Agenda - Council - 07/26/1983 - Laserfiche WebLink

Home

Table 2 DEVELOPMENT COST SAVINGS I '1 I I i i Facility Net Savings - Sanitary sewer lateral - Water main - Street paving and curb - Water service to house - Sewer service to house - Driveway (single car width) - Boulevard sod - Storm sewer $625.00 5OO.O0 625.00 100.00 115.00 80.00 40.OO 325.00 While these savings may appear small individually., their total is significant in conjunction with the ~£~ination of garage requirements and the reduced .floor area requirement. The developer o~' Shannon Park estimates a potential savings of'approximately $10,000 per single-family lot ($3,000 street and utilities, $4,000 g~age, and $2,000 sma'ller'minimum floor area) from the reduced standards. Lobs'in Shannon.~Park were marketed at about $11,000, $7,000 less than the market price for a conventional 10,800 square foot.lot in Coon Rapids. NEGOTIATING AFFORDABLE HOUSING PRICES I I ! i I I To ensure the cost savings provided by reduced development standards in Shannon Park would actually be passed on to buyers, the city negotiated a housing price ceiling contract with the developer during the planned unit development approval process. The housing price contract negotiations between the city and the developer began in a positive atmosphere of shared, affordable housing objectives. From. the'developer"s perspective, affordable single-family housing was a very marketable commodity reflecting strong consumer preference. The city entered the negotiations with an adopted policy that fostering affordable housing is a valid public purpose. ~ City-developer contract negotiations focused on one fundamental issue-- agreement on a reasonable system for limiting housing prices. This system had to protect both the parties' interests by allowing the developer a reasonable profit, and the city a reasonable expression of housing affordability in the plahned unit development. Contract negotiations began with commitments of good faith and trust from both parties. The developer served as his own negotiator and chose not to involve an attorney. The city negotiation team consisted of the planning director, senior planner and city attorney. Major factors considered in developing the housing price limitation system included: 1. The developer's actual cost to produce housing units and his desired profit margin. The relationship between variable mortgage financing points and housing purchase prices, and how many points should be built into the basic housing price.