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Council Provided Information - 9/14/20211 BOARD STAFF REPORT THE REDEVELOPMENT AGENCY of SALT LAKE CITY TO:RDA Board Members FROM: Allison Rowland Budget & Policy Analyst DATE:September 14, 2021 RE: INFORMATIONAL: WESTSIDE COMMUNITY INITIATIVE ISSUE AT-A-GLANCE The Board agreed in May 2021 to use Inland Port Housing Funds specifically to promote Westside homeownership and new opportunities for small businesses. In response, RDA staff has developed a proposal to meet this goal, which it has tentatively named the Westside Community Initiative (WCI). For these purposes, the Westside is defined as the City area west of I-15. The RDA proposal states that the program is intended to be broader than a typical community land trust or cooperative housing development to allow it to carry out projects in addition to housing, like infrastructure improvements, economic development, and redevelopment of undesirable land uses, which are consistent with State statute. The long-term approach to development projects would allow the RDA to balance the provision of public benefits with the generation of new revenue for reinvestment on the Westside. RDA staff has identified existing policies that would need to be updated or created to implement the program, a list of proposed goals for it, and its primary activities. It also recommends a number of “next steps,” which include revision of the RDA Housing Allocation Funds Policy, a new policy resolution to establish the program, and a new policy to guide a proposed “shared equity housing development” program. A summary version of the proposed WCI framework can be found on the final page of the transmittal. Goal of the briefing: Review, discuss and provide direction to RDA staff on the proposed Westside Community Initiative. POLICY QUESTIONS 1. Is the Board comfortable with the purpose of the Initiative being defined as “building community cohesion and personal wealth”? Item Schedule: Briefing: September 14, 2021 Set Date: n/a Public Hearing: n/a Potential Action: n/a Page | 2 1 9 7 5 5 2. Does the Board wish to discuss or request clarification of any of the concepts or terms used in the Goals section of the proposal? For example, a. Community-defined purpose b. Opportunities for revenue generation c. Mitigating gentrification and displacement d. Collective Impact Approach 3. The transmittal mentions that the RDA would identify and acquire outside funding and professional resources for the WCI by bringing together other partners. The Board may wish to ask whether the RDA staff anticipates the need for additional FTEs as a result of this program, and whether current staff may need training in new areas to expand their own expertise. 4. The transmittal mentions (in the Strategic Acquisition section) that redeveloped properties would have “profound impacts on people, particularly low-income and vulnerable populations, in order to uplift others, create economic opportunities, improve health outcomes, and influence the physical and socioeconomic landscape of Salt Lake City.” The Board may wish to consider whether this list might prove useful for developing metrics to assess the program (for example, are reliable data readily available to track these changes annually), and whether measurable progress in these areas is a reasonable expectation for a real estate development project. 5. In the May 2021 RDA work session conversation, Board Members expressed interest specifically in using Inland Port Housing Funds to promote Westside homeownership and new opportunities for small businesses. The Board may wish to discuss whether this proposal satisfies those interests, or whether it prefers that staff narrow the scope of allowed development. SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: August 26, 2021 PREPARED BY: Tammy Hunsaker RE: Westside Community Initiative – Initial Briefing REQUESTED ACTION: Briefing on the framework for a new program intended to utilize Inland Port Housing Funds to advance development activities on the City’s Westside. POLICY ITEM: Affordable housing; 9 Line and North Temple project area development. BUDGET IMPACTS: Inland Port Housing Funds. EXECUTIVE SUMMARY: Earlier this year, the Board of Directors of the Redevelopment Agency of Salt Lake City (“RDA”) directed staff to develop a proposed program for the utilization of funds received by the RDA from the Inland Port Authority. These funds are received pursuant to Utah Code Title 11-58 Utah Inland Port Authority Act, which provides that a portion of tax differential generated within Inland Port Authority Jurisdictional Land shall be paid to the RDA to be utilized for housing. As such, RDA staff is working to develop a new program, tentatively called the Westside Community Initiative (“WCI”). While the proposed WCI is based on community land trust and cooperative-style housing development, it is broader in nature to carry out other project types for a collective impact. As proposed, the WCI shall facilitate the implementation of transformative housing and mixed-use projects with a focus on affordable homeownership as a way of building community cohesion and personal wealth. The geographic scope of the initiative is proposed to be the City’s Westside defined as west of I-15. The RDA’s 9 Line and North Temple project areas are included in this larger geographic area. Affordable and mixed-income housing projects will be leveraged with additional public benefits including neighborhood services, economic opportunity, and transit-oriented development. By taking a long-term approach to development projects, the WCI will balance the implementation of public benefits with the ability to generate revenue to be reinvested back into the community. Inland Port Housing Funds are required to be utilized for the purposes outlined in Utah 17C - Community Reinvestment Agency Act, section 17-C-1-412 – Use of Housing Allocation, which generally limits eligible activities to the development and preservation of housing targeted to households at or below 80% of the area median income (“AMI”). Under the statute, funds can be utilized to implement mixed-income projects, mixed-use projects, and related improvements. As such, funds can be leveraged as part of housing projects for a broad array of other public benefits, including infrastructure improvements, economic development, sustainable building practices, and the redevelopment of undesirable land uses. While the primary source of revenue for the initiative is anticipated to be Inland Port Housing Funds, the Board would be able to allocate other revenue sources to the WCI. In addition, the RDA would actively work to acquire outside funding sources and resources to collaborate on projects and activities. This could broaden the eligible uses of funding dedicated to the WCI. This memorandum includes initial information on the proposed framework for the WCI , including the budget and policy structure, goals, and activities. RDA staff will incorporate the Board’s feedback as specific details of the initiative are developed for the Board’s consideration at a future date. ANALYSIS & ISSUES: Additional details on the proposed framework of the WCI are as follows: I. Budget & Policy Structure: To implement the WCI, the following efforts would need to be carried out by the Board: 1. Update the RDA Housing Allocation Funds Policy, resolution R-4-2021, to earmark the Inland Port Housing Funds for the WCI and to allow for allocations from other revenue sources. This would be a minor change to the existing policy. 2. Create a new policy for the WCI that establishes the purpose, goals, activities, metrics, and reporting requirements for the initiative. If the Board is supportive, this policy would be based on the information contained herein. While the WCI policy would identify the purposes, goals, and activities of the initiative, projects would be administered pursuant to existing RDA programs and tools. Additionally, a new policy would be developed for a Shared Equity Development program. Programs and tools the WCI would be administered pursuant to are as follows: • RDA Loan Program Policy: Resolution R-37-2016 • Tax Increment Reimbursement Program Policy: Resolution R-9-2017 • RDA Real Property Disposition Policy: Resolution R-6-2021 • Housing Development Loan Program: Resolution R-7-2021 • Shared Equity Housing Program: Resolution Forthcoming Refer to Attachment A for a chart depicting the proposed structure of the WCI. II. Goals: The goals for the WCI are proposed as follows: • Develop Land with a Long-Term Approach to Continuously Serve a Community- Defined Purpose WCI will take a long-term approach to land development and community building so that the RDA may retain the fee ownership to and a reversionary interest in the property. By ground leasing to development partners, the RDA will provide an opportunity to receive revenue generation to serve other public benefits. • Create Opportunities for Revenue Generation while Balancing the Implementation of Public Benefits WCI will strive to balance the development of property with the incorporation of public benefits. Benefits such as affordable housing and below-market commercial space which generate limited or no cash flow would potentially be subsidized with land uses that generate positive cash flow. Revenue generated by projects and received by the RDA will then be reinvested back into the WCI with the goal of furthering shared prosperity. • Assist the Westside in Mitigating Gentrification and Displacement WCI will acquire land with the goal of holding it for the community in perpetuity, thereby removing land from the speculative market so that it serves low and moderate -income residents in perpetuity. Housing will remain affordable even as neighborhood change occurs and gentrification pressures mount, which protects families from displacement. • Give Lower Income Households the Opportunity to Build Wealth Through Ownership WCI will create opportunities for families to buy homes at affordable prices by focusing on a shared-equity model. A shared equity model offers an alternative form of ownership that provides benefits traditional markets cannot, such as long-term housing affordability and the ability for low and moderate-income families to build equity. When families decide to sell, they will receive their portion of the appreciation but the RDA remains as the land owner and is in the position to continue to sell the home at a below-market price, making it affordable to another family of limited means. Keeping the home affordable, from family to family, will benefit future generations by acting as a steppingstone for low-income families to go from renting to building wealth. • Engage Community Members in Development Decisions The RDA will involve the community in the planning and goals regarding long term land use and housing development. This can translate into residents actively involved in creating positive change within their communities and projects that reflect the value of its residents. The result will be projects that incorporate a shared mission and vision with the community. • Leverage Resources for Other Neighborhood Development Purposes Revenues acquired through ground leases or partnerships could contribute to other purposes, including subsidizing deeply affordable housing, below-market commercial space, infrastructure, public art, etc. • Collaborate with Other Partners to Broaden the Pool of Funding and Expertise The RDA would actively work to acquire outside funding sources and professional resources by bringing together financial institutions, the private sector, nonprofits, public officials, other government agencies, researchers, and practitioners to collaborate on community and economic development activities. • Carry Out Efforts with a “Collective Impact” Approach The RDA will continuously evaluate how projects work together to address common goals through a “collective impact” approach that produces measurable results. These measurable results will be tracked and reported on to promote data-driven and outcome-based decisions. III. Activities: The activities of the WCI are proposed as follows: • Strategic Acquisitions Strategic property acquisitions that may include distressed properties characterized by high crime rates, properties that are located at target locations, and other opportunities that align with the City’s objectives and meet predefined policy priorities. Properties will be redeveloped as elevated real estate development projects that have profound impacts on people, particularly low-income and vulnerable populations, in order to uplift others, create economic opportunities, improve health outcomes, and influence the physical and socioeconomic landscape of Salt Lake City. • Shared Equity Models of Development o Land Trust Development The RDA will retain ownership of land and provide for the sale or rental of housing to lower-income households. To make certain would-be homeowners and renters benefit from the arrangement for years to come, the resale prices and rents of the housing will be capped, maintaining affordability for the next family. o Multifamily Cooperative Housing Development The RDA will facilitate the development of cooperative housing projects to provide a framework for homeownership by bringing people together to own the building in which they live. A housing cooperative or "co-op" is a type of residential housing option that is a corporation whereby the owners do not own their units outright. Instead, each resident is a shareholder in the corporation based in part on the relative size of the unit that they live in. The co-op housing model provides low-income households with a way to accumulate personal wealth, through equity accumulation and mortgage interest deductions. • Residential and Mixed-Use Rental Housing Development The RDA will facilitate the development of rental mixed-income and mixed-use projects that are part of a larger coordinated effort to co-locate housing with the services and resources to increase a person’s likelihood for upward mobility. • Other Public Benefits While it is anticipated that the WCI will focus on affordable housing due to certain funding source restrictions, there is opportunity to leverage housing projects with broader public benefits. Furthermore, there is opportunity to broaden the WCI’s funding sources, with both internal and external sources, to expand the eligible activities funded through the WCI. Other public benefits could include infrastructure improvements (both street and green infrastructure), housing for a broad array of AMIs, job creation, small-business development, street activation, publicly visible art, historic preservation, adaptive reuse, neighborhood services, among others. IV. Next Steps RDA staff will incorporate the Board’s feedback on the information contained herein and will return to the Board with the following: 1. Revisions to the RDA Housing Allocation Funds Policy, resolution R-4-2021, to earmark Inland Port Funds for the WCI. The policy will also be revised to allow for allocations of other sources of revenue to the initiative. 2. A new policy resolution for the WCI that establishes the purpose, goals, activities, metrics, and reporting requirements for the initiative. 3. A new policy for a Shared Equity Housing Development program that provides for homeownership by bringing people together to own the building in which they live while the land is owned by the RDA, or another entity, to preserve affordability in perpetuity. PREVIOUS BOARD ACTION: • May 2021 – The RDA Board directed RDA staff to develop a proposed program for a community land trust type program for the City’s Westside that utilizes Inland Port funds. ATTACHMENTS: • A – Westside Community Initiative: Proposed Framework Chart WESTSIDE COMMUNITY INITIATIVE (WCI) PROPOSED FRAMEWORK Note: The Initiative’s activities shall be administered pursuant to the following policies: RDA Loan Program Policy: Resolution R-37-2016 Tax Increment Reimbursement Program Policy: Resolution R-9-2017 RDA Real Property Disposition Policy: Resolution R-6-2021 Housing Development Loan Program: Resolution R-7-2021 Shared Equity Housing Program: Resolution Forthcoming • Develop Land with a Long-Term Approach to Continuously Serve a Community-Defined Purpose • Create Opportunities for Revenue Generation while Balancing the Implementation of Public Benefits • Assist the Westside in Mitigating Gentrification and Displacement • Give Lower Income Households the Opportunity to Build Wealth Through Ownership • Engage Community Members in Development Decisions • Leverage Resources for Other Neighborhood Development Purposes • Collaborate with Other Partners to Broaden the Pool of Funding and Expertise • Carry Out Efforts with a “Collective Impact” Approach GOALS PURPOSE The implementation of transformative housing and mixed-use projects with a focus on homeownership and affordability as a way of building community cohesion and personal wealth. Housing projects will be leveraged with additional public benets including neighborhood services, economic opportunities, and transit-oriented development. A Westside Community Initiative policy will be created that identies the purpose, goals, and activities of the initiative. Projects will align with the intent of the WCI and will be administered through RDA programs and polices. INLAND PORT HOUSING DIFFERENTIAL OTHER SOURCES ALLOCATED BY BOARD WCI REVENUE WCI HOUSING FUND FUNDING SOURCES (revenues) ACTIVITIES (expenses) STRATEGIC ACQUISITION SHARED EQUITY DEVELOPMENT OTHER PUBLIC BENEFITS RESIDENTIAL & MIXED-USE DEVELOPMENT Note: The RDA Housing Allocation Funds policy, resolution R-4-2021, will be updated to provide for the earmarking of Inland Port Housing Funds, WCI revenue, and other funds as determined by the BOD for the WCI. As the Policy currently stands, there is a NWQ Housing Fund that receives Inland Port Housing revenue. This fund would be renamed to the WCI Housing Fund.