Agenda - Planning Commission - 09/04/2014

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Last revised July 24, 2014 adopts the affordability definitions as set forth by the US Department of Housing and Urban Development (HUD), under which housing is "affordable" for low, very low, and extremely low income households when they pay no more than 30% of gross household income on housing. Low, very low, and extremely low incomes are defined as follows: • Low Income: a household earning no more than 80% of the Area Median Income for a household of four, adjusted for family size • Very Low Income: a household earning no more than 50% of the Area Median Income for a household of four, adjusted for family size • Extremely Low Income: a household earning no more than 30% of the Area Median Income for a household of four, adjusted for family size Aging in Place The ability to live in one's own home and community safely, independently, and comfortably, regardless of age, income, or ability level. Allocation of Affordable Housing Need (the Need) Provided every 10 years by the Metropolitan Council, the Need reflects what share of forecasted regional household growth will make less than 80% of the Area Median Income, and therefore need affordable housing in order to not be cost burdened. The Allocation of Affordable Housing Need is the determination of each community's share of this regional need. Communicating forecasted affordable housing need numbers is the first step in helping communities determine the housing goals and objectives to be included in the housing element of their comprehensive plans. Area of Concentrated Poverty People living in poverty are often clustered in certain neighborhoods rather than being evenly distributed across geographic areas. Measuring this concentration of poverty is important because researchers have found that living in areas with many other poor people places burdens on low-income families beyond what the families' own individual circumstances would dictate. Many argue that this concentration of poverty is correlated with higher crime rates, underperforming public schools, poor housing and health conditions, as well as limited access to private services and job opportunities. The Council's definition of areas of concentrated poverty are census tracts where more than 40% of residents live below 185% of the federal poverty line (as context, 185% of the poverty threshold for a typical family of four in 2012 was $43,460). Area Median Income 100% of the gross median household income for a specific Metropolitan Statistical Area, county or non -metropolitan area established annually by HUD. The area median income is a critical component of housing related activity, though particularly for affordable housing programs. The important uses of area median income include but are not limited to: • Use as a housing and economic market indicator • Use as an important element in estimating future need and affordable demand • Use as an important distinguishing factor between extremely low, very low, low, and moderate income households and housing strategies to serve them • A tool around which legislators envision affordable housing programs and strategies • A key input into project underwriting, tenant screening, compliance strategies and more • A essential component in design and implementation of housing programs Bridge Loan (aka interim financing. gab financing) A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing 2040 HOUSING POLICY PLAN I METROPOLITAN COUNCIL DRAFT RELEASED FOR PUBLIC COMMENT Appendices I Page 80