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HomeMy WebLinkAbout2023-07-11 VLHA Agenda 2 3 4 Vail Local Housing Authority Minutes Tuesday, June 27, 2023 3:00 PM Vail Town Council Chambers PRESENT ABSENT Steve Lindstrom Craig Denton Dan Godec via zoom Kristin Williams James Wilkins via zoom STAFF George Ruther, Housing Director Martha Anderson, Housing Coordinator via zoom Missy Johnson, Housing Coordinator 1. Call to Order 1. 1 Call to Order at 3:01 p.m. 1.2 Zoom Meeting 2. Citizen Participation 2.1 Citizen Participation - No comments. 3. Approval of Minutes 3.1 VLHA June 13, 2023 Minutes Presenter(s): Missy Johnson, Housing Coordinator MOTION: Godec SECOND: Williams PASSED: (5- 0) 4. Main Agenda 4.1 Lowering the Barriers to Delivering Housing Solutions in Vail Presenter(s): Dominic Mauriello, Principal at Mauriello Planning Group Presenter item was postponed. The Authority continues to work on the following: 1. Land Use Change, zoning change - how to make that process flow better 2. Housing Zone District We are seeing this now with Timber Ridge - need for approvals without having the full building designed down to full construction plans, specifically for the approval of some infrastructure and parking started without having the full building plans done and approved. These topics will return as we have updates and Mauriello's materials are likely to be available by mid to end of July. Vail Local Housing Authority Meeting Minutes of June 27, 2023 5 4.2 Review of Capital Improvement Policies in Deed-Restricted Housing Presenter(s): Martha Anderson and Missy Johnson, Housing Coordinators Anderson presented an analysis of Capital Improvement Policies attached to a variety of deed restricted residences. Anderson reviewed a spreadsheet that highlighted a variety of deed restrictions and the policies regarding a sampling such as Arosa Duplex, Chamonix Vail, North Trail Townhomes, Pitkin Creek Townhomes, Red Sandstone, Vail Commons and Vail Heights. The comparison includes the following items as applicable: annual appreciation cap, maximum % amount for capital improvements, disallowed capital improvements, permitted capital improvements with a cost related cap and depreciation policies. These topics vary amongst the deed restrictions and housing staff turned to Authority for thoughts regarding the goals of policy and any unintended consequences. Discussion ensued around the primary goals of the capital improvement policy and maximum resale value and is the current policy effect over the years. 1. Primary goal is to maintain affordable housing 2. Secondary goal to incentivize property maintenance and upkeep (such as appliance, water heater, HVAC systems) 3. Get clear and educate owners regarding the distinguishing between repairs and improvements (and cost of home ownership vs. upgrades) The current policy effect over the years covers goal 1 but because there is no incentive or disincentive for goal 2, there is little financial motivation to maintain the home with upkeep. The authority agrees that there is a cost of home ownership and based on circumstances, cost of home ownership and upkeep is necessary. We have an appropriate position to put education and policy in place, especially for EHUs and products moving forward. Conversation ensued around a recent example of a North Trail Townhome and the needed maintenance to systems and appliances. Considerations for future could include home inspection to ensure the property is habitable Part of the capital improvement policy to include list of minimum overall functional systems including heating, plumbing, appliances based on an inspection Distinguishing repairs vs. improvements and recognizing the cost of home ownership Reminder that the cost of an HOA assessment is applied to the maximum resale value, without depreciation Reminder that these are existing contracts and any changes need to be mutually accepted Prefer to offer incentive vs. penalize There is an opportunity for provision of some of the deed restriction at the point of ownership changing hands but, in some cases, the Town cannot change Master Deed Restrictions unilaterally. The Housing Staff will come back to the Authority with options for considerations, based on the recommendations heard from the Authority. Vail Local Housing Authority Meeting Minutes of June 27, 2023 6 5. Matters from the Chairman and Authority Members 5.1 Matters from the Chairman and Authority Members Presenter(s): Steve Lindstrom, VLHA Chairman Williams highlighted Habitat for Humanity's ground-breaking last week in Eagle for the 16 new homes. It's underway! Godec had lunch with an Eagle County task force member and learned there are some "bold moves" initiatives. The Housing Staff will provide the summary to the Authority. On Tuesday, July 25th, the Authority invites some select individuals to speak to experiences around Lowering the Barriers to Delivering Housing Solutions in Vail On Thursday, June 29th an RFP will be released for a development on the West Middle Creek Parcel and Ruther will circulate a draft document to the Authority for input. The total development opportunity is 7.68 acres of land. 6. Adjournment 6.1 Adjournment 5:00 PM (Estimate) Meeting adjourned at 3:58 p.m. MOTION: Williams SECOND: Denton PASSED: (5- 0) 7. Future Agenda Items 7.1 Vail Housing 2027 Land Banking Investment Banker Discussion Review Retirement and Remote Worker Policies Review Chamonix Vail Deed Restriction 8. Next Meeting Date 8.1 Next Meeting Date July 11, 2023 7 Vail Local Housing Authority Meeting Minutes of June 27, 2023 8 MEMORANDUM To: Vail Local Housing Authority From: Carlie Smith, Finance Director Date: July 11, 2023 SuVail Local Housing Authority Investment Policy Administration bject: I.Purpose The Vail Local Housing Authority (VLHA) has current revenues of approximately $52,000 and expenses of approximately $6,000 annually. Conservative spending has allowed the VLHA to build up a projected 2023 ending fund balance of $385,187. The Vail Local Housing Authority would like to invest some of those funds to take advantage of the favorable interest rate environment. II.Investment Policy o invest funds, the Vail Local Housing Authority must formally adopt an investment policy. Staff recommends an investment policy similar to the Town’s investment policy (attached). The investment policy is summarized below. Please see the attached for the full policy. Objectives: safety, liquidity, and yield (listed in order of priority). Standards of Care will include: A prudent person shall be the standard applied when managing the portfolio. Officers and employees involved in the investment process shall refrain from personal business activity that could conflict. Management of the investment program is held by the Town of Vail Town Manager with appointed designees. The investment Committee will consist of the Town Manager, Finance Director and Finance Controller (or comparable positions). 9 The Finance Director shall manage the day-to-day operations of the portfolio as well as an internal control structure. Authorized Investments include: Fully collateralized interest-bearing checking accounts, savings accounts, and CDs at commercial banks. Certificates of deposit and loan associations insured by the FDIC. Any security issued by, guaranteed by, or for which the credit of any of the following is pledged for payment: the United States, a Federal Farm Credit Bank, the Federal Land Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Government National Mortgage Association. Colorado investment pools. Any money market fund that is registered as an investment company under the Federal Investment Company Act. No load mutual funds that invest in mortgage-backed securities issued by the Government National Mortgage. Association (GNMA) or the Federal National Mortgage Association (FNMA), or the Federal Home Loan Mortgage Corporation (FHLMC). Taxable municipal securities: taxable obligations of political and governmental subdivisions may be purchased. The issue must be rated at least “AA” by a nationally recognized security rating organization. Similar to other Town component unit funds, staff recommends keeping the administrative functions of the investment policy with the Town’s Finance department. A hybrid arrangement of keeping the Town for bookkeeping services and hiring an outside CPA firm for investment administration is not recommended. Staff is recommending investing in the Colo Trust Prime account which currently has a 30-day yield of 4.9%. This fund is advantageous to smaller Authorities because it is very liquid and will allow the VLHA to have quick access to those funds if needed. III. Action Requested of Vail Local Housing Authority Would the VLHA like to adopt a policy that mirrors the Town’s investment policy established by Title 2, Chapter 2 of the Vail Town Code? 2 | Page Town of Vail : 21 22 23 24 25 26 75 South Frontage Road West Housing Department Vail, Colorado 81657housing@vailgov.com vailgov.com MEMORANDUM To:Vail Local Housing Authority From:George Ruther, Housing Director Martha Anderson and Missy Johnson, Housing Coordinators Date: July 11, 2023 Re: Capital Improvement Policy Proposal I. Purpose The purpose of this memorandum is to present policy changes and additions related to capital improvements and maximum resale valuations and receive direction from the Vail Local Housing Authority to present a recommendation to Vail Town Council. This memorandum outlines the goals of price capped deed restricted housing, the challenges with current policies, and offersrecommendations. II. Background The Town of Vail Housing department reviews capital improvement submittals and requests for maximum resale valuations on a as needed basis or as owners are preparing to sell their home. With a variety of Town of Vail deed restrictions in place, there is variance across policies as it relates to the following topics: annual appreciation cap, maximum amount permitted for capital improvements, permitted capital improvements, disallowed capital improvements, permitted capital improvements cost cap and depreciation policies. 27 The Vail Local Housing Authority has identified the following as the primary goals of price capped deed restricted housing: 1. Maintain affordability 2. Incentivize property maintenance and upkeep 3. Educate on the distinction between repairs and improvements, explain cost of home ownership and importance of reinvesting in one’s property III. Current Policy Challenges The following are the challenges with current capital improvements policies as it relates to price capped deed restricted housing in the Town of Vail: 1. The current policies are supporting the primary goal of maintaining affordability but lack to incentivize upkeep and maintenance and disincentivize the lack of it. In the open market, home values are dependent on quality of maintenance and improvements or lack of them, however, deed restricted housing values keeps going up no matter the home conditions. 2.Permitted capital improvements policies are vague and subject to interpretation, this create confusion for the homeowners as to what improvements are covered and creates disagreements with staff as to what capital improvements are allowed or not. 3.There are a variety of policies among the different deed restricted housing complexes, this creates a sense of unfairness between owners of deed restricted housing in the Town (e.g., some deed restricted units have an annual appreciation cap of 1.5% vs. others at 3%) 4. There is not a set standard of expectations for the conditions of deed restricted homes to ensure habitability. This allows deed restricted owners to receive the total annual appreciate cap annually without having to do any maintenance or improvements to their homes. 5. Special HOA assessments are added to the home value 100% of the cost with no depreciation. Open market homes are not necessarily able to add 100% of the cost of assessments to the values of their homes. Also, assessments are usually replacements or repairs not improvements, for example, replacement of the roof. 6. The maximum amount permitted for capital improvements on a 10-year period as well as the cost cap on permitted capital improvements are fixed and not adjusted for inflation. 2 | Page Town of Vail 28 VI. Recommendations All recommendations applicable to current deed restrictions will require to be mutually agreed upon by all parties. Town staff will consult with the Town’s legal team to ensure the legality of any recommendations. 1. Incentivize functional systems and proper upkeep and maintenance with an annual 4% appreciation cap. 2. Disincentivize non-functional major home systems and upkeep and maintenance by reducing the amount of annual appreciation cap and home value dependent on the conditions of the home. 3. Clarify the capital improvements policies by creating an itemized list of the improvements that are permitted and what is not permitted and providing this updated list to all deed restricted homeowners. a. Further clarify permitted improvements for energy and water conservation as follows: i. Upgrade your home insulation and get your home professionally air sealed ii. Install an electric air-source heat pump iii. Convert your home from fossil fuels to electricity to increase home value iv. Upgrade to a smart thermostat v. Switch to a heat pump water heater vi. Install solar panels vii. Upgrade to energy-efficient windows 4.Create lunch and learn sessions for deed restricted owners in which we will explain new policies, go over the costs of homeownership, explain repairs vs improvements, energy efficient improvements and educate on the importance of reinvesting in their properties.Town staff will also send e-newsletters to EHU owners on a quarterly basis and include education content helpful to current and new owners. 5.Level up the maximum amount permitted for capital improvements to 15% among all price cap deed restricted housing. 6. Change annual appreciation caps to match annual inflation rates (CPI-U). 3 | Page Town of Vail 29 7.The amount of maximum amount permitted for capital improvements must be reevaluated and updated annually. 8.The amount of permitted capital improvements cost caps must be reevaluated and updated annually. Cost caps must be applicable to all futuredeed restrictions. 9.Require all new deed restricted homeownersto meet with town staff to go over terms of deed of deed restriction and educate on all aspects related to capital improvements. 10.Special HOA assessments should be evaluated on a case-by-casebasis.Repairs and replacement costs should not be added to the home value and improvement cost should be added but depreciated depending on the life of the improvement. 11.Depreciation should be standardized among the different deed restricted housing. 12.Consider adjustingthe Housing Guidelines so that the guidelines are applicable and uniform for all price capped properties, except forthe property annual appreciation ap, which is specified to buildings and master deed restrictions. This would include the permitted capital improvements list, disallowed improvements list and permitted capital improvements cost cap, depreciation policies. 4| Page Town of Vail 2: a. This would positively streamline the review and approval process of the administrative implementation to create an improved process and outcome for owners. b. Unintended consequence is that it could create too much confusion and inability to fairly be retroactive. c.This would be an adjustment for properties moving forward. d.This change would require very careful consideration and to run comparisons to see how this would affect an owner from Arosa to Chamonix to Vail Commons. 13. Create a set of expectations thatinclude a list of major home systems that must be functional at time of listing to include, but not limited to, electrical, heating, plumbing, appliances, smoke alarms and carbon monoxide detectors, based on a home inspection. The evaluation of systems will be done through a home inspection. Should the home not meet the expectations, the maximum resale value would be re-evaluated and lowered, in dollar value, if it requires additional maintenance or replacement as follows: ElectricalPlumbing Heating AppliancesSmoke Carbon (Service (Shut off (HVAC) (Refrigerator, Alarms Monoxide panel, valves, cooktop, and Detectors GFCI water oven) outlets, heater) circuit breakers, non- permitted electrical work) Functional 100% Deferred 50% Maintenance Not Deduction per estimated cost of repair/replacement Functional Functional: The system was visually observed and appeared to be functioning as intended. Normal wear and tear are allowable. Deferred Maintenance: Areas or components that are serviceable but are suspected to be near the end of their service life due to signs of wear, age, or deterioration. Evaluation, service, or replacement is advised. 5 | Page Town of Vail 31 Not Functional: The system is non-functioning, improperly constructed/installed or are presently creating damage to the structure. A system in this category should require repair or correction by a licensed tradesman. VII. Direction andDecision Making Which of the above best meet the goals and initiatives for the affordability and long- term maintenance and upkeep of price capped employee housing units? Does the recommendation offer owner education and more security for the owners that the review and approval process of Maximum Resale Valuation is fair and equitable? Are there additional recommendations and/or improvements that Town staff should be considering? Do any of the above present glaring unintentional consequences today or in the long run? 6 | Page Town of Vail 32