Item 2A - Street Impact Fee - staff presentation — original pdf

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Street Impact Fee Briefing: Study Results & Policy Recommendation Urban Transportation Commission July 10, 2020 Austin Transportation Department Overview • Recap – Impact Fees in Texas • Street Impact Fee Study Results • Staff Recommendation • Next Steps 2 Texas Local Government Code Chapter 395 • "Impact fee" means a charge or assessment imposed by a political subdivision against new development in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development. • Water, Wastewater, Stormwater, Roadways 3 Why Street Impact Fees? • Determining a method for growth to pay for necessary infrastructure in a way that is: • Equitable – the same type and intensity development pays equal fee within a Service Area • Predictable – can determine the fee without doing an intensive study • Transparent – a worksheet to calculate the fee would be publicly available • Flexible – fees collected can be spent within a Service Area on any projects identified in the study within 10 years of being collected • Ultimate purpose is to develop a fair and reasonable fee development should pay for vehicle capacity improvements 4 Example Developments Austin Development Round Rock+ Frisco+ Fort Worth+ Prosper+ Austin Mitigation/TIA 298 Apartments $86,288 $424,104 55,000 ft2 Office $317,388 $107,402 $631,164 $177,870 397,000 ft2 Office 46,700 ft2 Restaurant 250 Apartment 100 Room Hotel Single Family: 153 D.U. Office: 7,700 ft2 Retail: 7,700 ft2 $561,325 $1,566,632 $2,274,362 $260,000 $1,051,057 $624,023 $365,348 - $803,408 $216,315 - $475,915 $2,395,819 - $5,270,671 $375,130 - $785,925 $1,059,688 - $1,397,620 $214,005 - $282,260 $2,785,632 - $3,674,050 $761,045- $1,003,832 + Note: Comparison cities are collection rate. 5 LGC Chapter 395 Required Study • Project new growth for the next 10 years • Establish Service Areas within which a maximum impact fee is determined • Develop Land Use Assumptions and corresponding growth projections within each Service Area • Project corresponding roadway capacity needs (Roadway Capacity Plan) to accommodate that growth within each Service Area 6 Texas Law: CIP Definition • Roadway (Street) facilities means arterial or collector streets or roads that have been designated on an officially adopted roadway plan of the political subdivision, together with all necessary appurtenances. The term includes the political subdivision share of cost for roadways and associated improvements designated on the federal or Texas highway system, including local matching funds and costs related to utility line relocation and establishments of curbs, gutters, sidewalks, drainage appurtenances, and rights-of-way. 7 What could Street Impact Fees pay for? Components that cannot be paid for Non Capacity Related Projects: • Projects not included in the Roadway Capacity Plan • Repair, operation and maintenance of existing or new facilities • Upgrades to serve existing development • Administrative costs of operating the program Components that can be paid for Capacity Related Projects: ✓ Construction cost of capital improvements in the Roadway Capacity Plan • Roadways – additional lanes, bridges, including “appurtenances” of roadways Intersections – Signals, turn lanes ✓ Corridor Planning and Preliminary • Engineering ✓Survey and Engineering fees ✓Land acquisition costs ✓Debt Service of Street Impact Fee Plan ✓Study/Update Costs 8 Prior Meetings & Actions Council Actions: Council Committee, Boards & Commissions: • • June 21, 2017: Council Mobility Committee July 25, 2017: Impact Fee Advisory Committee • Recommended approval of Land Use Assumptions for 10-year growth & • June 9, 2016: ATD authorized to procure consultant to develop Street Impact Fees (SIF) Service Areas • October 19, 2017: City Council Public Hearing on Land Use Assumptions • April 11, 2019: Austin Strategic Mobility Plan adopted, calling for implementation of SIF policy and program to fund roadway capacity improvements necessitated by growth • October 10, 2017: Urban Transportation Commission • • • August 16, 2018: Council Mobility Committee June 13, 2019: Council Mobility Committee June 13, 2019: Impact Fee Advisory Committee • Recommended approval of Roadway Capacity Plan • August 21, 2019: Council Mobility Committee • September 23, 2019: Design Commission • March 4, 2020: Impact Fee Advisory Committee • Recommended approval of Street Impact Fee Study Report • August 8, 2019: City Council Public Hearing on SIF study assumptions • August 22, 2019: City Council approval of SIF study assumptions (Land Use Assumptions & Roadway Capacity Plan) • April 14, 2020: Impact Fee Advisory Committee • Recommended fee collection rates and policy • April 30, 2020: Council Mobility Committee • • • • June 16, 2020: Bicycle Advisory Council June 17, 2020: Codes & Ordinances Joint Committee July 6, 2020: Pedestrian Advisory Council July 8, 2020: Codes & Ordinances Joint Committee 9 Approved Study Assumptions August 22, 2019 • 17 Service Areas (6-mi. diameter) • Land Use Assumptions • Basis for residential and employment growth projections over 10-year period (2017-2027) • Roadway Capacity Plan (defined by Austin Strategic Mobility Plan) • New roadways • Roadway expansions • Access management • Intersection improvements 10 Street Design based on • ASMP Street Network Table → ROW • Transportation Criteria Manual → Cross-sections 11 Texas Law: Service Unit definition • Standardized measure of consumption attributable to an individual unit of development calculated in accordance with generally accepted engineering or planning standards and based on historical data and trends applicable to the political subdivision in which the individual unit of development is located during the previous 10 years • Roadway utilizes vehicle-miles: one vehicle to travel one mile 12 Impact Fee Calculation 𝑴𝒂𝒙𝒊𝒎𝒖𝒎 𝑰𝒎𝒑𝒂𝒄𝒕 𝑭𝒆𝒆 𝑷𝒆𝒓 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 𝑼𝒏𝒊𝒕 = 𝑹𝒆𝒄𝒐𝒗𝒆𝒓𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕 𝒐𝒇 𝑹𝑪𝑷 ($) 𝑵𝒆𝒘 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 𝑼𝒏𝒊𝒕𝒔 𝒐𝒇 𝑫𝒆𝒎𝒂𝒏𝒅 • Developed Land Use and Population Projections (Demand) • Developed 10-Year Impact Fee CIP (RCP) • Removed costs associated with existing demand and growth at 10+ years • Accounted for prior developer contributions • Conducted Credit Calculation = Maximum Impact Fee 13 14 Collected Fees – Considerations Council can consider the following factors in establishing policy/equity: • Vary by Service Area: Use a different collection option by Service Area • Vary by Land Use: Use a different rate or percentage for residential and non- residential by development • Phased-In Approach: Start with one option in year 1 and transition to another option in the future (e.g. Round Rock) • Offsets: In all options, fees would be offset by system improvements that are built • Reductions: Additional reductions for different development types that further other City objectives, such as affordable housing and transit-oriented development 15 Maximum Impact Fees & Draft Recommended Rates • IFAC process to recommend Collected Rate • IFAC initially agreed on the following: • Flat percentage of maximum across City, not a flat rate • Different rates for residential and non-residential • 50% of maximum for non-residential uses • 35% of maximum for residential uses 16 *Highest rate in Service Area K **Lowest rate in Service Area DT DU = Dwelling Unit s.f. = square foot Housing Fees 17 Grey represents maximum fees, Blue/Orange represent IFAC recommended collection rate (35% of maximum) $- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DTHousing FeesSingle Family (ITE 210)Townhomes / Duplexes / ADU's (ITE 220) $- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DTHousing FeesSingle Family (ITE 210)Townhomes / Duplexes / ADU's (ITE 220)Service Area Single Family (ITE 210) Collection Rate Townhome / Duplex, ADUs or 1-2 Story Multi-Family (ITE 220) Collection Rate Mid-Rise Apts & Condominiums 3 – 10 Stories (ITE 221) Collection Rate DT A B C D E F G H I J K L M N O P 18 $2,194.75 $6,678.19 $5,430.22 $3,307.04 $1,367.12 $3,046.11 $1,611.22 $4,578.86 $2,300.61 $1,719.70 $3,740.76 $8,576.23 $2,531.34 $3,600.77 $2,246.94 $5,846.21 $4,489.40 $1,241.63 $3,778.04 $3,072.03 $1,870.88 $771.69 $1,723.27 $909.47 $2,590.39 $1,301.52 $970.70 $2,111.51 $4,851.81 $1,428.84 $2,037.05 $1,271.15 $3,307.36 $2,539.78 $973.73 $2,962.86 $2,409.18 $1,467.21 $609.73 $1,351.44 $718.59 $2,031.47 $1,020.69 $766.98 $1,668.35 $3,804.95 $1,128.96 $1,597.52 $996.88 $2,593.74 $1,991.78 Note: $ values shown reflect 35% of maximum for residential land uses as recommended by the Impact Fee Advisory Committee 3,000 s.f. Restaurant 19 Grey represents maximum fees, Green represents IFAC recommended collection rate (50% of maximum) $- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT3,000 s.f. Restaurant3,000 s.f. Restaurant $- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT3,000 s.f. Restaurant3,000 s.f. Restaurant10,000 s.f. Office 20 Grey represents maximum fees, Purple represents IFAC recommended collection rate (50% of maximum) $- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT10,000 s.f. Office10,000 s.f. Office $- $50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT10,000 s.f. Office10,000 s.f. Office50,000 s.f. Retail 21 Grey represents maximum fees, Yellow represents IFAC recommended collection rate (50% of maximum) $- $500,000.00 $1,000,000.00 $1,500,000.00 $2,000,000.00 $2,500,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT50,000 s.f. Retail50,000 s.f. Retail $- $500,000.00 $1,000,000.00 $1,500,000.00 $2,000,000.00 $2,500,000.00SA ASA BSA CSA DSA ESA FSA GSA HSA ISA JSA KSA LSA MSA NSA OSA PSA DT50,000 s.f. Retail50,000 s.f. RetailDraft Fee Reductions • Technical reductions (applies to whole site) • Internal capture (cap of 20% reduction from effective rate) • Transportation Demand Management (cap of 40% reduction from effective • Policy reductions (applies to specific land uses / units) rate) • Affordable housing • Maximum cumulative reduction (60% of effective rate) 22 Feedback • Groups we’ve met with: • Austin Chamber of Commerce • Urban Land Institute • Austin Infill Coalition • Austin Neighborhoods Council • Austin Contractors & Engineers • American Institute of Architects Austin Association Chapter • Real Estate Council of Austin • Home Builders Association of Greater Austin • Evolve Austin • AURA • Bicycle Advisory Council • Texas Society of Professional Engineers, Travis Chapter • Austin Housing Coalition 23 • What we’ve heard: • Smaller and infill development concerns • Encouraging ADUs • Not wanting to disincentivize house- scale multifamily and missing middle • Considering equity (historic underinvestment) & affordability • Reductions for deeply affordable housing • Encouraging sustainable transportation and meeting ASMP goals • Current economic environment • Wanting growth to pay for growth Maximum Impact Fees & Revised Staff Recommended Rates • Staff utilized IFAC’s percentage but used Citywide values • 50% of maximum for non-residential uses • $1,215 / vehicle-mile • 35% of maximum for residential uses • $850 / vehicle-mile • Simplifies calculation and improves equity 24 *Highest rate in Service Area K **Lowest rate in Service Area DT DU = Dwelling Unit s.f. = square foot Inside Loop means Service Areas entirely contained within the highway boundaries of SH 71, US 183, and SL 360. (F, I,J,L,DT) Land UseOutside LoopInside LoopUnitSingle Fam3,621$ 2,440$ DUDuplex/ADU2,049$ 1,494$ DURestaurant14$ 14$ s.f.Office8$ 7$ s.f.Retail9$ 10$ s.f.Staff Recommended RateRevised Staff Recommended Rates Service Area Single Family (ITE 210) Townhome / Duplex, ADUs or 1-2 Story Multi- Family (ITE 220) Mid-Rise Apts & Condos 3 – 10 Stories (ITE 221) 3,000 s.f. Restaurant (ITE 931) 10,000 sf. 50,000 s.f. Office (ITE 710) Retail (ITE 820) $3,621.00 $2,048.50 $1,317.50 $55,003.05 $47,263.50 $484,785.00 $2,439.50 $1,377.00 $884.00 $54,820.80 $51,880.50 $443,475.00 Outside Loop Inside Loop Inside Loop means Service Areas entirely contained within the highway boundaries of SH 71, US 183, and SL 360. (F, I,J,L,DT) 25 Note: $ values shown reflect 35% of citywide maximum for residential land uses and 50% citywide maximum for non-residential land uses. Does not include reductions. Collection Rate Comparisons – SA G Austin Development Austin Mitigation / TIA Study Draft Maximum Recommended Revised Staff Recommended Round Rock+ Frisco+ Prosper+ Fort Worth+ 298 Apartments $86,288 $1,729,648 $605,778 $478,737 $424,104 55,000 ft2 Office $317,388 $657,040 $328,520 $259,949 $107,402 $365,3488 - $803,408 $216,315 - $475,915 $631,164 $177,870 $1,059,688 - $1,397,620 $214,005 - $282,260 397,000 ft2 Office 46,700 ft2 Restaurant 250 Apartment 100 Room Hotel Single Family: 153 D.U. Office: 7,700 ft2 Retail: 7,700 ft2 $561,325 $8,858,400 ($8,415,480) $4,211,546 ($4,000,968) $3,147,838 ($2,990.447) $1,566,632 - $2,274,362 $2,785,632 - $3,674,050 $2,395,819 $5,270,671 $260,000 $2,282,302 $840,908 $655,063 $1,051,057 $624,023 $375,130 - $785,925 $761,045- $1,003,832 + Note: Comparison cities are collection rate. () 5% Internal Capture Reduction – NO OTHER REDUCTIONS APPLIED 26 Service Area G is outside the loop. Collection Rate Comparisons – SA I Austin Development Austin Mitigation / TIA Study Draft Maximum Recommended Revised Staff Recommended Round Rock+ Frisco+ Prosper+ Fort Worth+ 298 Apartments $86,288 $653,025 $228,560 $324,224 $424,104 55,000 ft2 Office $317,388 $402,063 $201,031 $285,343 $107,402 $365,3488 - $803,408 $216,315 - $475,915 $631,164 $177,870 $1,059,688 - $1,397,620 $214,005 - $282,260 $561,325 $4,929,803 ($4,683,312) $2,382,726 ($2,263,590) $3,249,160 ($3,086,702) $1,566,632 - $2,274,362 $2,785,632 - $3,674,050 $2,395,819 $5,270,671 $260,000 $904,276 $339,374 $481,487 $1,051,057 $624,023 $375,130 - $785,925 $761,045- $1,003,832 + Note: Comparison cities are collection rate. () 5% Internal Capture Reduction – NO OTHER REDUCTIONS APPLIED. Inside the Loop is anticipated to be higher. 27 Service Area I is inside the loop. 397,000 ft2 Office 46,700 ft2 Restaurant 250 Apartment 100 Room Hotel Single Family: 153 D.U. Office: 7,700 ft2 Retail: 7,700 ft2 Fee Reductions - Revised • Internal capture (cap of 20% reduction from effective rate) • Transportation Demand Management (cap of 40% reduction from effective rate) • Affordable housing (up to 100%) • Infill units (100%) • Building reuse (100%) • Maximum cumulative reduction (100% from effective rate) 28 Draft Ordinance Elements - Reductions • Internal Capture / Mixed Use Reduction: The amount of street impacts fees may be reduced by up to 20% for any new development where an accepted analysis demonstrates internal capture of a development will reduce vehicle trips from those contained in the adopted LUVMET. • Transportation Demand Management Reduction: The amount of street impacts fees may be reduced by up to 40% for any new development where an accepted transportation demand management plan. 29 Draft Ordinance Elements - Reductions Affordable Housing Reduction: • New development will qualify for additional reductions if: • The development has entered into an agreement with the City to provide for affordable • The developer has provided a letter from NHCD certifying the affordability levels and period housing for at least fifteen years; of affordability; and • The development is utilizing transportation demand management approved by the director. • If a development qualifies, the amount of street impact fees can reduced by the following percentages: • The percentage of affordable units being provided if the new development is proposing at least 10 percent, but less than 20 percent, of the dwelling units are affordable; • Fifty percent if the new development is proposing at least 20 percent, but less than 50 percent, of the dwelling units are affordable; and • One hundred percent if the new development is proposing at least 50 percent of the dwelling units are affordable. 30 Draft Ordinance Elements - Reductions • Infill Units Reduction: For existing residential land uses that add up to three additional dwelling units, an 100% reduction will be received if no additional parking is added. • Building Reuse Reduction: Existing occupied buildings whose building is not being demolished and the total square footage is modified by less than 1,000 additional square feet will receive an 100% reduction for the original square footage and expansion of up to 1,000 square feet. • Reductions cumulative: The reductions authorized under this section are cumulative so that a development that qualifies for the maximum reduction under each provision may reduce the amount of street impact fees up to one hundred percent. 31 Summary of Revised Staff Recommendations Policy Topic Recommendation Effective Rate 50% of Citywide Maximum for Non-Residential land uses, 35% of Citywide Maximum for Residential land uses Reduction – Internal Capture Use ITE Methodology, capped at 20% Reduction – Transportation Demand Management Follow City procedures to determine, capped at 40% Reduction – Affordable Housing Tiered approach starting w/10% affordable units, also TDM plan Reduction – Infill units Up to 3 additional dwelling units and no parking, 100% Reduction – Building Reuse Previously occupied bldgs. <1,000 sq. ft. addition, 100% Reductions Cumulative Maximum reduction is 100% Effective Date Same as ordinance adoption, no collection of fees for 1 year 32 Next Steps • Continue public meetings and information on draft ordinance and policy considerations • Planning Commission – July 14, request recommendation • Public meeting (virtual) – July 21 • Council Public hearing – July 30 • Ordinance approval • Development of administrative procedures 33 More Information austintexas.gov/streetimpactfee • Study Final Report • “101” one-pagers on study elements • Status Reports to Mayor and Council • FAQs • Upcoming meetings • Sign-up for updates • Request a presentation • Impact Fee Advisory Committee meetings 34 Questions Liane Miller, AICP Austin Transportation liane.miller@austintexas.gov 512.974.7922 35 austintexas.gov/streetimpactfee