Mr. Newman went over the guidelines for public comment and participation. Ben Brewer, City Development Services, recapped his presentation of the August 6, 2019 Missoula Consolidated Planning Board Meeting. At that time, he provided background on the Townhome Exemption Development (TED) ordinance to amend Title 20; he described the process used to develop the strategy, including the development of leadership and technical teams that assisted Development Services. At that meeting he gave the rationales and explanations for the specific language amendments that were proposed. Mr. Brewer gave an overview of where they are today. This project is being developed during an interim ordinance period initiated by City Council in response to TED projects that were being proposed that were increasingly complex and large in scale and were at odds with existing regulations, that jeopardized the city's ability to ensure orderly development and provide for the general health, safety, and welfare which would put the city at risk for litigation. The interim ordinance period is not a moratorium on TEDs. It does not affect smaller TEDs, which constitute most TED projects in the City. He stated that it does add additional standards and conditional use review criteria to larger TED projects that do require conditional use approval. Mr. Brewer stated that TEDs have been around since the beginning of this decade, and for almost nine years the city has attempted to accommodate them in various shapes and sizes. TED projects in the City of Missoula have included:
- a couple of existing single-family homes,
- 40 or 50 new residences,
- multiple apartment buildings under separate ownership, and
- multiple commercial buildings on a single lot.
They have been used for infill development, Brownfield development, Greenfield development, development on sites that are flat and served by infrastructure, next to flood prone areas, and sites with steep slopes. Mr. Brewer stated that he feels when comparing Missoula to jurisdictions throughout the state; Missoula has been very accommodating towards TEDs. They are at a point where they needed to step back to reflect and evaluate the benefits and challenges. He stated that the preference for development through TEDs is clearly a reaction to the perception that it is the desirable alternative to subdivision. From the beginning of the development of these amendments, his department has recognized that there is an aversion in doing subdivisions in the city and that there is a general desire to improve the subdivision process and his department is committed to cooperating with that. Their focus has been on TED because that is the immediate need. Mr. Brewer reiterated the intent is to follow what comes out of the project with the subsequent process that looks to enable an urban subdivision process that is as preferable as development through TED is now but which still enables the city to protect for the general welfare and achieve important city goals. He stated that he felt it was also clear that one cannot talk about TED without talking about housing and affordability. This was considered from the opening conversation about the amendments they are proposing, when the TED leadership group discussed what goals to base their strategy on. The Housing Department was included in that group and brought the perspective that came out of the development of the new city housing policy. With regard to affordability, Mr. Brewer stated that the strategy was based on the understanding that TED does not necessarily lead to new housing at the levels of affordability identified in the housing policy, but that it brings the benefit of enabling new housing stock to be brought on-line in a timely manner. The focus on timeliness of construction is an important component of the strategy that he is proposing. Other input from the housing policy process was that developers want predictability; predictable and consistent regulations and that it is a benefit to remove unnecessary legislative decisions such as the conditional use approval process; all of which his department has aimed to do in this proposal. He stated that it is important to recognize the need for the amendments is not a response to a single project nor is it based on a single issue. It has been cumulative over the years and is based just as much on proposed projects as those that are in existence now. Mr. Brewer stated that they recognize greenfield development is important in addressing housing supply and his department has included a path that enables TED to be used in greenfield areas. He stated that the TED is best suited for promoting housing supply through small to medium sized urban infill projects. His department sees that type of development as playing an important role in creating future supply over the coming years. He stated that is a balanced package of amendments that creates a clear, predictable, and consistent process that will help alleviate the housing affordability problem while not losing sight of the many other issues that have been expressed through the development of the growth policy, other city plans and policies and their overall commitment to maintaining community values. Mr. Brewer thanked the board for the opportunity.
PUBLIC COMMENT
Dwight Easton, Public Affairs Director, Missoula Organization of REALTORS (MOR). Mr. Easton provided the board members with copies of the "2019 Missoula Housing Report". At the previous meeting the board had asked about the median pricing of TEDs. He referred the board to table 11 on page 20 of the report. He stated that he feels the board is wrestling with the issue of attainable housing, affordable housing, which may not be interchangeable, but they are part of the discussion of the overall housing policy. Mr. Easton pointed out that the median price for a townhome in 2018 was $254,353. A single-family residence had a median price of $383,500 in 2018. He stated that the townhome would have been developed under a TED and that the single-family residence would have most likely have been developed under subdivision regulations. The median price of the single-family residence is 50% higher than the townhome. In terms of attainability and affordability, Mr. Easton stated that this should be considered in the TED ordinances. He feels that the TED has been used very effectively to bring that to the marketplace. He stated that they also did comparisons on dwellings of 2,000 square feet. They found that the median price on new townhomes at 2,000 square feet was $253,032; very close to the median price of a townhome, meaning that 95% of all the sales were in that category. Using a single-family residence at 2,000 square feet, new builds came in at $345,250, or about 39% of that number in the report on table 11. He stated that single family residences were approximately 36% higher than townhomes. Mr. Easton stated that where more attainable housing is concerned, the TED is the product that is being utilized by the development community. He noted that absorption rate, which is 1.96, means that there is less than a two-month supply in all housing stock, so housing remains very tight. The absorption rate for housing below $300,000 was .82 for the past 30 days, which is less than a month. This number improves to 2.94 when the cost of housing is over $300,000. Mr. Easton state that this means that everything being built at that price range is being "snatched up" as quick as they can build it. He stated that Development Services has been very good and are willing to work on subdivisions; however, he feels that this set of ordinances as it exists right now is not the solution. He would like to start over again and work together to come up with a solution. The position of MOR is that if the Missoula Consolidated Planning Board needs to move something forward, then he would ask that they please take the Missoula Building Industry Association (MBIA) suggestions and put those into the ordinance. His first choice would be to start over.
Gene Mostad, Mostad Construction, Inc. and Missoula Building Industry Association (MBIA). Mr. Mostad has been building and developing in Missoula for 42 years. He stated that throughout the years he has done subdivisions through the subdivision process and development through TED. His projects have been large, 75-100 lot subdivisions, and he addressed the boards' concern of circumventing good planning by not going through the subdivision process. Mr. Mostad stated that Brookside, which was approximately 75 lots, was completed through the subdivision process. Currently he is in the middle of a 76-lot townhome development at the back of Pleasant View, called Valley View. Mr. Mostad stated that the process was a lot simpler through the TED process. He stated that very nice communities were constructed either way. He estimated that if it had not been for the TED process it would have taken him at least another year to get underway on the Valley View project. He stated he has had bad experiences when properties are financed and purchased and followed by a lengthy subdivision process. The TED process allows developers to come out with the same product but not have to spend another year and twice the money to go through the subdivision process. Mr. Mostad stated that in the subdivision process, even at Brookside, he had planners try to completely redesign the subdivision, which he felt was out of line and not under their authority. He stated that these are types of unpredictability; and that the builders and developers have been asking for predictability. The developers in Missoula have long term commitments to the Missoula community; they are not big builders coming in from out of town. They want to do good communities in this town and the TED was working. He asked why the rules need to be changed when it was working. Affordability is discussed a lot, but he feels that the city is trying to make the developers go back to using the subdivision process, which needs updating and streamlining, but this should be done before changing the TED. Mr. Mostad stated that changing rules makes development difficult; he would like predictability. He asked why there were issues with phasing. In the development world, across the county, phasing is used all the time depending on market saturation. Missoula doesn't have the saturation rate to absorb all the units if a development had to advance without phasing, unless they are in the $250,000 range. Because of the economy and type of jobs in Missoula the developers in Missoula need to watch this. Developers need to closely follow the saturation rate and need to phase accordingly to stay financially solvent. He stated that the Brookside development took 15 years, in multiple phases, to complete. He thanked the board and appreciated the time to make comments.
Nick Kaufman, Land Use Planner, WGM Group. Mr. Kaufman thanked Mr. Brewer, Mr. Keene, Ms. Means, and the board members. He provided a brief presentation on two WGM projects, one completed and one active project. He stated that at the last planning board meeting there were some questions about the proposed project WGM is working on, relative to the standards that are proposed in the TED regulation. Mr. Kaufman stated that Scott Street Village was developed at the old Clawson Manufacturing site, north of White Pine Sash. The houses have been developed and are painted now. He stated that the city requirements were for improved standards for the TED, which were basically the same as for subdivision. There were performance standards for street, sewer, water, storm drainage, access and traffic. There was zoning compliance for the district and supplemental chapters. For that project they received TIF district financing with a total funding of $518,230. $78,250 went to demolition, $344,825 to infrastructure, and $95,155 for permits, traffic control and engineering. The rest was developer financing. The design process was completed working with Missoula Redevelopment Agency and Development Services. He stated that it was a project of 1-, 2-, and 3-unit townhomes and single-family homes in three phases. A city park was constructed at the old White Pine Sash location; lacrosse is played there now. This park is within walking distance to Scott Street Village. Mr. Kaufman presented project milestones: the project was initiated in March 2015 and the first home closing was in January 2017. There are about 54 homes.
Next he discussed Hellgate Village, which he had asked the board to consider being grandfathered from the proposed TED regulations. He feels the staff is working hard to find ways to do that. Hellgate Village is a proposed project between Edgell Building Inc. and Hoyt Homes, Inc. He stated that Opticos is the site designer. He presented a projected aerial view of the project; the project contains "mews", which are attached single family homes with a walkway. Project would be 8.5 acres, east of Mary Jane Blvd and West of Mary Jane Blvd. One phase would be to the east of Mary Jane, the other to the west. Mr. Kaufman stated that there are 5 proposed lots in the subdivision; lots 1, 2, and 5 will have townhome units with ADUs; lots 3 and 4 will have 4-plexes. He showed a slide demonstrating 2 phases of the project. He stated that the ordinances under consideration prohibit ADUs. The developer is the builder in this project. He stated that his presentation illustrates how phasing, removal of limits, and ADUs work together in this project.
PUBLIC COMMENT HEARING CLOSED
BOARD COMMENTS/DISCUSSIONS
Mr. Newman asked members of the board for their preliminary responses to gauge further review and comments. The board chose to continue to work on the ordinance to amend Title 20; although Mr. Hoffman stated he agreed with MBIA's assessment and felt starting over would be best and he could not support the amendment. He felt that although improvements could be made, they would not be enough to induce more affordable housing. Mr. Houlihan agreed with Mr. Hoffman.
Mr. Rice asked staff who was on leadership team. Mr. Brewer stated that the leadership team was comprised of two city council members, John DiBari, Jordan Hess, Eran Pehan, Dale Bickell, the director of development services, Laval Means and himself.
Ms. Hassanein thanked Mr. Easton for bringing the numbers forward, she found the comparisons helpful. She asked Mr. Easton and the staff about the estimated 4,000 build-able lots in the urban area and if the TED tool could be used for development of these lots. Mr. Easton asked to defer his response until he better understands access/availability of these lots; his concern is that while there may be a preponderance of smaller parcels for development, 61% of all housing units created by TEDS have come from larger TED developments.
Mr. Newman stated that TED projects are not necessarily circumventing the standards that would provide for health, safety, welfare; which are the same as with subdivision review. Therefore, there should be no difference in cost between the two types of development. Is the difference in cost due to the delay in subdivision approval as well as the associated carrying costs? He asked what difference cause the additional expense. Mr. Hoyt/Hoyt Homes responded that one of the reasons was the time element; paying interest approximately 8 to 12 months longer. He stated building costs have increased 34% since two years ago; in the first 6 months of 2019 there has been an 8% increase, but it could end up being another 17% year by the end of December. There are also tariffs that drive up the costs. Costs need to either be absorbed or passed on. Most financial institutions will not loan to projects that aren't phased. Mr. Newman confirmed that regulations themselves do not create the costs; the review time creates expense. Mr. Brewer clarified how phasing would or would not work in what they are proposing. He stated that the language addressing phasing is specific to a TED; with what Development Services is proposing TEDs would be limited to 10/20 units to a TED. Within those 10/20 units phasing would not be allowed; for something larger than the cap there would need to be a minor subdivision then various TEDs on the lots that would be created through that minor subdivision. Each of those lots would have a separate TED, which creates a built-in phasing option.
Ms. Potts asked for clarification about TEDs on subdivided properties, specifically the Hellgate property. She asked how different this is from what is being proposed. Ben Brewer stated that she may be referring to the Valley View Terrace TED, in the Pleasant View area. He stated that the development had already gone through or started the subdivision process in anticipation of multi-family development, it then switched to townhouse style development. Mr. Brewer stated that it had enough lots to do the proposed development by splitting it up into smaller, separate TEDs which would not trigger a conditional use. Mr. Rice stated that those lots already existed and was zoned multi-family so was administratively reviewed as nine units. There were some boundary line re-locations and Mr. Mostad was the developer. Mr. Mostad followed up that the Valley View subdivision were multi-family lots reconfigured to townhomes; his concern is that Development Services does not want phasing in TEDs. He cited the example of 76 units, 5 phases, but they were all in 9 lot groups. Mr. Mostad stated that if phasing is taken away the project could not be done. Mr. Rice clarified that because each was on an individual TED parcel, each is not a phase, but its' own TED unit. In that case there were 5 lots, and if you wanted to do 20 units each; those are not phasing under this regulation, they are TED parcels.
Mr. Rice recommended proceeding through the amendment document systematically and discussing it chronologically when possible. Mr. Newman and the board members concurred. Mr. Rice believed that the strategy for this document should have been presented at a public forum format and revised and edited prior to being presented to the planning board. Ms. Potts stated that she wanted to go on record that she feels only one point of view is being represented at this meeting; she is concerned that this tool is being used in a way to subvert the public process that would allow public discussion and involvement. She feels that subdivision review has a purpose and that that TED should not be used as a replacement to the subdivision process; however, it is a good tool to meet Missoula's growth policy.
Mr. Rice addressed the board's attention to the intent section of the document. He proposed a change to Title 20 City Zoning chapter 20.05, section 20.05.40.D, 1-c which reads "The TED tool is not intended for new greenfield development..." to "The administrative TED review is not intended for new greenfield...."
Mr. Rice stated that he aligns more with the builders and believes that TEDs should be allowed for commercial uses. He would like the language struck that reads "TED is not permitted for development that includes nonresidential uses." Mr. Bensen said he was not opposed to having housing/residential uses in commercial districts. He would like another perspective on this matter and is uncomfortable removing this text without further review of possible ramifications. Mr. Hoffman stated that one had been done in Billings, so they have not been prohibited in other jurisdictions. Ms. Potts sees the need for mixed uses; modern neighborhoods are not 100% housing and cited live-work communities; however, she is not in agreement with a TED that is for commercial uses only. Mr. Brewer stated that the staff added this language, to not permit nonresidential uses, as TED allows the properties to be sold into different ownership, but the actual buildings may not be that of a townhouse structure. Within the state law, a townhome is very general which creates challenges. Mr. Brewer stated that the intent was to focus on housing, and residential uses to make it a more predictable document. Ms. Hassanein stated that she is concerned that this limitation would restrict the addition of a small coffee house to a TED project, which is counter to their commitment to mixed use; however, she will not be supporting this change to the amendment. Mr. Rice would like to see the TED amendments to continue to be overhauled to become a better usable tool for the community.
Mr. Rice would like to see more allowable units in Figure 20.05-7. He recommended changing the parameters listed in the table in Title 20 City Zoning chapter 20.05, section 20.05.40.D, Figure 20.05-7:
- Replace "One (1) to ten (10) total dwelling units" to "One (1) to fifteen (15) total dwelling units";
- Replace "Eleven (11) to Twenty (20) total dwelling Units" to "Sixteen (16) to Thirty (30) total dwelling units"
- Replace "More than Twenty (20) total dwelling units" to "More than thirty (30) total dwelling units"
Mr. Brewer explained that the staff arrived at the cap numbers based on the strategy that they would try and limit TED development to a size that is not too complex and could be brought on-line in a timely manner. The size cap was identified as one way of accomplishing this and maintaining a streamlined review. Most TED projects to date have been less than ten. There have been minimal TEDs greater than 20. A traffic study was utilized in their decision, as well as the area required based on the zoning. Based on the zoning, half a block to a block area would be possible, based on the caps. Mr. Brewer stated that TED is an exemption to the subdivision process, which has a robust public participation component. Ms. Hassanein would like to see a percentage of units dedicated to lower price, affordable units so there would a range of prices available. Mr. Rice stated that it is very complicated to provide incentives. Ms. Hassanein asked Mr. Brewer about the ramifications to his department if the numbers were changed in the chart. Mr. Brewer stated there are implications with raising the cap as there are deadlines and timelines to review, there are also implications to the public participation side.
Mr. Kaufman stated that when development is done there are real design issues. He cited connectivity and roadways. He stated eight (8) homes could be put on one side of a block, and eight (8) homes on the other side of the street that is 16; and they get a full block. When they are only allowed to do ten; they get a half block and half the connectivity that they need. Another consideration, he stated, was that cul de sacs, dead end streets and looped streets cannot be done in the City of Missoula in these cases. Mr. Kaufman stated that allowing up to 16 units will accommodate a block, with homes on both sides.
Mr. Bensen asked one of the builders/developers to address how the numbers affect them if the planning board recommends alternate caps on dwelling units in the chart. Mr. Edgell was concerned that the reduced number was that if a subdivision had to be done first, and then a TED, which has been the case with Hellgate Village, it doubles the cost, which are passed onto the purchasers. Mr. Edgell stated that lower numbers would increase the risk to the builders as well as decrease the affordability to the consumer.
Mr. Keene, Interim Director, City Development Services, asked at what point does the city need to create additional roads and blocks. When the number rises over 20 additional right of ways need to be created. When the project is split with a road down the center it creates two parcels, and ten units could be put on either parcel. He was concerned about block patterns with 30 units. Mr. Keene stated that the housing policy is to create more supply and affordability, but it also explicitly tries to create quality of community. He doesn't want good development patterns lost in the name of supply. Mr. Hoffman stated that the requirements in Title 12 on block standards is already addressed in the requirements. Mr. Keene stated they are trying to make the requirements clearer and more manageable for everyone, including how the infrastructure gets built out. Motion put to a vote.
Mr. Rice stated that he agreed with the removal of the internal setbacks of the roadways in section 20.05.05.B. He feels this will result in better and more creative designs. Mr. Rice would like to discuss item 8: Total subdivision unit yield is calculated based upon the gross lot area divided by the minimum lot size. He felt that this was the intent, but he felt there might be a future misinterpretation, which is to get a better yield count. Mr. Brewer stated the intent was to add clarity for all users. Motion put to a vote.
Mr. Newman thanked Mr. Rice for his expertise and guidance. Mr. Rice recommended adding the text "administrative review" to 20.40.180, A-1 to read "The following administrative review standards apply..." Brief discuss and motion.
In response to Mr. Kaufman's presentation Mr. Rice would like to have a section added to read: "if the number of townhouse units are disclosed as part of a subdivision review, then the maximum lot count shall not apply." He gave the hypothetical example of a four-lot subdivision, which would go through the public hearing process, complied with zoning, the road network was shown, all city review was completed; he asked why there should be a maximum unit count. He stated that if the layout and units was disclosed during subdivision review it would be more expensive, there would be more public comment and more input and it should not be restricted to 15/30 units. Mr. Bensen questioned the openness of the process and public input. Mr. Brewer stated that it had been considered but there is unease of an unlimited cap and uncertainties with public approvals. Ms. Means stated that one of the concerns her department had was when they thought about the implication of more units through a minor subdivision would be that essentially that it would be a lot like a major subdivision and they are restrained by time limits for their review; which she believes is 35 days. Ms. Potts asked about larger projects subverting the process; she cannot support an unlimited count. Mr. Rice agreed that there should be a limiting multiplier. Mr. Bensen supported the concept as an incentive. Mr. Kaufman added that if one considered the maximum number as 30, a 10% density bonus increase is 3; 20% is 6, 30% is 9, and 40% is 12. Mr. Kaufman stated he liked this as an incentive to do both, as a subdivision addresses public health, safety and welfare and when you show what you are doing it can be better reviewed. Mr. Rice clarified that he is seeking a unit count increase, not a density bonus. After board discussion, Mr. Rice recommended adding the text "up to 150% of the stated maximum unit count" to his propose motion.
Mr. Rice stated that he had initial concerns to the floodplain section, but he feels that staff revisions are adequate for now. He asked about section 20.40.180 B-4, “Any property requiring dedicated Public Right-of-Way by the Development Services Director in consultation with the City Engineer….” He asked the staff for the rationale on why this would limit a properties’ suitability for development through the TED process. Mr. Brewer explained that public right of way, especially where there are connections, continues come up in different scenarios with TED projects. He stated that typically in TED projects the road is private with an easement for public access. There are situations where the city is asked to take a road they do not desire to maintain, as well other scenarios. Mr. Rice questioned if this was a perceived, not an actual issue. Mr. Rice would like an amendment that would address the perceived problem. Ms. Means stated that the language in E-4 addressed private internal connections, not public internal connections.
Mr. Rice asked to discuss number 3 on page 9 “Any land that is already included in a filed TED Declaration”. He would like to discuss why this is an issue and asked for additional information on why this was included. Mr. Brewer stated that is “a TED of a TED scenario” and provided details on that and the challenges of phasing a TED. Ms. Means stated that the concern was not getting a full understanding on the infrastructure needed and how to adequately evaluate that. Ms. Hassanein asked why Development Services did not want phasing.
Mr. Rice recommended the use of “Geotechnical Engineer” over “Soils Engineer” which is more specific and accurate. This appears in two places.
On page 10-F, Mr. Rice read “Block lengths shall not exceed 480 feet in length unless topographic constraints are present as confirmed by the Zoning Officer.” He felts this needed clarification regarding lots and blocks. For clarification, he recommended: “A topographic constraint is defined as a condition where street connections are not feasible in accordance with Title 12 standard grades, widths, connections, etc.” … He felts the additional clarity was appropriate and there are a limited number of places where this would happen. Mr. Kaufman stated this goes to the compliance side of designing subdivisions.
Planning Board members chose to discuss Title 20 City Zoning chapter 20.40.180, item I-1 which stated “TED projects shall be submitted in their entirely in one townhome exemption application and reviewed in one zoning compliance permit (ZCP) application in compliance with section 20.85.120. Phasing is not permitted for TED Projects.” Mr. Rice would like to propose phasing; he understood that the intent was to keep it simple and small in scale. Mr. Bensen asked about the “danger” in phasing and why the hesitation to support phasing. Mr. Brewer gave the example of orderly development and the infrastructure complexities of providing for that. Mr. Rice asked the developers about multi-unit developments and the pros and cons of phasing. Mr. Edgell stated that the market dictates the numbers that need to be phased, and why pay taxes on lots that do not sell. He cited how finances are critical and needs to be considered. Mr. Rice asked about phasing of infrastructure. Mr. Brewer referred him to the appropriate section. Mr. Kaufman spoke about the sequential order in which development occurs. Motion withdrawn and reworked.
Mr. Rice asked about the purpose of item 20.40.180, item I-2 which reads “The zoning compliance permit will lapse and no further effect two years after it is issued by the Zoning Officer and the townhome exemption approval is rendered invalid unless: a), b), c)…” Mr. Rice proposed the addition of letter “d” which would state: “the original approved phasing plan included a longer development timeline.” Mr. Brewer stated that current language would extent this another year.
Mr. Rice spoke on I-4 “if a public access easement is required for a TED project, it must be filed prior to ZCP approval.” He feels the language needs improvements and would like this incorporated as part of the declaration documents. That way it doesn’t have to be done prior to the ZCP. Mr. Brewer referred Mr. Rice to section J-2.
Mr. Hoffman stated he will be voting against the main amendment. He agreed that a lot of improvements have been made; but he also felt he could not support a process where developers were not at the table in the beginning.