Presentation, public comment, and discussion on the proposal and staff recommended motions to approve the annexation, preliminary subdivision plat application, variances, and master site plan, subject to the recommended conditions of approval. Final Consideration held on Monday, January 9, 2023.
Mayor Jordan Hess And this similarly, we'll have a presentation and questions tonight and then we'll have final consideration on Monday, January 9th as well. And Mr. Nugent do we have a, we don't have an LUP in between, do we?
Alderperson Mike Nugent We do not. If we needed one we could, but I don’t anticipate we will.
Mayor Jordan Hess Great. So, this is the West End Homes Major Subdivision, Annexation, Zoning Upon Annexation, Sxwtpqyen Master Site Plan Review, and Cassie Tripard is here with our staff report. Ms. Tripard.
Cassie Tripard Let me just share my screen. Great. Can you see my slides?
Mayor Jordan Hess Yes we can.
Cassie Tripard Great. So, I'm Cassie Tripard, a Planning Supervisor with CPDI and I will be covering the West End Homes Major Subdivision and Annexation. Today is the public hearing and if City Council chooses, this item may go to Land Use and Planning Committee for additional discussion on January 4, 2022. A final decision must be made at City Council on January 9, 2022. So, the property contains two parcels located just west of Flynn Lane, Hellgate Elementary and Middle School is to the south, McNett Flats a recent subdivision touches the southwest corner. The red shading shows city limits and these parcels are not currently within city limits despite the map showing them as red. An annexation request is included with this project and parcels to the east, southwest, and northwest are within city limits. The subject property is located within annexation area A on the city's annexation policy map. Parcels within annexation area A generally meet the guidelines of the annexation policy. The parcels to the east and southwest are within city limits and the airport is northwest of the property and also within city limits. Annexation of this property would begin filling in gaps left by previous annexations and the policy states parcels that fill in gaps in city limits should be prioritized for annexation. Through the subdivision proposal, the subject property will provide the same level of infrastructure as the rest of the city which is a requirement of the annexation policy. The property is 71.39 acres total, the site is relatively flat and currently vacant. The site is not within a flood plain and does not contain any surface water features and it was most recently used as agricultural land. Show here is the subdivision preliminary plot; the subdivision proposes 260 lots, three smaller open space common areas and a 26.72 acre open space covering two abutting parcels. The subdivision is bisected by England Boulevard and Daugherty Drive. Camden Street is proposed to continue through the subdivision from the east, five new additional roads are proposed as well, and lot sizes vary but the average lot size is 0.1 acres. Subdivisions must consider the Growth Policy and zoning, impacts to agriculture and agricultural water user facilities, provision of services, the natural environment and wildlife habitat, and public health and safety, and these are the review criteria for subdivision approval. West End Homes is the first project located within the Sxwtpqyen neighborhood's master plan area to come through public hearing. The Sxwtpqyen neighborhood's master plan is the applicable regional plan also known as a Growth Policy. The master plan requires development based on neighborhood unit types and you can think of neighborhood unit types as land use designations. The property is within the crossroads center neighborhood unit type and the crossroads center is intended to provide a transition area between the existing residential development to the east in future development and more intensive or in the more intensive town center and community center neighborhood types to the north and west. Sxwtpqyen form-based code which is Title 21 zoning code requires the allocation of specific percentages of zoning districts based on neighborhood unit type and note that we do not include excess parkland and the total net lauded area for these calculations. The subdivision proposes to provide 54.4% of the net lauded area as T3 neighborhood edge, 10.4% of the net lauded area is proposed to be zone T40 neighborhood general open, and 20.4% of the net lauded area is proposed to be zoned T4R neighborhood general restricted. Normally, only 10% of the subdivision would be allowed to be zoned T4R; however, the applicant is utilizing an incentive to increase the allocation to 20.4%. The incentive allows this increase in exchange for preserving more significant agricultural soils than would normally be required. It essentially allows for density to, to be made up elsewhere on site when extra open space is provided, and the zoning district allocations proposed comply with the form-based code. The code regulates lot dimensions and block perimeters as well to ensure future development opportunities in adequate connectivity. All lots and blocks within the subdivision comply with the form-based code. So, here's an overview of the proposed zoning districts. The open space zoning district does not allow for residential or commercial development. The uses permitted in the stunning district are consistent with various park uses. The T3 zoning district allows for densities between six and eight dwelling units per acre. T3 is a residential zoning district that allows mansion apartments, duplexes, townhouses, various types of detached houses, religious assemblies, group living, and daycares. Both the T4O and T4R zoning districts allow residential development between 12 and 36 dwelling units per acre. The primary difference between the two districts is that T4O allows for commercial development. The T4R district is primarily residential allowing apartments, duplexes, townhouses, and various types of detached houses. T4R also permits nursing homes, group and assisted living, religious assemblies and daycares. The T4O district allows all housing types, small-scale lodging, commercial uses, religious assemblies, daycares, and group and assisted living. Additionally, the code requires that three residential building types listed in the code be provided for each zoning district. The subdivider is proposing house, villa, and cottage building types in T3, which are all different forms of single dwelling detached houses. For the T4 districts, the subdivider proposes side yard houses, mansion apartments, and townhouses. Side yard houses are detached single dwelling houses that are pushed to the side of the lot to maximize private yard space and mansion apartments are buildings that look like houses, but contain two or more dwelling units, and I will note that housing in this subdivision is proposed to be affordable. There are three methods listed in state law for applying zoning upon annexation. Though the proposed zoning complies with all three, staff are recommending approval of the proposed zoning upon annexation based on compliance with the Growth Policy. The parcel has periodically been used for hay production, 96.3% of the property has soil types designated as prime farmland, if irrigated. A significant portion of the property is proposed to be preserved as open space, mitigating the impacts of development, and while the subdivision would develop agriculturally significant soils, the property is within the Sxwtpqyen neighborhood’s master plan area. This plan was approved in 2020 in anticipation of development in the area with the understanding that agriculturally significant soils are present. There are no irrigation ditches or agricultural water user facilities on the property and the subdivider proposes to sever the water rights from the land as well. Development of this parcel will not impact water availability for other properties. Waste disposal and city water and sewer are available to the site. Adequate park facilities are included with the subdivision. The developer has been working with Parks and Recreation for about a year on plans for the larger park. You can see a draft concept of the plan on Engage Missoula under the West End Farms page. Hellgate Elementary and Middle School responded to the subdividers stating they can accommodate additional students that may be added to the district as a result of the subdivision. Big Sky High School stated that an assessment of their capacity needs is ongoing; however, they did not identify adverse impacts as a direct result of the subdivision. City Fire and City Police will serve the subdivision; installation of additional fire hydrants to serve the development are required as a recommended condition of approval. And additionally, the subdivision proposes adequate motorized and non-motorized facilities, which we will cover in the following slides. The form-based code came with new road types that differ from those traditionally required in town by the subdivision regulations. England Boulevard is planned to be a main thoroughfare through the area and is a neighborhood collector. England Boulevard is a Mullan BUILD Project road, which means federal grant money will be used to help build the road. Daugherty Drive is planned to eventually connect to West Broadway and is also a neighborhood collector. Neighborhood collectors include two travel lanes, parking lanes, boulevards, protected bike lanes and sidewalks. Six new roads including Camden Street are proposed to be neighborhood streets. For the most part, these are smaller roads interior to the subdivision. Neighborhood streets require two drive lanes, a parking lane on one side, boulevards, and sidewalks. Flynn Lane runs the length of the eastern property boundary; it is proposed to be a neighborhood bike street, two-way track, and this road type requires drive lanes, boulevards, sidewalk, and a protected two-way non-motorized track. The Mullan BUILD Project proposes the two-way track to serve as Flynn Lane Trail, offering improved connectivity and a safe route to school for the neighborhood. And here you can see where the roads are located in reference to the subdivision. Roads that are not labeled are neighborhood streets and we'll also note that block faces exceeding 600 feet in length require a mid-block pedestrian crossing. These Crossings are provided throughout the subdivision where required and Tipperary Trail is also proposed to connect through the large open space in the subdivision. No impacts to the natural environment, wildlife, or public health and safety are foreseen as a result of the subdivision. The property does not contain steep slopes, floodplain, or surface water features. There is potential for high ground water. As part of the Mullan BUILD Project, a portion of Grant Creek is proposed to be realigned into its previous more natural path. This project could result in changes to groundwater in the area. So, staff are proposing a condition stating basements are prohibited unless the subdivider can provide adequate data to prove they are safe to construct. There are no nearby natural features or riparian vegetation. A weed management re-vegetation plan was included with the application packet and additionally a biological assessment of the area was conducted as part of the Mullan BUILD Project. The biological assessment was used in the development of the Sxwtpqyen Master Plan slating the area for development. Any wildlife that may be present will still have habitat conserved through the large open space and City Fire and City Police will serve the site. Two variances are requested with the subdivision. The first variance is to the requirement that all lots abut or must abut on and have access to a public or private street or road. Eighteen lots are proposed to be provided pedestrian access from paths through open spaces at the front and vehicular access from an alley called Sumac Lane to the rear. The alley is wide enough to accommodate a fire truck and alleys are not technically considered streets or roads, so this requirement is not met by Sumac Lane. Camden Street is existing to the east of the subdivision, its continuation through the subdivision in this location is ideal. Daughtery Drive and England Boulevard are currently established through county road easements and must be in the locations shown south of Camden Lane. It's ideal to create a two-tiered standard block; however, with the lot dimensions or lot dimension requirements in the form-based code, a road is needed south of this block. If it were to continue straight across, it would conflict with the existing location of the England Boulevard and Daugherty Drive intersection, and for this reason, the roads south of the block needs to jog southwest to connect to England Boulevard. This creates a gap of space south of the block and rather than proposing to have long lots with space that is not useful, the subdivider proposes to use these gaps of space's common area open space with pedestrian paths connecting the fronts of the units to the street. There are six review criteria that approval of variances must be based on. The first is that granting the variance will not result in threat to public health, safety, or the general welfare. Staff proposed conditions of approval placing specific requirements in the covenants and on the plat to improve fire safety for lots impacted by this variants. They are all requirements that ensure fire access is available from Sumac Lane and they include the prohibition of rear fences, address visibility from Sumac Lane, and man door or access from the rear of the structures. With these requirements in place, the variance will not cause a threat to public health or safety. The criteria require the presence of a hardship and states the variance request must be unique to the property. In this case the presence of previously established road placements paired with lot dimension standards of the form-based code creates a hardship unique to this specific property and the variance does not violate zoning code or the master plan. The variance will not cause an increase to public costs. The pedestrian paths at the front of the lots are located in HOA common area and will need to be installed by the subdivider and maintained by the homeowners association. The hardship was not created by the applicant or their agents. Camden Streets placement is a result of previous development. England Boulevard and Daugherty Drive Street locations were previously established through county road easements and the Mullan BUILD Project. The second variance requires parks to be adjacent to public streets on at least 50% of the park's perimeter. The large park or open space does not meet this criteria or does not meet this requirement; it is adjacent to England Boulevard and Tansy Lane ends at the park. Though the rear lane, which is a type of alley does not count as a street, the park is proposed to have 42% of the perimeter adjacent to right-of-way. The subdivider has worked with the property owner to the south of the park to draft a development agreement requiring future development to the south to provide a road. In exchange for this development providing the required parkland dedication. When development to the south occurs, this regulation will be met so this is considered a temporary circumstance. The dashed lines on this image are the airport's extended approach and departure area zone or EADA zone. There are special requirements in this zone like reduced density and clustering of development to concentrate open space in the area. These requirements have led to this park location. The park is still publicly accessible from England Boulevard, Tansy Lane and [inaudible] Lane, protecting public welfare. The location of the open space leading to this variance request is within the EADA zone, which is in the best interest of public health and safety. Eventually, additional road frontage will be provided through the development agreement and over 50% of the property is within the EADA zone creating a situation unique to this property. Installation of a road with this subdivision would lead to one of the following undesirable scenarios, either reduction of developable lots within the EADA zone, reduction in open space, or the creation of a non-contiguous open space, which limits design options for the park and this variance does not violate zoning code or the master plan. No increases in public costs will result from the variance request and lastly the hardship has not been created by the subdivider or their agent, EADA zone is established by the master plan and the airport. And lastly, the subdivider offers mitigation of the variance through the development agreement, which ensures this code section will be met in the future. Staff recommend approval of both variances allowing the subdivider to develop as they have proposed. There are 52 recommended conditions of approval for the subdivision; I've tried to summarize them in this slide. They include requiring the subdivider to pay into special transportation and sewer fees required as part of the Mullan BUILD Project. They require secondary improvements to England Boulevard with an amendment to an existing right-of-way agreement and note that England Boulevard is a Mullan BUILD Project Road. The conditions require dedication of an additional three feet of right-of-way for Flynn Lane, half street improvements to Flynn Lane and installation of Flynn Lane Trail. Installation of all sewer, water, pedestrian paths, mid-block crossings, fire hydrants, additional roads and alleys, and stormwater infrastructure is required. And I mentioned with the variance, that conditions providing improved fire protection for certain lots are recommended. Due to high groundwater, staff recommended condition prohibiting basements unless the applicant can show they can be built safely, and parkland dedication and installation of park facilities is required. Staff recommended condition of approval requiring notice of the EADA zone and its associated hazards to be on the plot and in the covenants. And lastly, the subdivider must complete removal of water rights from the land. Staff recommend approval of the annexation and zoning upon annexation in compliance with the form-based code in Sxwtpqyen Neighborhood's Master Plan subject to conditions of approval. And staff recommends City Council approve the West End Home Subdivision and Master Site Plan subject to the recommended conditions of approval and based on the findings of fact and conclusions of law in the staff report. And that concludes staff's presentation. Thank you.
Mayor Jordan Hess Thank you Ms. Tripard.
Cassie Tripard And I believe the…..
Mayor Jordan Hess On behalf of the applicant….I believe, we probably have someone?
Cassie Tripard Yes, I believe so.
Joe Dehnert Hey can you all hear me?
Mayor Jordan Hess Yes.
Joe Dehnert Well I couldn't quite match the gusto and everyone else's sweaters, so I didn't get the memo. And I, I do believe that there might be someone from the development team and in person there tonight. So, I'll, I'll try to keep this really short. My name is Joe Dehnert and I work at the IMEG office in Missoula. I'm joined by my co-worker, Mr. Danny Oberweiser this evening and we're representing the applicant, Evergreen Housing Solutions, LLC for the West End Homes Major Subdivision. Cassie, as always, a phenomenal job summing up a project with a lot of context in such a succinct manner. I said it at planning board, I know I said it at LUP, and I'm going to repeat it here tonight because it definitely bears repeating. Thank you to all the city staff that have worked collaboratively with both our office and the developer to get this project to this point. One of the, one of our mantras is the future built smarter and I definitely believe smart development can't happen in a vacuum. It takes flexibility by the developer, it takes creativity in our designs, and ultimately, it takes intelligent reviewers that not only have a grasp on the regulations but understand the intent behind those regulations. This is 100% true in the new Master Plan area where this form-based code has been rolled out and I know this question has actually come up in planning board, it came up at LUP, and so for any members of the public that are tuning in tonight, I, I did just want to reiterate that when we say form-based code it's a new Title 21 for this area that focuses on really creating predictability in the built environment by controlling physical form rather than a separation of uses. And the idea behind that is really by honing in on the physical form instead of just segregating the uses, you get a vibrant livable community with a real sense of place, and I definitely believe that that idea has been realized in the design for West End Homes. Between the various housing options that are being proposed and the prioritization of open spaces throughout the development, the huge potential for the open space on the other side of England and the pedestrian connectivity throughout, this development is going to be a beautiful place to live for Missoulians. I, I know there were questions relating to different building types in LUP and in planning board and really the overarching connectivity between this neighborhood unit and the other neighborhood units in the Sxwtpqyen area. So, without harping too much more, Cassie laid phenomenal groundwork for us to have a quality discussion this evening. Myself and Danny are here from IMEG to answer any questions that we can help with and then like I said, I, I do think there might be someone from the development team in the crowd to maybe add context or answer questions, if we can't. So, with that, I'll pass it back. Thank you.
Mayor Jordan Hess Great, thank you. And anyone, anyone in the audience want to add anything?
Justin Metcalf Hello, excuse me, it's quite too long. My name is Justin Metcalf and I'm the applicant. I'd like to first thank the City of Missoula; this has been a, a very collaborative project. I've been in affordable housing development my whole career, over 25 years. This is our first foray into for sale housing and as background, I was sitting around with the rest of you during COVID watching our home prices go up and I have two young children and wondering you know what, what's going to happen? And so, this project was kind of my brainchild to take our production building methodology and think about well what happens if we take that for multi-family and affordable housing and apply it to single family, and what happens if we keep our, our profit low and create something we call a profit share to create something that really hasn't been created before, which is a mechanism to provide for sale workforce housing because I'm, I'm involved in affordable housing policy and there's, there's nothing at the federal, state or local levels that allows us to create for sale workforce housing at scale, not yet. So, we're taking a stab at that which is aspirational and it's really fun to be a part of. We're also taking a stab at, and I think we have very successfully created a fantastic regional park and it's been really fun to work with Donna and Parks Department, and it's been really an honor to work on this project and I've worked in a lot of different cities on affordable housing, and I have to say Missoula, coming back home and working here has been a real treat and to anybody who's working in and around Missoula is very competent, very streamlined. This is, just has been a really great experience. So, I'm here to answer questions and we are taking, taking comments to heart. I've already met with CFAC regarding the farmland, which is kind of integral to our park design. This is hoping to be and will be Montana's first agrihood and meeting with the daycare provider next week looking to integrate some of those uses into, into the project. Thank you.
Mayor Jordan Hess Thank you Mr. Metcalf. And you know I wanted to share that I've been keeping tabs on this project through staff and have appreciated how, how quickly you've adapted to changing conditions through, through all of the different uncertainty that's going on in the development market right now. So, so appreciate you coming down tonight and appreciate the presentation. At that, we will open the public hearing and take comments tonight and then we'll take questions from Council, and then we'll be back for the final consideration on the ninth. Any, anyone like to make a comment tonight? Okay, seeing none, we will hold this open, and we'll have it back for public or for final consideration on the ninth do we have questions? Ms. Jones.
Alderperson Jones Thanks. Thanks Cassie. First of all every time I have a question then you answer it in the next couple minutes, so I really don't have a lot of questions. My, my one question I did want to ask tonight was the mansion apartments is a concept that people really enjoyed hearing about on Council and I represent the U district, so I have my own favorite mansion apartments that I can always visualize in the U District, but can you let us know just if I were to walk down this development two or three years from now and see a mansion apartment what, what do you anticipate it looking like? Because I think, we, it comes down to design a lot of times and we hear concerns about having a big block of a duplex but mansion apartment, mansion sounds great, but what does that mean to you?
Justin Metcalf Yeah, you know you're touching on the one that was the most confusing to me honestly because I have my own thoughts on it too and it goes back to kind of a, an earlier time period, a more university you know style home and that is not the style that we're building in. We've been working with Paradigm Architecture and that particular home type along with the side yard home type were both new to us and we actually have a 3D model cut now so we can kind of get a sense of it, but specifically to the mansion apartment what it says to me is when you walk up, you don't have two different stairwells going up to you know two different distinct doors. It appears as, for us, two different dwelling units I know the definition can have more than two but ours will have two. A single you know kind of porch, a single roof line, and then you know all design can be blocky. From there, it's, it's behoven on the developer and/or builder to make the product you know not appear like a block, which is you know the cheapest way to build and that's not our intention. We've gone currently back and forth on a lot of different renderings which I could share with you. At one point, actually, if I could get your email to send you what we have, and you can take a peek. And again, we welcome a lot of feedback on that.
Alderperson Jones So, until we, until we vote on this, I don't think you can send anything to just me, but if, if everybody wants to see it….So if, if you have anything that you can share prior to the, the final consideration, I think there's a lot of interest in how we can create density that is acceptable in our community so, and that seems to go to it. So, yeah, I'd love to see anything, if that's fine?
Mayor Jordan Hess And Ms. Tripard.
Cassie Tripard Justin couldn't have described it better. I was wondering if it's an option if he sends it to me, if I can post it to the record, if that's a good way to share?
Mayor Jordan Hess That’s, that’s great if everyone, if that works for the development team? Okay. Ms. Sherrill.
Alderperson Sherrill Thanks and I think most of my questions were answered on Wednesday when this came, so I appreciate that. I really appreciate your outreach to partners in the community and I know that CFAC has been an organization that's been you know you know very involved in that area and going out Mullan Road, and so, I appreciate the conversations you're having with them. Could you speak more to, I guess the, the other partners in our community and more of the outreach that you've done and who you've heard from?
Justin Metcalf Sure, absolutely. So, my development team includes myself and then Rosalie Cates who I'm sure most of you are familiar with. She was really integral in helping me decide if I was crazy or not on the affordable piece, like you know we're a, we're not a for-profit, we're not a non-profit we're an impact company. So, people plan at profit equally and so, Rosalie's been fantastic in helping me kind of create the overall mission. I worked with Homeword a lot in trying to define what levels of AMI were really achievable and then when interest rates went crazy, you know well, what does that mean? So, working with Andrea and her team and worked out or talked with Gene over with, I’m blanking, not CPAC, my mother here…. Yes, Garden City Harvest and they're not, at this time, able to take on a big project like the form we’re proposing, but they introduced me to First Nations, and I believe they got a grant to assist an indigenous farmer. So, I got to meet Skye and her team over at First Nations and in our affordable work we do a lot of outreach into the communities particularly those that miss the affordable opportunity due to language or whatever technology, whatever the case may be. So, part of our outreach process in placing these homes is not to put them on the MLS, but go to the city and the school district and to our veterans and to our indigenous population and market, you know, off book. And so, through that marketing effort talking with Skye on twofold, (1) are you interested in farming some of this, if Gene were to assist? And they are, but not all of it, and then also how can we do more you know how can we do more outrage to the local indigenous population? You know, what's an effective marketing tactic that type of thing? So, that's been, there's been some really fun conversations that come from that. That led to CFAC, which I met with last week and we had a fantastic meeting and they mentioned they'd have a proposal for us, I think the, a week or two into the new year. So, we'll collaborate with them further on the farming piece. Who else have we collaborated with? I've had a few meetings with Heather, Heather Harp, with Habitat and talking about how busy they are, and I know they've got a big, big aspirational goals on how many homes to build and now a big brand new piece of land. So, maybe we're, maybe we're in the, in the background at the moment, but you know I have one component of how to bring affordability or put you know homes to you know Missoulians that are working, but there's lots of rooms to use all the other tools we've been using. So, community land trusts, Habitat, there's a few other things, so starting to talk with some people at the state too about what they've seen. Really trying to maintain flexibility and have our ears open kind of kind of everywhere. So, our entire team is local as well, IMEG, Paradigm, we're actually forming our own GC for this project; otherwise, we'd be bringing in one from out of state which I don't, don't want to do. And that is, I'm sure, I'm sure I'm missing people but that's, that's where we are right now.
Mayor Jordan Hess Thank you. Anything else Ms. Sherrill?
Alderperson Sherill Yeah, no that’s, that's great. I really appreciate it. What, did I did I hear that correctly, that you're, you're, you're not going to, your goal at least would not to be able to list them on MLS and to go to the partners in the community?
Justin Metcalf Correct.
Alderperson Sherrill Okay.
Justin Metcalf Yeah, the….So, so our, so our concept, especially when I originally penciled this out at our cost of construction and what homes were worth left a, what I'll call a, a lot of profitability on the table. And so, what I did is I took a, a portion of that profit that is really commensurate with what we see in affordable housing, and said well that, that will be our profit and everything that's left we'll divide it by the number of homes. We'll create a second mortgage for the homeowners and as long as they own or occupy for five years, at the end of that five-year term, it will be forgiven. And we had to go, we’ve determined conclusively that, that will be a non-taxable event to them, and we coined it community profit share and I went look far and wide thinking well I'm not the first one to do this somebody else has done it; they haven't. So, we are kind of plowing new ground with this and, and I want to make sure I, I answer your question, which is more specifically?
Alderperson Sherrill You are answering my question. It was, I mean, it was more around that you weren't, I was surprised that you weren’t listing….
Justin Metcalf So, so we have this product with the second mortgage, which we think is going to be you know in high demand. I mean the, before interest rates went up, the second mortgages were substantial and the intention was that they go to local Missoulians and in the same way when we do a new affordable housing project, we want it to go to those that you know are the most in need, which similar to a for sale project, you take an affordable project and you just put it out there on the internet. Everybody that has an internet connection and that has least affordable housing before is the first in line, it's kind of the same with the MLS. So, what we're going to do is we're going to go local and so we'll have a, this is still, this is still, it's still in process of how we're exactly going to do it, but it could be as simple as myself and Rosalie and another small team reaching out and meeting with and we've already met with quite a few people, but meeting with city, city representatives, meeting with the school district….By example, when we met with Hellgate, we were talking with them about the project we have you know flyer of what this all looks like to the home types and we said when we're ready to go, can you distribute this to your teachers? You know, the same thing with city, the same thing with, you know, our indigenous population, and so on and so forth and….And meeting people where they are is really important with this type of work and so relationships with Skye at First Nations is critical because otherwise nobody, nobody will show. You know, similarly with you know the, the police department, the fire department, to a lesser extent but you know finding advocates that can take, take what we give them and distribute it out and say you know this, this, this opportunity is available, here's where you go to find it. It's my hope that all the homes sell in that manner. If they don't all sell in that manner then that means we're producing more housing than is needed which, I, I find hard to believe but maybe you know it. And at that time, we would just go to the market and list them on the MLS but we're building in phases and yeah…
Alderperson Sherrill That’s exciting. Thanks.
Mayor Jordan Hess Great, thanks. Ms. Anderson.
Alderperson Anderson Thanks so much Mr. Mayor. Thank you for your presentation. Okay, you term you used a term I did not recognize, we're building the first EGO, agrofarm, like ….
Justin Metcalf Agrihood….
Alderperson Anderson Okay, so, I, it is a first. So, I had never heard of it. I mean you had talked about the fact that this significant portion of open space will have a farming component to it and, which I guess is what now makes it an agrihood but I you know what's the kind of breakdown? Is there opportunities for you know people who live there, especially the ones in the apartments to like have plots like a community gardening and I and that may be exactly what you're already reaching out and working with CFAC on, I was just like, did I hear that correctly? I wanted to see if there was any more context you could provide based on other than kind of what you shared with Ms. Sherrill.
Justin Metcalf Absolutely. The individual community plots will be interior to our project in those three open spaces, so they'll be maintained by the HOA. The farmland that's central and integral to the larger park is, you know up to, it's still a bit in flux but call it you know three to eight acres in size and as CFAC mentioned needs to be farmed. So, there will be opportunities for local residents to have their own plots outside of their own backyards, but the farm itself is substantial and leads to this this term agrihood, which I'd never heard of either until about a year and a half ago where the City of Missoula hired a firm called Design Workshop out of Colorado. I got interviewed, in the process, I said wow you guys sound really smart do you, do you know, can I hire you to do some work? I started talking with them and looked at their work. They did an agrihood in Iowa and what an agrihood is, is it's a, it's a neighborhood built around a working farm. It’s as simple as that and so, the working farm serves as kind of a central amenity and kind of a link back to you know our roots and everything and I thought well for Missoula I mean this is, this is perfect. So, I actually hired a Design Workshop on behalf of the city to design that whole park and they took public comment out at Hellgate and held some different presentations and stuff and that's, if you go online and see the design of the park today, that's the result of that public process. The refinement of it is forthcoming and CFAC, I hope, will be very involved in that, but yeah at a high level it's just rather than having you know soccer fields as the, as the central it's, it's a, it's a working farm which particularly for this area that had such historic agriculture use, I think it's a good way to go.
Alderperson Anderson Yeah. May I have another question? Followup, yes. So, I really appreciate the kind of design and more information is always appreciated, especially if you want to send Cassie the kind of you know so we can visualize a little bit more. And within your community outreach, as you're chatting with folks about trying to really find that, either workforce housing, missing middle housing and kind of the creative financing you're obviously looking at doing, I mean, I think another component of that is you know having the ability to put down the down payment for homes. This is not a part of the process, I'm just putting it out there because you're taking feedback and you know kind of thinking about that from a first time, you know, you know when I was a first-time homebuyer you know that was…..
Justin Metcalf Absolutely and that's you know, workforce housing, just like affordable housing means something different to everybody that hears it. It's almost, it almost gets misinterpreted. First time home buyer housing is, is really poignant and I think relative to what we're trying to, to deliver. Back in the 50s, 40s, you know that's predominantly what America made. Today, it's less than 3% of our housing stock is built as first time home buyer housing and that that is are these small little condos. So, the benefit of the of the second mortgage that we carry back, I thought the same thing well this is going to be fantastic nobody needs to put up a significant down payment. The first thing I learned is Fannie and Freddie won't even allow it. I even went to test her and went all the way to Fannie and said you know let's, let's get this as a pilot program and that's stalled out. So, we're going to go with the local lender probably a credit union, we're talking with several and I think that'll solve lots of issues that we're having right now. And I think they will look at it and say oh you know the risk is there, yeah we can go with a lower down payment and also through that lender, they're more familiar with Montana and the various you know other subsidies and offerings that we have for, for different types of buyers. And then after five years, they can upsell that mortgage to the secondary market and be fine. So, it's my hope that you know mortgage insurance and down payments, you know no mortgage insurance and low down payments because that, that it's about, especially worth where rates are now the buying power of so many you know people is, is significantly eroded.
Alderperson Anderson And Mr. Mayor, I have a super quick question for Cassie Tripard. In one of the conditions, you can read if you're interested for those listening all 51 conditions on pages 15 through 21 of the staff report, but one of the meant that you mentioned was letting a requirement to let homeowners know that they're in the expanded, oh there's a technical term for it but adjacent to the airport. What, when you say they're required to let homeowners know what is that requirement look like?
Cassie Tripard Yeah, so the EADA zone was developed with the master plan in partnership with the airport. Really, there's increased noise there, some increased risk that homeowners should know about, but the airport, working with them we came up with criteria for how that area would be treated. For instance, only four dwelling units per acre are permitted there, 50% of the developable lots need to be clustered, so that you have large swaths of open space making it safer, but really, I could pull up the staff report for the exact language. Does that kind of answer it?
Alderperson Anderson It was mainly from a standpoint of the notification processes. Is that going to be like on page, you know is there, and you can email me that separately in just a followup, but just from a standpoint of like what is the notification requirements? So, that homeowners are aware of the….
Cassie Tripard Yeah, the, the condition requires that that notification be included in the covenants, which you would receive upon purchasing the home and then as well as on the plot, so two locations where they would be likely to see it.
Alderperson Anderson Great, that’s what I wanted to know. Thank you.
Mayor Jordan Hess Mr. Nugent.
Alderperson Mike Nugent That will also be on their title work when they purchase it, so it’ll give a notice as a line and exception.
Mayor Jordan Hess Ms. West.
Alderperson West I had some questions around the, the model, so I appreciate the detail that's already been covered. So, I have a, some related questions still. So my first one is, I guess what is the AMI range that is being targeted with this development?
Justin Metcalf I’ve, I've learned an interesting lesson with AMI on for sale housing, which is unlike in affordable, there's an interest rate that that comes in. So, we were hitting 80-100% AMI and it went to 100, over 130, and the only thing the move was the interest rate. I’ve been engaged in some interesting conversations with lots of people in our industry about that you know that the concept of workforce housing in today really came about during a period of stable interest rates. So, it's like well how does, you know an AMI is a historic look back index, you know, will it catch up, what does it mean? So on and so forth. What we can do is we can put out a first-time homebuyer product that is not an inferior design without you know closet doors opening into beds and things like that, but isn't overbuilt and we can price it appropriately. We're looking to reduce the size where we can of our three bedrooms and if we can keep them below 350, we can get under 120 AMI. I don't know if that should be our goal or not, the more I learn about AMI with for sale housing, just being honest. I'm kind of learning about a lot about this as I go. We're starting to do some more surveys of Missoulians and there is some good data out there, but there's not enough. So, in terms of what is the, the true sweet spot you know, the nice thing about this is we can pivot and react. So, if we, you know, if we, if we hit a lower AMI, but there's, there's not a lot of demand because we by example put a threshold on it like you can't buy it unless you're below a certain level of AMI. I think that's where we run into more problems that's where the, the historic credit or the federal credit for sale credit ran into problems. So, we're not going to have that, there won't be an income qualification, so it's more about a measuring stick of the outcome and to me it's one outcome of many, but where we are right now is we're 125 to 139, which is again 20 points higher than we were before rates going to move across the board.
Alderperson West And I have a followup on my question, if that’s okay? And so, I, I guess related to that, I was wondering if you'd considered instead of looking at AMI purely as a metric, as I guess working for or earning a certain percentage of income from local, in the local workforce. So, instead of saying you have to earn 120% AMI or below, instead you would say, you have to earn 75% of your annual income from an employer that's based in Missoula County.
Justin Metcalf Oh yeah, yeah. That, there’s some, there's some legality with that. It's, it's interesting, I didn't, I didn't research it as far as I did another one, which was can we put a restriction on who gets the, the, the profit share to Missoula County and the answer is no, but you can't draw a circle around Missoula County, and you can do that. So, that is a tool that we have in our toolbox if we wanted to play it to ensure that the, the product lands where we want, and you never get 100%, so we have to shoot for 90%. So, if we can deliver 90% to local Missoulians I'll be thrilled and I don't think there's any reason we shouldn't be able to, to do that with the five-year restriction and, and I should also say you have to own or occupy for five years and there's a moratorium on renting, you can't buy it and not occupy you know you have to own or occupy. If we need to take more drastic measures, if we find that the homes are not going where we, where we intend them to go then we can, we have we have the ability to do that. And again, we're in charge of where we go first to put these you know where we market these homes. And again, there's some legalities here and since I'm on the record I should say it's at one point in time these homes will be listed on the MLS because that is the law, but prior to that there's nothing that says we can't go out directly market them.
Alderperson West And then I have two more questions. So, with that five-year moratorium, who is monitoring compliance?
Justin Metcalf At this point, we've been working, I know I'd forget some NeighborWorks Montana, so with Kaia and her team. They've been really instrumental as well and helping kind of sort through this particular on the finance side. At this time, it's our intention to transfer those mortgages to NeighborWorks and have them provide the, basically take out, take over everything from that point forward.
Alderperson West And then my last question, and I realize none of them, these questions have anything to do directly with the zoning or annexation. Is, is any of the affordability passed past the first generation of home sales or is this a like affordable on the first time and then whoever got in gets, the, the equity moving forward?
Justin Metcalf Correct yeah, it’s a, it’s a fir time equity shot for who, for, for who the buyer is, which as I mentioned before we're, with 260 homes, I'm open to leveraging every tool that we have in our toolbox. A community land trust, by example, has a perpetual affordable component to it and I fully intend and hope that we have community you know home subject to a community land trust and Habitat as well and there's overlap there, but their, their capacity is limited. This model is a first time homebuyer model, and you know the ability to get into a home and then have equity in five years, I mean that's how we as Americans build wealth most of us is, is in our homes and we've got an entire generation plus of individuals being priced out of that. So, this is intended to address that, but to your point, you know there's, there's no free lunch. The opposite that you know once it's there it's gone, but I will state I've had, since we've come up with this concept, six different meetings with younger developers who are really interested in it, and you know how can, we do something like this you know. And that's, that's the intention is that you know development can be done; however, we want to do development and so, you know, there's nothing to say West End Homes is the last time we have to do something like this, you know if there's high demand, we can keep going.
Mayor Jordan Hess Thanks. Mr. Nugent.
Alderperson Mike Nugent Thank you Mr. Mayor. Most of my questions have been answered, I'm not surprised because Ms. West went before me. I did want to I guess ask you and, and I work in housing, so I just want to say that you being willing to put forth a model like this that that foregoes a lot of profitability is new to you know this area, and I'm very excited to see this this go forward. I'm curious, as you've kind of started having conversations with people in the community, if any other developer types have reached out to you about learning more about how you're doing this?
Justin Metcalf This is really the first time I’ve publicly talked about it because I run a big risk here about falling straight on my face if we’re unable to perform, so, I anticipate they will. The short answer is you know other than Cassie and our team, we've been really focused more on is this something we can do, what are, what are the legalities that that stop us? We've gotten through a lot of that, and the answer is yeah, we can do this and as I mentioned before, we're kind of sizing our profit off a similar size project in the affordable world and then what's left thereafter, you know that that's enough for us type of thing. Another developer who hasn't worked in affordable housing wouldn't have that same metric, so, another way we've kind of pitched it is in thirds. So, two-thirds go to the developer whose for-profit that then pays taxes, one-third to the homeowner, and that mass seems to check out well. When this concept came up, it was, you know, constructed before construction prices went up, home prices were high, profitability was you know 30% higher than it was today, but the model still survived that and it actually, it actually speaks very well to other for-profit developers who are purely for-profit because one of the biggest risks in any subdivision is the speculative nature. So, if you have this profit share theoretically you should have higher demand, which should reduce your risk and what is that worth to you typically. So, I've been having those type of conversations and with, with other people in, particularly our lender, who's like wait, what, you know. So…
Alderperson Mike Nugent So, I mean, you basically answered my next question with your answer to this one, but you, you'd be willing to sit down and discuss with other people ways to replicate this idea? And I would say whether you fall on your face or not, I don't think you will, will, but this, the, the world we're in right now requires things like this.
Justin Metcalf And holistically, the, the notion of an impact company is something I'm really excited about. I mean, you know, we get caught up and especially in my world in affordable housing. I'm seen as the enemy the moment I walk in through the door is a for-profit and, and we get caught up in our labels, but as I think through a project knowing that we're an impact company that has that is different than a non-profit and different than a for-profit, but has to equally consider all three and I equally believe in all three, it fundamentally changes the way you think about business, it's, it's, it's interesting. So, I, if we're having those conversations that's a, it's a high level place to start.
Alderperson Mike Nugent Great and then last one and then the last one, not necessarily relevant to this specific one, but you mentioned. Land trusts and other ideas for kind of the permanent affordability angle or the affordability angle….
Justin Metcalf Yeah….
Alderperson Mike Nugent Would you be open to discussing those with, with Council down the road?
Justin Metcalf Yes, I would, I would love that. Yeah again, I don't pretend to…. I have no ego here; I don't pretend to know all this. I'm you know so, particularly other methods of creating permanent, you know more affordable housing out of for sale. Yeah, absolutely….
Alderperson Mike Nugent Great because a lot of this falls under the committee Ms. West chairs, on housing, and I think that I think it's an interesting community conversation and it would be helpful to share ideas and put things together.
Justin Metcalf Yeah, I'd welcome that. Thanks.
Alderperson Mike Nugent Thank you.
Mayor Jordan Hess Well, there's no one else with their hand up in the queue, so we can, we can move on. We'll have this back. Mr. Metcalf thank you for indulging us with the questions tonight, I appreciate learning more about the project. Thank you staff and, and developer reps for presentations as well, and we will see this back on the ninth. Thank you.