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HomeMy WebLinkAbout2019/05/13 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA MAY 13, 2019 6:00 p.m. STUDY SESSION – Council chambers Discussion items 1. 6:00 p.m. Future study session agenda planning 2. 6:05 p.m. 2020 Budget/Maintaining Financial Sustainability 9:05 p.m. Communications/updates (verbal) 9:10 p.m. Adjourn Written reports 3. Mixed-use zoning district density bonus 4. PLACE Via Sol and Via Luna projects update 5. 2018 Housing Activity Report Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the administration department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting. Meeting: Study session Meeting date: May 13, 2019 Discussion item: 1 Executive summary Title: Future study session agenda planning Recommended action: The city council and city manager to set the agenda for the regularly scheduled study session on May 28, 2019. Policy consideration: Not applicable. Summary: This report summarizes the proposed agenda for the regularly scheduled study session on May 28, 2019. Also attached to this report is: - Study session discussion topics and timeline Financial or budget considerations: Not applicable. Strategic priority consideration: Not applicable. Supporting documents: Tentative agenda – May 28, 2019 Study session discussion topics and timeline Prepared by: Debbie Fischer, Administrative Services Office Assistant Reviewed by: Maria Carrillo Perez, Management Assistant Approved by: Tom Harmening, City Manager Study session meeting of May 13, 2019 (Item No. 1) Page 2 Title: Future study session agenda planning May 28, 2019. 6:30 p.m. Study session – Community room Tentative discussion items 1.Future study session agenda planning – Administrative services (5 minutes) 2.PLACES (Public Art and Community Engagement Southwest) – Community development (20 minutes) PLACES is the public art effort along the SWLRT corridor. It was initiated by Hennepin County Community Works and is being continued by Forecast Public Art with the intent of creating a plan and pursuing private funding for art. The committee includes the five corridor cities, Hennepin County, the Met Council and art organizations. The group has asked the public agencies to contribute $10,000 to continue the management of this project over the next year. Jack Becker from Forecast Public Art will be here to discuss the request. 3.CSAH 25 conceptual roadway layout study – Community development/engineering (30 minutes) This background study assessed current conditions and character of CSAH 25 to pursue the redesign to an urban boulevard. Staff will review the recommended priorities for moving forward. 4.Historic Walker Lake small area plan recommendations – Community development (45 minutes) Presentation on the small area revitalization plan and design guidelines to review the planning process, public input, and plan recommendations for Historic Walker Lake. 5.Former Sam's Club site land use and development study – Community development (50 minutes) Presentation of three land use and development scenarios, fit plans, development assumptions, and recommended lands use and zoning amendments needed for each. Discussion with city council on next steps. Communications/meeting check-in – Administrative services (5 minutes) Time for communications between staff and council will be set aside on every study session agenda for the purposes of information sharing. Written reports 6.SWLRT update Study session meeting of May 13, 2019 (Item No. 1) Page 3 Title: Future study session agenda planning Study session discussion topics and timeline Discussion topic Comments Date Scheduled Ordinance regarding home occupations (Firearm sales) Discussed 5/21/18 & 7/23. Written report provided at 9/24 study session. PC currently reviewing ordinance options. Policy on city facilities adopted 10/15. Going to PC 1st reading May 20, 2019 Revitalization of Walker Lake area Part of preserving Walker building reports: 8/28/17, 9/25/17, 1/22/18, design study 2/12/18, update 4/23/18, design study update 8/27/18; SS report 2/11/19 May 28, 2019 C-1 zoning district retail and service use restrictions Discussed on 6/11/18; referred to PC. Discussed 11/26/18; SS report 2/25/19; Discussed 3/11/19 –further discussion requested by council June 10, 2019 Immigration & supporting families Discussed 8/6 and referred to HRC. HRC held comm. mtg. in Oct. Council/HRC discussion on 12/10; referred back to HRC for refinement of recommendations. June 24, 2019 Accessory dwelling units/home-based businesses June, 2019 Election holiday discussion 3rd Qtr. Crime free ordinance/affordable housing strategies Discussed 5/14/18. 1st reading housing trust fund 10/1/18; Other affordable housing strategies/Crime Free Ordinance – Nov/Dec, 12/10 and 12/17/18 and 1/14/19 council discussion; Certain provisions of crime free ord. suspended; Work group being formed; CFO work group discussed on 3/25/2019 TBD; Pending workgroup recommendation Discuss and evaluate our public process TBD Easy access to nature, across city, starting with low-income neighborhoods TBD One-for-one replacement policy for NOAH properties TBD STEP discussion: facilities Discussed on 1/14/19 City, School Dist and STEP are meeting on 5/9 Westwood Hills Nature Center Access Fund *On hold pending discussion with school district. *On hold SEED’s community greenhouse/resilient cities initiative *On hold until Food Access and Security study is complete and recommendations have been made.*On hold Discuss Council Norms Reviewed on 5/7/18; adoption postponed on 5/21/18. Discussed at Jan. Retreat; discussed on 3/18/19 Meeting: Study session Meeting date: May 13, 2019 Discussion item: 2 Executive summary Title: 2020 Budget/Maintaining Financial Sustainability Recommended action: Council is asked to participate in a discussion related to the 2020 budget and ongoing financial sustainability using the systems thinking approach. Policy consideration: • Does council have sufficient information to provide parameters to staff for 2020 budget development? • Does council have sufficient information to provide direction on capital and debt service plans for 2020 and future years? • Are there shifts that need to be made for continued fiscal health and sustainability while taking into consideration strategic priorities and overall service delivery for our system? • What additional information would the council wish to review during the upcoming budget and capital processes? Summary: As a result of the 2019 retreat, Council and staff committed to using a systems thinking approach when considering operations, programs, policies and opportunities for St. Louis Park. We are a high touch, progressive organization and community that strives to continue to provide excellent service delivery with future thinking in mind. It is important to check in on the overall fiscal health and sustainability of what the council desires for the community from a systems perspective as we move ahead to budget for 2020 and planning for the future. Based on the above, the kick-off to our annual budget and capital and financial planning effort is being done differently this year and will include the use of a facilitator. The facilitators name is Mike Sable and his bio is attached along with a more detailed agenda for the meeting. Financial or budget considerations: The financial position of the city is very strong and healthy. Financial considerations will be discussed during the study session. Strategic priority consideration: All of the city council’s strategic priorities are related to this discussion Supporting documents: Facilitator bio (Mike Sable) and agenda Budget calendar 2020 (draft) City of St. Louis Park Strategic Priorities Prepared by: Nancy Deno, Deputy City Manager Maria Carrillo-Perez Management Assistant Approved by: Tom Harmening, City Manager Study session meeting of May 13, 2019 (Item No. 2) Page 2 Title: 2020 Budget/Maintaining Financial Sustainability Michael Sable (Bio) Michael Sable is a graduate of Augsburg (BA) and the University of St. Thomas (MBA) and brings 20 years of local government management experience. He’s currently an adjunct faculty member at the University of Virginia, Weldon Cooper Center for Public Service, and managing partner for the consulting firm The Work of Leadership. Michael consults for the local governments across the country helping them proactively respond to the changing demands of the 21st century. Prior to starting the firm, Sable worked for Hennepin County, directing a department staff of 270 with a combined operating and capital budget of $180m. He’s also worked for the cities of Brooklyn Park (pop. 78,000) and Cedar Rapids, IA (pop. 125,000) as the Assistant City Manager, including serving as Interim City Manager for Brooklyn Park in 2015. Sable currently serves on the board of directors for the Alliance for Innovation, a member- based organization promoting innovation in local government nationally, GTS Educational Events, providing training and event services to local governments in the region, and an advisor to the Drucker Institute Public Sector Playbook at Claremont Graduate College. Study session meeting of May 13, 2019 (Item No. 2) Page 3 Title: 2020 Budget/Maintaining Financial Sustainability Agenda 2020 Budget and Maintaining Financial Sustainability 6:00pm Welcome & Introductions – Tom Harmening, City Manager Overview of study session process – Mike Sable, Consultant Setting the context - Tom Harmening, City Manager The financial picture – Tim Simon, Chief Financial Officer Historical overview Budget assumptions Capital plan forecasts/impacts Break Questions for clarity – Mike Sable, Consultant Focused conversation with council. What do you hear, feel, trends, concerns? What other considerations need to be addressed? Is there other information needed? Break Outcomes and decision making moving forward together Healthy choices to ensure our continued success 5 – 10 yrs. and more Levy impacts? Systems thinking Next steps Wrap up 9pm Adjourn Study session meeting of May 13, 2019 (Item No. 2) Page 4 Title: 2020 Budget/Maintaining Financial Sustainability Strategic Priorities 2018 – 2028 St. Louis Park, adopted 5/21/18 City of St. Louis Park Strategic Priorities St. Louis Park is committed to being a leader in racial equity and inclusion in order to create a more just and inclusive community for all. Creating pipelines and opportunities for communities of color and indigenous people to be part of city leadership roles. Investing in small business and services owned by people of color and indigenous people. Expanding racial equity as an ongoing discussion within all areas of city business. Creating awareness and a learning environment where consequences and unintentional impact of our work and decisions are addressed. St. Louis Park is committed to continue to lead in environmental stewardship. Supporting climate action plan strategies and goals through planning, education, resources, communication and implementation of programs and initiatives. Increasing opportunities to connect with nature in the city. Continuing to protect and improve the quality of natural resources, parks, lakes, creek, wetlands and surface water planning, and using green spaces effectively. Continuing to provide quality water to residents. St. Louis Park is committed to providing a broad range of housing and neighborhood-oriented development. Providing more diverse and creative housing choices to meet the needs of current and future residents while preserving existing affordable housing. Fostering and facilitating reinvestment and redevelopment of neighborhood-oriented businesses and services. Promoting locally owned small business, especially in indigenous, immigrant and communities of color. Conducting research to further understand what people want and need access to in the community, i.e., food, services, housing options, business opportunities, gathering spaces. St. Louis Park is committed to providing a variety of options for people to make their way around the city comfortably, safely and reliably. Continuing to expand the network of sidewalks, trails and bike facilities. Researching and implementing multiple and affordable mobility solutions for all. Fostering smart growth and transit-oriented housing development. Increasing pedestrian safety through crosswalk improvements and increased park and trail lighting. Expanding the number of north-south and east-west transit options. St. Louis Park is committed to creating opportunities to build social capital through community engagement. Fostering and facilitating transparency between community and the City of St. Louis Park. Building strategies and opportunities to reach historically unheard voices and unseen communities within St. Louis Park. Building trust and deeper connections within communities of color and indigenous people. Connecting and engaging with St. Louis Park School District and other community organizations to meet the needs of current and future community. Continuing to support youth and future generations. Encourage neighborhood associations to deepen their reach and connections within the community. Study session meeting of May 13, 2019 (Item No. 2) Title: 2020 Budget/Maintaining Financial Sustainability Page 5 Meeting: Study session Meeting date: May 13, 2019 Written report: 3 Executive summary Title: Mixed-use zoning district density bonus Recommended action: Provide feedback to staff on the proposed density bonus requirements in the draft mixed-use zoning district. Policy consideration: Does city council support the proposed density bonus point values and concepts in the mixed-use zoning district? Summary: The City of St. Louis Park’s current M-X Mixed Use zoning district requires a Planned Unit Development (PUD) overlay in order to allow for mixed-use buildings. In 2015, the City of St. Louis Park adopted a specific PUD zoning district, which made the existing M-X district obsolete, except for mixed use development previously approved under the old code. On December 17, 2018 the city council approved the St. Louis Park 2040 comprehensive plan for submittal to the Metropolitan Council. It is expected that the Metropolitan Council will approve the plan in June or July 2019, and the plan will be placed into effect immediately following. The plan re-guides several properties on the Future Land Use Map in the city to mixed use. Therefore, it is a high priority to update the mixed-use zoning ordinance so it is consistent with the St. Louis Park 2040 land use plan. City council reviewed portions of the proposed mixed-use zoning ordinance in March 2019, including a discussion on density bonus concepts and point values. Some council members expressed interest in reviewing the final density bonus draft language prior to formal action. The density bonus includes points for inclusionary housing (6 points), green building and climate action (8 points), inclusionary commercial (4 points), travel demand management (2 points) and gathering spaces (2 points). This language is included in this report for council’s consideration. On April 17, the planning commission held a public hearing, and voted unanimously to recommend the adoption of the updated mixed-use zoning ordinance. This item will be brought to city council for a first reading of an ordinance on May 20, 2019. Financial or budget considerations: None Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: Discussion Draft density bonus language Prepared by: Jennifer Monson, Planner Reviewed by: Sean Walther, Planning and Zoning Supervisor Karen Barton, Community Development Director Approved by: Tom Harmening, City Manager Study session meeting of May 13, 2019 (Item No. 3) Page 2 Title: Mixed-use zoning district density bonus Discussion Background: Density bonuses: The maximum permitted-by-right density in the draft mixed-use zoning district is 50 units per acre. To meet the goals of the 2040 Comprehensive Plan, the draft ordinance seeks to allow up to 75 units per acre through the inclusion of density bonuses. The density bonus concept is used to help the city more predictably advance goals for inclusionary housing, climate action, sustainable buildings, affordable commercial space, and public gathering spaces. This approach could potentially reduce the need for lengthy negotiations to achieve these goals. Also, it would not hinge upon city financial assistance alone to advance these goals. It is important to keep the density bonus list small to ensure the city is able to achieve desired goals and outcomes, and to provide choices to property owners to implement items most suitable to their sites, developments and goals. During city council’s study session on March 11, 2019, some members of the council expressed interest in reviewing the density bonus items prior to council’s formal consideration of the first reading of an ordinance. Staff provided the summary below of the proposed density bonus topics, research, and point values. Present considerations: The density bonus topics and values have been organized by city council’s stated priority levels, with the highest priority items listed first with higher point values. The density bonus includes points for inclusionary housing (6 points), green building and climate action (8 points), inclusionary commercial (4 points), travel demand management (2 points) and gathering spaces (2 points). Inclusionary housing: Inclusionary housing is listed first, which would allow a developer 6 points towards increased density if they provide affordable housing at levels that are consistent with the inclusionary housing policy. Environmental, energy, and water resources: Staff worked with the city’s climate action plan and green building policy consultants at LHB to help determine density bonus items and point allocations regarding sustainability and climate action. LHB recommended higher points (5) for the green building policy and fewer points (3) for on-site renewable energy. LHB’s research showed the green building policy has an overall larger effect on climate action than renewable energy alone. LHB studied several existing projects in St. Louis Park and found that 0.5 Watts of on-site renewable energy per gross square foot of building area may be achieved on new buildings with total costs relative to total project size. LHB did say that up-front costs for on-site energy generation will be high, but believe there are market-based solutions to help ease those costs, including tax credits or solar rewards. Staff recommends 3 points be allocated to renewable energy options due to the high cost of implementation, and the city’s long-term energy carbon-neutral goals. Due to cost and overall impact, a total of 8 points may be earned pertaining to environmental, energy, and water resources. Inclusionary commercial: Staff’s research of programs nationally found few examples of requiring affordable commercial space within mixed-use buildings when those buildings are not owned by the local economic development agency. The mixed-use zoning ordinance proposes several methods to achieve this goal, including a concept similar to the inclusionary housing policy, where a portion of overall commercial space is provided at a lowered market value, as Study session meeting of May 13, 2019 (Item No. 3) Page 3 Title: Mixed-use zoning district density bonus well as an option to provide 1,500 square foot micro-storefronts as a percentage of overall commercial space. Based on discussions with developers and the city’s Tax Assessor, market values and taxes limit the likelihood of achieving truly affordable new commercial space in mixed use buildings. Unlike affordable housing, there are no tax credit options available for commercial space, and taxes can be 50% of the fair market rent of commercial space. The city is also required to follow the Freedom of Information Act, and since a developer’s financials are typically private, a third party consultant would need to be hired to review fair market rents, inclusionary rental rates, and long term tracking. Additionally, fair market rent varies widely within different areas of the city, and each building may have different fair market rental rates. Furthermore, the process of determining which eligible businesses qualify for the affordable space will be challenging as it would require businesses to demonstrate financial need which would require an application process involving review of the businesses’ pro-formas. Such a process would likely be complex and time-consuming for the developer depending on the type of business that applies. However, staff and the planning commission would still like to pursue this as an option for providing more affordable space to locally-owned businesses. An easier method to implement the option to providing affordable commercial space is through micro-storefronts a maximum of 1,500 square feet in size. These smaller spaces would cost less to rent, and may make it easier for locally-owned businesses to afford rent in mixed-use buildings. The only administrative requirement for this provision occurs during the building review process to ensure a certain percentage of the commercial space is designed and built for micro-storefronts. A maximum of 4 density points are recommended to be allocated for inclusionary commercial spaces. Travel demand management: To meet goals of the 2040 Comprehensive Plan Mobility Plan, reduce demand on single-occupancy vehicles and provide incentives for alternate modes of travel more conducive to walking, biking, and transit, points have been allocated for implementing a travel demand management program, as well as points for commuter bicycle infrastructure. A maximum of 2 density points are recommended for this concept. Gathering Spaces: Planning commission and city council have both expressed a desire to include community oriented spaces in new development including plazas, courtyards, community rooms, or community gardens. This incentivizes the provision and ongoing management of these spaces with the ability to gain a maximum of 2 density points. Next steps: Provide feedback to staff on the proposed concepts for the mixed-use zoning district. The proposed mixed-use zoning ordinance will be presented to city council on May 20, 2019 for the first reading of an ordinance. Study session meeting of May 13, 2019 (Item No. 3) Page 4 Title: Mixed-use zoning district density bonus ARTICLE IV. ZONING DISTRICTS § 36-263 DIVISION 9. M-X MIXED USE DISTRICT Sec. 36-262. Definitions. The following words, terms and phrases, when used in this section, shall have the meanings ascribed to them in this subsection, except where the context clearly indicates a different meaning. Inclusionary Commercial Space means a specified reduction of commercial rent only for small local businesses, based on the fair market commercial rents for the building. Micro Store Front means a commercial or industrial space a maximum of 1,500 square feet in size only for a small local business. Small Local Business means a local, independently owned, non-franchised business. Local means located in the Twin Cities Metro Area. Sec. 36-268. Dimensional standards and general requirements. Notwithstanding the provisions of Section 36-32, the following standards and requirements cannot be modified or waived except as specifically stated: (1)The maximum nonresidential density is 1.5 FAR and the maximum residential density is 50 units per acre. In determining density, the total nonresidential floor area or number of residential units shall be divided by the land associated with each use, including building coverage and parking areas associated with the use and a proportion of the on-site usable open space. Stormwater ponds and public/private streets and alleys shall be excluded from land calculations. Maximum residential densities may be increased by up to 50 percent based on Table 36-268 (a). Table 36-268 (a) 3 points 10% increase in density 6 points 20% increase in density 9 points 30% increase in density 12 points 40% increase in density 15 points 50% increase in density a.Inclusionary housing (maximum 6 points may be earned) i.Provide affordable housing at the levels required in the city’s Inclusionary Housing Policy, as amended from time to time, whether or not the development includes city financial assistance (6 points); b.Environmental, energy, and water resources (maximum 8 points may be earned) Study session meeting of May 13, 2019 (Item No. 3) Page 5 Title: Mixed-use zoning district density bonus i. Meet the requirements of the city’s Green Building Policy as amended from time to time, whether or not the development includes city financial assistance (5 points); ii. Provide 0.5 W of on-site renewable energy per gross square foot of building area (3 points) c. Inclusionary commercial (Maximum 4 points may be earned) i. Inclusionary commercial space for retail and service less than 8,000 square feet, food service, and restaurant uses (4 points): 1. 10 percent of total commercial space provided at 80 percent fair market rent for 10 years; or 2. 20 percent of total commercial space provided 90 percent fair market rent for 10 years. ii. Provide 20 percent or up to 5,000 square feet, whichever is less, of the total commercial space as micro storefronts (4 points) d. Travel demand management (maximum 2 points may be earned) i. Complete a travel demand management plan and implement all recommended strategies (1 points) ii. Commuter Bicycle Facilities provided onsite (1 points) 1. In addition to the bicycle parking requirements in Section 36-361, an additional 10 percent of the required bicycle parking facilities shall be provided as bike lockers, on-site showers shall be available for building occupants, and a bicycle repair station shall be provided. e. Gathering spaces (maximum 2 points may be earned) i. Provide and maintain a publically accessible space which may include a plaza, courtyard, or community room (1 points) ii. Provide and maintain a publically accessible community garden (1 points) Meeting: Study session Meeting date: May 13, 2019 Written report: 4 Executive summary Title: PLACE Via Sol and Via Luna projects update Recommended action: None at this time. Policy consideration: Does the EDA wish to consider extending the deadline for conveyance of the South Parcels until December 31, 2019? Summary: PLACE contractors began remediation activities on the Via Sol project site in January. Weather conditions and road restrictions on heavy equipment have delayed their progress; however PLACE expects to complete remediation work within about a week and commence foundation work on the Via Sol building immediately thereafter. Staff has been meeting regularly with PLACE since January to discuss progress on the next phase, Via Luna, on the South Parcels. At present, design work on the mixed-use apartment and hotel buildings is progressing but is not expected to be construction approval-ready by the required closing date of June 28, 2019, per the most recent amendment to the Purchase and Redevelopment Contract. PLACE therefore is requesting that the closing date be extended to December 31, 2019 (see attached letter). PLACE has also been working to close on its permanent bond financing for the Via Luna apartment building. However, the bonds must be sold by June 28, 2019 and given the very short time frame, it is unlikely that they will be able to sell the bonds by that deadline. With regard to the financing on the hotel and the e-generation facility, PLACE plans to utilize PACE (Property Assessed Clean Energy) financing and “has received terms from PACE Equity” to provide a loan utilizing this financing mechanism. Such financing, however, is dependent upon legislation to the current PACE statutory authority to allow for this type of financing to be utilized for new construction projects. The proposed legislation to address this issue is included in the omnibus tax bill currently pending in the legislature. This financing will also require approval by the city council. Overall, at this point there are various uncertainties that could impact the financial viability of the South Components. If the EDA wishes to extend the property closing deadline on the South Parcels until December 31, 2019, a fifth amendment to the Purchase and Redevelopment Contract will be needed. Further financing updates and the necessity for the extension request are expected to be discussed at the June 10th study session, with formal consideration at the June 17th EDA meeting. Financial or budget considerations: Extending the property closing date on the South Parcels would delay receipt of land sale proceeds for up to 6 months. Land holding costs will also continue to be incurred. Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: None Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Karen Barton, Community Development Director Approved by: Tom Harmening, EDA Executive Director and City Manager Meeting: Study session Meeting date: May 13, 2019 Written report: 5 Executive summary Title: 2018 Housing Activity Report Recommended action: The purpose of this report is to update council on housing programs and activity. This report is informational. No action is required. Policy consideration: None at this time. Summary: The housing activity report has been presented to council annually since 2005. The executive summary provides a brief overview of the detailed report. The report provides information on new housing policies and initiatives, historical trends, program descriptions, affordable housing data and information on housing programs in St. Louis Park. Financial or budget considerations: Not applicable. Strategic priority consideration: St. Louis Park is committed to providing a broad range of housing and neighborhood oriented development. Supporting documents: 2018 housing activity report Prepared by: Marney Olson, Assistant Housing Supervisor Reviewed by: Michele Schnitker, Housing Supervisor/Deputy CD Director Karen Barton, Community Development Director Approved by: Tom Harmening, City Manager 2018 Housing Activity Report EXECUTIVE SUMMARY The purpose of this report is to provide city policy makers with an overview of housing program activity during 2018. The report provides information on new initiatives and updates as well as historical trends, program descriptions, and data on city and federally funded housing programs and activity that are in line with the city’s housing goals. 1.New Initiatives and updates in 2018 a.Inclusionary Housing Policy – Increased required percentages of affordable units and added a 30% AMI option (30%, 50% and 60% AMI) b.Tenant Protection Ordinance approved by council (60% AMI and below) c.Housing Trust Fund established d. NOAH preservation strategies approved by council for implementation: i.4D tax incentive program (60% AMI and below) ii.Multifamily rental rehab program (60% AMI and below) iii.Legacy program (60% AMI and below) e.Kids in the Park program – increased funding to serve more families (50% AMI and below) f.Housing Authority awarded new Family Unification Program and Mainstream vouchers (50% AMI and below) g.New down payment assistance program for first time homebuyers (120% AMI and below) 2.Remodeling Activity a.Housing rehab projects (general remodeling) remained strong in 2018. Most projects were financed without using city loans. b.The city’s Architect Design Services and Remodeling Advisor Services continued to be great tools for residents and usage is in line with previous years. c.Major remodeling projects and home additions continue to be strong. There were 62 additions and 77 major remodels in 2018 with average valuations at $124,150 and $68,085 respectively. d.The Construction Management Plan program has been in place since November 2014. In 2018 44 neighborhood notification letters were sent for Construction Management (CMP) plan projects: 33 major additions, 7 demo/rebuilds, 2 new builds and 2 demo only. A map is included in the report showing the location of these projects. 3.Affordable Home Ownership and Public Housing Update a.Citizens Independent Bank offers $500 to qualified borrowers eligible for the Live Where You Work (LWYW). There have been a total of 24 buyers under this program, 2 in 2018. The LWYW program ended in 2018 and effective January 1, 2019 it became part of the new down payment assistance program. b.West Hennepin Affordable Housing Land Trust had a purchase agreement for their 17th home in St. Louis Park. c.CDBG funds were used to fund the Deferred Loan Program for low income residents in St. Louis Park and the West Hennepin Affordable Housing Land Trust (WHAHLT) dba Homes Within Reach. d.The city transitioned the funding for the emergency repair grant from CDBG funds to city funds. e.Maxfield Research completed their rental study in the end of 2017 and of the 7,000 rental units surveyed 49.3% are affordable at 60% AMI or below. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 2 f.The 2018 affordable ownership purchase price was $234,500 and 29% of homes in St. Louis Park are at or below this affordability limit. These homes are comprised of single family, condos and townhomes. 4.Housing Matrix a.Owner occupied (no rental license) properties comprise 56% of the housing market with rental properties (units with a rental license) at 44%. b.The single family home ownership rate is 94%. c.The Housing Development Project List is included in the report showing residential projects approved since 2009 including projects completed, under construction and approved. 5.Foreclosures a.The foreclosure rate is extremely low with only 19 residential foreclosures in 2018. 6.Federally Funded Housing Programs a.The St. Louis Park Housing Authority affordable rental housing and rental assistance programs served approximately 500 households with rental assistance in 2018. (50% AMI for the housing choice voucher (HCV) program, 80% for public housing although the majority of households in public housing are below 50% AMI. Both the HCV and public housing programs serve a significant number of households below 30% AMI) b.The St. Louis Park Housing Authority, in partnership with Hennepin County, has continued administering the new Stable HOME rental assistance program for Suburban Hennepin County which provides housing assistance to homeless or previously homeless individuals and families in Suburban Hennepin County. 42 households were served in 2017. (50% AMI) c.77% of households served by housing authority rental assistance programs are at or below 30% AMI and 18% are between 31-50% AMI. Households served by housing authority rental assistance programs as of 12/31/2018 30% AMI 50% AMI 60% AMI 80% AMI 100% AMI Number of Households 350 80 15 8 1 Percentage of Households 77% 18% 3% 2% <1% 7.Program Descriptions: This section gives detailed descriptions of the various housing programs. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 3 1.NEW INITIATIVES The City of St. Louis Park has undertaken new initiatives and updates to current policies to address affordable housing needs in the community. Inclusionary Housing In June 2015 the city council adopted an Inclusionary Housing Policy that requires the inclusion of affordable housing units for lower income households in new market rate multi-unit residential developments receiving financial assistance from the city. The goal of the Inclusionary Housing Policy is to increase the supply of affordable housing and promote economic and social integration. In May 2017 the city council approved increasing the percentage of required affordable units and added a requirement that developments covered by the policy must not discriminate against tenants who pay their rent with government provided Housing Choice Vouchers or other local rent subsidies. In 2018 the city council approved increasing the percentage of required affordable units at 60% AMI, adding a 30% AMI option, and changing the ownership to requiring a payment in lieu. Table 1: Inclusionary Housing Policy Requirements Initial Policy 2018 Updated Policy Rental Projects •10 % of units at 60% AMI •8% of units at 50% AMI •20% of units at 60% AMI •10% of units at 50% AMI •5% of units at 30% AMI Ownership Projects 10% of units at 80% AMI Payment in lieu In 2018 the income limit eligibility for existing tenants was amended to be consistent with the tax credit income limits. Table 2: Affordable units created and approved Development Total Number of Units Total Number of Affordable Units Affordability Level O bedroom Affordable Units 1 bedroom Affordable Units 2 bedroom Affordable Units 3 bedroom Affordable Units Completed Projects Shoreham 148 30** 50% 4 13 13 4800 Excelsior 164 18 60% 1 10 7 Central Park West Phase 1 199 6* 60% 1 2 2 1 Approved Projects Luxe Residential (approved in 2018) 207 8* 60% 2 3 2 1 Via (PLACE) (approved) 300 22 @ 50% 58@ 60% 120@ 80% 50%, 60% and 80% 107 52 21 18 + 2 four bed- room units Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 4 Development Total Number of Units Total Number of Affordable Units Affordability Level O bedroom Affordable Units 1 bedroom Affordable Units 2 bedroom Affordable Units 3 bedroom Affordable Units Central Park West Phase 2 (approved 2018) 164 5* 50% 1 1 2 1 Elmwood (approved in 2017) 70 17 60% Platia Place (approved 2018) 149 15 50% *Central Park West Phase 1 and Phase 2 and Luxe were not subject to the Inclusionary Housing Policy but voluntarily included affordable units **Shoreham is a tax credit property resulting in 20% of units affordable at 50% AMI Tenant Protection Ordinance: The city council adopted a tenant protection ordinance in 2018. The tenant protection ordinance requires a three month period following the ownership transfer of a NOAH multifamily residential property during which the new owner would be required to pay relocation benefits to tenants if the rent is increased, existing residents are rescreened or non-renewals are implemented without cause. NOAH properties would be defined as buildings where at least 18% of the units have rents affordable to households with incomes at or below 60% Area Medium Income (AMI). The ordinance does not prohibit a new owner from taking the management actions listed above; however, the owner would be required to provide resident relocation benefits if they do take any of those actions during the tenant protection period and a tenant decides to move as a result. The three month protection period provides a period of time for residents to work with housing support resources and seek alternative housing if they are facing unaffordable rent increases, new screening criteria requirements that would be problematic for them, or a thirty day non-renewal without cause notice to vacate. The ordinance requires the new owner of a NOAH building to provide notice of the ordinance protections to tenants of affordable housing units within 30 days of the sale of the building. The 3 month tenant protection period begins once the notice has been given to the tenants. Local housing trust fund: The city council approved establishing a local affordable housing trust fund in 2018. Housing trust funds are distinct funds established by city, county or state governments that receive ongoing dedicated sources of public funding to support the preservation and production of affordable housing. Housing trust funds can also be a repository for private donations. The Minnesota Legislature passed a bill in 2017 that allows local communities to establish housing trust funds. The housing trust fund may be established by ordinance and administered by the city. Money in a housing trust fund may only be used to: •pay for administrative expenses not to exceed 10% of the balance of the fund; •make grants, loans, and loan guarantees for the development, rehabilitation, or financing of housing; •match other funds from federal, state, or private resources for housing projects; or •provide down-payment assistance, rental assistance, and homebuyer counseling services. The city may finance the fund with any money available to a local government, unless expressly prohibited by state law. The proposed primary source of funding for the city’s trust fund is an annual budgeted allocation of HRA Levy funds, which will be available beginning in 2020. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 5 Land banking Land banking is the practice of aggregating parcels of land for future sale or development. The Economic Development Authority (EDA) has purchased parcels near the Beltline and Wooddale stations to facilitate future redevelopment which will include housing. The EDA has also purchased a single family home on Minnetonka Blvd. and is actively working with a realtor to purchase a second home for future redevelopment purposes. NOAH Preservation (Naturally Occurring Affordable Housing) Housing staff continued to participate in a Regional Housing Workgroup to review and discuss strategies for preservation of NOAH. Additional preservation strategies including the multifamily rental rehab program, Legacy program and 4D were approved in 2018 to preserve NOAH properties. These new programs go into effect in 2019 and communication and marketing efforts began in 2018 to inform property owners of these programs. Legacy program – 60% AMI and below Investors are buying NOAH apartment properties across the Twin Cities, often renovating the properties and increasing the rents. The City of St. Louis Park created the legacy program to encourage multifamily NOAH property owners in our community who are thinking about selling their property to consider connecting with a socially driven investor who will preserve the affordability of their development. The city created a legacy program brochure outlining how an owner can make a difference by providing a legacy of affordable housing in St. Louis Park. The brochure was mailed to all B and C class multifamily rental properties. 4d - 60% AMI and below St. Louis Park’s 4d affordable housing incentive program helps preserve affordable homes in the city by providing financial incentive to qualify apartment owners for state property tax reductions if they agree to keep 20 percent or more of their rental units affordable. The program also offers grants to help owners make energy efficiency and safety improvements to their properties. This program was developed, approved and marketed in 2018 to preserve affordable housing in St. Louis Park. Multifamily rental rehab program - 60% AMI and below The multifamily rental rehab program provides moderate rehabilitation assistance to eligible owners of St. Louis Park multifamily residential rental properties with 3 or more units. The targeted properties are NOAH properties that have been maintained, are in good standing, and wish to make improvements to their properties. Buildings must be at least 30 years old and meet the St. Louis Park definition of a NOAH property. The maximum loan amount per qualified rent restricted unit is $5,000 with a maximum loan per building/development of $50,000. Loans have 0% interest and are due upon the sale of the property. Owners must restrict the rents for a 10 year term or until the sale or transfer of the ownership of the property. The goal of this program is to provide a rehab incentive for NOAH properties to improve their property without raising rents above the 60% AMI rent level. Rental Assistance Kids in the Park Rent Assistance Program – 50% AMI and below Kids in the Park provides rent assistance to households with school-age children for up to four years. Participants receive a flat monthly rental assistance subsidy that decreases annually over the four-year period. Eligible households must have an income at or below 50% of the area median income, a child attending school in St. Louis Park, one parent or guardian that works a minimum of 28 hours per week, live in rental housing in St. Louis Park and comply with their lease. Families with disabled and elderly heads of household do not need to comply with the work requirement. The program was developed in partnership with the St. Louis Park Emergency Program (STEP) and the St. Louis Park School District. The Kids in the Park program began serving 9 families in December 2017. Funding was increased for 2018 allowing us to serve 14 families as of December 2018. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 6 New vouchers awarded to St. Louis Park Housing Authority – 50% AMI and below The St. Louis Park Housing Authority applied for two grants in 2018 in order to serve more low income households in St. Louis Park. Both grant applications were successful adding 23 new vouchers to the HA’s portfolio. These two voucher programs serve income eligible households that are at or below 50% AMI and voucher holders pay approximately 30% of their income towards rent. Family Unification Vouchers (FUP) The Housing Authority was awarded 15 Family Unification Vouchers (FUP) at the end of 2018. FUP is a program in which Housing Choice Vouchers (HCVs) are provided in order to lease decent, safe, and sanitary housing in the private housing market to: •Families for whom the lack of adequate housing is a primary factor in either: the imminent placement of the family’s child(ren) in out of home care or the delay in the discharge of the child(ren) to the family from out of home care. There is no time limitation on family FUP vouchers, or •Youth who are at least 18 years or and not more than 24 years old who: left foster care at age 16 or older to will leave foster care within 90 days and are homeless or at risk of homelessness. FUP vouchers used by youth are limited by statute to 36 months of housing assistance. The HA is partnering with Hennepin County on this program. Applicants are provided through the Coordinated Entry process and Mainstream The Housing Authority was awarded 8 Mainstream vouchers at the end of 2018. These vouchers provide vouchers to assist non-elderly persons with disabilities who are transitioning out of institutional or other segregated settings, at serious risk of institutionalization, homeless, or at serious risk of homelessness. It was designed to further to the goals of the Americans with Disabilities Act (ADA) by helping persons with disabilities live in the most integrated setting. Families or individuals on with a Mainstream voucher must have a household member at least 18 years of age and less than 62 years of age with a disability at the time of eligibility determination. Home ownership - down payment assistance program - 120% AMI and below The city reviewed and evaluated the Live Where You Work program over the past couple of years and determined that it is not meeting the goal of the program. $2500 was not enough to assist income eligible first time homebuyers in purchasing a home in St. Louis Park. After researching other programs staff recommended a new down payment assistance program which was approved in 2018 to begin January 1, 2019. The new down payment assistance program provides down payment/closing cost assistance to first-time homebuyers, or those that have not owned a home in the last three years, for purchasing a home in St. Louis Park. Employees of St. Louis Park businesses may be eligible for additional funds to encourage them to live where they work. The loan is a zero percent interest deferred loan up to $15,000, not to exceed 5 percent of the purchase price. An additional $5,000 is available for employees of St. Louis Park businesses. Income restrictions apply. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 7 2.REMODELING ACTIVITY Residential permitted activity measures remodeling and maintenance activity. This section shows historical trends of remodeling activity. Residential properties include apartments. Permit Trends •“Alteration Residential” or General Remodeling General remodeling work includes residential projects with permit valuations less than $37,500. Although there were fewer permits in 2018, the average value per job in 2018 is $10,200 which is an increase of nearly $2,000 over 2017. Permits include a wide range of projects including remodeling of existing spaces, window and door replacement, drain tile, insulation, foundation work, etc. Chart 1: Trend of General Remodeling Permits valued under $37,500 •Roofing and Siding Activity Reroofing and residing permits are tracked separately. Almost 60% of the homes in the city had roofs replaced between 2008 and 2011. Chart 2: Reroofing and Residing Permits *Spike in reroofing due to 2008 storms. 797 971 869 1129 1011 1091 1084 1074 1203 1170 983 0 500 1000 1500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number of Permits IssuedYear Maintenance & Minor Remodeling Permits Alteration Residential (Minor) 845 201 761 140 161 131 104 80 107 163 573 332 117117 73 83 70 47 86 62 850 500 1000 1500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number of Permits IssuedYear Reroofing and Residing Permits Reroof Reside Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 8 •Additions and Major Remodeling The number of major remodeling permits (valued at more than $37,500) and additions continues to be strong. The average permit valuation for additions during 2018 is nearly $160,000, an increase in over $35,000 over 2017. The 2018 average valuation for major remodels is $63,300, a decrease of approximately $5,000 compared to 2017. Chart 3: Number of Addition and Major Remodeling Permits •Permit Valuation The following chart shows historical remodeling permit valuation for additions, major remodels, remodeling and maintenance, garages/decks, reroofs, and siding. Permits with additional valuations were issued for plumbing, heating, and electrical work (not shown here). Chart 4: Permitted Residential Remodeling 89 55 40 48 71 67 67 70 59 62 59 46 50 53 46 44 53 53 70 65 77 77 0 40 80 120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number of Permits IssuedYear Addition and Major Remodel Permit Activity Addition Residential Major Remodels $22.5 $68.5 $26.6 $17 $26 $16.8 $21 $25 28.0 0 20 40 60 80 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Permit Valuation -Million $Year Residential Remodeling Permit Valuation $23.1 Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 9 City Housing Improvement Services, Loans Trends and Program Descriptions Home Improvement Services. The city’s architectural design service, remodeling advisor and Home Energy Squad Visits are great programs for residents who are considering a remodel or energy improvements to take advantage of. The home energy squad visits peaked in 2014, but residents continue to use the program and benefit from the recommendations and installation of materials such as door weather stripping, water heater blankets and programmable thermostats. Chart 5: Technical, Design and Home Energy Visits Construction Management Plan Major additions (second story additions or additions of 500 square feet or more), demolitions and new construction projects need to comply with the Construction Management Plan (CMP). In 2018 the following neighborhood notifications were sent: 33 major additions, 7 demo/rebuilds, 2 new builds and 2 demo only. The total permit valuation for CMP projects in 2018 was $9,867,000. Chart 6: CMP Activity 48 32 30 29 29 37 41 22 31 33 39 130 126 89 82 69 69 95 69 76 76 83 122 153 173 125 170 109 85 0 20 40 60 80 100 120 140 160 180 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number of VisitsYear Technical Home Improvement Services Architect Services Remodeling Advisor Home Energy Visits 32 37 33 33 19 10 10 7 3 6 2 20 5 10 15 20 25 30 35 40 2015 2016 2017 2018 Number of CMP ProjectsYear Construction Management Plan Activity Additions Demo/New Build New Build Demo only Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 10 Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 11 •Home Remodeling Fair and Tour Both the Home Remodeling Fair and Tour continue to be popular events with residents. Approximately 300 residents visited each of the six tour homes in May and over 1,000 visitors attended the Annual Remodeling Fair in 2018. The city continues to serve as the fiscal agent for the West Metro Home Remodeling Fair. •City Loans and Rebates The following chart shows the number of Move Up Loans, Discount Loans and Energy Rebates issued in recent years. There were three Move Up and five Discount Loans in 2018. The number of Discount Loans is low; however, CEE notes that discount home improvement loan use is slow in their service area and there are other loan options that do not have an income limit. Due to the low usage of both the Move Up and discount loans staff recommended income limit and interest rate changes effective January 1, 2019. Chart 7: Use of City Financial Incentives Summary of Move-Up Activity Loan and Service Costs The ratio of public to private investment in 2018 was 1:5.4 – for every dollar the city invested in the discount loan and move up in the park deferred loan residents invested roughly $5.41. This estimate does not capture how many projects were completed by homeowners after having a remodeling advisor or architectural design consultation or visiting the home remodeling fair or tour. The city invested approximately $87,900 in 2018 in the discount loan and move-up in the park deferred loan which leveraged $475,465 worth of private investments. Move-Up in the Park loans are deferred until the sale of the home or forgiven after thirty years. Table 3: Move-Up Loans Paid off in last five years Year Number of Loans Paid Off Amount of Loans 2014 2 $23,957 2015 4 $78,246 2016 4 $97,970 2017 3 $80,909 2018 3 $66,432 17 17 8 10 6 6 6 7 10 6 3 55 52 64 22 26 22 17 13 11 6 5 22 42 83 73 113 166 143 108 101 125 0 25 50 75 100 125 150 175 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number Loans -RebatesYear Loans and Rebates Move up loans Discount loans Energy Rebates Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 12 Move-Up Participation and City Costs YEAR Move-Up Loans Discount Loans Architectural Design Services Remodeling Advisor Services Remodeling Tour & Fair Green Rebates Home Energy Squad Enhanced Visits Total City Cost 2005 7 $182,806 76 $45,636 68 $15,300 221 $28,730 $272,472 2006 27 $591,264 88 $186,205 102 $22,950 157 $20,410 1 $5,000 $825,829 2007 27 $620,000 50 $74,000 62 $12,400 179 $23,270 1 $5,000 $734,670 2008 18 $330,937 55 $114,129 49 $11,025 130 $16,900 1 $5,000 $477,991 2009 17 $329,650 52 $106,000 12 $7,200 126 $16,380 1 $5,000 22 $4,092 $468,322 2010 9 $209,769 64 $86,263 30 $6,750 89 $11,510 1 $5,000 42 $7,820 $327,112 2011 10 $226,877 22 $29,213 29 $6,525 82 $10,250 1 $5,000 83 $15,465 $293,330 2012* 6 $106,232 26 $31,276 29 $6,525 69 $8,970 1 $5,505 73 $13,748 122 $7,320 $179,576 2013 6 $145,071 22 $33,063 37 $8,325 69 $8,970 1 $8,271 113 $26,000 153 $10,650 $240,350 2014 6 $138,740 17 $26,079 41 $9,225 95 $12,350 1 $12,350 166 $37,575 173 $11390 $243,573 2015 7 $173,000 13 $17,577 22 $4,950 69 $15,525 1 $10,084 143 $37,610 125 $6,250 $264,996 2016 10 $231,057 11 $27,001 31 $6,975 76 $17,100 1 $7,585 108 $29,304 170 $8,510 $327,532 2017 6 $137,950 6 $5,907 33 $7,425 76 $17,100 1 $7,710 101 $22,951 109 $5,450 $273,883 2018 3 $75,000 5 $12,904 39 $8,775 83 $18,865 1 $6,784 125 $30,112 85 $4,250 $156,690 Detailed descriptions of each Move-Up Program are listed at the end of the report. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Table 4: Move-Up Participation and Costs Since 2005 Page 13 Live Where You Work – Two loans in 2018 (120% AMI) The Live Where You Work Homebuyer Assistance Program began in spring 2009 to promote home ownership within the city among employees of St. Louis Park businesses. The city provides a deferred loan of $2,500 to an eligible employee and an additional $1,000 is provided to employees purchasing vacant lender-owned foreclosed properties. Employers are invited to contribute a matching or lesser amount to the city’s contribution. The deferred loan is forgiven after 3 years if the employee continues to work for the employer and meets other qualification requirements. The city contracts with CEE for loan administration. Total participation to date is 24. Two Live Where You Work loans were closed in 2018. In 2016 Citizens Independent Bank began offering qualified borrowers $500 off the origination fee. This program has not been as effective as the city would like. After evaluating the program and researching other options a new down payment assistance program was approved in 2018 and will be rolled out January 1, 2019. Housing Improvement Area (HIA) - No HIAs initiated in 2018, one association is exploring an HIA The HIA is a finance tool to assist with the preservation of the city’s existing townhome and condominium housing stock. An HIA is a defined area within a city where housing improvements are made and the cost of the improvements are paid in whole or in part from fees imposed on the properties within the area. The Association borrows low interest money from the city, improvements are completed and unit owners repay the loan through fees imposed on their properties and collected with property tax payments. To date, seven HIA’s have been established and over twelve million dollars of improvements has been made to 1100 units. There are no new HIA’s currently in process; however, one condo association began exploring the possibility of an HIA in 2018. Community Development Block Grant (CDBG) (80% AMI) The CDBG calendar year runs from July 1 – June 30th. FY2018 CDBG allocations included: •$85,335 for the Low-Income Deferred Loan Program administered by Hennepin County •$30,000 for West Hennepin Affordable Housing Land Trust The emergency repair grant that had previously been funded using CDBG funds is now funded with housing rehab dollars. West Hennepin Affordable Housing Land Trust, dba Homes Within Reach (HWR) - One purchase agreement in 2018 (80% AMI) Homes Within Reach is a program of West Hennepin Affordable Housing Land Trust that purchases properties, rehabilitates and then sells the home to qualified low to moderate income households. Buyers pay for the cost of the home only and lease the land for 99 years. City funds are leveraged with CDBG, Hennepin County Affordable Housing Incentive Fund (AHIF), HOME Partnership, Metropolitan Council, Minnesota Housing and other funds. Using the land trust model means that families can more easily purchase a home where they work or live, retain it for generations, not over burden their incomes in becoming homeowners and build wealth. As a result, both the families and communities can rely on affordable homeownership option, which expands homeownership, sustains community resources, supports residential stability, preserves affordable housing and supports a stronger local workforce. There was one purchase agreement for a home in 2018; however it did not close until 2019. That home is the 17th home in St. Louis Park. Twin Cities Habitat for Humanity (80% AMI) The city has partnered with Habitat over the years to acquire nine blighted properties for rehab or tear- down for new construction. The city last assisted Habitat with the purchase of one property in 2011, Page 14 3. AFFORDABLE HOME OWNERSHIP AND COMMUNITY DEVELOPMENT BLOCK GRANTS Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report construction was completed in the fall 2012 and the home was sold to a low income family. Twin Cities is expanding their services to include financing which may serve more St. Louis Park residents than their traditional program and Habitat met with housing staff in 2018 to discuss their outreach in the community. 4.HOUSING MATRIX AND DEVELOPMENT The housing matrix shows the numbers and percentages of housing types, tenure (owner or rental), affordable units, senior designated units and large single family homes. The matrix is a guide to evaluate future housing development proposals. •10,950 units (44% of units) in St. Louis Park have a rental license. •The chart shows percentages of rental vs. owner occupied units over time. Prior to 2017 the chart reflects homestead vs. non-homesteaded properties. In 2017 the chart uses rental licenses to count the number of rental properties in St. Louis Park since not all non-homesteaded properties are rental. •94% of single family detached homes were owner occupied (did not have a rental license) and 78% of condos/townhomes were owner occupied (no rental license) in 2018. •The city hired Maxfield Research to update the city’s comprehensive housing analysis. The report was completed and presented to council in 2018. Chart 8: Percentage of Owner Occupied Units *Rental license data used beginning in 2017 Family size single family homes One of the city’s housing goals is to increase the number of family size homes available in the city. “Family size single family homes” are being defined as exceeding 1,500 square feet of living space, having 3 or more bedrooms, 2 or more baths, and at minimum a 2 car garage. According to the Assessing Department, 2,329 – or 20% – of SLP single family homes meet this threshold. This is an increase of 41 homes since 2017 (due to additions and demo/rebuilds). Although this size home is not considered large when compared to newly constructed housing, in St. Louis Park 74% of single family homes have a foundation size less than 1,200 square feet and 46% of single family homes have less than 1,200 square feet above ground. 96 93 93 93 91 89 89 90 89 93 948989 80 75 70 67 66 67 67 78 79 0 50 100 2008 2010 2012 2014 2016 2018*PercentageYEAR % Owner Occupied Units Single Family Detached Homes Condos & Townhomes Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 15 Affordable Housing The Metropolitan Council sets the 2018 affordability limits for ownership and rental housing at 80% of the area median income for both rental and ownership housing. In 2018, the metro area median income (AMI) for a household of four is $94,300. Under these limits, a family of four can earn up to $71,900 to qualify for affordable housing. Below is a chart showing the number of market rate affordable multifamily rental units in St. Louis Park with affordable levels from 30% AMI to 80% AMI based on the Maxfield Research update. Among the over 7,000 market rate units that were inventoried by Maxfield Research by unit mix and monthly rents, only 7.9% of the units are affordable to householders at 50% AMI. However, together with 41.4% of the units affordable at 60% AMI, 49.3% of the market rate rental housing inventory is affordable at 50% to 60% AMI. The St. Louis Park Housing Choice Voucher (HCV) program has approximately 300 units that can be utilized in market rate rentals reducing the rents to 30% of a voucher holder’s income and the average HCV income is below 30% AMI. Table 5: Multifamily market rate rental units by AMI # of bedrooms 30% AMI 50% AMI 60% AMI 80% AMI Efficiency 0 106 204 123 1 bedroom 20 370 2466 807 2 bedroom 19 198 879 929 3 bedroom 6 20 48 Total 39 680 3559 1906 Source: Maxfield Research & Consulting, LLC Owner Occupied •The 2018 affordable ownership purchase price is $234,500 or less. The housing matrix shows the number of single family homes, condos and townhomes with an assessed value of $234,500 or less. The matrix also shows the data for single family homes, condos and townhomes valued at $181,500 or less which is the 60% AMI affordable ownership purchase price. •In 2018, 4,134 homes are considered affordable at or below 80% AMI based on valuation data from assessing which is 29% of the single family homes, condos and townhomes in St. Louis Park. This is a decrease of 1364 affordable units compared to 2018. This decrease is due in part to the increases in assessed value and a slight decrease in the affordable ownership purchase price which was reduced due to increases in interest rates. Rising mortgage interest rates have prevented the affordable purchase price from increasing in tandem with Area Median Income. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 16 Table 6: St. Louis Park Housing Matrix December 31, 2018 Housing Units by Type Large Single Family Homes, Affordable, and Senior Housing Housing Type Housing Units Net Units added in 2018 Owner Occupied (No Rental License) Rental Licenses Family sized single family homes over 1500 square feet 2018 Affordable Market Rate (NOAH) SF, Condo and TH Units 60% | 80% Maxfield Research Affordable Market Rate (NOAH) Rental Units 60% | 80% Public Subsidized Affordable Units, Includes Section 8 Housing Units Senior Designated Single Family Detached 11,620 46% 1 10,867 753 2329 195 1550 37 Duplex 430 2% 0 269 161 Condos and townhomes 3572 14% 0 2818 754 1565 2584 60 Apartments 9282 37% 112 9282 4278 6184 879 958 COOPs 114 <1% 0 114 106 Totals 25,018 113 14,068 56% 10,950 44% 2329 20% 1760 13% 4134 29% 4278 46% 6184 67% 916 8% 1124 4.5% % of SF Homes % of owner occupied SF, Condo & TH % of Multifamily % of Rental % of Total Housing Units In 2018, the rental unit numbers are coming directly from the rental licenses through the inspections department. The percentage of owner occupied (no rental license) units to rental (units with a rental license) units is 56% to 44% of units with a rental license. This is due in part to a change in homestead status of approximately 1,200 condominium and townhouse units since the early 2000s and the addition of new multifamily rental units. Met Council revised the affordable housing income standards and now considers both rental and owner occupied housing units affordable at 80% AMI. This chart shows all single family homes, condos and townhomes with an assessed value based on 60% and 80% AMI. The chart also shows multifamily rental units affordable at 60% AMI and 80% AMI based on Maxfield Research data. More data is on the previous page related to affordable rents based on the number of bedrooms in a unit. Data source: St. Louis Park Community Development, Inspections and Assessing departments, Development Activity in St. Louis Park, and Maxfield Research & Consulting, LLC. Added one SF homes on previously undeveloped lot. 112 apartment units added at Parkway 25. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 17 Project Developer Planning Approval Type Total Units Affordable Units Status/ Completion Richard & Adrienne Harrison (Owner) 2600 Natchez Creek Hill Custom Homes (Builder)2008 Single-Family 1 Completed 2009 Ellipse 3920 Excelsior Blvd Bader 2008 Condo 132 Complete 2011 TowerLight 3601 Wooddale Ave S Greco 2008 Senior Apartment 115 Completed 2013 The Flats at West End 5310 16th St West The Excelsior Groups 2010 Apartment 119 Completed 2013 Shaun Smith (Owner) 2005 Louisiana Andrew Hewey Const. (Builder) 2010 Single-Family 1 Completed 2011 Hoigaard Village Medley Row & The Adaigo 5650 W 36th St Frank Dunbar 2011 Apartment & Rowhomes 22 Rental Rowhomes / 100 unit Apt Completed 2013 36 Park (Park Summit) 3601 Park Center Blvd EJ Plesko 2011 Apartment 192 Unit Apt Completed 2012 Eldridge 1st Addition Rob Eldridge 2011 Single-Family 4 new SF lot (5 SF lots total) Constructed 2012 Fretham 12th Add Curt Fretham 2011 Single-Family 5 new SF lots (6 SF lots total)Constructed 2013 Gateway Assisted Living 7115 Wayzata Blvd Viren Gori 2012 Assisted Living 22 Complete 2014 Calhoun Apt Homes Cty Rd 25 & Inglewood Ave Andrew Brenner 2012 Apartment 7 Completed 2014 E2 3920 Excelsior Blvd Bader 2012 Apartment 58 Completed 2013 Kaiser Subdivision Rob Eldridge 2012 Single-Family 2 Completed 2013 Siena Apartment Homes 6800 Cedar Lake Rd Dan Hunt 2013 Apartment & Single- Family 138 Apt units / 2 SF Apartments Completed 2015 SF completed 2016 Wooddale Flats 3998 Wooddale Ave S Gatehouse Prop Ltd 2013 Condos 33 Completed Fretham 14th Addition Curt Fretham 2013 Single-Family 1 new lot created (2 SF lots total)Completed 2014 Millenium at West End 1621 West End Blvd DLC Residential 2014 Apartment 158 Completed 2015 Eldridge 5th Addition 7701 Edgebrook Rob Eldridge 2014 Single-Family 1 Completed 2015 5609 Wood Ln Gavin May 2014 Single-Family 1 Completed 2015 4101 31st St Apts 4101 31st St Josh Brandsted 2014 Apartment 13 Completed 2015 4106 Forest Lane ALTUS Architect/Sunny & Tiffiny Han 2015 Single-Family 1 Completed 2016 4300 Brookside JP Brooks 2015 Single-Family 1 Completed 2017 Central Park West Phase 1 Apartment Building DLC Residential 2015 Apartment 119 Units in St. Louis Park 6 units @ 60% AMI Completed 2017 The Shoreham mixed-use building Bader Development 2015 Apartment/comm.148 30 units at 50% AMI Completed 2017 4800 Excelsior Weidner 2015 Apartment 164 18 units at 60% AMI Completed 2017 Arlington Row Apartments West Melrose Company 2015 Apartment 34 3 units at 80% AMI Approved Arlington Row Apartments East Melrose Company 2016 Apartment 27 3 units at 80% AMI Approved 2915 Maryland Ave Alliance Builders 2016 Single-Family 1 Completed 2017 1404 Louisiana Ave Anton Homchik 2016 Single-Family 1 Completed 2017 2010 Flag Ave JR Hultman Homes 2016 Single-Family 1 Completed 2017 Via PLACE 2017 Mixed Use 299 200 units from 30-80% AMI Approved 2017 2847 Zarthan Ave Alliance Builders 2017 Single-Family 1 Completed 2017 The Elmwood 36th Street LLC 2017 Mixed Use 70 17 @ 60% AMI Approved 2017 2715 Monterey Alliance Builders 2017 Single-Family 1 Under Construction 2018 Parkway 25 Paz Sela 2016 Apartment 112 Completed 2018 Platia Place SLP Park Ventures, LLC 2018 Apartment 149 15 @ 50% AMI Approved 2018 3216 Xenwood MDH Properties 2018 Single-Family 1 Completed 2018 Central Park West Phase 2 Apartment Building Greystar 2018 Apartment 164 5 @ 50% AMI Approved 2018 Luxe DPRE 2018 Apartment 207 8 @ 60% AMI Approved 2018 Total Units Approved since 2009 Single Family 26 Total:2490 total units 305 affordable units Condo 165 Townhome Rental 22 Apartments 2140 Senior Apartments 115 Senior Assisted Living 22 Total Units Added since 2007 2490 Table 7: Housing Development Project List Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 18 Foreclosures are measured by the number of sheriff sales. The number of residential foreclosures in St. Louis Park and throughout Hennepin County has been declining since 2010. Chart 9: St. Louis Park Residential Foreclosures by Year The trend chart below shows foreclosure by housing type over time. Chart 10: Residential Foreclosures by Housing Type *Townhome & DB = Townhome and Double Bungalow/Duplex 133 92 191 163 122 59 54 47 31 36 19 0 40 80 120 160 200 240 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number of Sherrif Sales Year Residential Foreclosures by Year 93 63 106 109 82 45 39 28 21 25 163027 54 40 30 9 14 15 6 9 2102 31 8 10 5 1 4 4 2 10 40 80 120 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Number Sherrif SalesYear Residential Foreclosures by Housing Type Single Family Detached Condos Townhome & DB Page 19 5. FORECLOSURES Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report The St. Louis Park Housing Authority (HA) administers programs that ensure the availability of safe and desirable affordable housing options in the St. Louis Park community. These programs include the Public Housing program, Housing Choice Voucher rental assistance program, Continuum of Care rental assistance program, and TRAILS family self-sufficiency program. The HA currently serves approximately 500 eligible, low-income households through their housing programs. Public Housing – Restricted to households at or below 80% AMI; however, the majority of public housing residents have incomes below 50% AMI, with a significant number below 30% AMI The HA owns Hamilton House, a low-rise apartment building (108 one-bedroom units and 2 two- bedroom caretaker units) built in 1975, and 37 scattered site single-family units (3 to 5 bedrooms) acquired or constructed between 1974 and 1996. Hamilton House is designated for general occupancy; however, priority is given to elderly and disabled applicants. The single-family scattered units house families with children. The HA also holds the HUD Annual Contributions Contract (ACC) and maintains a waiting list for 12 two-bedroom Public Housing apartment units located at Louisiana Court. The average annual income for households at Hamilton House is just over $15,000 which is below 30% AMI. The average income for the scattered site single family homes is $39,600. Family sizes in the houses range from 3 to 10 people per home. Approximately 54% of the households in the single family homes have incomes below 30% AMI and 24% have incomes between 31 and 50% AMI. Annual income does not count some income that is excluded per HUD regulations. Public housing residents pay 30% of their income towards rent. The 2018 annual budget for Public Housing was $1,202,950. Table 8: Public Housing Occupancy Public Housing Total Units 1-BR 2-BR 3-BR 4-BR 5-BR December 31, 2018 Hamilton House 108 108 100% Scattered Site Single Family 37 0 0 17 17 3 100% Louisiana Court, Metropolitan Housing Opportunity (MHOP) Units 12 12 100% Total (bedroom size) 108 12 17 17 3 Total 157 100% Continuum of Care (Permanent Rental Assistance) The Continuum of Care Program (CoC) is designed to link rental assistance with supportive services for hard-to-reach homeless persons with disabilities (primarily those who are seriously mentally ill or have chronic problems with alcohol, drugs or both) and their families. Grants are provided to be used for permanent housing which must be matched with supportive services that are equal in value to the amount of rental assistance and appropriate to the needs of population to be served. The St. Louis Park Housing Authority was previously the grant recipient partnering with two sponsor organizations that administer supportive housing programs with 13 of the units in St. Louis Park and 8 in Minneapolis. The grant rules used to require a government agency to administer the grant; however, that recently changed so the Housing Authority has transferred the 8 unit grant at Camden Apartments in Minneapolis to Project for Pride in Living and the remaining 13 units here in St. Louis Park to Perspectives. The housing assistance is still in place but the change improves efficiency and removes the administrative burden from the Housing Authority while increasing the administrative dollars that the non-profits receive resulting in a win-win for all agencies. Housing Choice Voucher Program (HCV) – 50% AMI or below Page 20 6. ST. LOUIS PARK HUD FEDERALLY FUNDED HOUSING PROGRAMS: UPDATE Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report The HA is allocated 268 Housing Choice Vouchers from HUD. This rent assistance program provides rent subsidies for low-income individuals and families in privately owned, existing market rate housing units. The rent subsidy is paid directly to the owner of the rental property by the HA with funds provided by HUD. The HA administers both tenant-based and project-based vouchers. 41 vouchers of the HA’s allocation are designated for use in three privately owned developments (Excelsior & Grand, Vail Place, and Wayside) and are referred to as project-based vouchers. The average income of voucher holder households in St. Louis Park is $17,200 which is below 30% AMI. HCV participants pay 30% of their income towards rent and can choose to pay up to 40%. The 2018 annual budget for HCV was $1,959,928. The HA was awarded 15 Family Unification Vouchers (FUP) and 9 Mainstream vouchers in 2018. Table 9: HCV Lease-Up Report Housing Choice Voucher – Lease Up Report December 31, 2018 Units HUD Allocated Vouchers 291 Vouchers Issued (Executed, Pending, Outstanding and Leased Project Based) 252 Unleased Project-Based (PB) 0 Vouchers Outstanding 3 Executed St. Louis Park Contracts: Housing Choice Vouchers 220 Excelsior & Grand 18 Vail Place 8 Wayside Supportive Housing 15 Mainstream 1 FUP 0 262 Port-Ins 36 Port-Outs 69 Pending Port-Outs 2 Executed and Pending 267 Total Administered 262 Summary: % of Vouchers Utilized % Utilized, Pending, Outstanding & Unleased PB 89% 91% Stable HOME Rental Assistance Program – 50% AMI The Stable HOME program provides rent assistance to low-income singles and families who were homeless or would otherwise be at risk of homelessness. Rent assistance is limited to three years. During the three years, participants must establish good rental histories and relationships. They must also work to improve their earnings enough to where they do not need rental assistance. The program is administered by the HA, but participants are free to choose a rental unit anywhere in Hennepin County except Minneapolis. Participants are referred to the program by Hennepin County. This program is funded with federal HOME funds allocated to the county. 42 families throughout suburban Hennepin County were served by this program 2018. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 21 Architectural Design Service – no income restrictions This service provides an architectural consultation for residents to assist with brainstorming remodeling possibilities and to raise the awareness of design possibilities for expansions. Residents select an approved architect from a pool developed in conjunction with the MN Chapter of the American Institute of Architects. All homeowners considering renovations are eligible for this service; however, to ensure committed participants, residents make a $25 co-pay. Remodeling/Rehab Advisor – no income restrictions The intention of this service is to help residents improve their homes (either maintenance or value added improvements) by providing technical help before and during the construction process. All homeowners are eligible for this service regardless of income. Resident surveys indicated that homeowners valued the service and would recommend it to others. The city contracts with the Center for Energy and Environment (CEE) for this free service to homeowners. Home Energy Squad Enhanced Visit – no income restrictions Home Energy Squad Enhanced program is a comprehensive residential energy program designed to help residents save money and energy and stay comfortable in their homes. The program which began in March, 2012, is administered by the Center for Energy and Environment (CEE). The city pays $50 per resident visit which is leveraged with funds from Xcel Energy, Center Point Energy and CEE. The cost per resident is $50 per enhanced visit. Free home energy visits are available to low income households. The home energy squad consultant evaluates energy saving opportunities and installs the energy- efficiency materials the homeowner choses including: door weather stripping, water heater blanket, programmable thermostat, compact fluorescent light bulbs, high efficiency shower heads and faucet aerators. They will also perform diagnostic tests including a blower door test to measure the home for air leaks, complete an insulation inspection, safety check the home’s heating system and water heater and help with next steps such as finding insulation contractors. All single family and duplex homeowners are eligible. Renters qualify for the installed visit ($30) without diagnostic tests. The Home Energy Squad Enhanced visits qualified residents for CEE’s low interest financing and utility rebates and they also notify residents of the city loan and rebate opportunities. Annual Home Remodeling Fair The cities and school district community education departments of St. Louis Park, Hopkins, Minnetonka, and Golden Valley co-sponsor the annual home remodeling fair. The fair provides residents an opportunity to attend seminars, talk with vendors and city staff about permits, zoning, home improvement loans, and environmental issues related to remodeling. The fair is a self-sustaining event and vendor registration fees cover the costs. Home Remodeling Tour The annual tour is designed to meet the housing goal to remodel and expand single family owner occupied homes. The self-guided tour of six homes provides a showcase of a variety of home remodeling projects to provide ideas, information, and inspiration to other residents considering remodeling. Page 22 7. PROGRAM DESCRIPTIONS Technical, Design, and Conservation Services Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Construction Management Plan The city recognizes that many households are looking for larger homes and supports keeping families in the city. As a result, significant additions and/or tearing down of existing homes and rebuilding larger homes is becoming more common. Because St. Louis Park is a fully built community, these major additions and construction of new homes impacts the surrounding neighbors. Effective November 15, 2014, major additions (second story additions or additions of 500 square feet or more), demolitions and new construction need to comply with a Construction Management Plan (CMP) per City Code 6-71. Major additions, tear downs and new construction are required to send a written neighborhood notification to neighbors within 200 feet of the property. Demolitions and/or new construction also require a neighborhood meeting and signage. Financial Programs In an effort to encourage growing families to stay in St. Louis Park the city has developed and implemented a number of programs toward this effort. Discount Loan Program – serves households with incomes at or below $141,000 This program encourages residents to improve their homes by “discounting” the interest rate on the Minnesota Housing Finance Agency (MN Housing) home improvement loans. Residents must have a household income of $141,000 or less. Eligible improvements include most home improvement projects with the exception of luxury items such as pools and spas. The city contracts with CEE for loan administration. Implementation of discounting of MHFA loans began in late 1999 as a pilot project. Move – Up Transformation Loan – 120% AMI The purpose of this loan is to encourage residents with incomes at or below 120% of median area income ($113,150 for a family of four) to expand their homes. The program provides deferred loans for 25% of the applicant’s home expansion project cost, with a maximum loan of $25,000. The revolving loan pool will continue to fund future expansions. This loan requires significant upfront work by the residents, from deciding on the scope of the project to selecting contractors. Loan guidelines are: •Only residents making significant expansions are eligible. The minimum project cost must exceed $35,000. •The maximum loan amount is $25,000. •The loan has 0% interest with a carrying cost fee of 3% paid by the borrower which covers the lender’s administrative fee. •Loan is forgiven after 30 years if homeowner continues to live in the home. Green Remodeling Program & Energy Rebates – no income restrictions The Green Remodeling Program includes the Home Energy Squad Enhanced home visit program, use of energy rebates, and access to CEE’s Home Energy Loan. The city provides a match of 50% of gas and electric utility rebates for energy efficient furnaces, water heaters, air conditioners and qualifying air sealing and insulation. CEE also provided low interest loans to residents making qualifying energy improvements and St. Louis Park residents can take advantage of this loan. This energy improvement loan has no income restrictions and there is no cost to the city. Study session meeting of May 13, 2019 (Item No. 5) Title: 2018 Housing Activity Report Page 23