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III.5. Affordable Housing Update; Youngquist Page 1 CITY OF HOPKINS Memorandum To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Jan Youngquist, AICP, Community Development Coordinator Kersten Elverum, Director of Planning and Development Date: March 14, 2023 Subject: Affordable Housing Update _____________________________________________________________________ PURPOSE Staff will provide an affordable housing update based on the direction provided by the Council at its September 13, 2022 meeting. Council members indicated an interest in more information on inclusionary housing, 4d programs as a tool for the preservation of naturally occurring affordable housing, and affordable housing trust funds. Staff will be looking for direction from the Council on its continued interest in developing an inclusionary housing policy, exploring a 4d program, and developing an affordable housing trust fund. INFORMATION Inclusionary Housing What is inclusionary housing? Inclusionary housing is a tool used by local jurisdictions to increase their amount of new affordable housing. Inclusionary housing policies create a framework within which developers of new market rate housing are required to develop a certain number or percentage of housing units that are affordable to households that otherwise would not be able to afford to live in the housing being developed. This brief video includes a basic overview of inclusionary housing: Inclusionary Housing Explained. How do inclusionary housing policies provide affordable housing? Typically inclusionary policy requirements are triggered by new market rate developments of a specific size that require a land use decision such as a rezoning or planned unit development (PUD) or that include a request for city financial assistance. These policies often require a certain number or percentage of units to be affordable for households at various levels of area median income (AMI). Attachment A includes information on the AMI and affordable rents for the Twin Cities. Planning and Economic Development Department Page 2 For example, a policy may require that a project with 20 units or more that is seeking a planned unit development include 15% of the units to be affordable at 50% AMI, based on the unit size and rents shown in the above table. In this scenario, the development would need to include at least 3 affordable units. If these were all 2 bedroom units, the rent would be $1,320 (or less) per month in 2022 and adjusted each year as HUD determines annual AMI for the region. Inclusionary housing policies require annual monitoring and oversight to ensure compliance. Some local communities have dedicated staff for this work, while others hire an outside third party. Which local communities have inclusionary housing policies? Thirteen communities in the seven-county metro area have adopted inclusionary housing policies, nine of which are communities in Hennepin County: Bloomington, Brooklyn Park, Eden Prairie, Edina, Golden Valley, Minneapolis, Minnetonka, Richfield, and St. Louis Park. The other communities in the metro area with inclusionary housing policies are Chaska, Mounds View, North St. Paul and Shoreview. There is not a one size fits all when it comes to inclusionary housing policies. These policies vary by community in response to local market conditions. Hopkins staff prepared a summary of the inclusionary housing policies for the eight suburban Hennepin County communities as those policies relate to the development of multi-unit rental housing (Attachment B). These policies all include alternatives to the policy requirements in acknowledgement that it might not be feasible to provide affordable units in every new development. How do inclusionary housing policies affect a development project’s feasibility? Feasibility of development is based on calculations of whether a project has sufficient income to cover its construction and operating costs and provide financial returns for the effort and risk undertaken by the developer and its sources of funding. Feasibility calculations have two major components: • Sources and uses of funds to build and finance a project • Comparison of ongoing operating costs compared to rental revenues (Refer to Attachment C for more information) Inclusionary housing policies affect the economic value of a development by driving part of its use to a below-market purpose: the provision of units affordable to households that otherwise would not be able to afford the market rate rent at the property. This has the effect of lowering net operating income. When faced with this situation, developers typically have three options: • Decline to proceed with the proposed market-rate development project. • Persuade the owner of the development site to sell it for a below-market price, which most private landowners are unwilling to do. Page 3 • Accept a lower return on the proposed market-rate project, which most developers have limited (if any) ability to do, as equity investors expect a certain rate of return on their financial investment in the project. However, development can move forward under inclusionary housing policies without experiencing these outcomes, under the following scenarios: • The rents for the market-rate units are high enough to “cross subsidize” the lost value associated with rents for the below-market units. Increases in land prices, construction costs and interest rates over the past few years have made this scenario difficult to achieve. • A subsidy is provided to sufficiently mitigate the impact of the below-market units on overall development feasibility. These incentives can come in the form of subsidies such as Tax Increment Financing (TIF) or tax abatement and may also include other incentives such as density bonuses or parking reductions. This report provides a deeper dive into this topic: Economics-of-Inclusionary-Zoning.pdf (uli.org) Potential Costs of an Inclusionary Housing Policy Recent affordable housing development in Hopkins has been structured with 100% of the units being affordable, including Oxford Village, the Burnes Building, Vista 44 and Building A at 325 Blake Road. Inclusionary housing provides mixed income opportunities, where the development provides affordable and market rate units in the same building. Developments with 100% affordable units qualify for funding such as Low Income Housing Tax Credits (LIHTC) as well as other state and federal subsidy programs. LIHTC is a very competitive program and mixed income buildings are not able to score enough points in the application process to qualify. Often, mixed income buildings rely on local subsidies to offset the financial gap. At the Council’s work session on September 13, 2022, staff from Ehlers, the City’s financial consultant, presented information on the potential costs associated with providing financial assistance for affordable housing through an inclusionary housing policy. Various scenarios of affordability requirements were run based on the financial information associated with the Ovation project, which has 150 units of multi-family housing. Assuming an inclusionary policy that requires 25 years of affordability and 10% of the units to be affordable, the present value affordability cost estimate is: Affordability Level Total Cost Per Unit Cost 10% of units at 30% AMI (15 units) $3,433,214 $228,881 10% of units at 50% AMI (15 units) $2,200,792 $146,719 10% of units at 60% AMI (15 units) $1,583,942 $105,596 Page 4 The tools for subsidizing these costs are Tax Increment Financing (TIF)—either a Housing or a Redevelopment TIF District, tax abatement, or tax levy. For housing TIF districts, state statute requires 20% of the units to be affordable at 50% AMI or 40% of the units to be affordable at 60% AMI. Redevelopment TIF districts do not have housing affordability threshold requirements, but not all sites qualify as a Redevelopment District. As an example, the following table shows the present value affordability cost estimate for a recent development using the affordability requirements of a Housing TIF District. Housing TIF District Scenario Affordability Level Total Cost Per Unit Cost 20% of units at 50% AMI (30 units) $4,820,852 $160,695 40% of units at 60% AMI (60 units) $7,056,340 $119,599 Additional scenarios provided by Ehlers are included in Attachment D. Previous Direction from the Council on Inclusionary Housing Staff presented an overview of inclusionary housing at the Council’s September 13, 2022 work session. The Council was generally interested in further exploring an inclusionary policy, but wanted to take a flexible approach. Concerns about the resulting cost of an inclusionary policy were also voiced by some Council members. Staff Recommendations on Inclusionary Housing If the Council is interested in developing an inclusionary housing policy, staff recommends the following parameters: Applies to: Multi-family rental development projects with 10 or more units that receive financial assistance or discretionary land use approvals from the City Requirements: 10% of units at ____ AMI, with a mix of unit types distributed throughout the building Term: 25 years Alternatives: Exemptions subject to approval by the City Council. Monitoring: Annual compliance monitoring and oversight to be done by a third party, paid for by the developer Questions for the Council: • Are you interested in developing an inclusionary housing policy? • How should the AMI level(s) be determined? ­ Staff recommendation ­ Market study to determine the needs specific to Hopkins ­ Council decision • If you develop an inclusionary housing policy, would you want to include a payment in lieu option? Page 5 4d Program What is 4d? The State of Minnesota has several different tax classification types for rental property. Class 4d is defined as “low-income rental property” under MN Statutes Section 273.13, Subd. 25. Class 4d property is taxed at a rate of 0.75% for the first tier of valuation and at 0.25% for the second tier of valuation. In comparison, typical market-rate rental units are considered class 4a or 4b and are taxed at a rate of 1.25%. Properties qualify for 4d classification if the units are subject to rent and income restrictions under the terms of financial assistance provided to the rental property by a local, state, or federal government, and at least 20 percent of the units are occupied by residents whose household income at the time of initial occupancy does not exceed 60% AMI. Only the affordable units in the building qualify for 4d classification. Owners of legally binding subsidized affordable housing work directly with the Minnesota Housing Finance Agency for certification of the units for 4d tax classification. How have 4d programs been used for the preservation of affordable housing? Some communities in the metro area have established 4d Programs, with the goal to preserve naturally occurring affordable housing by providing reduced property taxes for rental property owners who commit to the affordability requirements required by statute. The following local cities have 4d Programs: Edina, Golden Valley, Minneapolis, St. Louis Park and St. Paul. Since the 4d classification requires governmental financial assistance, cities with 4d programs provide grants to property owners to help offset the costs of administrative and reporting requirements associated with the program. Property owners are required to submit annual reports to the cities as well as annual applications to the Minnesota Housing Finance Agency to renew the 4d tax status. Some cities also provide direct grants for energy efficiency improvements. Others provide referrals to programs offered by Xcel Energy, CenterPoint Energy, or the Center for Energy and the Environment. The 4d Programs in Minneapolis and St. Paul are robust and have each had more than 2,000 individual housing units enrolled. These cities have dedicated staff to promote the programs and assist property owners in navigating the process. To date, the suburban communities of Edina, Golden Valley and St. Louis Park have not had large enrollment in their programs. Hopkins staff prepared a summary of these local 4d Program requirements (Attachment E). How does the 4d tax classification reduce property taxes? As mentioned earlier, a market rate apartment building is taxed at a rate of 1.25%. Units that qualify as 4d are taxed at 0.75% for the first tier of value, which is currently $100,000 (as defined in statute) and the second tier is taxed at 0.25%. Page 6 The following table shows the potential tax savings for a property owner through a 4d Program for both a 23 unit apartment building and a 187 unit apartment building: 23 unit apartment building in Hopkins 2021 Market Value Per Unit Value Tax Capacity 2022 Taxes $2,312,000 $ 100,522 $ 28,900 $ 44,101 Scenario Tax Capacity Total Taxes Potential Tax Savings 20% 4d affordable (5 units) $26,374 $40,527 $3,574 100% 4d affordable units (23 units) $17,280 $27,672 $16,429 187 unit apartment building in Hopkins 2021 Market Value Per Unit Value Tax Capacity 2022 Taxes $23,721,000 $ 126,850 $ 296,513 $ 452,476 Scenario Tax Capacity Total Taxes Potential Tax Savings 20% 4d affordable (38 units) $267,309 $411,163 $41,314 100% 4d affordable units (187 units) $152,803 $249,290 $203,186 The legislature is currently considering bills that would eliminate the two tiers and modify the 4d tax classification rate to 0.25% for the entire valuation, which would significantly reduce the property taxes. Questions for the Council:  Are you interested in pursuing a 4d policy?  What are the appropriate levels of incentives?  What additional information would help inform your decision? Page 7 Affordable Housing Trust Funds Affordable Housing Trust Funds are funds that are set up by local government by dedicating local revenues for affordable housing. Affordable Housing Trust Funds are defined in MN Statute 462C.16. Sources of funds include: • HRA or general levy • Bond proceeds • Payment in lieu from an inclusionary housing program • Matching funds from a federal or state housing trust fund • Cash donations from individuals or corporations. • Grants and loans from state, federal or private source • Investment earnings on the funds Uses of funds include: • Grants and loans for development, rehabilitation or financing of housing • Matches to other funds for housing projects • Down payment assistance, rental assistance, and home buyer counseling services • Administrative expenses (up to 10% of the fund balance) Questions for the Council: • Are you interested in establishing an Affordable Housing Trust Fund? • If so, how would you like to fund it? FUTURE ACTION If the Council chooses to move forward with an inclusionary policy, 4d Program and/or an Affordable Housing Trust Fund, staff will work with our attorneys and financial advisor and return to the Council with draft policies and programs. If an inclusionary policy is pursued, the City would also need to amend our TIF policy. Attachments: A. Affordable Housing Overview B. Summary of Suburban Hennepin County Inclusionary Housing Programs C. Understanding the Economics of Development D. Scenarios of Financial Assistance for an Inclusionary Policy E. Summary of Local 4d Programs ATTACHMENT A Affordable Housing Overview The federal government defines housing as affordable when it consumes no more than 30% of a household’s income, so people can pay for other necessities such as food, clothing and transportation. Housing affordability is often measured against the Area Median Income (AMI). Income thresholds relative to AMI identify households that are eligible to live in income- restricted housing. Each year, the U.S. Department of Housing and Urban Development (HUD) defines and calculates levels of AMI by household size for every region in the country. HUD’s AMI for a family of four in the Twin Cities region in 2022 is $118,200. The 2023 AMI data is anticipated to be released by HUD in May. Households earning less than 80 percent of the AMI are considered low income by HUD. Those earning less than 50 percent of the AMI are considered very low income, and those making less than 30 percent of the AMI is considered extremely low income by HUD. 2022 Level of AMI for the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area (family of 4) Area Median Income (AMI) $118,200 80% of AMI $89,400 60% of AMI $70,380 50% of AMI $58,650 30% of AMI $35,200 Affordable rents are calculated based on the number of bedrooms in a housing unit. The following table shows affordable rents for different income levels for our region in 2022. 2022 Affordable Rents for the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area No. of Bedrooms 30% AMI 50% AMI 60% AMI 80% AMI Studio $616 $1,027 $1,232 $1,643 1 Bedroom $660 $1,100 $1,320 $1,760 2 Bedrooms $792 $1,320 $1,584 $2,112 3 Bedrooms $915 $1,525 $1,830 $2,440 ATTACHMENT B SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Bloomington Opportunity Housing Requirement— adopted by ordinance amending the City Code 20+ units ­ 9% of units at or below 60% AMI (Percentage was determined through an Affordable Housing Nexus Study and Feasibility Analysis) 20 years ­ Density bonus ­ Floor area ratio bonus ­ Height bonus ­ Parking reduction ­ Enclosed parking space conversion ­ Minimum unit size reductions ­ Alternative exterior materials ­ Storage space reduction ­ Landscape fee in lieu reduction ­ Development fee deferment or waivers ­ Expedited review of plans ­ Land write down for development on City owned land ­ Tax Increment Financing (TIF) ­ Project based housing choice vouchers ­ Construction of required units on another site. 9 % of units must be a mix of extremely low, very low and up to 60% AMI. ­ Payment in lieu ($9.60 per square foot of leasable space) to the City’s affordable housing trust fund ­ Dedication of land lieu ­ Purchase and rehabilitation of naturally occurring affordable housing units ­ Acquisition and rehabilitation of existing market rate units to convert to affordable units ­ Partnership with an affordable housing developer Brooklyn Park Mixed Income Housing Policy ­ 10+ units AND ­ Comp Plan Amendment, or ­ Zoning Code or Map Amendment, or ­ Planned Unit Development (PUD), or ­ City financial assistance ­ All residential or mixed use projects located in a Transit Oriented Development area ­ 15% of units at 60% AMI, or ­ 10% of units at 50% AMI, or ­ 5% of units at 30% AMI 20 years ­ Minimum of 10% density bonus Alternatives that provides or enables the provision of affordable housing units in the city, subject to City Council approval. SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Eden Prairie Inclusionary Housing Policy ­ 15+ units AND ­ Rezoning, or ­ Comp Plan Amendment, or ­ PUD, or ­ Site plan review, or ­ City financial assistance ­ 15% of units at or below 60% AMI, or ­ 10% of units at or below 50% AMI, or ­ 5% of units at or below 30% AMI Perpetuity None specified Exemptions are at the sole discretion of the City Council. Edina New Multi- Family Affordable Housing Policy ­ 20 + units AND ­ Rezoning, or ­ Comp Plan Amendment, or ­ City financial assistance, or ­ Development on land purchased from the City ­ 20% of units at 60% affordable rental rates, OR ­ 10% of units at 50% affordable rental rates 20 years ­ Density bonus ­ Parking reduction ­ Tax increment financing (TIF) ­ Deferred low-interest loans from HRA ­ Tax abatement ­ Dedication of existing units within the city (110% of units) ­ Construction of required units on another site ­ Payment in lieu ($125,000 per unit) into City's Affordable Housing Trust Fund Golden Valley Mixed-Income Housing Policy ­ 10+ units AND ­ Conditional Use Permit, or ­ Zoning Map Amendment, or ­ Comp Plan Amendment, or ­ PUD, or ­ City financial assistance ­ 15% of units at 60% AMI, or ­ 10% of units at 50% AMI, 20 years ­ Minimum of 33% reduction in required parking ­ Minimum of 10% density bonus ­ Dedication of existing units within the city ­ Alternative that provides or enables the provision of affordable units, as approved by the City Council Minnetonka Affordable Housing Policy ­ 10+ units ­ 5% of units at 50% AMI ­ Zone change or Comp Plan Amendment without City financial assistance: 10% at 60%, with at least 5% at 50% AMI ­ If project receives City financial assistance: 20% of units at 50% AMI OR 40% of units at 60% AMI 30 years None specified City may waive the requirement based on a case by case basis review. SUMMARY OF SUBURBAN HENNEPIN COUNTY COMMUNITIES INCLUSIONARY HOUSING PROGRAMS FOR MULTI-UNIT RENTAL RESIDENTIAL DEVELOPMENT Community Trigger Requirements Term Incentives Alternatives Richfield Inclusionary Affordable Housing Policy ­ 5+ units AND ­ City financial assistance ­ 20% of units at 60% AMI, or ­ 15% of units at 50% AMI, or ­ 10% of units at 30% AMI 15 years or term of subsidy (whichever is greater) ­ Building permit fee reduction ­ 4d property tax reduction ­ Code flexibility in PUDs ­ Density bonus of 5-15% ­ Exceptions for projects between 5 and 19 units may be granted by the Community Development Director ­ If developer identifies alternative means of addressing the intent of the policy, the City Council, HRA Board, or Economic Development Authority Board may vary the application of the policy St. Louis Park Inclusionary Housing Policy ­ 10+ units AND ­ Comp Plan Amendment, or ­ PUD, or ­ City financial assistance (also applies to renovation of an existing building that includes 10+ units) ­ 20% of units at 60% AMI, or ­ 10% of units at 50% AMI, or ­ 5% of units at 30% AMI Developments with 50+ units must include a minimum number of 3 or 4 bedroom units 25 years None specified. Subject to approval by the City Council. ­ Dedication of existing units within the city ­ Off-site construction of affordable units ­ Partner with affordable housing developer in construction of units on another site ­ Alternative that provides or enables the provision of affordable units in the city NOTE: This is a summary level review of these policies as they relate to new multi-unit rental development. Each policy is unique and may include additional requirements that are not depicted in this table. ATTACHMENT C ATTACHMENT D 150 Unit Market Rate Rental Project (Enclave) 13-Sep-22 Affordability RequirementAff. Units Total Per Unit Total Per Unit Total Per Unit 5% of units @ 30% AMI 8 1,296,497 172,866 1,805,628 240,750 1,990,931 265,457 5% of units @ 50% AMI 8 827,094 110,279 1,151,891 153,586 1,270,104 169,347 5% of units @ 60% AMI 8 592,130 78,951 824,658 109,954 909,288 121,238 5% of units @ 80% AMI 8 122,464 16,329 170,556 22,741 188,059 25,075 10% of units @ 30% AMI 15 2,465,155 164,344 3,433,214 228,881 3,785,548 252,370 10% of units @ 50% AMI 15 1,580,237 105,349 2,200,792 146,719 2,426,649 161,777 10% of units @ 60% AMI 15 1,137,320 75,821 1,583,942 105,596 1,746,494 116,433 10% of units @ 80% AMI 15 251,878 16,792 350,790 23,386 386,790 25,786 20% of units @ 50% AMI 30 3,461,522 115,384 4,820,852 160,695 5,315,593 177,186 40% of units @ 60% AMI 59 5,066,672 85,876 7,056,340 119,599 7,780,497 131,873 Assumptions: Annualized rental income loss per applicable affordability requirement is discounted to present value based on affordability duration Affordable rental rates account for utility allowance Annual rental income reduction discounted at 4.25% for present value Actual gap for proposed projects will vary depending on specifics Shaded areas indicate TIF and Tax Credit Eligibility thresholds 15 Years 25 Years Hsg TIF Total Present Value Affordability Cost Estimate 30 Years • Tools TIF District (housing or redevelopment) Tax Abatement Tax Levy Attachment E: Summary of Local 4d Programs City Existing Enrollment Term Length Property Eligibility and Affordability Income Qualification Grant from City/HRA Energy Efficiency (optional) Other requirements Edina 1 single family rental and one 23- unit apartment building 5 years. 10 years if they choose the energy efficiency grants. At least 20% of units at ≤60% AMI. 1-4 unit buildings, 50% must be affordable. Income qualification determined with initial occupancy. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements. Existing tenants in units that have program compliant rents do not need to be income qualified. $100 per unit, capped at $5,000 per building City pays application fee to MN Housing the first year. ($10 per unit) Grant: from the City’s Affordable Housing Trust Fund providing 90% of the costs to improve energy efficiency, after rebates, up to $50,000. Property owner would work with the Center for Energy and the Environment to identify energy efficiency opportunities and rebates. Rent increases limited to 6% or less annually unless the unit is turning over to a new tenant or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases. Must commit to accept tenant based assistance. Involuntary displacement of residents prohibited. Golden Valley 0 units 10 years 10+ units At least 20% of units at ≤60% AMI. Rental property owners do not need to verify incomes of existing tenants. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements. If units turn over and new tenants move in, owners must verify tenant incomes and report them to the City of Golden Valley on an annual basis. $100 per unit, capped at $1,000 per building. City pays application fee to MN Housing the first year only. ($10 per unit, capped at $100 per property.) Payment of the recording fee for the declaration against the property. Referral: Property owners may be eligible for the Multifamily Building Efficiency Program through Xcel Energy and/or CenterPoint Energy. Rent increases limited to 5% or less annually unless the unit is turning over to a new tenant before the next allowed annual increase or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases. Must commit to accept tenant based assistance. Involuntary displacement of residents prohibited. Minneapolis 2,044 units 10 years At least 20% of units at ≤60% AMI. Existing tenants do not need to be income qualified Income qualification of future tenants is determined upon initial occupancy only. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements. $100 per unit, capped at $1,000 per building City pays MN Housing application fee for the first year. ($10 per unit.) Referral: Free energy efficiency and healthy homes assessments available to buildings with 5 or more units. Free or low cost energy assessments are available to 2-4 unit properties. Grants: Existing buildings are eligible for City Green Cost Share funding up to a 90% cost share match and a maximum $50,000 project cost. Solar Energy incentives. For qualified properties, the City will provide an incentive of $0.35-.40 per estimated annual kwh production for the 1st year of production, up to $50,000. Can discuss financial assistance for lead window remediation with City staff. Rent increase limited to 6% or less annually, unless the unit is turning over to a new tenant or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases. St. Louis Park 17 units (one 22- unit apartment building) 5 years 2+ units. At least 20% of units at ≤60% AMI. Existing tenants in units that have program- compliant rents do not need to be income qualified. Income qualification for tenants is determined upon initial occupancy. Increased income of tenants in affordable units will not violate program requirements. $200 per unit, capped at $6,000 per property. City pays MN Housing application fee for the first year. ($10 per unit.) Referral: Owners of 5+ unit buildings can sign up for the Multifamily Building Efficiency Program through Xcel Energy and CenterPoint Energy, and complete a free energy assessment by Energy Insight Inc., to receive an energy report of recommended improvements. 3-4 unit buildings can get a free or low-cost energy assessment from the Home Energy Squad. Rent increases limited to 5% or less annually unless the unit is turning over to a new tenant before the next allowed annual increase or the owner provides evidence that a larger rent increase is needed to address deferred maintenance or unanticipated operating cost increases. Attachment E: Summary of Local 4d Programs City Existing Enrollment Term Length Property Eligibility and Affordability Income Qualification Grant from City/HRA Energy Efficiency (optional) Other requirements St. Paul 2,200+ units 10 years 1 unit—must be affordable at 50% AMI. 2 units-at least 1 unit at 50% AMI. Option to commit 2nd unit at 50- 60% AMI. 3+ units— 20% of units at 50% AMI OR 50% of units at 60% AMI. Tenants with existing leases at time of the property’s 4d certification are exempt from income verification; and, thereafter, new tenants’ household incomes are verified at initial occupancy only. $200 per unit that’s affordable up to 50% AMI $75 per unit that’s affordable up to 60% AMI Capped at $1,200 per property. City HRA pays: • Title and property search for verification of owners’ eligibility ($25 per property); • Recording of the Declaration of Restrictive Covenants ($46 per property); and • Application submittal to Minnesota Housing ($10 per 4d unit; capped at $150 per property). N/A Must advertise vacancies on HousingLink. Non-discrimination based on tenant based assistance. For buildings with 50+ units, affordable units must be distributed across unit types. NOTE: This is a summary level review of these policies. Each policy is unique and may include additional requirements that are not depicted in this table.