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Home My WebLink AboutCC WORKSESSION PACKET 06012020If you would like to request special accommodations or alternative formats, please contact the City Clerk at 612-782-3313 or email city@savmn.com. People who are deaf or hard of hearing can contact us by using 711 Relay. Work Session Agenda Monday, June 1, 2020 5:30 p.m. This meeting will be streamed live. Due to health concerns and limited seating, we encourage use of virtual option to attend meeting. Members of the public who wish to attend the meeting may do so in person. Following guidance from state health officials, some City Council Members may choose to participate in upcoming meetings electronically pursuant to MN Stat. §13D.021. Please click the link below to join the webinar: https://www.savmn.com/Calendar.aspx?EID=1167&month=6&year=2020&day=1&calType=0 Password: 975075 Dial In Options: iPhone one-tap : US: +13017158592,,88478194659#,,1#,975075# or +13126266799,,88478194659#,,1#,975075# Or Telephone:-Dial(for higher quality, dial a number based on your current location): US: +1 301 715 8592 or +1 312 626 6799 or +1 646 558 8656 or +1 253 215 8782 or +1 346 248 7799 or +1 669 900 9128 Webinar ID: 884 7819 4659 Password: 975075 International numbers available: https://us02web.zoom.us/u/kbzkG19mDD 1. Congresswoman Omar. Mark Casey, City Manager presenting 2. Affordable Housing. Mark Casey, City Manager presenting 3. Future Work Session Agenda Items and Date. Mark Casey, City Manager presenting 4. Adjournment City of St. Anthony CITY COUNCIL WORK SESSION Minutes May 4, 2020 Present: Mayor & Council Randy Stille, Mayor; Bernard Walker, Councilmember; Thomas Randle, Councilmember; Wendy Webster, Councilmember and Jan Jenson, Councilmember. Absent: None Staff: Mark Casey, City Manager, Jay Hartman, Public Works Director, Jon Mangseth, Police Chief and Charlie Yunker, Assistant to the City Manager Consultants: Justin Messner, City Engineer (WSB) Guests: Superintendent Renee Corneille and Activities Director Troy Urdahl Call to Order: Mayor Stille called the Work Session to order at 5:30 p.m. Artificial Turf and Drain Tiling: Staff presented a cover memo, a memo from 11/8/2016 with 4/15/20 notations, amendment to lease – redline, School District PowerPoint, School District Infographic and exhibit showing C2 & C3 tiling. Staff provided an option for contributing approximately a total of $260,000 over eight years by amending the current Community Center lease with the school district. Superintendent Renee Corneille and Activities Director Troy Urdahl reviewed the project. Councilmember Walker expressed concerns about safety with the artificial turf, specifically with material used and potential injuries. By consensus of the mayor and council, staff was directed to bring this to a future city council meeting for action. Speed Limit Revisions: Staff presented a memo outlining three options: reduce speed limits 25 mph, reduce speed limits to 20 mph or leave as is. By consensus of the mayor and council, staff was directed to bring the 25 mph option to a future city council meeting for action. Outdoor Recreation Facilities: Staff provided a memo that stated the current signage at various city outdoor recreation facilities and a survey of eleven other nearby cities showing their status for tennis courts, basketball courts, picnic shelters, playgrounds and ballfields. By consensus of the mayor and council, no changes were recommended. Coffee with the Council: The mayor and council discussed what they felt the goals/purpose of Coffee with the Council. Overall, there was consensus on three main areas: getting to know the council members, engaging with the residents and getting feedback. By consensus of the mayor and council, staff was directed to plan the July session for a virtual session on a Saturday morning, August session for a virtual session in the evening and the September session for an in-person session that will follow proper social distancing. Future Work Session Agenda Items and Date: Staff discussed two possible development related work sessions in the near future. Councilmember Webster wish to discuss affordable housing. Adjournment: The meeting adjourned at 7:33 p.m. Respectfully submitted by Mark Casey, City Manager. 1. Congresswoman Omar 2. Affordable Housing Housing Data Research A summary of data describing the makeup of residential land use in the St. Anthony Village community. This document represents a summary snapshot of the status of housing and housing value in St. Anthony Village. The data was collected from the Metropolitan Council, the American Community Survey of the US Census Bureau, and other resources including the City’s draft Comprehensive Plan. The purpose of the research is to provide a common set of data as the community examines current and future housing development and redevelopment proposals, in the context of the City’s Comprehensive Plan goals and objectives. Some of the data points vary for the same category of data since depending on the source, it was collected during different years, primarily between 2015 and 2017. Summary of the data: • St. Anthony Village has approximately 4,300 residential units, based on the most recent housing estimates. • The community has more than half of its housing stock in attached units, with just 48.5% of all units as single family detached. • St. Anthony has a greater percentage of housing in higher-density buildings than its neighbors, a similar level of medium density (townhouses and twinhomes, typically), and the lowest percentage of single family detached housing (48.5%). • In the metro area by comparison, nearly two-thirds of all housing is single family detached. • In St. Anthony, there is just an 8% spread between the number of single family homes and multi-family homes, whereas the neighboring communities, and the metro as a whole, show differentials of 24% to 44% for this disparity. • With regard to what is known as “housing tenure”, St. Anthony Village has the highest proportion of rental-occupied units of its near neighbors, at nearly 40% of the current housing stock. This is almost 10% greater than the cumulative Twin Cities rate of about 30%. • A study done for the 2040 Comprehensive Plan showed than 64% of the community’s housing stock falls within ranges that are considered “affordable”, defined as values affordable to those making less than 80% of the Area Median Income (AMI). Slightly more than 25% of the community’s housing is affordable to those making less than 50% of the AMI. • For the metro area, comparative affordability numbers are similar (or slightly lower than St. Anthony) for all categories of affordability: approximately 59% of housing units are affordable to those making below 80% of AMI, and 23% of housing is affordable for those below 50% of AMI. Of its affordable supply, St. Anthony’s proportion of units below the 30% AMI threshold is 15.6% as opposed to 10.8% metro-wide. Page 1 The first chart below shows that St. Anthony’s owner-occupied housing is slightly higher than values in New Brighton, Roseville and the 7 county metro area – in the range of 3%, while Columbia Heights lags in owner-occupied value. The next chart illustrates overall housing makeup in the community, by structure type, and compares the makeup to suburban communities directly abutting St. Anthony Village and the Twin Cities as a whole. As can be seen, St. Anthony has a lower percentage of single family detached housing than its neighbors. Although the percentage of single family homes in St. Anthony is lower than its neighbors, the city makes up for this with other housing options, with nearly 41% of total households in the city being in a structure of 10 or more units (apartment building). Page 2 238,000 161,100 230,200 232,100 230,700 $0 $50,000 $100,000 $150,000 $200,000 $250,000 St. Anthony Columbia Heights New Brighton Roseville 7 County Metro Median Home Value (owner-occupied) 48.5% 59.8%54.2%54.2% 65.7% 40.7% 19.1% 35.1%35.5% 14.5% 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 St. Anthony Columbia Heights New Brighton Roseville 7 County Metro Housing by Structure Density 1-unit, detached 1-unit, attached 2-4 units 5-9 units 10 or more units With regard to types of housing, St. Anthony is more evenly split than its neighbors and the 7 county metro area as a whole, with roughly 54% of the total housing stock being single family and the remaining 46% defined as multi-family. The availability of multi-family housing units in St. Anthony is the highest percentage out of the communities observed, suggesting a variety of options of housing type in the city. This chart combines single family detached and single family attached. The percentages of housing occupied by owners is similar in St. Anthony Village to its immediate neighbors, with just a 4.2% gap between the compared communities. When comparing St. Anthony to the 7 county metro area, there is an 8.8% gap in percentages of ownership units. St. Anthony’s percentage is on the lower end of the four communities examined. Relatedly, St. Anthony Village has a slightly higher percentage of renter-occupied housing Page 3 56.5% 60.7%59.0%60.7% 65.3% 39.5% 34.3% 37.5% 34.5% 30.3% 4.0%5.0%3.5%4.8%4.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% St. Anthony Columbia Heights New Brighton Roseville 7 County Metro Proportion of Owner vs. Renter Housing Ownership Units Rental Units Vacant From the 2040 Comprehensive Plan, the breakdown of existing housing in St. Anthony Village by affordability is shown in the following chart. With a total of 4,325 units, 458 (11%) are affordable to those making 30% of the Area Median Income (AMI); an additional 636 (15%) are affordable to those with incomes between 30% and 50% of the AMI, and 1,674 (39%) are affordable to those making between 50% and 80% of the median. In total, 64% of all housing units in St. Anthony are “affordable” to those within one of the three lowest classes of income. . The chart to the left breaks out the housing that is considered “affordable” for St. Anthony and the corresponding metro-wide statistic. Approximately 59% of the City’s affordable housing stock is affordable to those making between 51% and 80% of AMI. This percentage is similar to the metro-wide proportion, as shown in this chart. St. Anthony’s affordability ratios are similar overall to the Twin Cities, and in fact, higher for the lowest end (at or below 30% of AMI) – 15.6% as opposed to 10.8% metro-wide. In summary, while St. Anthony’s values tend to be higher than its immediate neighbors, there is also a slightly higher percentage of multiple family housing units, and a higher percentage of rental-occupied units. The majority of all types of housing falls into the “affordable” category, both by density as defined by the Metropolitan Council, and as measured by income affordability to those making less than 80% of the Area Median Income. Page 4 Chapter 5: Housing St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 47 CHAPTER 5: HOUSING St. Anthony is a self-described “village” located adjacent to a major metropolitan area. While a majority of the city’s land area is devoted to single family homes that were largely built after the 1950s, the actual number of housing units in St. Anthony is split almost evenly between single family units (detached homes and attached housing) and multifamily unit types (multiplexes, apartments and condominiums). The images shown below represent the range of housing types that can be found in St. Anthony Village. Traditional Single-Family Homes. Many, such as the home shown here, have tuck-under or attached garages. Duplex/Multiplex. Similar in appearance to single family homes but with more than one dwelling unit per building. Attached Townhomes. Housing units have shared walls and can be one or two stories. Apartment Buildings. Some apartments in St. Anthony, such as the building shown here, are built in an older walk-up style. Newer construction apartments can be found at Silver Lake Village. Senior Living. St. Anthony is host to several senior-oriented housing complexes that offer a spectrum of specialized programming or care. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 48 HOUSING: WHAT DID WE HEAR FROM THE COMMUNITY? During the public engagement phase of comprehensive plan development, the following housing themes emerged from public comment: • Overwhelming positivity for the “small town feel” of St. Anthony. • Balance the need for housing redevelopment and property improvements with the need to maintain an affordable housing stock. • There is an interest in increasing housing density in strategic locations (along transit routes or in underutilized areas). • Being inviting to new residents will keep the community vibrant. • The City has housing for all types of families, households and residents at all stages of their lives. • Prioritize mixed uses and allowing housing to co-occur within proximity to services, businesses, and critical infrastructure. EXISTING HOUSING AFFORDABILITY IN ST. ANTHONY The regional planning authority looks at housing affordability through lens of area median income, or AMI. For a family of four, regional AMI in the Twin Cities is $85,800. Households that have an income at or below 80% of the regional AMI are the targeted population for affordable housing. Median household income in St. Anthony is $54,943. According to the Metropolitan Council’s 2016 housing assessment, of the 4,325 total housing units in St. Anthony, around 65 percent are affordable to low or moderate-income households that are at or below 80% of AMI. As shown in FIGURE 5-1, most of St. Anthony’s affordable housing is affordable to households in the highest AMI band, or those making incomes of $43,758 to $65,700 annually. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 49 FIGURE 5-1: ST. ANTHONY HOUSING AFFORDABILITY Publicly subsidized units often comprise the most deeply affordable units in a community. There are 453 publicly subsidized housing units in St. Anthony, as shown in FIGURE 5-2. FIGURE 5-2: ST. ANTHONY SUBSIDIZED UNITS All Publicly Subsided Units Publicly Subsidized Senior Units Publicly Subsidized Units for People with Disabilities Publicly Subsidized Units: All Others 214 45 0 169 Data Source: Metropolitan Council Existing Housing Assessment (2016) When looking at housing tenure, St. Anthony has a higher percentage of renter-occupied units available than does the Twin Cities Region. St. Anthony housing units are currently about 39 percent renter-occupied. FIGURE 5-3: HOUSING UNITS BY TYPE Single-family units Multifamily units Manufactured homes Other Housing units 2,054 2,194 93 0 Data Source: Metropolitan Council Existing Housing Assessment (2016) 458 636 1,674 1,557 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Existing Housing Units Number of housing units Housing affordability by AMI level Not affordable to low and moderate income families 51% to 80% AMI 31% to 50% AMI At or below 30% AMI Income range of affordability Data source: Metropolitan Council Existing Housing Assessment (2016) Area median income for a family of four = $85,800 St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 50 FIGURE 5-4: HOUSING TENURE Ownership Units Rental Units 2,560 1,781 FIGURE 5-5: HOUSING TENURE COMPARED TO TWIN CITIES REGION Rental Affordability St. Anthony’s rental housing landscape looks different than it did 20 years or even a decade ago. About 30 percent of the city’s existing rental stock has been constructed over just the past 15 years, which includes 235 units of below market, affordable housing developed at Silver Lake Village with tax credits, tax increment financing, and County HOME funds. A 2017 Ehlers assessment looked in depth at the affordability of available rental housing in St. Anthony. Of the 13 rental properties and 1,458 rental units comprising the study, the assessment found that more than 80 percent of these units can be considered affordable at some level. In a similar manner to the Metropolitan Council’s 2016 housing assessment, the Ehlers assessment shows affordability broken down by AMI bands. The greatest share of affordable rental housing in St. Anthony is affordable between 50% and 60% of the area median income. 61% 39% St. Anthony Twin Cities Region Owner-Occupied Renter-Occupied Number of Properties Number of Units Number of Affordable units Percent of Units Affordable Number & Percent Affordable at 30% of AMI Number & Percent Affordable at 50% of AMI Number & Percent Affordable at 60% of AMI 45 423 753 4%35%62%13 1,458 1,221 84% 65% 31% St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 51 OWNER AFFORDABILITY FIGURE 5-6 shows the market value of owner-occupied housing units in St. Anthony. Owner occupied housing units valued at $243,500 or less are deemed affordable for residents making less than 80% of the Area Median Income. St. Anthony has a surprisingly large percentage of affordable owner housing due to the existence of affordably priced condo units. In 2016, 42% of the owner-occupied units in St. Anthony, or 930 units of 2,218 owner-occupied units were affordable (or less than $243,500 in market value). FIGURE 5-6: OWNER-OCCUPIED HOUSING ESTIMATED MARKET VALUE St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 52 Existing Cost-Burdened Households While the price of housing units relative to area median income is one measure of housing affordability in a community, another way to examine the impact of housing costs is by looking at cost-burdened households. Households are “cost-burdened” if their housing costs are at or over 30 percent of their income. This is an indicator of households that are spending a disproportionate share of their income on housing. The implications of a housing cost burden are most severe for households in the lowest income tier. FIGURE 5-7 illustrates the share of low-to-moderate income households that are cost-burdened in St. Anthony, by AMI income level. One-quarter of St. Anthony’s total households are cost-burdened, and almost 50 percent of those cost-burdened households have incomes in the lowest AMI tier. FIGURE 5-7: COST-BURDENED HOUSEHOLDS Source: Metropolitan Council Existing Housing Assessment 2017 AMI level Households Percentage Income at or below 30% AMI 501 12% Income 31-50% AMI 336 8% Income 51-80% AMI 221 5% The rate of cost burdened households in St. Anthony mirrors the cost- burdened households rate in the Twin Cities region overall, at about one in four households. In comparison to neighboring and comparable inner-ring suburb cities, St. Anthony’s cost-burdened share is very similar to surrounding communities. FIGURE 5-8: COST-BURDENED HOUSEHOLDS COMPARISON City Cost-burdened households at <30% AMI at 31-50% AMI at 51-80% AMI Total percent cost-burdened St. Anthony 12% 8% 5% 25% Roseville 12% 8% 7% 27% New Brighton 14% 8% 4% 26% Columbia Heights 14% 9% 5% 29% Robbinsdale 14% 7% 7% 28% Twin Cities Region 10% 8% 6% 24% Source: Met Council Existing Housing Assessment 2017 St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 53 Meeting the Regional Affordable Housing Allocation Share St. Anthony, along with every community in the metro area, is responsible for planning for an adequate regional share of affordable housing. The Housing Element of Metropolitan Council’s Thrive 2040 plan has determined the affordable housing requirement for every community by affordability level, as determined by a household’s relationship to the Area Median Income (AMI). St. Anthony’s affordable housing requirement is shown in FIGURE 5-9. FIGURE 5-9: AFFORDABLE HOUSING NEED ALLOCATION* Affordable Housing Need Allocation, 2021- 2030 At or Below 30% AMI 74 From 31 to 50% AMI 53 From 51 to 80% AMI 25 Total Units 152 AMI = Area Median Income * This is based on the Met Council revised allocation from the EAW comments for Southern Gateway Site, not the published need of 34 units in the 2015 system statement Housing calculations from FIGURE 5-10 indicate that St. Anthony has guided sufficient high-density land at a minimum of 8 units per acre to produce 313 units of housing at affordable densities in the 2021-2030 decade, which exceeds the Metropolitan Council’s affordable housing allocation. Based on the allocation of land at the guided densities, during the 2021-2030 decade, there would be approximately 15.5 acres of land to produce the 313 units. Future Residential Land Use From the 2040 guide land use map, FIGURE 5-10 below shows the total acreage within St. Anthony that is allotted to residential land uses in the 2040 plan. Of the 660 total residential acres in St. Anthony, 39.13 of these acres are estimated to redevelop within the 2040 planning horizon. Affordable densities as defined by the Metropolitan Council are those with a minimum range of 8 units per acre and above, which means that all high-density residential redevelopment areas expected to develop within the 2021-2030 decade qualify as affordable housing – using the minimum density to calculate unit potential as directed by the Metropolitan Council. FIGURE 5-11 St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 54 below summarizes the residential redevelopment potential from the land use chapter, and highlights in red the units that would be considered affordable to meet St. Anthony’s regional affordable allocation. Using minimum density to calculate unit potential, St. Anthony can expect to net 338 units of affordable housing in the decade from 2021-2030 using approximately 19 acres. In practical terms, housing development above a particular density threshold does not guarantee housing affordability. The next section of this chapter will discuss the tools and strategies that St. Anthony can employ to help ensure that housing affordability goals are achieved. FIGURE 5-10: FUTURE RESIDENTIAL LAND USE Land Use Category Land Uses Total 2040 Guided Residential Acres Low Density Residential (2-4 units/acre) • Detached housing units • Duplexes • Churches, schools and institutional uses 508 Acres Mid Density Residential (4-20 units/acre) • Duplexes or multiplexes • Rowhomes or Side-by-Side townhomes • Garden apartments • Apartment buildings (2-3 stories) • Churches, schools and institutional uses 103 Acres High Density Residential (20-40 units/acre) • Rowhomes or Side-by-Side townhomes • Garden apartments • Apartment buildings (2-5 stories) • Churches, schools and institutional uses 49 Acres Commercial (30-40 units/acre) • 17.5% of commercial land as residential • High Density Residential uses in a commercial context • Apartment buildings 10 Acres Residential St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 55 FIGURE 5-11: GUIDED DENSITY FOR RESIDENTIAL LAND USE Guided density Re- developable Acreage Density (Min) Net Unit Potential (Min) Staging 2020 Units 2020 Acres 2021- 2030 Units 2021- 2030 Acres 2031- 2040 Units 2031- 2040 Acres Mid density 8.67 4 36 0 0 27 6.47 9 2.2 High density 24.57 20 491 0 0 384 19.2 25 1.26 Commercial 10 30 300 300 10 0 0 0 0 TOTAL 37.13 827 300 10 411 25.67 34 3.46 St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 56 EXISTING HOUSING NEEDS From this assessment of the physical and cost characteristics of the housing stock in St. Anthony, combined with the demographic analysis of the community, there are some features and trends of the housing landscape that are especially notable and will shape the actions St. Anthony will take to address housing in the coming decades. The following trends are noted: • Rental housing demand at all affordability levels is increasing. The population of St. Anthony is aging and is also becoming more diverse. The need for affordable and appropriate rental housing will only increase with this trend. As this trend towards greater diversity and a higher share of older residents plays out across the region overall in the decades to come, the city could consider what initiatives to undertake if it wants to provide housing opportunities for people of all ages, incomes, backgrounds, and in all stages of life. • In St. Anthony, renters represent an increasing share of the occupied households. Whereas in 2000 only 33 percent of households were renter-occupied, that share increased to 38 percent in 2010. As an inner-ring suburban community located close to jobs and transit, St. Anthony should expect the overall demand for housing to be strong and the rental demand to be maintained or increase. The regional observed trend predicts population movement toward redevelopment rather than greenfield development and increasing preferences for rental housing due to cost considerations and lifestyle choices. The housing stock in St. Anthony is aging, and residents will have increasing maintenance and upkeep requirements in the coming decades. St. Anthony contains a many smaller-lot single family homes developed in the 1950s and 1960s that are beginning to age and may not be as attractive or suitable for modern households as they once were. Developing strategies to maintain and support St. Anthony’s existing housing stock, will remain a significant challenge in the decades to come, and will be important to continue to attract newcomers to the city. Housing need goal: Support housing maintenance assistance programs, particularly for lower-income households. • St. Anthony, along with many urban communities, is at risk of losing its naturally occurring affordable housing to rising rents Typically, naturally occurring affordable housing comprises older attached and multifamily housing that may have deferred maintenance needs or is of an older or obsolete style. Naturally occurring affordable housing is an important source of housing affordability in many Twin Cities urban communities but requires a careful, balanced approach. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 57 There are steps that St. Anthony can take to recognize the important role that naturally occurring affordable housing plays in the community, typically supporting households between 30-80% AMI, and to pursue opportunities to preserve this housing and improve its safety and livability while maintaining its affordability. Housing need goal: Anticipate the need for preservation of naturally- occurring affordable housing within all affordability bands. Planning for Affordable Housing Affordable housing implementation toolbox St. Anthony has identified implementation tools that it is willing to consider. St. Anthony does already provide a variety of affordable rental housing options in comparison to many of its surrounding communities. Nonetheless. the City recognizes that the regional demand for affordable housing is great, and proactive policies and strategies by cities are needed across the region working in partnership with affordable housing developers and agencies. Strong partnerships are essential, as the city has limited tools at its disposal to produce and maintain affordable housing on its own. However, there are areas in which cities have flexibility to enact financial and regulatory discretion. The provision of Tax Increment Financing (or TIF) is one of the most effective tools that cities have at their discretion to aid the production of affordable housing projects, and St. Anthony has financially assisted affordable rental projects through TIF and other available means. Many affordable housing tools and strategies require partnerships with outside entities, counties, HRAs, funding and granting agencies, and non- profits that offer programs, funding and policies on a wider scale that support affordable housing. Tools that can be used to generate or maintain housing affordability can generally be grouped into the following categories: • Local funding (city or county) • Local policy or strategy • Regional or Federal funding source • Affordable housing preservation An overview of housing needs and the tools that may be used to address them are shown in the matrix below (FIGURE 5-12). The section that follows explains each of the affordability tools in greater detail and gives more details about when these strategies might be used. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 58 FIGURE 5-12: AFFORDABLE HOUSING TOOLS Identified Housing Need Goals Affordable Housing Tools* Local Funding Local policy/Strategy Regional/Federal Funding Affordable Housing Preservation Development Authorities Housing Bonds Tax Abatement Tax Increment Finance Supportive Referrals Local Fair Housing Policy Homebuyer assistance programs Foreclosure prevention Repair & Rehab Support City involvement in housing groups/initiatives Site assembly Zoning and subdivision policies allowing high density Rental license and inspections program MHFA Consolidated RFP Livable Communities grant (Met Council) CDBG grants & HOME funds Aff. Housing Incentive Funds (Hennepin Cty) Public housing and project based assistance LIHTC properties 4(d) tax program & private unsubsidized Community land trusts Housing Improvement Areas (HIAs) Anticipate and meet increased rental demand at all affordability levels. P/E P P P P E P/E E E E E Support housing maintenance assistance programs, particularly for lower-income households. P/E E E E P P E E Anticipate the need for preservation of naturally- occurring affordable housing within all affordability bands. P/E E E P P P E E E E E *”E” indicates a policy that the City can encourage and/or supports a partnership for this tool. “P” indicates the City can provide this tool directly. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 59 Affordability tools This section explains each of the affordability tools from FIGURE 5-12 in greater detail. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 60 Affordability Category Housing Affordability Tool Local funding for Affordable Housing Development Authorities (local HRA, CDA, or EDA) The Hennepin and Ramsey County HRAs can and do levy funds for affordable housing maintenance and production within St. Anthony. Activating the city’s HRA would allow St. Anthony to have more discretion over funding of affordable housing projects and programs and would allow the city to consider appropriate levies to support specific affordable housing needs, such as specific developments and/or housing maintenance programs. When we would use this: The City would consider using funds from Development Authorities for rental and ownership housing units that are affordable at or below 50% AMI. The City would also consider supporting using these funds if a project would provide necessary “missing middle” housing and senior housing at or below 80% AMI. This could support the development of “Missing Middle” housing in Low Density and Medium Density Residential Districts where multi-unit buildings can be built in scale with single family homes. Housing Bonds HRAs have the ability to issue bonds that help to develop and administer affordable housing developments or programs. Cities may make or purchase loans using the proceeds of the bond sales for activities such as new construction, acquisition and rehabilitation, or refinancing bond debt. There are specific affordable unit thresholds that must be met in bond-financed projects. Bond-supported projects would typically support affordable housing for the 50% and 80% AMI bands. When we would use this: The City would consider using funds from Housing Bonds for rental and ownership housing units that are affordable at or below 50% AMI. The City would also consider supporting using these funds if a project would provide necessary “missing middle” housing and senior at or below 80% AMI. Tax Abatement Tax abatement is a financing tool that reduces taxes or tax increases for owners of specific properties. Local governments offer the tax reduction to provide a financial incentive for a public benefit, such as creation of housing affordable to low and moderate-income households. When we would use this: The City would consider using Tax Abatement to support the development of both rental and ownership housing units that are affordable at or below 80% of the AMI or that increase transit-oriented development or high density development such as the former Walmart site. Tax Abatement could be strategy the City may use to help remove blight and/or encourage redevelopment. Tax Abatement proposals that would receive priority consideration are those which would extensively rehabilitate existing multi-family housing stock, develop multi-family workforce housing with amenities comparable to those found in market rate style housing, or workforce St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 61 housing which consider innovative or alternative forms of development and do not include high rise buildings. Tax Increment Financing The City may create a tax increment financing (TIF) district (pay as you go). The City has discretion over TIF allocations and will consider using TIF for housing projects that include affordable housing. By legislative definition, TIF used for affordable rental housing projects must meet affordability to those at 60% of AMI or less. The affordability threshold is 115% of AMI for owner-occupied housing projects. When we would use this: The City would consider using TIF to support the development of both rental and ownership housing units that are affordable at or below 80% of the AMI, or that increase transit-oriented development along key transit corridors or major redevelopment sites such as the former Walmart site. TIF may also be considered for projects which implement the City’s vision and values for a City identified redevelopment area or in instances where a project would redevelop a blighted, contaminated or challenged site. The City would also consider using TIF for projects which would rehabilitate existing multi-family housing stock or provide new multi-family workforce or workforce housing having amenities similar to those found in market rate housing. Additionally, proposals for workforce housing that are innovative and do not include high-rise buildings would be given priority consideration for these types of funds. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing 62 Local policies and strategies to promote access to affordable housing Effective referrals The City supports providing appropriate resources and education about existing housing support programs offered by other agencies and organizations. While the city does not have the capacity to provide staff to offer this service, there are opportunities to more effectively communicate to residents and prospective residents about existing programs offered through Minnesota Housing (first-time homebuyer and fix-up loan programs) and local non-profits serving the area. Effective housing referrals will increase opportunities for residents to enter the community who would otherwise have barriers and improve the likelihood of existing housing maintenance. Fair Housing Policy Both Hennepin & Ramsey County HRA support Fair Housing Policies, and the City will support implementation of that policy. A Fair Housing Policy states that the City will not discriminate or allow others to discriminate against protected cases, in compliance with state law. First time homebuyer, down payment assistance, and foreclosure prevention programs The City encourages residents to access existing programs available through Hennepin & Ramsey counties, as well as the Minnesota Homeownership Center and the StartUp program through Minnesota Housing. The City will continue to form partnerships with external organizations who offer these programs and seek to provide referral information wherever possible. Repair and rehabilitation programs There are many programs external to the city that support housing repair and rehabilitation assistance for homeowners and rental housing properties. Many of these programs and sources of funding assistance can be accessed through the County HRAs, Minnesota Housing, or others. The City will continue promoting its partnerships to residents and to support the efforts of external organizations to offer these programs to residents, particularly targeting those low- income residents most in need. Participation in housing-related organizations, partnerships, and initiatives City supports staff, commissioners and/or elected officials’ involvement in housing collaborations, working groups, technical assistance panels, or other events focused on the topic of maintaining or furthering affordable housing, and encourage collaboration and knowledge-sharing on best practices between cities and other jurisdictions. Site assembly The City states an intention of supporting policies that encourage land banking, reserving publicly owned properties, and other site assembly techniques for affordable housing. The Twin Cities Land Bank serves communities in Hennepin and Ramsey counties. St. Anthony will consider pursuing partnership or collaboration with the Twin Cities Land Bank and support land banking opportunities as they arise. St. Anthony 2040 Comprehensive Plan Chapter 5: Housing ൧൤ Manufactured Home Park Policies The City will work toward identifying homeownership resources applicable to owner occupied homes in the community, including manufactured housing. In addition, the City is supportive of voluntary cooperative conversions of manufactured home parks, and will work with owners to facilitate infrastructure needs, consistent with City policy applicable to all land uses. Zoning and subdivision ordinances City codes can encourage and streamline development of affordable housing. The City may consider proactive zoning policies that incentivize higher density or greater affordability. Such updates to zoning ordinances may help to meet rental demand and produce housing that is affordable to households at or above 50% AMI. Rental license and inspections programs St. Anthony already has a rental license and inspection program. These programs are enacted not only to ensure tenants are treated fairly but can also a data collection opportunity to keep tabs on rental properties. This data can help St. Anthony understand where naturally occurring affordable housing in the community exists and to better understand what steps need to be taken to help preserve it. Regional & Federal funding for Affordable Housing MHFA Consolidated Request for Proposals This is the big annual funding request from Minnesota Housing Finance Agency that supports affordable housing developments. The City will continue to work with developers in coordination with MHFA in supporting RFP submissions for projects that will help the City meet the Met Council’s proposed Affordable and Lifecyle Unit Housing Goals. When we would use this: The City does not maintain this program but the RFP is a useful tool to support the development of rental housing units affordable at or below 50% AMI or below. Livable Communities Demonstration Account (LCDA) St. Anthony is eligible for Met Council funding for developments within the community that will innovative projects often involving affordable and connected housing. The City will continue to work with developers in coordination with the Met Council in supporting RFP submissions for projects that will help the City meet the Met Council’s proposed Affordable and Lifecyle Unit Housing Goals. When we would use this: The City would support applying for LCDA grants for projects which are affordable at or below 50% AMI and are within a half‐mile walking radius to transit. Community Development Block Grant Funds (CDBG) Hennepin & Ramsey counties manage these funds, which can be used on a number of housing and revitalization St. Anthony 2040 Comprehensive Plan Chapter 5: Housing ൧൥ projects. St. Anthony may apply annually through a coordinated County RFP and will consider opportunities to apply for and use CDBG funds. When we would use this: The City will consider supporting CDBG as a tool to preserve both rental and ownership units affordable at or below 80% AMI and below. HOME Investment Partnerships Program (HOME) Offered through Hennepin & Ramsey County for construction or rehabilitation projects. St. Anthony may apply annually through a coordinated County RFP and will consider opportunities to apply for and use HOME funds, particularly for projects to mitigate the loss of naturally occurring affordable housing. When we would use this: The City will consider supporting this as a tool for both the preservation and development of both rental and ownership units affordable at or below 50% AMI and below. Hennepin communities: Affordable Housing Incentive Fund (AHIF) Financing supports acquisition, rehabilitation or new construction activities. St. Anthony may apply annually through a coordinated County RFP and will consider opportunities to apply for and use AHIF funds, particularly for projects to mitigate the loss of naturally occurring affordable housing. Affordable Housing Preservation Strategies Project Based Rental Assistance Typically HUD‐funded, this type of assistance is a deep subsidy that remains with the units of a project will consider supporting such projects. Low Income Housing Tax Credit Properties (LIHTC) With LIHTC, developers apply for tax credits to offset costs at the time of development. Although the City does not fund this type of assistance, St. Anthony will consider supporting developers who pursue LIHTC and who intend to seek ways to retain the affordability of the LIHTC property after the terms of LIHTC are up. 4d tax program Non‐subsidized properties may be eligible for a tax break if the owner of the property agrees to rent and income restrictions (serving households at 60% AMI or below) and receives “financial assistance” from federal, state or local government. Private unsubsidized affordable housing May be naturally occurring or supported through 4d tax program. St. Anthony supports private unsubsidized affordable housing and will consider exploring opportunities to work with property owners to retain the affordability of these properties over the long term. Community Land trusts and Land Banks. Land trusts provide permanent affordability for income eligible households. Typically, a land trust is structured where a homeowner owns the building and the land trust leases the land to the homeowner. Households that make at or below 80% of AMI typically qualify for these homes. Although there is not an St. Anthony 2040 Comprehensive Plan Chapter 5: Housing ൧൦ active CLT working within St. Anthony, the city can signal its support for CLT initiatives as a means of providing homeownership affordability in perpetuity in the community. Housing Improvement Areas (HIAs) A housing improvement area (HIA) is a defined area in a city in which housing improvements in condominium or townhome complexes may be financed with the assistance of the city (EDA, HRA). An active city HRA would have the opportunity to designate an HIA in an area where existing housing needs improvement for retention of housing affordability is at risk. Public Housing Typically HUD‐funded or supported through Federal funding, this type of assistance is a deep subsidy that remains with the units of a project or development. Affordable Housing Discussion Stacie Kvilvang –Ehlers August 10, 2017 1 What is Defined as Affordable? 2 HUD Income Definitions: •Low Income –Household income at or below 80%of area median income (AMI) •Low to Very Low Income –Household income at or below 60%of AMI •Very Low Income –Household income at or below 50%of AMI •Extremely Low Income –Household income at or below 30%of AMI # of Persons 30%50%60%80% 1 $18,990 $31,650 $37,980 $47,600 2 $21,720 $36,200 $43,440 $54,400 3 $24,420 $40,700 $48,840 $61,200 4 $27,120 $45,200 $54,240 $68,000 Income Limits By Household Size Affordable Rent Limits (HUD 2017) 3 Unit Type 30%50%60% Studio $474 $791 $949 1 - Bdrm $508 $848 $1,017 2 - Bdrm $610 $1,017 $1,221 3 - Bdrm $705 $1,175 $1,410 Rent Limits Rent Maximum For Family of 4 in 2-Bedroom 4 Area Median Income (AMI): Median 30% 50% 60% 80% Household Income (Family of 4): $ 90,400 $ 27,120 $ 45,200 $ 54,240 $ 72,320 Monthly Affordable Rent (2 bedroom): $ 2,480 $ 610 $ 1,017 $ 1,221 $ 1,990 HUD 2017, Twin Cities MSA What Does St. Anthony Have For Affordable Rental Property? 5 •30%of the City’s units (433) have been constructed in last 15 years –Of those, 52%were affordable •The Landings –20%affordable at 50%of AMI •The Legends –100%affordable at 60%AMI Number of Properties Number of Units Number of Affordable units Percent of Units Affordable Number & Percent Affordable at 30% of AMI Number & Percent Affordable at 50% of AMI Number & Percent Affordable at 60% of AMI 45 423 753 4%35%62%13 1,458 1,221 84% Allocation of Regional Affordable Housing Goals •Metropolitan Council’s Allocation Methodology: –Total Forested Growth (Thrive MSP Regional Plan) –Adjusted by Ratio of Low-wage Jobs to Low-wage Workers –Adjusted by Existing Affordable Housing •St. Anthony’s Allocation: –Time Period: 2020 to 2030 –Total Forecasted Household Growth (excludes Lowry Grove redevelopment): 100 households –Allocated Affordable Housing Need: 38 New Affordable Units •19 Units Affordable at or below 30%of Area Median Income •13 Units Affordable between 31% and 50% of Area Median Income •6 Units Affordable Between 51% and 80% of Area Median Income 6 Case Study –Market Rate vs Affordable Rents •97-unit apartment complex •$200,000/unit in total development costs –Total development costs of $19.4 million •5% vacancy rate •Revenues and expenses increase at 2% annually •Developer cash/equity 20% •Finance/mortgage 80% •Expected return on developer cash/equity 10% 7 Difference in Net Operating Income –Market Rate vs. Affordable 8 Type # of Bedrooms Monthly Rent Income Available for Debt Service 1 1,400$ 2 2,500$ 3 2,800$ 1 848$ 2 1,017$ 3 1,175$ Difference N/A N/A (1,186,580)$ Type # of Bedrooms Monthly Rent Income Available for Debt Service 1 1,400$ 2 2,500$ 3 2,800$ 1 508$ 2 610$ 3 705$ Difference N/A N/A (1,613,043)$ 97-Unit Apartment Market Rate Rents Rents @ 50% AMI 97-Unit Apartment Market Rate Rents 1,475,094$ Rents @ 30% AMI (137,949)$ 1,475,094$ 288,514$ Financial Impact •50% rent “write down” over 30 years = $35.6M ($1.186M/year) –Annual impact to average value home (21%tax increase) •30% rent “write down” over 30 years = $48.4M ($1.613M/year) –Annual impact to average value home (28%tax increase) 9 Estimated Market Value Taxable Proposed Market Value Exclusion Market Value Tax Increase* 150,000$ 23,740$ 126,260$ 352$ 200,000 19,240 180,760 505 Residential 260,000 13,840 246,160 687 Homestead 300,000 10,240 289,760 809 400,000 1,240 398,760 1,113 TAX IMPACT ANALYSIS Type of Property Estimated Market Value Taxable Proposed Market Value Exclusion Market Value Tax Increase* 150,000$ 23,740$ 126,260$ 259$ 200,000 19,240 180,760 371 Residential 260,000 13,840 246,160 505 Homestead 300,000 10,240 289,760 595 400,000 1,240 398,760 819 Type of Property TAX IMPACT ANALYSIS Sources of Funding For Affordable Housing 10 Type of Funding Level of Competitiveness Low Income Tax Credits (4% and 9%)High Tax Exempt Bonds High Minnesota Housing Finance Agency (MHFA) Deferred Loan High HOME High CDBG High AHIF (Hennepin County)High Livable Communities Demonstration Account (LCDA)High Local Housing Incentives Account (LHIA)High Tax Increment (only source cities have control over)* Low * If City doesn't have a large amount of its tax capacity captured by TIF What Does the City Really Have to Offer? •For no tax impact to existing residents and businesses –City can provide tax increment assistance (TIF) on a pay-as-you-go basis •Based upon 97 units •Value of $150,000/unit •4d tax classification (affordable housing tax rate) •Approximately $121,000/year –Developers have to seek other traditional funding sources in order to develop affordable housing •Low income housing tax credits •CDBG, HOME or AHIF grants from the Hennepin County •Minnesota Housing Finance Agency (MHFA) deferred loan 11 Final Comments •St. Anthony already provides a variety of affordable rental housing options, well above what many other communities do •St. Anthony has always been committed to affordable housing as demonstrated in their financial participation in the only two (2) rental developments proposed and completed in the last 15 years •St. Anthony is open to financially assisting future affordable rental projects if/when they come forward •St. Anthony alone cannot solve providing housing for very low or extremely low-income residents since they are limited in what they have as financial tools (only TIF) 12 Questions 13