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Presented by Margie Lance, Coordinator Moderately Priced Dwelling Unit Program

Presented by Margie Lance, Coordinator Moderately Priced Dwelling Unit Program Frederick County Housing and Community Development. Thurmont Town Meeting April 24, 2007. Purpose of the MPDU Program.

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Presented by Margie Lance, Coordinator Moderately Priced Dwelling Unit Program

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  1. Presented by Margie Lance, Coordinator Moderately Priced Dwelling Unit Program Frederick County Housing and Community Development Thurmont Town Meeting April 24, 2007

  2. Purpose of the MPDU Program • To increase the county’s supply of moderately priced housing units as a natural function of the development process.

  3. What is a MPDU? A housing unit which is created as part of a development for which the sales price or rental fee is capped and targeted to households earning a moderate level of income.

  4. Legislative Components • Ordinance (law) • Zoning text amendment • Regulations • Income eligibility • Sales prices • Rental rates

  5. Ordinance - Program Guidelines • Some set in the ordinance, some delegated to the Housing Director • Building requirements • Buyer/renter requirements • Price controls • Developer alternatives • Developer/builder and sale/rental processes, i.e. administration

  6. Building Requirements • New residential development with 25 or more units • On public water and sewer • At least 12.5% of the units MPDUs

  7. MPDU Density Bonus • Increase over the zoning base density ranging from 1-22% • For example – 20 acre R-5 project 0% density bonus 14% density bonus 12.5% requirement 13.9% requirement 100 units 100 units + 0 density bonus units +14 density bonus units +13 MPDUsroundup from 12.5+16 MPDUsroundup from 15.8 113 units total 130 units total

  8. What Buyers Are Eligible? • Moderate income households • Applicants who live or work in the County • Applicants who have not owned any residential property within the past 3 years (exceptions allowed for specified good cause)

  9. Price Controls • Sale Units = 15 years • Rental Units = 25 years • During control period – resale price is the original selling price, plus: • % equal to the increase in cost of living (CPI) • Fair market value of improvements • Allowance for closing costs • Reasonable sales commission

  10. Developer Alternatives • Build at least 10% more MDPUs at another site. • Contribute to the Housing Initiative Fund an amount that will produce at least 10% more MPDUs. • Or a combination of the two. (Example- 100 unit development with 13 unit MPDU requirement must build 15 MPDUs at another site, or contribute the cost of 15 units.)

  11. Zoning Text Amendment • Created Division 8 in the County Zoning Ordinance. • Made changes within sections of the County’s existing Zoning Regulations to allow for MPDU development and density bonuses. • Established significantly reduced “lot area, width and yard measurement” requirements for MPDU projects only.

  12. Regulation on Income Eligibility(#05-26) • Maximum income limits for purchase (70%) and rental (50%) of MPDU units of HUD median income • Sources of income • Mechanism for automatic update of income limits (HUD Washington Metropolitan Statistical Area)

  13. Maximum Income Limits 2007as a % of HUD median income

  14. Regulation on Sales Prices(#05-27) • Provides a base unit sales price for a range of housing unit types • Establishes price adjustments which are additions to the base unit • Establishes closing costs paid by the seller

  15. Regulation on Rental Rates (#05-28) • Establishes the maximum rental rates • Rental rates are computed using unit/bedroom size • Income limit is multiplied by 25% then divided by 12 to establish the rent (excluding utilities) • Example: 1 bedroom $33,100 x .25 = $8,275/12 = $690

  16. The MPDU Process for Developers/Builders Builder & government sign Agreement to Build with Sales or Rental Covenants Government approves developer’s subdivision plans with % of MPDUs and plan layout Builder and government sign Sales Offering Agreement setting MPDU sales prices Builder obtains building permits from government Builder receives lottery list of potential buyers; begins marketing MPDUs Builder sells MPDUs; provides sales documentation to government

  17. The MPDU Process for Buyers Interested buyers complete an MPDU application, usually for a specific MPDU development. Interested people attend an MPDU orientation Session. Interested buyers attend homebuyer training. Eligible applicants are entered into the lottery. The lottery list is posted and sent to the builder. The MPDU Program processes the applications and issues Certificates of Eligibility or denial letters. The eligible buyer settles on a MPDU and signs commitments that place a lien on the house for 15 years. The names on the lottery list are contacted by the builder to offer MPDUs; contacted applicants obtain mortgages.

  18. Resolution of the Board of County Commissioners March 22, 2007 The BoCC conceptually agrees and directs staff to work with [municipalities] to pursue a MOU [Memo of Understanding] for joint administration of the MPDU Program, with future potential for a cost share component to support that administration. (adapted)

  19. Full text at www.co.frederick.md.us/housing; click on the MPDU Program. Contact Margie Lance at mlance@fredco-md.net or 301-600-6647. More Information

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