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MINNETONKA, MN HOUSING TIF POLICY (AI summary) The City of Minnetonka uses Tax Increment Financing (TIF) and its Affordable Housing Trust Fund to support housing for low- and moderate-income residents. In 2026, the city council authorized the transfer of over $5.1 million in pooled TIF funds to this trust fund to increase the supply of affordable units. Affordability Requirements for TIF Projects Minnetonka mandates an affordable component in any residential project that receives TIF financing. • Multi-Family Rental Developments: o 20/50 Rule: At least 20% of units must be affordable to households at or below 50% Area Median Income (AMI). o 40/60 Rule: Alternatively, at least 40% of units must be affordable to those at or below 60% AMI. • For-Sale Developments: o At least 10% of units in attached for-sale developments (condos, townhomes, etc.) must be affordable to households at or below 80% AMI. • Projects Without City Assistance: o For developments requesting zoning changes but no city financial aid, the city requires 10% of units to be affordable (specifically 5% at 50% AMI and 5% at 60% AMI for rentals). Expanded Transfer Authority (Special Legislation) Minnetonka operates under special Minnesota legislation that allows it to transfer up to 15% of tax increments from non-housing districts to its Affordable Housing Trust Fund. • Flexibility: Once transferred, these funds are no longer subject to standard TIF reporting and can be used city-wide for broader housing initiatives. • Income Targets for Pooled Funds: o Rental housing: Must benefit households at or below 80% AMI. o Homeownership: Must benefit households at or below 120% AMI. • Expiration: This special authority to transfer funds to the trust fund is currently set to expire on December 31, 2026. • Forms of TIF Assistance The city typically provides TIF on a "pay-as-you-go" basis. • Reimbursement: The Economic Development Authority (EDA) compensates developers for eligible costs over a set number of years after property taxes are collected. • Duration: Housing TIF districts can generally collect increments for up to 25 years. 10