Housing Implementation Plan

WHY? Smaller houses don’t “pencil” on standard size lots or setbacks.  Smaller houses are desired by empty-nesters and young adults, and they provide more affordable opportunities for homeownership. Maximum height and lot coverage are not changing.

PROPOSALS: Reduce Lot Sizes (See Article 3, Table 3.190-1):

• For houses and duplexes between 800 and 1250 square feet*, reduce the minimum lot size to about 60% of the zone minimum
• For houses and duplexes < 800 square feet, reduce the minimum lot size to about 50% of the standard by zone

*Garages are not included in the square footage of the house. Because state law requires cities to allow duplexes on all single dwelling lots, duplexes that are within the smaller size ranges (total for both units) must also be permitted on smaller lots.

PROPOSALS: Reduce Setbacks (See Article 3, Table 3.190-1):

WHY? Setbacks can be obstacles to housing development. The city’s minimum front yard setbacks are larger than other cities, and the city’s rear setback (current interior) is less than other cities. Reducing side setbacks makes it easier to fit a house on a small lot. Reducing the front yard setback and increasing the rear setback will create more usable back yards.

• For small house and townhouse lots only, reduce side yard setbacks to 3 feet for one-story and 5 feet for two or more stories
• Reduce front yard setback but increase rear setback to enable usable backyards

WHY? Cottage clusters are groupings of small, detached homes with shared open space and sometimes parking. Albany currently allows up to 8 cottages per cluster around one courtyard. Cottage clusters could help fill the need for smaller homes, but currently there are barriers to creating this type of development.

PROPOSALS (Article 8, Section 8.175):

• Allow more cottages per lot if all the homes are under 800 square feet - between 10 to 16, depending on the zone. See Section 8.175(1)(c).
• Allow more than one cluster and courtyard per lot; the max # of cottages per lot still applies. See Section 8.175(1)(b) and 8.175(4).
• Increase average cottage size from 1,000 square feet to 1,100 square feet and remove community buildings from the average floor area calculation. (The max cottage size is 1400 square feet per state law.) See Section 8.175(2)(c).
• For cottages less than 800 square feet, reduce the lot size to 1,000 square feet per cottage.
• For lots with 4 or fewer cottages, decrease the minimum courtyard area from 150 square feet per cottage to 75 square feet per cottage. See Section 8.175(4)(c).

WHY? ADUs are an efficient form of infill development that retains existing housing and development patterns character of a neighborhood. ADUs provide housing for relatives and/or rental income. 

CURRENT: Maximum ADU size is 900 square feet or 50% of primary dwelling, whichever is less. Example: A primary dwelling of 1,200 SF can only have an ADU up to 600 square feet with the current standards.

PROPOSALS:

• Allow ADUs to be up to 25 square feet smaller than the primary dwelling but no more than 900 square feet. Example: A primary dwelling of 1,200 square feet can have an ADU of 900 square feet and a primary dwelling unit of 800 square feet can have an ADU of 775 square feet. See Article 3, Section 3.080 (4).
• Allow one “Single Room Occupancy Unit”, that is accessed from within the dwelling, is lockable, and does not have a kitchen and shares the kitchen with the primary dwelling. This unit would not be charged development fees. See Article 3, Table 3.080 and Article 22, Definitions.

WHY? Albany has a limited supply of land that is designated for apartments and attached housing types. These housing types are needed to ensure adequate supply and diversity of housing in Albany. Therefore, land zoned for medium and high-density housing should not be used for low density housing.  Maximum heights and lot coverage determine development scale. Currently few developments exceed 3 stories.

PROPOSALS (Article 3, Table 3.190-1):

• Set minimum densities in RM and RMA: 12 units/net acre in the RM Residential Medium Density zone and 20 units/net acre in the RMA Residential Medium Density Attached zone.
• Remove the maximum densities in the RM, RMA and HDR zones: Current maximum heights and lot coverage will not change and will naturally limit density.

WHY? Through the public engagement processes with middle housing, the HIP and this project, we heard that access to green space is important, especially in denser developments.  Many cities and counties require a percentage of the site be dedicated to common open space. 

PROPOSAL: Residential land divisions of 20 or more lots in the RS-10, RS-6.5, RS-5, HM, RM, RMA and MUR zones would be required to provide 50 square feet of open space per lot. See Article 11, Section 11.095.

Improvement Standards:

Pocket Park. At least one area would be improved with a pocket park of at least 400 square feet, with a minimum dimension of 15 feet.  The park must be accessible and contain seating, trees and landscaping.  Pocket parks may be collocated adjacent to natural areas, landscaped stormwater detention facilities or combined with remaining required open space for a larger park or natural area. 

Remaining Open Space. Could be a combination of walking/biking trails, a larger pocket park or park, green spaces, play areas, courtyards, gardens, passive landscape and trees, water features, natural resources, and above ground storm water quality facilities (if publicly accessible and contains some seating) may count towards 50% of the required open space.

Exemption: If a portion of the subdivision is within 1/4 mile (measured in walking distance) of a publicly accessible active open space such as a public park or elementary school.

WHY? Homes with alley access have driveways in the rear, creating more pedestrian friendly streets and allowing more on-street parking opportunities, especially for townhouses and narrow lot development.

PROPOSAL: Allow an increase of 10% to the maximum lot coverage for the zone for rear-loaded development and houses with no driveways to the street.

The housing construction excise tax (CET) is a one-time tax (essentially a fee) on construction projects that can be used to fund needed housing projects and programs, primarily for affordable housing. Over time, the program will provide a source of dependable, locally controlled funding for needed housing. The CET is a tool used by other cities including Corvallis, Newport, Medford, Eugene, McMinnville, and Bend, among others. Affordable housing developers are more likely to build in cities with financial incentives like the CET.

Tax/Fee Rate Proposals: a 1% tax on the permit valuation of residential improvements (the maximum allowed), and a 1.5% tax on the permit valuation of non-residential improvements (Commercial CET), excluding the first $50,000 of the permit valuation on all improvements.  The tax rate can be modified by Council at any time.

State Law Exemptions: public improvements, school improvements, religious facilities, affordable housing, hospital improvements, agricultural buildings, and nonprofit care facilities

City Proposed Additional Exemption: improvements with permit valuations of $50,000 or less.

Example CET fees:

• Fee on a 1,500 sq.ft. dwelling unit with a permit value of $280,000 = $2,300
• Fee on 33-unit apartment building valued at $1,250,000 = $12,000
• Fee on 6,890 sq.ft. commercial building valued at $531,000 = $7,215

Benefits:

• Revenue raised from the Residential CET must be used for affordable housing incentives and programs, including affordable homeownership.
• Commercial CET revenue is more flexible but would be used to support affordable and needed housing.
• An estimate of $300,000 to $900,000 could be generated annually (based on the last 5 years of permit data); with an average annual revenue of around $700,000.
• CET funding provides the local match to leverage substantial state and federal funding. A couple of examples:
  • In Eugene, a 70-unit tiny home village received $640,000 from CET funds and was able to leverage $12.16 million for the project.
  • In Corvallis, a 60-unit affordable housing development received $400,000 in CET funds and leveraged $12.4 million for the project. Corvallis has incentivized 465 units since 2020.

The Low-Income Rental Housing Tax Exemption Program (LIRHTE) provides a tax incentive to developers of new regulated affordable rental housing to locate in the City of Albany, by lowering operating costs.

Key facts:

• The value of the tax exemption must be passed on to renters in the form of lower rents
• Units must be affordable to residents earning 60% or below the area median income for the first year and below 80% of the area median income for subsequent years.
• The tax exemption is for 20 years and is only available to new affordable rental housing.
• Annual reports will be required demonstrating continued compliance with the affordability requirements.
• Applicants may be from non-profit or for-profit developers of affordable housing.

When the City does not have a higher priority need for surplus property including financial needs, the City would screen surplus property for housing suitability. If the property is suitable for housing, the City would solicit proposals for affordable or other needed housing types and make a good faith effort to negotiate with a housing developer first.  If no proposals are received or an agreement cannot be reached, the city can consider other non-housing proposals.

Benefits:

This strategy allows the City to maintain control over the type of development on the property and support affordable or other needed housing with little cost to the City. Because it can be challenging to find available land, allowing affordable housing providers a first chance at surplus land can be critical to a project moving forward.

Key facts:

• Currently, the City has very few surplus properties that would be suitable for housing, but this policy helps ensure future surplus properties may be considered for this purpose.
• This policy does not require the City to use surplus land for housing or sell it at a discount.