Inclusionary Zoning Policy Development
Proposed Permanent Inclusionary Zoning Policy
The City Council directed staff to develop a permanent inclusionary zoning policy in 2019 that is consistent with the Inclusionary Housing Policy Framework adopted in 2018. In early 2019, the City conducted a request for proposals (RFP) and selected Grounded Solutions Network (GSN) to help develop a comprehensive inclusionary zoning policy and implementation program consistent with the adopted framework. GSN presented draft Inclusionary Zoning recommendations to the City’s Housing Policy & Development Committee on October 16, 2019. Information on the draft policy recommendations includes:
- GSN Inclusionary Zoning Presentation (October 16, 2019)
- GSN Draft Inclusionary Zoning recommendations
- Proposed Inclusionary Zoning staff report
- Proposed Inclusionary Zoning ordinance
- Draft changes to the Unified Housing Policy
Timeline for the permanent inclusionary zoning ordinance and policy approval:
- July 17, 2019: Housing Policy & Development Committee receives and files presentation and public comment on compliance alternatives to inclusionary housing policies (2019-00822)
- September 13, 2019: City Council notice of intent to introduce subject matter related to Inclusionary Zoning
- September 27, 2019: City Council subject matter introduction
- October 16, 2019: Housing Policy & Development Committee considers draft policy recommendations
- October 17, 2019: Zoning and Planning Committee refers ordinance amendment to CPED staff
- November 18, 2019: Planning Commission holds public hearing on the permanent Inclusionary Zoning Ordinance
- December 4, 2019: Housing Policy & Development Committee considers approval of amendments to the Unified Housing Policy to incorporate affordability requirements for projects subject to the permanent Inclusionary Zoning Ordinance
- December 5, 2019: Zoning & Planning Committee considers approval of the permanent Inclusionary Zoning Ordinance
- December 13, 2019: City Council considers adoption of the permanent Inclusionary Zoning Ordinance and Policy.
Current Inclusionary Zoning Requirements
The City’s Unified Housing Policy requires residential developments of 10 or more units that receive City financial assistance, pass-through funding from the City, or involve City-owned land to provide a percentage of housing units at affordable rents. Effective January 1, 2019, the City adopted an “Interim” inclusionary zoning ordinance and policy that applies to new residential rental developments that request:
- re-zoning and/or
- additional development capacity of more than 60% of what would otherwise be allowed
Residential rental projects subject to Interim inclusionary zoning requirements can choose one of the following affordability options:
- Provide at least 10% of the units affordable to and occupied by households with an income at or below 60% AMI. The minimum affordability period is 20 years and these projects are not eligible for City financial assistance.
- Provide at least 20% of the units affordable to and occupied by households with an income at or below 50% AMI. The minimum affordability period is 30 years and these projects are eligible to apply for City financial assistance. The Revenue Loss Offset financial policy supports qualifying projects that choose this affordability option.
The Interim inclusionary zoning ordinance exempts ownership housing and housing developments primarily targeted to students.
On February 9, 2018, Council President Bender introduced subject matter to establish an inclusionary zoning ordinance. Inclusionary zoning intends to advance the goals of the City’s housing policies by requiring that affordable housing units are provided in new residential or mixed-use developments. Cities in the Twin Cities region with inclusionary zoning policies include Edina (2015), Golden Valley (2017), Brooklyn Park (2017), St. Louis Park (updated 2018), and Bloomington (2019).
Since 2003, the City of Minneapolis has implemented housing policy that requires affordable housing units in residential and mixed-use projects with 10 or more units that receive financial assistance from the City. The policy was expanded to apply affordable housing requirements to projects receiving pass-through funding from the City (state or federal funds), and projects developed on property or a portion of property owned by the City.
In 2017, the City engaged a consultant, Grounded Solutions Network (GSN), to conduct financial feasibility analysis and policy research about national best practices to inform recommendations for inclusionary zoning policy options for the City. Their report included pros and cons of different policy choices, and case studies from inclusionary zoning policies in Washington DC, Chicago and Seattle. The report included research and data from a policy brief called Inclusionary Housing Prevalence, Impact and Practices. This policy brief noted that at the end of 2016, 886 jurisdictions had inclusionary housing programs in 25 states and the District of Columbia. An inter-department team of City staff from Community Planning and Economic Development (CPED) Housing, Development Services, and Long-Range Planning divisions, City Attorney’s Office and the Finance and Property Services department supported this work. Grounded Solutions Network also received feedback from private developers and affordable housing advocates in this process.
GSN presented the report to the Housing Policy & Development Committee of the City Council on August 22, 2018. The report informed an inclusionary housing policy framework adopted by the City Council on December 7, 2018, along with the Minneapolis 2040 Comprehensive Plan. The City Council directed staff to develop a comprehensive inclusionary housing policy consistent with this framework in 2019.
Also on December 7, 2018, the City Council approved amendments to the Unified Housing Policy and the Minneapolis Zoning Code to allow for an “Interim” inclusionary zoning ordinance and inclusionary housing policy, to be in place from January 1, 2019 until a new comprehensive policy takes effect. This interim ordinance only applies to development projects that need re-zoning and/or substantial additional development capacity of 60% or more. The ordinance language defines projects subject to the affordable housing requirements. The Unified Housing Policy defines the specific affordable housing requirements.
- Unified Housing Policy – Adopted December 7, 2018 (PDF)
- Zoning Code Text Amendment – Adopted December 7, 2018 (PDF)
In 2019, the City approved an Interim Inclusionary Zoning Tax Increment Financing Policy for Revenue Loss Offset to support the inclusionary housing policy. This financial assistance policy supports qualifying projects subject to the City’s Interim Inclusionary Zoning Ordinance by ensuring the project remains financially feasible to develop.
- Revenue Loss Offset financial policy for projects subject to Interim Inclusionary Zoning Ordinance (PDF)
- Aug 22, 2018 - Housing Policy & Development Committee of the City Council
- Oct 18, 2018 - City Planning Commission – Committee of the Whole
- Nov 13, 2018 - City Planning Commission – public hearing
- Nov 28, 2018 - Housing Policy & Development Committee of the City Council
- Nov 29, 2018 - Zoning and Planning Committee of the City Council
- Dec 7, 2018 - City Council Meeting
- March 20, 2019 - Housing Policy & Development Committee of the City Council
- July 17, 2019 - Housing Policy & Development Committee of the City Council
- October 16, 2019 – Housing Policy & Development Committee of the City Council
- 2019 Income & Rent Limits (PDF)
- Inclusionary Housing Report Legislative File
- City of Minneapolis Unified Housing Policy Amendment Legislative File
- Inclusionary Zoning Regulations Ordinance Legislative File
- Grounded Solutions Network Presentation (Aug 22, 2018)
- Grounded Solutions Network Follow-Up Report on Mpls Policy Recommendations and Economic Feasibility Analysis (Sep 20, 2018)
- Grounded Solutions Network mixed income housing economic feasibility analysis, December 2016 (PDF)
Last updated Nov 17, 2019