02-11-2019 Council Packet - Laserfiche WebLink

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CMP Part 3C. Housing Plan City of Orono Community Management Plan 2020-2040 Part 3C, Page 18 15. Minnesota Housing Consolidated Request for Proposals: The Minnesota Housing Finance Agency provides a request for proposal (RFP) once annually where affordable housing developers can apply for funding to construct affordable housing. The City may consider supporting applications for new housing that addresses the City’s need allocation of 154 units below 80% AMI based upon how well the proposed projects meet City objectives, however the City is not likely to write down land cost, or reduce development related fees to support applications. 16. Tax Abatement: Cities may issue bonds to be used to support the construction of affordable housing, using a portion of the property tax received (tax abatement) from the development to finance these bonds. This removes this property from paying taxes for the services needed for this property. While the City may develop a tax abatement policy to determine if and when the level of affordable housing and the guaranteed length of affordability provide sufficient public benefit to justify the use of tax abatement, the City does not anticipate using Tax Abatement to meet any housing goals at present. 17. Tax Increment Financing: Cities may create a housing district to create a tax increment financing (TIF) district. The TIF bonds issued on this district are to be used to support the construction of affordable housing, and property taxes received above the original tax value (increment) from the development are utilized to finance these bonds. The property tax revenue that otherwise would be available to pay for city services would be restricted and not available to pay for the services. The City may develop a TIF policy to determine if and when the level of affordable housing and the guaranteed length of affordability to provide a public benefit is great enough to justify the use of tax increment financing. 18. Housing Bonds: Minnesota State Statute allows HRAs to issue housing bonds to provide affordable housing via the acquisition of an existing buildings, development of elderly or disability housing, or the acquisition of accumulated equity for low income preservation. The City does not anticipate using its HRA to develop a new housing project in the next 10 years. 19. 4(d) Tax Program: The 4(d) tax program provides a 40% tax credit to property owners of affordable housing, to be leveraged with local government financial assistance. The City does not anticipate providing financial assistance to private development. 20. Fee Waivers or Adjustments: State rules require that city fees correlate to the cost of providing the services. The city will closely monitor expenses as they relate to project review to ensure fees closely match expenses. The City will not waive fees in whole or part to support private sector development. 12. Table 3C-9 below links the housing related goals identified in the Housing Needs Assessment, Table 3C- 7, and the tools listed above. Generally, the City will apply tools consistent in sequence to how they are listed below, for each of the Goals. Table 3C-9: Housing Tools, Circumstance, and Sequence Summary Identified Goals Tool, Circumstance and Sequence To provide housing types and residential densities consistent with environmental and land use plans and with the availability of public services and facilities. 1, 3, 5, 7, 9