1.1                          A bill for an act 
  1.2             relating to housing; providing for affordable housing; 
  1.3             appropriating money; amending Minnesota Statutes 2000, 
  1.4             sections 462.358, subdivision 2b; and 473.255, 
  1.5             subdivisions 1 and 2; proposing coding for new law in 
  1.6             Minnesota Statutes, chapters 462 and 473. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 462.358, 
  1.9   subdivision 2b, is amended to read: 
  1.10     Subd. 2b.  [DEDICATION.] The regulations may require that a 
  1.11  reasonable portion of any proposed subdivision be dedicated to 
  1.12  the public or preserved for public use as streets, roads, 
  1.13  sewers, electric, gas, and water facilities, storm water 
  1.14  drainage and holding areas or ponds and similar utilities and 
  1.15  improvements.  
  1.16     The regulations may require that any proposed subdivision 
  1.17  include a certain percentage of units that are affordable across 
  1.18  a range of incomes.  
  1.19     In addition, the regulations may require that a reasonable 
  1.20  portion of any proposed subdivision be dedicated to the public 
  1.21  or preserved for conservation purposes or for public use as 
  1.22  parks, recreational facilities as defined and outlined in 
  1.23  section 471.191, playgrounds, trails, wetlands, or open space; 
  1.24  provided that (a) the municipality may choose to accept an 
  1.25  equivalent amount in cash from the applicant for part or all of 
  1.26  the portion required to be dedicated to such public uses or 
  2.1   purposes based on the fair market value of the land no later 
  2.2   than at the time of final approval, (b) any cash payments 
  2.3   received shall be placed in a special fund by the municipality 
  2.4   used only for the purposes for which the money was obtained, (c) 
  2.5   in establishing the reasonable portion to be dedicated, the 
  2.6   regulations may consider the open space, park, recreational, or 
  2.7   common areas and facilities which the applicant proposes to 
  2.8   reserve for the subdivision, and (d) the municipality reasonably 
  2.9   determines that it will need to acquire that portion of land for 
  2.10  the purposes stated in this paragraph as a result of approval of 
  2.11  the subdivision. 
  2.12     Sec. 2.  [462.3851] [COLLAR COUNTY; AFFORDABLE HOUSING.] 
  2.13     Municipalities in collar counties must adopt regulations by 
  2.14  January 1, 2002, that, at a minimum, comply with the 
  2.15  affordability and other requirements of section 473.2542.  For 
  2.16  the purpose of this subdivision, a "collar county" is a county 
  2.17  that is contiguous to a county within the metropolitan area as 
  2.18  defined in section 473.121, subdivision 2.  
  2.19     Sec. 3.  [473.2541] [DEFINITIONS.] 
  2.20     Subdivision 1.  [SCOPE.] For the purpose of sections 
  2.21  473.2541 and 473.2542, the terms defined in this section have 
  2.22  the meanings given them. 
  2.23     Subd. 2.  [AFFORDABLE RENTAL HOUSING.] "Affordable rental 
  2.24  housing" means rental housing units having a monthly rent of no 
  2.25  more than 30 percent of a specified area median income divided 
  2.26  by 12.  
  2.27     Subd. 3.  [AFFORDABLE HOMES.] "Affordable homes" means 
  2.28  single-family homes having a monthly mortgage payment of 
  2.29  principal and interest of no more than the amount determined by 
  2.30  30 percent of a specified area median income divided by 12.  
  2.31     Subd. 4.  [DEVELOPMENT.] "Development" means a new 
  2.32  construction or reconstruction development of single-family or 
  2.33  multiple-family residences containing a total of 20 or more 
  2.34  units located in the metropolitan area on a single parcel of 
  2.35  land. 
  2.36     Subd. 5.  [MUNICIPALITY.] "Municipality" means a statutory 
  3.1   or home rule city or town in the metropolitan area. 
  3.2      Subd. 6.  [PUBLIC SUBSIDY.] "Public subsidy" means local, 
  3.3   state, or federal funds provided to a specifically identified 
  3.4   project to assist in financing the construction of the 
  3.5   development.  
  3.6      Sec. 4.  [473.2542] [AFFORDABLE HOUSING.] 
  3.7      Subdivision 1.  [REQUIRING AFFORDABLE HOUSING.] A 
  3.8   development in a municipality must contain on the same parcel of 
  3.9   land at least 20 percent affordable rental housing or affordable 
  3.10  homes as provided in this section.  The affordable housing must 
  3.11  blend architecturally with the remainder of the development.  
  3.12     Subd. 2.  [PRIVATE DEVELOPMENT.] For a development without 
  3.13  public subsidy, affordable housing or affordable rental housing 
  3.14  and affordable homes shall be determined using 80 percent of the 
  3.15  area median income.  
  3.16     Subd. 3.  [PUBLIC SUBSIDY.] For a development of rental 
  3.17  housing receiving a public subsidy, ten percent of the units 
  3.18  must be determined affordable at 30 percent of area median 
  3.19  income, and ten percent must be determined affordable using 50 
  3.20  percent of area median income.  For home ownership units, 
  3.21  affordability is determined using 60 percent of area median 
  3.22  income.  
  3.23     Subd. 4.  [DENSITY BONUS.] A development containing at 
  3.24  least the minimum number of affordable units must receive a 
  3.25  density bonus of at least 30 percent more units to be built than 
  3.26  would otherwise be permitted. 
  3.27     Subd. 5.  [EXCEPTION.] A development complies with the 
  3.28  affordability requirement of this section even if that 
  3.29  development does not contain the requisite affordable rental 
  3.30  housing or affordable homes, if land adjacent to the development 
  3.31  is given by the developer to a local housing authority or 
  3.32  nonprofit developer and the requisite affordable units are 
  3.33  constructed on that land. 
  3.34     Subd. 6.  [REGULATORY FLEXIBILITY.] A municipality may 
  3.35  assist a development in being affordable by providing:  
  3.36     (1) reduced setback and parking requirements; 
  4.1      (2) decreased road width; 
  4.2      (3) flexibility in site development standards or zoning 
  4.3   code requirements; 
  4.4      (4) waiver of permit or impact fees; 
  4.5      (5) fast-track permitting; or 
  4.6      (6) any other regulatory incentive that would result in 
  4.7   identifiable cost avoidance or reductions and that contributes 
  4.8   significantly to the economic feasibility of affordable housing. 
  4.9      Subd. 7.  [RIGHT OF FIRST REFUSAL.] The local housing 
  4.10  authority has the first option to purchase the affordable units 
  4.11  in a development at fair market value, followed in order of 
  4.12  preference by the county housing and redevelopment authority and 
  4.13  nonprofit organizations.  This subdivision does not apply to 
  4.14  developments using federal tax credits.  
  4.15     Subd. 8.  [RENTAL LONG-TERM AFFORDABILITY.] Affordable 
  4.16  rental housing units must remain at affordable rents for at 
  4.17  least the first 30 years after initial occupancy of the unit.  
  4.18     Subd. 9.  [HOMEOWNER SALES RESTRICTION.] For the first ten 
  4.19  years after buying a home, all profits on resale go to the 
  4.20  metropolitan council for deposit in the inclusionary housing 
  4.21  account.  After the first ten years of ownership, profits are 
  4.22  split between the owner and the metropolitan council for deposit 
  4.23  in the inclusionary housing account.  
  4.24     Sec. 5.  Minnesota Statutes 2000, section 473.255, 
  4.25  subdivision 1, is amended to read: 
  4.26     Subdivision 1.  [DEFINITIONS.] (a) "Inclusionary housing 
  4.27  development" means a new construction development, including 
  4.28  owner-occupied or rental housing, or a combination of both, with 
  4.29  a variety of prices and designs which serve families with a 
  4.30  range of incomes and housing needs complying with the 
  4.31  affordability requirements of section 473.2542. 
  4.32     (b) "Municipality" means a statutory or home rule charter 
  4.33  city or town participating in the local housing incentives 
  4.34  program under section 473.254. 
  4.35     Sec. 6.  Minnesota Statutes 2000, section 473.255, 
  4.36  subdivision 2, is amended to read: 
  5.1      Subd. 2.  [APPLICATION CRITERIA.] The metropolitan council 
  5.2   must give preference to economically viable proposals to the 
  5.3   degree that they:  (1) use innovative building techniques or 
  5.4   materials to lower construction costs while maintaining high 
  5.5   quality construction and livability; (2) are located in 
  5.6   communities that have demonstrated a willingness to waive local 
  5.7   restrictions which otherwise would increase costs of 
  5.8   construction; and (3) include units affordable to households 
  5.9   with incomes at or below 80 percent of area median income meet 
  5.10  the affordability and other requirements of section 473.2542. 
  5.11     Priority shall be given to proposals where at least 15 
  5.12  percent of the owner-occupied units are affordable to households 
  5.13  at or below 60 percent of the area annual median income and at 
  5.14  least ten percent of the rental units are affordable to 
  5.15  households at or below 30 percent of area annual median income. 
  5.16     An inclusionary housing development may include resale 
  5.17  limitations on its affordable units.  The limitations may 
  5.18  include a minimum ownership period before a purchaser may profit 
  5.19  on the sale of an affordable unit. 
  5.20     Cost savings from regulatory incentives must be reflected 
  5.21  in the sale of all residences in an inclusionary development. 
  5.22     Sec. 7.  [APPROPRIATIONS; INCLUSIONARY HOUSING ACCOUNT.] 
  5.23     $....... is appropriated from the general fund to the 
  5.24  metropolitan council for deposit in the inclusionary housing 
  5.25  account in the metropolitan livable communities fund for the 
  5.26  purposes of that account.  The appropriation does not cancel and 
  5.27  is available until expended.