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M0U__N_DitSVIEW <br />City of Mounds View Staff Report <br />Item No: 04 <br />Meeting Date: June 2, 2025 <br />Type of Business: Council Business <br />City Administrator Review NA <br />To: Mounds View City Council <br />From: Evan Monson, AICP, Stantec, City Planner <br />Item Title/Subject: Affordable Housing <br />Request: Discussion Item <br />Introduction: <br />The City Council is currently discussing housing affordability as a part of their strategic planning <br />for the city. City staff directed our team to collect information on affordable housing to help inform <br />the Council during this discussion. <br />Analysis: <br />The issue of affordable housing can include a variety of programs, rules, and regulations. These <br />vary by local jurisdiction, county, and state. <br />Terms and Definitions <br />Affordable housing, as referred to by the Metropolitan Council in their 2050 Housing Plan, is <br />housing units that are affordable to households making 60% of the Area Median Income (AMI). <br />The Metropolitan Council requires jurisdictions to plan for new housing as a part of the <br />comprehensive planning process — the city's 2040 Comprehensive Plan had a requirement for <br />developing 59 total housing units by 2040. This included 27 units affordable to an AMI of 30% or <br />less, 11 units at an AMI between 31% and 50%, and 21 units at an AMI between 51% and 80%. <br />AMI is measured by the US Department of Housing and Urban Development using census data. <br />The median AMI for a family of four in the Twin Cities is currently $132,400; 60% would be <br />$79,440. For reference, the city's 2040 plan notes that 60% of AMI was $56,580 in 2018. <br />Deeply affordable housing is typically defined as units that are affordable to households making <br />30% of the AMI. Metropolitan Council staff further calculated rental rates and home prices that <br />are affordable based on different AMI levels — see figures 1 and 2 on the following page. <br />Naturally occurring affordable housing (NOAH) is used to refer to residential rental properties <br />that are affordable, but are unsubsidized by any federal program. The rents of these units are <br />relatively low compared to the regional housing market. <br />Inclusionary Zoning (IZ) is a policy that requires developers to build a percentage of <br />housing units within market -rate developments that are affordable to low- and middle -income <br />households. Jurisdictions will typically set requirements or thresholds that define what is <br />"affordable" and how many units must meet said requirement. For example, an IZ policy could be <br />that a multifamily development would have to provide 15% of units affordable to an AMI of 30%, <br />and 10% of units affordable to an AMI of 50%. The Federal Reserve Bank of Minneapolis issued <br />a quick facts sheet here in 2019 on IZ policies in the Twin Cities. <br />