Affordable Housing Policy

Background

The City recognizes the need to provide affordable housing in order to maintain a diverse population and to provide housing for those who live or work in the City. Since the remaining land appropriate for new residential development is limited, it is essential that a reasonable proportion of such land be developed into affordable housing units. As such, the City of Edina adopts the following Affordable Housing Policy:

The Policy

1. This policy applies to all new multi-family developments of 20 or more units that require a re-zoning or a Comprehensive Plan amendment. All new multi-family developments requiring a rezoning shall be required to be re-zoned to PUD, Planned Unit Development.

2.New rental developments will provide a minimum of 10% of all rentable area at 50% affordable rental rates or 20% of all rentable area 60% affordable rental rates as defined below.

3. New for-sale developments will provide a minimum of 10% of all livable area at affordable sales prices as defined below.

4. Rental and for-sale/owner occupied affordable units shall include the following:

A.On-site parking will be provided (either surface or enclosed) for affordable units, and will be included within the affordable sales price and/or affordable rent. At least one enclosed parking stall shall be included in the purchase price of an affordable for-sale unit in the same manner as offered to buyers of market rate units. Adequate surface parking shall be provided at no additional charge.

B. Affordable and market rate residents will have equal access to all entries, lobbies, elevators, parking and amenities.

C. Exterior appearance of affordable units shall be visually comparable with market rate units in the covered development and amenities and  access thereto provided with market rate unit shall also be provided with the affordable units. Examples of “amenities” include storage lockers, balconies, roof decks, outdoor patios, pools, fitness facilities, and similar unit and project features.

5. New rental housing will remain affordable for a minimum of 15 years, and this requirement will be memorialized by a Land Use Restrictive Covenant.

6. New for sale or owner occupied developments will remain affordable for a minimum of 30 years, and this will be memorialized by a Land Use Restrictive Covenant. The Land Use Restrictive Covenant will contain a provision providing the Edina Housing Foundation the right of first refusal to purchase affordable units.

7. Recognizing that affordable housing is created through a partnership between the City and developers, the city will consider the following incentives for developments that provide affordable housing:

A. Density bonuses
B. Parking reductions
C. Tax increment financing
D. Deferred low interest loans from the Housing and Redevelopment Authority and/or Edina Housing Foundation
E. Tax Abatement

8. It is the strong preference of the City that each new qualifying development provide its proportionate share of affordable housing, however, the City recognizes that it may not be economically feasible or practical in all circumstances to do so. As such, the City reserves the right to waive this policy (only if circumstances so dictate, as determined by the City). In lieu of providing affordable housing in each new qualifying development, the City may consider the following:

A. Dedication of existing units in Edina equal to 110% of what would have been provided in a proposed new development. These units would need to be of an equivalent quality, within the determination of the City.
B. New construction of units an equivalent quality within the City at a different site, at the discretion of the City.
C. Participation in the construction of affordable dwelling units of an equivalent quality by another developer on a different site within the City.
D. An alternative proposed by a developer that directly or indirectly provides or enables provision of an equivalent amount of affordable housing within the City. An alternative could be a cash payment to the City in lieu of providing affordable housing units, or a “Total Buy In” (TBI) fee. The TBI shall be $100,000 per unit. The TBI is due in cash or certified funds in full to the City at the time of the issuance of the building permit. A building permit will not be issued unless the TBI is paid in full. The City Council may allow housing developer to pre-pay a TBI to satisfy a future AHO, on a case- by-case basis.

Definitions

Rental Housing:

Either 10% of all rentable area is both rent restricted and occupied by persons whose income is 50% or less of area median gross income,

Or 20% of all rentable area is both rent restricted and occupied by persons whose income is 60% or less of area median gross income.

Both gross incomes (adjusted for family size) and gross rental rates (adjusted for bedroom count and including utilities) are updated annually by the Minnesota Housing Finance Agency (MHFA) and published at www.mnhousing.gov. 2017 income and rental limits are as follows:

 

Gross Incomes

 

Gross Rents

 

60%

50%

 

60%

50%

1 Person

$37,980

$31,650

Studio

$949

$791

2 Persons

$43,440

$36,200

1 Bedroom

$1,017

$848

3 Persons

$48,840

$40,700

2 Bedroom

$1,221

$1,017

4 Persons

$54,240

$45,200

3 Bedroom

$1,410

$1,175

5 Persons

$58,620

$48,850

4 Bedroom

$1,573

$1,311

6 Persons

$62,940

$52,450

 

 

 

 

   

Ownership Housing

10% or more of all livable area is affordable to and initially sold to persons whose income is at or below the levels set in the MHFA’s “Startup Program” (first time homebuyer). This program has a sales price limit of $306,000, adjusted annually. The Edina Housing Foundation has set this limit at $350,000 in consideration of the high prices in Edina. The following sales prices will be used as the acquisition limit in this definition: 

1 bedroom

$250,000

2 bedrooms

$300,000

3+ bedrooms

$350,000

The 2016 income limits as published on the MHFA website are as follows:

1-2 person household

$90,400

3+ person household

$103,900 

Income limits and maximum sales prices are updated annually.  See www.mnhousing.gov.

Originally adopted: November 1, 2015

Income/Rent Limits Adjusted: April 14, 2017

As amended: April 3, 2018