City Council approves inclusionary zoning policy to increase development of affordable housing

 The City Council has adopted an inclusionary zoning policy to increase the production of affordable housing units in new residential development projects in Minneapolis. 

The policy is one of several strategies the City has implemented to address the affordable housing crisis. It supports the affordable housing goals of Minneapolis 2040, the City’s Comprehensive Plan that takes effect Jan. 1, 2020.  As the City implements new zoning consistent with Minneapolis 2040, opportunities to increase the supply of housing and create new housing options will expand through the city. The inclusionary zoning policy ensures that affordable homes are built in exchange for increased development capacity. 

Policy highlights  

The policy takes effect Jan. 1, 2020 and applies to residential development projects with 20 or more dwelling units that file a site plan review application. It will phase in over time for smaller projects (20-49 units) and owner-occupied condo developments. 

Developers can comply with the policy by doing the following: 

·       Make 8% of the project units affordable to households with incomes at or below 60% area median income (AMI) for 20 years. 

·       Make 4% of project units affordable at 30% AMI for 20 years. 

·       Pledge to make 20% of units affordable at 50% of AMI for 30 years – a level that would allow the developer to seek City financial assistance for the project.  

Developers also have alternatives to complying with the policy: pay an in-lieu fee to the City; produce the affordable units offsite or preserve naturally occurring affordable housing within a one-half mile from the market-rate project; or donate land to the City. (Note: The second options will take effect June 2020.) 

Housing owned and operated by a university will be exempt from the inclusionary zoning policy. The City Council will also have the authority to grant an exemption when it determines “extraordinary circumstances and sufficient public benefit” justify it. Learn more about inclusionary zoning on the City’s website

 “After years of building support for this change, together with constituents and housing advocates, I am thrilled that starting in 2020 new housing developments will be required to contribute to our city’s urgent need for affordable housing,” said City Council President Lisa Bender. 

“This is one tool to help solve our housing crisis, by holding private developers accountable to supporting housing affordability across Minneapolis,” said City Council Member Jeremy Schroeder. “I believe inclusionary zoning is essential to building a healthy housing economy. It’s more important than ever to make sure new development aligns with the City’s goals and values, especially affordability and equity.”

 

Published Dec 13, 2019

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