City Council

HOPKINS CITY COUNCIL AGENDA Tuesday, March 14, 2023 6:30 pm THIS AGENDA IS SUBJECT TO CHANGE UNTIL THE START OF THE CITY COUNCIL MEETING I. CALL TO ORDER II. ADOPT AGENDA III. PRESENTATIONS 1. Depot Update; Lenz 2. West Metro Collaborative Update; Westmoreland/LaTondresse 3. Sanneh Foundation Update; Ballard 4. Short-Term Rental Update; Howard 5. Affordable Housing Update; Youngquist IV. CONSENT AGENDA V. PUBLIC HEARINGS VI. OLD BUSINESS VII. NEW BUSINESS VIII. PUBLIC COMMENT IX. ANNOUNCEMENTS  Next City Council Regular Meeting: Tuesday, March 21 at 6:30 p.m. X. ADJOURN  Administration CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Ari Lenz, Assistant City Manager Date: March 14, 2023 Subject: Depot Update _____________________________________________________________________ PURPOSE To provide Council and the Community an update on the changes at the Depot and to summarize the next steps. INFORMATION In 2022, the Depot Coffee House ended the year with a deficit of approximately $81,000, making the fund balance at a total deficit of negative $216,000. The current agreements in place for the Depot have no plan for how to address a deficit budget or balance. As the fiscal authority for the Depot, the City of Hopkins has been carrying that negative balance. Due to the on-going deficit challenge, the City has had multiple conversations with the partners over the past years and there has been minor contribution adjustments but no commitment to additional funding to meet the Depot’s deficit need. In January, the partners agreed to a revise hours at the Depot to reduce coffee operation hours during the winter months and adjust to longer hours in the summer months. However, in February, the Depot Program Manager submitted their resignation. The partners agreed with the deficit existing and no plans to resolve the outstanding balance or sufficient revenue to continue current operations, it was not fiscally responsible to move forward with rehiring at this time. Instead the partners agreed to taking this opportunity to suspend coffee operations, but continue to support youth programming and re-evaluate the program, goals and the financial situation. Coffee operations are suspended at the Depot Coffee House effective April 2, 2023. At its heart, the Depot’s primary mission has always been to provide a safe, chemical- free environment for students and youth in the community. It has been a space for youth focused programming and leadership development. The City and our partners have committed to continue funding the Depot Youth Board activities while we spend the coming months working together to find the best way to maintain youth programming and leadership development and opportunities to continue serving the Depot’s mission. Background The Depot has been in existence since 1997. Its Mission is “To provide a place of community and learning in which student involvement and youth development are encouraged in a chemically-free environment.” The Depot’s partners are Three Rivers Park District, Hopkins School District, City of Minnetonka and City of Hopkins. The Depot had a positive fund balance of $8,495 at the end of 2012. The fund balance remained relatively stable through 2017, ending the year with a deficit of $31,288. The Depot struggled financially in 2018 and eliminated a full-time coffee operations manager position as of 1/1/2019. All duties were combined with the Program Manager. The Depot’s Partner contributions were also increased in 2019 to provide additional support. 2019 began an arduous period for the Depot’s operations. In July, Metro Transit took over the Depot’s parking lot for construction of the Green Line Extension light rail project. A temporary parking lot was created, but it remains difficult to access the Depot. Excelsior Boulevard has been closed numerous times due to construction. Bike trail users are frequent customers at the Depot, but related trail closures have kept them away. Despite, all these challenges the Depot increased its fund balance by $1,957 in 2019. In 2020, the Depot experienced negative impacts from the COVID-19 Pandemic. The coffee operation were temporarily closed due to State orders. When reopened it was at limited capacity. The facility chose to operate a take-out only model. (The age of the building and physical location have always prevented a drive through). The depot decreased its fund balance by $28,099 in 2020. Issues stemming from both the Green Line Extension and the COVID-19 Pandemic continued in 2021. City Council approved a 2021 Budget with a $15,000 decrease in fund balance. Actual results decreased fund balance by $44,234. The following chart shows 10 years of operating data: 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Revenues 280,360 340,161 360,305 376,538 386,073 336,467 335,257 308,019 203,963 183,488 Total Expenditures 286,178 358,750 374,632 362,829 383,657 359,459 368,507 306,062 232,062 227,722 Increase (Decrease) (5,818) (18,589) (14,327) 13,709 2,416 (22,992) (33,250) 1,957 (28,099) (44,234) Ending Fund Balance 8,495 (10,094) (24,421) (10,712) (8,296) (31,288) (64,538) (62,581) (90,680) (134,914) Again, the Depot had an operating deficit of approximately $81,000 in 2022. The ending fund balance is negative $216,000 (unaudited). In 2023 the following contributions were committed by the partners, they have reaffirmed their commitment for this year during this transition period. The City also set aside $35,000 in ARPA funds for the deficit and was hoping for a match before committing those funds. No match has been made to date. Hopkins School District - $50,000 City of Minnetonka - $28,000  City of Hopkins - $28,000 (additionally is responsible currently for administration costs and financials including the deficit balance). Three Rivers Park District - $19,500 (additionally responsible for capital costs associated with the building, building is owned by Hennepin Rail Authority and leased through Three Rivers) 2023 Total Contributions: $125,500 FUTURE ACTION Staff will be combining some of our planned efforts related to the Youth Workforce program with the Depot program this Spring/Summer as we work on meeting with partners or potential partners, gathering information and making a recommendation that is both fiscally responsible and meets the goals to support youth leadership development and programming. Three Rivers has agreed to allow us to continue to use the building as the City of Hopkins sees fit. The City will be at least temporarily maintaining the building until we determine next steps. The Youth Board will be included in this process. We currently are accepting public feedback online via a survey form, the feedback will help shape the future program. https://www.hopkinsmn.com/FormCenter/The-DepotFreight-Room-25/Depot-Feedback-Form- 234.  Administration CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Ari Lenz, Assistant City Manager Date: March 14, 2023 Subject: West Metro Collaborative Update _____________________________________________________________________ PURPOSE Jen Westmoreland, Hopkins School Board Chair and Chris LaTondresse, Hennepin County Commissioner will be present to give an update on the West Metro Collaborative. INFORMATION Council allocated up to $20,000 of ARPA funds to the West Metro Youth Collaborative in 2022 and 2023. The funds were matched by Hennepin County and Hopkins Public Schools did the administrative work for the program. The goal of the program is to support the need to establish a multijurisdictional collaborative led by and with youth to build positive mentorship and social opportunities for youth in the West Metro. This collaborative will invite nonprofit organizations, government agencies, schools, and youth leaders to an advisory council in order to share knowledge, eliminate service silos, and identify gaps in youth programming. The proposal was for two phases, each phase had an allocation of $10,000. In phase one, the first portion of the funds ($10,000 for the City) was to do a research related to community needs and to hire eight consultants ages 15-21 to interview and survey community members, organize an informational event. The Generation Enhanced Network (GEN) grew out of some of the early exploratory work jointly funded and coordinated by the county, city and school district to generate insights and recommendations to inform the creation of the Collaborative. GEN has now continued as a promising example of the kind of youth-led initiative that could be further developed and scaled through the work of the Collaborative once chartered. Chair Westmoreland is currently working with Hennepin County Commissioner Chris LaTondresse to create the organizational structure for the collaborative. The second phase (an additional $10,000), is to use the research and discussions to establish and launch the West Metro Youth Collaborative. FUTURE ACTION The group will continue working in 2023 on establishing the West Metro Collaborative. Attachments: West Metro Collaborative Summary Generation Enhanced Network Update Office of Hennepin County Commissioner Chris LaTondresse West Metro Youth Collaborative Updated: March 6, 2023 OVERVIEW D Hennepin County seeks local government partners (cities and school districts across the West Metro) to help launch and lead the West Metro Youth Collaborative, a new organization formed via joint-powers agreement to strengthen youth voice, opportunity, and social connection. R Modeled on the successful Brooklyn Bridge Alliance for Youth, this new organization will pilot and scale initiatives by-and-for youth, enhance the quality of existing programming, attract funding for youth-focused initiatives and increase coordination among its members and with the community. AF While the mission, vision, goals, and strategies of the West Metro Youth Collaborative will be co-created by its founding members, potential areas of focus for this initiative include: mentoring, career pathways, after-school programming, mental health and wellness, and community safety. GOALS T 1. Strengthen youth voice, opportunity, and social connection in west suburban Hennepin 2. Increase coordination between Hennepin County, cities, and schools to support youth 3. Attract new funding for youth-focused initiatives in west suburban Hennepin 4. Scale promising youth-focused initiatives and launch new evidence-based pilots BACKGROUND Suburban Hennepin County is home to many young people (ages 15-24) who face significant challenges accessing resources and opportunities that can help them thrive, especially outside of traditional school hours and during the summer months. The need for expanded coordination, programming, and funding for youth-led and youth-focused initiatives is clear and urgent. In the spring of 2022, in the aftermath of several high-profile public safety incidents involving youth, Commissioner LaTondresse’s office convened listening sessions and one-on-one meetings to explore this topic with students, mayors and school board members, city and school district staff, police chiefs, community organizations, and other leaders. The goal of these conversations was to better understand the challenges facing youth and to identify forward-looking solutions. In the summer of 2022, Hennepin County partnered with Hopkins Public Schools and the City of Hopkins, tapping a group of 8 young leaders (ages 15-22) as consultants to engage their peers and the community, gather insights that could help inform this work moving forward and offer potential solutions. The insights yielded from their field-research inform the goals found in this memo, including the recommendation to establish the West Metro Youth Collaborative formally. Their activities also led to the creation of Generation Enhanced Network (GEN). This youth-led initiative is already serving youth in the Hopkins School District and represents a promising early example of the type of programming that could be scaled regionally with greater coordination and resources. D On December 15, 2022, the Hennepin County Board approved a budget amendment authored by Commissioner LaTondresse, establishing a contingency fund of $57,500 for this work. This R amount represents Hennepin County’s annual commitment to this organization, contingent on execution of a Joint Powers Agreement between the County and other member jurisdictions. AF MODEL We will model this new West Metro Youth Collaborative on the Brooklyn Bridge Alliance for Youth (The Alliance), whose work “assures the success of all youth by challenging the conditions that diminish their hope, by assuring that all youth are connected to a trusting adult who is vested in their healthy development as measured by educational success and mastery of life skills.”1 T While the founding mission statement, vision, goals and strategies of the West Metro Youth Collaborative will be co-created by its charter members, there are several features of The Alliance model that we recommend adopting and incorporating into our charter, including: Potential features of The Alliance model to adopt and incorporate: Legal Structure: Chartered and governed via a Joint Powers Governance Agreement between Hennepin County and all member cities, school districts, and community colleges. Governance: The Board of Directors is composed of appointees from each member jurisdiction. The Alliance defines 'Members' as those who have signed the Joint Powers Agreement that formed the Alliance, contribute to the general fund of the Alliance budget, and have staff actively participating on the task force teams that advance the mission and work of the organization. 1 Vision Statement, Brooklyn Bridge Alliance for Youth, https://www.brooklynsallianceforyouth.org/who-we-are Funding: The Alliance is jointly funded through approximately $212,000 in annual contributions from its Members, including Hennepin County ($57,500), the cities of Brooklyn Park ($57,500) and Brooklyn Center ($57,500), and schools: Osseo Area Schools ($11,500), Anoka-Hennepin School District ($5,750), Brooklyn Center Schools ($5,750), Robbinsdale Area Schools ($5,750), Hennepin Technical College ($5,750) and North Hennepin Community College ($5,750). These funds are leveraged to unlock $250,000 - $350,000 in additional outside revenues annually via federal, state, and local grants, and private, philanthropic, and corporate donations. Youth Voice: The Board of Directors includes four directors ages 18-24 who are drawn from across member jurisdictions and serve as a voice for middle and high school youth. Additionally, a separate, larger Youth Council further centers youth voice and leadership in all other aspects of D The Alliance’s governance, planning, programming, and coordination with the community. TIMELINE R Here’s a timeline with a few key milestones – past, present, and future: ● Summer 2022: Hennepin County partners with Hopkins Public Schools, the City of AF Hopkins, and young leaders to gather insights and co-create potential solutions, including the recommendation to pursue the creation of a West Metro Youth Collaborative. ● December 2022: Hennepin County Board approves a 2023 budget amendment to establish a $57,500 contingency fund and creates a draft Joint Powers Agreement. ● January-April 2023: Hennepin County leading discussions with select West Metro cities T and school districts to present the concept, and gauge potential membership interest. ● Summer 2023: Hennepin County will host a convening among interested cities and school districts to engage in preliminary visioning, planning, co-creation, and commitments. This convening will include youth voices from participating jurisdictions. ● Fall 2023: Participating jurisdictions secure funding during their annual budget process. ● Winter 2023: Joint Powers Governance Agreement finalized and executed. Member jurisdictions appoint board members and identify staff leads for the initiative. ● January 2024: West Metro Youth Collaborative Launches! Generation Enhanced Network (GEN) 2022-2023 Overview Prepared by Jen Westmoreland, Hopkins School Board Chair Dominique Pierre-Toussaint, ICA Director of Community Relations Background In the summer of 2022, Hennepin County and the City of Hopkins partnered with Hopkins Public Schools to hire a group of 8 young leaders (ages 15-22) as consultants to engage their peers and the community to gather information about what youth in our community need to thrive. Hopkins School Board Chair Jen Westmoreland and Dominique Pierre-Toussaint served as the adult consultants to this group. Ellie Maag served as a Youth Participatory Action Research (YPAR) consultant to help ensure that the group’s process aligned with YPAR best practices. This initial work took place between June and August 2022. In addition to conducting research that led to a recommendation to establish the West Metro Youth Collaborative formally, the youth consultants created Generation Enhanced Network (GEN). This youth-led initiative serves young people in the Hopkins Schools community and represents an example of innovative programming that could be scaled regionally to serve more youth with greater coordination and resources. Generation Enhanced Network (GEN) prioritizes “next generation” voices and is shaped by their/your vision. It’s an organization for schools, government organizations, non-profits, businesses, and community organizations to innovate and collaborate to best serve the needs of the next generation in our communities. Why do we need GEN? Our youth and young adults deserve the very best. We are a community with many resources. Change within the community comes from each generation moving forward. The best way to accomplish this change is by working alongside the next generation to ensure they have the resources they need to be successful. The GEN Team Our group represents the diversity of youth and young people in our community in terms of race, ethnicity, gender and sexual identity, socio-economic position, career interests, and individual strengths. The original GEN consultants were Harper Best, Abhinav Kumar, Antonio Perez, Kennedy Pierre-Toussaint, Alex Quintero, Zachary Stanton, Katy Young, and Simon White. Since August 2022 our group has grown to include more young people in the Hopkins Schools community. Our Process Between the months of June and August 2022, we met weekly as a group to work on collecting information from the community on needs and solutions, ideating on and creating the GEN identity, and spreading awareness of the network. As we engaged in this work, we learned that members of our consultant group were experiencing the impacts of systemic injustices and were in need of support. As a group, we practiced the foundational concept of GEN by speaking our truths, connecting each other to resources, identifying possibilities for systemic change, and supporting each other through individual and collective challenges that arose during our time working together. GEN Identity The consultants worked on creating the name Generation Enhanced Network, writing the description for the network, and creating a visual identity (branding). Information Gathering The consultants gathered information through surveys, interviews, and individual conversations with community members. These general questions informed the survey, interview, and individual conversations. If you are a young member of our community, we want to know what your needs and goals are. Is there a challenge you or your family are facing right now (food or housing insecurity, mental or physical health, etc.)? What do you need to pursue your passion (ex. arts, sports, business, academics, etc.)? What do you need to achieve your goals now and into the future (mentorship, internship, community support, etc.)? If you are a community member with resources to share, we want to know what resources you can bring to the table, what ideas you have for this emerging organization, and how we might collaborate to serve the next generation? The consultants received 31 survey responses from a cross-section of community members, interviewed 5 community leaders, and engaged in 32 individual conversations with young people in our community. They conducted a qualitative open coding process on the survey, interview, and conversation responses. The results are as follows. Top needs/gaps identified: ● Food insecurity ● Housing insecurity ● Mental health resources ● Financial and mentorship support for interests/passions ● Social and moral support Top solutions/possibilities identified: ● Compensating young people to be in decision-making spaces across our community (government, nonprofit, business) ● More robust partnerships with resource providers like ICA, ResourceWest, Relate Counseling ● Partnerships with businesses and individuals who can provide mentorship and professional opportunities for young people ● A young adult (21+) to young person (12-18) mentoring program Awareness Building Depot Coffee House Event The consultants planned a GEN awareness-building and information-gathering event at the Depot Coffee House on August 6th, 2022. Each consultant invited at least 10 people and shared the event on social media. Approximately 40 community members attended, including youth, parents/caregivers, elected officials, nonprofit leaders, business owners, and community leaders. GEN consultant and Hopkins Student Senate President Abhinav Kumar, Hennepin County Commissioner LaTondresse, and Hopkins Mayor Hanlon spoke about the importance of GEN. The GEN team gathered information through conversations with event guests, and all attendees were encouraged to fill out the survey. The GEN visual identity/branding was unveiled at the event, and consultants took photos and videos of the event to use in future GEN communications.  Presentation The consultants created a multimedia presentation that reflects our work on GEN thus far. This presentation can be shared with potential partners as we continue to build the Generation Enhanced Network. Social Media Platforms The consultants created GEN social media channels and took photos and videos for use on these platforms. GEN Activities Since August 2022 While the group’s formal information-gathering phase ended in August 2022, GEN has continued to build momentum as we move toward a more expansive West Metro Youth Collaborative structure. Here are some of the activities GEN members have been engaged in: ● GEN team members were invited as guest speakers and answered questions during the Ukraine Youth Group visit to the City of Hopkins in August 2022. ● GEN team members attended the ICA Great Taste Fundraiser in October 2022 to make additional connections in the community and share the work of GEN. ● GEN team members expressed an interest in learning about the behind-the-scenes work of a community podcast. The PARLE podcast launched in December 2022. A professional podcast producer is mentoring GEN members in sound production, photography, videography, etc. Recording of the podcast episodes has been open to the public (registration through Hopkins Community Education). ● GEN team members planned and provided support (music, volunteering, community connections) for the ResourceWest spring fundraiser in March 2023. ● GEN team members will participate in the Harvard Human Flourishing Program’s Leadership Summit in April 2023. ● GEN team members will be collaborating in August/September 2023 on a youth/young adult art exhibition with the Trilogy Real Estate Group building and the Hallon apartments project on Blake and Excelsior Blvd. ● GEN team took part in providing music for the State of the City of Hopkins event. ● GEN team adult consultants continue to connect GEN team members and other youth in our community to mentors, job opportunities, mental health support, and other resources.  Administration CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Ari Lenz, Assistant City Manager Date: March 14, 2023 Subject: Sanneh Foundation Update _____________________________________________________________________ PURPOSE Crystal Ballard, Hopkins High School Principal will be present to give an updated on the Sanneh Foundation’s work. INFORMATION Council allocated up to $40,000 of ARPA funds to the Sanneh Foundation. The program is aimed to support embedded tutor-mentors at HHS for the 2022-2023 school year via the Sanneh Foundation’s Dreamline program - an academic intervention program serving low-income, under-performing students in public middle schools and high schools. The communities hit hardest by the pandemic right now are overwhelmingly low- income, highly-mobile, and food-insecure. Dreamline will embed three tutor-mentors (i.e. Coaches) at HHS to provide services on-site to students identified as most in need of intervention, whose teachers and administrators have identified as failing or near failing, and whose academic futures are in the greatest jeopardy. The majority of these students come from communities of color and speak numerous languages, including but not limited to: English, Hmong, Spanish, and Somali. Dreamline coaches provide enhanced academic intervention, culturally specific social- emotional support, and academic assistance. The goal is to increase these students' academic performance, to improve school connectedness, and to develop leadership and relationship skills, so that they are empowered to positively contribute to their school and the Hopkins community. FUTURE ACTION Sanneh Foundation will finish out the 2022-23 school year.  Planning and Economic Development Department CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Kurt Howard, Planner Date: March 14, 2023 Subject: Short-Term Rental Update _____________________________________________________________________ PURPOSE Staff will present an overview of short-term rentals (STRs) in Hopkins. The presentation will briefly ground the Council in definitions and the history of STR regulations in Hopkins, review current regulations that apply, revisit questions raised during the first STR application review processed by the City, explore potential policy objectives and recommend adjustments to the City’s regulatory approach to STRs in Hopkins. Staff will be looking for input and direction from the Council on various policy objectives and regulatory elements that could be incorporated into a potential update to the City’s regulations for STRs in Hopkins. INFORMATION The growth in the popularity of STRs enabled by online platforms including Airbnb, Vrbo, and many others has, expanded the reach of the STR market such that its impacts are felt in a wide variety of communities. Some of these impacts are arguably positive, such the availability of flexible hospitality options that did not exist before and economic development benefits. However, STRs can also bring with them negative impacts, including threats to neighborhood character and nuisances that create tension between landlords and neighbors. The mix of impacts that STRs will have in Hopkins is as unique as the community itself, so an effective approach to regulating STRs should be informed by the community’s goals and vision regarding the role of this land use in Hopkins. Short-Term Rentals Defined Short-term rentals are considered by the zoning code to be a form of lodging. Lodging is described as “establishments that provide temporary lodging for less than 30 days to transient guests who maintain a permanent place of residence elsewhere”. Short-Term Rentals are defined as “all or a portion of a residential dwelling unit offered for rent to overnight guests for fewer than 30 consecutive days”. History of Short-Term Rental Regulations in Hopkins Prior to the Zoning Code Update completed in the summer of 2022, STRs were not specifically acknowledged or regulated in the City Code. In 2018, staff adopted an internal zoning policy of treating short-term rentals the same as bed and breakfasts, since code language was readily available and bed and breakfasts have similar impacts to STRs. During the Zoning Code Update process, the topic of STRs was studied and considered more closely. It was ultimately decided to specifically acknowledge and regulate STRs as follows. Current Regulations Short-term rentals in Hopkins are currently regulated through three primary means: zoning, licensing, and general nuisance standards. In terms of zoning, STR as a land use is permitted in non-industrial mixed-use zones, conditional in neighborhood zones, and prohibited in all other zones. All permitted STRs in the City are subject to the Supplemental Use Regulations established by the code, which are: 1. Short-term rentals must comply with all applicable licensing and permit requirements of the city and Hennepin County. 2. No more than 6 adults and their dependent children may occupy rooms within a short-term rental. 3. Short-term rentals are not permitted on lots occupied by accessory dwelling units. 4. External structural alterations or site improvements that change the residential character of the lot upon which a short-term rental is located are prohibited. Examples of such prohibited alterations include the construction of a parking lot, the addition of commercial-like exterior lighting, and signage. 5. A register of short-term rental guests must be maintained and made available to the city upon request. 6. Short-term rentals may not be used for special events to be attended by individuals who are not registered guests of the short-term rental unit. The City Code’s rental licensing requirements apply to STRs in the same manner as any other rental dwelling unit. Many of these provisions area a natural fit for STRs, but some rental licensing requirements translate poorly to STRs. Most notably, all rental licensees are required to conduct criminal background checks on all prospective tenants. The City’s general nuisance ordinances related to things like noise, trash, and parking all apply to properties used for STR the same way they do for all other properties in the City. These ordinances reinforce the expectation to be a good neighbor and grant the City authority to step in if nuisances persist. Questions Raised The first application for a Conditional Use Permit (CUP) to use a property as a STR was considered by the Planning and Zoning Commission at its meeting on October 25, 2022 and by the City Council on November 1, 2022. Processing this permit application offered an opportunity to evaluate the City’s new regulations in practice. Questions, comments, and concerns raised during the application review process touched on the following topics:  The impacts of STRs on neighborhood character and how to manage them  The impact of STRs on affordability and availability of housing  The ability for the City to effectively monitor and address nuisances should they arise after an STR has been permitted  Rates of compliance with STR regulations and how to address existing unpermitted STRs  Ensuring a fair and consistent process for reviewing and deciding on STR permit applications In light of the insights gained by the first CUP application review, staff received direction from the City Council to study the City’s regulatory approach to STRs. Policy Objectives In order to identify opportunities to improve the City’s approach to regulating STRs, it is helpful to reflect on what outcomes the City hopes to achieve with its regulatory approach. Developing a clear set of policy objectives helps ensure that the regulatory approach taken is informed by Hopkins’ unique situation in the STR market, the community’s priorities, and the City’s capacity to effectively enforce its policies in a practical and cost-effective manner. Examples of potential policy objectives that have been articulated by the City Council, Planning and Zoning Commission, community, and staff thus far include:  Protecting life safety  Minimizing nuisances  Accurately tracking the number and location of STRs operating in the City  Preserving neighborhood character  Protecting affordability and availability of housing  Improving rates of compliance  Enabling reasonable use of private property  Offering options for hospitality Regulatory Elements A variety of tools and mechanisms are available to help the City achieve its policy objectives regarding STRs. Registration: A requirement for STR operators to register with the City could provide the City with an effective means of tracking the number and location of STR operators in the City. This approach could have the effect of creating an approachable means for STR operators to formalize their operation in the City while providing the City with a more reliable account of the number and location of STRs. The collection and availability of this information would help the City track and evaluate the impact of STRs on an ongoing basis as dynamic trends in the STR market continue to develop. Licensing: A requirement for STRs to obtain and maintain a special Short-Term Rental License could allow the City to specify the terms that all STRs must adhere to in order to operate legitimately in Hopkins, identify a timeframe for license renewal, and establish grounds for license revocation. An effective STR licensing program would likely retain some elements of the current licensing requirements, while omitting elements that are poorly suited or impractical for STRs. One notable element of the current rental licensing requirements that is poorly suited for STRs is the requirement for hosts to run criminal background checks on prospective guests. The terms of the license could also cross-reference the City’s general nuisance standards related to noise, trash, and parking, and include inspection requirements if desired. Inspections: Inspections could offer the City an opportunity to verify that basic life safety protections are in place for STRs that are permitted to operate in Hopkins. These protections could include the installation of smoke detectors, carbon monoxide detectors, and proper egress for sleeping areas. Inspections could be required either as a one-time requirement prior to finalizing approval of an STR or on a recurring schedule. Zoning: The City’s current zoning of STRs identifies the use as permitted, conditional, or prohibited depending on the zone. For zones in which the use is identified as permitted, properties are allowed to use their property for STR subject to the supplemental use regulations and rental licensing requirements. For zones in which STRs are a conditional use, STR operators are required to apply for a CUP which requires an $800 non-refundable application fee and a public hearing at the Planning and Zoning Commission before a final decision is made by the City Council. Analysis A fine-tuned and coordinated mix of these regulatory elements may be better suited to meet the community’s policy objectives than the CUP application process. The CUP application review process and public hearing do create an opportunity for the community to review the proposed use and develop conditions as needed to maintain public welfare. However, the scope of the CUP application review process is limited to the particular merits of an individual application rather than the impact of STRs in the City overall. Additionally, CUP approval runs with the land and grants CUP holders permission to use the property for STR so long as the approved conditions are being met, limiting the ability to revise operating conditions over time according to feedback and changing trends. Finally, the cost, timeline, and uncertainty associated with the CUP application process could increase the temptation for STR operators to circumvent the proper approval process altogether. Given the high proportion of properties in the City where STR is a conditional use, this would significantly harm rates of compliance and deprive the City of valuable information needed to effectively monitor STRs and their impacts. Recommendation In light of these considerations, staff recommends that the following potential amendments to the City’s regulation of STRs be considered:  Require STR operators to obtain a license with a two-year renewal period  Require initial inspection to verify adequate life safety protections are in place   Revise zoning to make STRs a permitted use in zones where it isn’t currently prohibited  Establish appeal process for administrative decisions and license revocation FUTURE ACTION Based on input and direction from the City Council, staff will determine precisely which ordinance revisions would be needed to implement any desired changes to the City’s STR regulations and return to the Council with draft revisions.  Planning and Economic Development Department CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Jan Youngquist, AICP, Community Development Coordinator Kersten Elverum, Director of Planning and Development Date: March 14, 2023 Subject: Affordable Housing Update _____________________________________________________________________ PURPOSE Staff will provide an affordable housing update based on the direction provided by the Council at its September 13, 2022 meeting. Council members indicated an interest in more information on inclusionary housing, 4d programs as a tool for the preservation of naturally occurring affordable housing, and affordable housing trust funds. Staff will be looking for direction from the Council on its continued interest in developing an inclusionary housing policy, exploring a 4d program, and developing an affordable housing trust fund. INFORMATION Inclusionary Housing What is inclusionary housing? Inclusionary housing is a tool used by local jurisdictions to increase their amount of new affordable housing. Inclusionary housing policies create a framework within which developers of new market rate housing are required to develop a certain number or percentage of housing units that are affordable to households that otherwise would not be able to afford to live in the housing being developed. This brief video includes a basic overview of inclusionary housing: Inclusionary Housing Explained. How do inclusionary housing policies provide affordable housing? Typically inclusionary policy requirements are triggered by new market rate developments of a specific size that require a land use decision such as a rezoning or planned unit development (PUD) or that include a request for city financial assistance. These policies often require a certain number or percentage of units to be affordable for households at various levels of area median income (AMI). Attachment A includes information on the AMI and affordable rents for the Twin Cities. Page 1 For example, a policy may require that a project with 20 units or more that is seeking a planned unit development include 15% of the units to be affordable at 50% AMI, based on the unit size and rents shown in the above table. In this scenario, the development would need to include at least 3 affordable units. If these were all 2 bedroom units, the rent would be $1,320 (or less) per month in 2022 and adjusted each year as HUD determines annual AMI for the region. Inclusionary housing policies require annual monitoring and oversight to ensure compliance. Some local communities have dedicated staff for this work, while others hire an outside third party. Which local communities have inclusionary housing policies? Thirteen communities in the seven-county metro area have adopted inclusionary housing policies, nine of which are communities in Hennepin County: Bloomington, Brooklyn Park, Eden Prairie, Edina, Golden Valley, Minneapolis, Minnetonka, Richfield, and St. Louis Park. The other communities in the metro area with inclusionary housing policies are Chaska, Mounds View, North St. Paul and Shoreview. There is not a one size fits all when it comes to inclusionary housing policies. These policies vary by community in response to local market conditions. Hopkins staff prepared a summary of the inclusionary housing policies for the eight suburban Hennepin County communities as those policies relate to the development of multi-unit rental housing (Attachment B). These policies all include alternatives to the policy requirements in acknowledgement that it might not be feasible to provide affordable units in every new development. How do inclusionary housing policies affect a development project’s feasibility? Feasibility of development is based on calculations of whether a project has sufficient income to cover its construction and operating costs and provide financial returns for the effort and risk undertaken by the developer and its sources of funding. Feasibility calculations have two major components: • Sources and uses of funds to build and finance a project • Comparison of ongoing operating costs compared to rental revenues (Refer to Attachment C for more information) Inclusionary housing policies affect the economic value of a development by driving part of its use to a below-market purpose: the provision of units affordable to households that otherwise would not be able to afford the market rate rent at the property. This has the effect of lowering net operating income. When faced with this situation, developers typically have three options: • Decline to proceed with the proposed market-rate development project. • Persuade the owner of the development site to sell it for a below-market price, which most private landowners are unwilling to do. Page 2  • Accept a lower return on the proposed market-rate project, which most developers have limited (if any) ability to do, as equity investors expect a certain rate of return on their financial investment in the project. However, development can move forward under inclusionary housing policies without experiencing these outcomes, under the following scenarios: • The rents for the market-rate units are high enough to “cross subsidize” the lost value associated with rents for the below-market units. Increases in land prices, construction costs and interest rates over the past few years have made this scenario difficult to achieve. • A subsidy is provided to sufficiently mitigate the impact of the below-market units on overall development feasibility. These incentives can come in the form of subsidies such as Tax Increment Financing (TIF) or tax abatement and may also include other incentives such as density bonuses or parking reductions. This report provides a deeper dive into this topic: Economics-of-Inclusionary-Zoning.pdf (uli.org) Potential Costs of an Inclusionary Housing Policy Recent affordable housing development in Hopkins has been structured with 100% of the units being affordable, including Oxford Village, the Burnes Building, Vista 44 and Building A at 325 Blake Road. Inclusionary housing provides mixed income opportunities, where the development provides affordable and market rate units in the same building. Developments with 100% affordable units qualify for funding such as Low Income Housing Tax Credits (LIHTC) as well as other state and federal subsidy programs. LIHTC is a very competitive program and mixed income buildings are not able to score enough points in the application process to qualify. Often, mixed income buildings rely on local subsidies to offset the financial gap. At the Council’s work session on September 13, 2022, staff from Ehlers, the City’s financial consultant, presented information on the potential costs associated with providing financial assistance for affordable housing through an inclusionary housing policy. Various scenarios of affordability requirements were run based on the financial information associated with the Ovation project, which has 150 units of multi-family housing. Assuming an inclusionary policy that requires 25 years of affordability and 10% of the units to be affordable, the present value affordability cost estimate is: Affordability Level Total Cost Per Unit Cost 10% of units at 30% AMI (15 units) $3,433,214 $228,881 10% of units at 50% AMI (15 units) $2,200,792 $146,719 10% of units at 60% AMI (15 units) $1,583,942 $105,596 Page 3 The tools for subsidizing these costs are Tax Increment Financing (TIF)—either a Housing or a Redevelopment TIF District, tax abatement, or tax levy. For housing TIF districts, state statute requires 20% of the units to be affordable at 50% AMI or 40% of the units to be affordable at 60% AMI. Redevelopment TIF districts do not have housing affordability threshold requirements, but not all sites qualify as a Redevelopment District. As an example, the following table shows the present value affordability cost estimate for a recent development using the affordability requirements of a Housing TIF District. Housing TIF District Scenario Affordability Level Total Cost Per Unit Cost 20% of units at 50% AMI (30 units) $4,820,852 $160,695 40% of units at 60% AMI (60 units) $7,056,340 $119,599 Additional scenarios provided by Ehlers are included in Attachment D. Previous Direction from the Council on Inclusionary Housing Staff presented an overview of inclusionary housing at the Council’s September 13, 2022 work session. The Council was generally interested in further exploring an inclusionary policy, but wanted to take a flexible approach. Concerns about the resulting cost of an inclusionary policy were also voiced by some Council members. Staff Recommendations on Inclusionary Housing If the Council is interested in developing an inclusionary housing policy, staff recommends the following parameters: Applies to: Multi-family rental development projects with 10 or more units that receive financial assistance or discretionary land use approvals from the City Requirements: 10% of units at ____ AMI, with a mix of unit types distributed throughout the building Term: 25 years Alternatives: Exemptions subject to approval by the City Council. Monitoring: Annual compliance monitoring and oversight to be done by a third party, paid for by the developer Questions for the Council: • Are you interested in developing an inclusionary housing policy? • How should the AMI level(s) be determined? ­ Staff recommendation ­ Market study to determine the needs specific to Hopkins ­ Council decision • If you develop an inclusionary housing policy, would you want to include a payment in lieu option? Page 4  4d Program What is 4d? The State of Minnesota has several different tax classification types for rental property. Class 4d is defined as “low-income rental property” under MN Statutes Section 273.13, Subd. 25. Class 4d property is taxed at a rate of 0.75% for the first tier of valuation and at 0.25% for the second tier of valuation. In comparison, typical market-rate rental units are considered class 4a or 4b and are taxed at a rate of 1.25%. Properties qualify for 4d classification if the units are subject to rent and income restrictions under the terms of financial assistance provided to the rental property by a local, state, or federal government, and at least 20 percent of the units are occupied by residents whose household income at the time of initial occupancy does not exceed 60% AMI. Only the affordable units in the building qualify for 4d classification. Owners of legally binding subsidized affordable housing work directly with the Minnesota Housing Finance Agency for certification of the units for 4d tax classification. How have 4d programs been used for the preservation of affordable housing? Some communities in the metro area have established 4d Programs, with the goal to preserve naturally occurring affordable housing by providing reduced property taxes for rental property owners who commit to the affordability requirements required by statute. The following local cities have 4d Programs: Edina, Golden Valley, Minneapolis, St. Louis Park and St. Paul. Since the 4d classification requires governmental financial assistance, cities with 4d programs provide grants to property owners to help offset the costs of administrative and reporting requirements associated with the program. Property owners are required to submit annual reports to the cities as well as annual applications to the Minnesota Housing Finance Agency to renew the 4d tax status. Some cities also provide direct grants for energy efficiency improvements. Others provide referrals to programs offered by Xcel Energy, CenterPoint Energy, or the Center for Energy and the Environment. The 4d Programs in Minneapolis and St. Paul are robust and have each had more than 2,000 individual housing units enrolled. These cities have dedicated staff to promote the programs and assist property owners in navigating the process. To date, the suburban communities of Edina, Golden Valley and St. Louis Park have not had large enrollment in their programs. Hopkins staff prepared a summary of these local 4d Program requirements (Attachment E). How does the 4d tax classification reduce property taxes? As mentioned earlier, a market rate apartment building is taxed at a rate of 1.25%. Units that qualify as 4d are taxed at 0.75% for the first tier of value, which is currently $100,000 (as defined in statute) and the second tier is taxed at 0.25%. Page 5 The following table shows the potential tax savings for a property owner through a 4d Program for both a 23 unit apartment building and a 187 unit apartment building: 23 unit apartment building in Hopkins 2021 Market Value Per Unit Value Tax Capacity 2022 Taxes $2,312,000 $ 100,522 $ 28,900 $ 44,101 Scenario Tax Capacity Total Taxes Potential Tax Savings 20% 4d affordable (5 units) $26,374 $40,527 $3,574 100% 4d affordable units (23 units) $17,280 $27,672 $16,429 187 unit apartment building in Hopkins 2021 Market Value Per Unit Value Tax Capacity 2022 Taxes $23,721,000 $ 126,850 $ 296,513 $ 452,476 Scenario Tax Total Taxes Potential Tax Capacity Savings 20% 4d affordable (38 units) $267,309 $411,163 $41,314 100% 4d affordable units (187 units) $152,803 $249,290 $203,186 The legislature is currently considering bills that would eliminate the two tiers and modify the 4d tax classification rate to 0.25% for the entire valuation, which would significantly reduce the property taxes. Questions for the Council:  Are you interested in pursuing a 4d policy?  What are the appropriate levels of incentives?  What additional information would help inform your decision? Page 6  Affordable Housing Trust Funds Affordable Housing Trust Funds are funds that are set up by local government by dedicating local revenues for affordable housing. Affordable Housing Trust Funds are defined in MN Statute 462C.16. Sources of funds include: • HRA or general levy • Bond proceeds • Payment in lieu from an inclusionary housing program • Matching funds from a federal or state housing trust fund • Cash donations from individuals or corporations. • Grants and loans from state, federal or private source • Investment earnings on the funds Uses of funds include: • Grants and loans for development, rehabilitation or financing of housing • Matches to other funds for housing projects • Down payment assistance, rental assistance, and home buyer counseling services • Administrative expenses (up to 10% of the fund balance) Questions for the Council: • Are you interested in establishing an Affordable Housing Trust Fund? • If so, how would you like to fund it? FUTURE ACTION If the Council chooses to move forward with an inclusionary policy, 4d Program and/or an Affordable Housing Trust Fund, staff will work with our attorneys and financial advisor and return to the Council with draft policies and programs. If an inclusionary policy is pursued, the City would also need to amend our TIF policy. Attachments: A. Affordable Housing Overview B. Summary of Suburban Hennepin County Inclusionary Housing Programs C. Understanding the Economics of Development D. Scenarios of Financial Assistance for an Inclusionary Policy E. Summary of Local 4d Programs Page 7  ATTACHMENT A Affordable Housing Overview The federal government defines housing as affordable when it consumes no more than 30% of a household’s income, so people can pay for other necessities such as food, clothing and transportation. Housing affordability is often measured against the Area Median Income (AMI). Income thresholds relative to AMI identify households that are eligible to live in income- restricted housing. Each year, the U.S. Department of Housing and Urban Development (HUD) defines and calculates levels of AMI by household size for every region in the country. HUD’s AMI for a family of four in the Twin Cities region in 2022 is $118,200. The 2023 AMI data is anticipated to be released by HUD in May. Households earning less than 80 percent of the AMI are considered low income by HUD. Those earning less than 50 percent of the AMI are considered very low income, and those making less than 30 percent of the AMI is considered extremely low income by HUD. 2022 Level of AMI for the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area (family of 4) Area Median Income (AMI) $118,200 80% of AMI $89,400 60% of AMI $70,380 50% of AMI $58,650 30% of AMI $35,200 Affordable rents are calculated based on the number of bedrooms in a housing unit. The following table shows affordable rents for different income levels for our region in 2022. 2022 Affordable Rents for the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area No. of Bedrooms 30% AMI 50% AMI 60% AMI 80% AMI Studio $616 $1,027 $1,232 $1,643 1 Bedroom $660 $1,100 $1,320 $1,760 2 Bedrooms $792 $1,320 $1,584 $2,112 3 Bedrooms $915 $1,525 $1,830 $2,440  ATTACHMENT B SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Bloomington 20+ units ­ 9% of units at or 20 years ­ Density bonus ­ Construction of required units on below 60% AMI ­ Floor area ratio bonus another site. 9 % of units must be a mix ­ Height bonus of extremely low, very low and up to Opportunity (Percentage was ­ Parking reduction 60% AMI. Housing determined through ­ Enclosed parking space ­ Payment in lieu ($9.60 per square foot Requirement— an Affordable Housing conversion of leasable space) to the City’s adopted by Nexus Study and ­ Minimum unit size reductions affordable housing trust fund ordinance Feasibility Analysis) ­ Alternative exterior materials ­ Dedication of land lieu amending the ­ Storage space reduction ­ Purchase and rehabilitation of naturally City Code ­ Landscape fee in lieu reduction occurring affordable housing units ­ Development fee deferment ­ Acquisition and rehabilitation of existing or waivers market rate units to convert to ­ Expedited review of plans affordable units ­ Land write down for ­ Partnership with an affordable housing development on City owned developer land ­ Tax Increment Financing (TIF) ­ Project based housing choice vouchers Brooklyn Park ­ 10+ units AND ­ 15% of units at 60% 20 years ­ Minimum of 10% density Alternatives that provides or enables the ­ Comp Plan Amendment, or AMI, or bonus provision of affordable housing units in Mixed Income ­ Zoning Code or Map ­ 10% of units at 50% the city, subject to City Council approval. Housing Policy Amendment, or AMI, or ­ Planned Unit Development ­ 5% of units at 30% (PUD), or AMI ­ City financial assistance ­ All residential or mixed use projects located in a Transit Oriented Development area  SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Eden Prairie ­ 15+ units AND ­ 15% of units at or Perpetuity None specified Exemptions are at the sole discretion of ­ Rezoning, or below 60% AMI, or the City Council. Inclusionary ­ Comp Plan Amendment, or ­ 10% of units at or Housing Policy ­ PUD, or below 50% AMI, or ­ Site plan review, or ­ 5% of units at or ­ City financial assistance below 30% AMI Edina ­ 20 + units AND ­ 20% of units at 60% 20 years ­ Density bonus ­ Dedication of existing units within the ­ Rezoning, or affordable rental ­ Parking reduction city (110% of units) New Multi- ­ Comp Plan Amendment, or rates, OR ­ Tax increment financing (TIF) ­ Construction of required units on Family ­ City financial assistance, or ­ 10% of units at 50% ­ Deferred low-interest loans another site Affordable ­ Development on land affordable rental from HRA ­ Payment in lieu ($125,000 per unit) into Housing Policy purchased from the City rates ­ Tax abatement City's Affordable Housing Trust Fund Golden Valley ­ 10+ units AND ­ 15% of units at 60% 20 years ­ Minimum of 33% reduction in ­ Dedication of existing units within the ­ Conditional Use Permit, or AMI, or required parking city Mixed-Income ­ Zoning Map Amendment, or ­ 10% of units at 50% ­ Minimum of 10% density ­ Alternative that provides or enables the Housing Policy ­ Comp Plan Amendment, or AMI, bonus provision of affordable units, as ­ PUD, or approved by the City Council ­ City financial assistance Minnetonka ­ 10+ units ­ 5% of units at 50% 30 years None specified City may waive the requirement based on AMI a case by case basis review. Affordable ­ Zone change or Housing Policy Comp Plan Amendment without City financial assistance: 10% at 60%, with at least 5% at 50% AMI ­ If project receives City financial assistance: 20% of units at 50% AMI OR 40% of units at 60% AMI  SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Richfield ­ 5+ units AND ­ 20% of units at 60% 15 years or ­ Building permit fee reduction ­ Exceptions for projects between 5 and ­ City financial assistance AMI, or term of ­ 4d property tax reduction 19 units may be granted by the Inclusionary ­ 15% of units at 50% subsidy ­ Code flexibility in PUDs Community Development Director Affordable AMI, or (whichever is ­ Density bonus of 5-15% ­ If developer identifies alternative Housing Policy ­ 10% of units at 30% greater) means of addressing the intent of the AMI policy, the City Council, HRA Board, or Economic Development Authority Board may vary the application of the policy St. Louis Park ­ 10+ units AND ­ 20% of units at 60% 25 years None specified. Subject to approval by the City Council. ­ Comp Plan Amendment, or AMI, or ­ Dedication of existing units within the Inclusionary ­ PUD, or ­ 10% of units at 50% city Housing Policy ­ City financial assistance AMI, or ­ Off-site construction of affordable units ­ 5% of units at 30% ­ Partner with affordable housing (also applies to renovation of AMI developer in construction of units on an existing building that another site includes 10+ units) Developments with ­ Alternative that provides or enables the 50+ units must include provision of affordable units in the city a minimum number of 3 or 4 bedroom units NOTE: This is a summary level review of these policies as they relate to new multi-unit rental development. Each policy is unique and may include additional requirements that are not depicted in this table. ATTACHMENT C  ATTACHMENT D 150 Unit Market Rate Rental Project (Enclave) 13-Sep-22 Total Present Value Affordability Cost Estimate 15 Years 25 Years 30 Years Affordability RequirementAff. Units Total Per Unit Total Per Unit Total Per Unit 5% of units @ 30% AMI 8 1,296,497 172,866 1,805,628 240,750 1,990,931 265,457 5% of units @ 50% AMI 8 827,094 110,279 1,151,891 153,586 1,270,104 169,347 5% of units @ 60% AMI 8 592,130 78,951 824,658 109,954 909,288 121,238 5% of units @ 80% AMI 8 122,464 16,329 170,556 22,741 188,059 25,075 10% of units @ 30% AMI 15 2,465,155 164,344 3,433,214 228,881 3,785,548 252,370 10% of units @ 50% AMI 15 1,580,237 105,349 2,200,792 146,719 2,426,649 161,777 10% of units @ 60% AMI 15 1,137,320 75,821 1,583,942 105,596 1,746,494 116,433 10% of units @ 80% AMI 15 251,878 16,792 350,790 23,386 386,790 25,786 20% of units @ 50% AMI 30 3,461,522 115,384 4,820,852 160,695 5,315,593 177,186 Hsg TIF 40% of units @ 60% AMI 59 5,066,672 85,876 7,056,340 119,599 7,780,497 131,873 Assumptions: Annualized rental income loss per applicable affordability requirement is discounted to present value based on affordability duration Affordable rental rates account for utility allow ance • Tools Annual rental income reduction discounted at 4.25% for present value Actual gap for proposed projects w ill vary depending on specifics Shaded areas indicate TIF and Tax Credit Eligibility thresholds TIF District (housing or redevelopment) Tax Abatement Tax Levy  Attachment E: Summary of Local 4d Programs City Existing Term Property Income Qualification Grant from City/HRA Energy Efficiency (optional) Other requirements Enrollment Length Eligibility and Affordability Edina 1 single 5 years. At least 20% Income qualification determined with initial $100 per unit, capped at Grant: from the City’s Affordable Housing Trust Fund Rent increases limited to 6% or less annually unless family 10 years if of units at occupancy. $5,000 per building providing 90% of the costs to improve energy efficiency, the unit is turning over to a new tenant or the owner rental and they ≤60% AMI. Thereafter, increased incomes of tenants in after rebates, up to $50,000. Property owner would provides evidence that a larger rent increase is one 23- choose affordable units will not violate the program City pays application fee to work with the Center for Energy and the Environment to needed to address deferred maintenance or unit the 1-4 unit requirements. MN Housing the first year. identify energy efficiency opportunities and rebates. unanticipated operating cost increases. apartment energy buildings, ($10 per unit) building efficiency 50% must be Existing tenants in units that have program Must commit to accept tenant based assistance. grants. affordable. compliant rents do not need to be income Involuntary displacement of residents prohibited. qualified. Golden 0 units 10 years 10+ units Rental property owners do not need to verify $100 per unit, capped at Referral: Property owners may be eligible for the Rent increases limited to 5% or less annually unless Valley incomes of existing tenants. $1,000 per building. Multifamily Building Efficiency Program through Xcel the unit is turning over to a new tenant before the At least 20% Energy and/or CenterPoint Energy. next allowed annual increase or the owner provides of units at Thereafter, increased incomes of tenants in City pays application fee to evidence that a larger rent increase is needed to ≤60% AMI. affordable units will not violate the program MN Housing the first year address deferred maintenance or unanticipated requirements. only. ($10 per unit, capped at operating cost increases. $100 per property.) If units turn over and new tenants move in, Must commit to accept tenant based assistance. owners must verify tenant incomes and report Payment of the recording fee Involuntary displacement of residents prohibited. them to the City of Golden Valley on an annual for the declaration against basis. the property. Minneapolis 2,044 units 10 years At least 20% Existing tenants do not need to be income $100 per unit, capped at Referral: Free energy efficiency and healthy homes Rent increase limited to 6% or less annually, of units at qualified $1,000 per building assessments available to buildings with 5 or more unless the unit is turning over to a new tenant or ≤60% AMI. units. Free or low cost energy assessments are the owner provides evidence that a larger rent Income qualification of future tenants is City pays MN Housing available to 2-4 unit properties. increase is needed to address deferred determined upon initial occupancy only. application fee for the first maintenance or unanticipated operating cost Thereafter, increased incomes of tenants in year. ($10 per unit.) Grants: Existing buildings are eligible for City Green increases. affordable units will not violate the program Cost Share funding up to a 90% cost share match and requirements. a maximum $50,000 project cost. Solar Energy incentives. For qualified properties, the City will provide an incentive of $0.35-.40 per estimated annual kwh production for the 1st year of production, up to $50,000. Can discuss financial assistance for lead window remediation with City staff. St. Louis 17 units 5 years 2+ units. Existing tenants in units that have program- $200 per unit, capped at Referral: Owners of 5+ unit buildings can sign up for the Rent increases limited to 5% or less annually unless Park (one 22- At least 20% compliant rents do not need to be income $6,000 per property. Multifamily Building Efficiency Program through Xcel the unit is turning over to a new tenant before the unit of units at qualified. Energy and CenterPoint Energy, and complete a free next allowed annual increase or the owner provides apartment ≤60% AMI. City pays MN Housing energy assessment by Energy Insight Inc., to receive an evidence that a larger rent increase is needed to building) Income qualification for tenants is determined application fee for the first energy report of recommended improvements. address deferred maintenance or unanticipated upon initial occupancy. Increased income of year. ($10 per unit.) operating cost increases. tenants in affordable units will not violate 3-4 unit buildings can get a free or low-cost energy program requirements. assessment from the Home Energy Squad.  Attachment E: Summary of Local 4d Programs City Existing Term Property Income Qualification Grant from City/HRA Energy Efficiency (optional) Other requirements Enrollment Length Eligibility and Affordability St. Paul 2,200+ 10 years 1 unit—must Tenants with existing leases at time of the $200 per unit that’s N/A Must advertise vacancies on HousingLink. units be affordable property’s 4d certification are exempt from affordable up to 50% AMI Non-discrimination based on tenant based at 50% AMI. income verification; and, thereafter, new $75 per unit that’s affordable assistance. tenants’ household incomes are verified at up to 60% AMI 2 units-at initial occupancy only. For buildings with 50+ units, affordable units must be Capped at $1,200 per least 1 unit at distributed across unit types. property. 50% AMI. Option to commit 2nd City HRA pays: unit at 50- • Title and property search 60% AMI. for verification of owners’ eligibility ($25 per 3+ units— property); 20% of units • Recording of the at 50% AMI Declaration of Restrictive OR 50% of Covenants ($46 per units at 60% property); and AMI. • Application submittal to Minnesota Housing ($10 per 4d unit; capped at $150 per property). NOTE: This is a summary level review of these policies. Each policy is unique and may include additional requirements that are not depicted in this table.