The United States of America and to the Republic or one nation under Godissible with liberty and justice role.

Great.

And with thanks to Ms.

Ambush for her work.

Approval of minutes is the first item up.

Is there a motion to approve?

I move to approve.

And I'll second.

All in favor?

So passes.

I I would note that the document in the backup and that we're looking at today is conceptual.

It thanks to Ms.

Jackson, it sure looks a lot more polished, but from a concept standpoint, it's just the start, and I wanted to make sure that we could start our discussion today prior to having the uh city legal team and staff take a look at it.

So we're in early times with this.

So again, it it looks pretty advanced, but it's just the starter for our discussion.

Um that I spotted in my review of this is uh uh section nineteen five oh two generally under purpose B number three, lower income housing needs.

And I I think, and again, this is for discussion, that it might be helpful if we said to provide rental assistance, comma, including eviction prevention and uh deposit assistance, comma for lower income households.

So just to make sure we have some specificity there.

And again, that language can change.

This is just a s the start of our discussion.

But with that being said, uh council members, did either of you have any thoughts about this concept document?

And just so that I have some starter guidance from you all on that.

Yes, thank you for this.

Thank you.

Um Ms.

Jackson for this as well.

I think I stated previously before in regards to this is a pretty encompassing list.

I would like to see percentages on this.

So one is if we're if we're looking at these are not listed in any order in regards to this this number one, two, three, four, five, six.

Let's pretty much listen in terms of just topics, correct?

Yes.

Yes.

So of course I know there's administrative costs.

Um, and I know that some of this also uh will be not necessarily um I guess the other part of it is what has to come before this council and what latitude liberty does the director have.

I guess the other part of it is what has to come before this council and what latitude liberty does the director have.

I mean that also probably needs to be spelled out.

Like I would say, for instance, this is the Lightek project of four million dollars.

Does the director have the opportunity to sign off on that or does that come before council?

Is there is there a I know there are certain amounts in terms of our purchasing policy?

I know there is.

So that that may answer my question as well.

So I know from our purchasing standpoint, I have to check that.

This may not be this is not a purchasing issue.

So those so does Director Campbell have the latitude to say, you know, three million dollars goes to a project um on North Market Street.

Will he have that latitude or does that need to come before the council for approval as if differentiating between housing support for persons with disabilities?

And and I guess the other question would be I know we're having a conversation around rental licensing fund, which has not been finalized and where that goes, because then we're talking about some of these because it would be interesting to see like how much home repair assistance do we have, how much is not allocated for that, but what's the need in terms of the cost of that?

Are we talking about $500,000?

We're talking about $200,000.

I don't know, Eric, I know you're here.

I'm just saying, you know, and we have housing advocates here who are who are with us, but I'm just kind of brainstorming in some terms of some of these conversations of the of the amounts which we're talking.

Which may need some further discussion.

I think that makes sense.

If uh this is my brainstorming out loud, that's why people you're hearing me think out loud.

That's good.

Thank you.

But uh if the director and uh the director's team came before us to your good point with suggested percentage allocations for council to approve, then the director may also have in hand at least an estimate of what the dollars available for it would be.

And and lower income housing needs, I know we also contributed that to that through the rental licensing fund.

And I know that's also ongoing, but I know we have Nick Brown here.

I just wonder how many how much has been spent thus far from us in terms of that partnership relationship.

Gone.

And I'll probably ask you this question later on when I have you kind of go back and forth now.

So question to how much do we I can't remember how much we allocated for that.

Just outline a question when you when you come before us.

No, when he comes before us, he can he can ask.

You don't have to answer now.

I know he's coming.

Great, thank you.

So as we're we're brainstorming, um, I'm gonna go kind of up to the the beginning about establishing um so this is mostly concentrating of the MPDU program, but it says any other revenues designated by the city council.

And again, with brainstorming, um that I don't know if this is going to be a part of this or if this should be a separate thing, doing something like a percent for housing, so that we're not subject to maybe using rental licensing fees at inappropriately, um, so that we kind of have that we say, you know, housing is like an incredibly important value for the city and a high need, and and if we designate kind of some of our overall budget to that and not rely solely on the MPDUs, but I don't know offhand what that number is.

Right.

And and to your good point, this ordinance is written so that it could be the bucket into which general fund dollars, if we put that into our budget, could be placed for exactly these purposes, yes.

Would would uh establishing a perfect percent for housing, would that do you think come out of the budget discussions, or would that be an ordinance establishing a percent?

I guess my question is what do you mean by percent?

So let's say our you know, our overall city budget, and we allocate one percent or two percent of that budget to the housing fund that we're we're committing, you know, X amount of our overall and and this may not go anywhere, but I know that we're talking about doing percent for art, which is but that's CIP projects, not an overall budget.

Um I'm sort of brainstorming also about like how do we bolster this in a way that um is also in alignment with um some of the legal restrictions we have around fees.

I'll say this publicly as I've said this in regards to this.

My role as a council person is not to look at the legalities of things.

That's why I have a city attorney.

I don't make decisions based upon that.

Anyone can sue us.

So I don't look at it from I don't want us to look at it through the lens of fees and what that looks like.

That's why we have a city attorney um who provide counsel to us.

To I guess council member, to your point, I would not be in favor of any percentage of saying allocating from a budget, because that then limits what we can and what we cannot do.

I was just talking about in terms of the categories of percentages of saying 40 percent goes to administrative costs, 30 percent goes to LITTEC projects, 20 percent of that funding, but I would not be in favor of saying to to your point in regards to the first aspect of any designated, say one percent of our budget goes to that.

I don't want to limit us from that standpoint.

Um I do like the anything deemed by the council, because that that grants us flexibility um of what those resources um will look like in terms of that and how we would allocate those.

I was just speaking of in the section nineteen five oh two, the purpose of those particular categories, those percentages of what that what that allocation will look like.

Do you think that would be established as we do this ordinance, or would that be sort of an annual review based on need and based on because the amount that's gonna be in this fund fluctuates year to year based on um developers paying the fee or building the the unit.

So that's sort of a always in flux.

Um and I don't know if the need and we have to look to our housing experts if the need proportionally changes very much each year, or if we have a pretty good outlook for you know, if we can kind of predict with a reasonable amount of accuracy that you know we'll need five percent to this particular program or not.

Um again, I'm not we have a room full of experts here, so we we may need to look to them as far as what kinds of percentages make sense.

I think there are there are baselines.

And baseline would be s say um this home repair assistance.

I think there's a baseline of range probably every year that we would see.

I think there's anomalies probably generally speaking from one year to the next, but pretty much there's probably a range that's already probably been um baseline range in terms of yearly projections that's been occurring.

Same when we look at um low income housing needs, I know they may change, but there's probably a baseline range in terms of we look at anecdotal, I mean look at data that we can that we can see.

Um particularly if we look at um this commitment to also LITTEC projects.

I think this encompasses so much, but I think the other part for us is we want to see units get built, so there's probably got to be a greater percentage on that than any else, but just from that.

Then we built an administrative cost, which we know is also um necessary for us to have these have these plans and program implemented.

So just from that standpoint.

Yeah, I just wonder if again annually HHS could come to us with an anticipated amount of dollars that would be coming from MPDUs and other sources.

They wouldn't know unless we budgeted for it, what was coming from the city.

Uh and then with a suggestion to your good point about percentage allocations of those funds.

So and then council would say yes, that makes sense.

And and I think if we had a projection and we looked at like how much is in the the fund, and then if budget needs to have a line item to add to the fund, or is it robust enough?

Um again, because it's gonna fluctuate depending on what projects are out there.

Um I think that you know it's a nice relationship to have the back and forth of what are the needs, what's happening.

Um yeah.

Good.

At this again, early concept document juncture.

Is there anything else on this that you think we ought to add, subtract?

Is there a reason why you picked September 1st?

Say again.

So reason why we pick September 1st.

Just curious for that.

It it seemed like a good time before we got involved with the budget, but I'm open to other dates.

And but by the way, director, uh your and Jody's feedback on this is also welcome.

So this is not the Rosetta Stone.

This is just a start, so let me let me think let me give that some thought.

Sure, sure.

Anything else?

I'll I'll make a note September 1st question mark.

All right.

And as has been mentioned, we've got lots of folks who know a lot in the room.

Are there any comments about this draft at this time?

Do not have to be.

Again, this is early times.

All right.

Well, we will again be visiting with, among others, HHS, and I'm sure other stakeholders in the community before this comes back to public works.

But uh thank you for your feedback on this.

It's great.

All right, our next agenda item is to start learning more from process experts about moderately priced dwelling unit and our current policies.

Um I really appreciate your taking the time to prepare remarks and then come and share with them to us today on that.

Um, oh, could could you start?

Could FGAR come up first?

I I'm not wedded to an order.

Danny, if you would prefer to come up first, and you okay.

There we go.

Okay.

Hi, uh Danielle Adams, the executive officer of Frederick County Building Industry Association.

Um, honorable chair and council members of the committee, thank you for this opportunity.

I know that there's gonna be um a slide deck coming up.

Um I'll just preface this by two things.

One is because of the amount of time and effort with experts on the housing report that came out in February for the county, it did lean in heavy with the municipalities, especially the city, because it is the largest growth zone.

Use that as a guiding document if we can, as we're looking at again the moving ball with needs and funds as it always is kind of a balancing act.

The second thing is always to keep in mind what is the end goal, and I'll end my presentation with that question again.

Is what is the goal that you hope to achieve?

Is it people going into housing regardless of the number of people, or is it the number of housing units?

Um a lot of the reports that have come out, like the affordable housing task force had worked heavily on housing targets, and we've been able to sift that through from the county report, then looking at the general number, and then now looking at what the numbers about 4,000 that came out.

So mine should be FCBIA, the one on top.

Thank you for asking.

There you go.

Thank you.

Okay.

Excuse me, is there a feedback in the room?

I'm here for a reason.

Yes.

So while I'm talking.

It may not be you, it may not be anyone in here.

May you just be our tinnitus, I can't tell.

So it's like there's no I've been I've been with my kids all weekend or young adults, so I hear everything.

Yes, yes, thank you.

Oh thanks, God.

You can go ahead.

We'll be able to do that.

Okay, thank you.

I didn't know.

All right.

So one of the things I think is important is I always tried to look at case studies inside the state of Maryland, as we know, a little over 50 years ago, moderately priced dwelling units uh came on board for two predominant reasons.

One is because of the cost of housing, and the other one is because of segregation.

And we wanted to be able to have communities that were healthy, uh, that you had a variety of different ages and backgrounds and cultures and economics because uh a community thrives best when it has variety.

So those were the two leading components, and then trying to put a target on it between 12 and a half to 15 percent was the goal of setting aside units when you do have builds.

Our town, our city, uh started in 2008.

So there's still a lot to learn, and I appreciate this opportunity for us to take a look at it.

One of the things that I feel is important again, kind of a guiding question again.

What is the goal, rental or home ownership?

And understanding that you can really look at what goes on to the game board is anything that's gonna be 25 units or more in development.

That's currently what we use as a uh as a measurement.

Administratively, I've highlighted a few things in my slide deck because I think it's really important.

So for administration, as we know in Montgomery County, while it is much larger than we are in every capacity, um, there's been over 17,000 MPDUs built up until uh 2024 as a metrics.

We know that each year it's a little over a thousand or so.

But there's two things that come into play with that.

One is the cost in order to manage it.

Uh they put that together intentionally.

So having a budget of over 121 million dollars is appropriate because of the intentionality that they've places that as part of housing and their goals and again building those communities.

Do we have that today?

Have we done a feasibility study of what it might look like administratively for us as we just really get started?

The control period is the other thing that is the second um driver.

When you have a control period, you have to decide what is the amount of time you want to keep that unit in an affordable state or accessible to folks who identify into a certain bucket of access accessing that unit either for sale or for rent.

And what I try to do is give a little comparison of Frederick County, what their data shows as well as Montgomery County.

So we're at 40 years in the City of Frederick.

If you look at Frederick County, they do break out for sale versus for rent.

And then Montgomery County, you can see it's a considerable difference.

It's 99 years.

And again, there's metrics behind why those amount of years are chosen.

Yes, council member?

No.

Real quick, I I was you said 17,000.

How many how many units you said they had built for over 53 years?

It's been over 17,000 in Montgomery County and PDUs built, either for sale or for rent.

And that has been up until 2024.

That has been developer choice, if you understand what I'm saying.

Or has that been we we want you to build a units, but of course, with the MPU program, you could quote unquote.

So good question.

So I don't have policy as far as like when it was mandated versus incentivized, but that would be a good uh case study to understand what what changed.

I can tell you, while this is not part of this presentation, that while they have rent stabilization in place right now, over 97% of permits for multifamily dwelling has gone down.

Yeah, their rental solution, I think started two years ago, one or two years ago on the wheel.

A little over two years ago in 2024 in the fall, they started rent stabilization, and today they sit with investors pulling out.

So it has has affected it affects MPDUs significantly.

Okay.

Yes.

That's something to keep in mind too.

Thank you.

But we'll leave that for another conversation.

Um the other thing I wanted to share with you is what is the community challenges that are significant?

Resale in Montgomery County, 394 in 10 years.

Think about that.

When you have 17,000 designated MPDUs, some of them up to 99 years, and then you had the other um, and I'll just get back here so you can see oops, that you can see the um sorry, it's just kind of a weird scroll, but okay, you can see at the top here.

35 years for a rental um, no, sorry, 30 years for a rental in 99.

Okay, anyway.

So the 394 in 10 years is telling because you're not bringing that supply back onto the market for other people who might have affordability stepping stone needs.

I say stepping stone because if you're growing your family and you've bought a unit or you've rented a unit that's one bedroom or two bedroom, but you need something larger, where does that put you?

Do you go out of the community now that you've been building yourself into because the next step is is too expensive?

So, what does that look like?

Continuum of housing is a really powerful tool.

Also wanted to point out that when you do purchase a unit, um, we do find in Montgomery County there have been case studies where they want to hand back the unit because they can't afford the insurances, the HOAs, the taxes, all the cost to live in there.

Purchasing is one thing, but then the ongoing things that um you cannot control, they continue to escalate.

So the developer challenges just to point out a few of them.

Uh no two lots are the same.

And when you look across the city of Frederick, whether you are off of Key Parkway or you're off of E Street, think about all of the attributes to a lot or current existing land or existing buildings that no two are the same.

So it's really important to have you know a top 10, you know, grocery list of what people can get in order to find and meet the incentives that would draw them to invest into it, and then be able to go ahead and build because it does take time.

It's usually five, seven, ten years, depend upon the types of projects that you're building.

So I'll keep that in mind.

The other thing is the complexity of regulations, again, because the lots are different, being able to get certain amounts of units in there, you have form-based code, you're gonna have parking requirements, things of that nature.

And then logistical and administrative, it's really important to understand the cash flow issues, the cost to build.

One of the things I wanted to point out and I've highlighted this in Montgomery County, the challenge is if it's for sale and it's on the books for more than 90 days, there's a trigger point.

And that means that it can go to market rate and open to the general public.

So the goal initially was to set that unit aside but if it doesn't get sold, the goal is not to hold on to inventory for sale.

The goal is to possibly you know sell that in a shorter window of time and then keep it in an affordable status.

So that's a trigger again there's metrics behind why it's 90 days but that team tends to be the rule of thumb with MPDUs.

So density bonuses a lot of folks ask well why don't developers build them because they can get these density bonuses.

If you look at the challenges I pulled out the ordinance because the ordinance says that a developer has the fund basically a reasonable understanding that they can make money off of these units.

At the end of the day anything that's paid for is going to be passed on to the units that are adjacent to the MPDUs.

That means that everybody else outside of that 12 and a half percent get to bear the cost of whatever it requires to have the 12 and a half percent units.

It's just a reality of economics.

So the idea of what's reasonable again that's open for interpretation but when you look at density bonuses you have to think about the materials the engineering everything that goes into a building and if we're at if at max capacity at six floors six stories in this town and in Montgomery county in order to get 22% MPDUs you can go above 30 stories.

I don't think we're ready for that.

I don't even think we're ready for you know 20 stories because that's not the town we live in but the idea is in order to get those benefits and density bonuses you're going to have to go higher in order to get more units out of it and then it starts to calculate and you get the funds in there where you're going to make that income.

But again I think that's important to do a feasibility study to understand how how that looks in the city of Frederick what part of the you know Frederick it can be best served and then is it between 12 and a half percent to whatever percentage you want to give those bonuses at this is again going up to 22%.

Oh other thing TODs so transit oriented development while the General Assembly had an amazing bill about incentivizing developers to build towards transit we officially found that we do not qualify for that our mark train is not part of that equation and hopefully in the future it will be hopefully there'll be some things but you have to be able to be running seven days a week and you have to be able to run throughout the day and we don't have that type of service to offer folks who are needing it for workforce or pleasure whatever it may be so we would not qualify for TODs.

So FIA and Lou it's also called payment and lose so the fill or the pill some of the things I wanted to point out about this is uh we've gone from a $16,000 to a $2 square foot per for each unit I would revisit that just to make sure again because some of the things that I'm going to encourage you about incentivizing developers are going to lean into that.

Current funds I won't go over that the presentation before this that was great you can see what uh the things you guys were focusing on and maybe re-focusing on but here's my general recommendations using the pill for the construction of the actual MPD units leaning into that so that you're not dispersing so much onto all the other properties reducing city fees for qualifying projects modifying the standards where it's appropriate.

Nothing by the way would affect the health welfare and safety of any occupant that would never be on the table.

These are things that are time constraints and time is money or it's additional fees and as we know in the city of Frederick we've seen those escalate also reducing parking and parkland requirements such as the Frederick County parks and rec requirements and certain projects waiving and reducing utility connections we're at a juncture right now where everything is electric and that grid your all that new grid cost goes on to new construction so keep that in mind folks that have existing construction do not bear the burden of those costs so that is a real that's a reality that we need to face so reducing some of those connectivity fees can be a benefit producing some relief on school construction and other impact related fees and then also thinking about the down payments the county does this right now with their pill they have actually increased it so it's up to 2000 that you can give somebody for a down payment so they can make the purchase and then when they go to sell that property that 20,000 goes back to the county so it can be reallocated.

So it's kind of a um uh interest-free payment-free loan.

Um, but the idea is to help them get across the finish line to be able to qualify for um a loan.

And then again, I'll just add again what's the goal?

Whatever the goal is, work it backwards and figure out like how that would work best for our community.

So I think that's all.

Thank you so much.

Can can we go back one slide?

Yep.

And just for my education, provide down payment assistance.

What what a great idea.

Is this in addition to the unit being moderately priced?

So it's it's two.

This would be for for sale properties, yes.

Right, for sale property, but I'm getting it at a decreased price and uh hypothetically $20,000 uh down payment support.

Because the the individuals or families that might qualify for this, if we think about our inventory today, it's probably gonna be a home that um might need a little fixing up today.

It's really hard because there's not much inventory, but being able to give somebody where they don't have the cash to close um is really powerful because the appreciation of that unit is I'm not gonna say it's guaranteed, but we're not at any um measure of where we were in 2008, where we have a concern of uh that bursting uh the values of properties.

So the idea of building up generational wealth pretty quickly is is a powerful tool in helping that individual get there, that family.

Great.

Colleagues, any questions for for Danny Adams?

Yeah, so two very different questions.

Um you had mentioned early on about the purchasing of a property is not the only cost.

And as a homeowner, I know that we've needed a new roof and we had a chimney repair, and you know, and you have on and on and on, and that owning a home is a great way to build generational wealth, but it also can incur unexpected expenses.

And uh do you have suggestions or ways that we can help people maintain their homes or keep in their homes longer?

Because if you let your roof go, you know, that causes damage, which could cause mold, which could cause, you know, you know, and then and then people get buried or have to declare bankruptcy or something.

So that would be one question.

And the second one, which is very different, is when we start waiving fees for impact or schools or infrastructure.

This is when we were all out on the campaign trail.

One of the concerns we heard most from residents is that building is moving so rapidly in infrastructures and keeping up.

And I want to make sure that we can keep up with infrastructure, and as we all know, it's very expensive to do that.

And if you have any ideas on kind of how to balance that or how to how to make that happen in a in a way that doesn't negatively affect people on lower incomes to live here.

Yes.

Uh, your first question about maintenance with MPDUs, it's new construction.

So the life of the roof um codes have considerably changed the cost to build, it's made it very unaffordable.

Um so you're getting good quality, certainly efficient for probably your first 20 years.

Um I think this the second part of that is it's worth pursuing uh the cost to age in place.

Um it's worth pursuing existing infrastructure that you would turn into an MPDU.

Um, but again, you're talking about new construction, so they would have to bring and deliver that unit to the new party, uh, most likely at full uh value of a new HBAC, electrical work passing everything.

But I think that that's worth pursuing, and I hope that's something you would might consider as you're looking at funds, the housing funds is aging in place.

Um the second question you had about impact fees, um, just build them, just build the schools, use a public-private partnership.

It's a tool that the state uses.

Prince George's County has used it very well for all the controversy of why it cost a little bit more than they had budgeted for, they still delivered six schools in three years.

And it's a very powerful tool.

You can use public-private partnerships for multifamily housing.

You can use it for roads, bridges, jails.

No T two are the same, no public-private partnership too are the same because they have different attributes to them.

Um so I I highly encourage um looking into that as a financing tool.

I know that um the county is gonna be facing the challenges of a budget um constraints next year.

We've already been given a sneak peek of how many billions of dollars that the state will not be able to provide.

So that goes to the counties, which means it trickles down to the municipalities.

So we can't count on those funds.

So start planning now is my take on it.

So a public-private partnership would be a very valuable tool to get what we need built.

Tell me when the control period No, there's not one before that, is there?

Sorry.

I don't know if could you help me with it?

Thank you.

That was the beginning of the case.

No, okay, no, scroll down.

We see here.

City DM.

Keep going.

Okay, administration.

I'm just looking at that.

So I guess to my colleagues' point, and I've talked about the summit previously a few years ago.

Hugh knows this a few years ago when it comes to our impact fees.

Of course, we know that's a barrier.

And one of the things we I talked about with our staff is quote unquote, I don't use the word pay ourselves back.

But using this fund to weigh those fees to expediate and to make it cost efficient for developers to do that.

Yeah.

For one of our goals to being we want houses to be built.

And then in essence, using these fees to pay to pay into that.

So water, electricity, some of the things you mentioned, which sometimes can be cost preventative to use that fund for that.

That's a decision we have to make from a policy standpoint.

I've been trying to push that.

I've got significant amount of pushback.

But it's sort of like if this is one of the things in terms of areas where we we think it's a priority, we're gonna have to do something.

That's one approach.

Yep.

I don't think we're just gonna waive fees entirely.

No.

No, I'm going up to saying that's one that's one approach I've I've I've recommended.

I've asked my colleagues to consider that.

Um, particularly if that's approach that we want to we wouldn't want to go.

Um secondly, I I know you I've heard you say this on several occasions here.

This feasibility study.

Yes.

And we just did a study.

Not just regular study, it's something that I think your team could do.

No, that's that's what that's why I'm saying that's my question is yeah, we can do that in-house.

That's that's what I'm asking.

Yes.

Okay.

Fair enough.

Yes.

That's because sometimes we hear studies more cost.

Now I'm not saying that our study, but from the standpoint of we're talking another study.

Now we're talking about not I'm all about doing things right, but another study to analyze an issue which we know that we need to address and it's then I think the hard part is to do a fiscal note first.

A fiscal note says what you anticipate coming in based upon the pipeline.

So we already know some of the data we've seen last fall told us how many projects are paying into a fee, how many projects are being built, what was the required MPDU percentage, and what that looks like.

So the $18 million is over a period of time.

And even this task force, as we're looking at the report that came out in the middle of July was um a certain portion in in five years and so on.

So I think if you do a fiscal note, you can see what's coming in and what's going out.

I will say when you get to administrative costs, though, you're probably gonna have to, I'm not an expert.

You're probably gonna have to go to a consultant to justify the um positions that would be needed, how many positions in the housing team in order to oversee this.

How many units do you want for sale?

How many do you want for rent?

Those rental units need oversight, a lot of oversight.

So can you scroll down to the other slide, please?

Um go back, Stephanie, please.

One one more.

No, please up, please.

Complex regulations, can you talk about that's what I was looking for?

And then there's another slide.

Complex regulations in terms of that being a challenge.

Yeah.

Yeah.

So we don't control everything in this town when you're building and developing.

Sometimes it requires state agencies, and that's what I mean, how it can become very complex.

Um I know some of the LITECEC developers have had to really jump through hoops to try to avoid losing financing because of the time it took.

Um I think we're fortunate we're at a juncture right now where we have a state ombudsman for the Department of Um Housing and Community Development that it's willing to work with developers to kind of get that uh sense of let's put all the agency pinch points together and see if we can help you get through quicker.

But I think that that's just more as a like a test pancake.

I don't think we're there yet for every jurisdiction, but I would like to see if this town, you know, can look at that dashboard and see where those state agencies there could be um support.

If it's your goal, then everybody should be working together and mapping it out and saying this is how we're gonna get there and when we're gonna get there.

of um housing and community development that it's willing to work with developers to kind of get that uh sense of let's put all the agency pinch points together and see if we can help you get through quicker but I think that that's just more as a like a test pancake I don't think we're there yet for every jurisdiction but I would like to see if this town you know can look at that dashboard and see where those state agencies there could be um support if it's your goal then everybody should be working together and mapping it out and saying this is how we're gonna get there and when we're gonna get there but they do play a role in it and we have no control over that so you might I don't know so next and then funding and funding uh follows it and one that's one of the biggest things we're actually we have a work group that's talking about how do you fund a variety of different multifamily mixed use um a lot of the growth in the county in the master plan is going to be mixed use retail residential multimodal um so it's important to understand how those funding sources are going to come through um so I would encourage like that to be a focus next slide next yeah keep keep going down thank you um yeah right next slide and this is the next one yeah this one I I know my and I agree with my cottage in regards to what we always hear particularly development and building and I think it's incumbent upon us to also ensure that um our transportation modules and models of transportation because it's sort of like a culture shift in terms of how you how we deem transportation of you know I was in a conversation about Route 15 and everyone's excited and we know go put more cars on the road and it's more like how we develop or encourage development how do we now those transportation modalities which we're encouraging such as walkability bicycles those measures that we have to ensure that that's a culture shift in terms of our policy decision making I was also thinking from school construction standpoint I think it's important for us we look at one annexations and two development that we start looking at urban school designs and that those models because those models have worked in other cities we're not unique in that and we to get school but we in terms of what you're saying about going up we can't not in the city we don't have the acreage and the width to go out but we can do have the possibility of going up so it's important for us to look at urban school design and factoring into these our housing situation.

Yeah I'm from Baltimore they built them upwards and not outwards.

So I would say we have a couple models of urban school in Frederick their Montessori schools they do exist.

We have legal teams who have dealt with these type of designs there's great architects and engineers that are within our reach so it's um it's possible I think it is a culture shift I think the multimodal is much more um I think it's widely received the hard part is like you know knowing what street you're putting things on and there's form-based code so doing it in a way that um can can work it pencils out again those are restrictions so if a developer is told okay you planned on a hundred units and now you're only going to be able to do 50 units because we have to do XYZ and setbacks and certain things is it going to pencil out are they going to make the income on it that they anticipated so again no two projects are the same.

So great well thank you very much for sharing your wisdom and information with us.

Thank you very much.

Is this a good time for FCAR to come up okay please I'm the uh CEO of uh uh FCAR Fred County Association Realtors and I'm glad I did let the Annie go first um although she stepped on a lot of the points that I wanted to make here today so um it's interesting my first house was an MPDU in Montgomery village uh and as Danny pointed out it was after the 90 day period I think this is the case roughly a 90 day period where it was on the market as a MPDU where my sales manager at the end of that period that I was working for Kettler Brothers at the time took me out and said you need to buy your first house and it gave me the opportunity for for home ownership and council person around I want to go back to a question that you asked Danny about about maintenance and and people taking care of their homes.

I can tell you when you have the opportunity as a first time own owner to own a home you have pride in ownership.

And there's a lot of that that goes into understanding what it what it takes to maintain a home.

I can take you out to communities $650,000 communities in Frederick County and show you homes where people haven't properly maintained them.

So I don't know that it's any different in a first time ownership community than it is anywhere else.

I think people learn those traits, they have pride in ownership, and they learn to take, they they learn to take care of their homes.

The one thing I'm hoping that that this discussion will lead to is an actual creation of homeownership.

I know we've been using a lot of the funds that have been collected in the past for a variety of reasons and or variety of purposes.

And uh some of it, I mean it's it's all gone for for good purposes.

I know a lot of it has gone towards the LITEC communities and helping them to get off the ground and get built.

And those communities have been great because they have given first-time home buyers or first-time homeowners an option, an alternative.

But I think what we need to do is really focus on getting these units built.

Because LITEC doesn't create generational wealth.

You know, the these units are going to create the generational wealth that we need in the community.

And hopefully, if we can start to get these units built, we won't have to rely on um, you know, the other concerns where we've been directing money in the past.

So I'm I'm very hopeful that that that is, you know, the focus and and the direction we're able to move this this in.

Um I have some other notes here.

Oh, one of the things that um I'm I'm very hopeful of is I I heard you actually going through your mind, Council Councilman Shackleford, about the allocation of funds.

Um, you know, I'm not sure I understand that process fully.

And and it just seems like the monies that are being collected for for housing need to go towards the development of these communities and or the or these these properties, these houses, whether it is a community or whether it is these interspersed MPDUs in within a community.

And I think that's something else maybe you need to take a look at.

You know, can MPDUs be built in a isolated, you know, environment.

You know, I know there's been you know some some reasons why we've wanted to intersperse them in market rate houses because of social reasons.

Um but that's something I think that needs a little bit of exploration because I think that there are opportunities, I know there are groups, and Danny talked a little bit about private uh public partnerships where we could you know create a small community of affordable, and I actually am going to stop calling them MPUs.

I'm gonna start referring to to it as an affordable house, um, but where we where they're trying to create these affordable housing communities.

I know Ann Ryan's group is trying to do that.

And you know, they're going to be isolated communities on potentially on grounds that churches own.

I think we have that same opportunity, and I think I mentioned in my letter, you know, we have uh the city has um excess land, uh whether that be school dedicated for schools or parks, you know, maybe those are areas we need to take a look at, you know, um building the MPDUs because I think that's more of FCAR's concern.

I think FCAR's concern is just making sure that there is a first level of affordable affordability in the community.

Uh and I really think beyond that, I I really think that uh Danny covered most of the rest of of what I intended to say.

So hopefully that's helpful, and I'm certainly always available if you have any questions.

Just out of curiosity, uh do you have a sense of if we had a million dollars, and I know that's nothing in the world of housing, but what what percent we should spend on houses to buy, moderately priced welling units to buy, as opposed to moderately priced dwelling units to rent.

I'm sorry, repeat the question.

If if we have a limited amount of funds, what percent would you allocate for houses to purchase as opposed to places to rent?

I'd be under this program.

I mean, if we're really going to create affordable housing, I think 100 percent of it would go to this to this program.

To houses to purchase.

Houses to purchase.

We've kind of focused on houses to rent quite a bit over the last several years.

Uh there seems to be a lot of that in the marketplace right now.

I think our I think really, in order to make this happen, it's going to take a direct focus on houses to sell.

Okay, great.

Thank you.

Council members, any questions?

Hey, you I'm not going to look to do that easy, no that.

Sorry.

I think a couple of things I think someone to mention is I think because one is the need has been so great.

And I think that delicate balance is what's the greatest need that the parents face value, but then we get paralyzed by now.

We know there's this is the intent, but that need is so great.

So we want to use it towards that.

But at the same time, if we use it towards that, it's sort of like, well, we need to wait just in case.

Because uh the answer to your question may be just flat out you've got to build them.

What's your thought on that?

And and I I 100% agree.

Um, you know, I I think we've been talking about this for a while.

Uh and we haven't really seen much in the way of of productive, you know, production.

Um, and I I think it's really time that that we kind of make it, we make it happen.

Uh, you know, I think that's that would be you know a huge feather in all of your caps to to see you know that kind of housing become available in in Frederick City again.

And and that comes available, and I'm not opposed to that.

That house becomes available at the expense of the other aspects.

Of the other needs that we talk about in terms of those resources being used because Nick Brown's coming after you.

And he may not say you just felt outbuild them.

I might get into his presentation at all, but he may not say that.

So that's why I'm saying there's going to be those different approaches to that.

So but that's a decision, of course, that we have to make.

Well, and it's easy for me to sit here and say 100 percent of the funds should be used for housing.

I know you as you know, in in your positions aren't going to necessarily be able to do that.

There are going to be other good purposes.

But um, you know, I did there I my my point is just that we really need to get moving on this and and get something built.

No, I appreciate I appreciate that.

That's why I should the direct question.

Thank you.

Uh first of all, I uh thank you for being here, and I really appreciate your letter.

I I feel like you outlined some things really well, and you know, I wrote all over it and highlighted some things.

Uh recently I went to a talk um with housing secretary Jake Day, and he talked about kind of how we've regulated ourselves out of the starter home as it were.

And I I think your conversation is saying like get people into their starter homes into those.

And uh do you have any advice as it's gonna take a lot of different legislative things, a lot of different funding sources to um arrive at the goal of of more units.

But uh I guess where would you begin in regulatorily, if that's a word, um, in getting some of those quote unquote starter homes built.

Yeah, I and actually um thank you.

I I had made mention of several of those points, I think, in the the letter that I had um sent earlier.

Um, I had talked about uh streamlining the review process.

You know, that I think that's gonna be really important to to move these um communities along or move these these homes along.

Um there's ways that that are being done that are being done very successfully around the country.

Um we've talked about them in some of our subgroups, and I think we need to really go back and look at that and see if we can't implement it.

Um, I know Danny talked about uh reviewing our impact fees, our permitting costs, and other government fees, and I understand you know the schools need to get built, the roads need to get built.

Um, you know, there's there's no question about that.

But I think if there's at least a review that's necessary, and maybe there can be an easing in certain instances where maybe not as much is collected if if if it can't be waived entirely.

Um she talked about ex expanding density bonuses uh and high flexibility.

I I agree.

I think as the community grows, whether it's Frederick City or Frederick County, you know, we're gonna have to look at verticality as an option uh for our development.

I think that's really important.

And and I think we need to go back and look at at zoning and and all the rules and ordinances and regulations that might limit our ability to do what we're what we're trying to do.

Um, some of this also, you know, this has becomes the difficult part, I know, because there's there's a lot of what we're controlled by at the state level.

You know, they control a lot of, they make a lot of zoning quite um regulations that we have to follow.

You know, there's stormwater management, there's a lot of things that affect the cost of housing, but I really think we ought to be making efforts at the state level, you know, MDE, which probably won't affect most of these these uh communities or these these houses, you know, has a lot of impact on development and construction, and we just make need to make sure even at the state level that we're we're putting as much pressure or emphasis, or at least you know, telling them what our needs are, so that maybe, and I know you you just mentioned that you've been having conversations with Jake Day.

And we just make need to make sure even at the state level that we're we're putting as much pressure or emphasis or at least you know telling them what our needs are so that maybe and I know you you just mentioned that you've been having conversations with Jake Day um you know maybe that's the avenue to follow through on those those suggestions that that are those those problem areas that we we know exist.

Great thank you very much.

I hope that's helpful.

It's great.

Thank you.

Uh Nick Brown Beyond Shelter could you come share your perspective with us please evening folks and thank you for the opportunity to talk to you to tonight um in my letter and I'll disclaim here as well I am not an expert in this uh in this field uh I'm familiar with MPDU but it's not previously something I had been terribly involved in.

Um that said I was part of the uh recently held task force and a lot of that work was spent those 60 days were spent really looking at MPDU um as a process to find out mechanically where were some of the uh were there were the hangups were there issues that we could resolve by suggestions um to look at the fee structure uh suggest some uh recommendations therein so um we looked at the the the the time went by fairly quickly and we did look at three main halls um uh in the MPDU uh the first was uh of log jams we looked at f uh fees were there anything was was there anything in the fee structures that were back uh that were logjaming pro uh projects keeping things from developing here in the city uh it a bit of a surprise in that there were no projects backlogged because there were just no projects in the you know pending currently that were uh as as far as um known uh MPT projects there were five or six that are in the pipeline and we saw what those could potentially spin off um the the revelation there was that if everything that is in the uh current pipeline comes through in the time uh in the time it's not going to meet the level of need for the units that the report uh said we needed in the next five years I think the number was 2.5 million or thereabouts um certainly not enough to to spend the uh the number of units that we needed to to derive so that was one large uh revelation that we that we picked out um we looked at then uh next at policy recommendations uh how the council uh addresses the the ordin ordinance annually uh and and and the language that we saw there were some um and there was some uh generality which made sense right you want to have an ordinance that doesn't focus down too narrow um but I think it there are a couple of places that we found that that risk helping nobody because of the broadness of language right uh certain definitions what is a special population what is an affordable housing need um I'm kind of a details person in that regard and like to know that if we're recommending a policy to the council to say this is a potential way to go we want to know how that you know what those thresholds meant prior to making those recommendations so I think really uh honing down and getting um granular whether a you know notes whether you know that whether that's HHS staff somebody that that really drills down and finds um those details uh and and tailing into that um the uh there was a um uh language in here that says uh on an annual basis the council reviews it recommends changes to the MPDU um how do you guys do that right that was the thing that that really popped out it's like what are you responding to that that you're making a recommendation of and you guys have to be um aware of a lot of things and not necessarily the masters of a lot of things so you have to have you know experts come and tell you hey this need is emerging or this is the trend that we've that we've recently seen um you know I I've been trying to coin a new uh a new term we have a lot of Alice data floating around but we don't have any now list data right what is happening right now that that we can react to on an annual basis um you know no uh you know indictment to any of the reports done but a lot of that is either modeling information or it's two year old data or both and that is stale when you come to the the nonprofit land we move very quickly right we we see a need we address a need um and in six months there can be an influx and then in the six months that can end and that happens all inside a lot of those um timeframes where those two year periods occur so how do we create a repeatable consistent uh pool of data for you guys to react to um we did have a a brief conversation with um data di data different uh data driven Frederick um to see how do we set out a template to query all of the providers right we have tons and tons of nonprofits uh we have about 27 different nonprofits just in the continuing the homelessness continuum of care alone that we can that all you know report and create data how do we spend that to inform you from the city council to form the the county council so that you're making priorities based on real needs um that reflect what we're seeing in real time so that is I think one of the largest recommendations from you know personally um that I could you know that certainly can can suggest um I am here with as kind of two hats one is the ED of Beyond Shelter the other is as the chair of the current continuum of care um and we try to react to a lot of things we're reacting to um

How do we spend that to inform you from the city council to form the the county council so that you're making priorities based on real needs um that reflect what we're seeing in real time?

So that is I think one of the largest recommendations from you know personally um that I could you know that certainly can can suggest.

Um I am here with as kind of two hats.

One is the ED of Beyond Shelter, the other is as the chair of the current continuum of care.

Um and we try to react to a lot of things we're reacting to um known cuts right now.

Uh we're we're also planning and trying to advocate for what we know is coming down the pipe as which which is more or less 1.3 million uh dollars that are that is in jeopardy from being just gutted from from this county alone and through uh federal funding and state funding.

Um these are the you know, these are the concerns that we want to be able to bring to to your plate to be able to say, okay, the city is reacting to this need as you know as we go.

So um that was a uh a very large haul uh as we as as we went.

Um we have another um another just kind of an example of that is we have a number a good number of households that are soon to be um jettisoned from what they thought was gonna be a voucher system until 2030.

That's ending at the end of September.

And frankly, we don't have a lot of local plan on how we're gonna handle those 40 households that will no longer be funded to live where they live, right?

Another example of this is something that you guys need to know, you know, right now and immediately.

So uh council member Shackerford's uh question, uh the rental registration um has been moving.

Um this is actually uh very uh similar to how service dollars have flowed out of every financial um nonprofit in this in this area, and I'm sure or you know throughout the state.

Um uh actual numbers here, and this is something that we sent to um HHS a uh a little uh a couple of weeks back, but these numbers are all from April 25 to April 26 uh for reference.

So there were a total of 287 um beneficiaries.

That includes that's regular beyond shelter rental assistance as well as rental registration.

Uh there were 63 recipients of that that was uh from registration beneficiaries, and we spent 1571 ninety-five throughout that period.

Um this was done at the be at the end of June, and we knew that um by the end of July, those funds and unfortunately all of the rental assistance in the land will expend really at the end of July here until about October.

Um so we're gonna hit this lull of two months where there are no uh funding organizations that have any viable source for rental assistance really across the board.

So we're just now coming into that and how we get through that we'll you know, obviously we'll we'll see.

But there is no real safety net um heading into the fall as you know as we go.

Uh one number that we did come up with.

What's the reason for that?

Uh just spin down.

So we have seen more people through the door than we're more or less at a COVID level frequency through the door, right?

Uh more people asking for more uh assistance.

And that that more is what we actually drill down on to say what is the average award now versus the average award five years ago or otherwise.

Um depending on the source, and obviously some of our sources can give five hundred dollars, some of them can give five thousand dollars, right?

Our average award is um it's about fifteen hundred dollars that came out of the registration, um, but the average cost and cost burden to both either rehouse or to stave off a um uh potential uh eviction is about thirty one hundred dollars.

So the you know the gap between um what we have to what we need is is is gonna continue to grow.

And obviously housing costs aren't coming down, so that continues to be an issue.

So those are the numbers right now through the yep through the rental registration.

And we are working with HHS to you know uh all along the way, talking about other programming and and and the like, but the the reality of it is is that you know, very, very soon there are no providers to call in Frederick if you are facing an eviction, which is a bleak outlook.

So uh I'm really glad that Danny Adams went before uh me because she had well you know, well more eloquent than I ever could as far as what the you know what the findings and recommendations were.

Um and I believe Peter, your draft holds most of the other things that were uh recommended here, very uh you know, granular details, right?

Data and details is what we were um really looking for um to be able to inform whoever has an opinion about the MPDU a little better.

So that is really it uh that as far as I had I could you know uh hash out some of the letter, but I didn't know if there was any other questions.

Glad to answer.

Colleagues, any questions?

I always have questions.

If somebody is seeking rental assistance, are you the first shop?

Are there other places offering it or does everyone come through your organization?

We're generally the first one out, and then we refer um to other per providers.

The the bad news is that the alternate providers um that aren't necessarily the first up, but uh they are also expended as well.

So that includes hotel placement, that's rental uh security deposits.

It's really across the board when we're talking about rental assistance.

And it is a lot of this because the need is increasing and the the federal dollars are decreasing and that's creating this gulf.

Both.

Uh we've received uh three providers um took a hit to about to the tune of about 100,000 just this current cycle right now.

Fortunately, we were able to bridge that through the city's secure grant, um, but those are still uh you know reductions felt therein.

Um we also have upcoming some reductions to what's known as permanent supportive housing.

Um this was um unfortunately uh large changes at HUD have created um uh reality where we have at least one provider locally cutting their um their units in half.

So this is the local BHA behavioral health uh administration.

Uh they generally have 20 units of permanent supportive housing, and the caveat here is they are high-intensity placements.

These are folks who need these these placements.

Um BHA across the state has taken a 30 percent cut because of the reductions that HUD is inflicting, um, which means 10 of those households will automatically touch the street.

So um those 10 plus the 40 that we know through EHV, plus who knows what else is what we are, you know, the reality we're planning for now.

So all the more important is to talk about things like this.

I don't necessarily recommend that NPDU be used for rental assistance, but particularly places like the um those who are losing a voucher and need to remain in housing.

Um I could you know would certainly be a proponent for you know for actions like that.

So do you have you you mentioned um 27 maybe nonprofits that are addressing this need?

Um do you regularly come together so that you you can communicate to one another and okay we do so there are 27 is the is the continuum um size itself.

Inside of that are eight HUD providers that are kind of the core providers of the you know of those assistances.

Uh the remaining members are all of your all the other categories that you want to hit your health care, jail, mental health providers, otherwise.

Uh generally there's a core of I think seven to eight HUD providers.

Do you do you produce a uh report or a data that because I would love to see some of that data and and who's doing what and where the gaps are, if if that's possible, and if the council can um you know adjust things so that people are getting the care that they need.

I have a great advocacy doc that we spun up recently for the funders and hint hint for local government as well.

Yes, we will be glad to share.

Um that breaks down by both um permanent supportive housing as well as what's known as the HSP uh grant uh grant process as well.

Great, beautiful.

Thank you for the work that you do.

Thank you.

Okay, well we can certainly invite you back to talk about that at some point.

That would be great.

Glad to.

I uh I would add, friends, as a as an adjunct.

Uh the last time I was involved with the rental licensing discussion, city attorney said that the fees associated with licensing should only be spent on the maintenance of that program.

And so I I council members are working on a revision to that, but for that reason, the housing solutions document folded in rent eviction and other issues for just that reason.

So just so you know that that's why it showed up on in that document.

Great.

Thank you very much.

Thank you.

And Eric, Habitat for Humanity.

I think we have a presentation up as well.

Perfect.

Thank you, honorable chair and members of the committee.

I'm Eric Anderson, executive director of Habitat for Humanity of Frederick County.

And on behalf of Habitat Frederick, uh, we just wanted to thank you for the opportunity to summarize the recommendations that were contained in our letter.

Even though we have to follow the other subject matter experts in the uh in the room today.

So really appreciative of all the information that's been shared.

So our comments are informed by both Habitat's participation in the opening doors and Frederick initiative, uh as well as our direct experience using MPDU dollars to create permanently affordable homeownership uh through our West All Saints redevelopment.

In addition, our use of city provided funds supported much needed home repairs in Frederick that have positively impacted the lives of dozens of individuals and families.

So Habitat responded to your request for recommendations along with several of our nonprofit counterparts here today.

And for those that have not fully read those recommendations, we wanted to provide a brief summary.

I don't know if that can shift a little bit.

So first, we encourage the city to retain the fee-in-loo option for the MPDU program while continuing to prioritize on-site affordable units wherever practical.

These approaches should be viewed as complementary.

Second, we also recommend periodically reviewing the fee in lieu formula to ensure it reflects current market conditions and continues to encourage affordable housing production.

As part of that discussion, the city could explore whether a graduated fee based on home values would provide a more equitable approach across different types of residential development.

Just to be clear, we are not planting a flag on that, just something that might bear exploration.

So third, we encourage the city to continue reducing development barriers through predictable permitting, coordinated reviews, strategic incentives, and policies that improve project feasibility.

Reducing time uncertainty and carrying costs can often be just as effective as direct financial incentives.

So permanently affordable home ownership, affordable rental housing, uh housing preservation, and critical home repairs.

And measuring success by the affordability achieved, housing preserved, and addition additional investment leveraged.

So our central message is simple.

Frederick's housing challenges will require multiple strategies working in alignment.

So a strong MPDU program and a strong housing fund are not competing priorities.

They reinforce one another.

So we appreciate the city's leadership in reviewing this program and look forward to continuing our partnership and expanding affordable housing opportunities here in Frederick.

Great.

Thank you.

Yes.

Colleagues, any questions for the question.

I'll call for Eric and you to have a debate right now.

Talk to me through the housing repair.

Keeping people for keeping our residents in their housing.

I know we um distributed some finances to you this year.

Absolutely.

So we have been beneficiaries of what was from the uh affordable housing conservation fund from rental licensing uh was 150,000.

Uh we received that in November of 25, and in the uh almost nine months since then we are there's about 40,000 left with the um probably expenditure of those funds by the end of August, early September.

So in nine months, uh we've been able to uh basically utilize those funds.

Um there's been um Corlin was just talking to me while we came in here because we are at almost a 54 percent increase in requests in the city uh and uh home repairs that are provided.

So I know there's a lot of discussion about creating new homes uh and or developers, you know, the uh uh hopefully building affordable, you know, the uh affordable homes, but uh we're also through this program big believers in preserving the homes that already exist.

And that's definitely a necessity.

And I was the reason why I asked that question because it's also in our conversation, particularly around this possible um this possible fund and what it looks like, it also gives me an idea of a percentage.

You missed like 150,000.

And so if we would say 250,000, that would be a percentage of that to allocate for that for that particular based based upon the growth that we've seen in the program as well as the funds that have been expended.

I I think anything between 200 and 250,000 would be absolutely you know on target.

Okay.

And we know uh we as we said, those funds came uh via the rental licensing program, and we know that that's been sort of put on hold.

And so that's also one of the um when Jody just recently presented on kind of the adjustments to the MPDU recommendations.

Clearly there's language in there that supports home repairs, and so we feel like the you know being able to uh draw from the housing fund would be an appropriate use of those funds, and now we just need a mechanism to do that.

Thank you.

Council member?

All right, well, thank you very much.

Thank you.

Is there any public comment on this topic?

All right, I prepared five minutes of comments, so I'm going to speak fast.

Well, hey, can we give gives us five minutes?

Great, thank you.

And thanks for joining us this afternoon.

Yeah, hi everybody.

Uh Ryan Trout, uh resident, city resident, uh 517 Wilson Place.

Um, thank you for the opportunity to provide feedback on the city's MPDU program.

Uh so uh these comments first uh reflect my my personal feelings as a city resident, someone who has spent much of my career working in local government and affordable housing uh separately in my role as a director of another municipal housing department, my staff will reach out to city staff and provide kind of staff-to-staff level comments.

Uh as many of you know, I led Frederick County's most recent rewrite of the MPD ordinance, which was then modified and kind of copied by the city.

Uh that was an 18-month multi-stakeholder process involving many of the people in the room.

Uh, developers, affordable housing advocates, local governments, and other community partners.

The city participated in that effort, and much of today's ordinance is based on that work.

Uh in my other comments, I provided uh stakeholder analysis, some final policy recommendations that came out of that, and an inclusionary tax abatement model uh that I've already shared with staff in the past as well.

Uh so I would like to offer three observations for your guys' consideration.

Uh first, uh take the time to fully understand how the payment in lieu option fits within the city's overall affordable housing strategy before making significant changes.

The payment in lieu is not simply an alternative to building MPDUs, it is also a dedicated funding source for affordable housing, as you have heard from some of the speakers this evening.

Those funds provide gap financing that help leverage State and Federal resources to build additional affordable housing.

During Frederick County's analysis, we found that payment in lieu funds often produced five to eight times the affordable housing than if the MPDUs had been built.

Now it's important, there is an important distinction which you brought up, which is that most of those were then used through the LITEC development process, which are 60 percent AMI and below rental units, which can be a different income target and typology, right?

So MPDUs, it's important to note are both rental and ownership units.

They're not all ownership units if they had been built.

Um the uh but both are really important, right?

MPDUs create mixed income communities, uh, they can create home ownership opportunities, while gap financing primarily supports deeply affordable rental housing.

The question is not which approach is better, it's how to maintain a balanced portfolio that serves multiple housing needs.

Second, if the city wants more developers to build MPDUs instead of paying the fee, we've got to pair requirements with meaningful incentives, uh, which is more likely to create success than relying solely on what have become unfunded mandates.

We require 12 and a half percent, we create a payment option, and then we wonder why nobody builds them.

One model worth considering is Chattanooga's affordable housing pilot program.

Rather than providing uh either no incentive or a flat tax break, it offers a 15-year partial pop property tax abatement that is directly tied to the actual cost of providing the affordable units.

This is on the rental side.

Developers receive an incentive only for the affordable units they build, and those units must remain affordable throughout the incentive period.

Essentially takes that difference in what market rate rent would be to the restricted rent, and that delta becomes their net operating income over the course of the year, you give them a tax abatement for that difference.

Chattanooga provides an incentive of an extra 10 percent.

So if say you were losing a thousand dollars a month for a unit to be 60 percent AMI instead of market, it would be 12,000 plus another 1,200 to 13,200 would be the tax abatement on that that unit for that year.

My phone keeps timing out, means I need to hurry up.

Let's see.

Uh I analyzed how a similar model could work in Frederick and developed a financial model that's also been provided to staff.

It is designed to make inclusionary housing financially feasible with without requiring a direct public subsidy.

Finally, if the city pursues both a stronger payment and loo fee and a new incentive program, this policy should be evaluated together rather than independently.

One option would be to increase the payment in lieu to help offset the cost of the property tax incentive.

In effect, developers who choose not to build units would help finance incentives for those who do becomes an exclusionary tax.

You want to create an exclusionary community?

Okay.

Like here's a here's a steep fee for that.

However, there are trade-offs.

If the payment in lieu option is too expensive, or if the option is eliminated entirely without meaningful incentives, the city risks discouraging new housing production and reducing funding available for affordable housing.

On the other hand, if incentives are highly successful and most developers build the MPDUs, the city could collect less payment in lieu, which also then reduces the collections for the other taxes.

No, no, uh so the city could collect less payment in lieu revenue while also reducing property tax collections through the abatements.

So then you have kind of a loss loss.

Neither outcome is inherently good or bad, but they illustrate why these policies should be modeled together with careful financial analysis before changes are made.

In closing, I encourage the committee to approach this as a comprehensive policy discussion rather than narrow view of the payment in lieu, the MPD program, the housing fund, uh you know, development economics and long-term housing production are all interconnected.

Uh happy to take your guys' questions.

Well, thank you again for coming and sharing this with us.

Colleagues, any questions Do you have your remarks in text?

Could you send that to to us just so that we can um because it's a lot to take in and uh some of these financial tools, you know, are a lot to understand uh right away.

Yeah, I I will distribute them.

Yeah, thank you.

They've been provided with the uh the chairman and and the accompanying spreadsheet, I believe, is attached.

If you don't mind, I heard a question of yours earlier that I could just make comment on.

Uh you asked how to build more starter homes uh beyond the MPDU process.

Uh I think it's important to look both at like regulation and fees, uh, looking at parking requirements, setbacks, the typologies that we allow, making sure that in single family areas we allow duplexes and triplexes, looking at building codes.

You know, Minneapolis, Minnesota got rid of they banished single family housing.

And then in the seven years since, they've barely built any duplexes or triplexes.

And it's because they didn't do the other things.

They didn't fix their FAR, they didn't fix their setbacks, they didn't fix their building codes, and so you're not seeing a production of the other typologies.

They just got a really nice, you know, headline in the newspaper.

So I think it's really important that if you want to create smaller typologies, if you want to create entry-level units, you have to do all the other pieces that accompany it.

Umelines, as Hugh mentioned, uh looking at pre-approved plans.

Your planning department could create some models.

Uh South Bend, Indiana has a very good uh template for that.

They have everything from accessory dwelling units all the way up to six unit apartment buildings that can be pre-approved.

They're right off the shelf.

So that really helps cut down on the cost of an architect and it cuts down on timelines.

And then the last thing I would look at is a lot of developers are talking about the challenges of financing.

If you're seeing projects that have site control, they have their permits, but they still aren't building.

It's probably not because of all of those things.

It's because they're now stuck in the where the project seems no longer penciling, right?

It's in the red and they got to figure out some other mechanisms.

And so there are some creative financing models that the city can look at as well.

Great.

Thank you again.

Is there any other public comment?

All right.

Is there any council comment?

Thank you, um, everyone for today.

I think we probably need another another aspect, and Ryan just mentioned, and I'm sure then you know this is we need to have some developer conversation as well.

And resident conversations of residents in terms of how this is affected in terms of their particular experiences.

And thirdly, I would probably well, not probably, it's going to take a huge education component.

I say that because we oftentimes hear this, and I know you hear this.

We oftentimes hear this, we are building way too much.

And we know there is a great need, and then what we get is we are building way too much.

And I just use this as an experience.

The Frederick Brickworks property, which is uh going to be a good project.

How many calls I received about that that this building way too much, and we have not put a dent in what we in this conversation in terms of what we need.

I know we're talking about affordable units, but just in terms of housing, the housing stock.

And this is going to take a big not only some coverage from us to do this, but as well as our from community to understand about educationally about what this means as well.

Thank you.

I was gonna comment something similar that that we hear from a lot of residents that you know we're building too much without the infrastructure, and it's hard to um think about all the housing need without also thinking about transportation and schools and making sure that that infrastructure is is keeping pace with with all of this, and um, you know, there's no easy solution to that.

Uh I would love to see some some new starter homes um distributed.

I think that we've done a lot of work in the city on infill development that's using existing infrastructure.

Um of these things are coming together.

So this is a great discussion.

Thank you.

Great.

Well, thank you very much.

We're adjourned.