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; proposing coding for new 
  1.6             law in Minnesota Statutes, chapter 473. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [473.255] [DEFINITIONS.] 
  1.9      Subdivision 1.  [SCOPE.] For the purpose of sections 
  1.10  473.255 and 473.256, the terms defined in this section have the 
  1.11  meanings given them. 
  1.12     Subd. 2.  [AFFORDABLE RENTAL HOUSING.] "Affordable rental 
  1.13  housing" means rental housing units having a monthly rent of no 
  1.14  more than the amount determined by: 
  1.15     (1) multiplying 30 percent of the area annual median income 
  1.16  by 0.3; and 
  1.17     (2) dividing the product obtained in clause (1) by 12. 
  1.18     Subd. 3.  [AFFORDABLE HOMES.] "Affordable homes" means 
  1.19  single-family homes having a monthly mortgage payment of 
  1.20  principal and interest of no more than the amount determined by: 
  1.21     (1) multiplying 50 percent of the area annual median income 
  1.22  by 0.3; and 
  1.23     (2) dividing the product obtained in clause (1) by 12. 
  1.24     Subd. 4.  [QUALIFYING DEVELOPMENT.] "Qualifying 
  1.25  development" means a new construction development of 
  1.26  single-family or multiple-family residences containing a total 
  2.1   of 30 or more units located in the metropolitan area on a single 
  2.2   parcel of land and having at least 15 percent of its 
  2.3   single-family housing consist of affordable homes and at least 
  2.4   ten percent of its rental housing consist of affordable rental 
  2.5   housing. 
  2.6      Subd. 5.  [MUNICIPALITY.] "Municipality" means a statutory 
  2.7   or home rule city or town in the metropolitan area. 
  2.8      Sec. 2.  [473.256] [INCLUSIONARY HOUSING POLICY.] 
  2.9      Subdivision 1.  [ENCOURAGEMENT OF AFFORDABLE HOUSING.] A 
  2.10  municipality may adopt an inclusionary housing policy that 
  2.11  encourages affordable rental housing and affordable homes 
  2.12  development. 
  2.13     Subd. 2.  [POLICY PROVISIONS.] (a) An inclusionary housing 
  2.14  policy must contain at least one of the following: 
  2.15     (1) provide a density bonus for a qualifying development 
  2.16  that allows at least 25 percent more units to be built than 
  2.17  would otherwise be permitted; 
  2.18     (2) allow a development to be considered a qualifying 
  2.19  development even if that development does not contain the 
  2.20  requisite affordable rental housing or affordable homes, if, as 
  2.21  part of that otherwise nonqualifying development, adjacent land, 
  2.22  or land within the same municipality in a nonimpacted 
  2.23  neighborhood is given to a local housing authority or nonprofit 
  2.24  developer and the requisite affordable units are constructed on 
  2.25  that land; or 
  2.26     (3) provide regulatory flexibility to a qualifying 
  2.27  development with policies that may include, but are not limited 
  2.28  to, any of the following:  
  2.29     (i) reduced setback and parking requirements; 
  2.30     (ii) decreased road width; 
  2.31     (iii) flexibility in site development standards or zoning 
  2.32  code requirements; 
  2.33     (iv) waiver of permit or impact fees; 
  2.34     (v) fast-track permitting; or 
  2.35     (vi) any other regulatory incentive that would result in 
  2.36  identifiable cost avoidance or reductions and that contributes 
  3.1   significantly to the economic feasibility of lower income 
  3.2   housing. 
  3.3      (b) An inclusionary housing policy must require 
  3.4   architectural compatibility between a qualifying development's 
  3.5   market rate units and its affordable rental housing and 
  3.6   affordable homes. 
  3.7      Subd. 3.  [METROPOLITAN COUNCIL POLICY CERTIFICATION.] A 
  3.8   municipality may submit its inclusionary housing policy to the 
  3.9   metropolitan council for certification.  The council shall 
  3.10  certify the policy if it finds that the policy complies with 
  3.11  this section and will encourage qualifying developments.  The 
  3.12  council may decertify a policy at any time if it finds that the 
  3.13  policy is not in compliance with this section or is not being 
  3.14  implemented to provide qualifying developments. 
  3.15     Subd. 4.  [INCLUSIONARY HOUSING ACCOUNT.] The metropolitan 
  3.16  inclusionary housing account is created as an account in the 
  3.17  metropolitan livable communities fund.  The council shall use 
  3.18  funds in that account to make grants or loans to municipalities 
  3.19  participating in the local housing incentives program under 
  3.20  section 473.254 to develop an inclusionary housing policy and to 
  3.21  assist in the design and construction of qualifying developments 
  3.22  in municipalities with certified inclusionary housing policies. 
  3.23     Subd. 5.  [PREFERENCES FOR INCLUSIONARY HOUSING POLICY 
  3.24  MUNICIPALITIES.] The metropolitan council shall grant 
  3.25  preferences for the use of TEA-21 (Transportation Equity Act for 
  3.26  the 21st century) money, for metropolitan urban service area 
  3.27  (MUSA) sewer line extensions, and for sewer and transportation 
  3.28  investment to municipalities with a certified inclusionary 
  3.29  housing policy.  The preference may be an absolute preference or 
  3.30  an additional number of points in ranking projects from those 
  3.31  municipalities. 
  3.32     Sec. 3.  [APPROPRIATIONS.] 
  3.33     Subdivision 1.  [INCLUSIONARY HOUSING ACCOUNT.] $....... is 
  3.34  appropriated from the general fund to the metropolitan council 
  3.35  for deposit in the inclusionary housing account in the 
  3.36  metropolitan livable communities fund for the purposes of that 
  4.1   account.  The appropriation does not cancel and is available 
  4.2   until expended. 
  4.3      Subd. 2.  [MARKETING TO COMMUNITIES OF COLOR.] $....... is 
  4.4   appropriated from the general fund to the metropolitan council 
  4.5   for deposit in the inclusionary housing account in the 
  4.6   metropolitan livable communities fund.  The appropriation must 
  4.7   be used to market qualifying developments to communities of 
  4.8   color.  The appropriation does not cancel and is available until 
  4.9   expended.