Fairfax City Council Discusses Affordable Housing Ordinance

Fairfax City Council Discusses Affordable Housing Ordinance

Developers would get higher density in exchange for ADUs.

Developers want to build houses in the City of Fairfax; but affordable homes just aren’t as profitable for them. So the City is now considering an affordable dwelling unit ordinance to make the idea more attractive.

During a recent City Council work session, Brooke Hardin, director of Community Planning and Development, explained the proposal in detail. Also helping was attorney Pat Taves.

“This would be an amendment to the City’s zoning ordinance,” said Hardin. It would apply to rezonings, planned developments, special-use permits and special exceptions, plus administrative approvals of subdivisions and site plans.

The ordinance would provide additional density through ADUs and market-rate units by allowing the developer to add up to 20 percent more density (units per acre) in all residential, multifamily and mixed-use zoning districts. For new developments, 10 percent of detached homes or townhouse units must be ADUs, and 6 percent of multifamily units must be ADUs.

Taves said the ordinance is optional for the City to adopt. But, he stressed, “An optional density increase has got to be offered to the developer. The 20-percent bonus-density number could be more or less, but this is similar to what Fairfax County has.”

PREVIOUSLY, he said, the threshold triggering ADU requirements was a development of at least 10 units. “But City Council thought that number was low, so we’re recommending 30 units,” said Taves. “It would help mitigate the effects of density on established neighborhoods and smaller, new developments.”

In addition, said Hardin, “We heard comments about offering the bonus density in height increases to decrease the impact on open space. It wouldn’t be necessary for single-family homes, but it would apply to townhouse and multifamily developments.”

In areas adjacent to residential, townhouses would be able to go from 35 to 40-feet high, and multifamily, from 35 to 48 feet. In areas not next to residential, three-story townhouses could increase from 35 to 40 feet, and four-story townhouses, from 45 to 48 feet. Four-story multifamily developments could go from four stories and 45 feet to five stories and 60 feet.

Another way to reduce the impact on open space would be by allowing townhouses to decrease their minimum lot sizes from 18 feet wide to 16 feet. It wouldn’t apply to multifamily homes.

Taves said the ADU ordinance would be administered by the City before construction, including plan review and approval. After construction, the county’s Department of Housing and Community Development would individually review housing applications and do the day-to-day administration. Zoning enforcement would be the City’s job.

Recommended income levels to own an ADU would be households with a total maximum income of 70 percent of AMI (area median income). To rent an ADU, that number would be 60 percent or less of AMI.

“We changed the income for ownership units from 60 to 70 percent because, if they’re going to buy a home, they’d need a larger salary,” said Taves. “Existing rental tenants may earn up to 80 percent of AMI, if they get a raise once they get into a unit. But if they earn more than 80 percent, they’d have to leave.”

Applicants for ADU ownership must be first-time homebuyers who haven’t owned a residential property in three years. Exceptions would go to former homeowners who are displaced homemakers no longer supported by a spouse, single parents, seniors moving to an age-restricted ADU and disabled people who owned a home prior to their disability.

Tom Fleetwood, the county’s director of Housing and Community Development, said Fairfax County has purchased some for-sale ADUs and has the authority to buy up to one-third of those under its domain. City Council members then weighed in on what they heard.

“Is this applicable to a by-right project?” asked Councilman Sang Yi “Yes,” said Hardin. “Or they could pay cash in lieu of having 50 percent of the ADUs.”

“I’m more comfortable with the 30-unit threshold than 10, and the up-to 20-percent density,” added Yi. “What kind of [monetary] growth do ADU’s have?”

“During the 30-year control period, growth and price are controlled by the CPI – consumer price index,” said Fleetwood. And, added Abdi Hamud, who administers the county’s ADU program, “They’d have to have a fixed-interest rate.”

Yi asked the average price to buy an ADU, and Taves said, “At 70 percent AMI, we estimate $251,000.”

“I’m OK with ADU rentals, but when it comes to ownership, I see a lot of pitfalls,” said Yi. “It doesn’t seem that worth it, buying a $251,000 home that won’t increase that much in equity. I’d rather help people who really need it.”

Councilman Michael DeMarco asked, “For a high-end, for-sale product, could a developer pay in lieu of a 100-percent ADU opt-out?” Fleetwood answered that the goal is to not have developers eliminate ADUs from their projects.

But, said Taves, “If it’s at 50 percent opt-out of the ADUs, Council wouldn’t have to decide this, all the tie, for each project.” And Hamud noted that, “We’ve had no trouble marketing and selling ADUs.”

MAYOR David Meyer said, “In some projects, it doesn’t make sense to put in ADUs. For example, HOA [homeowners association] dues could be a problem [for the purchaser].” Under the plan, if a buyer sells his ADU before 30 years, half his profit would go to the City’s Housing Trust Fund. But, asked Meyer, “If somebody lives in their home 20 years and makes improvements, would they get credit for them?” Hamud said they would. However, Meyer called it “draconian” for the City to take half the ADU-sale profit.

“The ADU home-ownership program isn’t for creating wealth for the homeowner,” replied Fleetwood. “It’s to provide him with an affordable home priced far below what it would be otherwise.”

“I just want to make sure that where those lines cross is fair to everyone,” said Meyer.

“It’s successfully provided affordable-housing opportunities throughout the county,” said Fleetwood. “And we’ve had some good, public/private partnerships.”

“Who are the people benefiting, and what are the effects on the community?” asked Councilman Jon Stehle. “Working people who drive buses and cabs, teach or work for the county,” answered Fleetwood. “And it’s benefited the communities to be able to provide housing for their workforce.”

“What happens if a person lives in their ADU more than 30 years and dies?” asked Councilwoman So Lim. “Can they will it to their family?”

“After 30 years, it’s not an ADU anymore, so they can,” said Hamud. “Or [if they’re still alive], they can sell or rent it. They no longer have to live in it.”

But, concerned about ADUs being willed, Yi said, “We want new families in [ADUs]. The intent of this program isn’t to keep the same family in there. We should put a limitation in the ordinance.”

He also asked if a senior who sold his already-paid-off home for $1 million and has no income could buy an ADU. “We look at both income and assets for purchases,” replied Hamud. “But I’d have to get back to you about rentals.”

Meyer then asked the Council to consider all these things and share them with their colleagues at a later date. There’ll be another work session on the final draft ordinance, and then the matter will go to both the Planning Commission and Council for public hearings.