from the exterior, excluding size differences; and b. The differences do not include components of energy efficiency such as windows, doors, insulation, HVAC systems, or similar components. 2. The mix of units based on the number of bedrooms for affordable dwelling units shall be consistent with the mix of units based on the number of bedrooms for market rate units to ensure equity in the type of units being provided. 3. Affordable dwelling units shall be no less than 80% of the average size of market rate units within a project that meets the standards outlined in Section 5.16.B. E. Incentives. Projects that include affordable housing as outlined in Section 5.16 are eligible for any development incentives that are included in Section 5.14 if the minimum standards for the specific incentive are met. SECTION 5.17 – REPLACEMENT OF EXISTING DWELLING UNITS A. Intent. The intent of these regulations is to ensure existing dwelling units that have multiple bedrooms are maintained, the City will require replacement of dwelling units that are lost to redevelopment activities. B. Applicability. This section shall apply to all Zoning Districts in the City where: 1. Redevelopment projects that propose five or more dwelling units; and 2. The redevelopment project will remove, in whole or in part, existing dwelling units, including multi-unit dwellings. C. Requirements. The following replacement standards shall be required if projects meet the standards outlined in Section 5.17.B. 1. All existing units, including both number of units and their respective bedroom counts shall be replaced in-kind in the new development. 2. Specific incentives will be offered to deviate from this requirement. D. Incentives. For every new unit that includes three or more bedrooms and is affordable as outlined in Section 5.14.C will be eligible for the following incentives: a. Existing bedrooms will be counted on a two for one basis (i.e. six existing bedrooms can be accommodated with one three-bedroom affordable dwelling unit); or b. Existing dwelling units of two or fewer bedrooms will be counted on a three for one basis (i.e. three existing dwelling units be accommodated with one three-bedroom affordable dwelling unit) E. Exemptions. The following instances will qualify as exemptions to the requirements for housing replacement as identified in Section 5.17.B. 55 Article V – SPECIFIC USE STANDARDS | City of Winooski  1. Properties that have been ordered for demolition by the City of Winooski, except where it has been determined that the deterioration was caused by neglect or lack of maintenance. 2. Loss of units due to the conversion of an apartment house, duplex, or accessory dwelling back to a single-unit owner occupied dwelling. 3. Dwellings that are lost for the development of a public use that will serve residents making less than 50% of the HUD Area Median Family Income as identified under Section 5.14.C.2, or provide a service to the community that has been explicitly identified to not currently exist in the City of Winooski. 56 Article V – SPECIFIC USE STANDARDS | City of Winooski  City of Winooski 27 West Allen Street Winooski Vermont 05404 Vermont’s Opportunity City 802 655 6410 winooskivt.gov Memorandum March 19, 2024 To: Planning Commission From: Housing Commission Subject: Development Regulation Considerations The following document contains the recommendations from the Housing Commission in relation to recent guidance from City Council to explore replacement and inclusionary zoning regulations. These recommendations are acutely related to construction and replacement of housing and therefore in the direct interest of the Housing Commission to provide feedback on. Replacement Regulation: The required replacement of units which existed pre development. Dwelling Unit Replacement vs. Bedroom Replacement When determining what aspects of existing developments should be replaced with new development, several options exist. These include: 1. Post-development shall include at least the same number of total bedrooms as pre- development. Example: Property A has three dwelling units with a total of six bedrooms. Any proposed redevelopment of Property A shall include a minimum of six total bedrooms regardless of dwelling unit count. 2. Post-development shall include at least the same number of total dwelling units as pre-development. Example: Property B has five dwelling units with a total of 11 bedrooms. Any proposed redevelopment of Property B shall include a minimum of five total dwelling units regardless of the number of bedrooms in each dwelling unit. 3. Post-development shall include the same number of units with the same number of bedrooms as pre-development Example: Property C has three dwelling units and each dwelling unit has two bedrooms. Any proposed redevelopment of Property C shall include a minimum of three dwelling units with no less than two bedrooms in each dwelling unit. Housing Commission Recommendation: Option 3, requirement to replace the same number of units with the same number of bedrooms as pre-development. With two points of nuance. 1. This is to be paired with an incentive (density, parking TBD) for building an affordable 3-bedroom unit. This can be the same incentive offered to any developer looking to build this type of unit, but is not required via replacement regulation. 2. 2 /3 for 1 allowance for any units below a three-bedroom. Example: A developer needs to replace 3 two-bedroom units which were in existence prior to redevelopment of a property, if they instead elect to build 1 affordable three-bedroom unit they would meet the replacement requirement. This option is by far the most effective in preserving the type of housing the community is asking for and is in need of. It would be rare that an entire building (or multiple) 3 + bedroom units are demolished. Historically it has more often been at most one or two. It is important to consider that market forces make it so that 3+ bedroom units do not easily pencil out. Replacement requirements of these unit types could prove to stifle development as it is the most burdensome on the private developer, which is why the incentive pairing and 2/ 3 for 1 allowance provides the flexibility to offset some of this burden. Threshold considerations (existing units): Replacement housing regulations should also consider when the regulations will be required. This could be applied to any project, or projects that propose a certain number of new dwelling units. It may be appropriate to have replacement housing regulations only apply to projects that propose a certain number of new dwelling units. Care should be given when establishing thresholds to ensure projects aren’t purposely under developed to avoid exceeding the threshold when housing replacement regulations would apply. It may be appropriate to require any redevelopment projects to be subject to replacement housing regulations. Considering the right of single family home owners to redevelop their properties as they wish, replacement ordinances would be best served above 2 units. Threshold Options: 1. 2 units and above: This would be heavy handed and take away some flexibility for those interested in purchasing multi unit homes to convert to a single family home for their own use. 2. 3/4 units and above 3. 5 units and above 4. 10 units and above: Only large projects would be held to this standard and the loss of smaller multi unit housing could continue occurring. Housing Commission Recommendation: Development threshold of 5 units and above as long as the units are below 3 bedrooms. If there are 3+ bedroom units in a property being redeveloped which has 3, or 4 units then those units need to be replaced. Since the residential zoning districts max at 4 units per parcel this regulation would become mostly relevant to only the commercial and mixed use zoning districts. Additionally, properties with 5 or more units are treated as commercial properties from a tax perspective. By keeping this regulation relevant only to properties which have 5 or more units ideally Federal and state accessibility laws dictate that any project with 5 or more dwelling units include adaptable or accessible dwelling units, depending on specific factors in the building (elevators, ground floor entrances, etc.). This would effectively remove accessibility as a consideration for replacement regulations since the threshold recommended is the same level as existing protections. Inclusionary Zoning Set-aside amount & income targeting: The percent of the development that is required to be affordable. Income targeting defines the income group the units will be affordable. For example: the units created through IZ will be rented or sold at or below a certain % of the Area Median Income (AMI). Higher numbers make it easier for developers to achieve, but do not provide housing for very low income households. Very low AMI targets can act as barriers for developers, but provide the desperately needed units for those living in poverty. Options: Static set aside % (15, 20, 25%) or static income targeting (70,80, 100% AMI), if it should fluctuate based on the zoning district, cost of the project, or price of the market rate rents. Housing Commission Recommendation: a fluctuating set of three options which allows for developers to choose if they would like to develop less affordable units that are deeply affordable or more units that are less affordable. Requiring units below 50% AMI is a significant financial burden to place, so this option would give developers an option in how they want to fulfill the requirements of this regulation. Rental units Set aside % of total units AMI targeting 10% of units 50% AMI and below- ($1,006- 1 bed) 15% of units 65% AMI and below- (~$1,250- 1 bed) 20% of units 80% AMI and below- ($1,609- 1 bed) *Priority housing projects already have this AMI set to (80%). IZ regulations could be combined with this requirement. Ex: if a developer chooses to set aside 10% of their project units for those at 50% AMI and less, they can choose to do an additional 10% at least at 80% AMI to obtain priority housing project status with the state. Homes built for purchase Set aside % of total units AMI targeting 10% of units 80% AMI and below- ($186,500- 1 bed) 15% of units 100% AMI and below- (~$234,000- 1 bed) 20% of units 120% AMI and below- ($282,000- 1 bed) Development size threshold: The triggering point at which the ordinance is required, typically the number of units in a development. For inclusionary zoning this number is usually higher to avoid stifling the creation of missing middle housing like duplexes, triplexes, and quadplexes. Similarly, the number should not be above 10 as that might make it too limited to infrequent large-scale projects. ● 5 unit threshold- (Burlington) ○ An independent consultant found that Burlington’s IZ policy likely stifled some medium sized development by having their IZ threshold too low at 5 units. ● 10 unit threshold- (Williston) (Burlington- Adapted use) (Hinesburg) Housing Commission Recommendation: 5 unit threshold, but projects with 5-9 units can utilize the payment in lieu option. Any project with 10 or more units would be excluded from this. Payment-in-lieu Offers developers the option to pay a lump sum to the municipality if they do not want to build the affordable units required through the inclusionary zoning regulations. While payment in lieu offers flexibility to developers, it can negate the point of an inclusionary zoning program, which is to ensure economic integration within a City. For Winooski, where larger developments are few and few between, a payment in lieu is a lost opportunity for affordable units to be integrated into that project, which will often be in a higher opportunity zone. Options ○ 5-9 units- $ XX,XXX ○ 10+ - $ XXX,XXX ○ 20+- $XX,XXX Housing Commission Recommendation:  ○ Payment in lieu only available to developments with 5-9 units. Any projects with 10+ units will be exempt from this option and be required to fulfill their affordable unit requirement. ○ The cost for each affordable unit not built = $35,000 ○ Payment in lieu for developments from 5-9 units would be the % of one unit cost at 10% of the affordable unit requirement. ■ Ex: a 6 unit building would have been required to build 10% of their units affordable. If the developer chooses the payment in lieu option they would have been required to build 0.6 affordable units. 0.6 x $35,000 = a required payment of $21,000. Off-site development: ● Off-site option: If a developer can demonstrate that site conditions prevent the inclusionary units from being built on the same site as market-rate units. ○ Burlington: the requirement may be met off-site within the city at 1.5 times the on-site quantity. The sole exception is that this option is not available for projects in a waterfront district. Housing Commission Recommendation: Off-site development not be an option as developments are so far and few in between and time between projects are often lengthy. This also somewhat defeats the purpose of IZ as a policy itself. Affordability control periods: Length of time the inclusionary units must remain affordable. Options: ● Deed restricted to make perpetually affordable ● 99 years ● 50 years ● 10-20 years ● 25 years Considerations need to be made on how these affordable units will be tracked in the long term, through partnerships or through the HID. Housing Commission Recommendation: To be decided Additional Requirements: Unit comparability ● It is advised to do a generalized statement for unit comparability to ensure that units built affordably are not designed with sub par space/ quality of finishings compared to the market rate units.