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Institutional Arrangements Programs/Processes Framework chart

Tools
Tools are specific mechanisms, programs or entities used to implement regional visions and growth manage-ment plans. Participation can be required or voluntary. Examples are characterized as either regulatory or market-based.
Characteristics Tool Example
Regulatory
  • Inclusionary zoning
  • Growth boundaries
  • Revenue sharing
  • Below-Market-Rate Housing Program
  • Lexington/Fayette County Urban Service Boundary
  • Charlottesville - Albemarle County Revenue Sharing
    • Market-based
  • Purchase of development rights
  • Transfer of development rights
  • Tax increment financing
  • Location Efficient Mortgages
  • Congestion pricing
  • Maryland Rural Legacy Program
  • Pinelands Development Credits
  • Chicago Tax Increment Financing districts
  • Location Efficient Mortgage
  • State Route 91, Orange County CA

    • Descriptions of examples in bold-text in the chart above:
    Inclusionary Zoning
    BELOW-MARKET-RATE HOUSING PROGRAM, PALO ALTO, CALIFORNIA
    The Below-Market-Rate (BMR)Housing Program requires developers to provide 10% of the total units in most residential developments at prices affordable to moderate-income households. This is an example of inclusionary zoning, which some localities employ to achieve regional affordable housing goals.
    Scale:
    City of Palo Alto, CA
    Administered by:
    The Palo Alto Housing Corporation (PAHC), an independent, non profit organization, and by City of Palo Alto Planning Department staff.
    Funding:
    The annual cost of the contract with PAHC is paid by the City from in-lieu fees received from developers.
    When developed:
    Developed in 1974 as a program covering newly-constructed homes, this program now includes both ownership and rental units. The ownership and rental units are deed-restricted and monitored to ensure that the units remain in the city's affordable housing stock.
    How it works:
    The BMR Program requires that new developments contain at least 10% units that are affordable to moderate-income households. Developers must provide units within their housing project unless the City determines that on-site units will be infeasible. Usually only luxury single-family home subdivisions or special purpose housing such as senior units with required services are permitted to pay an "in-lieu" fee. The PAHC administers purchase of housing units and monitors compliance in the rental units. In the first 25 years of the program's existence, the BMR program generated 147 ownership units and 38 rental units; 63 new rental units are currently under construction.
    The ownership program serves households at 60% to 100% of median income, from $36,000 to $87,000 depending on household size. The rental BMR program serves households in the 50% to 80% of median income category, depending on household size. Money raised through the in-lieu fees funds non profit development of subsidized rental housing for very low-income households.
    Application to Utah:
    BMR housing is a tool which could be used to implement the 1996 Utah Affordable Housing Act, which requires all cities to have an affordable housing plan. While most cities are still working on preparing their plans, a BMR-type program could help to secure a future affordable housing stock.
    Contacts:
    Marlene Prendergast, PAHC Executive Director, tel: 650-321-9709
    Cathy Siegel, City of Palo Alto, tel: 650-329-2108
    Relevant websites: Palo Alto Housing Corporation
    Purchase of Development Rights or Conservation Easements
    RURAL LEGACY PROGRAM, STATE OF MARYLAND
    The Rural Legacy Program supports the state's efforts to preserve rural areas by first defining and then providing a means for protecting rural character. The voluntary program utilizes purchase of development rights, paying owners of qualifying rural lands for development rights to their property. An unusual feature of this program is its effort to conserve contiguous land with different purposes, such as agricultural, forest, open space, natural resource, or cultural heritage, which taken together define rural character.
    Scale:
    Statewide program, 25 areas designated by the Rural Legacy Board and Board of Public Works as eligible for the program.
    Administered by:
    The Maryland Department of Natural Resources administers this program. The Rural Legacy Advisory Committee, appointed by the Governor, and confirmed by the state Senate, reviews all applications and makes recommendations to the Rural Legacy Board, staffed by the heads of the state departments of Natural Resources, Agriculture and Planning. The Board of Public Works designates the Rural Legacy Areas and approves Rural Legacy funding.
    Funding:
    The program is funded by a combination of support from Maryland Program Open Space transfer tax revenues, an established tax base, and general obligation bonds approved by the state General Assembly for this program.
    When developed:
    This program was first adopted in 1997 as part of the state's "Smart Growth Initiatives." It is one part of the state's efforts to protect its forests, farms and small towns while supporting urban land development in Priority Funding Areas.
    How it works:
    Local governments and private land trusts first identify land which fits the qualifications for the program in eligible areas. Interested parties then apply for designation as a Rural Legacy area, and for state Rural Legacy funds for preservation of that area. Successful applicants receive funding to purchase conservation easements (a restriction on the nature of future development of the property) on qualifying land in the designated areas. Participation in this program is voluntary for landowners, who may choose to participate by selling or donating their development rights and retain ownership of their property. The development rights are transferred in perpetuity. In the first three years of the program's existence, the state committed approximately $100 million in grants, preserving 47,000 acres of land in 20 of Maryland's 23 counties. The program, along with other programs such as Program Open Space and the Maryland Agricultural Land Preservation Foundation led to national recognition, including an award from the Sierra Club as the state most involved in land conservation.
    Application to Utah:
    The Quality Growth Act calls for land preservation, and has established the LeRay McAllister Critical Land Conservation Fund in order to preserve agricultural land and open space. The Rural Legacy Program offers a model which could expand Utah's efforts by broadening the definition of lands which make up rural character, while preserving individual property rights and providing market-rate compensation for those who choose to keep their land in rural status.
    Contacts:
    Pam Bush, Maryland Department of Natural Resources, tel: 410-260-8428
    Website: Maryland Rural Legacy Program Home Page
    Location Efficient Mortgages
    SEATTLE, WASHINGTON
    Location Efficient Mortgages provide larger home loans for properties in locations served by transit or with pedestrian or bike access, removing the need for a second car. This program encourages new urbanist and transit oriented development(TOD). It offers a trade off between multiple vehicle ownership or larger or better located housing.
    Scale:
    City of Seattle. Similar programs are available in Chicago, and are starting in the San Francisco Bay area, Los Angeles and Orange Counties. Fannie Mae is supporting a four-city pilot study, and will review the results early in 2002. After that time, the program may become available nationwide.
    Administered by:
    A private lending institution, the HomeStreet Bank, in partnership with the City of Seattle.
    Funding:
    The City of Seattle devoted $50,000 to a study on LEM feasibility, and provides a staff person to promote and facilitate the program.
    When developed:
    Conceived and developed by Chicago's Center for Neighborhood Technology, the LEM program was first established in Seattle in 2000.
    How it works:
    This program enables a borrower to qualify for a higher mortgage amount based on the location of a home. Each Seattle neighborhood is assigned a monetary value based on a variety of factors including neighborhood density, amenities, and access to public transportation. The loan officer will combine this monetary value, known as the Location-Efficient Value (LEV), with the household's qualifying income. The addition of the LEV funds can increase the income used to calculate a mortgage loan. This helps moderate income households qualify for home loans in Seattle' s expensive real estate market.
    This program opens homeownership to households which might not otherwise be able to afford to own a home, and offers financial rewards for those choosing to live closer to transit service. The addition of the low-cost transit pass and discounted membership in the Flex-Car program to the LEM further encourages transit use.
    To initiate a LEM program, a city sponsor must do preliminary research, recruit willing lenders, and promote the new idea to the community. As this new program becomes established in its pilot locations, these start up requirements should become easier.
    Application to Utah:
    In Utah's real estate market, with rapidly increasing housing prices, affordable housing is a growing concern. Simultaneously, residents have voted to expand light rail service. Utah's affordable housing plan requirements and Envision Utah's emphasis on infill and TOD development could be implemented in part through LEM.
    Contacts:
    Gary Clark, City of Seattle Office of Housing, tel: 206-684-0344
    Relevant websites: City of Seattle LEM Home Page, HomeStreet Bank LEM Home Page