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Item No: 2 <br />Meeting Date: October 6, 2025 <br />Type of Business: Council Work Session <br /> City Administrator Review: ___ <br /> <br />City of Mounds View Staff Report <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 /> <br /> <br />Introduction: <br />The City Council previously discussed the topic of affordable housing as a part of the strategic <br />planning process at the June and August work sessions. Discussion centered on how the city can <br />use ‘inclusionary zoning’ to require a percentage of new housing units within market-rate <br />developments to be affordable to low- and middle-income households (based on area median <br />income or ‘AMI’). Based on the discussion at those two meetings, staff were directed to prepare <br />a draft affordable housing ordinance or policy for review. <br /> <br />Review: <br />For reference, see the following terms and definitions related to affordable housing. <br /> <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 /> <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. See <br />figures 1 and 2 on the following page to see home prices and rental rates at different AMI levels <br />as calculated by the Metropolitan Council. <br /> <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 linked here in 2019 on IZ policies in the Twin Cities. <br /> <br />Analysis: <br />Inclusionary Zoning in the Twin Cities is primarily enacted or adopted by a city via either an <br />ordinance or a policy; the term inclusionary zoning program will be used in this report to cover <br />either option.