November 13, 2017 To: Judge Paul Pape, Chairman, Leadership Council Bastrop County Cares From: Bastrop County Cares Board of Directors RE: Affordable Housing Working Group Draft Recommendations The Affordable Housing Working Group has completed their study of opportunities, gaps and barriers in the development of affordable housing in Bastrop County. The BCC Board of Directors reviewed the draft recommendations on July 10, 2017 and the BCC Leadership Council approved these recommendations on September 7, 2017. An Implementation Committee held their first meeting on September 19, 2017. Quite a few of the participants from the Affordable Housing Working Group have expressed a desire to continue with the Implementation Committee. The Implementation Committee will have an initial meeting to develop a plan of action; and for the next few months, will hold meetings with County leaders identified in the recommendations to discuss the findings and recommendations and ask each organization to consider our suggestions. Six to nine months later, members of the committee will conduct a follow up visit with County leaders to check in on progress. We look forward to the input from the County Commissioners on this pilot study and recommendations. Your ratification of these recommendations will add weight to the seriousness of community leaders desire to work collaboratively to make Bastrop County a great place to live. Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Background Bastrop County Cares is a county-wide partnership of public, private, faith-based and nonprofit organizations, institutions, and individuals which collaboratively strengthens the social, health, education, and economic opportunities in Bastrop. Our mission is to improve the lives of people in the Bastrop County. We do this in a three-fold way: • We identify large community issues that no one organization can tackle on its own, • We research, collect and analyze data, and we make decisions on community issues together, • We build public will, advance policy, and mobilize/leverage funding. Beginning in February 2017, Bastrop County Cares (BCC) invited community leaders from all parts of the county to engage in a citizen-led working group to study the needs and opportunities for developing affordable housing in Bastrop County. We selected this topic based on a year-long conversation at the monthly Community Network meetings, where nonprofit partner organizations’ spoke often and with great frustration about the lack of affordable housing for their clients in crisis. We began our study knowing that the natural disasters that Bastrop had experienced over the past seven years had caused our housing market to shrink and the need for affordable housing to grow. On top of that, according to a recent housing study conducted for the Bastrop Economic Development Corporation, Bastrop County, with its current population of 75,000 people, was projected to grow by an additional 20,000 people by year 2020, and top 200,000 by 2050. We realized that the demographic changes would affect the housing market -- and housing prices -- based on supply and demand. We felt it was time for our community to develop a strategy to meet the housing needs of all our citizens now and into the future. To that end, over the next five months, 15-20 community leaders met twice a month for two hours each time, in different locations around the county. The Affordable Housing Working Group: • Reviewed housing data, • Heard from regional and state experts in the fields of affordable housing development, finance, and infrastructure, • Looked at best practices in other counties. Synthesizing all the information and data, the BCC Affordable Housing Working Group offers the following set of findings and recommendations for leadership in our county to consider and implement to proactively address the current and future housing needs of our citizens. 2 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Findings The Working Group defined affordable housing very broadly, looking at the continuum of housing needs based on incomes from homeless families, to elderly and disabled people, working families who don’t earn enough to afford safe housing, and even middle-income families. (See appendix for more information about the continuum of housing.) We heard from folks who studied and worked in the Bastrop County housing market that every price point has a deficit, even market rate housing. The combination of the County’s devastating fires, the Great Recession of 2008, the large portion of the County protected from dense development because of the Houston Toad habitat, and the explosion of the Austin real estate market all contribute to a current situation where there is a shortage of buildable lots to deliver housing to the market; and a serious lack of land in the three cities properly zoned for multifamily housing. We learned from developers and financers of affordable housing about the difficulties and expertise that is needed to put together multi-layers of financing; the costs and struggles of permitting and construction of affordable housing; that private, market rate developers often do not have the expertise or desire to develop quality, affordable housing for the lowest ends of the market; and that one of the single, most difficult challenges in the development of affordable housing is the misconceptions in the community about who lives in affordable housing and what it will mean for the neighborhood when affordable housing is developed next door. The following recommendations stem from these findings. We borrowed from successful affordable housing advocacy groups, who taught us that to tackle the challenges around affordable housing, we would need to deploy five strategies simultaneously: o Preserve - existing affordable housing o Invest – through public and private partnerships o Leverage – layering resources from many sources o Partnering – bringing new organizations, institutions and businesses together o Include – “All Kinds of Homes in All Parts of Town for All Kinds of People” Strategies and Recommendations Our goal was not to publish one more study that sits on a shelf. The following recommendations identify organizations and institutions who we feel might best help us implement our ideas. Bastrop County Cares does not implement programs, but acts as an intermediary, to bring forth recommendations and then asks our County-wide partners to consider executing on these recommendations. Our power is only in our collaborative approach to bring our community together in conversation. We offer these recommendations to our community: 3 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Community Education About Affordable Housing Bastrop County Cares/Bastrop, Smithville, Elgin Chamber of Commerce(s) Collaboratively develop and implement a community-wide educational campaign to encourage neighbors to accept affordable housing to be developed all over the community, combatting Not In My Backyard (NIMBY), where neighbors fight the development of affordable housing in their community. • Change the negative perception of affordable housing. Highlight examples of beautiful and well managed affordable housing; what it could look like. Highlighting the variety of residents like families, veterans, service workers, elderly, disabled etc.; resident screening and resident services in well-managed affordable housing. • Look at effective campaign materials: All Kinds of Homes in All Parts of Town for All Kinds of People. • Look at Can I Be Your Neighbor? model for ideas for a campaign. • Consider tours of well-designed and well-managed affordable housing developments like Easton Park • Encourage Homeowner’s Associations to participate in the campaign CAPCOG • Help Bastrop County/Cities develop goals for the number of affordable housing units, resident services, designs, similar to the resolution’s passed in other communities supporting the development of affordable housing. City Council/County Commissioners • Adopt affordable housing development goals for the county and jurisdictions. (Austin City Council adopted the Austin Strategic Housing Blueprint in 2017: www.austintexas.gov/housingblueprint) • Support/adopt a county-wide campaign to educate the community about the need for quality affordable housing. Development of Affordable Housing Bastrop Housing Authority/Combined Community Action/Workforce Solutions Collaboratively develop a one stop shop for homebuyers/renters looking for affordable housing. The One-Stop shop may use a website, a primary location, mobile office to serve remote parts of the county and periodic Housing Fairs that draw people to their services. The One-Stop shop would have trained staff capable of assisting potential homebuyers or renters in the following ways. • Assist folks to apply for financing for homeownership or residency in rental housing • Certified USDA 502 loan packagers with strong connections to the Georgetown USDA area office • Connections to local financial institutions who use USDA 502 loan guarantees • Connections to local financial institutions who have access to down payment assistance programs (through Federal Home Loan Bank, Homes for Heros and other sources) • Provide homebuyer counseling workshops and credit counseling services • Work with USDA to increase their area loan limits in Bastrop County, which are currently $150,000. 4 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Bastrop, Smithville and Elgin Housing Authorities and other strategic partners Collaboratively form a new nonprofit affordable housing organization with the capacity to develop quality affordable housing throughout the county. The board of this new organization should have representatives from all corners and interest in the county including representatives from the Independent School Districts that may also have land that could be used for affordable housing for their staff and families of students. • Develop housing communities that combine both affordable housing and market rate housing to encourage all kinds of homes in all kinds of communities for all kinds of people. • Explore a Community Land Trust model to encourage long term affordability by limiting land appreciation, reducing property taxes and imposing deed restrictions that keep property affordable. The National Community Land Trust Network (www.cltnetwork.org/) could be a useful resource. • The Austin Housing Authority (Michael Gerber) has developed a powerful subsidiary development company and would be willing to coach a new organization in Bastrop County, and provide connections to reputable development partners. • Marble Falls Housing Authority has become state wide under a new name, Texas Housing Foundation. They also might be willing to coach a new organization in Bastrop County. For more information visit their website: http://www.txhf.org/php_overview.php • Engage a willing member of the local for-profit development sector, particularly those developers who cater to families at the lower end of the market and genuinely want to provide a good product. • Develop attractive quality housing, similar to Foundation Communities model, providing resident services and strong property management. • Look for CRA (Community Reinvestment Act) investments from Banks • HUD HOME funding for affordable housing might be an option worth investigating for smaller 40-50 unit deals. Combined Community Action Actively pursue a pilot initiative to develop and rehabilitate affordable housing in Bastrop County; collaborate with other housing rehab efforts in the county • Develop an owner-occupied housing rehab program using USDA Housing Preservation Grants, 504 loans and grants • Develop the capacity to purchase and rehabilitate existing rental housing to preserve the existing organic affordable housing. • Work with property appraisers to keep property increases due to rehabilitation affordable for low income owners/tenants Bastrop Long Term Recovery/Bastrop, Smithville, Elgin Ministerial Alliances: • Collaboratively develop an advisory board or an independent board affiliated with the Austin Habitat for Humanity to strengthen and expand Habitat’s work in Bastrop County. • Develop relationships within local churches for volunteer builders, financial support, and resident selection. • Caldwell County has an advisory board that might be used as a model. 5 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Opportunities to Support Affordable Housing and Remove Barriers County Judge and the County Commissioner’s Court Develop a county/regional land banking program that identifies, secures and entitles appropriate land for affordable housing throughout the county. • Work with local governments, institutions and businesses to identify land held in inventory that might be developable e.g. City, County, ISDs, other governmental units that have excess land. • Buy lots in foreclosure, lots with delinquent taxes, lots in government inventory. Hold without property taxes. Clean titles. Sell lots with concessions to developers for affordable housing. • Housing Works Austin is putting together a Strike Fund that eventually will be available in Bastrop County for early acquisition and land banking for affordable housing sites. • More information about land banks around the country can be found here: www.communityprogress.net/land-banking-faq-pages-449.php Bastrop, Smithville and Elgin Cities/Bastrop County Provide incentives for developers of affordable housing. • Allow concessions for developments that include a percentage of affordable housing • Incentivize long term affordability • Examples of possible incentives includes: o Fee waivers o Zoning code options like density bonuses, reduced parking, increased height or increased bulk of projects in exchange for affordability, and expedited review processes are attractive to many potential developer projects o Develop a financial INCENTIVE program or tax break to encourage developers. o City pick up tab for off-site upgrades. Density bonuses for affordable housing. o Cash (like waiving fees and costs, doing offsite work for development, etc) o Expediting services – Planning and Zoning could meet more often than 1x mo; Rezoning currently takes more than 3 months. • The City of Bastrop is updating development codes in the next couple of months; could get concessions written in. • Cities should review zoning codes to allow for greater amount of multi-family housing; and get zoning in place early. • County Commissioners: New county subdivision regulations adopted April 24, 2017 should be reviewed to see where incentives could be added. • Local resources for developing these incentives include Jim Withers, Capital Area Housing Finance Corporation, Shawn Kirkpatrick, Bastrop Economic Development Corporation, City and County Planners. 6 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Capital Area Housing Finance Corporation (CAHFC)/County Commissioners/City Council(s)/County Legislative Committee CAHFC works regionally, including Bastrop County, to promote affordable housing development, and is affiliated with the state and national associations of housing finance agencies who educate and lobby to develop resources and remove barriers to affordable housing development. We ask the CAHFC to take the lead and keep the County, our Cities and our representatives know how and when to intervene Nationally and at the State through the State Legislature and Texas Department of Housing and Community Affairs: • Currently, the State limits rural affordable housing developments using Housing Tax Credits to a maximum of 80 units. This limit may be waived by the TDHCA board for 4% deals, but would have to be changed by the legislature for 9% deals. • We ask CAHFC to: a. Work with the legislature to redefine rural areas adjacent to urban areas (or areas that use an urban SMA) that are being impacted by the fast-growing urban markets to remove the limit of 80 units for rural development. Test the TDHCA board waiver process by submitting a project application for more than 80 units for a 4% projects. b. Ask TDHCA about SDDA AND DDA’S DESIGNATION for Bastrop County based on the low incomes in the rural county in a high-income region (to get tax credit boost). Using higher household incomes make developments in lower income counties more difficult to develop to serve the true incomes of residents. c. Coordinate a meeting with TDHCA director and representatives from Bastrop County to discuss our study and recommendations. d. Participate at TDHCA public hearings to advocate on behalf of these findings and recommendations. Bastrop Economic Development Corporation BEDC operates under Code 501 and 505. Code 505 allows them to work on affordable housing. • Work with Cities and County on incentives for affordable housing • Be a strong advocate with developers to link affordable housing incentives to developments. • Help County/Cities get ahead of properly zoning parcels for MFH Bluebonnet and Aqua Our utilities have the capacity to add connections. Yet both, being cooperatives, pass utility extensions and upgrades on to developers. As an example, Aqua has 4 inch lines in much of its grid, yet developers that need fire suppression for their development must pay for installing 6 in lines, which can be costly and cost prohibitive for affordable housing developments. • Ask the boards of Bluebonnet and Aqua to develop concessions for developments that include a percentage of affordable housing such as: o Concessions in impact fees, assessments, predevelopment fees, or long term. o Look for non-member funds e.g. USDA or Texas Water Development Board, to upgrade lines in high development areas, to provide relief to developers of affordable housing. o Plan and implement the upgrades to utility lines in anticipation of high growth areas so the infrastructure is ready. 7 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Cities/County Planning Departments • Improve the development processes in each of the cities and the county so that developers have a clear path through the process, time and costs can be anticipated and managed, and the reputation for developing in Bastrop County is more attractive to developers. Independent School Districts (ISDs) • School scores have been a part of the scoring process for Housing Tax Credits. Improve school testing scores so that Bastrop affordable housing proposals are competitive. • Review ISD land inventories, and make land available to Land Bank/CLT/Affordable housing efforts. • Provide leadership to new organizations and efforts to increase affordable housing. For more information about the study and recommendations, please contact either Joni Foster at joni@fostercdc.com or Sherry Armstrong at sherryannha@yahoo.com. 8 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Affordable Housing Working Group Participants While not everyone attended all the meetings, the following people attended two or more of the twelve meetings held twice a month between February and June, 2017. People with a * by their name were stalwart, and attended most of the meetings. Joann Harkins, Prosperity Bank* Laura Munos, Reinemund Real Estate* Chuck Kellogg, Aqua Water* Connie Schroeder, City of Bastrop, Mayor Mel Hamner, Bastrop County Commissioner Mark Meuth, Bastrop County Commissioner Brandy Spencer, Bastrop Housing Authority* Shawn Kirkpatrick, Bastrop Economic Development Corporation Jennifer Bills, City of Bastrop Planner*` Julia Cleary, Bastrop County Planner* Adena Lewis, Bastrop County Tourism and Economic Development Jim Wither, Capital Area Housing Finance Corporation Board Member (Smithville) Jim Shaw, Capital Area Housing Finance Corporation Julie Montgomery, CAPCOG Kelly Franke, Combined Community Action* Barb Schafer, St Vincent de Paul, Smithville* Dr. Chris Fox, St. Vincent de Paul, Smithville Vanessa Lindsley, Bastrop Chamber of Commerce Shelia Lowe, Bastrop County Long Term Recovery Team Donna Snowden, Elgin resident Jeanne Dube, McDade resident Debbie Bresette, Bastrop County Cares* Sherry Armstrong, Bastrop County Cares Board Member and Study Co-Chair* Shanda Hernandez, Bastrop County Cares Board Member and Study Co-Chair* Joni Foster, Bastrop County Cares Board Member and Study Co-Chair* 9 Bastrop County Cares Affordable Housing Working Group Final Draft Recommendations Affordable Housing Working Group Resources We are grateful to the following organizations which provided expert input at our meetings either in person or via phone/video calls. • • • • • • • • • • • • • • • • • • • • Texas Target Communities Texas A&M University Bastrop Economic Development Corporation City of Bastrop Planning Bastrop County Planning Texas State Affordable Housing Corporation Housing Works Austin Capital Area Housing Finance Corp. Prospera Housing Community Services Habitat for Humanity Bastrop Housing Authority Austin Housing Authority Foundation Communities Bastrop Long Term Recovery Team United States Department of Agriculture Rural Development, Single Family Housing Aqua Water Supply Pegasus Planning and Development Bluebonnet Electric Cooperative Bastrop County Houston Toad Management Texas Department of Housing and Community Affairs 10 HOUSING DEVELOPMENT PARTNERS MARKET: SEE ER SIDE Bastrop County Cares Affordable Housing Working Group Appendw Firance Partners i Acquis 'rb'u nstructl'bnll' Permanentlenders ?mg?e ?We? Land and Entitlements cummunity Deuelbpn?lent Humebuyercuunse m Water Financialmangement cbun- Sewer State i Electricf?as i Hbusing Finance Agencies assistance it ?nds i Federal ms Ebning Inte rrneclia ries Capacity building at ractl'cesll'tra in i ng A dub cacwrig rad Ass ciatl'b ns uilderaf?wn era bf [Affa rda bl e] bu sing Maragernent partners . pro?t developers Prupertyr Management Cum- pans Partners: maintenance i Architects . agencies Lands cape maintenance i Appraisers . . . i chusmg Authorltles i T'rtle cumpanies i i i At'tbrne'ys i Cuntractursll'builders i MaterialsfSuppliers i Laburers Public Pcilicvchuu er nrnent F'a rtners Cit-5r Cbuncil Planning Department Ec : n : rnic Deuelupn'lent HuusingAuthnr'rtgr Gaunt-5r Cbn'lrnissinners Cbuncil beSmIernn'Ients State Legislature TDHCA Cungras HUD USDA Treasurg Source: ring 11 Bastrop County Cares Affordable Housing Working Group Appendw Housing Market Continuum . he bl 55 of AMI lnoome Housing Market Continuum 1200-6 93,350 2,3311 1000-6 Market 1,9115 80% 52,310 Wo rlctoroe 1,556 50% ?15,680 Wo rlctorce 1,15? 509-6 38,000 Worktoroef?eniorIDisabled SHE 300-6 23:3!? WorktoroefSeniorfDisabledf 58d Homeless 201-6 15,550 Worktoreef-E?seniorfDisabledf 380 SupportwefHomeless Notes: Eastrop Countsr is part ofthe Austin-Round Rock-San MarcosT}: MBA. Area Median Income is for a familvoffour. Te:-:as minimum wage is 5?.25fhour, or 515,000Nr forfull time emplofment Housing expenses Calculated at SIZE-G ofineom e. H00 201? Fair Market Rents for Elastrop Count?,r based on number of bedrooms are: it Bedrooms 943 payment fora51?5,000 single family home in the Cit-5r of Elastrop [303rrf4EE-?jwould I- 0- Housing Types Homeownership i Single family i Landtrust i Condominium i Manufactured Housing i Mobile Homes, Trailers and Rental i i Transitl'onalHousing i Congregate Iii-.Iing i Mobile home park i Ht.? Parks and "man camps? i Assisted Iii-.Iing Shelters etfeotthe rrarket: i Schools i Crime i Heatth care i Transportation i Shopping i ecre an' nf?. an itl'es 12