Agenda - Council - 08/27/2019 - Laserfiche WebLink

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CHALLENGES AND OPPORTUNITIES o Shallow Rent Subsidy: The HRA funds a shallow rent subsidy program to provide pro- gram participants living in market rate rentals a rent subsidy (typically about $100 to $300 per month). o Tax Increment Financing (TIF): Program that offers communities a flexible financing tool to assist housing projects and related infrastructure. TIF enables communities to dedi- cate the incremental tax revenues from new housing development to help make the housing more affordable or pay for related costs. TIF funds can be used to provide a di- rect subsidy to a particular housing project or they can also be used to promote afforda- ble housing by setting aside a portion of TIF proceeds into a dedicated fund from other developments receiving TIF. o Transfer of Development Rights —Transfer of Development Rights (TDR) is a program that shifts the development potential of one site to another site or different location, even a different community. TDR programs allow landowners to sever development rights from properties in government -designated low -density areas, and sell them to purchasers who want to increase the density of development in areas that local govern- ments have selected as higher density areas. o Waiver or Reduction of Development Fees —There are several fees developers must pay including impact fees, utility and connection fees, park land dedication fees, etc. To help facilitate affordable housing, some fees could be waived or reduced to pass the cost savings onto the housing consumer. • Job Growth/Employment/Outflow. Historically, low unemployment rates have driven both existing home purchases and new -home purchases. Lack of job growth leads to slow or di- minishing household growth, which in -turn relates to reduced housing demand. Like most areas across the Twin Cities and Minnesota, the unemployment rate in Ramsey peaked in 2009 during the Great Recession at 7.9%. However, over the past nine years the unemploy- ment rate has decreased annually and is presently at only 2.6% in Ramsey through 2018. Although the low unemployment rate is positive, if the unemployment rate continues to de- cline it could be difficult for Ramsey businesses to find enough labor to fill job openings. Like many suburban communities on the fringe of the Metro Area, Ramsey householders are commuting outside the city for employment. Only 8% of Ramsey's householders are also working in Ramsey; meaning over 90% of Ramsey householders commute for employ- ment outside of Ramsey. Additional job creation in Ramsey will result in household growth that could exceed projections and accelerate housing demand. • Land Supply. New construction activity in Ramsey has been strong the past two years and is approaching production levels between 2002 and 2004 before the housing market slow- down. Based on the current supply of vacant developed lots, the current lot supply is esti- mated to be about three years should lots continue to absorb at the same pace for the next few years. Because new lot product tends to take a few years before homes are shovel ready; new lot production should be occurring now to ensure adequate land supply in the short-term. If new lots are not developed soon, upward pressure on land costs will result driving up the cost of housing. MAXFIELD RESEARCH AND CONSULTING 154