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Affordable Housing Discussion; ElverumPlanning & Economic Development CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Membe s Mike Mornson, City Manager1 From: Kersten Elverum, Director of I ing & Development Date: February 13, 2018 Subject: Affordable Housing Discussion PURPOSE The purpose of the discussion is to update the City Council on the affordable housing policies that have been discussed at previous work sessions. Staff will also recommend next steps and look for confirmation of the recommended approach. INFORMATION This will be the third meeting focused on new policies that aim to protect, preserve and produce affordable housing in our community. Specifically, we will focus on: • Increased notice for lease terminations without cause • Advanced sale notification • Non-discrimination against recipients of Section 8 assistance • Inclusionary Housing • Notice of rent increases Staff wiil share what we have heard from our legal counsel including an overview of the applicable law that governs our authority. Staff will recommend a course of action based on these findings. Staff will be looking to the City Council to support and inform the recommendations. The Council may suggest additional actions or a different approach to this work. Members of the Cultivate Hopkins comprehensive plan committee, who had indicated an interest in affordable housing, have been invited to attend. Staff aiso expects that several of our community partners will be in attendance. FUTURE ACTION If the City Council agrees with staff recommendations, the details of the new policy(s) will be refined and brought back to the City Council at a future work session. Affordable Housing February 13, 2018Hopkins City Council Work Session Part III– What policies have been discussed to date?No Rent Increases for 90 days •Inclusionary Housing•RecipientsDiscrimination Against Sec 8 -Non•Advanced Sale Notification •Renewal Without Cause -Increased Notice for Lease Non• What will not be discussed tonight?based policies-New local funding sources for incentive•Single family home affordability• What is the City’s Authority?promote public health, safety, and general welfareImplied under the Land Planning Act (Sec. 473.859) & Sec. 462.351 authorizing cities to all income levels in the approval of subdivisionsSec. 462.358 gives authority to promote the availability of housing affordable to families of Examples include:•enabling legislation from the StateThe authority for a city to pass ordinances is granted through • What is the City’s Authority?State/Federal constitutional provisions In no case can the requirements be contrary to existing State law or •Should be reasonable and tied to a public goal•and in some cases land use approvals–financial assistance can apply affordable housing requirements as a condition of obtaining In the absence of either specific or implied statutory authority cities • Increased Notice for Lease Non day notice with cause. -without cause. Landlord could give 30days notice -Suggested policy would require a landlord to give 90•Goal is to buy more time•In today’s market, that is not enough time to find a replacement unit•day advance notice-requires 30Current law does not require any notification or, at a maximum, •Without Cause Renewal - Increased Notice for Lease Non month by 60 days without legal justification” -to-extending a monthinterfering with a landlord’s contractual rights and effectively month lease to 90 days, the City would be -to-renew a month-to non“By extending the notice requirement –City Attorney did not support •Sec. 504B.135 is silent on requiring a reason•renewals -requirement for all nonTo accomplish this, the city would need to adopt a just cause •Without Cause Renewal - Advanced Sale Notification buyers togetherAdvanced sale notification would help bring sellers and preservation •Preservation buyers are not aware of willing sellers•reposition NOAH rental propertyCurrent market conditions make it favorable for investors to sell and • Advanced Sale Notification use approvals properties that receive public financial assistance and possibly land Recommendation: Tie advanced sale notification requirement to •“Number of scenarios under which this requirement might arise is too •No applicable case law•No expressed or implied statutory authority• Non participation in program discrimination but could not mandate City could adopt ordinance preventing •programsbe required to participate in Section 8 concluded that property owners can not 2010 Minnesota Court of Appeals •with the Section 8 program because landlords choose not to work 8 vouchers are unable to use them Problem: Many people who have Section •Discrimination Against Sec 8 Recipients- Non discussions with other cities and bring it back to City Council when it Recommendation: Follow the Minneapolis case, continue •District Court on various grounds City of Minneapolis currently being challenged in Hennepin County •Discrimination Against Sec 8 Recipients- Inclusionary Housing such as PUD. financial assistance. May also include negotiated land use approvals Case law supports inclusionary housing strategies when providing •market would buildThe goal is produce more affordable housing units than the free •affordable units in a new or remodeled housing developmentThe requirement of a developer to include a specific percent of • Inclusionary Housing City’s goals to be considered by the City Council Recommendation: Draft a Inclusionary Housing Policy based on •determine the legality of the strategy”which affordable housing will be required by the City will ultimately “Defining the goals of the City and outlining the circumstances under • No Rent Increases for 90 days St Louis ParkRecommendation: Continue to discuss with partner cities including •Concerns about violation of rent control prohibition (Sec. 471.9996)•St Louis Park property owners were supportive•required to pay relocationor –be prevented from raising rents or other lease terms for 90 days If a property is sold or planned to be repositioned, the owner would • Other Staff Recommendations city policy -and advocate for multiGroup Continue to meet with the Regional Housing Preservation Work •City’s goals around preservation & establish open communicationto understand their goals, share the Meet with apartment owners•wide campaign-Advocate for metroMet Council present at HAMA meetingassociated with it& the myths Educate landlords (and public) about Section 8 program • Other Staff Recommendations the importance of affordable housing and the preservation of NOAH with strong language about Address in Comprehensive Plan Update •preservation that incentivizes NOAH Advocate for rental rehab loan program • Questions?