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HomeMy WebLinkAboutStudy Session Agenda Packet 11-15-21STUDY SESSION AGENDA CITY COUNCIL CITY OF WHEAT RIDGE, COLORADO 7500 W. 29th Ave. Wheat Ridge CO November 15, 2021 6:30 p.m. This meeting will be conducted as a virtual meeting and in person at 7500 West 29th Avenue, Municipal Building, if allowed to meet on that date per COVID-19 restrictions. Some members of the City Council or City staff will be physically present at the Municipal building for this meeting. The public may participate in these ways: 1. Provide comment in advance at www.wheatridgespeaks.org (comment by noon on November 15, 2021) 2. Virtually attend and participate in the meeting through a device or phone: • Click here to join and provide public comment • Or call +1-669-900-6833 with Access Code: 847 2054 2253 • Passcode: 273439 3. View the meeting live or later at www.wheatridgespeaks.org, Channel 8, or YouTube Live at https://www.ci.wheatridge.co.us/view Individuals with disabilities are encouraged to participate in all public meetings sponsored by the City of Wheat Ridge. Contact the Public Information Officer at 303-235-2877 or wrpio@ci.wheatridge.co.us with as much notice as possible if you are interested in participating in a meeting and need inclusion assistance. Public Comment on Agenda Items 1. Affordable Housing 2. Accessory Dwelling Units (ADUs) Update 3. Staff Report(s) 4. Elected Officials’ Report(s) Memorandum TO: Mayor and City Council FROM: Patrick Goff, City Manager DATE: November 5, 2021 (for November 15 Study Session) SUBJECT: Affordable Housing Councilmembers Hoppe and Nosler-Beck requested an agenda item concerning “affordable housing” for a future study session. On September 13, the Mayor and City Council will receive a presentation regarding affordable housing from Susan Powers, President of Urban Ventures, LLC. Urban Ventures offers a variety of consulting services in real estate and community development. Urban Ventures focuses on healthy places, resilient communities, affordable housing and adaptive reuse and is deeply committed to building quality projects that address the rising demands of affordable housing. Affordable housing continues to be identified as an issue by Wheat Ridge residents. On the biennial Resident Survey, respondents were asked to rate the “availability of affordable quality housing” in Wheat Ridge. Only 37% of respondents rated this characteristic of Wheat Ridge as excellent or good in 2021, a significant decrease from 51% in 2012. In the Let’s Talk Resident Engagement Program, housing choice and affordability is one of the key issues emerging from the over 800 residents City staff has engaged with so far in the first four of ten neighborhoods. Bel Aire and East Wheat Ridge residents recently ranked “broadening housing options” as #2 of 9 possible City action items and Applewood and Leppla Manor residents are similarly raising housing choices as a key concern. The City has participated in several partnerships and implemented numerous programs and services over the years to attempt to address housing affordability issues in Wheat Ridge. Following are a few examples of such endeavors: • Since their inception in 2001, the Wheat Ridge Housing Authority (WRHA) acquired, remodeled, and resold 49 dwelling units to income-qualified individuals. Over the years, this included 32 condominium units, 6 duplex units, and 11 single-family homes. • The City and WRHA collaborated on the sale and repurposing of Fruitdale School, which resulted in an additional 16 rental units for workforce housing, five of which are income restricted. • Wheat Ridge 2020 (now Localworks) purchased and rehabilitated 13 blighted homes across the community and resold them as affordable housing options to local homebuyers. Funds for this program were provided through the Neighborhood Stabilization Program from both the George W. Bush and Barack Obama administrations. • The Town Center and Town Center North projects at the southeast corner of 44th and Wadsworth was a partnership between the City, Renewal Wheat Ridge and a private developer using the competitive Low Income Housing Tax Credit (LIHTC) program to provide 138 units of income-restricted apartments for seniors. • In partnership with other Jeffco municipalities and residents, the City participates in the distribution of Community Development Block Grant (CDBG) and HOME funds. These funds support programs that provide services and housing to vulnerable populations, including low- to moderate-income individuals, seniors, and veterans. • Wheat Ridge is collaborating with Foothills Regional Housing to provide a living community designed to implement proven successful strategies around housing, education, employment, health and other well-being indicators for over 300 families to keep these families from slipping into poverty and becoming homeless. • The City has also collaborated with Foothills Regional Housing by assigning over $5 million of private activity bonds to Foothills for the Caesar Square project in Wheat Ridge and the Allison Village project in Arvada to provide close to 200 affordable units for veterans, youth transitioning out of foster care, and other low-income residents. • A county-wide homeless navigation model was launched in 2020, comprised of six municipal and county-based homeless navigators who work directly with persons experiencing homelessness or at imminent risk of homelessness. The role of the Homeless Navigator is to assist those experiencing a housing crisis find stable housing and obtain the services and resources needed to maintain that housing. • The Housing Navigation Collaboration (HNC) is a group comprised of the governments of Jefferson County, City of Lakewood, City of Arvada, City of Westminster, City of Wheat Ridge, City of Golden and City of Edgewater. On behalf of the HNC, Jefferson County recently released a Request for Proposal for professional services for two Housing Navigation Centers in Jefferson County. The Centers will provide housing navigation and day resource centers to accommodate an approximate daily flow of 200 persons seeking resources; emergency short-term overnight beds to house up to 100 persons per night; and 80 units of permanent, affordable workforce housing and 70 units of permanent supportive housing for individuals who formerly experienced homelessness. • With support from City Council through an approved resolution on September 13, 2021, City staff applied for a grant from the Colorado Department of Local Affairs (DOLA) Affordable Housing Strategies Planning Grant Program. The DOLA program recognizes that affordable housing is one of the biggest issues facing the state. On November 2, 2021, the City was informed of a $112,500 grant award through this program to complete a City of Wheat Ridge Affordable Housing Strategy and Action Plan. The funds will be used for a consultant-supported strategy that will include a housing market assessment, problem definition, articulation of the City’s housing policies, and a market-based action plan in consultation with key stakeholders. ATTACHMENTS: 1. Affordable and Workforce Housing Presentation AFFORDABLE AND WORKFORCE HOUSING WHEAT RIDGE CITY COUNCIL MONDAY, November 15 Susan Powers, President ATTACHMENT 1 WHY DO WE NEED AFFORDABLE HOUSING? $1,304/mo $1,605/mo $786/mo $976/mo JEFFERSON COUNTY INCOME / RENT COMPARISON Source: https://reports.nlihc.org/oor/colorado 50% AMI level 70% AMI level WHEAT RIDGE RENT STATISTICS •46% of homes are renter-occupied •53% of homes are owner-occupied •$1,566 average rent (up from $1,319 in 2019) •13% increase in rent cost Y-o-Y from August 2020 to August 2021 WHEAT RIDGE RENT RANGES Source: https://www.rentcafe.com/average-rent-market-trends/us/co/wheat-ridge/ WHEAT RIDGE COST OF HOMEOWNERSHIP •Median Wheat Ridge home price: $550,000* •Monthly cost:$2,367 •Household income of $90,300 *Source: https://www.realtor.com/realestateandhomes-search/Wheat-Ridge_CO/overview **Source: https://datausa.io/profile/geo/wheat-ridge-co •Median Wheat Ridge household income: $57,659** •Monthly cost:$1,345 •Home price of $317,400 $90,300 $550,000 $57,659 $317,400 FUTURE HOMEOWNERSHIP CONCERNS 13.4% increase in Wheat Ridge home prices from August 2020 to August 2021* Only 3.2% increase in Wheat Ridge income from August 2020 to August 2021** No-growth ordinances drive prices even higher, putting more strain on an already imbalanced price / income balance *Source: https://www.realtor.com/realestateandhomes-search/Wheat-Ridge_CO/overview **Source: https://datausa.io/profile/geo/wheat-ridge-co WHO NEEDS AFFORDABLE HOUSING? AMI%2021 Income* (Jefferson County) Example Occupations 2021 Max Rents* (1BR) 40%$29,360 Fast Food Worker ($27,000) Home Health Worker ($29,000) $786 60%$44,040 Bus Driver ($42,000) EMT ($42,000) Dental Assistant ($43,000) $1,179 80%$58,720 Mail Carrier ($52,000) School Teacher ($56,000) Social Worker ($57,000) $1,573 100%$73,400 Tax Preparer ($62,000) Firefighter ($63,000) Building Inspector ($71,000) $1,966 •Wheat Ridge Median Household Income: $52,747 •Owner Occupied: 53% •Renter Occupied: 47% •Average Household Size: 2.2 persons *HUD 2021 Rent and Income Limits for Jefferson County WHAT HELPS TO FILL THE GAP TO KEEP RENTS LOW? LOCAL GOVERNMENT •Political Will: goals, strategic plans, regulations •Funding: grants, rental assistance •Zoning / entitlements: density bonus •Incentives: discounted land, expedited permit approvals STATE GOVERNMENT •Funding: grants, rental assistance, state tax credits •Capacity-building resources: training, education •Legal Assistance FEDERAL GOVERNMENT •Policy and priorities: veterans, homelessness •Funding: HOME, Project-based Vouchers •Low-interest loans: 221d4 PROJECT PARTNERS •CHFA (Colorado Housing and Finance Authority): equity, loans, education, LIHTC administrator •CDOH (Colorado Division of Housing): grants, loans, education •Lenders: local and national banks •LIHTC investors: LIHTC syndicators and direct LIHTC investors who buy tax credits to provide equity for LIHTC project •Developers: private, non-profit •Housing Authorities (Foothills Regional Housing): rental assistance, property tax exemption •Professional and advocacy organizations: policy, education, advocacy, network •Service providers: supportive services, funding, advocacy AVi at OLDE TOWNE (ALLISON VILLAGE) 4% LIHTC + state credits Partnership with Foothills Regional Housing 100 units 30%-80% AMI Federal VASH vouchers for Veterans Units focused on youth aging out of foster care Construction start summer 2021 WHAT ABOUT THE “MISSING MIDDLE” AND AFFORDABLE HOMEOWNERSHIP? CREATING HOMEOWNERSHIP MODELS •Deed-restricted homeownership model –through Inclusionary Zoning •Increased density to allow for more units / acre to naturally keep development costs per unit lower •Support for individual homeowners in soft increase of density with ADUs •Land trust model •Elevation Community Land Trust •Partnership with Habitat for Humanity •Cohousing model •For people who are looking for very strong community involvement in their daily lives *HUD 2021 Rent and Income Limits for Jefferson County *Home price of $317,400= AFFORDABLE HOMEOWNERSHIP CHALLENGES •Development and land is expensive: margins are too slim to sell units at a lower price point without taking a loss •Construction costs are increasing •Gap funding is necessary (but scarce) to sell units substantially below market •Colorado’s construction defect policy requires expensive umbrella insurance that drives the cost of developing for-sale product even more •No incentive exists for market rate developers to build more affordably priced housing MONARCH MILLS Deed-restricted homeownership 7 stories, structured parking 75,624 SF 69 total units 56 affordable units, 13 market rate Deed-restricted for 20 years 80% -95% AMI 3% increase in price / year plus closing costs allowed for sales within 20 years Affordable units have no impact on value to market rate units Property taxes based on market value for market rate units and deed-restricted value for affordable units FIRE CLAY LOFTS Adaptive reuse of historic warehouse, new construction of three and four-story condo buildings and two-story townhomes 166 total units 32 deed-restricted affordable units, 134 market rate units Completed 2008 198,812 SF ARIA Mixed-income, mixed-use Master-planned community Historic rehab New construction townhomes LIHTC apartments, market rate apartments Commercial 17.5 acres 403 total units 36 deed-restricted affordable homes 144 LIHTC apartment homes WHAT CAN WE DO NOW? ACTION ITEMS •Create a strategic plan: define need, set goals, map out path to success •Preserve existing affordability: Elevation Community Land Trust (for sale), covenants (for rent) •Establish partnerships (Hospitals, Higher Education, Foundations) •Reduce land basis: sell/lease land and buildings at low/no cost to housing providers •Create incentives: expedited City approvals, fee waivers, density bonuses •Provide political support •Increase funding and funding accessibility to fill the $ gap to build •Support homeowner ADU development to help keep residents in their homes •Use the City’s power of zoning to encourage affordable housing production •Oppose no-growth ordinances Susan@Urbanventuresllc.com Memorandum TO: Mayor and City Council THROUGH: Patrick Goff, City Manager FROM: Scott Cutler, Senior Planner Kenneth Johnstone, Community Development Director Lauren Mikulak, Planning Manager DATE: November 5, 2021 (for the November 15 study session) SUBJECT: Accessory Dwelling Units (ADUs) Update Purpose The topic of Accessory Dwelling Units (ADUs) has been discussed periodically over the last six years. Most recently, at the strategic planning retreat on February 20, 2021, City Council identified nonconforming ADUs as a topic staff should address in the coming months with a study session. It was Council consensus at that time for staff to return later in 2021 to discuss this topic. The purpose of this memo is to provide an update to City Council on what public outreach has occurred for ADUs to date, summarize local communities’ approaches to ADUs, and summarize nationwide best practices for ADU ordinances. While Council has specifically asked staff to study nonconforming accessory dwelling units (some of which are legal and some of which are illegal), policy direction on ADUs in general will help to inform the nonconforming conversation. This memo is organized as follows: • Definition of ADUs • Background information including a summary of past public processes and more recent public sentiment • Current code • How ADUs and nonconforming dwellings are currently handled • Practice of other Front Range communities • Best practices for ADU ordinances • Potential next steps and recommendations What is an ADU? The American Planning Association (APA) defines an Accessory Dwelling Unit (ADU) as a smaller, independent residential dwelling unit located on the same lot as a stand-alone home. ADUs can be converted portions of existing homes or additions to new or existing homes (i.e., attached or basement ADUs), or they can be new or converted stand-alone accessory structures 2 (i.e., detached ADUs). These ADU typologies are shown in the graphic below. ADUs are sometimes also called “granny flats”, secondary suites, accessory apartments, casitas, or carriage houses. ADUs are intended to be subordinate to the principal dwelling unit on the property. Source: City and County of Denver. Background ADUs have long been included in public processes and discussions in Wheat Ridge. An initial study session was held with City Council on November 23, 2015 and two public input meetings were held in 2016 on April 12 and May 10. A final City Council study session was held on June 6, 2016. Staff and the City Attorney drafted a potential ordinance based on feedback received in 2015-16. Upon reviewing the ordinance and based on a lack of consensus among Council, City Council tabled the discussion indefinitely. The public has consistently been in support of allowing ADUs. The following paragraphs summarize the various input opportunities the City has had to engage with the public on the topic of ADUs. The Neighborhood Revitalization Strategy (NRS) public engagement process, which began in 2018, included ADUs as a discussion topic. The NRS process included several public meetings, a steering committee, City Council and Planning Commission presentations, and an online survey with over 1,000 respondents. The NRS was adopted on July 22, 2019 by City Council. The final adopted strategy recommends that ADU discussions be tabled for two years (2019 to 2021) because there was not enough support to justify spending resources on the topic at this 3 time. The NRS acknowledged public support but recommended prioritizing other projects over ADUs. The NRS reached these conclusions: • 40% of participants outright supported ADUs at the NRS open house, 49% said “it depends” (based on various characteristics of the ADU), and only 11% did not support them at all. • Neighborhood engagement should occur to understand what residents care about at a neighborhood level. This request was noted elsewhere for other topics in the NRS and was the guiding principle behind the establishment of the Let’s Talk resident engagement program in 2020, described further below. • Observe and track the progress of ADU ordinances in nearby jurisdictions. • See if ADUs are still important to residents in 2021. The City of Wheat Ridge surveys its residents on a bi-annual basis using the National Research Center, Inc. Resident surveys for the past several years show a large percentage of Wheat Ridge residents support allowing ADUs in some capacity. In 2021, the survey was distributed to 4,500 households and included several questions related to ADUs that provide insights into resident sentiment: • The survey results report that at least two-thirds (2/3) of Wheat Ridge residents support or strongly support allowing and regulating existing and new ADUs. • Only a fifth (1/5) did not support the City taking action and thus continuing the prohibition on ADUs. • If ADUs were allowed, about 7 in 10 respondents believe occupancy or bedroom limits should be placed upon ADUs. • If ADUs were allowed, 6 in 10 respondents believe that the property owner should live on site (either in the ADU or main dwelling unit). • About 7 in 10 would at least consider adding an ADU to their property for various reasons. These survey results are fairly consistent with the 2018 resident survey, showing sustained majority support for allowing ADUs in some capacity in Wheat Ridge. The Let’s Talk Resident Engagement Program, launched in 2020 as a result of the NRS recommendations, has to-date engaged with four of ten identified neighborhoods in Wheat Ridge, with two more just starting, with plans to engage with all ten neighborhoods by early 2023. The neighborhoods visited to-date are Bel Aire, East Wheat Ridge, Applewood, and Leppla Manor, with Fruitdale and Anderson Park underway. A wide range of public input was received for each neighborhood including several virtual and in-person meetings and online surveys that were completed by hundreds of residents. Addressing ADUs was largely supported in these neighborhood outreach programs, although some neighborhoods felt more strongly than others that the City should allow more flexibility for ADUs: • In East Wheat Ridge, “broadening housing options” (including ADUs) ranked #2 of 9 of the action items, with 73% of residents in support or strong support of this action item. • In Bel Aire, “broadening housing options” (including ADUs) ranked #2 of 8, with specific discussion centering around large lots in the neighborhood being able to reasonably accommodate ADUs, and 61% of respondents supporting this action item. • In Leppla Manor, residents were asked specifically about ADUs, with 68% in support or strong support and only 13% opposed or strongly opposed. Interestingly, only about 50% 4 of people supported additional restrictions on ADUs as part of an ordinance, such as size restrictions, off street parking, owner occupancy requirements, or architectural compatibility. Numerous comments from Leppla Manor resident responses were sensitive to over-regulation in general of ADUs. • Applewood had the least support for ADUs, with about 46% supporting or strongly supporting and 36% opposing. This neighborhood was also more in favor of additional regulations than Leppla Manor, with 60-65% supporting additional restrictions. Opinions on ADUs appeared to be more polarized in discussions as well. This could potentially be due to the more suburban nature of Applewood, with more neighborhoods being managed by HOAs or covenant restrictions. • Discussion around ADUs across each of these four neighborhoods centered around intergenerational housing, gentle or dispersed density, context-sensitive development, and adding neighborhood flavor. Some concerns included using ADUs as short-term rentals, parking/traffic, and additional density. In addition to the formal surveying and outreach described above, staff has noted an ever- increasing interest in ADUs in the past 3-4 years based on anecdotal data from the number of phone calls and emails received by the Planning Division. Inquires most commonly are focused on whether ADUs are permitted and if a permit can be obtained to build a new ADU or convert an existing structure or portion of the house. These inquiries increased further during the COVID-19 pandemic as residents were inquiring about building additional living space for family members or friends (particularly seniors and college-aged or adult children) or seeking rental income opportunities. The two-year waiting period recommended by the NRS has passed, and all of the other recommendations from the NRS report regarding ADUs have been fulfilled. The Let’s Talk program and resident surveys still show support for ADU legislation in 2021. Communities nearby and nationwide have continued to adopt and refine ADU ordinances. It is an appropriate time for Council to begin policy discussions as to if and how ADUs should be allowed in Wheat Ridge. Based on input to-date, staff does not recommend additional outreach or surveying at this time. Current Code The City’s zoning code (Chapter 26) does not specifically define Accessory Dwelling Units, but does have a definition for “dwelling unit.” A dwelling unit is defined in Section 26-123 as: A building or any portion of a building designed for occupancy as complete, independent living quarters for one (1) or more persons, having direct access from the outside of the building or through a common hall, and having living, sleeping, kitchen and sanitary facilities for the exclusive use of the occupants. Section 26-625 (Accessory buildings and structures) provides regulations on accessory buildings, which are buildings incidental or subordinate to the principal use and structure on a property. Section 26-625.C.1.c.iv specifically prohibits dwelling units to be located within accessory buildings “except as otherwise expressly allowed.” No other portions of the code expressly allow dwelling units in accessory buildings, so effectively ADUs are not permitted in the City of Wheat Ridge. 5 Where multiple units are permitted by virtue of the zoning, lot size, and lot width, the code requires they be attached units. For example, a duplex is required to be two attached units. Because the multiple dwelling units are each considered a primary use, they are required to have their own utility taps. A Planned Building Group (Section 26-116) can be reviewed to allow multiple primary structures on a property, but these are rare in a residential context and do not relate to accessory structures. Nonconforming ADUs Despite the lack of code provisions allowing ADUs, staff are aware that dwelling units exist in accessory structures or attached additions/basements across Wheat Ridge. Based on experience, these appear to be more concentrated in East Wheat Ridge where development took place many years prior to incorporation in 1969 and carriage houses were in the norm, though they are not exclusively limited to this area. These dwellings can be broken into two categories: • Legally nonconforming dwelling units are those which were legal at one time but are now prohibited or regulated. Often these kinds of units predate the City’s incorporation, or there is a record of the City recognizing the dwelling unit in some capacity. For example, the City would not have original permit records for a carriage house built in the 1940s, but there may be City records or permit history recognizing it as a dwelling unit of some type. Some legally nonconforming dwelling units exist because in earlier eras, permits were not always referred to the Zoning Division for review, so Building Division approval estops the City from enforcing the zoning code and the unit becomes recognized as legally nonconforming. Section 26-120 of the code outlines the allowances and limitations of a legally nonconforming use and structure. If a unit is determined to be legally nonconforming, no enforcement action is taken, and the unit may remain under the conditions of Section 26-120. • Illegal dwelling units and those which were created by an owner (or prior owner) without formal approval or in violation of a Certificate of Occupancy that was issued for non-dwelling purposes only. This could be an illegal conversion of an accessory building or portion of the primary building (e.g. basement) to create a separate dwelling unit. This could also be a legal or legally nonconforming structure that was illegally converted into a dwelling unit (i.e., a residential use). This would typically occur if the City was not aware of work being done on a property due to lack of permits being obtained. If a unit is determined to be illegal, staff may inform the property owner that the dwelling could not be used for dwelling purposes and may in some instances require the removal of cooking facilities. City staff do not have the resources or policy direction to seek out accessory dwelling units, and it is not possible to quantify or estimate how many units may exist. Rather these kinds of units are periodically brought to the City’s attention in a few ways. Most frequently, inquiries arise during a real estate transaction or refinancing. For example, real estate agents attempting to list a property will call to confirm whether a dwelling unit is legal or not. Likewise, inquiries can also arise as questions from the current or prospective owner/tenant, title company, appraiser, or insurance provider, or through short-term rental licensing applications. Occasionally they arise through building permit submittals or as complaints from a neighbor concerned about additional occupancy or a potential short-term rental. 6 The status of a dwelling unit (whether it is legally nonconforming or illegal) can only be determined on a case-by-case basis. Once a unit is brought to the City’s attention, staff utilize an exhaustive research checklist to confirm the legitimacy of an additional dwelling unit. The status of an additional dwelling unit depends on the history. Just because an additional unit exists does not mean it was lawfully allowed or constructed. The research checklist is attached as an exhibit (Exhibit 1) and includes 23 different considerations. For each inquiry, staff performs a thorough analysis of the property including the zoning, subdivision plat, Assessor records, land use case history, permit files in Laserfiche and microfilm, and the building permit tracking system, ADG. They may also request additional information from the property owner if necessary, which is especially useful if the property owner can produce documents that would confirm legally nonconforming status of the structure such as a permit approval and/or Certificate of Occupancy. If a unit is determined to be legally nonconforming, that written determination is made and noted in the property files. As noted above, the unit is allowed to continue to exist based on the provisions of Section 26-120. If demolished, it cannot be replaced. Because ADUs are not a permitted use, they cannot be enlarged. If a unit is determined to be illegal, that determination is documented as well and is provided to the original inquirer. Where life/safety concerns may exist a courtesy building inspection may be requested. Modifications may be required to allow it to remain as living space and to remove the features that make it appear or function as a dwelling unit (e.g. removal of cooking equipment). It is not practical to take a broad-brush approach to legalizing all existing legally nonconforming or illegal dwelling units. There are numerous implications related to utilities, building code, fire code, and zoning. That said, it is appropriate to consider a path to legalization within the framework of broader policy on ADUs. This is the same process that occurred for short-term rentals whereby Council considered public sentiment, other communities, best practice, and their own policy goals to create an ordinance that allows STRs, provides a pathway to licensing for pre-existing STRs, and establishes clear licensing and operational requirements that apply to all STRs (pre-existing and new). Surrounding Communities and ADUs By virtue of not allowing ADUs, Wheat Ridge is now an outlier among peer communities. In a review of 12 Metro Denver communities, Wheat Ridge and only 3 other cities do not allow ADUs in any capacity (except for some existing legally nonconforming dwellings as described in the previous section). Further, at least two of the remaining holdout cities are actively contemplating code changes to permit ADUs, and some other cities have expanded their provisions since the City’s original research completed in 2016, including Denver, Aurora, and Englewood. Statewide, there is a wider range of allowances but overall, many communities, particularly mountain communities or Front Range cities affected by high housing demand, have chosen to allow ADUs in some capacity. When comparing Wheat Ridge locally, statewide, and nationally, the City is well behind others on ADUs. Recognizing that ADUs fulfill a missing middle in housing stock, many states deem ADUs to be a matter of statewide interest and have laws 7 requiring municipalities to allow ADUs and to establish reasonable requirements to enable construction; these include Oregon, California, Vermont, New York, and Connecticut. The practices of Metro Denver communities are summarized in the attached table (Exhibit 2). Codes adopted by local peer communities do not always follow national best practice but do follow some general regional trends. (A later section in this memo summarizes nationwide best practices for addressing ADUs and includes some examples of “model ordinances” and policy guidance.) General trends in the Metro Denver area include the following provisions: • Where allowed: Most cities allow ADUs in all residential zone districts and sometimes mixed use or commercial districts if the primary use is residential. In the cities that don’t allow ADUs in all districts, they are generally allowed in downtown/central zones, or residents are able to potentially add their property to a district that allows ADUs (as is the case in Denver). • Minimum lot size: Where ADUs are allowed by the zoning, most communities determine eligibility of a specific property by creating a minimum required lot size to accommodate an ADU. This minimum lot size is generally in line with the smallest lot allowed in the City (in Wheat Ridge this is 5,000 square feet for single-family). • Types of ADUs: Cities generally allow both detached and attached/basement ADUs. Distinctions between these are rare. • Administrative review: All but one peer city allow for administrative review of ADUs. This means that no public hearing or process is required. Non-administrative review is typically a deterrent to construction and contrary to policy goals of allowing ADUs in the first place. • Neighbor notice: Most cities do not require neighbor notice of ADUs (only 3 of the 12 surveyed require notice). This may be because other more impactful “use by right” construction does not require neighbor notice, such as constructing an addition, garage or new house. • Off-Street Parking: All but one city require one off-street parking space for ADUs. One city makes an exception in historic districts or affordable housing. • Owner occupancy on property: All peer cities require either the primary home or ADU to be occupied by the property owner. In cities that allow short-term rentals, STRs are generally allowed in ADUs provided the other structure is occupied by the owner. • Size restrictions: All cities have an upper limit of size for ADUs, but this varies widely by community. Sometimes they are based on the size of the primary structure, and sometimes there is a maximum square footage. These sizes can also vary based on whether the ADU is detached or attached. The upper limit in the metro area is approximately 1,000 square feet, though some cities are closer to 650-800 square feet or have limits on the number of bedrooms in ADUs. In all cases a size restriction is used to emphasize that the unit should be secondary or smaller as compared to the primary dwelling on the property. • Height limits: All cities have height limits on ADUs. For attached or internal units, height follows the primary structure regulations. For detached units, the height is generally based on the allowed height for accessory structures though sometimes taller to accommodate the form of a unit above a garage. 8 • Number allowed per lot: All peer cities have a maximum of one (1) ADU per lot, regardless of ADU type. This is not the trend nationally, as several states or municipalities allow 2 ADUs per property given other requirements (lot size, parking, etc.) are met. • Limits on number of ADUs: No Metro Denver city has limits on the total number of ADUs in the City. Only one has any type of limit, which is applied only to a small residential district within that city. The lack of limit is often two-fold: a limit may be contrary to housing policy goals and ADU proliferation is often self-limiting because the investment to create an ADU is substantial. Best Practices and Policy Considerations The American Planning Association (APA) periodically publishes policy guides representing the organization’s official position on critical planning issues. The APA’s 2019 Housing Policy Guide1 recognizes ADUs as helping communities to age in place and to broaden housing options. Further, the APA supports the modernization of local zoning ordinances to increase housing production and dismantle exclusionary zoning laws. This includes allowing ADUs and specifically “minimizing regulatory obstacles to the establishment of accessory dwelling units.” The APA also supports local funding to subsidize development of ADUs, specifically those targeted for occupancy by lower-income households. Lastly, the APA calls for sustainability which includes a “variety of housing types including ADUs and [… housing types] for residents of all ages, different incomes, needs, and physical abilities.” Specific to legally nonconforming or illegal dwelling units, the APA in other policy documents also recommends addressing both categories in an ordinance. There may be opportunities to legitimize both types of dwelling units as part of an ADU ordinance, even if they may not comply with all of the regulations placed upon new ADUs such as maximum size, with due consideration for basic life/safety regulations. The American Association of Retired Persons (AARP) is a well-established advocate for ADUs. AARP believes that ADUs play a “major role in serving a national housing need” and notes that ADUs have long been embraced by intergenerational communities. In 2019, they also released a policy guide called The ABCs of ADUs2 which outlines best practices for ADU legislation, detailed definitions and photo examples. It also explains why ADUs can benefit a community by addressing affordability and intergenerational living. The guide also notes the strong historical presence of ADUs in the United States (e.g., carriage houses), which were nearly wiped out by restrictive zoning laws in the 1900s. AARP specifically encourages local communities to “allow all ADU types, simplify the building permit process for ADUs,… and to adopt simple, flexible but nondiscretionary ADU rules about setbacks, square footage and design compatibility.” While ADUs are not exclusively used to house seniors, they are often an attractive option because a senior homeowner can downsize into an ADU but remain on their property; a senior homeowner can afford to remain in their home by supplementing their income through rental of an ADU; and families can house aging parents in an ADU providing support, proximity, and independence. All Baby Boomers will be 65 or older by 2030 and that age cohort will then 1 https://planning-org-uploaded-media.s3.amazonaws.com/publication/download_pdf/Housing-Policy-Guide-rev.pdf 2 https://www.aarp.org/content/dam/aarp/livable-communities/livable-documents/documents-2019/ADU-guide-web- singles-071619.pdf 9 comprise 19% of the nation’s population (up from 13% in 2010). Wheat Ridge has already reached that mark with 19.1% of residents 65 or older as of 2019. Anecdotally, several Wheat Ridge households have moved or explored moving to other communities in order to accommodate intergenerational housing. The AARP released a model ADU ordinance in collaboration with the APA, with a recent update in 2021 that includes additional information on the national housing crisis, the impacts of COVID-19, and an aging population. The AARP specifically calls out “poison pills” of ADU legislation which often limit a property owner’s ability to construct ADUs or prevent flexibility. These items can inadvertently reduce the positive impacts of ADU legislation by making it overly burdensome or costly to construct: • Owner occupancy requirements • Parking requirements • Conditional or special use approvals • Discretionary design or “neighborhood character” standards The first two items—owner occupancy requirements and off-street parking requirements—are common components of all researched communities in Metro Denver. Local ordinances are increasingly out of line with nationwide best practices and research and compared to other communities. ADU legislation is no longer new, and communities and researchers have had many years to research both the impacts of ADU ordinances and how policies may actually hinder the development of ADUs. The remaining AARP recommendations take a market-based approach, while still providing some recommendations to allow for local control and standards. These include: • Being flexible on size limits of ADUs; this will be driven by the market and size of the lot • Considering allowance for more than one ADU on larger lots or in denser zones o Some states have preemption laws that require municipalities to allow up to two (2) ADUs per single-family lot, one attached and one detached • Allowing both detached and attached ADUs • Allowing maximum heights of 25’ to accommodate two stories (or apartment above garage configuration); allows reasonable configuration without major impacts or burdens • Removing discretionary design or neighborhood character review (treating ADUs the same as primary dwelling units and accessory buildings) Policy Discussions, Recommendations, and Next Steps Staff is recommending a potential code amendment in 2022 and is seeking policy direction from Council in order to proceed. Staff recommends that ADUs be permitted in some capacity and recommends that Council provide policy direction on ADUs in general and not exclusively on legally nonconforming and illegal ADUs. These recommendations are based on the following: • It has been over two years since staff presented an update on ADUs to Council (and five years since original ordinance discussions), and public sentiment and housing policy has evolved since then and continue to support ADUs. 10 • Several additional local communities have adopted ADU ordinances, and as national policy has advanced there is a better sense of lessons learned and policy implications. Many of the initial fears about ADUs have been shown to be unfounded. An ADU ordinance would create opportunities for nonconforming structures to come into compliance, even those with potential setback and size nonconformities. It may also give the opportunity for illegally converted units to come into compliance as attached or detached ADUs. However, only addressing nonconforming ADUs overlooks the critical question of new ADUs, which will continue to come up as a tool to address proven housing needs and demands in the community. Staff is requesting direction from Council on whether to allow ADUs, and if so how. Staff has outlined three potential policy approaches below, the third option being the recommended approach: 1. Do not address ADUs in any capacity. 2. Proceed with a code amendment that defines ADUs and conditionally allows existing legally nonconforming and illegal dwelling units to become permitted/legal ADUs. 3. Proceed with a code change to allow ADUs in Wheat Ridge, including provisions for new ADUs as well as provisions to conditionally allow nonconforming or illegal dwelling units to achieve legalization. Staff is recommending Option #3 for a few reasons, notably: 1. There has been a pattern of support for ADUs over the last 6 years. 2. It is now the norm for communities to allow new ADUs. It is an appropriate policy decision and there is demonstrated interest from the Wheat Ridge community. 3. Only addressing existing legally nonconforming and illegal dwelling units is inequitable in that it picks winners and losers based on the existing conditions of a property. In other words, leaving out new ADUs from an ordinance creates unequal opportunities and rewards only those individuals that currently have legal nonconforming or illegal dwellings on their property. There is a demonstrated reason why all area ADU ordinances and national models include both new ADUs and existing nonconforming ADUs. A follow-up study session to present an ordinance framework is an appropriate next step to establish ADU policy, regardless of whether Council wishes to proceed with Options #3 or #2. Staff recommends coming back directly to Council with an ordinance framework. We have more than sufficient public comment on ADUs in order to proceed to policymaking, as demonstrated by the various public comment opportunities summarized in this memo. ATTACHMENTS: 1. ADU research checklist 2. Denver Metro ADU regulations 1 | Rev Nov 2020 Residential Units – Research Checklist The Community Development Department is frequently contacted with reports of additional dwelling units on a residential property. Under current codes, for a dwelling unit(s) to be legal, it must have the correct zoning, meet the minimum lot size and width requirements for the number of units, there must be evidence that a building permit has been issued acknowledging additional units, all building codes must be met, and a Certificate of Occupancy must have been issued for the subject unit. The status of an additional dwelling unit depends on the history—it may be legal, legally nonconforming, or illegal. Sometimes alleged illegal units are referred to as being “grandfathered,” however, just because an additional unit exists, it does not mean it was lawfully allowed or constructed. Depending on the date of construction, a permit should have been required by either Jefferson County or the City of Wheat Ridge. Unfortunately, the City does not have building permit records from Jefferson County prior to 1969. Inquiries on residential units come in many forms—sometimes from a neighbor as a complaint, other times from the current owner, prospective owner, tenant, real estate agent, title company, appraiser or insurance provider. In order to prove that a unit is legal or legally nonconforming, research must be completed by staff and sometimes the property owner. This document provides a guide for staff. Ask the inquiring party: Why do they think the structure has additional units? Do they have any sort of concrete evidence? Can the property owner (or inquirer) provide any evidence—permits or other paperwork—that would indicate the unit was legal or approved by the City or County? Research for staff: Check the zoning – Does the zoning allow multiple residential units? Check the property measurements – Would it meet the standards for more than one residential units in the zone district? Check the subdivision plat – When was it recorded? Is the platted lot larger or smaller than indicated by the current County records? Was it conforming when the home was built? ATTACHMENT 1 2 | Rev Nov 2020  Check the Jefferson County Assessor’s records – Does the lot size meet that shown on the recorded plat? Do their records indicate that there are multiple improvements? Are the number of bedrooms excessive? (Note: The Assessor will tax all improvements on a property regardless of their legal status. If the Assessor notes a second or multiple residential units, this is not necessarily enough evidence to confirm the legal status of the units.)  Check the land use atlas to see if there is any case history, which may have resulted in the construction of additional units – Was a variance approved which would allow an extra unit? Is the property located in a PRD, which may have special provisions for extra units?  Check the address point layer in ArcGIS to see if multiple addresses come up.  Check the address change log to see if multiple addresses were approved for the property.  Check the building permit files in both Laserfiche, microfiche, and ADG – Are there any building plans available for viewing? Do any of the documents indicate that an additional unit was allowed? A room is considered a bedroom if a closet is provided. Are there other “clues” that the additional unit was allowed? Read through all permits and inspection slips for clues or second address notations.  Review Google Streetview and/or perform a field inspection – Are there any property or building attributes, which appear to support additional units? Are the units side-by-side? Are the units attached or detached? Are there other building attributes, which would indicate that there are additional units (separate front doors, extra electrical meters, etc.)?  Check aerial photo archives (GIS, Google Earth, and mylar) to observe changes to the property over time.  Check internet real estate websites to see if a property is listed for sale with extra units or see how it has been described in prior listings. Other issues for consideration:  According to the property owner, how long has the extra unit been in existence? Do they have any paperwork that indicates such? 3 | Rev Nov 2020  Are there people currently living there?  Are there opportunities for the extra unit to be legitimized through a land use process?  Could a variance be pursued to alleviate the nonconformities?  Could a subdivision or PBG be processed to alleviate the nonconformities? Next Steps:  Prepare a timeline of property history with findings of fact from your research.  Review fact pattern with planning staff at division meeting. Role of the Building Division, if needed:  Request a building inspection of the premises from the property owner and/or tenant.  Does any of the work meet building code?  If it does not, what would be the extent of the work required to bring it to code? Outcome: (Note, each case is different, other outcomes are possible; discuss in Zoning Division meeting and with Building Division, if needed)  Have the findings of fact scanned into the address file. If the property meets the requirements for the zoning code, the following may need to occur if there is not sufficient evidence in permit records:  Property owner apply for a building permit for improvements to legitimize the additional unit(s) with the outcome of having a C.O. issued for all of the units in the building. If the property does not meet the requirements for the zoning code, the following may need to occur:  If the property does not qualify for an additional unit, send the City’s modified form letter to the property owner notifying need for unit to cease. Determine what needs to change physically and coordinate work, permits, and/or inspection with Building Division. 4 | Rev Nov 2020 Miscellaneous considerations: Section 26-123 of the zoning code defines dwelling unit: Dwelling unit. A building or any portion of a building designed for occupancy as complete, independent living quarters for one (1) or more persons, having direct access from the outside of the building or through a common hall, and having living, sleeping, kitchen and sanitary facilities for the exclusive use of the occupants. There is no limitation to the number of privately owned vehicles associated with a property as long as they are licensed and operable. (This is often a neighbor compliant but is not sufficient evidence of an additional dwelling unit.) Most of the streets within the City are public which means anyone regardless of who they are or whether they own property in the neighborhood, can park anywhere as long as it does block any property’s access. Jurisdiction ADUs Permitted Detached ADUs? Attached or Basement ADUs? Administrative Review Neighbor Notice? All Residential Zones Minimum Lot Size Off-Street Parking Required Owner Occupancy Required (ADU or Primary) ADU Size Restriction Height Number allowed per lot Limits on total number of ADUs Arvada Y Y Y Y N Y (plus Olde Town and Mixed Use)N Y (1)Y Y - Not to exceed 40% of primary, can be up to 1,200 sf depending on lot size (max of 2 bedrooms) 25-30' depending on zone district 1 N Aurora Y Y N N Y - for conditional use N - only in "Original Aurora"Y - 6,000 sf Y (1)Y Y- Max of 650 sf 24' or height of principal dwelling, whichever is less 1 N Broomfield Y Y Y Y N Y N Y (1)Y Y - Max of 800 sf or 50% of primary, whichever is less 30' (two stories)1 N Boulder Y Y Y Y Y - posting and adjacent (no public comment) N - only SFR residential (high density zones allow or require more intensive uses) Y - 5,000 sf Y (1), unless in historic district or deeded affordable then 0 required Y Y - Max of 550 sf (detached), Max of 1,000 sf or not to exceed 30% of primary (attached) 20'1 Y - but only in the lowest density zone district Denver Y Y Y Y N N - but allows properties not in those districts to rezone for ADUs Y - usually 3,000 sf (varies by zone)N Y Y - Varies by Zone District (range of 650- 1,000 sf) 24'1 N Edgewater N - under consideration as part of 2022 code update Englewood Y Y N Y N Y N Y Y Y - Max of 650 sf or size of primary, whichever is less 26'1 N Golden Y Y Y Y N Y Y- 7,000 sf Y (1)Y Y - Not to exceed 50% of primary, or 800 sf, whichever is less (if attached, must be less than primary unit but can be over 800) 25'-35' depending on zone district 1 N Jefferson County Y Y Y Y Y (adjacent)Y Y - 7,500 sf if detached, min. lot size for zone if attached Y (1)Y Varies with size of lot (range of 600-1,000 sf) or 40% of primary, whichever is less 25'1 N Lakewood Y Y Y Y N Y (plus MU and commercial)Y - 9,000 sf Y (1)Y 700 sf (max 1 bedroom)30'1 N Littleton N - under consideration Westminster N ATTACHMENT 2