CITY COMMISSION AGENDA ITEM

Department:	Planning and Development Services		Commission Meeting Date: 2/6/2018
Staff Contact:	Scott McCullough, Director
Recommendations/Options/Action Requested:
Receive recommendation from the Affordable Housing Advisory Board and direct staff to revise certain codes and practices related to the city’s building codes and practices in order to reduce the cost of developing housing.  Any code amendments would be considered by the City Commission at a future regular meeting.
Executive Summary:		At their September 1, 2016 retreat, the Affordable Housing Advisory Board (AHAB) created a goal for staff to work with developers and builders to reduce the costs of housing by 5% within a 24-month timeframe.  The Lawrence Home Builders Association offered their support to this goal and presented staff with a spreadsheet reflecting increased costs incurred over the last ten years due to various reasons - additional service programs, desire to recover costs for services, adopting certain building codes, and other issues related to building a home.  The list represents items the city has control over. Other items that affect housing costs are not reflected – land availability, land prices, profit margin, labor and material inflation, etc. The list is based on added costs per lot of a 2,000 square-foot, single-family home with 80 feet of street frontage valued at $200,000.  The exercise was intended to find development-related items that could be changed to reduce the cost of building such a house by 5% or $10,000.  The spreadsheet is in relatively rough format as it should be considered a working draft.  Staff reviewed the list with appropriate review agencies and provided comments and recommendations on program changes that can help reduce time and money in constructing houses. The result, in staff’s opinion, is that there may be revisions in building and inspection methods and codes that could create efficiencies to marginally reduce the building costs of a home (by $2,000 to $3,000 once code changes are made), but the fact is that costs are likely to further increase over time due to the need for the city to recover costs for services and to continue to build sewer, wastewater and street systems.  Staff calculates that without significantly changing development standards, reducing sidewalks to one side of the street instead of two, for example, only a few thousand dollars of cost reductions can be produced relative to current standards and development fees.  Even so, these pursuits are worthwhile from staff’s and AHAB’s perspective. In their discussion, AHAB considered how any cost reductions will be transferred to the tenant or homeowner and not simply realized as additional profit to builders or sellers of property; as well as how some of the savings that can be realized upfront, by reducing energy standards or material standards of concrete, for example, may not be good for the eventual homeowner who will pay more in utility costs or repair work for reduced minimum code standards or materials requirements. Staff presented the spreadsheet to AHAB at their November 2017 meeting and lead the board in a discussion related to potential revisions to city code as an outcome of this effort.  The conclusion that staff reached is that some cost savings and efficiencies can be made to current codes and practices, but significant cost savings can only be achieved by reducing major systems of development such as a reduction in sidewalk infrastructure or energy code standards. Staff provides a list of program or code changes that AHAB desires to be pursued.  Unless directed otherwise, staff will begin drafting code amendments to various chapters of the city code to pursue these matters and bring them to the Commission in the future for their consideration.  Some of the issues may be included in the review of the 2018 I-codes that is currently taking place. Finally, staff and AHAB wish to thank the Lawrence Home Builders Association for their interest and effort in this exercise attempting to make housing more affordable in the community.
Strategic Plan Critical Success Factor		Safe, Healthy and Welcoming Neighborhoods Collaborative Solutions
Fiscal Impact (Amount/Source):		Unknown at this time, but anticipated to be minimal.  As code amendments are brought forward for consideration, the fiscal impact will be analyzed and reported.
Attachments:		Affordable Housing Advisory Board Memo Affordable Housing Advisory Board Minutes of 11/13/17 LHBA Spreadsheet List of Program/Code Changes

Reviewed By: (for CMO use only)

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