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HomeMy WebLinkAbout13.C.1. Livable Communities Act (LCA) Participation-Res. No. 7041/3,c./. CITY OF SHAKOPEE Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Julie Klima, Planner II RE: Livable Communities Act (LCA) Participation DATE: September 7, 2010 DISCUSSION On June 25, the Metropolitan Council notified the City of the parameters for continued participation in the Metropolitan Livable Communities Act Local Housing Incentives Account (LCA LHIA). The City has participated in this program since 1996. The City's participation is set to expire in 2010 unless the City chooses to continue its involvement. The next timeframe of participation will be from 2011 to 2020. When the City opted to participate in this program in the mid 1990's, the City was required to prepare a Housing Action Plan (HAP). As a part of the HAP, the City adopted the following goals: • At least 64% of ownership and 32% of the rental housing as affordable; • At least 35% of the housing as units other than single family detached; • An owner/renter mix of 70 percent owner occupied and 30 percent renter occupied; • Single family detached houses with a density of 1.9 units per acre and multifamily housing with an average density of at least 10 units per acre. As was noted in the City's 2030 Comprehensive Plan, the City has met and/or exceeded these goals as follows: • As of 2002, about 93% of ownership housing was in the affordable value range, while in 2000 over 50% of rental housing was in affordable ranges. • At the end of 2005 about 46% of the housing units in the City were other than detached sing- family residential. • The most recent Metropolitan Council data on owner-renter mix available at the time of the preparation of the 2030 Comprehensive Plan indicated that about 23% of the housing in the City was renter occupied, but that did not take into account townhouses or single-family houses that may have been converted to rental use. Staff had reviewed a number of townhouse projects at the time, and found that as many as 25% of the units in some of these projects had been converted to rental use since they were developed. • Through its participation in the plat monitoring program operated by the Metropolitan Council, the City has demonstrated its compliance with the overall residential density goal of 3.0 units per acre. The current affordability figure being used by the Metropolitan Council is $233,000. Using that figure as a benchmark, the Scott County Assessor's office reported that Shakopee currently has 6480 residential units with a total value of $233,000 or less. Giving the City a current ownership affordability figure of 64.3% (10,075 total lots16480 valued at $233,000 and less) which means that the City continues to meet the goal agreed to in the 1996 HPA. In addition, the number of listings of residential units with a value of $230,000 or less on the MLS on July 27th was 217 residential units. These figures clearly indicate that the City has more than an ample of supply (and availability) of affordable housing. The 2030 Comprehensive Plan acknowledges that Shakopee's fair share of the region's projected affordable housing need for the years 2011 to 2020 is an additional 2,105 units beyond what exists today. The Metropolitan Council, in its June 25`x' letter, asks the City to revise this number to an affordable housing goal range of an additional 1,368 to 2,105 units. Assuming that current building activity levels remain constant for some time, the City would produce approximately 2,500 residential units within that time frame. It seems unrealistic to expect that 55% to 8~1% of those units would be built at an affordable rate, and staff is concerned that the Metropolitan Council may begin to view those numbers as a hard and fast target that the City must meet rather than a goal based on a projection of the expected need, which the City could not in all likelihood meet. Based on this concern, staff suggests that the City Council discuss further whether it wishes to commit to more specific housing goals in the form of a new HAP for the next decade in light of the ample supply and availability of residential units falling within the affordable category. A primary reason for participating in the Livable Communities program is that the program offers funding opportunities primarily for affordable housing projects to participating communities. The report provided to the City indicates that the City received funding in the amount of $420,000 through the program. In actuality, these funds were all requested by private developers for private development projects, although the City was required to sign the request before the funds could be disbursed for those projects. The City did initiate a number of applications for Livable Communities funds, however, none of those applications has been funded to date. Staff has reviewed the documentation of funding received by all LCA participating communities and found that only two other Scott County projects (in addition to those mentioned in Shakopee) have received funding. One project was in Prior Lake and the other in Jordan. Staff further found that the communities most often receiving funding for their requests were located primarily in Hennepin County (9), Ramsey County (4), and Carver County (2). These communities received anywhere from 70% to 100% of the total requests submitted. When questioned, the Metropolitan Council staff stated that they were unable to separate out how many of these applications were city initiated vs. developer initiated. The need for the City to determine if it wishes to participate in the Livable Communities program for the next decade raises several policy issues. ^ Given the current rate of development, as well as, the current availability and supply of affordable housing in Shakopee, does the City want to commit to a Housing Action Plan for the next decade that would necessitate that it concentrate its efforts on production of additional affordable housing? ^ Secondly, the City will need to determine if participation in the Livable Communities program is beneficial given the programs lack of historical impact for this City in particular and/or the City's intentions toward affordable housing. When discussing the future housing development opportunities within the City, it may be worthwhile to also discuss how these opportunities may or may not impact the initiatives that are being charged to the Economic Development Advisory Committee (EDAC) to ensure that the objectives of the City are consistent. The EDAC has prepared a draft work plan that incorporates language relating, among other things, to the marketing of Shakopee. Depending upon the focus of that marketing effort, will it be more appropriate to plan for additional affordable housing units or for units that have a value exceeding the affordability rate in order to provide housing alternatives for the types of employees that target businesses may attract? This agenda item relates to Goal B -Positively manage the challenges and opportunities presented by growth, development, and change. If the Council wishes to participate. in LCA for 2011 to 2020, it will need to: 1. pass a resolution to that effect; 2. adopt the new affordable and life-cycle housing goal ranges as a part of that resolution; 3. prior to December 1, 2010 the City must develop a Housing Action Plan (HAP) outlining the steps the City will take to help meet its LCA goals. Attached to this memo is a copy of a draft resolution for consideration, should the City Council opt to continue participation in this program. ALTERNATIVES The City Council is presented with several alternatives regarding LCA participation. 1) Adopt a resolution accepting the affordable housing ranges presented and opting to participate in the Livable Communities program for 2011 to 2020. Further, direct staff to begin preparation of a 2020 Housing Action Plan for submittal to the Metropolitan council by December 1, 2010. 2) Direct staff to prepare a letter to the Metropolitan Council acknowledging the receipt of the June 25 letter and its affordable housing range numbers for the City of Shakopee while declining to participate in the LCA at this time for the following reasons: a) The City of Shakopee has demonstrated through its supply and availability of affordable housing its commitment to providing its fair share of affordable housing for the region. The City is concerned that the affordable housing ranges identified by the Metropolitan Council will become mandates rather that statements of the potential need for affordable housing. If that were to happen, it is likely that the City would be unable to meet the requirement based on current housing activities. b) Participation in the LCA may not align itself with the direction of the City's EDAC regarding job creation and associated housing opportunities, and the work of the EDAC related to these issues is not completed. 3) Table a decision and request additional information from staff. ACTION REQUESTED Offer a motion consistent with the wishes of the Council and move its adoption. ul Klima Pl er II h:\cc\2010\0907\Ica 2011 participation.docx RESOLUTION N0.7041 A RESOLUTION OF THE CITY OF SHAKOPEE ELECTING TO CONTINUE PARTICIPATING IN THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT CALENDAR YEARS 2011 THROUGH 2020 WHEREAS, the Metropolitan Livable Communities Act (Minnesota Statues section 473.25 to 473.255) establishes a Metropolitan Livable Communities fund which is intended to address housing and other development issues facing the metropolitan area defined by Minnesota Statues section 473.121; and WHEREAS, the Metropolitan Livable Communities Fund, comprising the Tax Base Revitalization Account, the Livable Communities Demonstration Account, the Local Housing Incentive Account and the Inclusionary Housing Account, is intended to provide certain funding and other assistance to metropolitan-area municipalities; and WHEREAS, ametropolitan-area municipality is not eligible to receive grants or loans under the Metropolitan Livable Communities fund or eligible to receive certain polluted sites cleanup funding from the Minnesota Department of Employment and Economic Development unless the municipality is participating in the Local Housing Incentives Account Program under Minnesota Statues section 473.254; and WHEREAS, The Metropolitan Livable Communities Act requires the Metropolitan Council to negotiate with each municipality to establish affordable and life-cycle housing goals for that municipality that are consistent with and promote the policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide; and WHEREAS, previously negotiated affordable and life-cycle housing goals for municipalities participating in the Local housing Incentives Account Program expire in 2010; and WHEREAS, ametropolitan-area municipality can participate in the Local Housing Incentives Account Program under Minnesota Statues section 473.254 if : (a) the municipality elects to participate in the Local Housing Incentives Program; (b) the Metropolitan Council and the municipality successfully negotiate new affordable and life-cycle housing goals for the municipality; (c) the Metropolitan Council adopts by resolution the new negotiated affordable and life-cycle housing goals for the municipality; and (d) the municipality establishes it has spent or will spend or distribute to the Local Housing Incentives Account the required affordable and Life-Cycle Housing Opportunities Amount (ALOHA) for each year the municipality participates in the Local Housing Incentives Account Program. NOW THEREFORE, BE IT RESOLVED THAT SHAKOPEE: 1. Elects to participate in the Local Housing Incentives Program under the Metropolitan Livable Communities Act for calendar years 2011 through 2020. 2. Agrees to the following affordable and life-cycle housing goals for calendar years 2011 through 2020: Affordable Housing Goals Range Life-C cle Housing Goals Range 1,368 -2,105 units 2,105 - 2,590 units 3. Will prepare and. submit to the Metropolitan Council a plan identifying the actions it plans to take to meet its established housing goals. Approved this 7th day of September, 2010. John J. Schmitt, Mayor ATTEST: City Clerk