City Council Work Session — March 10, 2026

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Thanks, Tyler. Good evening, Mayor and Council. So we wanted to just do a quick update. This isn't really intended to dig into this legislative session, although we'll touch on that. But it's more to talk holistically of how the city of Fort Collins operates a legislative program. And obviously we have a subcommittee that is the Legislative Review Committee made up of three council members. This year we have council members Pinotaro, Hoven, and Conway. We meet every two weeks with our lobbyists and some other staff folks and try to keep up on the fast pace of what's happening there. A lot of our action is determined through a legislative policy agenda, which is updated every two years, and this will be a year to update, so wanted to highlight that. And then we also utilize some other trade organizations. And I should have mentioned, Tyler and I will tag team on this a bit. But so some of those organizations are listed there.

Yeah, what I would note about how we work with other groups around the state, this includes many of our staff's professional trade organizations.

You think like the State Association of Chiefs of Police is one example, but as well as the Colorado Association of Municipal Utilities, because some of our peer communities don't own their own utilities.

This allows us to stretch our legislative reach and understanding of bills further than if we were to just to beef up on legislative staff or lobbying. And so we find this to be the most efficient way to do this is to lean on others sort of expertise.

It also helps us identify where priorities might be in conflict between those organizations. So some key things we do always try to look out for are really state or federal things that that impact us in ways that we may not want them to. which includes additional burdens on us. More and more we're seeing just issues pushed down. I think last year they wanted individual cities to do their own gun control policies

or take on some additional things. So we're trying to watch for things that we think make sense at a state level and then protect things that we think make sense at a local level.

And that includes being on the lookout for unfunded mandates that increase really our cost of services and a lot of complexities.

I don't want to say we try not to. We're selective in how we choose to take positions on bills. Again, we just came out of a legislative review committee meeting today, and I think they said we're at 450 bills that have been introduced. So, again, we try to be selective, and I put this slide up to sort of show where we were at last year.

Yeah, and I think there's always room for disagreement on this approach, but mentioning the number of associations that the city's either a member of or that we have professional ties to, right, like when staff recommends a position that the legislative committee take, it tends to be something distinctive, either because we're in conflict with some of our organizations or because we think us having a support, oppose, or amend position might add some ump for something different to the conversation that's not currently in there.

So a couple major themes this year are listed there.

The real current status at the state is the budget deficit and really understanding that this year,

anything with a fiscal note or a cost to the state general fund is unlikely to move forward.

And it makes us try to be very careful seeing where they're trying to push costs down further so that we take that burden.

And it helps know where we may need to put our influence more or less if things have a fiscal note and they're unlikely to pass.

We sort of continue to monitor those.

I think I've done this for a long time. Here are some bills, though, that we're tracking, and we're not going to go through these.

But obviously in the housing and land use space, we're watching things.

and a lot's actually changed since I had to submit these. So we do now have a lot splitting bill that is introduced.

So housing and land use energy is kind of always of interest, and this year it's going to be a lot around large energy users, including data centers.

So we're watching those and trying to work with the county here locally, as well as our energy partners.

We always see a lot in the law enforcement and courts arena, and there's a lot this year, as you can imagine, around surveillance and use of data and those types of bills.

And so, again, some conflicting bills, so watching to see what moves, what doesn't, and how things maybe combine or don't.

and then we always have things that are sort of just operations or other interests in here and

so we even made some changes to these today and i'll note that that quora bill actually died last week so again things move very very quickly as we stay on top of that that's really all i have and

then my sort of poor effort to show you where to find the bill tracker which is on the website under the Legislative Review Committee, if you click that

bill tracker button in the bottom right there, it takes you to our full bill report. So you can always check there.

And that's really all I have. So unless there are questions, thank you. Great, thank you. Any questions, comments?

Melanie? I'll make a comment. Just thank you to those of you who are involved with this committee, both the, what are you called, commissioners and the staff who are assisting because like you said this is a huge job um and

super grateful for the hard work thank you it's just fast moving it is especially this time so any other questions comments okay see none thank you

all right with that i'll invite some of our housing team members up um it'll be mostly the same staff team, I believe, for the second and third item.

So as soon as Jacob gets set up here, I'm going to turn it over to him and hear how

he'd like to introduce the item.

I always like taking my sweet time, getting all my things, my water bottle.

Really, I'm just buying you guys time to prep. TO PREP.

Deputy City Manager, Mayor, we're ready? Yeah. Okay. Good evening, Mayor, members of council. It's an honor to share another Tuesday night with you. My name is Jacob Castillo. I have the honor of serving as the Chief Sustainability Officer. and as tyler mentioned we're here for two meaty housing items um i can say in the staff preparation for this evening there is genuine excitement for this conversation not only because i'm here with you know some expert colleagues on the on the topic folks who've given their most of their professional career to the topic of housing but i also know that this is a key priority for this Council and for our community and we're happy to sink our teeth into these topics tonight. So we will be discussing two items. One is the Regional Housing Needs Assessment. This will be a launch pad to the Housing Action Plan. We're going to be hearing from our consultant Molly Fitzpatrick from Root Policy Research going over some data. As you saw in the packet, the materials Prior to this, there is a lot of information. We'll be synthesizing that into a handful of slides, of course, inviting any questions or discussion on anything you might have seen in the packet, but we'll cover the highlights in the presentation. Then we're going to move into a second topic, the Affordable Housing Capital Fund Plan, where we'll be talking about the CCIP and quarter cent capital tax strategies and priorities for the use of those funds, the investment sequencing, and some of the process to invest those dollars in the community. I should introduce both Vanessa Finley and Chad Wright, my colleagues who serve in the Housing and Community Vitality Department. And I should mention this is Chad's first time at the table since joining the city organization five, six months ago. So welcome, Chad. I was going to say be easy on him, but you don't have to be easy on him. No kids gloves tonight. And I guess with that I'm going to hand it over to Vanessa to get us

started. Thank you Jacob. Mayor, council members, it's good to be here tonight talking about the regional housing needs assessment. I'm going to kick off the presentation tonight, if I can get this to advance. There we go. Just talking a

little bit about the background of the housing needs assessment and the process that was folLod. I'll then kick it over to Molly to talk about some of those key findings and regional recommendations and then we'll wrap up talking about next steps especially as we move into the housing action plan

So our discussion tonight, of course, we want to

Answer any questions you have about the data and findings presented anterior

Reactions to those recommendations that will really be kind of the launching pad into our housing action plan

We do have time at the end for that discussion

But of course if there are clarifying questions, especially around the data that Molly will be presenting please feel free to interject and we're happy to answer those along the way.

So to start with a little bit of background and process. So the housing needs assessment is required through Senate Bill 174. Jurisdictions are required to complete this by the end of this year and then every six years thereafter. This Senate bill also requires us to complete a housing action plan. We made the decision to do this in partnership with Larimer County and the City of Loveland, really to create a regional housing needs assessment this allows us to understand our regional housing market and really see the whole regional context while also homing in on our local data so we think this will give us a better opportunity as we move into that housing action plan process really to have more nuanced and contextualized data that we're working with I will say

that Molly has presented the housing needs assessment to both the Larimer County Commissioners that was last week and then she'll be back up this way presenting to Loveland City Council in just a couple of weeks. So the housing

needs assessment is largely based on state methodology. The states come out and said these are the types of analyses we want included and the data sources we'd like you to use and that's really what a lot of the data that you see in the housing needs assessment around demographic trends, economic trends, or housing gaps. But engagement was also a substantial piece of the process and so So Root was able to conduct a few community meetings, including one here in Fort Collins at the Old Town Library.

They also hosted a series of resident focus groups. They administered a resident survey and an employer survey. That resident survey returned about 1,100 responses, and then the employer survey returned about 43 employer responses.

And then also engaged with other folks working in the field through interviews, focus groups, and other information gathering.

So with that, I'll go ahead and turn it over to Molly so she can dig into the findings. Great. Thank you so much.

And good evening, Mayor and Council. Delighted to be here.

As has been indicated, I'm just going to hit the high points. There's obviously a lot of data, especially when we're taking a regional approach, really

trying to understand the region as a whole, but dig into communities as well. I'm just going to hit kind of the high points. I'm happy to answer clarifying questions as we go, of course, so feel free to interrupt me if that's the easiest way to get to that. And I will talk kind of fast because that's kind of how I talk most of the time, but don't feel bad interrupting me and we'll kind of move through the core data portion here in about 10 minutes.

And then roll into all of the exciting actions that you get to take as a result of some of that as well.

So moving into the key findings. Oh, I did it. Okay, great.

I can work a computer. Don't worry. We're all in good hands.

As we look at demographic and socioeconomic trends in general, broadly, we're seeing a lot of the things that you would expect. Growing population, aging population to some extent, certainly that's true countywide. Incomes have gone up, but they aren't quite keeping pace in some cases with certainly not with home prices and to some extent not with rents. We also take a close look at home ownership, and this graphic is showing you home ownership rates by income level. So the percentage that are owners at these different income buckets, and you can see Fort Collins right in the middle there. And what's notable about this in particular is that homeownership rates in particular have dropped for households earning between $50,000 and $100,000 per year. What that tells us is that these income levels, which have historically been able to access homeownership, are having more and more challenges doing that in our current market. and that has really been the case over the last 10 years we've seen that decline, but even over the last five years seeing that decline as well. In the survey analysis, I'm not going in depth on the survey results tonight, but we do ask a lot about what are the barriers to home ownership, especially among renters who say they would like to buy a home. And really what we saw primarily,

or at least the top answers, are not being able to afford a down payment. So as prices go up, even if you can finance it, getting that down payment is a real challenge. Worrying about the mortgage payment as well and additional fees, and then not being able to find a home that's affordable in an area that might be close to schools, jobs, that sort of thing. So lots to dig

into.

This is showing you the change in rents between 2018, which is the darker blue, and 2023. So kind of that five-year period there across Colorado, Larimer County, all of these different jurisdictions. Obviously, big percentage increase in rents across the board here. Fort Collins is no exception with about a 30% increase in rents over that five-year period. That did exceed inflation. It also exceeded the rise in wages.

This shows you a little longer view on rents. So the gray bar is showing you where that typical rent is, the average rent. And this moves us all the way into the end of 2025.

So you may have seen or may have heard how rents are softening, rents are plateauing. That is absolutely true over the last two years.

However, you can see leading up to that, we had really, really sharp increases, particularly between 2019 and 2023. And so that softening in the last couple of years is really more of a correction to the market than it is a, oh, we've built enough and prices are coming down.

So I think it's important to kind of see that full timeline of that really steep increases.

We were seeing a little bit of leveling out, certainly, but your vacancy rates are still very, very low. So 5% vacancy, that's really tight. So still really tight in that rental market, even though we're seeing a little softening on the average.

Similar steep increases to home prices. So this graphic, the blue lines are showing you the typical home price in Larimer County overall, Loveland and Fort Collins, Fort Collins being the lightest blue line. That's a little bit hidden behind the Larimer County line, if you can see that, because Fort Collins tracks pretty closely with the county overall. But broadly speaking, again, really sharp increases, particularly between 2019 and 2023. The increase has softened a bit over the last couple of years. But what's most, I think, critical about this graphic and kind of understanding the trends is looking at the dashed lines that are at the bottom. The red, yellow, and green dashed lines are showing you what is the affordable price at various levels of AMI or area median income. You'll hear that term a bunch tonight. That for those that are not like housing dorks like myself, that is basically how we think about income qualification for various programs. it's a nice way to kind of look at trends over time as well, because we're looking at a percentage of the middle, right? So we're saying 100% AMI, that's your typical middle household. So 120 is a little above middle, and 80 is a little below middle. And those are also how we structure housing policies, housing programs are targeting those AMIs. But when we look at these lines, the dotted lines at the bottom, what's that showing you is how incomes have changed, but also how mortgage interest rates are affecting purchasing power. So what you're seeing there is the purchasing power or the affordable price at those income levels. And so particularly notable is that in the late 2000s, you know, 2008, 2013, that green line, 120% AMI, could afford more than the typical household or the typical home price. Now there's a massive gap between what is affordable at that household, for that household, and what is actually the typical price. So we were kind of keeping up a little bit there, and now it's really taken a dive. That's primarily due to home prices continuing to rise as interest rates also rose. So interest rates go up, purchasing power goes down, you're spending more of that payment on interest. So some clear market trends there. I'm going to pivot now into a little bit talking about just the needs. So how do those trends relate to incomes and affordability and the people that are actually living in your community? cost burden is one way we do that. So we look at what percentage of folks are spending more than 30% of their income, and even more critically, what percentage of folks are spending more than half their income on housing? That's what you see here. So there's about almost 19,000 renters in Fort Collins that are spending more than we'd like to see on their housing costs. Some of those are likely students, but not most, right? So we do pick up some student population. We don't pick up your full student population, but those do kind of impact the numbers a bit. But still, even without students, you have at least, you know, over half of your renters spending more than 30% of their income on housing, about 21% of your owners are cost burdened as well. Another thing we look at is what different industries that the average wages can actually afford to buy a home. And you can see by this graphic that that dark line across the middle is the average sale price. And then these bar charts are showing you by different industry, what is the average wage? What could they afford? Can they afford the home price? In the blue at the top, that means you have to have two earners in that industry in order to afford. So broadly, what this is saying is there's not a single industry where average wages can, with one or even 1.5 workers, can afford your average home price. And there's plenty of industries where even two earners are not going to afford it either. Displacement is another thing we look at for housing needs, and that is when people say, I had to move out when I didn't want to. That doesn't mean they were evicted necessarily, but it is an indicator that folks are struggling with a variety of issues that mean they end up having to move when they would rather stay where they are. In Fort Collins, about 18% of survey respondents said that they had to move when they didn't want to. The most common reason, because their rent went up. So rent's going up, people are

having to move. Implications of having to move are often, kids had to go to a different school. I ended up in an apartment that was not suited to my needs, or I ended up having to pay more

anyway. So we end up kind of in a cycle of displacement as a result of that as well. And then finally, I promise I'm not going to read all these numbers or make you do any math tonight, but I did want to keep this in. We'll show a summary slide of this, but I just want to explain how we look at affordability gaps. So that's one analysis that we do to understand where's the market working and where's the market not working in terms of serving all of the folks that are living in Fort Collins. And so one way we do that is say, okay, we're going to do this affordability gaps and we take the number of renters you have by income and compare that to the number of rental units that are available in their price range. So that's what this table is showing you, the different, how many renters are in each of those income groups, and then how many rental units are affordable to them. Where you see the red numbers over on the mismatch, That means there's more renters than units in that income category. And so when we look at that, we're really trying to evaluate kind of what's the magnitude of need, but even more importantly, which households are not being served by the market? So where do we have market failures? And what does that look like from a policy and implementation perspective? So to summarize that sort of table gaps analysis, you can see we're summarizing here with the number of renters that are earning less than 50% AMI compared to the units. and that's where your gap is. What that tells us is that in your rental market, the part that's not working is below 50% AMI. We also do a similar analysis on the for sale side, comparing potential buyers to what's available on the market. In that context, the market is not serving folks that are earning between 50 and 100% AMI, which is where we'd like to see folks starting to enter homeownership at profitable, but there just aren't units. So what we think, this is based on, this is not necessarily new units that you need to create. This is where there are mismatches in your market. So when you think about policies, programs, incentives, investments, you want to think about where's the market not serving, and that's where the public sector may need to step in, and that is generally below 50% AMI on the rental side, below 100% AMI on the for sale side. Now acknowledging that that's taking a look at your existing residents who lives here now and where those affordability mismatches are. We also do a production analysis. So how many units do you need to add? So the previous slide, you can solve those problems theoretically through subsidies or incentives and those types of things. Now we're looking at how many units do you need to both catch up and keep up? So this is looking at the existing production needs are based on how do we ease vacancy rates a little bit and how do we make sure overcrowded households are alLod to divide

into two households. And then for future, we're looking at what are the population, household, and economic forecasts, and how does that relate to Fort Collins, and how does that break out from

an income or AMI perspective, as well as from tenure, so rental and owner. So this graphic is summarizing how many units you would need to produce in order to accommodate future residents, for the most part, as well as some new residents. And that's about 7,000 units total. And you can see in the breakdown here on the bar chart at what AMI levels and what rental and ownership levels. Again, the market, as long as there's an option to produce units, the market can typically produce those for you above 150% AMI on the ownership side and above about 80% AMI on the rental side. But to hit those targets, as you see below 30, 50, and even 80 or 100 on the homeownership side may require some public investment as well. The good news on that is that the permitting trends are showing that you have about 7,000 units potentially in the pipeline. So there's some good news as we roll into that. And I will let city staff talk more about kind of what is coming as well. As was mentioned, as Vanessa mentioned earlier, this kind of is the kickstart to a housing action plan for the city of Fort Collins, that will be a really tailored, strategic, action-oriented document that says, what do we do about all these housing needs? However, I do at least want to highlight before we move off of the regional assessment, what our recommendations are for kind of the regional approach in general. This will then be kind of targeted into individual action plans, but broadly speaking, in response to the needs that we've seen across the region, our recommendations to help address some of those needs are continuing the regional collaboration and public-private partnerships, looking at funding source options, allocating publicly owned land to affordable and mixed income development, preserving existing housing that's already serving low and moderate income households, implementing as well as monitoring land use updates. So you all have done a lot of land use changes, land use updates. So just looking to see, are those working? Do we need to tweak them? Do we need to calibrate? And same on incentives. So refining and expanding development incentives. What's working? What's not working? How's the market shifting? And then seventh, finally, just assist and stabilize existing household through program and policy support there. So that is kind of my wrap up there. And I will hand back to Vanessa, but also happy to answer any questions on the regional assessment, any of the

data questions as well. In the housing needs assessment draft, you'll also see that Root has pulled out a few opportunities, different activities that we may want to consider as jurisdictions as move into the housing action plan so we pulled out a few of these these are really just examples to illustrate some of the opportunities that we can start looking at as we as we go into that planning phase based both off of those regional recommendations as well as with consideration for some of the work underway and so what's coming up next we will of course take the feedback tonight along with larrimer county commissioner's feedback and loveland city council's feedback incorporate that into revisions and then finalize and submit our regional housing needs assessment TO THE STATE THAT WILL LIKELY BE IN THE NEXT COUPLE OF MONTHS AND AROUND THE SAME TIME WE'RE HOPING TO ALSO START OUR HOUSING ACTION PLAN PROCESS WE HEARD A COUPLE OF WEEKS AGO THAT WE RECEIVED FUNDING FROM THE STATE TO SUPPORT THAT SO THERE WILL BE A LITTLE BIT DEPENDENT ON THE TIMELINE JUST WITH GETTING UNDER CONTRACT FOR THOSE FUNDS AND THEN BEING ABLE TO CONTRACT WITH A CONSULTANT BUT WE'RE HOPING THIS SPRING EARLY SUMMER WE CAN START THAT PROCESS AND WE'RE WANTING TO MOVE QUICKLY WE KNOW THAT THERE'S A LOT OF MOMENTUM ALREADY GOING ON WITH WORK UNDERWAY with having council priorities really solidified now and with having this housing needs assessment now completed so we're hoping for a few intensive months really to be able to refine and home in on those both the housing goals updating those and the housing strategies that housing action plan will come back to council for adoption likely later this year and then we'll be able to submit to the state we do have about a year's buffer before we're required to submit that to the So we have a little bit of cushion, but again are wanting to to build on the momentum that we have So with that that brings us to our discussion and curious to hear what questions you all have and what reactions you have to the recommendations Great. Thank you. That was a very comprehensive Presentation and captured really a lot of the high-level things that were in the report. So do council members have any questions or comments?

Julie Thank you so much for data junkie like me, this was great a lot. So I have some questions. I just don't quite understand the housing action plan. So even though we collaborated with Larimer County and Loveland, we're going to have separate housing action plans. Is that correct?

Yeah, that was the direction, you know, when Larimer County, Fort Collins and Loveland started talking, we really saw the opportunity to do the needs assessment on the regional level, but felt that where each jurisdiction was and the work underway that kind of focusing more at that local level of course we work closely with those other jurisdictions and want to be able to leverage those opportunities and have this common thread of those regional recommendations guiding us but felt that we would be able to create something that felt really tailored and actionable if we were

focused specifically on fort collins okay thank you and so will there be portions of the plans that are the same i mean i saw obviously the regional recommendations but are we working with

the county in loveland on parts of the plan um we the state does require that you talk about the regional housing needs assessment in that plan and so there will be some overlap at least in that regard and as i'll let vanessa answer too on on kind of just the continuing collaboration but i think collaboration is certainly a theme. I think where we want to make sure that it stays tailored is that everybody's starting from a little bit of a different spot within that. And so understanding that I think particularly when we look at kind of county level strategies, most often those are very integrated as part of kind of their municipalities as well. And so for example, we've done a recent housing action plan for Jefferson County and in their housing action plan, they talk about all the cities within the county and what strategies they're doing and how they're looking to support that as well. So I think even if there's separate plans, there's certainly overlap. The state wants to see overlap as well. And there's natural overlap just based on the way they're collaborating. And I think most of the jurisdictions are kind of on a similar timeline of doing these a little bit earlier than the state deadline, which I think also helps with some overlap. Okay, great. Thank

you. And then my last question, maybe for Jacob, maybe, I mean, definitely for city staff. So I did see in the AIS that

the Housing Action Plan is going to build on the 2021 Housing Strategic Plan. I mean, what does that mean? And which document like is the alpha? Yeah, the way we've been talking about it, you know, certainly the housing strategic plan from 2021 has 26 strategies. And it really signified a shift in how the city is looking at our housing strategy before we had had affordable housing specific strategic plans. And so that's what it's going to be. the sort of thing that we really want to be able to carry forward that focus on our entire housing housing market the entire housing spectrum we think the vision everyone has healthy stable housing they can afford that kind of platform for how we then think about approaching our housing strategies we want to be able to can carry forward and we know that those 26 strategies now things have changed we need to refresh them there have been some questions over the last couple of years about whether our housing goals and you know we have this idea of 10% of our market is affordable indeed restriction at the kind of at our planning horizon is that still the right goal those are the opportunities the more I think specific intangible things that we really want to guide our priorities over the next couple of years that will be updated but that that I think the spirit the overall philosophy and the vision of the

housing strategic plan is what we want to carry forward so are the two plans still going to exist simultaneously like will the the strategic plan just be updated or will

this replace it I think we've been thinking of it as almost an addendum so kind of a replacement but again with references back to the original plan so hopefully folks can look at the housing action plan and really see that as the roadmap for what we're doing right now and see those relevant pieces that have come before that were captured in the housing strategic plan okay thank you

Yeah, Melanie. Thank you for the presentation. I have several questions that are kind of related, so I'll just ask those. First of all, I was wondering if on slide five, is that Harmony Cottages, I believe? Yes. I just wanted to point out that they're all duplexes, and they look awesome. And it's a cool community. um so speaking of duplexes when i was looking at this data it seemed like loveland is outpacing us with single family attached dwellings duplexes triplexes fourplexes whereas fort collins seems to be leaning more towards creation of apartments um do we happen to know why loveland seems to be able to generate more of that type of housing it just seems pertinent to the lack of homes between

that 200 and 400 number that was identified? Yeah, that's a great question. I don't have a perfect answer for you necessarily. I do think, you know, we're looking at it at a percentage basis per unit. And so I would say Fort Collins has certainly added more multifamily as a percentage than Loveland has. Some of that is that Loveland could have an opportunity potentially to had more multifamily, so I don't want to say multifamily is always bad. Sometimes it's really good to add that in that case. But Loveland has certainly pushed more toward having some of that creating, they had a couple of larger developments that had some of that in it as well. So it's a great question. I don't have a perfect answer from like a land use or zoning perspective necessarily, but continuing to watch that from a numerical perspective in addition to percentage-wise.

Okay, I'll just be interested to see as we move forward how we're integrating those kinds of housing types because again It seems like and this is anecdotal, but we're seeing quite a lot of generation of apartment buildings and people commented on it frequently whereas it seems like the patio homes duplexes triplexes That that we just don't have as much choice as would be ideal in my mind So my second question actually was about patio homes because that was another area that the data said was lacking. Is that a zoning barrier or do we have an idea of why patio homes also don't seem to be a real hot commodity for building? Or do we think that the bill at the Capitol about the minimum lot sizes or lot splitting might be helpful to the creation of that kind of home?

You know, that's something I'm looking at. Clay's here. Clay Frickey is here and he might be able to better speak to what we're seeing come through, especially with those permits and with some of the land use changes and what opportunities that opens up.

I am not Jacob Castillo. My name is Clay Fricke. So, yeah, I think that the patio homes, duplexes, the missing middle thing, I know is a priority for this council. One of the challenges that we hear from developers is that they are very expensive to build compared to how much they can either sell for or rent for. So, we don't see a lot of those housing types. I would say that's especially true of like the duplex to fourplex type of thing. It's not common because they are very expensive to build per square foot compared to a larger structure. And so there's just not the same economies of scale. And so we'll tend to see those more in greenfield developments where they're building them in up front. Or we'll see them on individual parcels. And so I think one that comes to mind right away is there's a new ish duplex on Mulberry thinking like Smith On the northwest corner if you can imagine it It was anyway, that's like one of the more recent duplexes that I can remember coming to us And it's sort of on a case-by-case basis, but it's yeah It's mainly a function of market forces in the expense of building those units. Okay. Thanks Clay

And then I'll just ask I have two rent questions. So the first one is with rent increasing, rent increases, do we have any data around landlords' ownership costs versus the rent they're charging, the profit margin? Because I am curious, you know, is it just exorbitantly expensive to own and manage a rental property or are people maximizing the

market for profit? I would love if that data existed and unfortunately it does not. We've tried to track it before, it's really challenging. So the short answer is no. The long answer is probably both things are true, right? It's getting more expensive to own. Operating expenses are up as we do have some data on operating expenses and those are going up. But we also know that landlords are managing to the market. It is also for new developments. And we talked about mortgage rates. That does also affect development because folks are borrowing money to develop. So when we look at new rental developments, those are certainly more expensive now because their interest rates are higher as well. So it's a little bit of both. And broadly speaking, landlords are going to manage to kind of willingness to pay. That doesn't necessarily mean they're gouging people. I know their costs are going up, but it's really hard to find that

detail. Okay. Thank you. And then, oh, yeah, of course. Just following up with city staff, I mean,

We've had the rental registration in place for two years now three are we getting any valuable data?

One full year. Okay. Are we getting volume? Valuable data out of that

We are Thank you Tyler we are getting valuable data I think it's still too early to be able to track trends, but we are we are asking landlords what are they charging, trying to understand some of the dynamics that Molly just described, but it's too early for us to have a thorough analysis of that. Okay. Okay. Last rent

question was, do we have a breakdown of rental rates by number of bedrooms? Because I noticed that there's a huge number of units with rents of $2,000 plus per month, and I'm just curious because I'm lucky enough to not have been needing to look for an apartment in quite a while. But is that $2,000 for a one bedroom, for a two bedroom? That's the average rent.

That's the average rent. The average unit is two bedrooms. But we can also add some data that show you rent by number of bedrooms. So all of those have kind of gone up. It's not just that now you have a mix that are a bunch of larger sized units. That doesn't explain the increase in rents, But we can add that for average rent by studio one, two, and three.

I'd be really curious. Sure. Okay. And then my last question is just a yes or no. I'm jogging my memory, but am I remembering correctly that the city's currently doing a review of our real estate holdings in the context of this conversation? Okay. I thought so. Okay. Thank you so much.

If I could, I'd like to just interject a little bit on the cost issue. And I can speak from very recent experience on this. Just anecdotal for now. but operating costs have increased dramatically. I mean, insurance rates have gone up double digits over the last several years, and the inflation that's kind of hit everything in the economy over the last four years, it's certainly hit services as well. So just the, if you're a responsible property owner and you are doing the things you need to do to keep your property current replaced, repaired and reserved, those costs have gone up substantially. and I know a lot of landlords struggle. We certainly did with that sweet spot between increasing rents to the point where you can adequately not only just pay for the services, pay for the insurance, but even more critically ensure that your replacement and operating reserves are capitalized for future needs. So it's a pretty difficult path to navigate.

Thanks. That's helpful.

Other questions, comments? I have one question about slide 16 with the, no, sorry, slide 17 with the production needs. Is that production needs based on our current AMI makeup in Fort

calls? Yes, it is based on, it is roughly based on the current AI makeup. So it does allow for incomes to rise, but all incomes rising, like, you know, with the kind of the typical increase

in AMI. Okay. Yeah. I guess I'm curious because we know a lot of families have left and people aren't able to forehear. So now we have a higher AMI. So I guess I'd be curious what the production needs would be if we wanted to go back to the time when families were here.

Sure. So looking further back, what was our AMI makeup five years ago, potentially, and looking at how would that shift this distribution?

Yeah, I'm sure city staff would have a better idea of what year to look at, especially with when we started seeing outmigration of families and real affordability crisis happening. Sure. Yeah, I think that would just be super helpful. I was surprised that the highest number of production needs was 151 AMI plus.

Yeah, I mean, I think it looks big because it's our highest category, but that's, you know, if we broke that out by, we're breaking out a lot more detail at Lor AMIs, right? Because that's really where we, it gets more nuanced in terms of policy and programmatic interventions. above 150 we're sort of like yeah the market builds all of that there is variation there certainly but if you think about the typical household is 100 percent AMI that should be the halfway point and it's but but we see as we're looking at who's moving in your incomes have gone up as you said and looking at that that's just where you have most households right now yeah I think that

tracks and also just you know when I think about an average cost of 550 or 600,000 for a house what am I then supports that is higher and higher so it doesn't make sense but yeah okay this was super helpful I I mean it's just really great data to have especially if council like really focusing on housing and just the data needed to really focus and understand what the problem is so I just appreciate the report and the regional context as well yeah

great thanks yeah Chris yeah I just want to echo those sentiments I really appreciate having all this data here, things I've been thinking about and wondering about. I had some questions about where we get the 7,000 needed units over the next 10 years. To be honest, that sounded really low to me in a certain way. Can you talk a little bit about how you came to that number?

Absolutely. So we start with the state demographers projection of growth in both households and jobs at the county level. So the state demographer says, this is what we think Larimer County is going to do. And then we run that through a lens that kind of weights out both growth in Fort Collins historically, as well as where Fort Collins fits into the regional dynamic. So other places in Larimer County are growing faster than Fort Collins. So we don't want to say, oh, Fort Collins has historically, you're going to hold exactly the same percentage of county. So we balance that. We also do balance that with job creation. So, um, and where jobs are expected to grow as well. So all of that kind of comes into it, but the baseline number starts from what the state demographer thinks the county's overall growth is going to be over 10 years.

And then are you shooting for when I was reading through the report, when it talks about the catch up, are you shooting to maintain that 5% vacancy rate, essentially? Or is that reflecting some kind of effort to get back to a much more affordable time in the city?

Yeah, we are maintaining the 5% vacancy rate because that is what the state would like us to maintain. I would say for a robust and healthy market, a little higher vacancy would be even better. But in that context, we are making sure that we're staying really tight to the DOLA prescribed methodology on that forecast. So they suggest we want this to stay at 5% vacancy on rental and a little bit Lor vacancy on homeownership. And so we're maintaining those. But you could say, I mean, and the reality is that anytime an economist gives you a forecast that's wrong, which is why I like being economists, because I never have to be right. And it's great. but I think thinking about this from like an order of magnitude of are we at least on pace to kind of keep up with this those projections change all the time and those projections are accounting for you know potentially if we're losing family

community that we want, but also reflect a reality that's already occurring. And so I think this should be sort of a baseline understanding of, hey, this is ballpark what we think we might need. But if we as a community say we really value making sure families can live here, to your point, Mayor, then maybe that number needs to go up. Or if we really value making sure our market has enough availability, maybe we say we'd like to ratchet that up in terms of how we think about policy, what we're tracking to. This doesn't have to be a hard and fast number. It's kind of something on paper to give you something to work with, but there are certainly policy decisions and community vitality decisions that you may want to make that would adjust that number up or down in terms of what you all as a community might want to target. Is it your sense that a vacancy rate

tells you about the price level or about the change in price over time? That's one thing I

don't understand. The vacancy, vacancy certainly is connected to pricing, right? If you have a ton of vacancies, prices are going to soften a little bit, but they're not a perfect econ 101 straight line of like, oh great, we upped this, so this goes down perfectly. It just, that's not, the market lags. The way we build is really cyclical, just in general. And so those are not as, I mean, there's certainly indicators to pay attention to. And if your, you know, vacancy rate goes way up, certainly, I think we would see some leveling off of prices. But I don't expect that you're, even if you got a vacancy rate that was really high, I don't think your prices are going to go down, right? What we're really trying to do when we talk about adding supply to impact affordability is we're trying to level off some of those steep increases. And so, you know, to Chad's point earlier, there's lots of costs that go into having a rental unit. It's not just like, oh, I can get this, I'm going to do that, and I can go up and down with vacancy. And so it's an important metric. It's not the end-all be-all that perfectly drives price. Does that help?

Yeah, that definitely helps. I was just trying to think of like, if we increase the vacancy rate, would we expect, like if we had a 10% vacancy rate, would we expect the price level to go back down to 2010s or would we expect the delta like the change to reflect more like that will indicate that there will be like easing of pressure over time but I think I understood from your response I guess do you have a sense like 7,000 units over 10 years seems like I think that's like a one you know it's like a one percent increase per year like non-compounding or something like that I mean when in cities that have maintained affordability over a longer time frame like do you know what kind of kind of annual stock increase they are achieving? Like, is it one, two, three percent? Like what kinds of increases have actually managed to maintain home prices over time in cities that have done that? Great question. And unfortunately, there's not,

again, a perfect number because it's so dependent to on the demand to live in your community. Right.

And so as long as there's demand to move in, it's about kind of balancing that demand with that supply. So certainly adding supply can help, especially if it's keeping up with demand. That's much more likely to have you see price increases that are more moderate and price increases that are a little bit more in line with income increases. So you're going to see more proportional increases. But there's not an amount of stock that you can add that would bring prices back down to 2010 levels.

I mean like relative to income in some way, like a price to income ratio of some kind. I guess part of what I'm driving at is I'm trying to get a sense of like what number we could shoot for that would reasonably, I guess my ambition is to bring prices, like to bring that chart where it's like the home prices on one side and it's the dotted lines on the other. I guess my ambition would be to bring those top lines down to places where they were, you know, in that time, not at the exact price level of 2010 or whatever. But, and so I'm just trying to get, I guess I'm still interested in figuring out at some point, like, what number should we shoot for? I was doing some, like, I was reading something that was talking about ambitious, like, growing housing markets were reaching 2%, 3% a year, places like Austin, places like Denver in the last several years. and for longer term like Atlanta or a place in the south. But I guess I'd be interested in finding that number longer term and figuring out what would be a reasonable thing to shoot for if we want to actually bring down prices relative to income in the longer term. Can you talk a little bit about how we create naturally affordable,

how like market conditions create naturally affordable, you know, naturally occurring affordable housing, like through vacancy chains and moving things like that, moving.

Sure. So a couple of ways. One is diversification of product, which it sounds like you guys have already talked about to some extent. So creating more opportunity for missing middle types, which tend to have a little bit more affordability than single family. And so making sure that that That is not just an option compared to multifamily, but making sure that is an option compared to single family. And so a lot of times what we'll see is, are we creating opportunity for small lot homes and duplex, triplex, fourplex in place of single family, not just in place of where I could build a sixplex, eightplex, 10plex, 20plex, right? So looking at the areas in which those are an option to increase housing diversity, certainly in this state, we still need reform around construction defects law. And so understanding that condos are still not really a super viable option for that in terms of producing naturally affordable housing. So on the production side, looking for ways to increase housing diversity. On the preservation side, so thinking about we already have some homes that are in those price ranges. What keeps those home in price ranges is exactly as you're talking about, that continued to production. And so when we see that production is keeping up with demand, then you're less likely to over inflate existing housing prices. And so we want to make sure that we're kind of balancing both of those, we're producing the things that are going to create affordability long term, but also producing enough that the ones that are affordable are staying in that affordability. There's other preservation tactics, certainly that relate to investing public funds and creating a deed restriction and that sort of thing as well. It's sort of a different policy objective. but looking at that preservation opportunity for what already exists and then looking to produce more diversified housing stock.

If I may, your question about vacancies and impacts on markets. We really do have a real-world laboratory experiment playing out in real time in Denver and Colorado Springs. Both of those cities have had a historic infusion of units over the last four or five years. to the point that there is a real convergence and compression now on actual market rate rents when you factor in incentives because there are so many units that have come into the market. They have to incentivize getting heads on beds. And it's actually pressuring restricted affordable vacancy rates in Colorado Springs right now. The last data I saw, restricted LIHTC unit vacancy rates are 10 basis points higher than market rate. units. So in a normal market, when you're adding sort of bit by bit, year after year, it's one thing. But when you have quick infusions of supply, it can really turn a market upside down. And it's great if you're looking for a unit, because now you may be leaving a Class B or a class C unit and you can afford a class A unit because of the incentives to get those, you know, for those to fill up. If you're running those class B and class C units, you can be experiencing some pressures as well because your vacancy rates now are going up, whereas they used to be pretty low. And if you're trying to run restricted affordable in a market that's kind of in tumult like that, there's pressures there. So there's always trade-offs. But having a lot of a quick infusion of units, it really does have an impact on availability for households. And then I would just say nationally, one of the big issues with, especially on the ownership side, is after the Great Recession, macroeconomic factors resulted in just a cutting off of the spigot of building new units. And so what our market lacked nationally was that regular infusion of new units being added year after year after year. So that sort of normal, if there is such a thing, those normal stages of macroeconomics and general housing finance, where you have easy access to capital, that capital is pretty steady, you can depend on it, you can project and plan, that was all turned on its head. And so we had lots of units prior to the Great Recession, and then just a very quick cutoff of supply for many, many years. And I think that housing markets nationally are still trying to recover from that. And then we have a global pandemic added on to that. It's just been a very tough, volatile 10, 15 years in housing finance. I appreciate all the stuff you guys have put in all the work you guys have put in I really hope we can get to a really ambitious number at some point to see if we can get to where Denver is where their class C rents are cheaper than their affordable housing

but I had one more question about when we talk about preservation programs for naturally occurring affordable housing can we talk about what kind of programs we're looking at or what we're thinking about

and I'm especially thinking about this in the light of the conversation about an infusion of units being able to like Expand the pool of naturally affording a curable How for some reason I get to naturally? I just want to say like cheap market apartments basically, right? Like can we? What's our strategy? What are we thinking about right now?

So I think that'll really be what we talk through with the housing action plan process Yes. Certainly some of the things that we already have going, like the work in mobile home parks, I think feeds into that. And we've seen other communities really lean into this NOAA space where, you know, Molly had mentioned working in more of that naturally occurring affordable housing market. And maybe it's, you know, smaller infusions with really doing that maintenance and upgrades for a very short term kind of restriction. maybe not a full income restricted deed restriction, but like a price restricted deed restriction. Those are some of the, I think, examples that we can look at from other communities, but certainly all up in the air as we kind of dig into the housing action plan process.

Well, just thanks so much again, and I appreciate you guys.

Yeah, Amy. Thank you, and thank you for the in-depth information. It's really helpful, and it's a lot.

So thank you.

And as council talks about creating more streamlined processes, what does implementing a fast track process look like for you?

So that's actually a great question for our friend Clay Frickey again. He can talk more about the 90-day fast track kind of approval process.

So where we're at with that is we have a process drafted and we are just waiting for a project

to test it on.

And so we have two projects that might be in the hopper where we can test out the new

90-day review process. And so we'll be able to report back to Council hopefully on that here pretty soon.

Any other questions or comments? Okay. Seeing none. Thank you very much. Thank you. Should we move on to the next item?

Sure. I'm going to toss it right back to Jacob to move on to the Affordable Housing Capital Fund.

I'll take Mike on privileges and just come back to a quick topic before introducing our next one. Council Member Conway, and I think this is germane to questions others were asking about affordability relative to income. I feel it's my responsibility to say we're working on this from both sides of the equal sign, that it's really important for us to focus on affordability and cost of living issues in our community and one way that we make things more affordable is by supporting business growth and good jobs and upward mobility. So our Economic Health Office and the work that we're doing around economic development is critical to how we think about affordability in our community. And you will have a number of times in the month of April to engage with the Economic Health Office around some important policy discussions and some strategy. So just two sides of the equal sign. want it to be affordable and one way we do that is by putting more money into people's pockets all right and with that not an elegant segue into um our next topic uh we will be talking about the affordable housing capital fund and as i mentioned uh two primary sources um of revenue going into this ccip and the quarter cent capital tax uh this is going to be a lot of conversation around trade-offs so i think we're going to have a very healthy dialogue around the prioritization of uses when over time we invest so the sequencing of those and the process so with that i'll hand it off once again to vanessa to get into this but i do think this will be a juicy one another one round two yeah thank you jacob so tonight we'll start with

providing just a little bit of again background information some current conditions especially as we've been out in the community talking with developers and other community organizations working in this space and then we'll be able to start digging into some of those outcomes that we may want to work towards with these dollars and those associated uses this is where some of the discussion around priorities and sequencing of funds will come into play and then we'll have a couple of slides at the end again to talk about the process for being able to seek applications and award those funds and some criteria that we may want to clarify or put in place just to make it clear which projects.

a couple of breaks around discussion. And as Jacob mentioned, a lot of the information, a lot of that discussion,

we expect to be really in that trade-off space,

not only around, yes, those investments and prioritizing one strategy

may mean we are not able to invest in another strategy. And certainly when we're thinking about process,

if we can move quicker with something that's more prescriptive,

then that may mean we're also setting up a process that's less flexible. and really considering that with all of the decisions and input provided tonight.

So jumping into some current conditions and background information, just to echo what Jacob was talking about, when we're talking about the Affordable Housing Capital Fund,

we're really talking about two different phases of the sales tax revenue. CCIP referring to the dollars collected from 2016 to 2025, and then quarter cent capital tax referring to the dollars that are being collected now. 2026 through 2035. So if we say CCIP or quarter cent capital tax we're specifically referring to those buckets of funding but things that span both phases or that apply to the whole fund will say affordable housing capital fund. So what we're working with dollar amounts we have five million dollars that we're expected to have appropriated this year those were unspent CCIP dollars that council last fall kind of directed to go into the affordable housing capital

fund for the quarter cent capital tax on the ballot there was 10 million dollars that was directed towards the affordable housing capital fund and earlier this year this council uh awarded

two projects to to have funds from that from that um pool of money uh that was housing catalyst village on eastbrook project so that's new development 73 units and then also care communities wind trail park rehab so that's preserving 50 units of affordable housing so with that two million dollars or so of funds taken out we have eight million dollars still in those quarter cent capital tax funds that we're expecting to be coming our way of that eight million we do have 550,000 that you all have already appropriated to that fund we also have 400,000 from CCIP for fee credits specifically that's already been budgeted for and designated for fee credits that's in addition to the five million so different different slight pools that we're talking about and again when we're talking about this fund we're really talking about those capital expenses so not housing programs not operations really the sticks and bricks expenses to develop affordable housing

so one thing that we have heard and seen from developers is that development costs have increased pretty dramatically over the past several years around 53 percent over the past five years across the state of Colorado so last year the average per unit development cost was close to half a million dollars. We're able to get more regional data from the Colorado Housing Finance Authority but

we have to look back over five years and so you can see those differences. It's if we're looking at Larimer and Weld counties you know our five-year look back

is around you know 374,000 and we know it's higher than that now just again because of how rapidly some of those development costs have increased. There are also some changes happening with more federal regulations that are really creating some uncertainty and increasing costs for a lot of developers. First is Build America by America or BABA. This is a regulation that requires federally funded infrastructure projects to source some of the materials from American sources. And there's been questions around does affordable housing count as infrastructure? And right now the decision is yes, it does. So that means our affordable housing providers are often incurring additional costs, not just those hard costs from materials, but also having to hire consultants to navigate compliance, additional administrative time to apply for waivers.

So all of that are bringing additional costs into projects and sometimes also creating delays in projects.

We're hoping for a legislative fix, but the most recent one that we were hoping would kind of manifest ultimately fizzled out.

So we're still waiting to see what may come, but this is something affecting affordable housing development nationally A lot of people are paying attention. So we are hopeful

We've also seen some recent changes to the low-income housing tax credit program and understanding the full effects of these We just still have to wait a little while The first change that we were seeing are to the 4% tax credits

So those projects have had to secure a certain level of private activity bond capacity in order to access those tax credits And now at the federal level they've Lored that amount that threshold that you have to show that you have bond capacity for in order to access those tax credits So we can feasibly have more tax credit projects with the same amount of private activity bond capacity but what that means is that those projects have gaps that need to be filled with more soft sources and Some of those projects because of this kind of reconfiguration of bond capacity and tax credit equity are actually having larger gaps that they're trying to fill in their capital stack

At the federal level, they've also expanded the 9% tax credit program. And so there could be additional 9% projects. We don't know. We don't know exactly what will come and make its way into Fort Collins market. But again, those projects we're expecting to see gaps because we're seeing pretty much

every affordable housing project now come with gaps and the need for just those soft sources to kind of make their project pencil.

The last thing we wanted to highlight is more specific to these funds and what we've really HEARD LOCALLY. WE'VE HEARD FROM DEVELOPERS THAT FOR THESE AFFORDABLE HOUSING CAPITAL FUNDS, THEY REALLY WANT NOT ONLY FLEXIBILITY IN THE USE OF FUNDS, BUT ALSO A FLEXIBLE AND TRANSPARENT

PROCESS TO ACCESS THOSE DOLLARS. AND INTERNALLY AS STAFF, THIS HAS REALLY OPENED UP A CONVERSATION

FOR US TO SEE HOW WE CAN BETTER ALIGN ALL OF OUR FUNDING THAT WE MAY BE AWARDING TO HOUSING DEVELOPERS JUST TO MAKE THE PROCESS MORE STREAMLINED AND CLEARER FOR THOSE DEVELOPERS.

So moving on to talk a little bit about outcomes and uses. So we've pulled out four different outcomes, and we'll talk through each of these and the associated uses.

And again, the tradeoffs will really be important. We know this is more money than we've had in this fund before, and still it is really a drop in the bucket in the development landscape. The funding isn't enough to really substantially change our affordable housing development.

environment and every project that's going to be seeking those funds is going to be leveraging other sources. As we've been talking through these different outcomes and uses, there have been questions that have come up over the past several months of how are we thinking about our leveraging opportunities? How are we thinking about how many units we can produce with the dollars that we have? And incorporated into that, we've also been thinking about first, we're being responsive to the pipeline in a lot of cases.

Again, we're not going out there and developing. We're really relying on our local developers to come to us,

and they're making decisions about what they can develop based on their own mission, what they can access in other funding and financing. And so we're being responsive to those needs as they come forward.

In addition, there may be units that we want to invest more in and actually yield fewer units.

And so you just heard from Molly with the housing needs assessment that we have the biggest gap in our rental market at that 30% AMI level and below. And those units because the rents are so low they can't really sustain themselves ongoing

and so you need a bigger infusion in cash on the front end. So we may choose to invest more on the front end in those units in order to help fill that gap. And that's actually one of those kind of approaches and strategies that's outlined in the housing strategic plan that we would propose kind of bringing into the housing action plan.

You know using some of our regulatory authority to make the development landscape more predictable.

All of the things that we're talking about right now and then the additional resources we have Trying to give an extra boost to those units that the market just can't produce otherwise

So going in more to each of these outcomes

We wanted to start with this outcome of ensuring affordable projects can be built with or acquired without delay

And this really points to the use of gap funding for projects

This is the role that the city has filled before and that developers really look to the city to fill

This is something that can be used for new development preservation or acquisition We have had new development and preservation supported through these dollars before we haven't had an acquisition project But that is something that would be eligible

and this is something that Again is something that's very needed in the community and that we see

Increasing needs as some of those capital stacks really are just showing bigger gaps

This is exactly the type of request that council has received lately of course those two that we already mentioned village on eastbrook and the wind trail park rehab

and then also voa switchgrass crossing that council considered last fall this was also an example of just providing gap funding helping to make the project pencil

the next outcome we wanted to introduce was offsetting costs for more affordable development and this points towards the use of maintaining or increasing our fee credits for affordable housing So right now those fee credits are set at $14,000 per unit for the 30% AMI units only.

And we know this conversation around fee structure and fee relief is much bigger than we'll get into tonight and those conversations are coming.

But right now the fee credits are budgeted for out of the Affordable Housing Capital Fund and so we wanted to introduce this conversation because any decisions or direction provided

around changing that fee credit structure would impact the availability of funding for other sources from this particular source any change to fee credits would require a code change so it would be a longer term commitment from council and also just a couple of considerations

with fee credits right now it is primarily to benefiting new development we do have a Lor

level of fee credits available for adaptive reuse projects and again right now our housing strategic

plan approach really focuses on directing those resources to units at the Lost amis which is part of the reason that we have those funds specifically going into those 30% units.

To give a sense, though, because it has come up in conversations, it's been a question, what would it look like to provide higher fee credits? We did want to pull in some of these figures. So we looked at our production from 2018 to 2025. And so what would it look like if we kind

of ran a few different models? So the top line is our current scenario, $14,000 per unit for 30% AMI. and we'd be looking at around $300,000 that we would estimate the average annual cost. And of course, you can see that increasing if we bumped it up to maybe 50% AMI,

still within that range where we're showing a gap in units. If we expanded to all affordable housing, so that would be up to 80% AMI for our rental units

and up to 100% AMI for our homeownership units, we're looking at around $1.6 million on average a year.

We also looked at what would it take, you know, if we doubled essentially the fee credit.

And so this was really just an exercise that $28,000 would get us closer to being able to cover the fees for affordable units.

And if we were staying at that 30% AMI level, we'd be looking at an average estimated annual cost of $600.

If we ramped it all the way up to all affordable units at that higher dollar amount, we'd be looking at over $3 million on average a year. So it'd be very quick that those dollars would be depleted for this use of fee credits. Fee credits are very important to developers. They made that clear. They really appreciate the fee relief and when we've had those conversations they've said for this pot of money It's really that gap funding that's most valuable Looking forward to hearing the ongoing conversations about fee relief and other you know opportunities to maybe provide that and Not necessarily going down the path of increasing from this bucket of money

The next outcome we wanted to bring forth tonight is around our land bank properties So we have five land bank parcels right now that are awaiting development, and these are tricky parcels, like many of our parcels that are owned by private developers. So, for instance, we have one land bank parcel that is partially in a floodplain right now. And so there are some infrastructure needs, some site improvements that could be made on some of these land bank parcels, we think, that would either allow them to be deployed more quickly and would certainly help offset some of those infrastructure costs that otherwise the developer would be taking on once they had that parcel in their hands. So this is an opportunity to leverage the city resource of land bank property and of course if we invest in this it takes away money from potentially other strategies. And then the last outcome that we wanted to bring tonight is around establishing a sustainable source of funding through investing in a revolving loan fund. And when we've been looking at this outcome, we've really been looking at the opportunity to invest in the regional revolving loan fund that the NOCO Foundation is seeding and launching. When we look really at this opportunity in the short term as that fund builds, those loans will look like short term, low interest loans. Many of those projects are still going to require gap funding. And so for that reason, when we've weighed this option against some of the other options, ESPECIALLY JUST PROVIDING THAT DIRECT SUBSIDY INTO PROJECTS, THAT HAS FELT LIKE THE MORE STRAIGHTFORWARD WAY TO REALLY FILL A NEED IN THE COMMUNITY THAT DEVELOPERS ARE SAYING. SO AS STAFF, WE WOULDN'T NECESSARILY RECOMMEND MOVING FORWARD ON THIS, AT LEAST IN THE NEAR TERM.

AND SO AGAIN, THIS IS JUST TO SUMMARIZE THOSE OUTCOMES AND USES. AND WHEN WE LOOK ACROSS THESE OUTCOMES AND CONSIDER SOME OF THE CONDITIONS THAT WE HAD TALKED ABOUT AT THE BEGINNING, THERE HAVE BEEN A COUPLE OF THINGS THAT HAVE REALLY INFORMED STAFF'S thinking first we're expecting development costs to continue to increase and so if we can more rapidly deploy these dollars get them into projects that can actually be the most efficient strategy in order to use these

dollars for for good and then the second thing is just this refrain that we heard

around really the value of the city being a gap funder and a gap filler and how projects are really struggling to make their to make their capital stack pencil right now and so then when we pulled it all together and thought how could we think about this in the sequencing of funds and priority of

different outcomes and uses this is what we wanted to bring to you tonight and of

course this isn't set in stone this is up for you know to help frame the discussion tonight but what this shows is that this year in 2026 we'd be looking at that additional 5 million in CCIP that will be appropriated later on in the year as well as the five hundred fifty thousand that we have right now for the quarter cent capital tax that's already been appropriated directing those dollars really into that project subsidy. In addition we do have that 400,000 in CCIP appropriated for fee credits with what we know is kind of coming down the pike in the next few months this year we think those dollars can carry us through this year and into 27-28. Looking into next budget cycle if we're able to have another appropriation we think we can put those dollars pretty quickly into

use directly again We think we can put those dollars pretty quickly into use directly again into those project subsidies ! as well as fulfilling our commitment to the fee credits. ! And then around the same time, next budget cycle, 2027, 2028,

! This is the time where we would want to come back and kind of reassess those opportunities around ! So, being able to take a look again at our land bank parcels, see if any infrastructure has come in that maybe has reduced some of the need for us to invest, understand what some updated estimates may be, and then also look at the performance of the revolving loan fund and see whether that may be an appropriate time to invest. revolving loan fund and see whether that may be an appropriate time to invest if we want to go that route. So then in 2029-2030, we could have another appropriation. Again, making sure that we're still directing those dollars into those project subsidies, being that gap funder,

still fulfilling the commitment to fee credits.

And then if there are additional funds that we would want to direct into those other opportunities, these land bank parcels or the revolving loan fund, depending on the assessment and what we feel like may be the best strategy at that point, we would kind of be looking at it in that timeframe. So really in the near term, in the next few years, continuing to prioritize the fee credits and gap funding, and then being able to reassess as we're moving into future budget cycles. So with that, we'll pause a little bit for discussion,

and I think especially are curious to hear your all's thoughts and conversation

around the sequencing investments and different priorities with those uses. Thank you. Do Council members have any questions or comments?

Chris, go ahead.

So when we talk about using the fee waivers, how much of this is an accounting issue

where we charge future capital needs

against the Affordable Housing Fund,

rather than just thinking of fee waivers as like we didn't get the money, oh well, or something. You know what I mean?

Maybe that's a Kayla question.

Yeah, I think a financial question and also a legal question was some of that. And so...

Carrie, do you want... Carrie would...

I don't feel like I can probably provide too much of an answer just because I think it's right now more of a financial projection. So I guess I would turn it over to Caleb.

I can start while Caleb's coming up. I think there have been a variety of what I would call some policy decisions and then some what we believe to be restrictive uses of certain capital fees. So take something like some of the utility fees that we have historically backfilled because of the perceived harm to the ratepayer. We have said those are mandatory backfills. I think some of the other traditional fees fall more into the policy camp. But I'm curious how Caleb would characterize that.

Yeah, I would agree with that. And certainly with the plan that's been presented tonight, we are fortunate to be in a position where there are some resources available broadly for affordable housing.

Certainly what the city is able to bring in a large scale to this large scale problem is not going to resolve it.

So I certainly anticipate in future years there's going to be additional need to identify further resources for affordable housing. What I will say the way I've been thinking about it is where we have the flexibility and where the legal opportunity might exist. Generally, it's going to be easier to plan around foregoing revenue than having to identify dollars to send out the door. So that's certainly the conversation that's occurring at the staff level. And as Kerry mentioned there and Tyler mentioned, there would be a lot of legal and policy issues we'd have to look at around that. But my general philosophy from a financial management perspective is if it is a council priority, it's going to be, I think, generally more simple to plan around foregoing revenue versus having to continually identify large portions of dollars to send out the door.

Just to be clear, you're saying it's easier to forego the fees than to spend money.

It's a general comment in terms of financial planning. Like I said, we are in a fortunate position right now with the passage of the quarter cent capital tax and the balances that we built from the previous 10 years, CCIP,

that we have some resources available for affordable housing. Right now, what I'm saying is just looking out over the next four or five years, that general need for being able to provide resources for affordable housing isn't going to go away. And I think it's going to be a very ripe policy discussion for the city to look at if certain fee waivers that we're able to do can be part of that mixture as well.

Okay. I would just say it seems like in a lot of different policy situations, there's like revenue on the table and we don't like charge it against certain activities or not, right? Like it's not, we're not going to say like, well, we're losing $5 million if we don't implement paid parking in the future, even though we're giving away a lot of value for free to individuals.

So I guess I think we should be looking at ways to move towards just Loring fees, capital expansion fees, on things like parks, fire, police, things like this. I don't think giving up hypothetical revenue to like a police department in 2040 that we're going to need at some point.

I think that makes sense to me that we don't need to charge those kinds of fees if we're looking for affordable housing.

I guess just to answer the questions up there, I think the sequencing of investments to me looks great.

I think the gap funding seems like a really smart plan. To me, I think kind of uncorking some of our options around like the land bank,

like now while we have a really acute affordability problem seems to me like a smart way to go.

And so I'm really supportive of that. I think my preference is always in terms of in ways that are going to increase the overall supply such that we're helping the private market and the public market at the same time. So I'm thinking about like supporting projects that are on public like city owned land, public land, which I know is part of the process or part of the presentation such that it's not competing with private so that we might get double the benefit in some sense. Like we're getting this new stock of deed restricted affordable for people who need that deep deed restriction. And then that doesn't take up land that might very well be developed for market rate housing and help free up naturally occurring affordable housing in other parts of the city. And then I guess one of my little ideas around affordable housing is I think like in Europe, I think they do a lot more thinking about using affordable housing and deed restriction as a way to promote socioeconomic diversity in different parts of the city. So I'm really interested in looking at ways like I think Oak 140 is a really important way of bringing kind of a socioeconomic diversity to a part of the city that may be losing that over time. So I'm really interested in thinking about ways to promote that, I guess. It's called social mix in different parts. So that's where I would like to see these uses prioritized, and I'm excited to see what we can do with some of these dollars.

Great. Anyone else? Yeah, Josh.

So it sounded like the fee waivers are, if we were to ask the development community, those would be the top priority or the most effective way to expand affordable housing. That's kind of the top issue, or did I mistake that?

I'm not sure I would say it's the top issue. I think they very much value it. It's every single cost just kind of adds to things. And for the amount that fees are in the entire capital stack, it's not going to solve a problem. And certainly, you know, we're providing more in the gap funding that really helps fill those needs as they're able to kind of readjust their development budget. So I think it's something that they're very interested in engaging in that conversation and want to track. But for the purposes of these funds, they've really leaned into that gap funding purpose. Okay. Makes sense.

It might be helpful for me to add to, and I maybe should have said this when Chris was asking for a response earlier, but there are a lot of legal intricacies associated with capital expansion fees. And so it's probably not quite as simple as it sounds, but I think there's a lot of work going on right now to evaluate the options.

MR. Yeah, Kerry, if you don't mind me piggybacking on that, I appreciate that. I think that's one of the reasons we're not fully prepared to have that discussion tonight. I'll say in addition to legal intricacies, there are certainly significant policy issues the Council would weigh, both in terms of the level of service that our capital impact fees are supporting in terms of build out of our system and in the – I forgot what my second point was going to be around that. But yeah, it's really a level of service question and one that's going to require a lot of coordination with the attorney's office and other stakeholders

as well. And if I could just add, one of the things that we're talking about internally is really trying to simplify that process. I mean, cap stacks in these deals are already incredibly complex. And every layer of that cap stack brings its own underwriting requirements and trying to weave all of that together can be a very challenging thing. So what we've been talking about is how can we build a large toolbox with a lot of different types of tools that can be picked up by whether it's market rate developers, affordable housing developers, that can pick and choose from that toolbox in order to both get more restricted, affordable, built, but also to help with this overall supply issue. And we're talking about a lot of new and different things, for instance, with the land bank program that we'll talk about in more detail later. But that's kind of the general mindset that we're taking is we want more tools. We want them to be simple, easy to pick up. One of my protocols for a new rule or a program is it should not take a consultant to sort it out and interpret how to access that program. It should be as easy to handle as an app on your phone. So that's some of the things that we're talking about. And just a lot of credit to Caleb as well. I've had several conversations with him and with Jen, and just it's been a very good give and take, and that's a good thing to have within an organization.

Sorry. Thank you. And it's good to hear. On the sequencing of funds with the $5 million from it says $5 million in 2026 appropriation. That's $5 million carried over from the prior tax that wasn't spent. So is there anticipated to be a need for that this year where it says 26 appropriation? Like will it actually be spent or are we just talking about kind of putting it in the balance for future projects? If that makes sense.

We do think we can spend some of that. Maybe not the full $5 million. And again, we're responsive to the pipeline. And we'll talk a little bit more about the process and how we're thinking of that. But part of that is as we look to align some of our funding, how do we gather some information around those project gaps through our competitive process, which is the annual process that we use to award funds like our federal funds. And we also have some general fund dollars there. And if we can kind of have a continuation, those projects that aren't necessarily awarded through the competitive process, would they be eligible for affordable housing capital fund? And what does this project need? Are they so early in the process that maybe they could come back in next year to the competitive process? Or do they really need a local investment right now in order to move forward with securing additional funding? So it's a lot of moving pieces that it makes it hard to say for sure yes or no. But we think we could make a good dent in that and still have a little bit of continuation into 2728.

Thank you. So I think I just want to echo what Chris said about the fee. I think I've been bringing this up for a few years that it's an accounting practice that we decided to do. There's many jurisdictions across Colorado that just waive fees for affordable housing, and we don't actually have to backfill it with something. So I'm in favor of it moving faster than I think we're talking about. I think especially because the affordable housing developers need it either allocated in our city budget or just waived to be able to show in their stack that it's accounted for. Right because I think last budget cycle we are going to remove it and just doing that as need basis but that was just really difficult for The developers to like put it in their stack so You know, I think it's maybe something finance Committee can talk about if that's going to accelerate it, but I do think that this is a Approach we've been taking that may not be serving us anymore

Yeah, thanks for that mayor

And I was going to suggest after hearing a number of these that we take it as a follow-up item, given, again, what I'm hearing from council is probably not a desire to expand the use of this appropriation to offset fees, as has been some of our historic practice, but look more at the policy considerations of doing that. So we can circle up as a staff team and then plan with LPT on what may make the most sense to get that back in front of council.

Okay. That was a great summary. I would say as far as the the use of these dollars It you know and from the root policy research that came out It's like we need a lot of units right now and we need 7,000 over 10 years, but we need 1500 right now And so I would be in favor of using those dollars to meet the need that we need right now Instead of spreading it out over that decade where we can make the most impact with those dollars right now the land bank I just would be concerned because in history we purchased it and then we don't use it for at least a decade and that's not really meeting the demand right now and also I I don't think I've seen an update to the policy about how we're disposing of land bank properties and I've heard concern about that being equitable across partnerships and so making sure that we have that clear plan in place I would be more comfortable with before moving forward with that so

there are gonna be more gaps with everything that's going on at the federal level and with baba and We don't want those projects to fall through Because we need those units right now. I'd rather not wait So I don't know if that because right now we're not we're only using like five hundred thousand of the quarter cent sales tax until 2728 is that the I'm trying to keep up with all the different

Slightly variation we have CC IP. I know yeah, we have the five hundred thousand that is available right now and then the additional $5 million appropriation, which Caleb probably has a better sense of the estimate on that.

So $5 million is a conservative number.

We actually think that the balance in the previous capital tax, we're in the process of closing the books right now for 2025, so we think it'll be a little bit higher than $5 million. And then what we've shared previously for some of the Southeast Community

and Recreation Center discussions in the fall is that once that project is under, has a guaranteed maximum price contract, and we're moving forward with that at some point in the summer, then those funds would be available to be appropriated. So

it'll be, you know, conservatively, when I was looking today, I think we're going to be at least at five and a half million dollars there, maybe slightly more. Okay, that's helpful. And do we

know from our, I mean, we have great partnerships with the affordable housing developers that they have a great timeline of when all these projects are getting built and it seems to be that they have a pretty good understanding of what those gaps in funding are do we have an idea over the next two years estimated gaps in funding probably not as specific as the estimated gaps in funding

I think just as folks are trying to line up other sources certainly and this is something that Kristen Fritz from housing catalyst has an ex officio seat on the affordable housing board and she started to provide ongoing updates around the development pipeline. I think there's always the chance that that pipeline can shift. We also see new gaps, of course, open up. So, some of what we'll talk about in the process too is how do we address some of those gaps that folks know upfront that they are going to have in their capital stack and then even as new gaps may emerge down the road that we can be responsive in those contexts as well. There may also be some unexpected opportunities that we just can't predict specifically in the acquisition space that we want to leave okay I'm

opportunity that's helpful I think my concern is that if we're not you're marking any of the new CCIP which is the quarter cent now we're referring to it the quarter cent that we get to a point where we need those dollars to make those units complete now and we're not going to have that because we've already allocated it to other projects so by not having any of the quarter cent dedicated to our affordable housing capital fund you know five million five 5.5 you know that's a huge amount of money more than we've had you know It's more than we had over 10 years in the last month, so it's great and if we really want to make a dent I just worry that if we're not allocating this now or having it earmarked then we're gonna have an issue

Julia then Josh

I believe there was a backup slide that came out of

Leadership planning team that kind of talked about well, I don't know. I'm eager to see how you

interpreted the question I asked.

Yeah, so a lot of caveats with these. I think, you know, one thing that we've talked about, and yeah, Chad, please feel free to jump in. Any estimates are rough estimates. Again, we are dependent on the pipeline,

and different affordable housing developers are going to kind of fill those gaps in different ways. The projects will look different. What those gaps look like look different.

And so kind of working around this, I'm actually going to start in the bottom left-hand corner with the fee credits because that's the most kind of explicit cost. We know it's $14,000 per year or per unit right now. And so if we were, again, kind of looking out over 10 years at that $300,000 estimated annual cost, we're talking about $3 million. We then took that out of the $13 million total that we're expected to still be able to designate towards projects. Again, the $5 million coming from CCIP underspend, and then the $8 million that we have still from the quarter-cent capital tax. And so that's where that $10 million in the project subsidy upper left-hand corner comes from. And these estimates, the $165 to $500, that is a massive range, estimated three to six projects, again, because of just the range of investments that we've seen. We did look back at the most recent investments from our Affordable Housing Capital Fund projects, and it just really does indicate we're talking about new development. preservation we're talking about a nine percent tax credit project with switchgrass crossing versus a four percent you know new project with village on Eastbrook so we're really wide range of investments and again thinking too about do we want to put more per unit if we're getting like those 30 percent units the land bank this is where we're thinking again those infrastructure improvements could really range we do need to do more work to really estimate what those costs would be and which would be most impactful which which parcels because could that really unlock and allow us to deploy more quickly and so this is a rough estimate again we would want to do much more work before bringing any sort of proposal on the land bank parcel those land bank parcels too are very different sizes we have a couple acres up to I think 17 acres might be the largest one that we have undeveloped so the difference between a capacity of 25 units to over 300 that could be developed on a parcel and then of course the revolving loan fund this is using some estimates from partners that we had talked with if we put in 3 million for instance from the city this would rely on other sources being secured you know 20 million or more from other sources to really see the impact that's that could be projected but over those 10 years we'd be talking about 230 to 410 units supported but again those units would also probably require gap funding this is really those short-term loans to just serve as a bridge, do some pre-development work, those sorts of things. So it's a very apples to oranges comparison, admittedly. Yeah, well, this is helpful, though, because I really was trying to

quantify and qualify in my mind, like, what is going to get us the most units quickly, and it seems to come to the same conclusion that you did with the way you laid

out the timeline. So I have a question. I feel like it's

kind of already been answered, but I'm not, I want to hear the answer directly. If you were to ask

our affordable housing developers, which use works best for them? Would the answer be the same across

the board? One. And if so, would it be that gap funding? Is that what I'm hearing you say?

I don't want to say it'd be the same across the board because we haven't quite asked that question that way but i think this gap funding every time you know even we presented these four different options just a couple weeks ago um to the one voice for housing group which included all of our kind of local affordable housing developers and even talking about land bank fee credits the conversation kind of drifted back into that project subsidy space because again i think that's the role that they expect the city to play um and and really where they see the ability to to have an entity that's being really responsive especially amid a lot of other funders maybe changing some guidelines things changing with the financing space at the federal level so that is the impression that I got that folks were pretty pretty focused on the project subsidy and being that gap funder okay and then with the

timeline that's laid out and so it's about four years what opportunity is

there to pivot if needed? I mean, that's a great question. I think this is something that certainly we've built in opportunities along the budget cycles to be able to assess how things were going, not only spending down a fund's consideration for what the pipeline is showing and what we're learning about project needs, but then also if we're not spending down those dollars or we see a greater opportunity as we're assessing, we want to be able to bring that forward and provide that opportunity and so right now we're thinking of doing a little bit of that assessment kind of in conjunction with the budget cycle especially because we will have information on what's coming down the pipeline you know a year or two out as as some of those applications come forward

so i apologize if it's in here but are there then success metrics to know that it's working

i think what's the well let me ask a follow-up question what would be kind of your definition of working? Well, that we are getting the outcomes that we wanted by going along this path.

Like, how do we know? And yeah. How do we know? How do we know? Yeah. Well, I think part of that is also hearing your all's direction tonight. If there is like a real commitment to how do we do what we can to get more of those 30% units, then that may factor into how we think about some of these applications and so certainly reporting back out on what are those investments we can we track you know what the leveraging rate is what units are we getting how quickly are we spending down those are the sorts of things we've been talking about and without having strict benchmarks of we

have this much money and we think we can get this many units because there are so many things in flux being able to really firmly say yes we did it may not may not make sense because things can change and we want to be able to be responsive and and be able to

adjust if a different project comes along that we feel like really needs that infusion that may again be a higher investment even if we're getting fewer units for example.

Okay. I think too utilization and production and just monitoring that in real time and really staying in close contact with our development partners that they will help be a conduit for us to understand if the products we're offering are beneficial or not. I think one thing that won't change over the next several years is costs of production are going to be high. I mean, land, labor, capital, it's all up there. And the cost pressures in trying to put these deals together, I mean, I've been there, I've done that, that's kind of, I've got a lot of experience there. And so that direct subsidy, I mean, if you were asking me six months ago, eight months AGO, I WOULD PROBABLY SAY THE DIRECT SUBSIDY IS BEST BECAUSE YOU HAVE SO THE COST PRESSURES ARE JUST SO INTENSE RIGHT NOW WITH TRYING TO GET A DEAL PENCIL AND GET THOSE UNITS OUT OF THE GROUND.

YEAH, I HAVE SOME FOLLOW-UP, MAYOR, TO YOUR PREVIOUS QUESTION THAT MAY JUST BE HELPFUL

FOR COUNCIL AS YOU'RE THINKING THROUGH THIS. AND SINCE WE ARE IN A LITTLE BIT OF A UNIQUE situation waiting on the previous CCIP funding to become available to be appropriated. One thing that I'll share is that in 2026, we have about $4.9 million of quarter cent capital

tax anticipated revenue that's not yet appropriated. And my recommendation, certainly hearing council's discussion tonight would be, you know, if we want to preserve flexibility while we're waiting for the $5 million to be available. Certainly, I would not recommend appropriating

that whole $4.9 million for other projects, but holding some so we are able to be responsive if

there is an opportunity for, you know, a new project we don't know about that comes in next month. So that, you know, we have the discussion at Council Finance a week ago about another potential quarter cent capital tax project and the council finance

committee's direction was that you wanted to have this discussion tonight potentially move into the budget process the summer before we start making project decisions so if councils top priority is to make sure that we are

fully flexible to be able to address any emerging opportunities that come up we have four point nine million dollars of quarter cent capital tax anticipated

revenues this year that could still be appropriated. So we certainly are not short on available

resources right now if there's any opportunities. Great. That's super helpful. Thank you, Caleb. I would feel more comfortable if we allocated at least part of that for housing.

We're going to go to Josh and then we'll go to Chris. sort of along those lines how the the ability to appropriate every year is it pretty much

beholden to the amount of sales tax that's coming in or do you kind of maybe appropriate more in

one year maybe borrow from the general fund and then the next year like if there is a project

that comes in you know the end of this year but we've already we only have a million bucks left but this would be four million dollars would be awesome is there the ability to do that

So I'll answer it two ways. Historically, how we have managed that fund is it's either been anticipated revenues or available balance within that fund that we would appropriate. Certainly, if there was a specific opportunity that required us to get a little more creative with finding the dollars, we could explore that on that basis. I think there would definitely be viable pathways to do that if there was a really specific opportunity that we want to take advantage of.

Thank you.

Chris, did you?

I was just going to ask you, Emily, when you're thinking about the fee discussion for affordable housing in particular,

how are you thinking about that in terms of timing it with the broader fee discussion we might talk about in terms of infill or exfil

or how we want to adjust our fees in general?

You know, I'm not sure where staff is with those two conversations happening at the same time.

Yeah, I will probably have to follow up with counsel on that. my sense is that they're different policy conversations i thought so okay yeah i would

rather accelerate the fee waiver for affordable or affordable yeah okay

any other questions comments

okay we have just a couple more slides really focused on the process and criteria

so we started digging into a little bit um of this uh before in response to councilmember fudge's

question, but what we're thinking about are

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Olympus Dirğıtlina Rovinağı. housing capital funds especially if a project really needs dollars now some of those projects that apply for the competitive process mean it may not be eligible for the affordable housing capital funds so that will also be a consideration but I can say that in this year's competition I think we have a

little over 3 million to allocate and we've had close to 7 million dollars

worth of requests so this is back to kind of being able to make a good dent in the affordable housing capital fund if we were to kind of take that gateway pathway we've also talked to staff about opening an optional second window if

funding is available for additional requests this would be more in quarter three with decisions made early in quarter four and we anticipate this being used for instance if a project is moving towards closing and now they've had a

gap open up on their capital stack and they kind of need that last funding in we don't want them to have to wait that could delay their closing this is something that again those last three projects that council has approved funding for were all in this situation they're all moving towards closing in the next month or two and if they'd had to wait for the competitive process all of those projects would have been delayed which would have introduced

additional costs so we see this as really being responsive to you know unforeseen needs coming up later in the game this may also be the opportunity for projects that may not be eligible for those federal dollars eligible for

the competitive process to submit applications and then we also wanted to

keep open the opportunity to again respond to what we're thinking of as timely unexpected and extraordinary opportunities again likely most in the acquisition space if something comes on the market we can't necessarily wait for months the developer can't wait for months and so we want to be able to

consider those requests if that's something that they'd like to move on

we've also talked about utilizing staff committee review so we've always done that review at the HCV staff level when we look at for instance our private activity bond capacity allocation then we do utilize the staff committee that pulls for a few different departments so just different departments with different lenses on housing development and if we do that we think we can you know just bring a well-rounded perspective and recommendation to council and then in order to still keep that flexibility we're recommending still bringing those project subsidy requests as well as if there was an interest in investing for instance in a land bank parcel or in the revolving loan fund still bringing those to council again to have you all weigh in and provide that final

approval not improvement and then finally we wanted to talk about some of the criteria for

the fund some of these are things that we just really feel like we need to clarify make sure it's communicated out into the community and then others are more points of discussion tonight so first again we know these dollars are used for capital expenses of new development preservation and acquisition again we haven't seen any acquisition projects so making it clear that those could be eligible projects we've also historically funded

100% affordable housing projects but what we've talked about is that as

developers are facing these really significant challenges in the financing space more mixed income projects may be feasible that may also introduce some of that socio-economic diversity and so still being willing to put funds into those mixed income projects that are substantially affordable. We didn't kind of nail down a specific percentage, but making sure, of course, the funding is proportional to the affordable units produced. And then we'd also want to clarify that a deed restriction would be tied to these dollars. Our other funding sources come with the requirement of a deed restriction. Of course, we have the requirement of a deed restriction through the land use code, but making sure that if somebody accessed only these dollars that we would still have a deed restriction in place. And then finally geographic parameters. This is one that we really are curious to hear your thoughts on tonight The question's been raised of whether these funds could be used in the GMA When we've consulted with the city attorney's office initially that answer is not clear So if that is something that city council members are interested in us exploring We would want to go back to the city attorney's office Fully vet that and make sure that we are aligned before putting anything down on paper But certainly our federal funds can't be used in the GMA They can only be used in city limits and so that may be an opportunity to provide some flexibility and some opportunities to some projects that

Can't necessarily access some other local dollars

And with that we'll move on to the last

Discussion question around processing criteria and whether these align with council members expectations

Great. Thank you questions or comments

Julie? Do we know of any projects in the GMA that are waiting?

Not any that have. So there has been some interest from one project that's in the GMA that would just provide a little bit of infrastructure work. No other new developments or anything that we're aware of in the GMA. But there is some interest.

Is there is that something we could explore when it comes to us instead of. Is there value in doing it before someone comes to us, I guess, would be this to go at a right angle of my first statement there?

Well, I think this would be probably a request that would come to us as soon as we had a decision made. so it's probably something that if there was a clear direction yes in the gma or no then

that's probably when they would submit a request and it could be that if that policy guidance was was given and made clear that that would factor into certain developers decision making and

planning okay yeah because i guess i don't particularly have i don't feel like i have enough information about what it would be in the GMA to say that we should spend work or money on it at this point but that's my personal feeling so I see

Melanie yeah I just have a follow-up I mean you're the MPT but um I guess my follow-up and we were just checking but the quarter cent tax and the CIP all of the taxpayer dollars are coming from within city limits correct so we would potentially be applying dollars to community to areas that are not contributing to the tax

i think there's occasionally a fair argument that residents of our gma pay sales tax in fort collins but you are correct that the tax is only collected within city limits okay i just wanted

to check with regard to you know optics and transparency around that other questions comments

Chris?

I would just say my understanding is that CHAPA often has a shifting bunch of criteria that these affordable housing developers are constantly having to adjust to. So any kind of criteria that we add on, I would just hesitate to add yet another criteria that they have to jump through a hoop to try to meet. And so being somewhat flexible and trying to match some of what the governor is asking these projects to do would have value for us just because they already suffer from these things where you're like finding money for that can only be used for veterans projects it can only be used near transit it can only use you know and so i would just say simplicity is really important here um that said the other thing that i'll just say again that i think was i maybe already said but it just comes up here because it's it's in the criteria is just to me when a like sometimes the preservation feels like less impactful than new stuff and that's not always true it depends on how it's depends on how it's structured but in the sense that like when a project is about to not be deed restricted affordable again that to me that's you oftentimes the kind of unit that becomes the naturally occurring affordable housing that we're talking about in the other and so taking it from that to full deed restricted is kind of moving from one group of people who really need that housing to another, which is as good as far as it goes because we are getting that deed restriction benefit, but not as impactful as getting a project that wouldn't get off the ground. And so now you have both the deed restricted affordable, the naturally occurring affordable housing and this new project. And so to me, that's like kind of doubling your impact in a certain sort of way. And so that's the only thing I would say in terms of the criteria is just simplicity. And then how do we support both the naturally occurring affordable housing, like that bottom end of the market and the deep restricted? How do we not have those be competing but working together?

Anyone else? I just have it. So right now the process is just the quarter one, quarter two, right? And then we have kind of like the rolling application.

Yeah, we've never directly considered the Affordable Housing Capital Fund request kind of as a next step from the competitive process. Sometimes projects have inquired, and so we've been able to give them information and they've kind of submitted then a request, but it's really been two separate processes. And we've had more of that rolling open application. And so this is trying to put some parameters on there, really saying if you submit through the competitive process, we'll take that application and we'll be more proactive with engaging with you and figuring out do we need to move this forward for a decision and then still leaving open you know that window in quarter three quarter four so it would be combined with our other application process yes and and I think the expectation there is you know we know these federal dollars it's it's the most consistent funding we've had over time so making sure that

folks are still applying for those dollars okay and then um does one of the boards still review the applications to make the funding recommendation and would they for these

funds as well yes so the Human Services and Housing Funding Board makes the actual recommendations the Affordable Housing Board also reviews those applications and contributes provides input to the Human Services and Housing Funding Board so they would really be saying these are projects that we would recommend for funding and then you know on the back end our staff does quite a bit of work to match the type of ask with the eligibility of different funding and some of those requirements. And so if there are projects that those boards would want funded, but again, we've run out of money, I think that's where we would then bump into the affordable housing capital fund process. We would, so there's kind of that initial vetting, I think, through that staff process and through those boards, but would still be kind of following this process of doing our own review at the staff level and being able to bring it forward to council for consideration

okay is there a reason that the decisions around housing haven't been moved to the affordable housing board

representative of the board I think it was explained to me that often times there was a concern that there would be enough people on the affordable housing

board who are like biased in some way is that right um yeah yeah so it's like there's like

like kelly evans from neighbor to neighbors on the board or there's lots of folks from that that community on the affordable housing board and so they're they provide recommendations but there

might be like biases and maybe not only bias and not to put sue on the spot although please correct me if i say anything wrong i think there's the level of expertise and the complexity around these deals is enormous. So having an affordable housing board who understands the complexity of projects, funding streams, and funding stacks, timing was really important. And that expertise didn't always exist on the human services board. So I think it was created to solve that issue.

Well, that's why I'm wondering why the affordable housing board doesn't approve the applications, because they're the ones with the expertise in those stacks.

And they make the recommendation, right.

Yeah. But the recommendation doesn't have to be folLod.

That's correct. Yeah. Anything you would add, Sue?

Hi, everybody. Sue Beck-Ferkus. I think that they handled the most important parts is that in the past, there's been a lot of conflicts of interest on the Affordable Housing Board. And also, the original Human Services and Housing Funding Board was called the CDBG Commission, right? So all those federal dollars went through that commission. And so now then we added some city funding and everything and so that board has always been the one making The funding decisions, but they did realize that additional input would be helpful to them

Is it fair to assume that this line of questioning is kind of getting at does our process work to get the best Recommendations or the most efficient recommendations from the most expert body. Yes, I think especially for the housing deals. Yeah

Yeah, especially if we're introducing another stream of funding and where those funds and federal versus city dollars, what should go to what project and understanding that. And like, you know, I will say, you know, with Chris's line of like rehab is not as fun as a new building. Right. But rehab and preservation is important. So, yeah, I think I was just, you know, is it working with this recommendation? I know we've just had one problem and that I'm aware of and maybe we haven't had other problems But you know to understand these deals it does take a certain level of expertise

Yeah, I think we we'd agree and looking at the two boards and how they work together is something we're interested in in doing and I'm looking at There's some nodding going on from the staff side of the table So I think that's something we can undertake at a high level and do some explore early stage exploration

Thanks for pulling us out of that rabbit hole. I appreciate it

So I think overall, I would say that I like having the two windows for the request because the one thing I've heard is that like the rolling kind of, if you know about it, then you can access funds, doesn't feel very equitable to everyone.

Especially if you're not, there's value in awarding the funds to for Collins-based affordable housing developers.

But there's also projects that we have from out of state. And if you don't know about the funds, you can't access them.

So I really like that we add a second window or this like more certain timeline when another application can come in. It's also just difficult as a decision maker to take one off requests because you have no idea what's.

have something, Chad? It's just part of the simple, clear method trying to create more of a unified gateway for these things to enter the city's, for the city's consideration. I mean, I'll speak very frankly, the HUD money just gets more difficult to use. And most developers, if they're honest with you, will tell you that if they could avoid using those funds, they would. But they're still critical And or it's a critical resource. So we want to try to weave those two things to together much more closely So that number one we can make better decisions and we can make sure the funds get allocated in the best way possible

So yeah, I think that's great I know we were trying to be flexible with kind of having the one-off and I understand that but it's just it just We were like trying to be flexible and maybe it wasn't the right approach. I like the second window um as far as the kind of restriction required I I can see the point of like focusing because we need 30 percent, but those deals are just so difficult to make that I would hate to just preserve the funding for just to focus on that. So I'm just wondering if there's been thought of having like having additional points if you are zero to 30 or 30 to 50.

So we can try to direct and put our money where we really need it, but we're not cutting off supply to anyone 80 percent under.

and then as far as the geographic parameters i hate that it's like it depends because our gma is rather large and there are some areas where i'd be like that's really far away from fort collins and i would but i would also feel comfortable with like a local one like especially you know i just also think about some of the mobile home parks and there's opportunities there those some of the mobile home parks are right outside of our city limits and it would be so nice to help them because they literally border us, but it's in the GMA. So I just hate that it

would depend, but for me it just kind of depends. And also like what is the city's plan for annexation? Some of those we're not going to annex into the GMA for decades, you know, so does that make sense?

So I'm open to GMA, but I'd want to see like some more boundaries around how we're going to approach that and how we would make a decision on that.

We thought it was just important to highlight that, bring it up. I mean, housing is such a difficult issue. It's so expensive. It's so complex that just to, I guess, speak very frankly, I think it behooves us to pick

up every rock we can and look under it.

It doesn't mean we take what's under it, but I think we need to constantly be evaluating options and being creative and thinking. and it may not be that we do all of those but I do think it behooves us to consider and look and

I would agree I think exploring it is fine you know especially because the GMA has a lot of greenfield opportunities that we don't have in in the city so it could benefit us yeah just to you if I could just to your point about the naturally occurring and I always think about a housing inventory as a line that moves through time, and that it's wonderful and sexy to cut the ribbon and add to the front end of that line of supply, but if you're losing

units on the back end, if you're not paying attention or just markets functioning the way they do and you're losing, you're shedding units on the back end of that, you're not really making a lot of progress.

You're missing something. So preservation is, I think it's a much more difficult road to hoe because so many aspects of the affordable housing finance system are all about the new. So it's something that we've talked a lot about internally is how do we think about preservation and how do we really honor that activity and acknowledge the importance of it.

And and so we're going to be doing a lot of thinking about preservation, but I will say it's a much more challenging

Aspect of housing to get out well, yeah, and those in older units also deserve to live in upgraded and Present-day, you know amenities that you know something was built 60 years ago, so it's definitely important Any other questions comments, do you all have what you need maybe we could do a summary?

Yes, I think if I could sum it up in two words, it's speed matters. We heard that a lot tonight, maybe not in those exact terms. But the way we've laid out some of the sequencing, I think there was general alignment and agreement that that approach works. There was an interest in accelerating fee waivers. I saw a lot of nods when that came up. Fee waivers vis-a-vis some of the other fee work. So we'll have some conversations about what that looks like. in terms of speed, the land bank policy, the sale and development thereof, allocating part of the quarter cent sooner rather than later, like now in 26, let's get that allocated. And then the board recommendations and review process is something that we can start on. But we heard you very clearly that moving faster, sooner rather than later makes a difference. And there was a lot of data questions on the front end for the first part I have captured that I don't think we need to go through But a lot of notes on the first part where we can follow up in our follow-up memo great

I would just add clear and predictable application process to that

Great any anything else on this item?

Okay That's our last item. So do council members have any announcements? Oh

Thank you. We do not have a meeting next Tuesday. So your favorite TV show will not be airing on March 17th So that is all. Thank you and good night for comps