Overview
Project Overview
Over the last year, the city has been taking steps to implement priority strategies identified in Albany’s Housing Implementation Plan (HIP) to encourage needed housing in Albany and incentivize more affordable housing and collecting public input on these strategies.
Public hearings are scheduled in December and January. Select the Participation tab above to find out how to testify and provide comments.
Policy Proposals to Incentivize Affordable and Needed Housing
- City Council Hearing: Wednesday, December 11, 2024, at 6:00 p.m.
- The materials provided to the Council are here. The Council packet will be posted on the Council materials page on December 5, 2024.
Housing Construction Excise Tax (CET): a one-time fee based on the value of building improvements excluding the first $50,000 to raise funds to support affordable housing
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.
Low Income Rental Housing Tax Exemption for 20 years for new affordable rental housing
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.
City Owned Surplus Land Policy for Housing, when suitable
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.
More information about these strategies is in the Housing Policies Options Report.
Albany Code Changes for Needed Housing (Planning Files DC-04-24 and CP-02-24)
- Planning Commission Hearing: Monday, December 16, 2024, at 5:15 p.m.
- City Council Hearing: Wednesday, January 22, 2025, at 6:00 p.m.
Remove barriers for small houses
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
Encourage cottage cluster housing and smaller cottages
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).
Increased flexibility for accessory dwellings units (ADUs)
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.
Reserve higher density zones for higher density development
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.
Require open space/pocket park in residential subdivisions
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.
Encourage rear-loaded development to save streets for parking (ADC Table 3.190-1)
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.
View minor housing related amendments to the Comprehensive Plan here.
HIP Project Background
The Albany City Council adopted the Housing Implementation Plan (HIP) in June of 2023. The HIP evaluated policies and strategies that the City can employ to address Albany’s current and future housing needs, as identified in the City’s 2020 Housing Needs Analysis (HNA). The HIP built upon community conversations and support around the Expanding Housing Options project that updated the City’s development code and comprehensive plan to allow middle housing types where single dwelling units were allowed. The HIP outlines priority implementation steps the City can take to encourage the production of needed housing.
Participation
Public Hearings
Housing Policies:
City Council, 6:00 p.m., Wednesday, December 11, 2024
- In Person: Albany City Hall, Council Chambers, 333 Broadalbin Street SW
- Watch online: http://www.youtube.com/user/cityofalbany
Development Code and Comp Plan Changes to Support Needed Housing:
Planning Commission, 5:15 p.m., Monday, December 16, 2024
- In Person: Albany City Hall, Council Chambers, 333 Broadalbin Street SW
- Virtual: https://council.cityofalbany.net/groups/plc/zoom
- Phone: 1-253-215-8782; Passcode: 464432
City Council, 6:00 p.m., Wednesday, January 22, 2025
- In Person: Albany City Hall, Council Chambers, 333 Broadalbin Street SW
- Watch online: http://www.youtube.com/user/cityofalbany
Options to testify at the hearings:
- Attend in person and register to speak* on the hearing sign-up sheet; OR
before noon on the date of the applicable hearing: - Email written comments to
This email address is being protected from spambots. You need JavaScript enabled to view it. . Include your name and address or mail to Albany Planning Division; PO Box 490, Albany, OR 97321; OR - Register to testify virtually by emailing
This email address is being protected from spambots. You need JavaScript enabled to view it. with your name, address, phone number, and if you are speaking for, against, or neutral on the proposal.
*Verbal comments to the City Council are limited to three minutes.
Public Engagement Summary:
During 2024, there were a range of opportunities for stakeholders and community members to participate in providing input on strategies. These included focus groups, open office hours, and a survey.
- HB4006 Housing Forum: Affordability Presentation (pdf) and Notes (pdf)
- Focus group notes: Housing Policies (pdf) and Development Code Changes (pdf)
- Survey results - all proposals (pdf)
- Other public Input (pdf)
Policy Proposals Input Summaries
Housing CET (one-time fee on new development)
Participants understand both the urgent need for affordable housing and funding to support it. There were concerns that a CET would contribute to rising costs. However, the potential benefit, especially the ability to leverage other funding, generally outweighed those concerns. Participants noted the success of construction excise taxes in nearby jurisdictions to support affordable housing with minimal adverse effects to broader development and a desire to bring those benefits to Albany.
Low Income Rental Housing Property Tax Exemption
Majority support for this tool, but a couple of people voiced concern about whether for profit affordable housing developments should be eligible for the tax exemption. There were some concerns about how much tax revenue the City can afford to lose by providing tax exemptions and compliance with affordability requirements, but most people did not express a strong opinion about whether to exclude for-profit affordable housing developers from the program. This has been a vital program to sustain affordable housing in Albany.
Surplus Property for Housing
Public input revealed both enthusiasm and caution for this strategy. Screening properties for housing suitability without requiring the City to use a property for that purpose was a favorable approach to most. A primary concern was that surplus City owned land may be needed by the city in the future. Any screening of properties for housing suitability should assess the likelihood of the city needing the land in the future. Nonprofit developers expressed that the ability to purchase surplus land can be enormously helpful in producing affordable housing. Some suggested limiting the sale of City owned surplus land to affordable housing, not other needed housing types.
Development Code Changes Input Summary
- Remove barriers to small houses and cottages - support
- Increase flexibility for accessory dwellings units (ADUs) - support
- Reserve higher density zones for higher density development – majority support
- Require open space in residential subdivisions of 20 or more lots – support, don’t require play equipment, allow storm water quality facilities to count
- Encourage rear-loaded development to save streets for parking - support
Documents
Documents
Housing Policy Options Background Report
The following report outlines three policy options the City may pursue to support the creation of needed housing in Albany. These policies came out of the Housing Implementation Plan and required a more in-depth exploration of the set of choices for how to design and implement the policies to produce the desired outcomes. The background report covers the key considerations and options for implementation of these policies.
Albany Market Feasibility Study
The market feasibility study was completed as one component of the City of Albany Housing Implementation Project. The purpose of this study is to assess the feasibility of mixed use (MU) development forms in the City’s six potential climate-friendly areas (CFAs). CFAs are a requirement of the state Climate Friendly and Equitable Communities rule (CFEC) which requires cities with a population greater than 25,000 residents to designate and plan CFAs to be future areas where greater housing capacity, commercial options, and transit access will allow residents to meet most of their daily needs without the need for a car. The CFAs, therefore, need to allow more flexibility in housing types, density and mix of uses. These development forms can be more expensive and complicated to develop than lower-density construction, meaning that they will not be feasible in all areas immediately. However, the right combination of incentives and positive amenities can help bridge the feasibility gap to achieve these goals. This study summarizes local market conditions for residential and commercial real estate. The study identifies gaps in feasibility and proposes strategies and tools for addressing these gaps.
Housing Implementation Plan Documents
The City of Albany prepared the Housing Implementation Plan (HIP) to identify actions the City can take to help increase housing options that create more housing for more people. The HIP prioritizes current and future housing needs and outlines equitable and actionable policies, strategies, and implementation steps needed to encourage the production of housing that is needed in the Albany community. The HIP summarizes recommendations for adoption of a range of housing strategies or tools to study further—these include regulatory changes, incentives, funding sources, programs, and partnerships.
- Housing Implementation Plan
- Appendix A - Part 1 Background Report
- Appendix A - Part 2 Background Report
- Appendix B Focus Groups Summary
- Appendix C Survey Summary
- Appendix D Housing Strategies Menu
Background Materials
- 2020 Housing and Residential Lands Needs Analysis
- 2020 Albany Housing Strategies Report – This 2020 document pre-dates the middle housing code updates and this project.
- Accessibility Requirements and Data
- Albany Data and Stats
Other Documents
Project memos, reports, and other work products will be posted here throughout the process.
- Round One Focus Groups Summary
- DRAFT Housing Strategies Menu v1
- Table of Proposed Albany Development Code Changes
Links to meeting materials will be posted here as they are available.
FAQs
FAQs
The HIP will guide a work program that will be implemented over many years. The HIP will identify priority actions and potential funding sources (where needed), necessary partnerships to carry out strategies, and an expected timeline for when actions will be complete.
No, the City is voluntarily electing to create a Housing Implementation Plan to help meet the community’s housing needs. However, in the future, the City will be required to adopt a “Housing Production Strategy” in conjunction with a future update to its Housing Needs Analysis. House Bill 2003, adopted in 2019, requires Oregon cities with populations over 10,000 to develop Housing Production Strategies (HPS), which include a list of specific actions that the city will undertake to address housing needs identified in their HNA. The City of Albany will not be required to adopt an HPS until the year 2028. However, the City intends to incorporate ideas and resources provided by the state of Oregon for HPS’s into its voluntary Housing Implementation Plan.
The 2020 HNA found that there is significant need for new medium- and high-density housing to meet the City’s 20-year housing needs. This includes multi-family housing and “missing middle housing” such as duplexes, triplexes, quadplexes, and townhomes. The analysis also found both existing and future needs for housing affordable to low-income households (defined as households earning 80% or less of area median income). In particular, the HNA identified a shortage of rental units at the lowest pricing levels that would be affordable to the lowest-income households. Residents, realtors, the housing authority, and developers have also indicated a need for one-bedroom dwellings, accessible housing of all shapes and sizes, smaller one-story housing for residents wishing to downsize or buy their first home, and narrow lot housing. These gaps will be a focus of the City’s Housing Implementation Plan.
Albany’s Housing Implementation Plan (HIP) will identify a set of policies and tools that the City can implement to facilitate housing development that meets the needs of the community. The HIP will prioritize strategies that promote fair and equitable housing choices for all residents, especially residents especially residents of protected classes and those experiencing housing insecurity.
The HIP may include strategies in the following categories:
- Zoning and development code changes
- Reducing regulatory or process barriers to housing
- Financial incentives (such as tax abatements or system development charge reductions)
- Funding sources (such as a Construction Excise Tax)
- Land, acquisition, lease, and partnerships with housing providers and other community organizations
An exhaustive list of potential tools, actions, and policies that cities can implement to promote housing development was assembled by DLCD and can be found here.
The HIP was adopted in June 2023.