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HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 07-21-2022Housing and Redevelopment Authority 1 of 2 July 21, 2022 CITY OF PLYMOUTH AGENDA Regular Housing and Redevelopment Authority July 21, 2022, 7:00 PM 1.CALL TO ORDER 2.PUBLIC FORUM—Individuals may address the HRA about any item not contained on the regular agenda. A maximum of 15 minutes is allotted for the Forum. If the full 15 minutes are not needed for the Forum, the HRA will continue with the agenda. The HRA will take no official action on items discussed at the Forum, with the exception of referral to staff for future report. 3.APPROVE AGENDA —HRA members may add items to the agenda for discussion purposes or staff direction only. The HRA will not normally take official action on items added to the agenda. 4.CONSENT AGENDA —These items are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless HRA member or citizen so requests, in which event the item will be removed from the Consent Agenda and placed elsewhere on the agenda. 4.1 HRA Minutes Housing & Redevelopment Authority Minutes 06-23-2022 4.2 Plymouth Towne Square housing report Plymouth Towne Square Financials 4.3 Vicksburg Commons housing report Vicksburg Crossing Financials 5.PUBLIC HEARINGS 6.NEW BUSINESS 6.1 Moderate Income Housing Policy Due Diligence Follow Up Compensation Fee Schedule - Sample Project Compliance Concept Memo Moderate-Income Housing Policy - redline 7.UPDATES 7.1 HRA Updates 1 Housing and Redevelopment Authority 2 of 2 July 21, 2022 8.ADJOURNMENT 2 Regular Housing and Redevelopment Authority July 21, 2022 Agenda Number:4.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, HRA Executive Director Item:HRA Minutes 1.Action Requested: Approve the attached minutes from the HRA meeting held on June 23, 2022. 2.Background: NA 3.Budget Impact: NA 4.Attachments: Housing & Redevelopment Authority Minutes 06-23-2022 3 DRAFT MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY June 23, 2022 MEMBERS PRESENT: Chair Michelle Soderberg, Commissioners Aqueelah Whitfield, James Williams, Wayne Peterson, Ronald Kelner, and Joel Spoonheim ABSENT: Commissioner Lucas Larson STAFF PRESENT: HRA Executive Director Danette Parr, Housing & Economic Development Manager Devon Pohlman, and Permit Technician Michelle Bast OTHERS PRESENT: Ed Goldsmith of Outreach Development Corporation and Hildania Christensen 1. CALL TO ORDER Chair Soderberg called the Plymouth Housing and Redevelopment Authority meeting to order at 7:04 p.m. 2. PUBLIC FORUM Chair Soderberg opened and closed the Public Forum as there was no one present to speak. 3. APPROVE AGENDA MOTION by Commissioner Whitfield, seconded by Commissioner Williams to approve the Agenda. Vote. 6 Ayes. MOTION passed unanimously. 4. CONSENT AGENDA 4.1. Approve proposed minutes from May 17, 2022. MOTION by Commissioner Williams, seconded by Commissioner Whitfield, to approve the Consent Agenda. Vote. 6 Ayes. MOTION passed unanimously. 5. PUBLIC HEARINGS 6. NEW BUSINESS 6.1. May 24 Joint HRA/City Council Study Session Feedback Housing & Economic Development Manager Pohlman gave an overview. She reported that the City Council appeared to support additional work on the Moderate Income Housing Policy and wanted to know more about how ongoing compliance work associated with the policy would be structured. Advancing the policy allows the HRA Board to enact an 4 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 2 important component of their Strategic Plan. She said at this time, the Council did not provide the direction to move forward with the Tenant Protection Policy. She said staff will work on the compliance matters related to the Moderate Income Housing Policy with potential to revisit the Tenant Protection Policy in the future. Housing & Economic Development Manager Pohlman said during today’s meeting she would like to discuss the goals of the Strategic Plan and what is in our capacity to administer this year. She said another topic for tonight’s meeting is discussion about CDBG grant management. 6.2 Moderated Income Housing Policy Compliance Concept Memo DRAFT Moderate-Income Housing Policy Chair Soderberg agreed with moving forward with the Moderate Income Housing Policy as an immediate priority. Commissioner Peterson requested the reason for the policy’s name change to be explained. He asked if the name was changed to make is more saleable. Housing & Economic Development Manager Pohlman responded the decision was made to name the policy to better reflect the affordability level of units the policy would generate. The policy is designed to serve households with median incomes at 50 to 60 percent of Area Median Income (AMI). Commissioner Williams noted that in the Strategic Plan the incomes at or below 50% are low and asked how either this policy specifically, or other components of the Strategic Plan, will serve low-income households below 50% AMI.. Chair Soderberg replied this policy is not intended to get us to 30% AMI low income; there are other ways to get to low income with additional subsidies. Commissioner Williams said we should be following the Strategic Plan that was developed, including focusing our efforts on serving 30% AMI households. Commissioner Williams asked why the name change is necessary. Housing & Economic Development Manager Pohlman stated often significant additional subsidies through the state, county and other sources are needed to reach 30% AMI rent and income levels. The Moderate Income Housing Policy is trying to create affordable housing at the 50-60% AMI level which can be accomplished by asking market rate developers to make a financial structure work serving a more moderate-income renter. This policy can be an effective tool to add affordability to a community, with additional and more comprehensive strategies needed to secure resources to effectively serve lower- income households. 5 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 3 Commissioner Kelner stated if developers participate at the ten – 20 percent level this will focus on the moderate income level. Commissioner Peterson said there could be a second policy to support lower-income affordable housing serving households at 30% AMI levels. HRA Executive Director Parr relayed the title was brought forward to describe the policy for what it is. This Moderate Income Housing Policy will help us serve more moderate- income households by working with developers doing market rate multifamily projects. Chair Soderberg added that this policy is one piece of the plan. The Moderate Income Housing Policy will be step one and then we can work to identify projects and affordable housing partners whose mission is to serve low-income households. Commissioner Peterson stated this policy is not a stopping point. We need to draft a policy to submit to the council because we are tying to get to affordable housing. Chair Soderberg asked who is okay with the Moderate Income Housing Policy. Commissioner Williams said we need to take on the hard work to stay with the vision of the Strategic Plan to make the greatest impact. Commissioner Kelner stated our plan can include those at 50 to 60 percent of income levels to encourage developers. And then we can focus on projects, like Cranberry Ridge, to get to the 30 to 40 percent income levels with higher subsidies. Chair Soderberg said the Council has to approve the Moderate Income Housing Policy to have the policy. Our donation to Cranberry Ridge did not go through the Council. We can do high impact things with our dollars; we can find programs for the target group. A member from the public, Hildania Christensen, asked about the intent of the CDBG program and noted that resources were needed to support homeowners who struggled to make their monthly mortgage payments because of COVID, citing that the state’s HomeHelpMN program launched too late to support many homeowners in need. Chair Soderberg requested that that we re-affirm with HRA members that we should advance the Moderate-Income Housing policy as proposed to City Council. Housing & Economic Development Manager Pohlman replied yes, we want to bring this to the City Council with additional background on how the ongoing compliance can be sustainably and successfully managed. Commissioner Spoonheim requested it be restated what we are discussing. 6 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 4 Chair Soderberg replied the City Council supports the Moderate Income Housing Policy with caveats about compliance. The City Council did not appear to support the Renter Protection Policy at this time. Housing & Economic Development Manager Pohlman suggested moving forward with the Moderate Income Housing Policy and additional due diligence related to the compliance aspect of the policy. Commissioner Spoonheim suggested that actual compliance cost be modeled out and presented with the compliance concept when the policy comes back to the City Council . Commissioner Spoonheim also emphasized the need for the Strategic Plan to address strategies for developing and preserving low-income housing. He suggested that having a policy that is clear about our intent to support low-income housing will help the City compete to get more points on housing applications submitted to the State, County or other funders. Chair Soderberg stated we are not disregarding low income; we are starting to create policies. Hildania Christensen, raised questions pertaining to how the city makes decisions pertaining to the CDBG program. HRA Executive Director Parr reminded the HRA members of the protocol around the public forum. Chair Soderberg proposed to go forward with the Moderate Income Housing Policy and address concerns about administration. Housing & Economic Development Manager Pohlman provided additional background information pertaining to the proposed compliance concept that would support long-term implementation of the Moderate Income Housing Policy. Compliance can be effectively managed using an affordable housing consultant given limited staff capacity to administer long-term rental compliance, with the potential to pass through relatively modest compliance costs to the developer responsible for long-term adherence to the affordability requirements. Commissioner Williams asked what the cost range is. Housing & Economic Development Manager Pohlman replied it depends on the project size and provided an estimated range of a sampling of compliance costs associated both with ongoing monitoring as well as individual tenant file review. 7 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 5 Commissioner Kelner said a developer wants to construct market rate unit and needs an incentive to provide housing for moderate income. He said he agrees with charging developers reasonable compliance fees. Commissioner Peterson said it is reasonable to contract with someone who is already managing properties. Housing & Economic Development Manager Pohlman said that experience in affordable housing rental compliance would be a pre-requisite for any potential contracted work given various legal requirements and tenant regulations that need to be considered with affordable housing. Commissioner Spoonheim noted that before the Moderate Income Housing Policy is brought forward for City Council action, staff need to be prepared to respond to the request for additional information about why the policy requires a 10 unit threshold to take effect, noting that this precludes smaller developers from the requirement as questioned by one City Council member at the May Study Session. HRA Executive Director Parr noted that our municipal advisory firm was consulted in the development of the 10-unit threshold and that projects with fewer than 10 units may not have sufficient margins to make the affordability requirements work, particularly in cases where homeownership is concerned. Housing & Economic Development Manager Pohlman agreed to reach back out to our municipal advisory firm with respect to the ten-unit threshold recommendation. Commission Kelner asked if the levels are federal guidelines. Housing & Economic Development Manager Pohlman said the unit threshold, as proposed, is a common standard for other cities. Chair Soderberg asked what the time frame is for when to go back to the City Council. Housing & Economic Development Manager Pohlman replied late summer to early fall. The policy will go before the HRA Board and then to the Council. Commissioner Spoonheim said public comments on the two proposed housing policies were not previously circulated when staff transitions occurred and requested those be made available. HRA Executive Director Parr said the comments will be shared and a discussion can be had to ensure we are doing this right and we are in agreement. Commissioner Kelner asked if the Dundee development will be market rate. 8 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 6 HRA Executive Director Parr said yes, and that the developer agreement includes a provision for funding for future affordable housing set at 2% of rents based on stabilized occupancy. When the project is closer to completion, the HRA Board will be consulted on how best to invest that funding stream. Chair Soderberg asked when to propose the Renter Protection Ordinance. Housing & Economic Development Manager Pohlman said after the Moderate Income Housing Policy is passed. Chair Soderberg asked if there were any questions for staff about the Renters Protection Policy. Commissioner Spoonheim said one of the Council Members raised the point that the 90- day notice requirement should be for all tenants regardless of which rate they are paying, noting that the policy could potentially move forward for further review. Chair Soderberg said we will reprioritize what is in the Strategic Plan and discuss that when we meet in July. Commissioner Kelner said it is the desire of the HRA Board to help ensure that the Strategic Plan specifically outlines strategies to serve low income households. Housing & Economic Development Manager Pohlman stated the Housing Choice Voucher Program is not called out specifically in the Strategic Plan and that is a critical resource that helps to serve low-income households and is administered by the City. Chair Soderberg said we will target the August meeting for further discussion related to Strategic Plan priorities and will work to advance the Moderate Income Housing Policy in the near term with additional financial modeling to highlight the rational for the ten unit threshold. 6.3 HRA Action Items 2022 CDBG Administration Timeline Housing & Economic Development Manager Pohlman provided an overview about the CDBG timeline. She said CDBG administration requires year-round work with the new program year starting on July 1. She noted that the City has three different options for CDBG program administration and briefly outlined those, including pros and cons. Commissioner Kelner said it makes sense to partner with Hennepin County to streamline program administration. 9 Draft Minutes Plymouth Housing and Redevelopment Authority June 23, 2022 Page 7 Chair Soderberg asked if staff is ready for a proposal. Housing & Economic Development Manager Pohlman replied not yet, but noted the likely timeline for partnering with Hennepin County would need to be to be soon to start negotiations in January 2023 for a partnership that could become effective with the 2024 program year. Further assessment is needed, and a proposal will be brought back to the HRA. Commissioner Peterson asked if CDBG administration were to move to Hennepin County, would the City of Plymouth retain its CDBG allocation amount? Housing & Economic Development Manager Pohlman said the funds will be reallocated to our formula by HUD. She said if Hennepin County managed it, the administration fee would go to Hennepin County, and public services funding would be combined into one county-wide allocation through the County. Currently Hennepin County has Joint Cooperation Agreements with individual cities to administer rehabilitation for specific amounts to each City, but the County would have discretion to change its administrative approach to the program. She stated managing the CDBG funds is very labor intensive. 7. UPDATES 7.1 Community Development Block Grant (CDBG) Program Updates – The 2022 Program Year Annual Action Plan awaits approval by HUD. 7.2 Lakeview Commons – The HRA discussed the potential sale of Lakeview Commons, the history of the development of the property, and potential strategies to maintain the long-term affordability of the property as well as the threat of conversion to market-rate units. A member of the public, Ed Goldsmith, provided background on the significant partnerships involved in the development and ongoing community support at Lakeview Commons, including partnerships with the local school district. 7.3 Upcoming HRA Meeting Dates – The next meeting will be held at Plymouth Towne Square on July 21 at 7 pm. Please note a change in the original meeting date. 8. ADJOURNMENT MOTION by Chair Soderberg, with no objection, to adjourn the meeting at 9:05 p.m. 10 Regular Housing and Redevelopment Authority July 21, 2022 Agenda Number:4.2 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, HRA Executive Director Item:Plymouth Towne Square housing report 1.Action Requested: Accept attached Plymouth Towne Square housing report for May 2022. 2.Background: Plymouth Towne Square housing report May 2022 3.Budget Impact: NA 4.Attachments: Plymouth Towne Square Financials 11 12 13 14 15 16 17 18 19 Regular Housing and Redevelopment Authority July 21, 2022 Agenda Number:4.3 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, HRA Executive Director Item:Vicksburg Commons housing report 1.Action Requested: Accept attached Vicksburg Commons housing report for May 2022. 2.Background: Vicksburg Commons housing report May 2022. 3.Budget Impact: NA 4.Attachments: Vicksburg Crossing Financials 20 21 22 23 24 25 26 27 Regular Housing and Redevelopment Authority July 21, 2022 Agenda Number:6.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, HRA Executive Director Item:Moderate Income Housing Policy Due Diligence Follow Up 1.Action Requested: Review the Moderate Income Housing Policy, associated compliance concept, and sample development compensation structure prior. 2.Background: In March 2021 the City Council adopted the HRA Strategic Plan after a variety of engagement opportunities with external stakeholders, City Council members, and analysis and input from other cities. In May 2022 a joint Study Session with the HRA and City Council was held to review two proposed policies within the Strategic Plan, with the City Council asking for additional due diligence related to the Moderate Income Housing Policy specifically. Staff have finalized the proposed policy with changes made subsequent to the May 2022 Study Session outlined in red, and have identified a recommended compliance concept for managing the affordability requirements long-term. Staff will present a proposed compensation structure for a sample development project for review and discussion. 3.Budget Impact: Under the proposed compliance concept, the HRA would incur a one-time compliance set up fee. Additional costs associated with ongoing compliance throughout the affordability period are proposed to be passed on the project owner. 4.Attachments: Compensation Fee Schedule - Sample Project Compliance Concept Memo Moderate-Income Housing Policy - redline 28 07/2022 COMPENSATION: Overall, Fee Types: Description of Fees: Fee Amount: HRA Set-Up Program Set-Up Fee (1X) $1800 Project Set-Up Project Docket Set-Up Fee (Per Project) $300 Initial File Review Initial Program Certification (Per Unit) $80 Annual Report Annual Report / Desk Audit Administrative Review (Per Project) $150 Annual Monitoring Annual File Monitoring 20% of Units $80 On-Going Monitoring MI/Turnover Initial Program Compliance (Per Unit/Per Occurrence) $80 First Year : Assumptions: 20% at 60% AMI – 100 total units with 20 affordable units Fee Type: Breakdown Fee Amount: Project Set-Up 1 X $300 $300 Initial File Review 20 units X $80 $1600 Annual Report 1 Report X 150 $150 On-Going Monitoring (Unknown – assumed 4 turns annually) 4 X $80 $320 Project First Year Fees $2370 Second Year: Assumptions: 20% at 60% AMI – 100 total units with 20 affordable units Fee Type: Breakdown Fee Amount: Annual Report 1 Report X $150 $150 Annual Monitoring 20% 4 X $80 $320 On-Going Monitoring (Unknown – assumed 4 turns annually) 4 X $80 $320 Project Second Year+ Fees $790 Third Year+: Assumptions: 20% at 60% AMI – 100 total units with 20 affordable units Fee Increase ($5 increase per report & per file review) Fee Type: Breakdown Fee Amount: Annual Report 1 Report X $155 $155 Annual Monitoring 20% 4 X $85 $340 On-Going Monitoring (Unknown – assumed 4 turns annually) 4 X $85 $340 Project Third Year Fees $835 29 PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY STAFF REPORT TO: Plymouth Housing and Redevelopment Authority FROM: Devon Pohlman, Housing & Economic Development Manager MEETING DATE: June 23, 2022 SUBJECT: Moderate-Income Housing Policy Compliance Discussion BACKGROUND: The City of Plymouth is considering adoption of a Moderate-Income Housing Policy as outlined in the HRA Strategic Plan. In the joint Study Session held with the City Council and HRA in May 2022, questions arose related to the long-term compliance plan for any affordable housing units, should the City Council ultimately adopt the policy. DISCUSSION: The Moderate-Income Housing Policy, as currently proposed, requires a 25-year affordability period for the affordable units. The following ongoing compliance concept would require accountability by the property owner/property manager, and ultimately provide assurance to the City, that these affordability requirements are met. 1. Creation of a Moderate Income Compliance Guide which would detail out policies such as the following: o Policy overview ▪ Period of affordability ▪ Affordability standards (income/rent limits) and required affordability (10% at 50% AMI or 20% at 60% AMI) ▪ Rental assistance ▪ Utility allowances ▪ Lease requirements ▪ Affirmative marketing plan o Maintaining the unit mix ▪ Fixed or floating units o General occupancy guidelines ▪ Eligibility determination ▪ Number of persons per unit ▪ Tenant selection plan ▪ Income verification ▪ Required disclosures 30 ▪ Household size ▪ Over income households ▪ Certification requirements – for ex., at initial lease up with full certification required every three years (to be determined by us) ▪ Tenant files o Reporting requirements ▪ Annual owner/agent certifications ▪ Compliance reports ▪ Utility allowance source documentation o Compliance inspections ▪ Physical inspections ▪ Review of tenant files and property records o Correction and consequences of non-compliance o Requests for action – required notification to the HRA before sale or transfer of the property to help ensure the new owner manages the property in accordance with the policy. 2. Ongoing compliance oversight – to be conducted by the contracted compliance specialist 3. Monitoring status report – to be provided to the City and property owner 4. Annual, or as needed, updates to the Compliance Guide BUDGET IMPACT: Under the proposed concept, a contract with an affordable housing compliance specialist organization would be negotiated. Specific terms would need to be negotiated, but would likely include provisions for the following: • New project set-up fee • Initial tenant file review • Ongoing tenant file review at a specific compliance interval (every three years?) • Additional tenant file reviews as needed (move in/out) • Monitoring fee Cities who have adopted this compliance model pass on the compliance cost of enforcing the policy to the developer as part of the developer’s agreement. The contract with the compliance specialist would be held by, and billed to, the City, with the City responsible for billing the property owner for any applicable fees. DISCUSSION • Are there any specific compliance policies the HRA wishes to have direct feedback on, or if the policy moves forward and we engage a compliance specialist as part of contract negotiation, bring a draft back for review? 31 Rev. July 2022 DRAFT Moderate Income Housing Policy A moderate-income housing policy encourages new developments to make a certain percentage of new housing units affordable. The goal of this policy is to promote high quality housing located throughout the community for a variety of income levels, ages, and household sizes in order to meet the City's goal of preserving and promoting economically diverse housing options within the community. The City recognizes the need to provide affordable housing for a broad range of income levels to maintain a diverse population and attract residents to live or work in the City. This Policy has been created to ensure that a reasonable proportion of each new development receiving City financial assistance include units affordable to moderate income households and working families. The requirements set forth in this Policy further the City’s Housing Goals and the City’s Comprehensive Plan to create and preserve affordable housing opportunities. These requirements are intended to provide a structure for participation by both the public and private sectors in the production of affordable housing. I. Applicability and Minimum Project Size Market Rate Multi-Family Development Receiving City Financial Assistance This Policy applies to market rate multi-family residential developments that receive financial assistance from the City and includes: (1) new developments that create at least 10 multi-family dwelling units; or (2) any mixed use building that creates at least 10 multi-family dwelling units; or (3) renovation or reconstruction of an existing building that contains multi - family dwelling units that includes at least 10 dwelling; or (4) any change in use of all or part of an existing building from a non- residential use to a residential use that includes at least 10 dwelling units. II. Affordable Moderate Income Dwelling Units General requirement A development that is subject to this Policy shall provide a number of affordable moderate- income dwelling units equal to at least ten (10%) to twenty percent (20%) of the total number of dwelling units in the development. The units designated as moderate-income will be subject 32 Rev. July 2022 to the requirements listed below. Calculation of units required. (1) For development of multi-family dwelling units: A. The required number of affordable moderate-income dwelling units is based on the total number of dwelling units that are approved by the City. B. To calculate the number of affordable moderate-income dwelling units required in a development the total number of approved dwelling units shall be multiplied by ten percent (10%) or twenty percent (20%) depending on the affordability standard. If the final calculation includes a fraction, the fraction of a unit shall be rounded to the nearest whole number. C. Properties that are remodeled or expanded will be subject to this policy. Affordable moderate-income dwelling units will be calculated based on the total number of units after renovation or expansion is complete. At least ten percent (10%) or twenty percent (20%) shall be affordable moderate-income, depending on the affordability standard. Affordability Level The required affordable dwelling units within a residential project subject to this policy shall meet a moderate-income eligibility and rent affordability standard for the term of the restriction as follows: (1) Rental Projects: A. At least twenty percent (20%) of the units shall be affordable to moderate- income for households at sixty percent (60%) Area Median Income (AMI), or B. At least ten percent (10%) of the units shall be at available affordable for moderate-income households at fifty percent (50%) Area Median Income. (2) For-Sale Projects: A. At least fifteen percent (15%) of the units shall be affordable for moderate- income households at eighty percent (80%) Area Median Income (AMI). Rent and Sale Price Level Rental Unit: The monthly rental price for affordable dwelling units shall include rent and utility costs and shall be based on fifty percent (50%) and/or sixty percent (60%) for the Twin Cities metropolitan area that includes Plymouth adjusted for bedroom size and calculated annually by Minnesota Housing for establishing rent limits for the Housing Tax Credit Program. For-Sale Projects: The qualifying sale price for an owner-occupied affordable dwelling unit shall include property taxes, homeowner’s insurance, principal payment and interest, private mortgage insurance, monthly ground lease, and shall be based on eighty percent (80%) AMI for the metropolitan area that includes Plymouth adjusted for bedroom size and calculated annually by the Department of Housing and Urban Developmentand calculated annually by Minnesota Housing for the Impact Fund program. Commented [DP1]: MHFA_1019813 (1).pdf 33 Rev. July 2022 Period of Affordability In developments subject to this Policy, the period of affordability for the affordable dwelling units shall be at least twenty-five (25) years. Location of Affordable Dwelling Units Except as otherwise specifically authorized by this Policy, the affordable dwelling units shall be located within the development. III. Standards for Moderate-Income Rental Units Size and Design of Affordable Moderate-Income Units The size and design of the affordable moderate-income dwelling units should be consistent and comparable with the market rate units in the project and are subject to the approval of the City. The interior of affordable dwelling units do not need to be identical to the market rate units but if units are smaller than the market rate units with the same number of bedrooms in the development, City approval must be obtained. Exterior/Interior appearance. The exterior materials and design of the affordable moderate-income dwelling units in any development subject to these regulations shall be indistinguishable in style and quality with the market rate units in the development. The interior finish and quality of construction of the affordable moderate-income dwelling units shall at a minimum be comparable to entry level rental or ownership housing in the City. Construction of the affordable moderate-income dwelling units shall be concurrent with construction of market rate dwelling units. IV. Integration of Affordable Moderate-Income Dwelling Units Distribution of affordable moderate-income housing units. The affordable moderate-income dwelling units shall be incorporated into the overall project unless expressly allowed to be located in a separate building or a different location approved by the City Council. Affordable moderate-income dwelling units shall be distributed equally by bedroom size be distributed and throughout the building. Number of bedrooms in the affordable moderate-income units. The affordable moderate-income dwelling units shall have a number of bedrooms in the approximate proportion as the market rate units. The mix of unit types, both bedroom and accessible units, of the affordable moderate-income dwelling units shall be approved by the City. Tenants Moderate-income rental dwelling units shall be rented only to income eligible families during the period of affordability. An income eligible family may remain in the affordable moderate-income dwelling unit for additional rental periods as long as the income of the family does not exceed one-hundred twenty fiveforty percent (125140%) of the applicable AMI. If the family income exceeds this amount they must be moved to the first available non-moderate-income affordable unit. Commented [DP2]: Industry standard LIHTC is at 140% 34 Rev. July 2022 V. Alternatives to On-Site Development of Affordable Moderate-Income Dwelling Units This section provides alternatives to the construction of onsite affordable moderate- income dwelling units as a way to comply with this Policy. The alternatives are listed in subsection (3), below. (1) The alternatives must be: A. Approved by the City Council, and B. Agreed to by the applicant in an Affordable Housing Performance Agreement. C. Applicant must show the City acceptable documentation that a formal commitment to the proposed alternative is in place. (2) This Section does not apply unless the applicant demonstrates: A. The alternative provides an amount of affordable moderate-income dwelling units equivalent or greater to onsite units in a way that the City determines better achieves the goals, objectives and policies stated in the Housing Goals and Comprehensive Plan; and B. Will not cause the City to incur any net cost as a result of the alternative compliance mechanism. (3) If the conditions in (2) are met, the City may approve one or more of the following options to providing affordable moderate-income dwelling units that are required by this Policy. A. The dedication of existing market rate units to permanently affordable moderate-income dwelling units that are of equivalent quality and size. Existing dwelling units are approved as suitable affordable housing dwelling units through covenants, contractual arrangements, or resale restrictions. B. Offsite construction of affordable dwelling units within the City. Offsite construction of units should be located in proximity to public transit service at a site approved by the City. C. Participation in the construction of affordable dwelling units by another developer on a different site within the City. D. An alternative proposed by the applicant that directly provides or enables the provision of affordable housing units within the City. The alternative must be approved by the City and made a condition of approval of the Affordable Housing Performance Agreement. VI. NON-DISCRIMINATION BASED ON RENT SUBSIDIES: Developments covered by the policy must not discriminate against tenants paying rent 35 Rev. July 2022 with federal, state or local public assistance, including, but not limited to rental assistance, rent supplements, and Housing Choice Vouchers. VII. Affordable Housing PlanPublic Financial Assistance Application and Agreement (1) Applicability Developments that are subject to this Policy shall include submit an Application for Public Assistance and enter into a Public Assistance AgreementAffordable Housing Plan as described below, which documents . An Affordable Housing Plan describes how the developer complies with each of the applicable requirements of this Policy. (2) Approval The Affordable Housing Plan Public Assistance Agreement shall be approved by the City. (3) Contents. The Affordable Housing PlanPublic Assistance Agreement shall include at least the following: A. General information about the nature and scope of the development subject to these regulations. B. For requests to an alternative to on-site provision of affordable housing, evidence that the proposed alternative will further affordable housing opportunities in the City to an equivalent or greater extent than compliance with the otherwise applicable on-site requirements of this Policy. C. The total number of market rate units and affordable dwelling units in the development by bedroom size and income threshold. D. The floor plans for the affordable dwelling units showing the number of bedrooms and bathrooms in each unit. E. The approximate square footage of each affordable dwelling unit and average square foot of market rate unit by types. F. Building floor plans and site plans showing the location of each affordable dwelling unit. G.D. The pricing for each affordable ownership dwelling unit. The pricing of each unit shall be determined at time of approval. At time of sale this price may be adjusted if there has been a change in the median income or a change in the formulas used in this ordinance. H.E. Proposed schedule of individual unit development (market rate vs. affordable units). 36 Rev. July 2022 I.F. Documentation and specifications regarding the exterior appearance, materials and finishes of the development for each of the affordable dwelling units illustrating that the appearance of affordable units are comparable to the appearance of the market-rate units. J. An Affordable Dwelling Unit Management Plan documenting policies and procedures for administering the affordable dwelling units in accordance with the Affordable Housing Performance Agreement. K.G. Any and all other information that City staff may request to achieve the Council’s affordable housing goals. VIII. Recorded Agreements, Conditions and Restrictions (1) An Public Assistance Agreement Affordable Housing Performance Agreement shall be executed between the City and Developer, in a form approved by the City Attorney, based on the Affordable Housing Plan described in Section VII, which formally sets forth development approval and requirements to achieve affordable housing in accordance with this Ppolicy and location criteria. The Public Assistance Agreement shall identify: a. the location, number, type, and size of affordable housing units to be constructed; and a.b. income limitations for the affordable units b.c. sales and/or rental terms; occupancy requirements; and c.d. a timetable for completion of the units; and d.e. restrictions that will be placed on the units to ensure affordability; and e.f. any terms contained in the approval resolution by the City as applicable. (2) The applicant or owner shall execute any and all documents deemed necessary by the City Manager, including, without limitation, a Declaration of rRestrictive covenants Covenants and other related instruments, to ensure the affordability of the affordable housing units in accordance with this Policy. (3) The applicant or owner must prepare and record all documents, restrictions, easements, covenants, and/or agreements that are specified by the City as conditions of approval of the application prior to issuance of a building Permit for any development subject to this Policy. (4) Documents described above shall be recorded in the Hennepin County Registry of Deeds as appropriate. IX. DefinitionsFinancial Assistance 1. Affordable Dwelling Unit: The required affordable dwelling units within a residential project subject to this policy shall meet an income eligibility and rent affordability standard for the term of the restriction as follows: Commented [DP3]: Included in the Public Assistance Agreement. 37 Rev. July 2022 (1) Rental Projects: A. At least twenty percent (20%) of the units shall be affordable for households at sixty percent (60%) Area Median Income (AMI), or B. At least ten percent (10%) of the units shall be at available affordable for households at fifty percent (50%) Area Median Income. (2) For-Sale Projects: A. At least fifteen percent (15%) of the units shall be affordable for households at eighty percent (80%) Area Median Income (AMI). 2.1. Financial Assistance: This Moderate-Income Housing Policy applies to all new and renovated multifamily residential buildings or new for-sale housing receiving City financial assistance. Financial Assistance is defined as funds derived from the City and includes but is not limited to the following: A. City or HRA funds or fee waivers of Plymouth B. Community Development Block Grant (CDBG) C. Housing Rehabilitation Fund D. Revenue Bonds (private activity bonds are negotiable) E. Tax Increment Financing (TIF) F. Tax Abatement G. Housing and Redevelopment Authority (HRA) Funds H.G. Land Write Downs 3. Affordable Housing Plan: A plan that documents policies and procedures for administering the affordable dwelling units in accordance with the Affordable Housing Performance Agreement. 4.2. Affordable Housing Performance Agreement: Agreement between the City and the developer which formally sets forth development approval and requirements to achieve Affordable Housing in accordance with this policy. Commented [DP4]: Already covered under II. Affordability Level above Commented [DP5]: Included in the Public Assistance Agreement 38 Regular Housing and Redevelopment Authority July 21, 2022 Agenda Number:7.1 To:Housing and Redevelopment Authority Prepared by:Devon Pohlman, Housing and Economic Development Manager Reviewed by:Danette Parr, HRA Executive Director Item:HRA Updates 1.Action Requested: Review brief updates on upcoming work items and areas of interest. 2.Background: Staff will provide updates and facilitate brief discussion on the following: 1. Senior Buildings - roof damage 2. CDBG Consolidated Annual Performance and Evaluation Report (CAPER) for Program Year 2021 3. Budget Process 4. Lakeview Commons 3.Budget Impact: NA 4.Attachments: 39