Agenda - Planning Commission - 09/04/2014

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Last revised July 24, 2014 incorporates local controls such as a density bonus not only to incent affordable development but also to secure other community benefits including parking, open space, or streetscape improvements.21 In our region, many cities require affordable units when tax increment financing is provided to projects, as well as through use and deployment of other fiscal, regulatory, and planning incentives and tools. Among the potential strategies to reduce the impediments to mixed -income development are: • Dividing the Property into two Distinct Projects —this strategy runs counter to the typically used criterion of a project as being a set of activities "under common ownership, management, and financing," and almost undoubtedly will result in increased soft costs, but the premise is relatively simple —find one investor that is interested in the market rate component and another for the affordable units. • Connecting by Breezeway or other Architectural Element —this approach entails building two separate structures —one for market rate units and the other affordable, but connects them through a functional architectural element such as a breezeway. The physical linkage allows it to be a single project under common oversight, but this in part dilutes the income mixing sought. • Building on Two or More Separate Sites —this concept would allow a developer to contemplate financing for two parcels, or perhaps to use a scattered site approach, but to bundle them together such that they are still under a set of activities under common ownership, management, and financing. This approach may allow more financial flexibility if the developer can build a more profitable structure at the most lucrative site and use a portion of the proceeds to "cross -subsidize" the affordable building which will be constructed nearby. • Adjusting Use of Public Financing —one approach to address the challenges in mixed -income housing involving tax credits could be to award a higher level of tax credits to very strong project proposals that are also located in strong markets and to use other more direct, less complicated financing tools to fund projects in markets where investor interest is lacking. Over time, if investments are soundly made, investor confidence may follow the movement of public capital into such markets leading to a healthier overall finance environment. Council Role • Participate in conversations with the housing finance community, tax credit investors and syndicators, private lenders, local officials and other stakeholders about reducing the financial and institutional barriers to the development of mixed -income housing. • Provide local governments best practices on the development of mixed -income housing. • Work with partners to plan, build, and operate the transit infrastructure that attracts mixed - income development. • Continue to support successful mixed -income development with Livable Communities Act funding 21 Urban Land Institute. 2012. Making Mixed -Income Housing Work. http://urbanland.uli.org/economy-markets- trends/making-mixed-income-housing-work. 2040 HOUSING POLICY PLAN I METROPOLITAN COUNCIL DRAFT RELEASED FOR PUBLIC COMMENT Part IV: Opportunities for Impact I Page 64