1.1                          A bill for an act 
  1.2             relating to housing; providing incentives for a 
  1.3             voluntary inclusionary housing policy for the 
  1.4             metropolitan area; defining an inclusionary housing 
  1.5             policy; appropriating money; amending Minnesota 
  1.6             Statutes 1998, section 473.251; proposing coding for 
  1.7             new law in Minnesota Statutes, chapters 462A; and 473. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [462A.2093] [INCLUSIONARY HOUSING PROGRAM.] 
  1.10     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  1.11  section, the following terms have the meanings given them in 
  1.12  this subdivision. 
  1.13     (a) "Municipality" means a town or a statutory or home rule 
  1.14  charter city. 
  1.15     (b) "Nonmetropolitan" means the area of the state outside 
  1.16  of the area over which the metropolitan council has jurisdiction.
  1.17     (c) "Inclusionary housing development" means a residential 
  1.18  development meeting the requirements of section 473.255. 
  1.19     Subd. 2.  [INCLUSIONARY HOUSING GRANT ALLOCATION.] The 
  1.20  housing finance agency shall use the funds allocated in section 
  1.21  4 to the community rehabilitation account or the affordable 
  1.22  rental investment fund for the purposes of promoting 
  1.23  inclusionary housing in nonmetropolitan municipalities.  A grant 
  1.24  application must at a minimum include the location of the 
  1.25  inclusionary housing development, the type of housing to be 
  1.26  produced, the number of affordable units to be produced, the 
  2.1   monthly rent or purchase price of the affordable units, and the 
  2.2   incentives provided by the municipality to achieve development 
  2.3   of the affordable units.  The application must include a 
  2.4   resolution of support from the municipality in which the 
  2.5   inclusionary development is located.  The participating 
  2.6   developer will also submit a letter of support. 
  2.7      Sec. 2.  Minnesota Statutes 1998, section 473.251, is 
  2.8   amended to read: 
  2.9      473.251 [METROPOLITAN LIVABLE COMMUNITIES FUND.] 
  2.10     The metropolitan livable communities fund is created and 
  2.11  consists of the following accounts:  
  2.12     (1) the tax base revitalization account; 
  2.13     (2) the livable communities demonstration account; ~~and~~ 
  2.14     (3) the local housing incentives account; and 
  2.15     (4) the inclusionary housing account. 
  2.16     Sec. 3.  [473.255] [INCLUSIONARY HOUSING ACCOUNT.] 
  2.17     Subdivision 1.  [DEFINITIONS.] For the purpose of this 
  2.18  section, the terms defined in this section have the meanings 
  2.19  given them. 
  2.20     (a) "Affordable rental housing" means rental housing units 
  2.21  having a monthly rent of no more than the amount determined by: 
  2.22     (1) multiplying 30 percent of the area annual median income 
  2.23  by 0.3; and 
  2.24     (2) dividing the product obtained in clause (1) by 12. 
  2.25     (b) "Affordable homes" means owner-occupied homes having a 
  2.26  monthly mortgage payment of principal and interest of no more 
  2.27  than the amount determined by: 
  2.28     (1) multiplying 50 percent of the area annual median income 
  2.29  by 0.3; and 
  2.30     (2) dividing the product obtained in clause (1) by 12. 
  2.31     (c) "Inclusionary housing development" means a new 
  2.32  construction development of single-family or multiple-family 
  2.33  residences containing a total of 30 or more units located on a 
  2.34  single parcel of land and having at least 15 percent of its 
  2.35  owner-occupied housing consist of affordable homes and at least 
  2.36  ten percent of its rental housing consist of affordable rental 
  3.1   housing. 
  3.2      (d) "Municipality" means a statutory or home rule charter 
  3.3   city or town participating in the local housing incentives 
  3.4   program under section 473.254. 
  3.5      Subd. 2.  [INCLUSIONARY HOUSING INCENTIVES.] The 
  3.6   metropolitan council may work with municipalities and developers 
  3.7   to provide incentives to inclusionary housing developments such 
  3.8   as waiver of service availability charges and other regulatory 
  3.9   incentives that would result in identifiable cost avoidance or 
  3.10  reductions for an inclusionary housing development. 
  3.11     Subd. 3.  [INCLUSIONARY HOUSING GRANTS.] The council shall 
  3.12  use funds in the inclusionary housing account to make grants or 
  3.13  loans to municipalities to fund the production of inclusionary 
  3.14  housing developments.  In evaluating grant or loan applications, 
  3.15  the council shall give priority to projects in municipalities 
  3.16  that offer the following incentives to assist in the production 
  3.17  of inclusionary housing.  Such incentives include but are not 
  3.18  limited to:  density bonuses, reduced setbacks and parking 
  3.19  requirements, decreased roadwidths, flexibility in site 
  3.20  development standards and zoning code requirements, waiver of 
  3.21  permit or impact fees, fast-track permitting and approvals, or 
  3.22  any other regulatory incentives that would result in 
  3.23  indentifiable cost avoidance or reductions that contribute to 
  3.24  the economic feasibility of inclusionary housing.  
  3.25     Subd. 4.  [GRANT APPLICATION.] A grant application must at 
  3.26  a minimum include the location of the inclusionary development, 
  3.27  the type of housing to be produced, the number of affordable 
  3.28  units to be produced, the monthly rent or purchase price of the 
  3.29  affordable units, and the incentives provided by the 
  3.30  municipality to achieve development of the affordable units.  
  3.31  The application must include a resolution of support from the 
  3.32  municipality in which the inclusionary development is located.  
  3.33  The participating developer will also submit a letter of support.
  3.34     Sec. 4.  [APPROPRIATION.] 
  3.35     Subdivision 1.  [INCLUSIONARY HOUSING ACCOUNT.] $....... is 
  3.36  appropriated from the general fund for the biennium ending June 
  4.1   30, 2001. 
  4.2      Of this amount, one-half is appropriated to the 
  4.3   metropolitan council for deposit in the inclusionary housing 
  4.4   account in the metropolitan livable communities fund for the 
  4.5   purposes of that account.  This appropriation does not cancel 
  4.6   and is available until expended. 
  4.7      Of this amount, one-half is for transfer to the housing 
  4.8   development fund for the community rehabilitation fund program 
  4.9   under Minnesota Statutes, section 462A.206, and the affordable 
  4.10  rental investment fund program under Minnesota Statutes, section 
  4.11  462A.21, subdivision 8b, for projects that meet the requirements 
  4.12  of Minnesota Statutes, section 462A.2093. 
  4.13     Subd. 2.  [MARKETING TO COMMUNITIES OF COLOR.] $....... is 
  4.14  appropriated from the general fund to the metropolitan council 
  4.15  for deposit in the inclusionary housing account in the 
  4.16  metropolitan livable communities fund.  The appropriation must 
  4.17  be used to market qualifying developments to communities of 
  4.18  color.  The appropriation does not cancel and is available until 
  4.19  expended.