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<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2>Thanks Ryan,</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2>My comments at PAZ were not presented as a
"complaint." I was engaged in a discussion, after being asked
to comment by council person Jaffee. My observation
regarding TDR/C was the strong potential that new housing and only new
housing could be the financing engine to make TDR's work. TDR's
can be a significant tool to achieve public goals to preserve LARGE agricultural
parcels while at the same time allowing for density to be appropriately
re-distributed to identified receiving areas with physical and cultural
infrastructure, which is another public goal. My comments were to suggest
that "public good" needs to be financed by the public and that new
housing should not be viewed as an unlimited source of revenue to
implement public policy. I further noted that the Bozeman model for
TDR/C recognized this and allowed for public funding of off-site infrastructure
in the receiving area (a cost that is normally borne by the
developer). I attempted to emphasize the desirability of a
model where new development and the public participate to implement
public land use policy. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2>I agree with your comments encouraging a public/private
partnership to look at TDR/C. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=200252715-05062009><FONT face=Arial
color=#0000ff size=2></FONT></SPAN> </DIV>
<DIV> </DIV>
<DIV><FONT face=verdana size=2><B><FONT size=2><FONT color=#000000 size=1>Nick
Kaufman</FONT></B></FONT><I><BR><FONT color=#000000 size=1>Vice President ,
Principal Planner</FONT></I><FONT color=#004080 size=5><BR><FONT
face="Arial Black" color=#004080 size=3>WGM Group, Inc.</FONT></FONT><FONT
size=2><BR></FONT><A href="http://www.wgmgroup.com/"><B><U><EM><FONT
color=#0000ff
size=1>http://www.wgmgroup.com</FONT></EM></B></U></A><BR></FONT></DIV><!--eMS4.8.1.D5M.6Y.2009-->
<DIV> </DIV><BR>
<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left>
<HR tabIndex=-1>
<FONT face=Tahoma size=2><B>From:</B> missoulagov-bounces@cmslists.com
[mailto:missoulagov-bounces@cmslists.com] <B>On Behalf Of </B>Ryan
Morton<BR><B>Sent:</B> Thursday, June 04, 2009 12:57 PM<BR><B>To:</B>
missoulagov@cmslists.com<BR><B>Subject:</B> Re: [MissoulaGov] Committee Update
6-3-09<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009>On the PAZ hearing:</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009>A TDR or TDC tool would need to be tailored to
Missoula. It could be done, but there are other tools we can use for ag
preservation. I look forward to seeing Lyn Hellegaard's referral about
funding a study for Missoula. MBIA is also looking to fund a study.
Perhaps this would be an opportunity for a public-private partnership to make
figure out how to make Missoula an even better place to
live.</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009>Cost-plus versus market rate: Existing housing
stock certainly gets sold based on what the seller can get in the market (profit
to the developer is a non-issue, however). Custom homes are cost-plus and
the customer is basically invoiced for the construction and the lot (if the
buyer hadn't already purchased the lot). I assume, Bob, that you're
speaking more about speculation homes. In that case, I think Jim McGrath
gave you an appropriate response. Demand and the possibility of profit
will drive the production of housing of that kind of housing.
</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009>Further, I think you forget that most of the costs Nick
and others refer to are "up-front costs" to the developer. As risk adverse
economic agents, higher up-front costs without higher demand willing to pay will
push producers away from production. His complaint is premised on when
developers DO take that risk, they must recover all costs with a profit to
survive as a business. Thus, costs get pushed to consumers who can
pay. Profit for a developer is their paycheck to cover their homes, taxes,
food, utilities, insurance, health care, etc. Would you like the
government constantly messing around with your paycheck? I have a fixed
wage based on hours worked and that is secured as long as I work. A
developer for speculation housing risks making no profit or even losing
money. Nothing for a speculation developer is secure and the
magnitude of potential loss is quite high to the tune of hundreds of thousands
to millions of dollars in expenses.</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><FONT face=Arial color=#0000ff size=2><SPAN
class=071282418-04062009>I suppose your assumption is that developers make more
money than God and that developers can absorb any cost you place on them because
their profits are astronomical. Reality is quite different.
Developers are unable to absorb all costs including fees, labor, materials, and
professional services. In Missoula, new home prices didn't really go down
during the housing bust, but construction company layoffs certainly went
up. <STRONG>If they could absord lower profits, they would not have laid
off so many workers.</STRONG></SPAN></FONT></DIV>
<DIV> </DIV>
<DIV align=left><FONT face=Arial size=2><EM>Ryan Morton</EM></FONT></DIV>
<DIV align=left><FONT face=Arial size=2>Government Affairs
Director</FONT></DIV>
<DIV align=left><FONT face=Arial size=2>Missoula Building Industry
Association</FONT></DIV>
<DIV align=left><FONT face=Arial size=2>406.543.4423 or 406.546.0902
(cell)</FONT></DIV>
<DIV align=left><FONT face=Arial size=2>ryan@buildmissoula.com</FONT></DIV>
<DIV> </DIV><BR>
<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left>
<HR tabIndex=-1>
<FONT face=Tahoma size=2><B>From:</B> missoulagov-bounces@cmslists.com
[mailto:missoulagov-bounces@cmslists.com] <B>On Behalf Of </B>Bob
Jaffe<BR><B>Sent:</B> Wednesday, June 03, 2009 10:43 PM<BR><B>To:</B>
missoulagov@cmslists.com<BR><B>Subject:</B> [MissoulaGov] Committee Update
6-3-09<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV class=Section1>
<P class=MsoNormal>Greetings,<o:p></o:p></P>
<P class=MsoNormal>This morning we considered a request to ask council members
to sign onto a letter to the State of Montana to approve a grant to fund the
Salcido Center.<o:p></o:p></P>
<P class=MsoNormal>The center got started with a $120,000 grant. They are trying
to get it funded again for $175,000 to carry them for 16 months. The
discussion was mostly about the services they offer, their budget, and if there
is any data to document their impact. At this time they are not able to provide
any specific data as to the level of services being offered. But there is plenty
of anecdotal information as to the use of the facility. There were some concerns
about whether any other organizations in Missoula were seeking the same funding.
Folks were a little worried about pitching for one of our local organizations
over another. We had received some public comment to this affect that
resonated. <o:p></o:p></P>
<P class=MsoNormal>Mr. Hendrickson asked if they had a sense of whether the
clients they were serving were “home grown” homeless folks or outsiders coming
to take advantage of Missoula’s generosity. The answer was not very specific but
I think she said that they serve plenty of folks who travel through but most are
locals. Renee made some kind of statement suggesting that people choose to be
homeless and facilities like this enable them. In fact, the man the
facility was named after was homeless by choice. The ladies doing the
presentation didn’t throw anything at her or even show any sign of being irked
by the comment. They said that when people “choose” to be homeless, this is
usually a response to some other trauma or dysfunction in their lives that make
a traditional lifestyle inaccessible. Everyone signed on to the letter except
Renee and Lynn, who is out of town. <o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>In Conservation we rejected the bids for the project to do
some preliminary grading work out at the new Fort Missoula park. The estimates
were based off of the idea that there was high trade value in the gravel that is
still on the site. At the moment gravel is not in very high demand so this
didn’t work out. There is no rush so we will try again another
time.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>In PAZ we had a presentation on the Transfer of Development
Rights program in Gallatin County. We had Greg Sullivan, the former
planning director in Gallatin County and current Bozeman City Attorney do the
presentation. There was a lot of food for thought. I was expecting to find
their program more relevant to our situation but it was a lot different from
anything we would want to do here. The Commissioners were also present but made
a point of staying out of the discussion. I invited them to the table at least
three times but they declined. What they have is a growth area triangle between
Bozeman, four corners, and Belgrade. This is roughly equivalent in size to the
Missoula valley urban growth area. The TDR program is just in the county outside
of city limits. In the growth “donut” area, they zoned it to about 2 per acre.
But you can buy development rights from the surrounding open space to go up to
about four per acre. <o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>In Gallatin County they are trying to preserve the
surrounding ranches. Some of which are thousands of acres. The vast majority of
the open lands in Missoula County outside of the growth area are public or owned
by Plum Creek. In Missoula, the discussion has mostly been about how we can
preserve relatively small open space tracts within the urban growth area. The
model they set up is for a 40 year development restriction rather than
permanent. They worked out a formula for how many development rights the
different parcels would have. Then established how many development rights would
need to be purchased to get the density bonus in the receiving zone. The price
for development rights would be determined by the market. <o:p></o:p></P>
<P class=MsoNormal>There was also a component where the county would provide
some kind of funding match to the developer where whatever they spent on
development rights the county would spend on infrastructure that provided public
benefit. No funding mechanism had been worked out for how that was going to be
financed. Possibly a general obligation bond of some sort.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Nick Kaufman of WGM Group commented on how he liked the
public participation part of it. He thought it was problematic that we heap the
costs of our community ideals on new development because that translates into
the cost of the homes which means the future homebuyers (our kids, new comers,
etc.) are bearing the full cost. If these are community ideals we should
all participate in the cost. I sort of agree with this. I probably need to
go through the MOR cost of development presentation again but I’m pretty sure
that the price of homes is based off of what people can get for them, not what
they cost to build. The difference is the profit of the developer. If the cost
goes up I don’t see why that is entirely absorbed by the new home buyer. Isn’t
there any elasticity in the developer’s profit? I assume that when the market
supports greater profits they take them regardless of whether their costs stay
the same.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Next was A&F. We learned about the Neighborhood
Stabilization Program (NSP). Montana got $19.6 million to assist with foreclosed
homes. We can use the money to buy foreclosed homes and do something with them
that helps people up to 120% of median income. The good news is that we really
don’t have a lot of foreclosures around here. The bad news is that makes it hard
to get a piece of this new federal pie. It can also be used to demolish
qualifying blighted properties. We have identified a few of those.
<o:p></o:p></P>
<P class=MsoNormal>Note to Realtors: If you know of foreclosures OPG may be able
to put a deal together to buy the homes.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Another cool piece of business today was approving a contract
between the city and the downtown business improvement district (BID) to take
care of trash pickup from the cans on the sidewalks. Currently we pay
Allied Waste $17,000 per year to do it. They empty them three times per week
during the busy season, twice a week in the winter. The BID will be hiring
a full time person to deal with the trash, clean graffiti and power wash messes
from sidewalks. They are also planning to take on plowing the alleys and other
miscellaneous tasks that can be billed to business owners to further offset the
cost of the position. A while back we received a grant from Coca Cola for
some recycling bins. We haven’t implemented them downtown because we couldn’t
work out a deal to get them emptied. It is likely this can be rolled in to this
deal with the BID. The BID will be able to be much more responsive to the
changing trash can collection needs downtown like the markets and
festivals.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Lots of little items in Public Works. Most notable for me was
the traffic calming project on Pattee Creek Drive. They had finally worked
out the details and are installing four of these speed cushions which are like
long speed bumps with a space in the middle so a fire truck can go through. The
cost will be about $350 for each of the 50 or so home owners in the
project.<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>In BCOW we heard the parks and public works budgets. There
was talk of moving some money between departments. We may yet find something to
fight about in this year’s budget. <o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Thanks for your interest,
<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P>
<P class=MsoNormal>Bob Jaffe<o:p></o:p></P>
<P class=MsoNormal>Missoula City Council, Ward 3<o:p></o:p></P>
<P class=MsoNormal>1225 South 2nd West<o:p></o:p></P>
<P class=MsoNormal>Missoula, MT 59801<o:p></o:p></P>
<P class=MsoNormal>(406) 728-1052<o:p></o:p></P>
<P class=MsoNormal><o:p> </o:p></P></DIV></BODY></HTML>