Agenda - Planning Commission - 04/20/2015 - Special

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Step 2: Determine the proportion of growth constituted by low-income households. Of the 119,000 additional households the region is expected to add between 2020 and 2030, 17.2% (20,400) will have incomes at or below 30% of AMI, 13.9% (16,550) will have incomes between 31% and 50% of AMI, and 16.3% (19,450) will have incomes between 51% and 80% of AMI. This is a total of 56,400 households. These projections come from historical income 6 distribution patterns, applied to the 2020 and 2030 household forecasts. Step 3: Determine how many low-income households will need additionalaffordable housing units. Not all low-income households will need additionalaffordable housing units. Some will be low- income seniors who already own their home free and clear without experiencing housing cost burden. Filtering out those households, there will be a total of 37,400 low-income households needing additionalaffordable units—18,900 households with income at or below 30% of AMI, 9,450 households with income between 31% and 50% of AMI, and 9,050 households with 7 income between 51% and 80% of AMI. Step 4: Calculate how many housing units will be needed to accommodate these low-income households. Housing units in the 51-80% band are likely to be supplied by the private market rather than governmental subsidies. If the region added only 9,050 housing units to accommodate the net growth in new low-income households needing additionalunits in that band, the market for affordable housing in that band would become increasingly tight. To ensure the 5% vacancy rate that fosters a healthy housing market, the region needs 9,550 total housing units to house the net growth in low-income households with income between 51% and 80% of AMI. We do not apply this vacancy rate adjustment to the 0-30% band or the 31-50% band because those units are likely to be publicly subsidized and less subject to the upward pressure on housing prices resulting from low vacancy rates. Adding those 9,550 units in the 51-80% band to the 18,900 units in the 0-30% band and the 9,450 units in the 31-50% band yields a total regional Need of 37,900 units. Part 2: Develop the Total Allocation for Each Community The 37,900 total affordable units should be allocated across the region’s communities in a way that places relatively more affordable housing units where they will expand housing choices the most. Recognizing that Council policies do not encourage development beyond sewer-serviced areas, we allocate Need only for the 124 communities with sewer service. The following steps, visualized below in Figure B-3, provide more detail on the method for allocating Need across these 124 communities. Exhibits 5 and 6 following this report indicate the results of these calculations for each community’s share of the regional Need. 6 Source: U.S. Census Bureau, 2009-2013 American Community Survey Public Use Microdata Sample and Metropolitan Council’s March 2015 update to the regional forecast. 7 Source: Metropolitan Council staff estimates based on U.S. Census Bureau, 2009-2013 American Community Survey Public Use Microdata Sample. Page - 19|METROPOLITAN COUNCIL