JOINT STUDY SESSION
PLANNING COMMISSION, HOUSING COMMISSION, & CITY COUNCIL
MINUTES
SEPTEMBER 30, 2008

CALL TO ORDER
Mayor Morrison called the meeting to order at 7:05 p.m. in the Civic Center Council Chambers, 1175 E. Main Street.

PRESENTATIONS
Mayor Morrison presented the City's outgoing Informational Technology Director Joe Franell with a plaque in recognition of his work for the City.

HOUSING INCENTIVES & REGULATORY BARRIERS
Community Development Director Bill Molnar and Senior Planner Brandon Goldman addressed the group. Mr. Goldman provided a brief presentation which addressed Ashland's rental market profile, rental production, and changing market conditions. He also identified the following regulatory barriers and possible incentives:

Regulatory Barriers:

Mr. Goldman also spoke to the regulatory barriers identified in the 2002 Housing Action Plan, which include: 1) identifying and zoning additional land for multi-family and affordable housing developments, 2) limiting or restricting single family housing in multi-family districts, 3) encouraging the development of accessory dwelling units, and 4) allowing for (or requiring) single family residential development on small lots.

Incentives:

Mr. Goldman listed the incentives identified in the 2002 Housing Action Plan, which include: 1) waiving System Development Charges and other planning or permitting fees, 2) creating a Housing Trust Fund and dedicate funding sources to that fund, and 3) identifying a target site with the potential for multi-story mixed used development for use of the new State vertical housing tax exemptions.

Mr. Goldman concluded his presentation and asked if there were any questions for staff before they hear from the invited speakers. Councilor Hardesty requested information on the State's vertical housing exemption. Mr. Goldman provided a brief synopsis and noted Karen Clearwater would be able to speak to this and the other State programs in greater detail. Councilor Chapman suggested tonight's conversation focus on how to create new housing, not how to maintain affordable rents in existing buildings. Councilor Navickas noted this discussion came about as a result of a motion made by Chapman in regards to the development of the City's Lithia Lot and voiced support for looking at the bigger picture and exploring the various options.

Presentations by Development Professionals
John Fields/Golden-Fields Construction & Design/Commented on apartment housing and income, and noted there needs to be a certain level of return in order for these ventures to be worthwhile. He commented that rentals in Ashland are expensive and stated the high cost of land in addition to Ashland's regulatory process can drive the cost to develop these units way up. He added this increased cost and the uncertainty in the process is now discouraging people from purchasing or building units in Ashland and renting them out. He noted the City's condo conversion ordinance and suggested many of the units are likely still rentals. Mr. Fields stated the City would have a difficult time trying to get the market to build affordable housing and recommended they consider annexing land into the City limits for this use. He commented on what he felt was a general hostility towards affordable housing in Ashland, and stated if the City wants this type of housing they should build it themselves, and suggested they explore possible partnerships with the private sector.

Mr. Fields commented on the issue of managing these properties and stated is it easier to rent out 3 larger units, than 10 smaller ones. He noted the reluctance of developers to build smaller units and stated people with a higher income are easier to rent to. He added in terms of management, it is preferred to rent to families or couples rather than singles.

Mayor Morrison suggested they focus on issues the City has some control over. Mr. Fields noted the huge expense in creating the required number of parking spaces and stated the City has a real opportunity for leverage with this. Mindlin voiced support for looking into this option, including reduced parking requirements and no car/limited car leases. Mr. Goldman noted two different affordable housing projects came forward recently that requested parking variances. He sated both variances were approved by the Planning Commission, but noted asking for a variance adds vulnerability to an application.

Mark Knox/Urban Development Services/Noted the sensitivity for apartment buildings in Ashland and agreed with Mr. Fields that the community has some issues with this. Mr. Knox spoke to the City's difficult planning process and stated the subjectivity and uncertainty drives developers away. He commented on the City's condo conversion ordinance and explained that developers would rather build condominiums over apartments because of the regulations to convert those apartments at a later date. He added the City should not have regulatory barriers for converted apartments. Mr. Knox commented on Accessory Residential Units. He suggested units fewer than 500 sq. ft. should be an outright permitted use and stated this is a great way to get small, affordable units in Ashland. He shared his own experience with receiving approval to build a mother-in-law unit on his property and stated the approval was appealed by a neighbor, which added thousands to the cost. Mr. Knox voiced his support for revising areas of the City's Comprehensive Plan to rezone areas and revising the annexation criteria in the Land Use Ordinance.

Mr. Knox noted the Ashlander apartment complex and stated they have the management in place and could possibly add new units. He recommended there be some entity that approaches these types of individuals with a private/public partnership.

Betty McRoberts/Jackson County Housing Authority/Stated the Housing Authority has to go through the same process as a private developer, however they do not make a profit. She explained when the Housing Authority does a project, they have to find land, find money to build the project, and then take it through the City's approval process. Ms. McRoberts stated her projects are more complex because of the need to assemble a huge funding package and noted most projects involve four or more funding sources. She noted the State of Oregon is a conduit for almost all of the funds they use, and this also brings complications to the process. Ms. McRoberts shared her issues with project timeframes and stated this is very critical in building affordable housing with public dollars. She stated if anything happens to disrupt that timeframe, they could lose everything, and whatever the City could do to help with this would be beneficial. Ms. McRoberts stated the high land costs in Ashland has made it difficult for the Housing Authority to build projects in Ashland and stated $200,000 per acre is about the most they can afford. She commented on the use of Transit Oriented Districts (TODs) and stated these have been very helpful and stated it is nice to know exactly what the requirements are.

Ms. McRoberts clarified the City of Ashland has been very supportive of their efforts, and it is more of an issue with land prices that is prohibiting them from constructing more units in Ashland. She also clarified the Jackson County Housing Authority manages their own units and do not use outside management agencies.

Karen Clearwater/Oregon Housing and Community Services/Commented on the Country's current financial situation and stated Fannie Mae and Freddy Mac were their largest equity investors, but they are no longer in the market. She explained the Sate uses the low income housing tax credit as their biggest source of funding and also commented on the Oregon affordable housing tax credit, which buys down a bank's interest rate. Ms. Clearwater recommended Ashland do whatever it can to speed up the approval process for affordable housing projects and explained the longer it takes, the more money it ends up costing. She stated the State is very interested in doing new affordable housing and noted Ashland rates number one with the State in their need for workforce housing. She added this makes Ashland a top priority for funding at the State level. Ms. Clearwater stated she does not believe Ashland will have a problem attracting for-profit and non-profit developers, but urged them to go with someone who has done affordable housing projects before.

Ms. Clearwater commented on the vertical housing tax credits and explained this program allows cities to delineate a specific area and apply to the State, and if approved, all housing constructed that is above the first floor becomes eligible for a 10-year property tax exemption.

Ms. Clearwater was asked if she could recommend any non-profits or for-profits the City could pursue working with. Ms. Clearwater listed Jackson County Housing Authority, OnTrack, Access, Bill Lovelace (Grants Pass), and Shelter Resources (Bellevue, WA).

Commission/Council Discussion
Mayor Morrison listed the following options he would like the City to pursue further: 1) Transit Oriented Districts, 2) expedited planning process, 3) parking requirements, 4) density, 5) height restrictions, and 6) partnering with experienced developers and management agencies. He asked if there were any others the group would like added. Additional recommendations were made to look into making Accessory Residential Units an outright permitted use and also reviewing the current lot coverage restrictions.

Navickas commented on the need to tie affordable housing development into the City's Economic Development Strategy and voiced his support for pursuing development of affordable units on the City's Lithia Lot, as well as the site across the street on the corner of Pioneer and Lithia.

Benjamin shared his optimism about what Ashland has accomplished. He noted the success of self-help housing projects and the Clay Street opportunities that may soon materialize.

Marsh commented on the need to take a "public pulse" on the issue of affordable housing and stated this goal needs to have broad based support in the community in order for it to succeed.

ADJOURNMENT
Meeting adjourned at 9:00 p.m.

Respectfully submitted,
April Lucas, Administrative Assistant