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PLAN COMMISSION 2011/04/13 MinutesThe City of Lake Forest Plan Commission Proceedings of the April 13, 2011 Meeting A regular meeting of the Lake Forest Plan Commission was held on Wednesday, April 13, 2011, at 6:30 p.m., at City Hall, 220 E. Deerpath, Lake Forest, Illinois. Commission members present: Chairman Jack Reisenberg, Commissioners Mark Shaw, Tim Newman, Catherine Waldeck, Mike Adelman and Jeff Kuchman. Commission members absent: Commissioner Beth Miller Staff present: Catherine Czerniak, Director of Community Development 1. Introduction of Commissioners and staff. Chairman Reisenberg introduced members of the Commission and City staff. 2. Approval of the minutes of the October 13, 2010 meeting. The minutes of the October 13, 2010 were approved as submitted. 3. Public Hearing and Action: Consideration of a request for approval of the tentative and final plat of the proposed 3-lot Hannah Gene Martin Re-subdivision, approval of associated variances, relief from existing plat covenants and approval of the required Special Use Permit. The property proposed for resubdivision is located within the Historic Preservation and Open Space District and therefore requires a Special Use Permit in conjunction with re-subdivision. The property proposed for resubdivision is located on the south side of Rosemary Road, west of Mayflower Road, and is commonly identified as 901 E. Rosemary Road. Applicant and contract purchaser: Eugene Martin Property owner: Philip Friedmann. Chairman Reisenberg stated that at the request of the petitioner, this agenda item will not be heard. 4. Public Hearing and Action: Consideration of an amendment to Chapter 20A of the Lake Forest Code, Inclusionary Housing based on the recommendation of the Housing Trust Fund Board. Chairman Reisenberg asked the Commission for any conflicts of interest of Ex Parte contacts. Commissioner Shaw stated that in the past, during discussions of the proposed Settler’s Square development, he recused himself from those discussions because the DeBruhler Company is a client of his firm. He stated however that he is not involved with the DeBruhler Company in any matters related to affordable housing and added that since this item is about the City Code in general, and not about any specific petition in which the DeBruhler Company is involved, he has Plan Commission Minutes – April 13, 2011 Page 2 of 10 no conflict and intends to participate in the Commission’s discussions and deliberations on this matter. Chairman Reisenberg invited a presentation from Michael Burns, Chairman of the Housing Trust Fund Board. Mr. Burns explained that the proposed amendments are in response to the City Council’s direction to the Housing Trust Fund Board to review the City’s Inclusionary Housing Ordinance, adopted by the City Council several years ago, to determine if any updates or amendments are appropriate at this time. He added that in October, 2010, the City Council adopted an update to the City’s Affordable Housing Plan including a set of action steps one of which was to review and update the Inclusionary Housing Ordinance. He listed the proposed amendments: the application of the Inclusionary Housing Ordinance to single family developments; clarification of the definition of affordable housing; the addition of a definition of moderate housing; clarification that in no case can the number of affordable units required be less than one; and an increase in the amount of the cash in lieu of on-site units payment. He noted that the proposed increase in the payment in lieu of on-site units is intended to more realistically reflect the cost of land and construction of offsite affordable units. He commented that the proposed payment is in line with the fee charged by Highland Park and with the construction cost per units as provided by Community Partners for Affordable Housing, a not-for-profit entity. He pointed out that the City Council still retains sole discretion to determine whether on-site units should be required as part of any new development, or whether a payment in lieu of on-site units should be accepted. He discussed the proposed application of the affordable housing requirements to single family home developments noting that this is not a new concept, but one that has been discussed for many months. He commented that this change is timely given that there are only limited areas left for development in the community. He stated that the proposed amendments are part of a continuing process to improve and adjust the City’s affordable housing tools to meet the City’s affordable housing goals. He noted that last fall; the City Council reaffirmed its commitment to affordable housing in the community and stated support for using a multi-pronged approach to achieving the established goals. He welcomed questions from the Commission. Ms. Czerniak stated that this matter is presented as a proposed amendment to the City Code. She reminded the Commission that Code amendments come forward from time to time for the purpose of updating, clarifying and making other changes to the adopted City Code. She noted that recently, the Commission completed a wholesale revision and update to the Subdivision Chapter of the Code for instance. She noted that the Inclusionary Housing Chapter was adopted in 2005. She stated that since that time, community discussions about affordable housing have occurred noting that the community, the Housing Trust Fund Board, the City Council and staff have all become better educated on the topic of affordable housing and as a result, some amendments are now proposed to reflect the discussions and what was learned. She stated that the proposed amendments affect only a few sections of the Code. She noted that last fall, the City Council considered the proposed Settler’s Green development. She stated that although the City Council did not accept the financial term sheet for that particular development, the Council did reaffirm its commitment to affordable housing in the community and directed the Housing Trust Fund Board to pursue affordable housing using various approaches and tools. She stated that the Inclusionary Housing Ordinance is one of the tools that support one approach to achieving affordable housing. She stated that the amendments presented were unanimously endorsed by the Housing Trust Fund Board to assure that as development gets underway again, Plan Commission Minutes – April 13, 2011 Page 3 of 10 the City has updated tools in place to avoid any delays. She stated that based on the significant amount of discussion that has occurred to date on this topic, and the recent direction from City Council, staff recommends support of the amendments as presented. Mr. Burns added that the proposed amendments were unanimously endorsed by the recently expanded Housing Trust Fund Board. Chairman Reisenberg invited questions from the Commission. In response to questions from Commissioner Adelman, Mr. Burns reviewed the rationale for increasing the payment in lieu of fee to $200,000 and explained that there is a preference to see affordable units built on site, as part of new developments. He noted that the current payment in lieu of fee, $130,000, is almost a bargain and acts as an incentive for developers to seek approval of a payment in lieu of constructing units on site. He added that if a payment in lieu of on-site units is accepted, the $130,000 is not sufficient to cover the cost of acquiring land and constructing a unit elsewhere. He reemphasized that the Housing Trust Fund Board and the City Council have both taken a position in support of dispersing affordable housing units throughout the community, as part of various developments, as opposed to locating them all in a few areas. In response to questions from Commissioner Adelman, Ms. Czerniak confirmed that the Plan Commission considered the Inclusionary Housing Ordinance at the time it was originally adopted in 2005. Commissioner Adelman stated that he is aware of the community discussions that have occurred on affordable housing but noted that prior to preparing for this meeting; he was not aware of the contents of the Inclusionary Housing Chapter of the City Code. He noted that much has changed since the Chapter was originally adopted and questioned whether given the current market conditions; this Chapter sets the requirements too high and serves to discourage developers. He stated that he does not understand the concept of accepting payment in lieu of on-site affordable units if what the City wants to achieve is affordable units as part of various developments. In response to questions from Commissioner Adelman, Mr. Burns explained that to date, the City has accepted only one payment in lieu of on-site units. He explained that the payment came from Presbyterian Homes in conjunction with the expansion of Lake Forest Place. He stated that in that case, Lake Forest Place provides extra services including medical services, food service and social services. He stated that Presbyterian Homes felt that the inclusions of affordable units as part of the development would have created a discrepancy in service levels. He noted that in exchange, Presbyterian Homes presented an in lieu of on-site units package that included payment to the City well in excess of the amounts specified in the Code, as well as other services in support of affordable housing in the community including maintenance, tenant support and rent subsidies. He noted that when the proposed Barat Woods development came forward, the approvals required that 10 to 12 affordable units be constructed on-site allowed the remaining required units to be covered by a payment in lieu. In response to a question from Commission Kuchman, Mr. Burns confirmed that the City Council has the discretion to grant a variance from the requirements of the Inclusionary Housing Chapter for any specific project. Plan Commission Minutes – April 13, 2011 Page 4 of 10 In response to questions from Commissioner Newman, Chairman Burns stated that the Area Median Income is defined by the Federal government and confirmed that it is based on the larger Chicagoland area, not just Lake Forest. Ms. Czerniak confirmed that the proposed addition of “moderate housing” to the Code is in response to concerns that the “affordable housing” definition may too low to hit the target groups in Lake Forest who need assistance. She noted that the moderate definition allows the programs to be targeted to higher income families and individuals. Commissioner Newman reviewed the percentages for “affordable” and for “moderate” noting that as he understands it, the concept is that no more than 30% of a family’s income should be directed to housing costs. In response to questions from the Commission, Mr. Burns stated that “moderate income” will be a defined term in the Code under the current proposal. He noted that as originally adopted, the Inclusionary Housing Chapter utilized Area Median Income as the basis for establishing criteria since it is accepted and widely used. He noted that the Chapter was adopted, at least in part, in response to State mandates despite the fact that they were determined to not directly impact Lake Forest. He noted however that the City Council’s goal was to create Code provisions that aligned with current adopted standards for affordable housing. He added that many grants and tax credit programs which provide funding for affordable housing require that Area Median Income be used to determine eligibility. In response to questions from Commissioner Kuchman, Chairman Burns stated that he does not have the numbers of affordable housing units located in neighboring communities. He stated however, that the information is available. Commissioner Kuchman stated an interest in understanding whether the need for affordable housing units is met by what is available in other nearby communities. He noted that he is not making a philosophical judgment on whether Lake Forest should or should not provide affordable units, but is interested in what is available nearby. Mr. Burns pointed out that there are affordable housing needs among Lake Forest residents and that the City Council established policies and adopted ordinances in support of working to address that need in the community. He acknowledged that there are affordable housing units in neighboring communities, but stated that the direction from the City Council was to provide affordable housing in Lake Forest. Commissioner Waldeck noted that the inclusion of moderate housing appears to be a response to concerns heard during recent discussions of affordable housing in the community. She commended the inclusion of the moderate definition noting that it may allow the efforts to more directly target Lake Forest residents. In response to questions from Commissioner Waldeck, Mr. Burns confirmed that priority groups are identified in the Inclusionary Housing Chapter including Lake Forest senior residents. He noted that within the parameters of the Fair Housing Act, the Housing Trust Fund Board has the ability to make recommendations on specific groups that should be targeted for any specific development. Plan Commission Minutes – April 13, 2011 Page 5 of 10 Chairman Reisenberg reviewed the section of the Inclusionary Housing Chapter that establishes priorities for different target groups. In response to questions from Commissioner Kuchman, Mr. Burns confirmed that so long as people are available from the target groups, those groups can be given preference for affordable units. He clarified that the target groups identified in the Inclusionary Housing Chapter are the target groups for this particular approach. He noted that the City’s Affordable Housing Plan identifies other target groups as well including employees of local institutions. In response to questions from Commissioner Waldeck, Chairman Burns stated that the amendments were reviewed by the City Council as part of adoption of the update to the City’s Affordable Housing Plan last fall. He added that the amendments were also reviewed and discussed at two recent Housing Trust Fund Board meetings which are publicly noticed and open to the public. In response to questions from Commissioner Shaw, Chairman Burns stated that the median income numbers are established by the Federal government for the Chicago metropolitan area. He noted that for a family of 4, the Area Median Income is about $74,000. He stated that based on his recollection, approximately 17% of the households in Lake Forest would qualify under the affordable or moderate criteria. He clarified that the proposed amendments would apply the inclusionary housing requirements to single family developments in addition to multi-family developments which are already required to provide affordable units. He stated that single family developments probably should have been included in the ordinance when it was originally adopted. He noted that requiring affordable or moderately priced units in all types of new development will result in more affordable units and will disperse the units throughout the community. He confirmed that households already living in Lake Forest, who meet the criteria, will have priority for the affordable units in a manner that is in compliance with Fair Housing laws. He stated that the City Attorney is confident that the Code language provides for locally identified target groups to be given priority. In response to questions from Commissioner Kuchman, Mr. Burns confirmed that Lake Forest residents can be given priority so long as they meet the established criteria. He noted that under the Fair Housing laws, units must be made available to non-residents if qualified families and individuals within the target groups are not available. In response to questions from Commissioner Shaw, Chairman Burns stated that the number of affordable housing units in other communities is irrelevant to this discussion. He stated that the direction to the Housing Trust Fund Board was to meet the City’s stated affordable housing goals through various approaches and provide affordable units within the City of Lake Forest for current residents. He explained that the previously proposed Settler’s Green development, a specific project, was to be funded through tax credits that were geared to serving families more so than seniors. He confirmed that the Settler’s Green project would have targeted current Lake Forest residents as a first priority, and then employees of Lake Forest institutions and businesses. He confirmed that in the past, the City Council, in response to an identified need by local institutions; the schools, Lake Forest College and the hospital, recognized the importance of providing housing within the community that is affordable for local employees. Plan Commission Minutes – April 13, 2011 Page 6 of 10 In response to questions from Commissioner Waldeck, Chairman Burns identified the members of the Housing Trust Fund Board. He stated that in expanding the membership of the Board, the Mayor included representatives of the seniors, financial institutions, the College and the hospital. He noted the Mayor’s efforts to broaden the representation of various interests on the Board. In response to questions from Chairman Reisenberg, Chairman Burns explained that the Area Median Income is based on the number of people in a household. He stated that based on his recollection, the Area Median Income for a one-person household is about $46,000 and for a two-person household, about $54,000. Chairman Reisenberg reviewed some calculations and discussed the various income levels that could qualify for affordable or moderate housing and discussed the dollar amounts available for housing costs if those costs are to be no more than 30% of total gross income for housing. In response to questions from Chairman Reisenberg, Chairman Burns explained that various methods could be used to create affordable units resulting from new developments. He stated that depending on the development, the units could be for sale units, or rental units. He noted that in some cases, the developer may retain ownership and in others, a not for profit entity could take ownership of the units. He stated that the home could also be sold at an affordable price. He noted that a deed restriction would then be placed on the deed to keep the unit affordable. He clarified that when on site units are provided, the developer receives a density bonus to compensate for the construction of an affordable unit. He stated that the Housing Trust Fund Board would prefer that units be sold and that a deed restriction be placed on the property requiring that any future re-sale would be done based on a formula and the amount of future profit, limited. In response to questions from the Board, Ms. Czerniak explained that with each development, the Housing Trust Fund Board will discuss options with the developer on how best to meet the affordable housing requirements whether through for sale units or for rent units, and if for rent, what entity should hold title to the property. Chairman Reisenberg stated that the proposed amendment is a disincentive to development particularly given the current market conditions. He stated that the amendment would place a “tax” on single family home developments in the City. He suggested that a financial impact study should be conducted to determine what the impact of this amendment would be on future development and future revenues to the City. He questioned what the impact would be on the City’s ability to develop the Laurel Avenue property in the future. He stated that this is a good goal, at the wrong time. He pointed out that the target group is seniors and noted that most seniors may not want single family homes which would be provided if the proposed amendment is approved. Chairman Burns clarified that the decision on whether to require on site units as part of the development or accept a payment in lieu of units, remains with the City. He stated that if the City determines that a particular development would not be an appropriate location for moderate or affordable units, the City can accept a payment in lieu of on-site units to support construction of units that meet the needs of the target groups, at an appropriate location. Plan Commission Minutes – April 13, 2011 Page 7 of 10 Commissioner Newman stated that the inclusionary housing requirements appear to be better suited to multi-family development, rather than to single family detached dwellings. He agreed that if the requirement becomes a defacto tax, in this market environment, the development might not happen at all. Commissioner Adelman questioned how saleable a lot next to an affordable house will be in a single family subdivision. He commented that in a 10 acre subdivision, requiring one lot to be affordable could taint the entire project. He noted that the Code provides for a waiver of some fees for affordable units and questioned the impact of those cost offsets. Chairman Burns commented that with respect to the current state of the economy, now may be a time when people need housing assistance. Commissioner Adelman countered noting that due to the economy, there are now homes available in Lake Forest at much lower prices than in the past. Chairman Burns noted that recent work by the Housing Trust Fund Board has indicated that some of the lower end prices are now increasing. Commissioner Kuchman stated that it would be interesting to hear more from the City Attorney on how the Fair Housing Act could impact the City’s ability to establish and implement its own preferences as stated in the Code. Chairman Burns stated that the City’s ability to establish priorities and target groups including Lake Forest residents has been discussed at length. He stated that the City Attorney has been clear that the City’s preferences can be implemented. In response to a question from Commissioner Waldeck, Mr. Burns stated that affordable housing units are taxed, but at a level related to the sale price of the home. Commissioner Adelman discussed housing needs for employees who work in Lake Forest noting that there are homes in nearby communities that fit the price ranges for employees. He pointed out for example that he only shops for a car which is within his price range. He stated however that he is sympathetic to the housing needs of Lake Forest residents who have lived in the community for a long time and now find themselves priced out of the market. He stated that one way to address the hardship for long time Lake Forest residents might be to address the real estate property tax issue. He suggested that a subsidy could be offered to assist with property taxes or a law could be considered reducing the amount of tax for longtime residents. He stated that is it not a “right” to be able to afford a home in Lake Forest. Chairman Burns stated that part of the reason behind the Council’s interest in affordable housing is because the complexion of Lake Forest has changed. He noted that in the past, teachers, police officers, and other local employees could live in and be part of the community. He stated that the diversity added to the fabric of the community. He stated that as a result of many of those people being unable to afford to live in Lake Forest, the community has lost something. He stated that the goal of affordable housing efforts is to recreate a more diverse housing stock in the community, similar to what used to exist. Plan Commission Minutes – April 13, 2011 Page 8 of 10 Chairman Reisenberg invited public comment and swore in those planning to speak. Walt Nielsen, 546 Timber Lane, noted that he has lived in the community for about 25 years. He stated that he submitted written comments to the Commission. He asserted that the entire history of the Housing Trust Fund Board has been to cut off the community discussion noting that the meetings are held at 7:00 a.m. He stated that the meetings of the Board are not conducive to public discussion. He stated that he does not support outsourcing of affordable housing efforts to a Highland Park entity. He stated that he lives in Lake Forest because he does not want to live in other communities. He stated that the community needs to be cautious to avoid becoming similar to other communities. He stated that he has watched the affordable housing legislation closely at the State level and discussed the history of the State mandate for affordable housing noting that the adoption of Home Rule was presented as a means of not needing to comply with State regulations. He discussed the Fair Housing Act and questioned who would stand up to the ACLU or the press if the City’s intentions are questioned. He stated that affordable housing is another name for subsidized housing. He commented that other people are paying for the housing needs of the less fortunate and that wealth is being redistributed. He stated that if the City believes that it should support the housing needs of deserving people, consideration should be given to supporting wounded warriors, not professors at Lake Forest College. He noted that the City program has made no efforts to coordinate with programs supporting wounded warriors. He stated that the affordable housing program that has been foisted upon the residents of Lake Forest is a scholarship program. He noted that it is not a matter of not having enough homes at different prices, but of people noting having enough income. He stated that there is a cottage industry around affordable housing programs and he questioned whether Lake Forest should be using its limited assets on this effort. He asked the Commission not to be enablers in moving these efforts forward. Hearing no further public comment, Chairman Reisenberg invited final comments from Housing Trust Fund Board Chairman Michael Burns. Chairman Burns reviewed the income levels noting that for a one-person household the income range is $31,000 to $63,000, for a two-person household, $36,000 to $72,000, for a three-person household, $40,000 to $81,000 and for a four-person household, $45,000 to $90,000. He stated that the ranges are based on the 60-120% of Area Median Income that is established by criteria for affordable and moderate housing. He stated that the Board is working to implement the affordable housing goals as directed by the City Council. Commissioner Kuchman stated that at this time, he is not prepared to support the proposed amendments given the questions that have been raised. He acknowledged that what is presented may be simply a clarification of the existing Code language. He stated with answers to the questions raised, he may or may not be able to support the amendments. Commissioner Waldeck agreed that further information would be helpful. She commented that the changes proposed, particularly the addition of moderate housing, appear to be a good beginning. Commissioner Shaw agreed that additional information would be helpful noting that there is no harm in delaying this matter. Plan Commission Minutes – April 13, 2011 Page 9 of 10 Commissioner Adelman stated that agreement with the comments of all of the Commissioners except for Commissioner Waldeck’s comments in support of the addition of moderate housing. He stated that the addition will simply broaden the applicability and he stated that he is not supportive of that direction. He stated an interest is seeing the public become more aware of the affordable housing discussion that is occurring. He commented that times have changed noting that Winnetka had a well-attended public hearing on affordable housing recently and it is an issue that needs more of a consensus, from more people. Commissioner Newman acknowledged that teachers, police officers and others have an increasingly difficult time finding housing in the community. He asked what the Commission is being charged with considering at this meeting, the merits of the overall Chapter of the Code, or the proposed amendments. He stated that the Commission’s discussion seems to have focused on the merits of the Chapter. Ms. Czerniak clarified that the City Council did not ask the Plan Commission to re-consider the entire Chapter and that the matter before the Commission for action is the proposed amendments. Chairman Reisenberg stated that he cannot support the proposed increase in the payment in lieu of on-site units because it would act as a disincentive to development. He added that he cannot support the application of the inclusionary housing requirements to detached single family homes. He stated that he believes that single family homes were not included in the Chapter in the inclusionary housing provisions originally for good reason. He stated that it is unconscionable to tax single family home developers at a time when the economy is in its current state. Commissioner Shaw made a motion to continue the matter for further study. The motion died for a lack of a second. Commissioner Shaw explained that his intention with the motion was to allow additional time for the questions raised by the Commission to be answered before a final vote. In response to questions from the Commission, Ms. Czerniak stated that further comment and evaluation by the City Attorney could be requested. Commissioner Adelman made a motion to deny the petition. The motion was seconded by Commissioner Kuchman. In response to questions from Commissioner Newman, Ms. Czerniak confirmed that the Plan Commission is a recommending body and that unless a petition is withdrawn by the petitioner, the action of the Plan Commission is forwarded to the City Council for final action. The motion to deny the proposed amendments was approved by the Commission by a vote of 5 to 1 with Commissioner Newman voting nay. 5. Public testimony on non-agenda items. Plan Commission Minutes – April 13, 2011 Page 10 of 10 There was no additional public testimony presented. 6. Additional information from staff. Ms. Czerniak recognized Commissioners Adelman and Waldeck noting that this is their last meeting as members of the Plan Commission. On behalf of City staff, she thanked them for their service on the Commission. The meeting was adjourned at 7:59 p.m. Respectfully submitted, Catherine Czerniak Director of Community Development