P-0320 - Impact Fee Reimbursement Policy for Affordable Housing 03-04-1998-9a

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• Board of Commissioners 6 Page 2 February 24, 1998 • • affordability. To further insure affordability for the desired length of time it is possible to develop an agreement or land covenant secured by a note and deed of trust which will require repayment of the. impact fee for any unit that does not remain affordable for the covenanted period of time. Whether the obligation to repay the impact fee could be enforced if there's a need to enforce it will depend on whether there is equity in the housing project and whether the County, at that time, has the will to enforce the reimbursement requirement. Establishing a policy for reimbursement of impact fees to rental housing projects has the potential to be perceived as an entitlement. That is, once the standards for reimbursement are established, they become the benchmark for projects seeking reimbursement. Since the amount of money involved in impact fees is significant, it is reasonable to assume that all new affordable housing projects, whether home ownership or rental, will meet Orange County's impact fee reimbursement standards. This fact may be perceived to be a "con." It will cost the County money. And, there is no rational way that I can think of to distinguish among the qualifying projects. In order to avoid the impact fee reimbursement policy from being perceived to be an entitlement program, the policy must limit reimbursements solely to the County's annual appropriations for .reimbursement. The appropriation limitation limits the County's annual expenditure for impact fees. I think it is very important that all reimbursement requests, both home ownership and rental, be treated first in, first out. Those that cannot be funded in the fiscal year in which the application is made will be held until they are either withdrawn or ultimately funded in a subsequent fiscal year, again on a first come, first served basis. This means that Orange County's standards for reimbursement will determine the universe of applicants. The tighter the standards, the fewer the applicants. The converse is also true. The standards proposed in the rental policy under consideration are parallel to those for home ownership affordable housing. They could be tighter for both home ownership and rental. For example, the Town of Carrboro has a policy for waiving permit fees. A copy is enclosed. This policy is more narrow than the County's impact fee policy and would, by and large, result in fewer Canboro permit fee waivers than County impact fee reimbursements. The "con" of limiting reimbursements as Carrboro has, is that otherwise affordable housing units may not be built or there may -not be as many built. For example, not all Habitat for Humanity housing projects would qualify under the Carrboro fee waiver policy. Eliminating a Habitat house from school impact fee reimbursement consideration based on the fact that no federal, state or local money is used to fund the project or the fact that the project is not necessary to implement the HOME program may lessen the number of Habitat houses that can be constructed and, therefore, may not be the kind of distinguishing characteristics that the Board would want to make in deciding whether to reimburse impact fees. The Board also sought some clarity as to what special needs populations are. A definition is provided as part of the abstract for the impact fee reimbursement policy revision. Providing reimbursement for special needs population housing is not addressed separately in the