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W C UQ O M N W LIFOit MON • Elk River MEMORANDUM TO: Housing & Redevelopment Authority Mayor & City Council Planning Commission FROM: Catherine Mehelich, Director of Economic Developmen DATE: February 25, 2002 SUBJECT: Related Articles on Housing Issues Attachments • "Housing agency seeks breaks for affordability", Star Tribune article • • "Affordable housing report faulted",Pioneer Press article • "Cities ready for debate over inclusionary housing",League of MN Cities, 2-13-02 • "Housing Rehab set for North Lake St.",West Sherburne Tribune article, 8-4-01 • Small Cities Development Program, Fact Sheet As the HRA, City Council and Planning Commission continue to consider the City's role in addressing the housing needs identified in the recent Elk River Housing Study completed by the Central MN Housing Partnership, staff will continue to provide information on related housing issues. The first three attached articles are regarding the MN Housing Finance Agency's (MHFA) recent legislative report on affordable housing. MHFA's recommendations to be considered for legislation largely include changes in city ordinances and development regulations. Staff will continue to monitor this affordable housing legislation and keep the HRA, Planning Commission and City Council informed. Another attached article features a project that the Big Lake Economic Development Authority completed this last summer. The City identified a redevelopment area, acquired and demolished several substandard single-family homes, and eventually sold the property to a developer for the construction of"upscale" townhomes. While this project does not necessarily address an"affordable" housing issue,it does provide an example of target • redevelopment for housing. An affordable housing alternative could be completed by Related Housing Issues February 25,2002 Page 2 of 2 • utilizing a Tax Increment Finance Housing District,which targets the new housing product for qualified household incomes. Lastly, attached is a fact sheet about the Small Cities Development Program that is administered through the MN Department of Trade &Economic Development. The program provides federal grants to local units of government on a competitive basis for a variety of community development projects. One of the most common applications is for Housing Grants,which most often includes the rehabilitation of a targeted area of local housing stock. 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CD , 050 •, co • c, Q , N PIONEER PRESS • WWW.TWINCITIES.COM LOCAL NEWS N CITIES n4t`4`'`'... e '9' TARES Bonofm®u : or SINE E T E Mayor school lied • IT yto B St.Paul Mayor I Pioneer Pr king Public affairs at a glance urged state lawm: • day not to cut f rism charter schools an he would ask fc TWIN CITIES change to let the c a public school for gee president group Affordable housing faulted welly and lg toured St .Paul's ses Sept. 11 Cesar Chavez cha Legislator doubts agency's suggestions the severity of the problem in a Monday with U.S. TTHIA BOYD way that would lead to signifi- Secretary Rod Pf leer Press would fly because of state's budget woes cant movement." visiting several The recommendations were around the count e BY MARA H.GOTTFRIED lotion: meant to be pragmatic and to light the new fed( Pioneer Press • Including a mix of home cover g points the Legislature tion law signed r e%.`,0,:; ownership and rental units that would be inclined to approve President Bush. Private builders need to do are unsubsidized. For instance, this year said Kit Hadley,hous- Charters are 'f i —1';',."8 more to help solve the afford- in a for-sale housing develop- mg agency commissioner. financed schools - able housing crisis in the state, went, at least 20 percent of the "Cities and developers are organized by pa it ir the Minnesota Housing Finance units would have to sell for no pretty polarized and our con- teachers and run 1 g Agency told the Legislature in a more than the median cost of a cern for more lower price hous- of traditional disti 's report released Monday. home in the community.The bill ing is so compelling that we tion.First started ir. 's Hugh Q. But builders say this won't would call for cities to offer need to Parmer y try to take some steps years ago, the cha . tackle the real issue of afford- developers reasonable regulato- forward this year," she said. concept has spread a ability ry accommodations, including "We don't want to over-promise country. Cesar Cha ifficial of the U.S. "We always said the biggest increased density and smaller that this is some kind of silver in the fall with abc it International thing the industry could do is lots. bullet.We're just trying to move dents, nearly all it and newly make housing affordable to • Changing the way cities forward." Latino. !sident of Min- more groups of people," said pay for road projects necessary Sen. Richard Cohen, DFL-St. red American Michael Noonan, developers' for development. Paul, who has authored other nmittee. council chair of the Builders •Shifting the burden of proof legislation dealing with afford- w.-, >rist acts of Sept. Association of the Twin Cities. to cities to explain why they able housing, said the recom- that,he said. "They're (the housing agency) acted as they did if disputes mendations are a start,but they ° ;ly, in my view, silent on this issue, and the arise with developers. don't go far enough. y we'll finally do land-supply issue and we ■Requiring cities to consider "The recommendations , " terrorism is to believe that's a real failure in the costs of local ordinances on would tend to let cities off the a stake in stabili- the report." housing. hook a little bit and more so f said Monday."It's The 2001 Legislature asked Representatives of many than I might have hoped," he ; a are desperate the housing agency to examine parties involved in the advisory said. "They put more emphasis ',. in training camps affordable housing laws and group, though, say the report on what the private developer , .:' 1." ordinances throughout the doesn't offer enough real solu- can do rather than what the city ' ,.0 onprofit,interna- country. An advisory group of tions for the affordable housing should do." nanitarian aid legislators, builders, city repre- crisis. Considering the emphasis i,was founded in sentatives and affordable hous- "I was not surprised that we this year on the budget, Cohen ing advocates met in the fall and were not able to come to a con- said there might be less focus a e Clinton admin- winter to_develop policy objet- sensus," said Jay Schmitt, co- on policy issues, leaving doubt " " "' armer led U.S. tives,identifying"production of director of Isaiah, an organiza- for him about whether the n relief opera- privately developed, unsubsi- tion representing religious affordable housing recommen- U.S. Secretary of I I to�in Koso- dized affordable housing"as the congregations in the metro area dations would pass. gartners David Sam ie 11 in_Hon- most important. and St.Cloud. Nina Cerda during Nicaragua, and On Monday the housing "The builders and the cities, Mara H. Gottfried can be reached charter school in St Ethiopia and agency recommended several while they have legitimate con- at mgottfried @pioneerpress.com points to be considered for legis- terns, are not grappling with or(651)228-5262. upports a 25-year aid partnership ST• overnment and STATE CAPITOL onprofit charita- Teachers ap] tions and praises PrODOSd laws foeus on kids'wtl fi rP nronosecl Cities ready for debate over inclusionary housing Ann Higgins The Minnesota Housing Finance and increase production of unsub- housing development that would Agency(MHFA)last week released the sidized housing for households be required by ordinance to be Study of Inclusionary Housing Initiatives. whose needs for housing are not affordable to individuals and families The study provides recommendations being met by the private sector. with low to moderate incomes; to encourage housing development • Expand the means and methods by • Require property affordable for that includes units built and priced which cities pay for development such housing be placed in a land for a range of incomes. City officials, and construction of road projects trust and allow cities to require particularly those in metro area com- necessitated by housing development. deed restrictions on such housing munities and in the cities of St.Cloud, • Change the burden of proof to to maintain affordability. St.Joseph,Sartell,Sauk Rapids,and cities when disputes arise with • Authorize cities to establish low- Waite Park,have a keen interest in the developers in instances in which the income limits for those eligible to outcome of the study and the prospect proposed development is consistent purchase affordable inclusionary for legislation that could impose new with local zoning. housing in such developments. restrictions on local zoning and land • Require cities to make findings on Both the League and AMM have use regulations. the extent to which local regulatory policies on inclusionary housing to This past fall,MHFA Commission- requirements or actions impact the respond to issues raised by proponents er Kit Hadley appointed three city cost of housing. and developers.The policies support officials representing the League and • MHFA and the Minnesota Depart- legislation that: the Association of Metropolitan ment of Administration should • Clarifies and strengthens local Municipalities (AMM) to the MHFA work with the State Construction authority to enact inclusionary Inclusionary Housing Advisory Group. Codes Advisory Council to develop housing policies that offer develop- The group,comprised of builders, model ordinances to help uncom- ers a range of incentives in return • developers,realtors,city administrators, plicate and reduce costs of compact for including a designated number local zoning and planning officials, mixed use development and in-fill of affordable units in their projects. housing advocates,and several legisla- redevelopment. • Identifies strategies that ensure tors,was charged with studying various In the meantime,housing advo- long-term affordability of rental and inclusionary housing statutes,ordi- cates are supporting SF 2881 (Cohen, owner-occupied housing produced nances,and approaches to inclusionary DFL-St.Paul),which would clarify as a result of local inclusionary housing enacted and carried out else- city authority to adopt ordinances for housing ordinances and practices. where in the nation. mixed housing development to • Focuses attention on assessment of Last week,along with the report promote projects for single-family local housing needs and directs state on inclusionary housing,MHFA homes and rental units that include a resources (financial assistance) toward issued five recommendations for the mix of incomes and increase produc- development of both affordable Legislature to consis er: tion of housing for households whose rental units and entry-level owner- • Adopt legislation for mixed housing housing needs are not being met by occupied housing. development to promote projects the private sector.The bill would: The League and AMM oppose for single-family homes and rental • Allow cities to establish initial sale state policy that would restrict or units that include a mix of incomes prices for housing units in a mixed eliminate local zoning and land-use regulations and planning authority. r • February 13, 2002 Page 7 CD A) P o m.�' 0 „ 0 ro 0 ° = ccD 0 m =,cs' o a < .D o ro` = 0uitflUu' ., .ro 5- . p rosy°F-2, c. cD sn ca• e �'="�' �, o p c<v . 0, = , AD cD az. po . °• C1. 0 ro 0" E W a .W 0 0 -52 con�. - I [ aIU ,ro. < -.,'0 CD ,.+C� + ca..<p .%t. 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IDD , d � � o , y 0 Colntnunities- Assistance Programs-Financial Resources- [Fact Sheet:] Small Cities Deve...) Page 1 of 2 }N AT • Fact Sheet Small Cities Development Program Program purpose To provide decent housing, a suitable living environment and expanding economic opportunities, principally for persons of low-and-moderate income. How It Works Provides federal grants from the U.S. Department of Housing and Urban Development(HUD) to local units of government on a competitive basis for a variety of community development projects. Eligible Applicants Cities and townships with populations under 50,000 and counties with populations under 200,000. Indian tribal governments, which can receive funds directly from HUD, are ineligible for this program. Minimum requirements Small Cities Program projects must comply with fair housing in and equal opportunity requirements. HUD's web site has • more information about fair housing and Equal opportunity ECM HOUStit/ requirements. OPPORTLIMIY Proposed projects must meet one of three national objectives: 1. Benefit to low-and-moderate income persons; 2. Elimination of slum and blight conditions; or 3. Elimination of an urgent threat to public health or safety. In addition,proposed project activities must be eligible for funding, project need must be documented, and the general public must be involved in the application preparation. Eligible projects State program rules subdivide grant funds into three general categories: 1. Housing Grants. Small Cities Development Program(SCDP) funds are granted to a local government which, in turn, loans funds for the purpose of rehabilitating local housing stock. Loans may be used for owner-occupied, rental, single-family or multiple family housing rehabilitation. Loan agreements may allow for deferred payments or immediate monthly payments. Interest rates may vary, and loan repayments are retained by • grantees for the purpose of making additional rehabilitation loans. SCDP funds may also be used to assist new housing construction projects. Funds may also be used for land acquisition, site improvements, infrastructure or housing unit construction. In all cases, housing funds must benefit low-and- http://www.dted.state.mn.us/02x01x01x05.asp 2/13/02 Communities- Assistance Programs-Financial Resources- [Fact Sheet:] Small Cities Deve... Page 2 of 2 moderate income persons. • 2. Public Facility Grants. SCDP funds are granted for wastewater treatment projects, including collection systems and treatment plants; fresh water projects, including wells, water towers, and distribution systems; storm sewer projects; flood control projects; and, street projects. 3. Comprehensive Grants. Comprehensive projects frequently include housing and public facility activities described above. In addition, comprehensive projects may include an economic development activity,which consists of loans from the grant recipient to businesses for building renovation/construction, purchase of equipment, or working capital. The most common economic development activity is rehabilitation of local commercial districts. Maximum available The maximum grant award for a Public Facility or Housing project is $600,000. The maximum grant for a Comprehensive project is $1.4 million. Other funds required The amount of other funds required is variable and contingent on the project type, other available sources of funds for the project, and the financial capacity of the applicant and local benefiting residents. Terms The length of project period is normally between two and three years, depending on • the size and scope of the project. Application accepted Part I pre-applications of the Business and Community Development application can be submitted year-round. Complete applications (including Part II)must be submitted by October 1 of each year. Grant awards The annual review and ranking period will commence on October 1. Grant awards will be announced each March. Approving authority Department of Trade and Economic Development. Disbursement of funds Grant monies are disbursed as project costs are incurred. irContact DTED Regional Representative • Print This Page Copyright©1999-2002,Minnesota Department of Trade and Economic Development.All rights reserved. http://www.dted.state.mn.us/02x01x01x05.asp 2/13/02