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HomeMy WebLinkAbout5G - Participation in the Local Housing Incentives Account Program MEETING DATE: AGENDA #: PREPARED BY: PRESENTER: AGENDA ITEM: DISCUSSION: 4646 Dakota Street SE Prior Lake. MN 55372 CITY COUNCIL AGENDA REPORT SEPTEMBER 20, 2010 5G DANETTE M. PARR, COMMUNITY DEVELOPMENT & NATURAL RE- SOURCES DIRECTOR DANETTE M. PARR CONSIDER APPROVAL OF A RESOLUTION ELECTING TO CONTINUE PARTICIPATION IN THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT Introduction The Minnesota Legislature created the Livable Communities Act (LCA) in 1995. The LCA is a voluntary, incentive-based approach to address the metropolitan area's affordable and lifecycle housing needs while providing funds to communities to assist them in carrying out their development plans. The City of Prior Lake has been a participant in the Local Housing Incen- tives Account Program (LHIAP) since its inception (1996). The Metropoli- tan Council is required by the State Legislature to have all participating communities reaffirm their commitment to the program by passing a resolu- tion. If the City Council approves the resolution, the City will continue to participate in the program and as a result be eligible for additional funding sources that could equally impact future affordable and life cycle housing, as well as economic development in the City. Historv LCA funds have leveraged millions of dollars in private and public invest- ment that has supported new jobs, housins~ choices, and business growth in the metropolitan area. The Legislature established the Metropolitan Liva- ble Communities Fund, including on-going accounts from which eligible communities could apply for funding, including the following: . The Tax Base Revitalization Account (TBRA) helps cities clean up contaminated urban land and buildings for subsequent redeve- lopment that could include commercial, industrial, or housing oppor- tunities. Supporting redevelopment opportunities that restore the tax base, create or retain jobs, or add affordable housing to the region are the primary objectives of this account. Projects funded through the TBRA foster increased reinvestment and infill near existing housing and services and help clean up the environment and pro- tect water quality in the region's urban communities. R\Collncil\2010 Agenda Reports\09 20 10\Livable Cormnllntiy CC Staff Reportdoc · The Livable Communities Demonstration Account (LCDA) funds public infrastructure and land assembly for development and rede- velopment projects that achieve connected development patterns that link housing, jobs and services, maximize the development po- tential of existing or planned infrastructure and regional facilities, and expand affordable and life-cycle housing options in the region. LCDA awards have been used to revitalize communities and estab- lish new neighborhoods as places for living, working, meeting daily shopping needs and recreation. The LCDA program is a popular funding source to help achieve regional and local community devel- opment objectives in the region's communities. Funded project elements have included land acquisition, street in- frastructure, pedestrian connections, stormwater management in- frastructure, and public-use structured parking to support additional density. LCDA funding is a catalyst that enables cities and develop- ers to implement replicable models that expand development op- tions in the market. · The Inclusionary Housing Account (IHA) In 2000 and 2004 the Council awarded grants from a one-time appropriation of funds to support affordable housing developments in which the reduction of local controls and regulations resulted in reduced development costs. The account is currently unfunded · The Land Acquisition for Affordable New Development (LAAND loan program) In 2008, in partnership with the Minnesota Housing and the Family Housing Fund the Council initiated the Land Acquisi- tion for Affordable New Development (LAAND) program using $4 million in LCDA funds to provide no-interest loans that would assist communities in efforts to address ttleir affordable housing need. · Other State (DEED) contamination clean-up grants. Current Circumstances In order to be eligible to compete for the funding opportunities described above, the LCA requires interested communities to establish long-term af- fordable and lifecycle housing goals (often referred to as the "fair share" of the region's affordable housing need). As part of City's 2030 Comprehen- sive Plan, the City established a fair share number of 1,166 units over the next 10 years. The Metropolitan Council has acknowledged the reality that cities face in respect to having limited funding available to create new af- fordable housing opportunities. For that reason, the Metropolitan Council is agreeing to allow a LCA affordable housin~~ goal for Prior Lake in the range of 758 to 1,166 units for the period of 2011 to 2020. The low end of the range represents the number of unites that can be accomplished at current- ly available funding levels region-wide. In respect to the City's life-cycle housing goal to diversity the type and den- sity of housing to meet residents' changing housing needs and prefe- rences, the Metropolitan Council asks that the City establish a lifecycle housing goal range of 1,165 to 3,000 units over the next decade. The low end of the range represents the City's total share of the region's affordable housing need and the high end is the potential number of units permitted by the land use guiding in the City's 2030 Comprehensive Plan update for R\Council\2010 Agenda Reports\09 20 10\Livable Commllntiy CC Staff Report doc 2 ISSUES: FINANCIAL IM- PACT: AL TERNATIVES: RECOMMENDED R.\Collncil\2010 Agenda Reports\O medium, high, mixed use, redevelopment, or similarly named residential developments, or the total forecasted household growth for the community to 2020, whichever number is less. If the City amends the 2030 Compre- hensive Plan, these goals would need to be modified as well to reflect the new projections. City and Scott County CDA staffs collaboratively submit an annual report to the Metropolitan Council that summarizes new affordable and Iifecycle housing units built over the previous year, as well as other programs the City and Scott County have taken part in that are eligible for credit toward these goals. As a result of the report, the Metropolitan Council establishes an annual score that is meant to be reflective of how well the City has done over the previous year in the area of supporting affordable and lifecycle housing. The Metropolitan Council acknowledges that a City's score may fluctuate from year to year, but believes that overall between the years of 2011-2020, the goals are attainable. If the City should exceed the goal prior to 2020, the Metropolitan Council requires the City to revisit the goal and increase it accordingly. If the City does not meet the established goal, there is no penalty, other than the Metropolitan Council taking this into con- sideration as a part of awarding funding. If the City chooses to not partici- pate in the program, the City will be ineligible to receive any funding awards described earlier. In addition, in order for the Scott County CDA to receive funds for a project in Prior Lake, the City must be a participant of the LHIAP. Conclusion Continued participation in the LHIAP allows the City the opportunity to compete for grants and loans to support activities that could help the City meet its affordable and life cycle housing ~loals, clean up polluted sites, and support demonstration projects linking jobs, housing and transit. City Staff recommends the Council accept the resolution to elect continuing to partic- ipate in the Local Housing Incentives Account Program. If the City Council approves the resolution City Staff will develop a Housing Action Plan outlining the steps the City will take to help meet its LCA goals. If the City Council opts to continue participating in the LHIAP, financial costs are largely limited to necessary staff time necessary for submitting annual reports. However, if the City Council decides to opt out of the pro- gram, the City will lose the ability to compete for funding that could assist with numerous community development aspects of the City (housing, jobs, transit, and economic development), which could be significant. The alternatives are as follows: 1. Approve a resolution electing to continue participation in the Local Housing Incentives Account Program. 2. Table this agenda item for a specific reason. 3. Deny this agenda item for a specific reason and provide staff direction. "" 3 4646 Dakota Street SE Prior Lake. MN 55372 RESOLUTION 1 a-xxx A RESOLUTION ELECTING TO CONTINUE PARTICIPATION IN THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, WHEREAS, Motion By: Second By: the Metropolitan Livable Communities Act (Minnesota Statutes sections 473.25 to 473.255) establishes a Metropolitan Livable Communities Fund which is intended to address housing and other development issues facin!) the metropolitan area defined by Minnesota Statutes section 473.121; and the Metropolitan Livable Communities Fund, comprising the Tax Base Revitalization Account, the Livable Communities Demonstration Account, the Local Housing Incentive Account and the Inclusionary Housing Account, is intended to provide certain funding and other assistance to metropolitan-area municipalities; and a metropolitan-area municipality is not eligible to receive grants or loans under the Metropolitan Livable Communities Fund or eligible to receive certain polluted sites cleanup funding from the Minnesota Department of Employment and Economic Development unless the municipality is participating in the Local Housing Incentives Account Program under Minnesota Statutes section 473.254; and the Metropolitan Livable Communities Act requires the Metropolitan Council to negotiate with each municipality to establish affordable and life..cycle housing goals for that municipality that are consistent with and promote the policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide; and previously negotiated affordable and life-cycle housing goals for municipalities participating in the Local Housing Incentives Account Program expire in 2010; and a metropolitan-area municipality can participate in thEl Local Housing Incentives Account Program under Minnesota Statutes section 473.254 if: (a) the municipality elects to participate in the Local Housing Incentives Program; (b) the Metropolitan Council and the municipality successfully negotiate new affordable and life-cycle housing goals for the municipality; (c) the Metropolitan Council adopts by resolution the new negotiated affordable and life-cycle housing goals for the municipality; and (d) the municipality establishes it has spent or will spend or distribute to the Local Housing Incentives Account the required Affordable and Life-Cycle Housing Opportunities Amount (ALHOA) for each year the municipality participates in the Local Housing Incentives Account Program. R\Collncil\2010 Agenda Reports\09 20 10\Livable Commllnity CC Resolution.doc NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. Elects to participate in the Local Housing Incentives Program under the Metropolitan Livable Communities Act for calendar years 2011 through 2020. 3. Agrees to the following affordable and life-cycle housing goals for calendar years 2011 through 2020. Affordable Housing Goals Range 758 to 1,166 units Life-Cycle Housing Goals Range 1,165 to 3,000 units 4. Will prepare and submit to the Metropolitan Council a plan identifying the actions it plans to take to meet its established housing goals. PASSED AND ADOPTED THIS 20th DAY OF SEPTEMBER, 2010. YES NO I Myser I Erickson I Hedber~ I Keeney I Millar Myser Erickson Hedber~ Keeney Millar Frank Boyles, City Manager R:\Collncil\2010 Agenda Reports\09 20 10\Livable Commllnity CC Resolution.doc 2