Page 1 of 1

Discussion Item RE: Pilot Knob PUD

Posted: Fri Feb 05, 2016 2:21 pm
by Steve Adler
Council Members,

From recent media reports and brief discussions with Council colleagues and their staffs, it is very apparent that there are questions and concerns regarding the affordable housing component of the Pilot Knob PUD. Council Member Garza and I will be putting this matter on the work session agenda for next Tuesday so that we can discuss the matter among us. We have also asked staff for a briefing on the Pilot Knob PUD and the related process and policies and they will let us know when they’re able to do this.

In retrospect, we should have more clearly communicated the mechanics of the agreement and the broader policies implicated in the days leading up to the council meeting and from the dais at third reading. I take responsibility for not taking the opportunity to explain the deal in greater detail. But we welcome the upcoming chance to do so, because we believe it is a fiscally sound deal that makes meaningful progress on one of our city’s top priorities – affordability, and does so in a way that does not irretrievably divert any money from the City’s water or any other department.

First, the developer is still obligated to pay all of the money he was to pay in fees for the project and does not save any money, and the requirement to pay that those monies is not forgiven, waived or excused.

Second, while the agreement obligates the developer to make a significant number of properties or homes available at below market prices, the City is not bound to buy those properties or homes at the discounted price with the money that was paid by the developer. If there was a need in the City’s water department, or any department for that matter, that required the Council to pass on the purchase of significantly reduced properties or homes, the Council at that time has full discretion to do so. There is no danger of a future gap in infrastructure needs that has been created here.

The City has an existing SMART housing policy that allows fee waivers, such as happened here, to be approved up to 1,500 units per year. The pro forma for the Pilot Knob development anticipates about 300 to 350 lots per year. So, while this development is big, it is a long term project and the numbers involved are a relatively small number within the existing policy limits for the SMART housing program. Of course, if the developer were to sell 2,000 lots per year or if we wanted to focus attention on different projects, the Council could vote to pass on the Pilot Knob opportunity. See above. We are told that the City processed about 800 to 900 last year. We left a little affordability on the table.

In the Pilot Knob case, instead of paying at least $50 million over the course of 20-30 years in fees (which totals less than $2M per year), the developer will instead deposit that full amount into an affordable housing fund so we can create an estimated 650 permanently affordable homeownership units, or 10 percent of the ownership units planned within this development. Additionally the developer will provide to approximately 350 rental units which will be affordable to households who earn 60% or less of the area’s median family income for 40 years from the date of their completion. The properties or homes that the City will buy from the developer with the housing fund will be priced at below market rates so as to drive the affordability levels. Of course, if the then Council wants to take money out of the affordable housing fund to plug any gaps in the City’s water department, or another place, it can certainly do that. Only the developer’s obligation to offer those lots to us at the lower price cannot change.

In addition to funding the affordable housing component, the PUD requires the developer to provide:

• An additional cash contribution of up to $6 million for affordable housing, which may be used for development of additional affordable units in the Pilot Knob PUD, buying down unit prices so they can be sold or rented at even deeper levels of affordability, down payment assistance, and other affordability programs.
• Ten acres of land in a planned town center donated to Capital Metro for a future transit facility or Park & Ride, giving all residents in the development access to affordable transportation options.
• Approximately $30 million in water/wastewater infrastructure that would likely otherwise be paid for by the water utility
• Parks and open space, trails, public art, and other infrastructure and amenities that are requirements of PUD agreements.

However, if the impact of the SMART housing program gives Council any pause, we would welcome a broader conversation about our existing SMART housing policy and we would support the Council if it wants to reconsider and add any further detail to the ordinance we passed. But know, this is a valuable tool to create affordability, and I would hope that we find many more opportunities to use this tool at the scale we have achieved with the Pilot Knob development.

Re: Discussion Item RE: Pilot Knob PUD

Posted: Tue Feb 09, 2016 11:29 am
by Steve Adler
Council Members,

Below is a linked document to which I may refer during today’s discussion of the Pilot Knob affordable housing deal. It is a quick summary comparing several elements of the originally proposed PUD agreement and what was adopted by Council in December. ... 094540.doc

Re: Discussion Item RE: Pilot Knob PUD

Posted: Wed Mar 30, 2016 5:16 pm
by OCC_Admin
This topic thread is locked by the system administrator. The "post reply" function has been disabled.