Bloomington Launches Opportunity Housing Ordinance
Developers welcome incentives to create new affordable housing units and spur private market development
The Housing Opportunity Ordinance designed to incentivize affordable housing development in the city goes into effect September 1, 2019. Developers will now offer affordable “Opportunity Housing” units in at least 9% of the units in all newly constructed or renovated housing developments of 20 units or more.
To incentivize affordable housing production, the City has increased flexibility in building and design requirements, reduced fees, expedited the approval process and increased financial resources available to housing developers. The more units developers offer at affordable rents and the more affordable the units are, the greater the incentives the City will provide.
The first project to take advantage of the incentives offered by the City is Lyndale Flats. MWF Properties plans to build an 81-unit, four-story building with a mix of one-, two- and three-bedroom units - all available to renters with low incomes - at 9320 Lyndale Avenue South.
MWF Properties submitted a proposal requesting flexibility in parking, storage and exterior siding design requirements, an expedited plan review and the elimination of the development fee to reduce costs. The proposal also requests Tax Increment Financing to help finance the $20 million development.
“Without the flexibility provided by the Opportunity Housing Ordinance, this development would not have been possible,” Chris Stokka said, development manager with MWF Properties. “The City of Bloomington is taking both an innovative as well as nimble approach in its commitment to affordable housing development.”
Opportunity Housing unit rents are affordable to tenants with low incomes ($60,000 a year and below) to extremely low incomes ($30,000 a year and below). In Bloomington, the average market-rate rent for a two-bedroom apartment is $1,800, which is only affordable to renters with household incomes of $80,000 a year. The median household income in the Minneapolis-St. Paul-Bloomington area for a family of four is $100,000. The Opportunity Housing Ordinance identifies a goal of building at least 842 new units of affordable housing in the city.
“The City of Bloomington is shifting the narrative on affordable housing development in the region,” Eric Johnson, Bloomington Community Development Director said. “Lyndale Flats is the first of many proposed projects to capitalize on the incentives. The development is financially feasible at 100% affordable and will provide rents that are affordable at 60% of Area Median Income, even lower than the industry standard at 80% of Area Median Income. Bloomington is telling a positive story on affordable housing development.”
“Kicking off Opportunity Housing with an 81-unit development located in the Gateway District along Lyndale Avenue near transit, amenities, services and employment is a great start to our work to meet our housing and community development goals,” Bloomington Mayor Gene Winstead said. “This proposal shows that providing these tools and incentives that allow developers to be innovative in their approach to building affordable and mixed-income housing has not discouraged, but encouraged, private market development in the city.”