04-27-2010 Council Work Session Packet

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To: Jessica Loftus, City Administrator Mayor White& Council From: Mike Gaffron, Asst. City Administrator/Long Term Strategy� Date: April 19, 2010 Subject: History of City of Orono Residential Development Subsidies With very few exceptions, the City of Orono has not historically subsidized private residential development in the City. This is the case for both residential and non-residential development. With regards to housing subsidies, the following excerpt from Orono's 1980 Comprehensive Plan addresses a general policy that has been adhered to fairly rigorously for the past three decades: "SUBSIDIZED HOUSING i1NITS Currently, the City of Orono does not contain any government subsidized housing units. This is due in part to the lack of, or limited, urban services such as shopping and employment opportunities, public transportation, medical facilities and limited areas served by central sewer and water services. According to policies adopted by the Metropolitan Council, communities located within the 1990 Metropolitan Urban Service Area (MUSA) must consider subsidized housing as part of their efforts to plan for their share of inetropolitan housing needs. Currently, only a portion of Orono is included in the present MUSA boundary and that part of Orono is almost totally developed. The Metropolitan Council has adopted a subsidized Housing Allocation Plan to help achieve the goal of increasing locational choice for low and moderate income households throughout the area. To accomplish this, the Council has determined priority areas to assist in the distribution of allocated units. Orono, due to its level of services and facilities has been designated a third priority community and based upon this, has been allocated a modest amount of subsidized units. On a three year basis (1977-1979) the plan has allocated a numerical goal of 32 units to Orono, which amounts to ten units per year. It should be noted that based upon an annual average of 50 building permits issued per year in Orono, this would amount to a full 20% of the total building permits issued per year. Therefore, Orono has instead been focusing housing subsidy funds on rehabilitation of existing substandard units occupied by low and moderate income persons, particularly the large number of retired persons occupying one-time cottages." Fast-forwarding to the City's 2010-2030 CMP `Housing Action Plan' (see attached excerpt), the City is committing to a variety of ineasures far supporting affordable and lifecycle housing, but does not commit to direct subsidies. As you know, the term "subsidy" means more than just the classic Section 8 housing programs which tend to cause shudders among the populace. Orono has in the past participated in a number of programs aimed at providing financial assistance and/or grants to low-income homeowners for maintenance and rehabilitation of the existing housing stock. Fiscal tools employed by Orono for development and/or preservation of affordable and lifecycle housing have included: — Community Development Block Grant(CDBG) Funds — Minnesota Housing Finance Agency (MHFA) Grants