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AFFORDABLE HOUSING Draft Policy Statement and Proposed Rule Changes LAND USE REGULATION COMMISSION 7 FEBRUARY 2007 BACKGROUND Issue of affordable housing mentioned occasionally in recent years Monhegan requested rule changes in September 2005

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AFFORDABLE HOUSING

Draft Policy Statement and Proposed Rule Changes

LAND USE REGULATION COMMISSION

7 FEBRUARY 2007


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BACKGROUND

  • Issue of affordable housing mentioned occasionally in recent years

  • Monhegan requested rule changes in September 2005

  • Affordable housing panel discussion held in August 2006

  • Commission directed staff to proceed with drafting rules

  • Denial of building permit to Monhegan resident in September 2006


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DRAFT AFFORDABLE HOUSING

POLICY STATEMENT

  • Policy statement provides the basis for proposed rule changes

  • Draft policy statement defines affordable housing

  • Describes housing market and income trends in jurisdiction

  • Discusses several issues related to affordable housing

  • Presents draft goal and policy statements


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AFFORDABLE HOUSING DEFINITION

  • Decent, safe and sanitary living accommodations

  • Affordable to lower and moderate income households

  • 33% limit on household income for housing costs


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Maine Housing Costs

  • Housing costs, sales and rentals, increasing much faster than incomes in most regions

  • MaineHousing tracks regional housing costs and median incomes

  • Trends are particularly problematic in coastal and southern Maine

  • Uses “affordability index” to evaluate extent of affordability problems across Maine (ratio between how much mortgage loan areas’ median income households can afford divided by areas’ median home price)


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2005 Affordability for Median Income Buyers

Income Needed to

Community or Affordability Median Median Afford Median

Housing Market Index Home Price Income Home Price

Communities

Greenville 0.81 $127,500 $35,948 $44,604

Rangeley 0.46 $251,250 $38,243 $83,826

Counties

Aroostook County 1.41 $ 67,000 $32,809 $23,249

Hancock County 0.66 $196,000 $41,869 $63,206

Franklin County 0.84 $127,000 $35,930 $42,752

Hancock County 0.66 $196,000 $41,869 $63,206

Knox County 0.69 $192,875 $44,005 $63,675

Lincoln County 0.64 $209,000 $43,559 $68,281

Oxford County 0.88 $129,900 $38,123 $43,510

Penobscot County 0.88 $132,500 $39,453 $44,988

Piscataquis County 1.02 $ 92,000 $31,652 $30,994

Somerset County 1.14 $ 91,500 $35,153 $30,898

Washington County 0.89 $ 95,000 $29,105 $32,723

Labor Market Areas

Dover-Foxcroft LMA 1.06 $ 86,750 $30,982 $29,291

Millinocket LMA 1.81 $ 53,950 $33,440 $18,488

Coastal Islands 0.50 $272,500 $42,716 $85,035

LURC MCDs 0.68 $165,000 $36,554 $53,498

Maine 0.70 $184,000 $43,370 $61,648



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LURC Regulatory Approach

  • Current CLUP does not mention affordable housing as an issue…

  • Chapter 10 rules don’t specifically address affordable housing


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Affordable Housing IssuesDevelopment and Regulation

  • Demand and Location: Accommodate affordable housing in all areas appropriate for residential development initially – then monitor

  • Environmental Protection and Land Use Regulation: Examine land use provisions to determine whether standards can be reduced or waived to reduce housing costs while still protecting natural resources


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Affordable Housing IssuesDevelopment and Regulation

  • Regulatory Techniques:

    • Inclusionary zoning – rules integrate affordable housing into overall development in communities

    • Density bonuses – allow additional units overall in exchange for inclusion of affordable units

    • Accessory apartments/multi-family dwellings – use incentives to encourage development; limit to affordable housing purposes

    • Incentives versus mandates – initially, use incentives, then monitor situation


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Affordable Housing IssuesLong-term Affordability

  • Specified time frames:

    • Variable – 10-99 years

  • Maintaining affordability:

    • Rentals – easier than sales units…oversight agency sets rental rates within affordable ranges and limits increases

    • Sales – deed covenants include pricing formulas that may consider inflation, improvements, subsidies

  • Mechanisms:

    • Income and affordability limits –set affordable rental rates and sale prices; screen households

    • Various means – deed covenants, subsidies to bridge gap, right of first refusal for sales


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Affordable Housing IssuesInitial Commission Approach:

  • Incentive-based Approach

    • Allow reduction of minimum lot size and other dimensional requirements, as needed

  • Long-term Affordability

    • Consider time frame of affordability

    • Leave method of ensuring long-term affordability to applicants

  • Housing Oversight

    • Require on-going involvement and oversight by acceptable housing entities

    • May require back-up for the housing entities


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Draft Affordable Housing Goal Statement

Proposed Goal:

Facilitate the provision of affordable housing opportunities in appropriate locations to households with a full range of incomes.


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Draft Affordable Housing Policies

Proposed Policies:

  • Evaluate current dimensional requirements and land use standards for residential structures and subdivisions to remove barriers to the creation of affordable residential lots and construction of affordable dwelling units.

  • Require that permitted affordable housing is overseen by experienced local or regional housing groups or agencies that can assure it is maintained as affordable housing over the long-term.

  • Ensure that permitted housing affordable to households with varied incomes is interspersed within residential projects and development subdistricts, as appropriate.

  • Work with local and regional housing groups, plantation and town officials, and regional planning agencies to identify the need and appropriate locations for affordable housing.


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PROPOSED RULE CHANGES FOR AFFORDABLE HOUSING ACTIVITIES

  • 10.02 DEFINITIONS

  • 10.25 DEVELOPMENT STANDARDS

  • 10.26 DIMENSIONAL REQUIREMENTS


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10.02 DEFINITIONS

  • Affordable Housing:

    • Decent, safe and sanitary living accommodations that are affordable to very low, low and moderate income households

    • Limit of 33% of income spent on housing

  • Affordable Housing Covenant:

    • Agreement among owners, and/or tenants, and qualified holders, that permits holders to control purchase price of housing

    • Primary purpose to provide affordable housing


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10.25 DEVELOPMENT STANDARDS U. AFFORDABLE HOUSING

  • Dimensional Requirements

    • Reduce minimum lot size to 20,000 square feet

    • Reduce other dimensional requirements, as needed

  • Income Restrictions

    • Require sale or rental to very low, low and moderate income households

    • Allow waiver of limit on % of income spent on housing in certain markets


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10.25 DEVELOPMENT STANDARDS U. AFFORDABLE HOUSING (cont.)

3. Maintenance of Long-term Affordability

  • Require that provisions run with land & are recorded

  • Restrict title for sales in perpetuity by deed covenant

  • Limit annual rent increases

  • Allow other equivalent mechanisms


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10.25 DEVELOPMENT STANDARDS U. AFFORDABLE HOUSING (cont.)

4. Qualified Housing Entities

  • Require oversight of affordable lots or units by qualified housing entity acceptable to Commission

  • Require back-up housing entity or covenant holder

  • Require approval of transfers of rights


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10.25 DEVELOPMENT STANDARDS U. AFFORDABLE HOUSING (cont.)

5. Affordable Housing Agreement – Submissions:

  • Identification of qualified housing entity & back-up

  • Method for maintaining long-term affordability

  • Process for screening and selecting tenants or buyers

  • Purchase option for qualified housing entity

  • Method to return profits for purpose of housing

  • Documentation of need for waiver of 33% limit


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10.26, G Exceptions to Dimensional Requirements

14. The Commission may reduce dimensional requirements for the purpose of providing affordable housing opportunities, in accordance with Section 10.25, U.


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STAFF RECOMMENDATION:

POST DRAFT AFFORDABLE HOUSING POLICY STATEMENT AND PROPOSED RULE CHANGES TO 30-DAY COMMENT PERIOD