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AHAC Minutes 01/09/2012January 9, 2012 MINUTES OF THE COLLIER COUNTY AFFORDABLE HOUSING ADVISORY COMMITTEE MEETINGi Janua ry 9 2012 Naples, Florida LET IT BE REMEMBERED that the Collier County Affordable Housing Advisory Committee, having conducted business herein, met on this date at 3:00 PM in REGULAR SESSION in Administrative Building "F," 3rd Floor, of the Government Complex, Naples, Florida, with the following Members present: CHAIRMAN: Vice Chair: Hannirig Coyle Coletta Stephen Hruby Cormac Giblin John Cowan Christian Davis Michael Diamond Patricia Fortune Christine Jones Bradley Schiffer Stuart Warshauer Clyde Quinby (Vacancy — Alternate) ALSO PRESENT: Kim Grant, Interim Director — Housing, Human & Veteran Services Frank ( "Buddy ") Ramsey, Operations Analyst Priscilla Doria, SHIP Loan Processor — Staff Liaison Item I _ 1 Copies to: January 9, 2012 1. CALL TO ORDER — CHAIRMAN: Chairman Hruby called the meeting to order at 3:00 PM and read the procedures to be observed during the informal meeting. 2. ROLL CALL: Roll call was taken and a quorum was established. Eight voting members were present. (Note: Stuart Warshauer attended in an "ex- officio' capacity and not as a voting member of the Committee.) 3. AGENDA AND MINUTES — CHAIRMAN: a. Approval of Agenda John Cowan moved to approve the Agenda as submitted. Second by Vice Chairman Giblin. Carried unanimously, 8 — 0. b. Approval of AHAC Minutes — October 10, 2011 (Revised) John Cowan moved to approve the Minutes of the October 10, 2011 meeting as submitted. Second by Bradley Schiffer. Motion carried, 3 — 0. (Note: Only 3 members were present who had attended the October 10`h meeting.) c. Approval of AHAC Minutes —December 12, 2011 John Cowan moved to approve the Minutes of the December 12 2011 meeting as submitted. Second by Bradley Schiffer. Motion carried, 6 — 0. (Note: Christian Davis and Patricia Fortune could not vote because they did not attend the December 12`h meeting.) d. Approval of Subcommittee Minutes — December 22, 2011 Chairman Hruby explained a new procedure was being instituted, i.e., Subcommittee minutes will be presented to the entire AHAC. Only the Subcommittee members will vote to approve /disapprove the minutes during regular AHAC meetings. Bradley Schiffer moved to approve the Minutes of the December 22, 2011 AHAC Subcommittee meeting as presented. Second by Christian Davis. Motion carried, 3 — 0. (Note: The Subcommittee consists of three members.) 4. INFORMATION ITEMS — STAFF: a. Review/Report — NSP Strategy and Implementation Plan Kim Grant provided background information: • December 13 —14: The Board of County Commissioners accepted and approved Staff's recommendations • Revised Action Plan: o Negotiate Developer Agreement with "Habitat for Humanity" ■ Transfer ownership of property to Habitat o Amend NSP -1 and NSP -2 Action Plans to reflect new direction ■ Submit to HUD for approval 2 January 9, 2012 o Solicit "not- for - profit" organizations (via "RFP" — Request for Proposals) to qualify to own and operate rental housing Chairman Hruby attended the Board of County Commissioners meeting and confirmed to the BCC that the AHAC supported the recommendations presented by Staff. He noted there was one caveat, i.e., the program income should be retained to support affordable housing. Kim Grant outlined the process: • March 13, 2012: A draft of the Developer Agreement will be presented to the BCC for review and approval o The Agreement will define the terms and conditions • Transfer of title will take place after the Agreement is approved • RFPs are being prepared and will be available within the next two weeks • Specific decisions concerning program income will deferred to a later date (Christine Jones arrived at 3:10 PM.) Bradley Schiffer requested information concerning the program's net worth. Kim Grant will provide the figures. b. Status — Subcommittee Review of Function, Powers and Duties of AHAC Chairman Hruby reported: • Subcommittee met on January 5, 2012 • The Ordinance was enacted when the housing crisis was at its peak — when prices the most expensive in County's history • Ordinance 2008 -17 which outlines the obligations and tasks of the Committee was reviewed at the request of Commissioner Henning to determine relevance and suggest updates • Under "Section Seven: Functions, Powers and Duties" — o Item 2 • Inclusionary Zoning is no longer appropriate as a tool — it is not flexible enough or market - driven • Various tools will be evaluated to determine which will incentivize when the market demands o Item 5 • Only a few applications were presented in the past • The AHAC can only recommend — not make policy • Placed an administrative burden on a developer to make an additional mandatory presentation Bradley Schiffer noted the County Attorney's Office may have revised the Ordinance Buddy Ramsey will research the issue and advise the AHAC if Item 5 was removed. Chairman Hruby stated the Subcommittee will address the issues in more detail during its next meeting. In the Subcommittee's opinion, its duties should be more policy and procedurally driven. The Subcommittee's suggestions /options to modify the Ordinance will be presented to the full AHAC for discussion. January 9, 2012 c. Subcommittee Report Chairman Hruby stated: • Previously, specific Subcommittees had been created to address specific issues /tasks with Staff o Two or three Subcommittees were running concomitantly • A Standing Subcommittee with three permanent members has been created • Chairman Hruby, Christian Davis, Bradley Schiffer — permanent members • No more than 5 members will sit on the Subcommittee at any time • All AHAC members are welcome to attend specific meetings to discuss items of interest Bradley Schiffer suggested scheduling Workshops where a specific topic would be discussed in detail with the entire AHAC. He noted the quorum rule would not apply to a Workshop Session in the event that more than 5 members wanted to attend. Kim Grant stated all members will be notified of the Subcommittee meetings and if the response was appropriate, a Workshop would be scheduled. Chairman Hruby noted the Subcommittee could recommend scheduling a Workshop to discuss an issue with the full AHAC Committee. Mr. Schiffer requested Staff schedule a permanent date for the Subcommittee meetings. 5. PUBLIC COMMENTS: (Speakers will be heard after the topic has been discussed.) 6. DISCUSSION ITEMS AND PRESENTATIONS: STAFF a. Review pending 2012 Renewal of Interlocal Agreement between Collier County and the City of Marco Island Buddy Ramsey provided the following information: • In 2000, the Board of County Commissioner and the City of Marco Island entered into an Interlocal Agreement • Term of Agreement: 3 years, renewable • The City of Marco Island would make a financial contribution to Collier County to support affordable housing o Payment: 10% of the annual Building Permit Fees collected or $50,000 whichever is greater • Next renewal date: October 1, 2012 • Recommendation: The Standing Subcommittee vet the issue and report to the full AHAC for discussion o Will contact Marco Island and request participation in discussion of financial component o Issue: $50,000 may be more than 10% of the Building Permit Fee collected 4 January 9, 2012 It was noted the Marco Island Affordable Housing Trust Fund is held by the Clerk of Courts and spending is at the discretion of the Board of County Commissioners. • Funds were used to pay the permitting fees for an non - profit organization that was building affordable housing in Immokalee • Tenant -based rental assistance Chairman Hruby clarified the funds are not targeted specifically to Marco Island and may be utilized for any affordable housing application within the County b. Review BCC's Decision to Suspend Collection of Affordable Housing Contributions Buddy Ramsey: • December, 2011: A recommendation was presented to the BCC to suspend collection of Affordable Housing contributions pending the Board's decision on a Land Development Code ( "LDC ") Amendment to implement permitting insubstantial changes to Planning Unit Developments ( "PUD ") to be approved by Staff • The Board: • approved the suspension of all affordable housing contributions required by a specific PUD • authorized notifying property owners that the PUD may be amended to remove the affordable housing commitment • recommended the refund of previously collected contributions Mr. Ramsey noted affordable housing contributions were collected during 2005 through 2008 when there was a significant lack of affordable housing in Collier County. The funds paid into the account were to be used to mitigate the issue. The real estate market has changed and properties are selling at significantly reduced prices. • The Board will review the Land Development Code Amendments in July, 2012 He stated approximately $591,000 remains in the account. The issue is whether or not there is a current need for affordable housing. Bradley Schiffer noted the funds could have been used for down payment assistance but will no longer exist if the Amendment passes in its entirety. Vice Chairman Giblin asked if the County had a history of refunding funds targeted for other commitments, for example, contributions for road development. Chairman Hruby stated to refund funds previously collected for specific commitments sets a dangerous precedence for the County. Bradley Schiffer cautioned an illusion persists that the affordable housing problem has been cured. He stated while the housing inventory is great, the problem is for a buyer to afford to purchase a property, i.e., accumulate the required funds for down payment and closing costs. He stated the need has shifted. The funds would be better utilized for down payment assistance. He noted the "affordable" houses are essentially vacant properties which have become a blight on neighborhoods. Kim Grant confirmed only a small amount of funds have been appropriated for permitted administrative costs. January 9, 2012 Chairman Hruby noted there are two issues: • There are commitments for land that has not yet been developed. The industry claims the contribution is burdensome and adds to developments costs. • The funds have been collected and deposited into a "Trust Fund." • The monies should be utilized for affordable housing purposes. He further stated the County could suspend the collecting the funds until the real estate market is active again and construction begins. If the availability of affordable housing becomes limited, the funds would be available. This is a "tool" to be triggered on or off as the market demands. Christine Jones concurred. As a licensed Realtor, she stated the market is "temporary." During the "boom" (six /seven years ago), available affordable housing was extremely limited. To completely eliminate affordable housing contributions by developers would place the County in a difficult position. The base price of homes currently being built is $250,000 which is not "affordable" to most first -time homebuyers. She further stated mortgage underwriting guidelines have become more restrictive. Kim Grant asked if the Committee wishes to make a statement to be presented to the Board of County Commissioners on the issue. Bradley Schiffer noted PUDs are being presented to the Planning Commission to request removal of the contribution requirement. He stated the the BCC has not requested the AHAC analyze the issue. Kim Grant stated the issue was brought to the AHAC's attention by Staff for informational purposes, the AHAC should determine how to proceed or to not take action. Bradley Schiffer cited from Section Seven of the Ordinance, under "Functions, Powers and Duties" as follows: "(1) The Committee shall monitor and advise the Board of County Commissioner and the City Council regarding the goals, objectives, and policies of the County's housing element in the Growth Management Plan, and the City's Comprehensive Plan, and any other program, means, or directives which would assist or encourage the provision of affordable housing in Collier County and its municipalities. " "(6) The Committee shall investigate any other relevant areas so directed by the Board of County Commissioners. " Christian Davis referred to Paragraph 3 under Section Seven: "The Committee shall review and determine the effect of proposed Ordinances on affordable housing and make recommendations to The Board of County Commissioners and the Naples City Council, as appropriate. " Chairman Hruby stated the Committee was obligated to monitor the issues that could affect affordable housing. January 9, 2012 Mr. Schiffer again stated the perception is that the affordable housing crisis no longer exists. He cautioned if the Committee is concerned that the decision could affect the availability of affordable housing, it should provide the BCC with facts and data to prove the contribution is still necessary. Chairman Hruby noted while the intention was not to supplement SHIP Funds with the contribution funds, since State funds have virtually "dried up," it may be possible to utilize the money for that purpose. Buddy Ramsey stated funds are still available and the County is meeting the current demand for down payment assistance. Kim Grant confirmed the annual appropriation has been significantly reduced and it is uncertain as to whether the funding will continue. Christian Davis noted the lack of affordable housing existed for 2 to 3 years before the issue was recognized and policies were enacted. His concern was for when the pendulum swings back in the opposite directions and it takes another 2 to 3 years to realize the problem exists. He supported "suspending" the contributions rather than completely eliminating the requirement. Vice Chairman Giblin concurred decisions should not be made during "peak" or "valley" situations. Patricia Fortune noted the last contribution was collected in 2007, and the funds were not appropriated during the height of the housing crisis. She supported refunding the money since it has sat idle in an account since that time. Buddy Ramsey explained other grant resources were available during the height of the housing crises. The Trust Funds was viewed as a "war chest" to be used when the amount rose to a significant level. The balance is under $600,000 and did not trigger a possible use of the funds. Chairman Hruby stated he thought the purpose of the funds was to be utilized to leverage the development of affordable housing. The intention was not to use the funds as an alternative to SHIP funding. The balance will not "leverage" or support the development of affordable housing. He asked the Committee if they wished to further discuss the issue and draft a recommendation for the BCC or merely kept informed. Vice Chairman Giblin stated the Ordinance mandates the AHAC to present an opinion. Christian Davis and Patricia Fortune concurred. Consensus: The Subcommittee will vet the issue and draft a recommendation to be reviewed and discussed by the AHAC before presentation to the BCC. Buddy Ramsey will confirm whether or not the BCC will hear the Amendment again and the date. It was his understanding that the petitioning developer asked only for removal of the requirement for a contribution. Bradley Schiffer confirmed the petition that came before the Planning Commission was to remove the contribution component. Chairman Giblin asked if the removal of the commitment was "insubstantial" Mr. Schiffer responded the BCC determined it was and there was controversy when the requirement was initially enacted. He stated if it has been decided to refund the funds, there is little the AHAC can do to prevent it. 7 January 9, 2012 c. Discussion of Subcommittee Report — Assess Need for Affordable Housing Buddy Ramsey outlined current goals and objectives of the Housing Element component of the Growth Management Plan: • Goal 1 /Objective 1: To increase affordable- workforce housing units by 15% but no less than 1,000 averaged over a 5 -year period • Measure of Success: Static — Not market driven, not flexible • The goal has not been met The Subcommittee recommends new measures: • Utilize objective third -party data • median sales price • median income o Housing Opportunity Index ( "HOI ") • Assess need quarterly to assess market changes • "Tipping Points" — when further review /action is necessary • Future improvement(s) Housing Opportunity Index • Developed by the National Association of Home Builders and Wells Fargo • Released quarterly • Data is reported at the Metropolitan Statistical Area (MSA) level o Local MSA: Naples/Marco Island • HOI Definition: The share (percentage) of homes sold that would have been affordable to a family earning the local Area Median Income ( "AMI ") o Components: Income and Housing costs o 2011 AMI — $71,800 Subcommittee reviewed viewed the data that had been compiled since 1991 and the trends that emerged. A PowerPoint presentation was given and several charts /graphs were reviewed. Measure recommended by the Subcommittee: • A decline in the HOI for 3 consecutive quarters results in additional indicators being monitored to assess current market conditions • If the HOI falls below 50 %, action should be taken to increase /incentivize affordable housing Investigate rental measure Chairman Hruby outlined the context under which the recommendations were formed: • The goals noted in the Housing Element were "frozen in time" (2005) • The goal was only realistic for a short period of time. • Issue: There were no "triggers" to alert that a problem was developing — need an "early warning" system to give time to determine the appropriate action to take o Not every market condition will require the same action • Flexibility was not built in January 9, 2012 Public Comment: Speaker: Marjorie Student - Sterling, Esq. • Ms. Student - Sterling is a volunteer for "Habitat for Humanity" • She stated that "Habitat for Humanity" serves a community who would be unable to afford a home — even a foreclosed property — because they do not qualify to obtain conventional financing o Obtaining funds for a down payment and closing costs is an issue • From 2008 — 2010, the average income of a "Habitat" applicant was $24,716 • There were 103 closings in 2011 — there were 10 applicants for each property • Ms. Student - Sterling volunteered to work with the Subcommittee and to provide the data accumulated by "Habitat for Humanity" Chairman Hruby stated it is difficult for an individual earning less than 50% of median income to obtain a home without a Federal or non - profit subsidy. "Habitat for Humanity" provides an opportunity for those individuals who earn 30% of median income to own a home. The population is also served by the multi - family rental market. He further stated in Collier County there is not a great deal of product or construction of multi - family units, especially for low- income families. • The "Habitat" communities are deed restricted • Habitat works with Code Enforcement to ensure the communities meet Habitat's" as well as the County's standards. • There is a better quality of neighborhood when properties are owner- occupied • Rental apartments are rarely sufficient for the size of families served by Habitat Chairman Hruby concurred alternatives are necessary in the rental market. Christine Jones commented if the median purchase price of a home is $200,000, the families who qualify for affordable housing are unable to purchase the properties. The affordable properties of $100,000 — 150,000 are purchased by investors. She stated while there are a number of properties that appear to be "affordable," the buyers are being shut out of the market by investors. A "Habitat" client could only afford a $65,000 purchase price in the open market and the properties do not exist. Bradley Schiffer suggested reworking the Subcommittee's recommendations to further define what actions would be taken when a trigger appeared. He stated the Planning Commission will need more data. Chairman Hruby noted there are very few tools in place and only a few incentives in the Land Development Code. The Subcommittee stated the indicator was first, then building tools were next. Discussion continued. Several options were suggested. It was noted the index indicated 68% of the properties sold during the third quarter of 2011 were "affordable to those earning 100% of the AMI. It did not indicate what was affordable to individuals earning less than 30% of the AMI or the status of rental properties. Chairman Hruby stated while the properties may be "affordable," they were not necessarily accessible. The need for affordable housing for the very low and low income households will always exist. He further stated the problem becomes more evident when it affects the moderate /workforce housing market. January 9, 2012 Chairman Hruby suggested expanding the Subcommittee's recommendation, i.e., if the HOI drops below 50 %, the metric will be between 50% and where it has fallen on the Indicator. That is the number of housing units to be generated through various means using incentives. The monitoring should begin at 75 %. Bradley Schiffer summarized: • When a trigger exists for a minimum of three months, the AHAC will suggest activities to generate a percentage of affordable homes to be added to the market through the tools that exist at the time. • Two things can be done — create product inexpensively, or create financing product for the market. Bradley Schiffer moved to recommend forwarding the Subcommittee's recommended measures of the Planning Commissioners. Mr. Ramsey was requested to prepare language to provide that will achieve the GMPS's goals and will outline the type of actions to be implemented. The metric will be calculated by the difference between where the Indicator has fallen and 50 %. Second by Patricia Fortune. Mr. Schiffer amended his motion: He moved to recommend forwarding the Subcommittee's three-point recommendation to the Planning Commission. He moved to expand the second point: Establish a unit goal of the difference between 50% and the point where the Housing Indicator Index has fallen. Second by Patricia Fortune. Carried unanimously, 9 — 0. d. Nominate an AHAC Member to Serve on RFP Evaluating Committee Bradley Schiffer nominated Christine Jones to serve on the Committee. Ms. Jones accepted the nomination which was approved by the Committee. 7. STAFF /COMMITTEE MEMBERS: GENERAL COMMENTS (None) NEXT MEETING: Monday, February 13, 2012 at 3:00 PM There being no further business for the good of the County, the meeting adjourned at 4:50 PM by order of the Chairman. 10 COLLIER COUNTY AFFORDABLE January 9, 2012 The foregoing Minutes were approved by Board/Committee Chair on v'1 / LO 1,-U , 2012, "as submitted" W OR "as amended" U.