Barbara Koelzer, Regional Government Affairs Director
Council to Talk About Payment-in-Lieu for Inclusionary Housing: The discussion concerning the proposed inclusionary housing ordinance is generating more questions for the City Council as time passes. The ordinance was supposed to be introduced on September 25 but has been postponed so the Council can revisit payment-in-lieu options.
Payment-in-lieu is an alternative way developers can comply with inclusionary housing requirements, in which they pay cash rather than deed restrict a percentage of their development for buyers making below 80 percent of the Average Median Income (AMI). Originally the Council supported a staff proposal to use the so-called “replacement cost” methodology in which a developer would be required to pay the complete cost for an affordable unit.
However, builders objected to this idea and suggested a different approach, which staff calls the “gap approach.” In this scenario, the payment-in-lieu is calculated by figuring the difference between a median priced free market home and the deed-restricted affordable home price.
The City Council will discuss payment-in-lieu options, as well as a few other lingering issues, on September 25 at a study session. The ordinance is scheduled for first reading on October 23.
City Creates Planning Academy: The Longmont Planning Academy is a four-class course designed to educate and engage residents, business and future community leaders in the City’s planning process and how planning shapes the community. It will meet for four consecutive Thursday evenings beginning on October 18th from 6 p.m. – 8:30 p.m.
The course objective is to assist participants in becoming more effective and informed advocates in Longmont’s planning efforts, and to encourage positive, ongoing engagement in the planning process. The academy is open to all current Longmont residents, business owners, and interested community stakeholders. Applications will be accepted through September 30, 2018. Applicants will be notified by October 9, 2018.
Factors Affecting New Home Prices: Ted Leighty, the CEO of the Colorado Home Builders Association (and former Vice President for Public Policy for the Colorado Association of REALTORS®) spoke at the NoCo Housing Now general session on September 21. His presentation focused on factors affecting the cost of new home construction.
Leighty said, simply put “Colorado has a supply problem.” New construction in our state has not caught up to pre-recession levels. The Denver Metro area alone would need to build 17,00 new homes a year over the next decade to have a meaningful impact on our deficit.
He said the rising cost of new homes can be categorized into four areas: land, labor, lumber & materials and loans. 18 percent of the cost of construction for a new single-family home is the land. Because the supply of land is constrained, the cost of purchasing it is increasing.
Labor is 21 percent of the cost of building a new home. With low unemployment and a shortage of labor, Colorado doesn’t have the workers it needs. The home builders are creating innovative programs to recruit and train the workers needed. This isn’t just a state problem, it’s true across the country with the cost/availability of labor listed as a top concern for builders nationally.
Lumber and materials constitute 29 percent of the cost for a new home. Lumber is a volatile commodity. As an example, Leighty said lumber reached its all-time high in June, adding $9,000 to the cost of a home. Other construction materials such as concrete and gypsum are also going up.
Construction loans are available, Leighty said, but the interest rates are increasing. He advocates for the use of metropolitan districts as one solution, particularly as a means by which to develop land outside of municipal service boundaries.
NOTE: NoCo Housing Now general sessions occur every other month. Speakers are invited to present issues related to housing affordability. In addition, a housing affordability summit is planned for January 2019. Stay tuned for more information!
COLORADO ASSOCIATION OF REALTORS®
CAR Announces Endorsements, Positions for November: The Colorado Association of REALTORS® Political Action Committee (CARPAC) supports Republican Walker Stapleton for Governor.
CARPAC supports the following Boulder County candidates:
House District 11 – Jonathan Singer(D) and House District 13 – KC Becker (D).
CAR supports Amendments Y and Z (redistricting) and Proposition 110 (Let’s Go, Colorado) the .625 transportation state sales tax.
CAR opposes Amendment 73 (education income tax increase), Amendment 74 (just compensation when private property is reduced in fair market value by government law or regulation) and Proposition 112 (increased oil and gas setbacks).
More information on CAR’s rationale for its positions on state ballot questions is available in CAR’s 2018 Ballot Guide, which will be available soon.
NAR Supports Student Loan Counseling Bill: On September 5, 2018, the U.S. House passed H.R. 1635, the “Empowering Students Through Enhanced Financial Counseling Act.” The legislation would empower student loan borrowers to make responsible choices through enhanced financial counseling. Due to partisan gridlock in Congress, it is unclear whether the Senate will vote on the measure. Note: Student debt affects a borrower’s ability to qualify for a mortgage, hence NAR’s support for the bill.
NAR on Conservatorship of GSEs: NAR recently issued a press release to reflect on the 10-year anniversary of the Conservatorship of Fannie Mae and Freddie Mac. Specifically, NAR urged policymakers in Washington to prioritize housing finance reforms that will protect taxpayers, provide liquidity to the broad national market, and promote stability in the housing market, particularly during times of economic distress.
Shortly after the press release was sent out, NAR joined an industry-wide coalition letter asking Congress and the Administration to preserve access and affordability by permanently locking in existing reforms to the secondary mortgage market, while ensuring additional reforms do not harm the market.
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