Explanation
BACKGROUND
In 2016 and 2017, the City of Columbus commissioned a study from HR&A on the effectiveness of the City’s economic development incentives, including real property tax abatements in Community Reinvestment Areas (“CRAs”). Based on the results of the study, the City revised its policies concerning CRA abatements, and decided to encourage the development of affordable housing by conditioning the provision of CRA abatements, in certain circumstances, on the inclusion of affordable housing.
In July 2018, City Council passed Ordinance No. 2184-2018, adopting Chapter 4565 of the Columbus City Codes to require certain entities seeking CRA abatements in Post-1994 CRAs to meet certain affordable housing requirements.
Pursuant to Chapter 4565, the affordable housing requirements applicable to any particular development project depends on whether the CRA in which the project will be constructed is designated as Market Ready, Ready for Revitalization, or Ready for Opportunity (the “Area Designations”). Generally speaking, the Area Designations reflect the extent to which housing within the CRA is blighted. Development projects located in areas with less blight must satisfy higher affordable housing requirements in order to receive the abatement.
Pursuant to Chapter 4565, the Area Designation assigned to each CRA must be reassessed every three years.
This code change will adopt certain administrative modifications to Chapter 4565.13 to provide for a an administrative process whereby the affordable housing requirements for owner-occupied housing may be waived, first through an application to the Director of the Department of Development, with a right of appeal to the CRA Housing Council pursuant to Ohio Revised Code Sections 3735.69 through 3735.70.
Title
To repeal and replace Section 4565.13 of the Columbus City Codes to incorporate certain administrative modifications related to affordability requirements and qualifications for owner-occupied housing units utilizing the waiver provision of Chapter 4565.
Body
WHEREAS, in 2016 and 2017 the City of Columbus commissioned and received a study from HR&A on the effectiveness of its economic development incentives, including real property tax abatements in Community Reinvestment Areas; and
WHEREAS, in response to the study, the City developed a revised incentive policy to encourage the development of affordable housing in CRAs in stronger market areas within the City by requiring developers to construct affordable housing in consideration of the City granting the developer a tax abatement; and
WHEREAS, in July 2018, City Council passed Ordinance No. 2184-2018, amending Title 45 of the Columbus City Codes to add Chapter 4565 embodying the City’s new residential CRA incentive policy for Post-1994 CRAs; and
WHEREAS, Chapter 4565 empowers the Director of the Department of Development to assign each residential CRA within the City one of three housing Area Designations: Market Ready, Ready for Revitalization, or Ready for Opportunity; and
WHEREAS, in accordance with the foregoing, Chapter 4565 requires certain property owners in Market Ready, Ready for Revitalization, and Ready for Opportunity areas to satisfy certain affordable housing requirements to receive a CRA abatement; and
WHEREAS, Chapter 4565 requires the Director to reassess the Area Designations assigned to each post-1994 CRA every three years to evaluate current market conditions based on the criteria outlined in Chapter 4565; and
WHEREAS, Chapter 4565 was updated in 2022 and 2023 with the passage of Ordinance No. 1843-2022 and Ordinance No. 1839-2023, respectively; and
WHEREAS, in December 2023, City Council adopted additional administrative amendments to Chapter 4565 with the passage of Ordinance No. 3447-2023, as amended by Ordinance No. 1392-2024, to include a provision in Section 4565.13 of the Columbus City Codes to permit waiver of the affordable housing requirements for owner-occupied housing under certain conditions; and
WHEREAS, it is now necessary to repeal and replace Section 4565.13 in order to make certain administrative modifications related to affordability requirements and qualifications for owner occupied housing units utilizing the waiver provision of Chapter 4565; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That Section 4565.13 of the Columbus City Codes shall be amended to read:
4565.13 Waiver of Affordability Requirements for Owner-Occupied Units
(a) Application for Waiver of Affordability Requirements. A Project Sponsor may apply for a waiver of the affordability requirements under Section 4565.05(B) regarding the Initial Pricing of owner-occupied Affordable Housing Units as applied to owner occupied units in a Development Project if the following conditions are satisfied:
1. The Development Project must have a minimum of 100 owner-occupied dwelling units; and
2. The Project Sponsor has committed to at least thirty percent (30%) of the owner-occupied units in the Development Project being Affordable Housing Units, meaning the units are occupied by the legal owner(s) of the unit, and whose annual household income is at or below one hundred and twenty percent (120%) of AMI; and and for which the annual cost of ownership does not exceed thirty-five percent (35%) of the household’s gross annual income.
3. The Cost of Ownership is affordable, as determined by rules adopted by the Director. In establishing rules for determining the affordability of Cost of Ownership affordability, the Director may consider the impact of any governmental assistance or donation by a comparable organization, including a lender, upon the owner-occupant’s ability to pay.
(b) Form of Waiver of Application. The form of the application for a waiver under this Section shall be established by the Director’s Rules.
(c) Director Evaluation of Waiver Application. The Director or their designee shall evaluate each application for waiver under this Section. The Director may, within the Director’s reasonable discretion, grant the application for waiver if the Director determines that granting the application for waiver satisfies the overall goals of this Chapter with regard to increasing the number of affordable housing units within the City and is in the best interests of the City. For purposes of this Section, the Director of the Department of Development, or their designee, is considered the housing officer as provided for in ORC Sections 3735.65 through 3735.70.
(d) Right of Appeal from Denial of Waiver Application. If the waiver application of a Project Sponsor is denied, the Project Sponsor may appeal the denial to the CRA Housing Council established pursuant to ORC Section 3736.69.
(e) Hearing of Appeal. The CRA Housing Council shall hear the appeal from a waiver application pursuant to ORC Section 3735.70. The Housing Council may affirm, modify, or reverse the denial after hearing. The Housing Council may impose such requirements and conditions on the Project Sponsor regarding the minimum number of Affordable Housing Units required for the waiver above the minimum requirements set forth in division (a) as it deems necessary to carry out the intent and purpose of this Chapter. The decision of the Housing Council shall be final and appealable pursuant to Chapter 2506 of the Ohio Revised Code.
(f) Burden of Proof. Under this Section, the Project Sponsor bears the burden of demonstrating that a waiver of the affordability requirements for owner-occupied units satisfies the overall goals of this Chapter with regard to increasing the number of affordable housing units within the City and is in the best interests of the City.
SECTION 2. That the existing Section 4565.13 of the Columbus City Codes is hereby repealed.
SECTION 3. That this Ordinance shall take effect and be in force from and after the earliest date allowed by law.