Agenda - Planning Commission - 09/04/2014

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Last revised July 24, 2014 Part IV: Opportunities for Impact The process of developing this Housing Policy Plan has produced rich conversation and discussion over the last year. However, it has become clear that there are a series of even richer dialogues that the region needs to have beyond what the Council was able to achieve in developing this Plan. This section describes areas where the Council intends to conduct additional analysis and convene or participate in broader regional discussions on how to move ahead in the coming years. If appropriate, the Council will amend the Housing Policy Plan to reflect any new policy direction emerging from these discussions. Items on the Council's future housing policy workplan include: • Reduction of barriers to development of mixed -income housing. • Exploration of inclusionary housing strategies. • Assessment of feasibility of strategies to share risk. • Shared regional strategies to affirmatively further fair housing and address housing discrimination. • Building wealth and expanding investment in Areas of Concentrated Poverty. Reduce barriers to development of mixed -income housing Mixed -income housing development holds the potential to create vibrant, diverse communities that offer choices to a range of households. Moreover, mixed -income development can be more politically viable and appealing to neighbors than developments of solely affordable units. The financing of mixed - income housing, however, presents several special challenges. How the region collectively overcomes these barriers will have important implications for the prospects of households of varied incomes within properties, districts, and neighborhoods, including transitway station areas. What is mixed -income housing? Mixed -income housing, in its strictest sense, refers to developments that mix market -rate or income - unrestricted units and subsidized units affordable to low- and moderate -income households. One previously common approach is the so-called "80/20s" in which 80% of units are market rate and 20% are affordable and where the market -rate rents are expected to help cross -subsidize the rental revenue "lost" by including the affordable units. This approach, however, inappropriately polarizes the market rate and affordable components by creating the presumption that the market -rate rents are high and achievable and that the rents of the affordable units are low, deeply targeted, and deeply subsidized. In practice, however, there are a number of additional ways that mixed -income projects are possible beyond the 80/20. For example: • A project that has less than 20% affordable units but requires some number or proportion might still be called mixed -income. • A project that has 80% income -targeted, subsidized units might have 20% market rate units and be called mixed -income. • Even a project that is "100% affordable" can and usually does still serve mixed incomes with some units reserved at households earning 60% of AMI, some reserved for households earning 80% of AM I, and some targeted to households at or below 30% of AMI. 2040 HOUSING POLICY PLAN I METROPOLITAN COUNCIL DRAFT RELEASED FOR PUBLIC COMMENT Part IV: Opportunities for Impact I Page 62