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Introduction of RBC

Welcome to the first issue of Breakthroughs, an online newsletter from the Regulatory Barriers Clearinghouse (RBC). Breakthroughs highlights success stories from around the nation about communities that are removing barriers to affordable housing.

The American Homeownership and Economic Opportunity Act of 2000 called for the creation of the Regulatory Barriers Clearinghouse to collect and disseminate information on state and local barriers to affordable housing and solutions proposed and achieved.

In addition to this online newsletter, the RBC Web site provides:

  • A searchable database of exclusionary, duplicative, or otherwise unnecessary local laws, regulations, policies, plans, and practices that create barriers to affordable housing. More importantly, the database provides activities, strategies, publications, policies, and practices that help reduce or overcome barriers along with any negative impacts encountered.

  • A toll-free number (1-800-245-2691, option 4) staffed by housing professionals familiar with regulatory barrier issues and the collection of clearinghouse materials.

  • An eList and a discussion board that keep users informed and encourages practitioners to share information on overcoming the barriers to affordable housing.

HUD's goal is to make RBC your one-stop shop for up-to-date information on the regulatory barriers to affordable housing and on innovative ways of overcoming those barriers in your community. In addition, HUD is committed to forging partnerships that will help communities identify and remove current impediments.

By assembling and disseminating information from practitioners in the field, we are creating a network for sharing information, resources, and successful practices. Materials being collected from the field include:

  • Information for inclusion in the RBC database about regulatory barriers in States and localities where the government serves a population of 100,000 or more.

  • Strategies and plans to remove or ameliorate the negative effects of regulatory barriers.

  • State and local strategies, activities, and plans that promote affordable housing and housing desegregation, including those found to be particularly innovative or successful.

Breakthroughs will draw on this and other information. Each article will highlight problems, challenges, and solutions from communities that are committed to addressing the barriers to affordable housing. The articles contained in this newsletter detail housing density bonuses in Arlington, Virginia and Habitat For Humanity activities in California. Each article has an icon linked to one of ten RBC focus topics:

Administrative Processes & Streamlining Administrative Processes & Streamlining.
  Building & Housing Codes Building & Housing Codes (including provisions for modular homes and technological advances).
  Fair Housing and Neighborhood Deconcentration Fair Housing and Neighborhood Deconcentration.
  Fees and Dedications Fees and Dedications (including impact fees and permit costs).
  Planning & Growth Restrictions Planning, Land Development, & Growth Restrictions.
  Redevelopment/Infill Redevelopment/Infill.
  Rent Controls Rent Controls.
  State and Local Environmental and Historic Preservation Regulations/Enforcement Process State and Local Environmental and Historic Preservation Regulations/Enforcement Process.
  Tax Policies Tax Policies.
  Zoning, Land Development, Construction and Subdivision Regulations Zoning, Land Development, Construction and Subdivision Regulations.

 

We hope you find the information in Breakthroughs both informative and useful. By sharing your experiences, you can help us impart a better understanding of the regulations that affect the production of affordable housing and let others in on the lessons you've learned along the way. With your help, we can overcome the regulatory barriers to affordable housing.

Arlington Develops Affordable Housing in Tight Market

What's a county to do? Fifteen percent density bonuses no longer attract affordable housing developers. Arlington County, Virginia faced this situation and turned to a new incentive—a larger, 25 percent density bonus for mixed-income housing developments that include affordable units.

Arlington faces tremendous growth pressure. It is the Virginia suburb closest to Washington DC, and has eleven Metro subway stations—each with the capacity to significantly drive up housing prices in surrounding neighborhoods, owing to the high cost of downtown parking and the high quality of the Capital region's transit system. In many areas luxury high-rises are rapidly replacing affordable housing.

Arlington officials began using 15 percent density bonuses in the early 1980s. By the late 90s, the strategy was less effective. "It became obvious that the 15 percent density bonus worked only when combined with other County financial incentives," commented Wayne Rhodes, director of Arlington's Office of Development. Developers also found the County's financial incentive packages to be overly complex. In addition, Arlington officials became increasingly concerned that they did not have sufficient resources to continue providing housing subsidies.

Density Bonuses for Mixed-Income Housing

To remedy this problem, the County went to the 2001 Virginia legislature for permission to revise Arlington's zoning ordinance. As a result, Arlington can now grant 25 percent density bonuses to mixed-income housing developments, provided they contain units affordable to low- and moderate-income persons. The zoning amendment is available on the RBC database, or online at http://www.co.arlington.va.us/cbo/2001/oct13/10.pdf.

In November of 2001, the County Board approved the first '25 bonus points' project, Odyssey Apartments. A 300-unit, high rise in the Courthouse Metro area is also under consideration.

Continue to Follow These Developments in Future Issues of Breakthroughs.

For further information on the density bonus program in Arlington County Virginia, visit cphd@co.arlington.va.us.

Habitat Faces Challenges in Southern California

Habitat for Humanity South Bay/Long Beach faces a number of challenges to affordable housing construction in some southern California communities as it tries to keep the price of housing affordable to low- and moderate-income homebuyers.

Habitat has encountered particular difficulties in Los Angeles, which has laid out a critical action flow chart that details a 12-18 month process from first submittal of tract map plans to approval of final plans. In many cases, Habitat believes it takes longer than 18 months to obtain these approvals. Part of this delay is based on the number of departments - 11 - that must review and approve plans for development in Los Angeles.

"This is a challenge to affordable housing developers who have to pay taxes, security, temporary fencing, and maintenance on the property during this down time," says Erin Rank, executive director of Habitat for Humanity South Bay/Long Beach.

Affordable Housing Design Criteria

Los Angeles has developed design criteria for affordable housing that are in addition to building codes. For example, Habitat International's standard for a 3-bedroom house is 1,050 square feet. Los Angeles' design standards require a minimum of 1,300 square feet for the same number of bedrooms. Other design criteria include master bedroom closets with 10 lineal feet of space and front yards with sprinkler systems.

Increasing land costs and development fees also impacts Habitat's ability to provide affordable housing. According to Rank, many cities are downsizing residential zoning to decrease density in neighborhoods. "This action increases our land costs," says Rank, because the lots we purchase must be larger." She references a survey by her site selection department, which shows that the average per-lot cost for land in the Los Angeles area is currently $55,000.

Impact of Additional Requirements

Fees and required improvements also impact the cost of affordable housing. Habitat budgeted $7,500 per unit for permitting fees on its last project, and ended up paying $13,000 per unit.

Los Angeles requires all developers—even affordable housing developers—to pay for significant off-site improvements such as street trees, fire hydrants, street lights, curbs and gutters, sidewalks, cul-de-sacs, and street widening. The city has very specific requirements about what kind of lights, trees, and inspections must be used.

"We need to pay landscape architects to submit drawings, and engineers to inspect the concrete manufacturing plant the day before all of our pours," Rank said. "We have to special-order street lights that take eight weeks to deliver. This held up our Certificate of Occupancy. Our off-site costs on our last project (26 homes) were close to $500,000; more than $19,000 per unit."

Regulatory Requirements Can Create Barriers

In many cases, the city provides low- or no-interest funding to help pay for some of these requirements, but the regulatory requirements of these funding sources often create further barriers. For example, the city provides HOME funding to offset these predevelopment costs. These funds are secured with second trust deeds, which increase the house price. Unfortunately, the HOME program places a cap on the sales price of homes assisted by the program, which sometimes forces Habitat to choose between using the Federal money or not.

All State-funded affordable housing dollars (called set-aside funds) carry a 45-year restrictive sale agreement that requires the seller to repay the original subsidy plus a substantial portion of any equity in the house to the State if the unit is not sold to a qualified household. Habitat does not have a problem with the requirement; it also requires a repayment if the house is resold within 20 years, but feels the 45-year term is too long.

Overcoming Barriers

How does Habitat overcome these problems and continue to provide affordable housing for low- and moderate-income people in the Los Angeles area? Enlisting the assistance of the Mayor's office, Habitat negotiated with the city to reduce some of the requirements contained in the design criteria.

Habitat also sought to speed the approval process by hand-carrying the development plans to each of the departments reviewing the plans, rather than wait for each department to review the plans consecutively. Habitat's project manager started calling each of the departments daily to check on the status of the review. They also hired a consultant to act as an intermediary with city departments. In future developments, Habitat plans to request that the city designate a single point of contact for the development process.

In some areas, Habitat has moved from building traditional single-family detached housing to condominium townhouses, even while recognizing that condo fees add to the monthly cost of housing. They are also working with the legislature to reduce the term of the state's second mortgage from 45 years to a more reasonable term.

For more information on Habitat's efforts in southern California, contact Erin Rank at erin_rank@habitatlb.org or 562-427-4663.

          

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Regulatory Barriers Clearinghouse
P.O. Box 23268
Washington, DC 20026-3268
Telephone: 1-800-245-2691, option 4
Email us at RBC@huduser.gov
TDD: 1-800-927-7589
Fax: 1-202-708-9981

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