Agenda - Council - 06/28/2016 - Laserfiche WebLink

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achievable and that the rents ofthe affordable units are low, deeply targeted, and deeply subsidized. In practice, however, there are a number ofadditional ways that mixed -income projects are possible beyond the 80/20. For example: *Aproject th8th8S|8SSth8n20968ff0rd8b|8unitSbutr8quir8SS0m8numb8r0rpr0p0rti0n might still becalled rnix8d-inoorne. p Aproject that has 8096 income -targeted, subsidized units might have 2096 market -rate units and becalled rnixed-inoorne. * Even a project that is 100% affordable can and usually does still serve mixed incomes with some units reserved for households earning 60% of AM I, some reserved for households earning 80% of AM I, and some targeted to households at or below 30% of "Mix8d-ino0m8"can have 8variety 0fpotential meanings and any number 0fcombinations ofincome targets within oracross projects, neighborhooda,oroorridora.|nd8ed,fund8ra increasingly recognize the value of building not only affordability into market -rate projects but also of market- or moderate -rate units into mostly affordable projects. Similarly, market - rate does not always equate to rich households. Rather, market -rate simply means the rate that potential renters will pay for housing. In the same way, affordable does not equate to households earning extremely modest incomes. In other words, the perception of mixed - income 8S8potential clash 0fvery high and very low incomes iSoften incorrect. What are the barriers t0developing mixed -income housing? A2013 report o0nnnniSSi0n8d by W1inn8S0t8 Housing, "Expanding Mixed |no0nn8 Housing Opportunitiea.^identifiedanurnberofoonoernaexpreaaedhvrnennberaofthedeve|oprnent and finance communities about the challenges inherent in mixed -income development:" • Most are familiar with mixed -income housing objectives, but have less experience in practice. • Developer interest in affordable housing reflects a desire to diversify portfolios and minimize risk. •Then8iaao|earneedfor"rniaaion-driven''oapita|toaupportrnixed-inoorn8deve|opnnent' especially trans it -oriented development. • Regiona|aub-nnarketvariationarnake^one-aize-fita-aU^approaoheadiffiou|t. • Market -rate amenities add todevelopment costs and challenges. • Jurisdictions see the need for education and outreach to developers on affordable finance tools. • Specific challenges exist with some Minnesota Housing programs for mixed -income housing. One chief impediment todeveloping mixed -income housing iathe real or perceivedhak involved. Risk, 8factor inany housing proposal, iSperceived differently across projects based on elements such as level of demand in the local housing market, the location of the property, and the value of comparable nearby properties. Investors or lenders evaluating a market -rate proposal will pay particular attention towhether local market FOUR: Opportunities for Collaboration