Published in the June 11, 2015 edition of the Lyons Recorder.
What’s the future for affordable housing in Lyons?
Trustees vote to negotiate in good faith with Habitat for Humanity: Ferguson quits, then decides to continue pursuing Valley Bank purchase
by Amy Reinholds
On June 3, the Board of Trustees passed a resolution to work in good faith with Habitat for Humanity on reducing tap fees to encourage affordable housing. At first, Craig Ferguson, who is under contract on the 0.76-acre Valley Bank property, and would like to sell 6 lots to Habitat for Humanity, resigned from the special housing committee, and said he was going to terminate the contract with Valley Bank. Why? Because the resolution that the trustees passed didn’t commit to a specific flat tap fee of $7,000 – approximately a $27,000 discount per unit. Ferguson said he needed a commitment from Habitat for Humanity before his closing date that they would have enough in their budget (planning for other costs like fees) to pay him $50,000 for each lot for 6 homes. As the developer, Ferguson would go through the zoning process and subdivide that parcel so the existing bank building would be sold to a business, and the residential lots would be sold to Habitat for Humanity.
But then, on Sunday and Monday, Ferguson said he changed his mind. He decided to keep his closing date of June 26 and he said he started talking with Habitat for Humanity, some planners, and others to draft an affordable housing agreement for this project that would minimize some risks for fee costs for Habitat and still be acceptable for the majority of the trustees.
In the meantime, another housing committee member, Tom Delker, announced his resignation on Facebook with statements accusing trustees of not wanting affordable housing. Despite this hasty decision, an opportunity for affordable housing was not killed in Lyons after all. The resolution was clear that the trustees do want to reduce tap fees, but they weren’t comfortable committing to numbers with a rushed timeline, without a detailed pro forma or development plan. And now, Ferguson said he is working to find a solution by the June 26 closing date.
The trustees approved their resolution with 5 yes votes and 2 no votes (Trustee Jim Kerr who said he thought it still was committing too much prematurely, and Trustee Dawn Weller, who said she wanted to see a commitment to a flat fee of $7,000).
The resolution “agrees to negotiate in good faith for the development of affordable housing units within the town of Lyons. In doing so, the Board acknowledges that this support may initiate a mechanism to make the utilities whole, or the solicitation of grant funding, to be determined through a memorandum of understanding with Habitat for Humanity. In turn, Habitat for Humanity guarantees that the units will be affordable now and into the future, and that a policy of preference for local residents displaced by the floods of 2013 will be approved by the Board and implemented, to the extent allowed by law.
The Town’s municipal utility regulations, at Article 13 of the Lyons Municipal Code, generally authorize the Town to waive or reduce certain fees when deemed appropriate to further one or more of the Town’s economic development goals.”
At the June 3 meeting, all three parties were asked to take risks: Ferguson as the land buyer/developer, Habitat for Humanity to make a commitment as buyer of future subdivided residential lots, and the Town of Lyons (taxpayers), asked to give up revenue. I spoke to most of the small audience in attendance, and their statements agreed that the trustees were looking out for the taxpayers and the utility ratepayers of Lyons by not promising something that might cause financial risk.
Aaron Caplan, chair of the Lyons Utilities and Engineering Board (UEB), presented the position from the UEB that if the town wants affordable housing, a policy for incentives to encourage affordable housing should be added to town municipal code. After the meeting, Caplan said “I thought the board was really trying to make something work. They’re trying to think about the entire town, and they are concerned about risk to the town and the taxpayers.”
Steve Wratten, a member of the UEB who also attended the meeting agrees. “They showed support for affordable housing the best they could without over-committing,” he said. He later told me that he had come to the meeting to argue against the board approving a flat rate to discount fees on the short time line for this project. Wratten said that the town received funding for three separate rate studies for each of the town utilities: electric, water, and sewer. The so-called “tap fees” are really licenses to connect, or connection charges, Wratten said. The reports will guide the town on whether the charges can be reduced and maybe more costs can shift to base rates. “For housing, you could work out incentives that the town could offer for anyone who provides affordable housing, not just Habitat for Humanity. If a policy is in that code that developers or builders meet criteria A, B, and C, then they would be eligible for a discount in fees.”
Gregg Oetting, a member of the Planning and Community Development Commission (PCDC) who serves as a liaison to the special housing committee, attended the June 3 meeting, and told me afterwards that he understands the vote of the board and their concern over committing to an actual dollar amount. “If the town is going to incur some of the development costs – or the tax payer is, for that matter – then a well written and complete pro forma [development plan] needs to be provided. It was not provided, and that puts them at enormous risk. The board of trustees members that pressed this issue were just doing their jobs.”
Oetting said next steps should be to determine who is responsible for completing a development plan pro forma. “The housing committee really shouldn’t be the one to do it. It’s generally the developer who writes it, as in most circumstances they cover all the costs of a development. Developers must be able to do it themselves or be willing to incur a cost to have a third party do it. If the development did not require public funds, this would be a completely different story. But that’s not our case. Going forward, the housing committee needs to understand its boundaries on producing a pro forma or development plan.” He said maybe the plans could be written by grant or written pro bono. He also said the committee needs to understand how complete a pro forma document must be before the committee recommends the trustees be involved.
“Deed restricted affordable housing will not be built without some relaxation – or a grant program – on tap fees,” Oetting said, agreeing with Ferguson. Oetting recommends that the mayor execute and get the proper team together to get the most official and accurate information on tap fees and the board’s ability to waive or not. “Endless speculation on these issues is actually harming the process,” he said.
Finally, Oetting said the challenge of smaller projects like the proposed 6 townhomes at the Valley Bank site, is the economy of scale. This issue issue was also discussed by the Housing Recovery Task Force and the Board of Trustees in 2013 and 2014. “If we try to fix the housing crisis by working on a series of small affordable housing development projects, I have learned now, that we have one very significant headwind. We are on the wrong side of economy of scale,” he said. “If every project requires some sort of grant written, some sort of approved tax relief, some sort of infrastructure change, such as sewer lines, some sort of PCDC and Board of Trustees process, some sort of development plan/pro forma, it’s going to be very difficult to justify the costs when the project is less than 6 – 8 units.” For example, it’s the same amount of cost to move a sewer line for a development of 2 units than a development of 30 units. “So goes it for the pro forma, the bureaucracy, and everything else. If we continue with the small project approach, with Habitat for Humanity as the builder, we need to make recommendations to the board on how we can alleviate this economy-of-scale problem.”
Despite resigning, Delker deserves recognition and respect for not missing a single meeting until last week. He and I were at every special housing committee meeting since the Board of Trustees created the committee, and I don’t think anyone else on the committee was, members or liaisons. (The only meeting we both missed was this past Thursday, the night of the hailstorm, but Craig gets my recognition and respect for attending Thursday’s meeting in the middle of a hailstorm, the only one who made it!) Delker sent an email to the committee stating that resigning “does not mean that I can’t or won’t attend meetings and help. I want the committee to succeed but even more importantly, I want the town to build homes for displaced residents,” he said.
Dave Emerson, executive director of Habitat for Humanity of the St. Vrain Valley, has been committed to working with Lyons since the flood, and still is. At the June 3 meeting, he said he he would bring the issue to the board of his organization the following week to see if there was any ability to raise more funds to be able to prepare for fees that were not discounted. “In short, plans for us are to remain open to conversations – on any future repairs or land possibilities – and continue to work with Cody (Humphrey) on the Railroad Avenue property,” he said after the meeting. He referred to the possible duplex that he and Humphrey, Lyons housing recovery coordinator, have been looking into on town-owned property east of the post office, already zoned for allowing that kind of residential development.
Keep following this weekly column for updates about what has and has not been accomplished. All housing committee meetings are open to the public: regular meetings are the 2nd and 4th Mondays, 5:30-6:30 p.m. at Lyons Town Hall Annex, behind the Barking Dog, and working meetings are every Thursday, 8:30-10 p.m. at the Lyons Valley Village community house.
Amy Reinholds served on the Lyons Housing Recovery Task Force from December 2013 through its end in February 2015. She is currently a member of the Lyons Human Services and Aging Commission and serves as a liaison to the special housing committee. She has lived in Lyons for 11 years and in the surrounding Lyons area since 1995.