SR 06:052 - Laserfiche WebLink

DISCUSSION As indicated, the authority for the IUC's is found in section 17.44.080(c) of the Municipal Code which allows a developer to receive "credits" for one development if another development has a number of affordable units that exceeds the minimum amount required. The use of these credits is subject to City Council approval that can be made at the time an affordable housing agreement is presented for approval or at a later date, as deemed appropriate by the Council. Staff has determined that the use of credits as requested by the developer is permitted, subject to City Council approval. Further, because the Council has established guidelines for the review of IUC's, this request has been reviewed in accordance with the guidelines as follows: Number of roc's Eligible for Approval - The IUC Guidelines indicate that the number of affordable units in a development must exceed the minimum number of affordable units required by the IZO after the granting Of IUC's. Because the project has a requirernent of 64 affordable (191 ownership units X 20% IZO requirement = 38 affordable detached units plus 172 rental units X 15% IZO requirement = 26 affordable attached units for a total of 64 units), it exceeds the minimum required by a total of 74 IUC's. However, because the project was approved initially with 86 affordable units, and subsequently increased to 87 units as part of the initial bond documents, staff's determination is that only the 51 (138 total affordable units minus 87 initial affordable units = 51) affordable units in excess of the affordable units approved initially are eligible. Because the guidelines indicate the number of affordable units must exceed the amount required after approval of any IUC's, staff's determination is that the development is eligible for 51 IUC's. City Financial Assistance to the Development - The City's contribution to this development includes a loan of $205,000 that will be repaid in 15 years, plus a waiver of development fees estimated at $807,000. The City also acted as a "conduit" for the issuance of private activity revenue bonds which are the primary component of permanent project financing. The issuance of these bonds did not require a fmancial contribution from the City. Staff has determined that the City's contribution to the project is consistent with many affordable housing projects approved previously and as such the City's financial contributions should not be an impediment to approving IUC's. Developer Contributions to the Development - The developer's contribution to the development have generally consisted of providing the land at no cost, and as indicated in Attachment 2, Ponderosa Homes indicates it has provided a loan of $1,906,000 to date, and that an additional loan is anticipated in the future, Staff has not seen detailed information demonstrating this loan, but the amount is consistent with project financing documents. In addition, as with any affordable development with rent restrictions in perpetuity, the developer will "lose" value on the property should it be sold in the future. Staff has determined that the developer's contribution to the development is significant and exceeds the typical contributions SR:04:260 Page 4