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Decatur Planning Commissions recommends adoption of mandatory inclusionary zoning

Business Decatur

Decatur Planning Commissions recommends adoption of mandatory inclusionary zoning

Decatur City Hall
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By Cathi Harris, contributor 

Decatur, GA — The Decatur Planning Commission voted unanimously to recommend the adoption of changes to the city’s Unified Development Ordinance (UDO) to increase the amount of affordable housing in the city. 

The changes would require all new residential developments of at least five new dwelling units to set aside 10 percent of the units for households making less than 80 percent of the area median income (AMI) for rental units, or buyers making less than 120 percent of the AMI for owner-occupied units.

Angela Threadgill, Decatur’s Director of Planning and Economic Development, told the Planning Commission the changes to the UDO would apply to the entire city.

”The requirement would apply to any new residential development that would create five or more housing units – single-family detached homes, attached homes and townhomes developments, or multi-family, whether it is rental or owner-occupied,” Threadgill said. “Our city has a great mix of housing types and affordable housing should reflect that opportunity among all of these housing types.”

If the City Commission follows the recommendation and adopts the changes, it will be a significant change from Decatur’s current incentive-based affordable housing program.

Under the current version of the UDO, developers can apply for a density bonus — an exception that allows them to build up to 20 percent more dwelling units than would normally be permitted — if they agree to reserve 75 percent of the additional units as affordable housing.

However, too few developments have taken advantage of this program and very few units have been developed in the almost 20 years it has been in effect.

The proposed amendments would keep the density bonus incentive, as well as waive certain inspection and permitting fees, and offer a reduction in the number of required parking spaces a new development would be required to provide.

“With any inclusionary housing ordinance there needs to be incentives or offsets,” Threadgill explained. “These are meant to offset some of the costs and help the developer build the housing.”

Otherwise, developers who might be interested in building in Decatur may find the additional set-aside requirements to be financially untenable or just too much of a hassle when they can build elsewhere.

In discussions that city planning staff have had with developers in Decatur, many said that the long permitting times and the risk of getting the discretionary approvals for the density bonus exceptions posed too much financial risk, Threadgill said.

By alleviating some of these issues, they hope to make developing more affordable housing easier in the city of Decatur.

Developers will have alternatives to including affordable units in their developments – they can either partner with an affordable housing nonprofit to build the same number of affordable units elsewhere in the city, or they can pay a set fee in lieu of construction into the City of Decatur Housing Trust Fund, a fund that was established years ago to fund affordable housing development in the city.

For some smaller developments, with five or six units, for example, the 10 percent calculation ends in a fraction, Threadgill acknowledged. “In that situation, when the percentage is 0.5 or higher, we round up to the nearest whole integer.”

For apartment developments, the city zoning administrator would be responsible for ensuring that available affordable units are appropriately publicized and marketed and that the renters meet the income criteria.

For owner-occupied dwellings, the Decatur Land Trust will hold a “ground lease” of at least 20 years on the property and would be in charge of finding eligible buyers should the original owner wish to sell. Those properties would come with deed restrictions, known as Land Use Restriction Agreements, that would require it to remain affordable to those making 120 percent of AMI or less.

Of the more than 20 residents who provided public comment or submitted written comments, all were in favor of Decatur adopting a mandatory inclusionary zoning ordinance. Many, however, felt that the proposed changes do not go far enough.

“I want to voice my strong support for amending this ordinance to reflect the Affordable Housing Task Force recommendation of 10 percent [of units] at 60 percent of AMI and 15 percent of units at 80 percent of AMI,” Clare Schexnyder told the commissioners. “We need to do that to catch up and start to fill the gap of all the affordable housing that has been lost under the existing policy.”

If the commission cannot alter the amendment, she urged that they pass it in its existing form, but continue to work on other measures to provide more affordable housing.

“Mandatory inclusionary zoning is one piece of the puzzle,” she said. “But we have to act now. We have limited available land and skyrocketing housing prices.”

Phil Cuffey, another resident, said that preserving affordable housing has been a stated goal of residents and city leaders dating back to the city’s 2000 strategic plan, but there is little affordable housing to show for it.

“The city has been pretty forward in terms of making these goals of paramount importance. But we have to be honest with ourselves and assess how well it has been done, then we have to acknowledge we can do better,” Cuffey said. “I think citizens of city have spoken and up to our leadership to stand up and say that we are listening and say we can measure the results of the recommendations and desires of Decatur citizens.”

Decatur resident David Lewicki wondered why the proposed amendments deviated from the recommendation of the city’s Affordable Housing Task Force, which was the impetus behind adopting mandatory inclusionary zoning in the first place.

In response, Threadgill said the planning staff used an online calculator to weigh the estimated development costs of six different potential development sites in Decatur. 

“You plug in what the typical land values are, what average construction costs are, plug in different incentives such as density bonus or parking reduction, to see what amount of affordability you can get while still remaining financially feasible, “ Threadgill said. “When we were analyzing the costs at 60 percent AMI, that is where we were running into trouble. That is why this only puts forward 80 percent. We had to balance the desire for more affordable housing with the current realities of our real estate market.”

Another of the task force’s recommendations was for tax abatements for affordable housing developers, Lewicki added, wondering if pairing the ordinance with that additional incentive would help.

“Would calculations be different if abatements were included?” he asked. “Would it be prudent to wait for a more ambitious plan and come back later after abatements are part of the calculation?”

The city is considering a separate tax abatement proposal, but those details are still being worked out, Threadgill noted. “If the city does offer tax abatements, we could look at amending [the income categories] in a future version.”

 

But the problem for many developers is that even if they are willing to absorb the lower profits and additional risk of building affordable housing, they have to obtain financing and their banks aren’t on board, added Jack Hondred, an architect and one of the owners of East Decatur Station at 111 New Street.

“We have been working on a mixed-use, pedestrian-oriented master plan for our area since 2002. Affordable housing is a key part of that,” he said. “As landowners and developers, we understand we will shoulder the bulk of the cost, but we can’t shoulder all of it. The numbers have to work or we just have no developments. It is the financing institution. They look at pro formas and numbers. They aren’t from Decatur and that is not what they care about.”

The current proposed ordinance is a good start and practical given the current real estate market.

“I think it is very smart and shows that a lot of thought went into making sure that we get something that will work,” Hondred said. “I think it would really be tragic if we did all of this work and then end up with what happened with the life cycle dwelling bonus in that nothing gets built. We want stuff to get built.”

Threadgill said that the city’s size is also a factor when it comes to affordable housing.

“It is important to remember that Decatur is a very small city, in terms of area, with just 4.7 square miles,” Threadgill added.

What little land inside the city that is available for development is very expensive. It is not comparable to a larger city with more development opportunities.

“The recommendation for 10 percent of units at 60 percent of AMI and 15 percent at 80 is similar to what Atlanta has in their inclusionary zoning ordinance,” she said. “But we can’t take Atlanta’s situation and apply it here. We have to look at what is happening in Decatur.”

In the discussion, members of the Planning Commission seemed persuaded that recommending the amendments as proposed was the most practical way to get at least some more affordable housing in the near term.

“I don’t want us to set the threshold so low that we accidentally have the opposite effect and people just stop building in Decatur,” said Harold Buckley, Jr., chair of the Planning Commission. “Then you have a slow down in supply that in turn drives up housing prices.”

Planning Commission member Mike Travis, who also served on the Affordable Housing Task Force, agreed, saying that they also needed to be prudent in the face of expected economic fallout from the COVID-19 pandemic.

“What we adopt tonight is not the final word,” he said. “Yes, in the past there were things that could have been adopted that were more aggressive. But we do have a lot of other recommendations [from the task force] that we will be looking at. And there will be opportunities to do more.”

The Planning Commission’s recommendation will now be forwarded for consideration to the Decatur City Commission, which will consider the amendments for final approval at its meeting on Monday, July 20.

All of the written public comments will be part of the final agenda packet submitted to City Commissioners. A copy of the proposed amendments to the UDO are available in the agenda packet for the Planning Commission meeting here. All written comments from the public will be included in the agenda packet sent to City Commissioners before their regular Monday meeting. Members of the public may submit comments to Senior Planner Ryan Sellers on the proposed changes by this Thursday afternoon for inclusion in the packet.

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