Welcome back to this weekly meeting of the Community Planning and Housing Committee with Denver City Council.

Your community planning and housing committee starts now.

Which does not do fire or it does really do.

Hi everyone.

We are on air, much to our surprise.

This is the community planning and housing committee of Denver City Council on April 28th of 2026.

I'm Clara Parity, one of your two council members at large, the chair of the committee.

We will start with council member introductions in the room and then see if we have anyone online, and I will go to my right.

I'm pausing to see if we do have colleagues joining us remotely.

We've had a little delay sometimes.

Yeah.

Alright, I don't see anyone online.

We have first a rezoning today from community planning and development of 8401 East Bellevue.

Tony is here.

We'll let him get settled and get started with the slides.

Alright.

We've got a light crowd today.

Yeah, I know.

Hopefully it'll hopefully it'll pick up a little.

All right.

Well, I am Tony Lechuga with Community Planning and Development, and I'm here to present the applicant proposed change to the zoning at 8401 East Bellevue Avenue.

So let's start by just looking at the applicant request.

I'm gonna pause as two more members cycle in.

I will welcome Council President Sandoval and Councilmember Torres, which gives us a quorum, which is great as for us.

Sorry, go ahead, Tony.

All good.

So we're talking about an applicant change to the zoning at 8401 East Bellevue Avenue.

And what they're asking to do is change their zoning from what is a currently former Chapter 59 zone district that has some waivers and two-use overlays to a standard Denver zoning code district, SMX8.

So the properties outlined in red there.

It's just under four acres.

What currently exists is a structure that used to house a two-story bank and office building.

It was a U.S.

bank for a long time, had associated offices with it.

There is an attached parking garage to that building, and then abundant surface parking lot.

The building has fallen largely into disrepair, and the bank functions have been moved elsewhere.

So in terms of location, it's located right on the southern edge of the city in Council District 4, represented by Council Member Romero Campbell.

And here we zoom in a little bit, and it's located in the Hampton South neighborhood.

If you're not familiar with all 78 of Denver's statistical neighborhoods, this is maybe more commonly known as the Denver Tech Center.

I'm gonna pause again real quick.

So in terms of the existing zoning, you can see a lot of this part of the city is former Chapter 59.

Um similar zoning north of it, that B8.

Um so this property, B8 is actually an intensive general business district as well as a high-density residential district.

So when we compare it to the proposed zoning, I'm gonna talk about in a minute.

The waivers on this site we're gonna get into in a second, but the use overlay one and two are the adult use overlay and the billboard use overlay, which while zoned here are both actually prohibited by the Denver Technological Center covenants on these properties.

And so they're not allowed uses by covenant.

Um and you can see that a lot of the area is still former Chapter 59.

However, the property immediately to the west rezoned to the similar district, SMX 8, a few years back.

Um, and then to the east, we have uh a linear park that has that OSA designation, and then some low-scale single unit districts.

And then to the south is Arapahoe County.

So the waivers on the site actually waive some of the uses.

So it waives certain fabrication, wholesale and warehousing uses that weren't deemed appropriate for the intense technological center uses that that this was dreamed out to be.

Um they also waive the gross floor area allowances of the B8 and establish a maximum height of two and a half stories.

So the proposed zoning gets away from that uh into a much uh into a height that much more aligns with the original intent of the B8 zoning.

And that's what they're asking for.

SMX8.

That's suburban, mixed use, up to eight stories.

And this is a suburban district, but it our suburban districts are intended to provide diverse areas where you can walk, shop, gather.

This is meant to apply to larger sites.

It's meant to provide some flexibility that we see on large sites and suburban contexts and balance sort of that street presence with necessary parking that we see in some of these suburban contexts.

And it does allow a diversity of building forms, both of the drive-throughs as well as the general and the shop front building form.

In terms of context, so you can see the existing land use is listed as office, although that has been winding down for many years now.

Immediately to the west, that site that was rezoned to SMX8.

It's under construction right now with some mixed use, it will actually be multi-unit residential and some commercial retail on site.

So a true mixed-use node in this part of the city.

Everything to the north is multi-unit residential.

It's built out sort of a series of townhomes, and then again you see to the east that single unit residential.

This is a single image that I got from Bellevue of the site where you can see it does have these like very large, wide, detached sidewalks with nice greenery, lush setbacks that are actually required of the Denver Tech Center design standards that apply here.

But you can see the building is set very far back from the street with abundant surface parking between it and anyone walking along the sidewalk.

Let's talk a little bit about process.

So the official application was referred out in January of this year.

Planning board happened last month, I'm sorry, a couple weeks ago on the 15th.

We're here today, and we anticipate this potentially going to City Council in early June.

Planning Board at their hearing voted unanimously to recommend approval.

There were no speakers, there was no controversy, they really had no deliberation.

They found it to be largely consistent with the plan guidance, and so voted unanimously to approve it.

In terms of public comments, we've heard no comments from applicable ROs, but I will note there are no localized ROs to this part of the city.

There is only the one citywide inter-neighborhood cooperation that applies to this area.

But we did receive three comments that are a part of the application package from the general public who talk about revitalizing this part of Bellevue, creating a true mixed-use community, especially as we've seen a lot of the office, the office culture and the tech center sort of plummet after COVID.

So let's talk about the review criteria.

So for this one, there are the three applicable review criteria we're asked to analyze to determine appropriateness.

And the first is our consistency with our adopted plans.

And for this site, we only have the two citywide plans, Comp Plan 2040 and Blueprint Denver.

We'll start with Comp Plan 2040, which lists a number of narrative goals around a set of vision elements.

And we do believe that this would create a more equitable, affordable, and inclusive Denver because it would allow for a broader diversity of things to be built on site than the former Chapter 59 zoning or the current uses on site today.

It would create a greater mix of housing options by allowing that high density residential on site, and it would allow for the creation of affordable and missing middle housing potentially on site, especially where it's close to transit.

I should note we're about half a mile from the Bellevue station, light rail station.

We believe that it would create strong and authentic neighborhoods.

Again, the new regulations of our zoning code help to build out a better, more well-connected network of vibrant mixed-use centers that are called for.

It would provide a greater diversity of housing in this area where we largely see a lot of for-sale housing, and this could create denser rental opportunities, and it would be quality infill on a site that's largely underutilized with the existing structure.

And we believe it would be in line with our environmentally resilient goals because it would promote infill development where we do already have services in place and infrastructure that can handle this intensity of development.

Now we'll turn to Blueprint Denver, which is the city's citywide land use plan.

So we get more refined land use guidance from this plan, not just narrative goals.

And what we see is that in terms of future neighborhoods, it's called out to be a suburban neighborhood.

They're asking for a suburban district.

And while the suburban neighborhoods are largely associated with low-scale, single-unit residential, it is noted in the language of Blueprint Denver that it can include higher density areas and can include commercial, especially along main corridors.

And we'll get to that here.

This map shows the future streets and future places as envisioned in Blueprint Denver.

And you can see both Denver Tech Center Boulevard and Bellevue are listed as commercial arterials, which are wider, larger streets that are known for having higher throughputs.

So we think in a suburban context, that's the appropriate place for locating higher densities and commercial nodes.

You'll notice the future place is regional center, which calls for a mix of uses, large scale buildings, and heights are generally the tallest within our suburban context.

And in terms of growth strategies, this is listed as a regional center, which is one of the highest intensity targeted areas for future growth based on the plan guidance.

So we anticipate seeing 50% of new employment and 30% of new housing in this type of growth area.

And this proposed district would allow for that type of growth on this particular parcel.

And then there are a number of narrative goals from Blueprint Denver that we believe this also achieves, which include encouraging high density mixed use in regional centers and community centers, rezoning out of former Chapter 59, and aligning our high density residential areas and regional centers to support housing near job growth.

The tip Denver Tech Center is known for having uh diversity of jobs and a high concentration of jobs, and with access to transit priority streets, and the Denver Tech Center Boulevard is listed in Blueprint Denver as a transit priority street.

We believe this help meets many of Denver Blueprint Denver's equity goals, but want to focus mostly on it would provide a broad range of commercial uses, which could provide a diversity of jobs for people of different education levels and economic needs.

It would also provide for multi-unit residential, including affordable housing that would necessarily be built into the project.

And in terms of helping to meet our climate goals, we believe that this uh helps meet a few of those by locating uh housing near transit.

As I mentioned, it's near the Bellevue train station, but it's also adjacent the 73 bus line and uh locating housing near a diversity of jobs, and we know that multi-unit buildings tend to be more energy efficient than single unit structures.

Um the second review criteria is public interest.

We do believe that this rezoning request is in the public interest as it does implement our citywide plans and it would create a more walkable mixed use area.

And the third criteria is is it consistent with our neighborhood context, zone district purpose and intent statements as written in the Denver zoning code?

And we believe that it is, as those call for the suburban context to be varied, to include multi-unit and commercial located arterials and collectors.

It does note that there are irregular blocks like those we see in the Denver Tech Center, and uh it also calls these areas uh uh to have larger sites and have the SMX8 located across uh corridors and arterials with heights of one to eight stories.

So uh finding that all three criteria have been met.

City council recommends that the committee move this on to a vote of the full council.

Okay, great.

Um and I will see if I will welcome Council Proton to the meeting and then see if she wants to ask questions first because it's her district.

Yeah, thank you.

Um thank you, madam chair, and thank you for the presentation.

Um I just I think that this particular site for um uh for the reasons that you mentioned is a prime opportunity to really think about how do we have a better use, how do you bring in more housing and more retail?

Um it's one of the more things that we hear for people wanting more access to kind of the restaurants and you know uh and other amenities.

Uh I have a question, and maybe this would be one for you to answer, Sky.

Um the building that currently is there is a bank, um, and it's set back far, but there are a ton of mature trees on this entire property, um, especially on the perimeter.

Uh can you talk to us a little bit more about like the development plans and is there also some commitment to be able to maintain the the trees and the treescape around.

Just introduce yourself.

Yeah, absolutely.

Sky Stewart here on behalf of Shay Properties.

Um, great question.

Uh the Shay is the developer of the site adjacent, as you know, Marina Square, and so they're just getting started on that SDP process that will come as part of this, waiting for our rezoning to make its way through the council process.

As part of that SDP process, we certainly connect with the city departments, including the Forester, on what's the most appropriate way to protect and manage for those trees.

So we don't have specific development plans yet.

We have a conceptual layout, and we'll work through the SDP to set that up, but it's a great note, and we'll certainly flag that for the team as we move forward.

Um I think on the Marina Square side they did a lot to protect as much as they could as well, and we'll continue to try to do that here.

Thank you.

Can I add one comment?

I also wanted to note in the staff report, it's mentioned that um the Denver Tech Center Architectural Control Committee has a set of regulations that apply to this site, and those require that 40-foot setbacks be maintained for any development along Bellevue and DTC Boulevard, which would mean that any of those mature trees that are within 40 feet of a Denver sidewalk would have to remain.

40 feet.

40 feet.

Oh wow.

Okay.

Off those two main streets.

Those two main streets.

Okay, that's that's much further than I thought.

Wow.

Okay.

Um I don't actually, I don't have any other questions.

I think that this would be a nice way to kind of bring this particular corner into what our current needs are for um Southeast Denver.

So thank you.

Manager, great.

Yeah, and we we'll we call those level rats questions in honor of our colleague Paul Cashman.

Um Idris next to Q.

Thank you.

Yes, I I thought the at the same thing about the trees and the setback.

And I'm curious what was the purpose and for and when was this district created for the DGZ?

The one that exists today.

Yes.

Yeah.

I know I think the building was built in 1978, and the district was applied sometime around then.

So it's pretty.

Sold for a building.

Do you know why it was initially created?

Was it part of like a metro district or was it like a good question for the applicant if that's sure?

And Councilwoman Romero Campbell can jump in here.

There is a metro district out there, Goldsmith Metro District.

Um, and and their entire goal around the whole breadth of the tech center is really to create um the proper architectural standards and design standards for that district.

It's been in place for a very long time.

Um, as Tony mentioned, there's the architectural control committee that oversees uh but Goldsmith Metro District also has a number of regulations in place to really try to keep high quality development, um make it one of the best employment centers.

Their their view was really trying to make it stand out as a very high quality employment center when it first started all those many years ago.

Interesting.

Um I'm curious, do they update any of their standards?

Can they vote on updating their standards?

Because it seems just from the setbacks and the design that it could be a little outdated.

Because I think part of the top part of what you said was that a good use of land, right?

And so they have these gigantic parking lots, and so curious if there will be a better use of land than that in the future, or if it seems like this 40 setback, does that include parking?

It's just that the buildings have to be set back at least 40 feet.

Correct.

And and there is a lot of parking out there today.

That will certainly be reduced as part of this development of a multifamily residential and some other retail pads.

So we will be taking that to a more manageable space.

Um the Metro District does have a board associated with it that votes periodically on their guiding documents, so that is certainly something that can be discussed and updated.

Um, I think those setbacks are pretty uniform across that area, so that's probably a larger discussion, but certainly this development won't allow for some of that sea of parking to disappear and be more of a mixed-use really walkable area, especially connected to the marina square site just to the west of it.

Great, thank you.

That's all I had.

Thank you.

Can I just add real quick to that?

This is one of the areas um in the city that does not have a neighborhood plan.

That's in the queue.

And I'm curious to that note, would a neighborhood plan change anything if the district really governs what the space looks like.

I don't want to speak for a plan for the future.

No, we haven't had one, we don't know.

Yeah, I mean, I think a plan could make strong recommendations for that.

I think there's maybe a bigger question for uh any of the lawyers in the room about um, you know, we have number of areas in the city where our development standards embedded in the zoning code might conflict with covenants that are associated with private development.

Um, and so while our code allows for one thing, a restrictive covenant on our property might not allow for that.

Right.

I don't know enough about uh what plays out.

Thank you, appreciate it.

None of that really affects the zoning.

I think it makes a lot of sense for this to move forward.

So thank you for bringing it and thank you for being here.

Thank you, committee chair.

Um, and I there was a member in the queue whose questions got answered.

Um anybody else?

All right, can I get a motion in a second?

Moved by Councilmember Campbell.

Second by Councilmember Albedrez.

Everybody good.

Okay, thank you so much.

Yeah, appreciate it.

Great, and then we have the host preservation ordinance, which I think we're very excited about.

Maybe that's just a mean statement.

I'm very excited about.

And just noting as as uh Kendra gets uh settled, we'll have the presentation from hosts.

We then do have public testimony on this because it's an ordinance.

Um and then council member options after that.

So all right, Kendra, whenever you're ready, introduce yourself and take us through the slides.

All right, thank you.

Um Kendra Garrett, um housing development officer officer with host.

And I'll just go over the changes to the preservation ordinance for the city.

So I'm gonna give a little bit of background on the preservation ordinance itself, um, and then we'll go a little bit over the state bill, House Bill 241175 that was passed in 2024.

Um, and then we'll go through the recommended changes to the ordinance, um, and then we'll do QA.

So our presidential our preservation ordinance is a good way to maintain housing affordability.

We're newly created affordable units across the city.

It was adopted in 2000, um, but that was amended in 2019, and so between 2019 and 2025, we've got preserved a little over 1400 units thanks to the ordinance.

Um a question that was previously asked by a council person around when's the last time that we've exercised a writer first refusal once in 2019 for a small property that was the owner was looking to terminate their HUD contract, and so we exercised our right, and the property was sold to have that ECLT.

And so ways we are able to help preserve affordable housing is through our sort of acquisition and preservation loans or our emergency maintenance grant program, which is sort of a smaller bucket of money for emergency repay or work for properties, and then exchange we put a 60-year affordability covenant on the property.

So we are updating the preservation ordinance to essentially do two things.

One is to do some conformity to the House Bill to the state bill 24115.

Um, in 2024, the state legislature passed this bill in order to provide a process for local governments to exercise or waive their writer first refusal or their writer first offer.

So writer first refusal applies to income restricted housing, and then re writer first offer applies to market rate properties.

Um right now, our coordinate our current ordinance only covers um income restricted housing.

And then we'll do some general sort of um updates to the ordinance language to address some inconsistencies, provide some more clarity, things like that.

The two biggest, I just want to do some highlights, the two biggest changes to the ordinance is um we will be changing the minimum affordability for all city subsidized affordable housing projects from 60 years to 99 years minimum, and then we'll be adding that first of the right of first refusal right of first offer section, which applies to all Markerate properties with at least 15 units and at least 30 years old.

And then second, we will have that's accompanying the ordinance is an opt-out resolution in the state bill, and I'll go a little bit um about that in a future slide.

So we've got a couple of slides that essentially go over the proposed changes.

Um I will sort of talk about the proposed change in the far left-hand column, and then the proposed ordinance change on the right-hand column.

So the first one is sort of added added definitions, and that's more for the inconsistencies, clarification, um, language changes in the ordinance around who are our government partners, um, what's a contingent sales agreement, um, what's the notice of intent to sell, things like that.

Um, and then the next two are applied or our writer first refusal, and so that's we broke we break those up in our ordinance based on two separate types of projects, um a federal preservation project and a local preservation project.

The difference is that um it is based on their um funding source.

So for federal one, it'd be a project that's got like the 221 D4 loan on it, um, has a section eight um half contract on it, things like that.

Um, and then a local preservation project would be funded by the state or the city.

So um tax credits, DOH funding, city funding, um funding sources like that.

And it applies to all income restricted housing in the city that's five units or more.

And so for those two projects, we are doing some um changes to conform to the state bill.

Right now, in our current ordinance, we have a one-year notice, which allows for developers to let us know one, if their affordability restrictions are coming up for expiration in the next year, um, if they're planning on selling, if they are planning on selling, um what's their intention for?

Um, are they letting the expiration the um affordability restrictions burn off?

Are they planning on re-syndicating?

Do they need our help if they're looking for a seller?

Things like that.

It gets sort of gives us a year heads up to continue start having conversations with the developer around best ways to keep the property um affordable and for the long term.

And then we have a 90-day notice, which essentially is the actual notice of their intent to sell the property.

We receive a notice, and in that notice, there's a several item due diligence items that we request that we review for the property.

And then additionally, they will send a notice to all tenants at the same time.

And then also in our current ordinance, we have no cause evictions during that 90-day period.

We are changing our one-year notice to a two-year notice and adding a six-month notice.

Those notices essentially do the same thing as our one-year notice, and that's to confirm to that's to conform to the state bill, and then we have no changes to our 90-day notice and no changes to the tenant notification requirement or the no cause eviction requirements.

And that's for both those two projects that fall under our writer-first refusal.

The next thing we are adding is the writer first offer section.

Again, that applies to all market rate properties with at least 15 units and at least 30 years.

This differs a little bit from the state bill because they have a max on theirs, up to 100 units.

For ours, we won't have a max.

It's just at least 15, and then again with the age of at least 30 years old.

As you can see, between this the proposed ordinance in red and the state bill, the notice time periods are a little different.

That allows us to have a bit more flexibility to be responsive to notices that we receive.

So if a property falls under this section and they're intending to sell, they will provide us a 21-day notice that lets us know that they intend to sell the property or intent to market it to the public.

And then in the ordinances, there are some notice requirements that are required at that time.

Once that time pain sort of is lapsed, then we have 10 days to express our interest or our preservation partner.

I'll talk about preservation partners in a bit.

Once they provide us that, we have 14 days to either exercise or waive our writer first offer.

If we decide to exercise our right, then the seller has 14 days to accept or reject the offer.

That time frame might kind of go back and forth depending on good phase negotiations.

If they do go ahead and accept our offer or our preservation partner's offer, we have 90 days to execute a PSA and 120 days to close the transaction.

And then again, tenant notification and no cause eviction requirements are the same as our writer first offer.

A preservation partner are in 2023, sort of early 2024, we released a solicitation to the development community to become one of our preservation partners.

They essentially allow us to do a couple things.

One, we can sign our right of writer-fresh refusal or offered to a preservation partner.

And then the biggest thing is they get sort of information on the property before it gets marketed to the pro to the public, giving them time to have negotiations with the with the owner, review the properties information, maybe even tour it.

And if they're interested, they can kind of proceed ahead of schedule before it gets publicly marketed.

And so that allows us to have continuum conversations with the owner and maybe the proposed owner, and also ways that hosts might be able to support sort of transferred ownership and keep the property affordable for the long term.

And then last set of proposed changes, again, we're changing the affordable restrictions from 60 years to 99 years for all city subsidized affordable housing properties.

It will be effective July 1st of 2027.

That allows us projects that are currently being underwritten by host to sort of move through our underwriting process, get city approved and close before mid-sumber of next year.

It doesn't apply to our emergency maintenance grant program.

Because it's a sort of a smaller bucket of money, less than 500,000, and ideally it's designed to sort of be deployed quickly.

We'd like to have sort of the ability to negotiate the requirements for those dollars, and that will be set by our annual term sheet by host.

Next is enforcement.

There's no changes there, but um just some what we are able to enforce if there are any violations through our ordinance is that we are able to levy city fines, place a lien on the property, or add penalties to existing city agreements.

And then lastly, the preservation policy will be effective at the end of May or pending city council approval, and there's no sunset date.

So this is a couple of things that were asked by council folks.

So the number of properties that are affected by the writer-first refusal or writer first offer according to our host dashboard, there's about 510 properties that would meet our writer first refusal criteria, and then a little over a thousand properties that would currently meet our writer-first offer criteria per COSAR, so at least 15 units and built 1996 or older.

And then this is just talks about a bit more about our enforcement capabilities within our rules and regs.

So we can levy a fine up to 15,000 per each separate violation.

We can record a certificate of noncompliance with the county, which constitutes a lien against the property, and then we can exact penalties if there's an existing um city agreement on the property.

And then uh for our opt-out resolution.

So the language in the slide sort of is lifted from the state bill itself.

The bill states that if a local jurisdiction already has a policy or adopts uh preservation of affordable housing policy, and the terms, the language in those in that ordinance is more favorable to local government, then ours is the sort of governing policy for the city.

Um we are op we are asking council to approve an opt-out resolution, which sort of makes it just clean that we are in fact the policy that will govern the city to make sure that our timelines are a bit more favorable to the city, and there's some notice requirements that are a bit that are a little hard for us to exercise based on um who we need to sign what in the time frame that they're required.

So it just um allows us that flexibility within our ordinance.

Um our approval timeline has been that we had a public meeting in November.

Um we did a series of council and mayor briefings between February and uh in April of this year.

Um we are currently presenting to council um for today and the next three weeks, and then once it's approved by council during the summer, I will um update the rules and regs, and then we have a web page that's will go live on the host website um that talks about the preservation ordinance and has all of the documents uploaded for the public.

Um any questions?

Okay, we have a few thank you, and I'm guessing we're make it in.

Um, starting with Councilmember Torres.

Thank you.

Um, I'm sorry, public comment.

I will skip it.

That's okay.

Public comment.

Um so I think we have one public commenter signed up, um, and we do uh two minutes of comment.

Um let me just make sure that I'm right about one person.

Yeah.

Um Mr.

Beshow, um, introduce yourself, you'll have two minutes.

I need to keep the time on that.

Um I am I would urge you to vote no, not because it's not a good ordinance.

Preservation matters, but I don't think it hits income below 30.

It's the 38 uh AMI.

It's only like it's the market of 60, 60 to 70.

Those folks under 30 are the most acute.

And costs don't disappear, they get shifted into shelters, emergency rooms, and jails.

And I think there should be more word to hit that market because those are the things wrong amongst us.

So the question is for us, are we measuring success and moving it around?

Or are we are we uh implement a policy that endorsed equitable as well?

Okay, thank you so much.

Um, and since we um have longer than that in our public comment period, if anybody wants to make comments, just checking to see if there's anyone else in the room that wants to make a public comment.

Um, and I'll give a few minutes if anyone is on Zoom and wants to make a public comment, raise your hand, uh use that function.

And I will take the moment to recognize Council Member Watson, who I think joined us because we took attendance.

Okay.

No hands raised.

Um, so we will conclude public comment with that.

Um we'll go to questions, starting with councilmember Torres.

Thank you.

Um thank you so much.

The um right of first refusal, um do you imagine it would involve any properties that carry debt or other kinds of obligation?

Um, what happens with that?

And then I know that some uh affordable housing projects also carry an obligation to support um uh moving costs of tenants.

Would either of those like how how would we handle those if they were carried with the property?

So for if they're carrying debt, if they're carrying private debt, then that would be um sort of negotiation between them and the seller around who if it's gonna be assumed or paid off at closing, if they carry essentially a loan from us or from DUH, they would go through our either paying being paid off at closing as well or being assigned and assumed by the buyer.

And that also goes for the re um affordable recruitment, the affordability restrictions of our covenant as well.

Okay, thank you.

Um for the right of first offer, um, say it's an apartment building and we're looking to a preservation partner.

Um, what do you feel like is their level of readiness to step in with the timelines that we've got?

Um it really depends on that would be really depends on the preservation partner, right?

Some of our larger ones would have more capacity and financial capability to do so if they were interested in it.

It'd be a bit burdensome for potentially for our smaller ones.

Um, but we can do those negotiations if we do have maybe a smaller develop a preservation partner who is interested.

How can we sort of support them if they're truly trying to purchase it and like how can we work with them on that?

That's I think what I'm um hoping for um maybe some future work on.

Yeah.

And I think having the advanced timeline, so the two year and the six-month notice gives them quite a bit of time to really um like plan out what their financial like the project proposal will be or the plan for the project if they are trying to um acquire it.

Right.

Okay, because it would be great for some equal footing um to be offered, like I know some of our larger preservation partners could probably do it really quickly.

Um, and if they're the only ones that could ever step in, that um creates a just a um a differential and opportunity, I guess.

Well, and I would also say that we within our preservation, like at least the spreadsheet I have for our preservation partners, they all have sort of different criteria what they're looking for, and so some things that a smaller developer is looking for um is not really in the viewpoint for our larger ones, so that also helps in terms of um when I get notices from owners, who do I think would be best equipped to like respond to those notices and be really interested in in learning more about the property.

Okay, thank you.

Um you mentioned city fines are levied.

What are what they're issued for what kind of violation?

They're not notifying us.

Yeah, um, if they if we find out that they sold the property before they um they notified us in the city and went through our process.

Um we haven't come across um that experience yet.

So uh and most of our all of our affordable housing sort of community knows that we have this ordinance in place and they are very attuned to complying with it.

Um the writer first offers sort of a new one, um, but because of the state bill, um their attorneys, title, some realtors, and then themselves are aware that they need to notify us not only to um apply, not even just to adhere to ours, but to the state as well.

Um and so that's been really helpful, and so um I hope that doesn't come across, but if we do, then we have some enforcement abilities to do um some enforcement on the property, on the property owner.

Yeah, on the fine, yes.

We can also put a lien on the property, okay.

Um that says they were in non-compliance and figuring out ways for them to rectify that.

Okay, thank you.

Thank you.

Do you want to answer your tenant question on moving expenses?

Yes.

So if they are um selling the property, they may or may not be required to comply to like our URA sort of uniform um relocation assistance that really depends on the financing sources on the property.

And if there is any intention to displace tenants, then we do have a process in place for moving expenses and making sure the tenants um are not burdened by those changes to the property.

Only if the URA That or our personal like our yeah, or our compliance rules.

Or ours.

Okay.

All right, thank you so much.

Thanks.

Yeah, thank you.

Um, I have Councilmember Almidra's next.

Thank you.

Um and thank you for all the briefings on this.

I appreciate it.

It's uh great topic.

I'm curious about the 15 units below that.

How many properties are falling through the cracks there?

Still not understanding why we chose 15 minimum.

I don't know why 15 was chosen to be within the state bill.

It probably was like sm small enough but large enough that a multifamily developer would be interested in it.

Um really things below, I'm gonna tell you from our preservation partners, most are not even interested in those smaller properties for their portfolio.

They're really looking for anything around 60 units or bigger, um, maybe some ones that are 30 to 50 if there's a few properties located together and they're sort of being urged all at the same time.

Um and then if you're getting towards like single family homes, triplexes, duplexes, like um ADUs are not um included in our ordinance, neither is mobile home parks, um, and that's also consistent with the state bill.

Um, and then we just don't have the capacity to really review um really small properties or single family units in the family homes, and then you're getting into state sort of property rights when we get much smaller around like single family homes.

Okay, and then just to answer one of the questions from public comment, oh, can you talk about what AMI qualifies or if this what that looks like?

Um, all of them if they are income restricted, that includes um all AMI levels that would be 30%, 60%, what up to 120, I think is some quality.

We do 80% AMI.

Okay.

Um, some do income averaging, so it would be slightly higher than 80, it'd be up to 100, 120, um, based on if they're getting funding from CHAPO or going through um, yeah, but otherwise, if they're income restricted by us or by another government agency, um the ordinance applies.

Okay, that's great.

And then I'm curious also about why only ones older than 30 years.

Um, I think whenever um sort of the community was helping write this bill that's in the state in 2024, it was just like properties that would be old enough that would probably need a rehab, and would be the sales price would be um something that they could actually afford, like when you get to newer properties, they're really expensive and really knowing if the value is just in terms of the sort of value ad is not really great for development community.

Yeah, and I've also heard about some of these larger developments potentially going into foreclosure, and I'm curious if an affordable housing unit younger than 30 years were to go into foreclosure because of the interest rates at the time over the last few years, would that be something that we would get notified at all?

If they are under 30 years old, but more than 15 years, our writer first offer doesn't apply to those properties.

And so would we but outside of the ordinance, do we get notified?

We don't have a mechanism for us to get notified of those unless um we would have somebody internally that's sort of watching foreclosure procedures and be interested.

Interesting.

Could a preservation partner come to you and tell you I heard that this property is into foreclosure?

Can you help us?

Um we could talk to them about um gap financing, sort of acquisition or preservation loans, but our if they don't fall within our criteria for our writer first offer, then we couldn't exercise that or assign it to them, but we can talk about ways that they can um purchase a property if we have funding available.

Okay, great.

Right, thank you.

Appreciate it.

That was all I had.

Thank you, committee chair.

Um, I have council president Sandoval next.

Thank you so much.

Um, in the appendix, uh there's a great example of how we used the um the preservation ordinance in council district eight.

Um it had 82 units and it had a mix of AMI between 60 and 80.

Uh different studio well bedroom.

Um since our preservation ordinance, how many how many other examples do we have?

Do you have data that shows it's working?

Um I don't have data today, but I can happily send it to you after.

Yeah, I think that'd be really important because I I this is the appendix is a great example for me to actually see like it's it seems like it's a very complicated deal.

And so for me to see that capital stack on the impact development fund, that's like 52%, and how we come in with 15% to 2 million to get to make sure that those 82 units in East Cofax State affordable was a great example.

So I would love that if you could even show us like other examples across the stat city if they were um scattered, that would be great.

Um what's the minimum?

So it's 15 units, um, and that's determined by state statute.

Is that correct?

Yes.

Okay.

And then who where do these notices go to?

Is it someone in host?

Technically, for the state bill right now, we're getting notices to us if they um they also will send it to the clerk's office, which is who like a general inbox that you all have created, or how does one go about doing that?

On our website, we do have a general like housing development email.

Sometimes they'll come straight to me or to one of our team members, and it sort of gets bored to me, or and it's like gets sent to this to um Chaffa has to be notified as well, and the city's clerk's office is notified.

And then you all talk.

They the clerk's office for me, and then I review their notice.

And CHAPTER, do you all talk to what CHAPTER makes sure you're all getting the same notifications?

Yeah.

Okay.

And then um how much does that is that a lot of work?

Not currently.

Not currently.

That was gonna nice.

I was asking is I think that there needs to be, I wish we had a fiscal note attached with this ordinance.

I feel like there needs to be education.

I don't think a lot of people actually know about this law and what what it how it works.

So if you are an owner, so let's just say, for example, the one that you gave villas at Gauge Point.

How did that owner know that they had to do this?

Or that how are they educated to make sure that you we were informed so that we could our preservation ordinance?

Is it the real estate agent?

Is it the title person on the title?

Do you get what I'm saying?

Because real estate trans, let me say it a different way.

I love real estate agents, I think they do great.

And they do not also understand our zoning code.

I have a lot of real estate agents go, oh yeah, look, you have this design overlay eight.

You can go up to eight stories on tennis in and no, you can't.

It actually means it's the eighth design overlay in our zoning code, and it means it has to have more transparency requirement and active floor street, you know what I mean?

So who who's doing all the education to all the property owners that the preservation ordinance would impact?

Um so for our affordable housing development company um community, they are pretty aware of it, but we could do a lot more um sort of outreach to that community, and then particularly when we're getting we're adding then the writer first offer, we could do some outreach, like maybe via apartment association in order to get um more um reach to um particularly market rate properties who may not be aware of the state law or um the the changes to our ordinance.

I think the the market rate was the ones I would like because that's why I asked how busy you were with this inbox is because I just don't think the market rate ones know that this is even established.

Right now, I think they're more aware of it because of the state bill, but that really depends on who their attorney is, who their title company is, um how attuned they are to changes at the state level.

Um and so between when the law was enacted in 2024, so in August to like February of this year, I've received like 45 notices.

Um exchanging hands for the next over the last two years or year and a half.

Um but we can definitely um vote in some outreach um over the next year or so as uh once this is implemented uh and flip implement once this is approved and I update the rules and regs.

That'd be cool because that's why if you give us examples of like throughout the city, then that helps me give examples to when I meet to people with people, like especially market rate, um, I can say, hey, are you aware of this?

Because here's an example of where it's worked.

And so I it I the devil's in the details, and I'm such a visual person that that's why I love what was in the appendix is because my brain was like, oh, okay, I can understand how that worked.

Um, but just wanting to make sure that we're making this more um just the awareness.

I think that's half the battle in in working in the city is how much education do we have, and we don't have fiscal notes with policy, and so if we do I wish we could have someone going around to the apartment association saying, hey, look at this cool tool.

Um I don't think people, especially the market rate.

I think affordable housing developers really understand their role in this, but it's the market rate developers.

All right, thank you.

Thank you, Madam Chair.

Yep, I have Madame Prochama next.

Thank you, Madam Chair.

Um thank you for the presentation and the briefing and answering a lot of questions.

Um I think in the presentation of a heard correctly, you said it was was it 2019 was the last time that a preservation partner purchased a building?

And so we've exercised our right of first refusal.

Yeah, we've exercised our right of first refusal.

So there hasn't been one since, or okay.

And then what is it?

I guess more of why.

And then why?

I I just I thought it was interesting.

I I hadn't heard that before, so well I think in the 2019 example, um, right, the owner was intending to terminate their had contract, and so we wanted to keep those units a portable.

Um in most in a lot of cases since I've well been here for almost two years, and so a lot of the switching of hands have been for properties that have at least 15 years left on their on our on some covenant to ours or the states, so um, and they're either being purchased by an exist like a photo positive developer that we are aware of or one that has experience um since it's only currently for income restricted housing.

Um we haven't had um an issue come up similar to the one in 2019 where they were planning on either letting the um the um restrictions expire or they were intentionally trying to go market on it.

Okay.

Huh.

Um in the briefing you had mentioned there was what 19 preservation partners.

18.

18.

Um how does one become a preservation partner?

Like are you trying to get more in the queue?

Is this something that we're trying to build or yeah?

So we released this uh solicitation at the end of 2023.

So we released this uh solicitation at the end of 2023, um, and so they were all chosen sort of early 2024.

I think uh potentially next year we might we have had some partners express interest in becoming one, so we're considering maybe doing a solicitation process next year to add more developers into to be our preservation partners.

Sure.

Okay, that makes that makes sense.

Um and then I guess there's I I think it's already been asked or answered, but it it's just are we do we have people in the queue that are that are selling, and how do we get more people in the queue?

I think that's maybe to your point, Council President, of the education component to it, but it seems like you you have people who are waiting or maybe that want to purchase, but also you know, what's the universe of what could be purchased?

Um it's really based on when the property owners wanting to sell, right?

And we don't really have any um discretion over that time frame.

Um we do have several um affordable properties that are coming up for sale, and those have been sort of marketed to our preservation partners.

Um, and then occasionally I'll get notices for market rate properties.

But it really that timeline really depends on the property owner and when they're wanting to um move on from that property to whatever that just in their portfolio.

Thank you.

Thank you, Madam Chair.

Thank you.

Um I'm just pausing to see if anyone else, Councilmember Watson or Lewis um wanted to get in the queue, and otherwise I do have some questions.

Okay.

Um I just have I just have one question.

I was looking at the the filed materials, um, and it's the resolution will waive the city and county's right of first refusal and right-of-first offer provided by state law H241175.

What would happen if we decided not to do this?

Um yeah.

Sorry, my Megan Maples with the city attorney's office and I've worked with host on um some of this ordinance.

I think under the state bill, there are requirements I'd have to go back and look specifically for the city to then issue a letter, and then I think it has to be posted or recorded.

So it's mostly an administrative step.

Um and this just by doing the resolution, it allows um everybody in the process to have certainty that they're following the right step and removes an administrative burden for a host.

Oh, so is this cost saving?

I would assume so, yeah, because it just time savings.

Time saving at least and it provides more certainty for um the title companies and the other folks involved in the process who just want to be sure that they have everything in the right order.

So thank you.

Yeah, thank you.

Thank you.

Okay, cool.

Um, so I just I mostly have a couple clarifying questions because I'm this ordinance is such a great tool, and I'm glad to see us thinking through how to best use it.

Um first thing, and I'm just gonna be the one who asked the silly questions on the slide that talks about um that we've only actually exercised our right of first refusal once, but then we've preserved um like 1400 units.

Is that because we assigned our right of first refusal to partners for those other units?

I'm just what's the difference between us exercising it once but helping preserve 1400 units?

I'm sorry, that's such a basic question.

No, no, I think it's not really um it's really based on the number of units that are sort of moving through um like host maybe um gap finding gap financing sort of process, and that we're preserving these these properties that are um coming up for sale and they're being sold to another um affordable housing developer who's gonna maintain the affordability over time.

Okay, but the financing is enabled by the ordinance in some way?

It's it's not enabled by the ordinance.

It it's one of the tools that we have to help preserve um properties that are um so just to be super clear, when it when the slide says we've helped preserve 1,400 affordable units citywide thanks to the preservation ordinance.

How has the ordinance enabled those 1400 units?

I would say the biggest part is through our affordability um restrictions of being in 60 years, and so as if they're coming to us to preserve for housing, then we are able to put a 60-year covenant on the property in exchange for gap financing.

Right.

But is it our ordinance that lets us do that?

I thought this ordinance just gave us a right of first refusal and now a right of first offer.

The ordinance also um puts the affordable restrictions that applies to all afford um city system city subsidized affordable housing.

So the preservation ordinance also has that provision inside of it.

Okay, thanks.

So our 60, our current 60 year covenant is based on the ordinance.

So any time we get a covenant out of funding, that's another feature of this same ordinance, and that's what those 1400 units is about.

Exactly.

Thank you.

That was super helpful.

I'm glad I asked my silly question because it turned out to be helpful to me.

Um thank you.

And then just wanting to make sure that I'm clear on this as well.

Um the it seems like the biggest change here is that we're creating a right-of-first offer for market rate properties, and that's totally new, right?

Yes.

Um does host have any current, like sort of for the remainder of this year, once this passes, um, thoughts about using that or funding to use that.

I know we're about to do another budget for 2027, but if we pass this, um, what are you expecting to see in terms of the new ROFO?

Um, I mean, right now I don't have a directive that we are interested in purchasing any properties, regardless if they are income restricted or market.

Um it just provides them to have to notify us, and that's also within the state bill, um, that they're intaining the sale.

And then if there is a property that um would meet sort of our presentation partner criteria, and um the price point seems favorable for them, um, I would go ahead and market it to them as well.

Okay, so it's kind of a like find out what is of interest to partners process.

Exactly.

Rather than us having like funding for us to put in.

Okay, that's oh, I will be really interested to see how that goes, and we should make sure and um once it passes, you know, wait some time and then have you come back to committee and tell us has anyone has anyone like taken the bait, right?

Um okay, and then my other question is about the um the penalties piece.

I see that we're not aligning with the state law, and it looks mostly because our existing fines are pretty similar.

We have a $15,000 per instance fine.

The state law said 10 to 30 for material violations, maximum bond.

I mean, it seems like we're just not changing what we're doing because it's simple magnitude anyway, plus we have the liens.

Um but I'm curious if we ever have had a cause to enforce it.

We have not had an issue in the last six years to be to need to levy any fine or put a lien on anybody's property.

That kind of makes sense to me because it was the um I feel like the properties that the ROFR has applied to, which are basically subsidized by some level of government in the past, would sort of be aware of this and inclined to comply.

Um I'm sort of curious um what the capacity will be if any affords enforcement is needed for the market rate properties of the ROFO.

Um, like who would even be in charge of that?

Probably someone in this room, but yeah, um do you mind if I respond to that question by emailing?

That'd be great, yeah.

Yeah, that would be great.

Unless um unless the state training's office has an answer to that right now, and again, I'll give you the moment, but if you don't.

Thank you.

Um, sorry, I just want to scroll back down through the slides because I think I had one more thing.

Um and then just to understand why we're opting out of the state bill, I think um on the slide we have three reasons, right?

Which is that we want to be able to assign to partners, not just Chatford DHA.

Makes perfect sense.

We don't want the mayor personally to have to sign certificates of compliance, that makes sense.

And then the other one was something about timelines.

I was just curious what the pieces that we wanted to do differently with timelines exactly.

Yeah, you can mostly see that on the slide.

Yeah.

Uh the slide for the write of first offer.

So our timelines are a little bit longer than theirs, and then just gives us flexibility to be able to respond.

Great.

That makes perfect sense to me.

So it's just referring to those RFO, ROFO timelines.

Okay, um, that was all I wanted to ask.

Does anyone, since we have time, have an additional question that was spurred by any of that?

Okay, great.

Thank you so much for all the work on this.

It's such an important tool, and um I'm gonna be very interested to see how that the market rate piece of it plays out.

So would that can I get a motion any second?

By all the address, I can buy Torres.

Um everybody thumbs up.

Okay, great.

Thank you so much, Kendra.

Thanks everyone for being here.

And we are, oh, we have two items on consent.

So pull those off.

We are adjourned.