TOWN OF HINESBURG

PLANNING COMMISSION MINUTES

February 28, 2007

Approved March 14, 2007

Commission Members Present: Jean Isham, George Bedard, Joe Donegan, Carrie Fenn, Fred Haulenbeek, Nancy Norris, Johanna White.

Commission Members Absent: Kay Ballard, Joe Iadanza.

Also Present: Alex Weinhagen (Director of Planning and Zoning), Karen Cornish (Recording Secretary), Kirsten Deluca, Julie Pierson, Donna Constantineau.

The meeting began at approximately 7:40 p.m.

I. Inclusionary Zoning (IZ) and Affordable Housing (AH)

Kirsten Deluca of the Champlain Housing Trust (CHT) was invited back to answer questions regarding affordable housing and CHT’s role in Hinesburg’s proposed inclusionary zoning ordinance. Alex read from a list of questions compiled by members of the Planning Commission and the Affordable Housing Committee:

How does housing via rental units work, and will CHT be able to handle the small number of units likely to be available in Hinesburg?

Kirsten said CHT’s role would be small, probably annually in a compliance role; they would check a tenant’s eligibility and also the check the rent price for affordability. Alex explained CHT would not serve as landlord to these units, only help with compliance. With rentals, Kirsten explained, compliance is checked each time a tenant turns over; with homeownership it is checked only at the time of sale or resale.

Jean asked what happened when a renter’s income increased. Kirsten said the rent may increase but that renter was not required to relocate, adding Hinesburg could set its own rules for this (note a homeowner would not need to relocate either.) Donna Constantineau explained that when income increases for those persons benefiting from rural development loans, rates go up but not higher than the VHFA rate at the time. Nancy asked who paid the $50 property management fee. Kirsten said the town or the landlord would pay it, not CHT. She reiterated CHT’s role would be small, depending on the level of compliance activity requested by the town.

Alex said the fees CHT realizes would be negotiated between the Select Board and CHT. Carrie suggested the IZ ordinance could specify which party pays which fees. Nancy asked for clarification of CHT’s role in larger rental properties (a large complex of rental units, for example); Kirsten explained that CHT does manage several properties, but usually owns them, adding they would not manage properties in Hinesburg. She explained the extent of a compliance transaction, saying it could be as simple as a letter to the landlord requesting updates information, forms, etc. She said the town could skip CHT and verify rental unit compliance on their own, as it involved a relatively small administrative effort.

Nancy said she did not want to include fees relating to rental units in the IZ ordinance, unless it was guaranteed the town would pay for those. Alex said the Select Board has spending authority and that the ordinance could not dictate that.

What happens if CHT runs out of funds?

Kirsten explained an AH transaction is a private sale, with CHT facilitating the sale but not subsidizing it. At first sale, units are sold at a price determined to be affordable to someone making 80% of the median income. If an income-eligible buyer cannot afford that price, they sometimes receive a subsidy and/or homeowner loans. Sometimes a subsidy is provided at resale if the market is soft, to help sell the property. Alex said the developer incurs costs associated with selling the home at a lower price, but that the town made up for those costs with density bonuses, reduced fee structures, etc. Kirsten described CHT’s sources of income and also Burlington’s housing trust fund. She said CHT serves Chittenden, Franklin and Grand Isle counties. Donna explained the Community Reinvestment Act (CRA), a federal program that required banks to give back to their communities financially. She is brainstorming ways to make use of this program in Hinesburg.

Does the seller pay a brokerage fee when CHT locates a buyer? Kirsten said no, but noted a real estate agency is usually involved with a development’s other units and a fee would probably be paid to them anyway. She said although CHT does not assume the primary responsibility for finding a buyer, they advertise for the seller through their homeownership center.

Is CHT willing to drop the 180-day right of refusal option period? Kirsten said it could be dropped to 90 days or even removed for an initial sale but that it was harder to adjust for a resale. She explained for the initial sale, the clause provides flexibility to the town or to CHT, creating an advantage for them if they desired to purchase the property. Alex added it stemmed from the fact that some towns have housing trusts; since Hinesburg did not have one, he dropped the town’s right in the draft and left it in CHT’s.

For a resale, Kirsten said the 180 days guarantees ample time to find a buyer, avoiding carrying costs (by having to purchase the unit themselves). The average time for a home to turn over is two to three months, with a buffer built in, in case a buyer deal falls through. She said the buyer of a home knows about the option period going into the deal. Joe asked if the home still had to be sold at an affordable price after the 180-day period; Kirsten said yes. She said there is a waiting list for all resales and added sellers aren’t restricted from helping to find a buyer, that it’s a cooperative process.

Alex said there was some concern that a family needing to sell their home in a hurry would be constrained by the option period. He argued homeowners could not get out of their home faster on their own (i.e. on the open market) than if CHT helped them. Joe felt homes in this program would likely sell faster given the price and pool of buyers. George said interest rates played a role in affordability, stating it would be hard for even income-eligible persons to buy the house. Kirsten described covenants in place regarding seller rights, stating CHT must start the marketing process quickly. Donna described flexible loan programs to lower income persons.

Joe asked about the buyer selection process, with regards to a preference for Hinesburg residents, particularly family members. Kirsten said CHT does not choose the buyer, that a developer or homeowner could come up with their own buyer as long as they were income-eligible. Alex said the town could have first right-of refusal, then pass that right onto CHT. George suggested that the most common way to pass affordable housing to a relative was to provide them with inexpensive land and housing directly; he felt that was preferable as the housing was later unencumbered by the AH program.

How would CHT deal with rental units and non-payment of rent? Kirsten said CHT is not in a landlord position, that issues such as non-payment are dealt by the landowner in the same manner as regular units. There are no additional protections on an AH unit than on a regular unit. Nancy asked whether a lease could be month-to-month; Kirsten said yes. She also said that in the case of non-payment, a landlord could ask CHT to verify income eligibility on a new tenant before the defaulting tenant was asked to leave.

Alex read comments he had received from the Affordable Housing Committee regarding the IZ Ordinance, Draft Version 2:

- AHC requested a maximum number of incentives for developers within the program.

- AHC requested incentives for small projects (those not affected by the 10-unit density bonus trigger) where an AH unit(s) was built voluntarily.

- They felt the ordinance should apply to all zoning districts. Alex clarified this version of the ordinance is restricted to the Village Growth Center, explaining AH incentivizing will be easier due to increased available land and density allowances. Joe suggested parts of the ordinance could apply to rural areas, such as the unit trigger but not the density bonus. Jean said building affordable units in the village was more cost-effective due to municipal water and sewer services. Fred said building in the village increased Hinesburg’s ability to provide mass-transit options.

Donna said some members of the AHC felt strongly that the AH program should be in rural areas. Joe D. did not feel many units would be built in rural areas due to the 1-in-10-unit trigger. Nancy was not opposed to the program in rural areas but did not think it was achievable without municipal services. George spoke about density bonuses being subjective to the DRB’s discretion. Nancy pointed out that almost all our current affordable housing is in rural areas, in the form of trailers. Donna said she is brainstorming how to utilize the RCA to help people replace their trailers with modular homes. Jean reminded the group that feedback from town forums stated people did not want high densities in rural areas. Alex agreed the Planning Commission should clarify density allowances in rural areas. Fred suggested including custom language for AH in rural areas when zoning for those districts came up for review later; Jean agreed. There was a discussion about the ownership and future of trailer parks in Hinesburg.

- Alex clarified a question regarding the calculation of sale prices related to bedroom and household size, saying the calculation is there to get to the maximum sale price.

- Alex pointed out a change in Draft 2 regarding an AH units location within a development. It was updated to allow units in a less desirable location (such as a location without views) but that the unit could not be further in distance from common areas or amenities within the development. Nancy asked about garages. Alex thought they would have to be built if the ordinance stated exterior appearances could not be different for an AH unit within a development. Fred felt garages or other unnecessary amenities should not be required, in order to make the program less cumbersome to the developer and therefore more successful. The National Association of Homebuilder’ s response to the draft ordinance was discussed. Joe suggested that by not requiring exterior amenities to be exactly the same, it also helped promote visual diversity of homes within a development.

- The AHC questioned the bedrooms to total minimum square footage chart. Kirsten explained it was there to ensure builders did not build homes too small so as to be difficult to market later. Nancy and Fred both suggested the minimum square footages were more suitable to units within multi-family housing. In comparing the chart to existing housing, George guessed a 2-bedroom condominium in Lyman Meadows was 1000-1200 square feet. Fred felt square footage was a minor consideration, as builders would build what would sell. The group discussed, but there was no consensus on, whether to change the numbers.

- The AHC felt bonuses (awarded relative to the number of AH units built) beyond the allowed base density should be larger. Alex adjusted the numbers to reflect that, and he said he put changes out to developers in the area for feedback. He stated that once the PC set those bonuses, it was his hope the DRB would approve that density rather than make it subjective to certain other PRD provisions. Fred thought the 40% maximum was not high enough; Alex pointed out that the higher the bonuses went, the lower the base density would have to be. Fred suggested bonuses vary by district, with pre-designated areas where density can go very high. He passed out a theoretical drawing he did with 4 multi-family buildings on a 1-acre parcel that showed setbacks and common area features. Each building contained (8) 900-sq. ft. units, for a total of 32 units. The group discussed the drawing and also builder incentives and permitting costs.

Alex further reviewed changes in the draft document. The group discussed how to define “family members or dependents”; the group decided to leave the language as-is. The group revisited the density bonus percentage. Fred suggested graduating densities based on the type of housing, stating an acre could be “customized” to suit mixed housing types. Alex said he prefers a consistent base density, noting Fred’s suggestion is the town’s current model. Jean suggested incentivizing areas within the village that need redevelopment. She also clarified that the stipulation that a home must be a primary residence should be in the ordinance

The next Planning Commission meeting is Wednesday, March 14, 2007.

The meeting adjourned at approximately 10:20 p.m.

Respectfully Submitted:

Karen Cornish

Recording Secretary