Title
Affordable Housing Policy
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Summary and Background Information:
The City of Commerce City has identified the need for the strategic construction of additional housing units to serve low and moderate-income households through the implementation of an Affordable Housing Policy. To meet this need, the City will add more affordable units each year with the aim of increasing the proportion of affordable units to 15% of total housing units by 2040. Additionally, the City will strive to ensure that 3% of all new residential units constructed each year are affordable. By working to construct economically diverse neighborhoods with a wide range of home types throughout the City, the Affordable Housing Policy is designed to help meet the City’s need. Further, both the annual and 2040 goals are in line with Proposition 123 and the parameters outlined within that document for the City to be eligible to receive tax revenue from the State for Commerce City’s Affordable Housing Policy and associated Affordable Housing Fund. It is the intent of this Policy to provide guidance to staff and elected officials as to the appropriateness of applications from developers to construct affordable housing and to guide possible future City investment in such housing with the adoption of an inclusionary zoning provision in the Land Development Code. All new residential development projects must provide 15% of the total dwelling units as permanently affordable housing. Further, the City’s goal is to have 15% of all residential units be deemed affordable by 2040. For the purposes of this Policy, an affordable housing unit is defined as one that is affordable to persons with income below 80% of AMI paying no more than 30% of their income for housing. All units must be deed restricted to require this level of affordability for 30 years.
Staff and the development community have seen the need for affordable housing units and staff is concerned, for several reasons, that affordable housing is concentrated within a very small area in the core city. Further, recent trends have highlighted several issues with the provision of housing that is affordable in Commerce City. Those trends include:
• Very high housing costs in the Denver Metro have made it almost impossible for lower income families, including those that may be identified as in the work force, to afford entry into the housing market, including the ability to purchase housing.
• Recent affordable housing projects have been disproportionately located or proposed in the Core City area, and in almost all cases are built as single income level housing with no mix of income levels or levels of affordability. This leads to an oversaturation in one area and is not conducive to attraction of retail nor the development of a quality community.
• Housing and land costs preclude the construction of housing affordable to most levels of defined low income (any level below 80% of AMI) without some type of government subsidy.
• Hundreds of market-rate units are being constructed in Commerce City without the inclusion of affordable units or a fiscal contribution towards an affordability fund.
Staff has developed a draft of an Affordable Housing Policy and Implementation Plan for Council’s review. In short, this policy would require future developments to construct 15% of the total dwelling units as permanently affordable housing, either on-site or off-site, pay a per-unit fee-in-lieu, or dedicate vacant land for community benefit. This policy would also create an Affordable Housing Fund (AHF) in 2025 to provide a flexible funding mechanism for housing-related projects, via the fee-in-lieu contribution and Proposition 123 funding. The number one priority use for AHF funds would be for mixed income projects that contain a minimum of 60% market rate units. Finally, this policy would prioritize targeted affordability north of 88th Avenue, to prevent further oversaturation of affordable housing units in the core city.
Staff Responsible (Department Head): Jim Tolbert, Assistant City Manager
Staff Member Presenting: Alex Van Zante, Policy Analyst II
Financial Impact: Positive
Funding Source: Varies
Staff Recommendation: N/A
Suggested Motion: N/A