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Inclusionary Zoning Policy Development

Affordable Housing Requirements

The City’s Unified Housing Policy requires residential developments of 10 or more units that receive City financial assistance, pass-through funding from the City, or involve City-owned land to provide a percentage of housing units at affordable rents. Effective January 1, 2019, the City also adopted an “Interim” inclusionary zoning (housing) ordinance and policy that applies to new residential rental developments that request:

Residential rental projects subject to Interim inclusionary housing requirements can choose one of the following affordability options:

The Interim inclusionary housing ordinance exempts ownership housing and housing developments primarily targeted to students.

Permanent Inclusionary Zoning Policy Development

The City Council directed staff to develop a permanent inclusionary housing policy in 2019 that is consistent with the Inclusionary Housing Policy Framework adopted in 2018. In early 2019, the City conducted a request for proposals (RFP) and selected Grounded Solutions Network to help develop a comprehensive inclusionary zoning policy and implementation program consistent with the adopted framework. This work is underway, supported by an inter-departmental staff team and involving stakeholder engagement, interviews, research and technical assistance.

Proposed timeline for the permanent inclusionary zoning ordinance and policy approval:

 
Background

On February 9, 2018, Council President Bender introduced subject matter to establish an inclusionary zoning (housing) ordinance. Inclusionary housing intends to advance the goals of the City’s housing policies by requiring that affordable housing units are provided in new residential or mixed-use developments. Cities in the Twin Cities region with inclusionary housing policies include Edina (2015), Golden Valley (2017), Brooklyn Park (2017), St. Louis Park (updated 2018), and Bloomington (2019).

Since 2003, the City of Minneapolis has implemented housing policy that requires affordable housing units in residential and mixed-use projects with 10 or more units that receive financial assistance from the City. The policy was expanded to apply affordable housing requirements to projects receiving pass-through funding from the City (state or federal funds), and projects developed on property or a portion of property owned by the City.

In 2017, the City engaged a consultant, Grounded Solutions Network (GSN), to conduct financial feasibility analysis and policy research about national best practices to inform recommendations for inclusionary housing policy options for the City. Their report included pros and cons of different policy choices, and case studies from inclusionary housing policies in Washington DC, Chicago and Seattle. The report included research and data from a policy brief called Inclusionary Housing Prevalence, Impact and Practices. This policy brief noted that at the end of 2016, 886 jurisdictions had inclusionary housing programs in 25 states and the District of Columbia. An inter-department team of City staff from Community Planning and Economic Development (CPED) Housing, Development Services, and Long-Range Planning divisions, City Attorney’s Office and the Finance and Property Services department supported this work. Grounded Solutions Network also received feedback from private developers and affordable housing advocates in this process.

GSN presented the report to the Housing Policy & Development Committee of the City Council on August 22, 2018. The report informed an inclusionary housing policy framework adopted by the City Council on December 7, 2018, along with the Minneapolis 2040 Comprehensive Plan The City Council directed staff to develop a comprehensive inclusionary housing policy consistent with this framework in 2019.

Also on December 7, 2018, the City Council approved amendments to the Unified Housing Policy and the Minneapolis Zoning Code to allow for an “Interim” inclusionary zoning ordinance and inclusionary housing policy, to be in place from January 1, 2019 until a new comprehensive policy takes effect. This interim ordinance only applies to development projects that need re-zoning and/or substantial additional development capacity of 60% or more. The ordinance language defines projects subject to the affordable housing requirements. The Unified Housing Policy defines the specific affordable housing requirements. 

In 2019, the City approved an Interim Inclusionary Zoning Tax Increment Financing Policy for Revenue Loss Offset to support the inclusionary housing policy. This financial assistance policy supports qualifying projects subject to the City’s Interim Inclusionary Zoning Ordinance by ensuring the project remains financially feasible to develop.

Past Meetings

Supporting Materials and Documentation

 

Last updated Oct 25, 2019

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