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HomeMy WebLinkAbout2020-03-12 HRA regular minutesMINUTES OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY MARCH 12, 2020 7:30 A.M. 1. CALL TO ORDER Chair Hovland called the HRA meeting to order at 7:30 a.m. It. PLEDGE OF ALLEGIANCE W. ROLL CALL Answering rollcall were Commissioners Anderson, Brindle, Fischer, Staunton and Chair Hovland. Absent: None. ►V. APPROVAL OF MEETING AGENDA — AS PRESENTED Motion made by Commissioner Fischer, seconded by Commissioner Anderson approving the meeting agenda as presented. Ayes: Anderson, Brindle, Fischer, Staunton and Hovland Motion carried. V. COMMUNITY COMMENT No one appeared. V►. APPROVAL OF CONSENT AGENDA — AS PRESENTED VI.A. Minutes of the Regular Meeting of February 13, 2020 Motion made by Commissioner Anderson, seconded by Commissioner Staunton approving the consent agenda as presented. Ayes: Anderson, Brindle, Fischer, Staunton, and Hovland Motion carried. VII. REPORTS/RECOMMENDATIONS VILA. 2020 AFFORDABLE HOUSING PROGRAM POLICY GUIDE —APPROVED AS AMENDED The Board recognized members of the Housing Task Force in the audience. Affordable Housing Manager Stephanie Hawkinson explained the Affordable Housing Program Policy Guide was updated in response to property managers' questions and feedback received from site visits over the past year. The Guide was intended to assist owners and managers of new multifamily housing developments that include affordable units. On Dec. 13, 2018 the HRA approved the first Guide and directed staff to make changes to tailor the language to fit the City's New Multifamily Affordable Housing ("Policy"), which was approved by the Edina Housing Foundation. In the year since the Policy was included in lease agreements, the City's third -party compliance consultant, Affordable Housing Connections (AHC), has met with property managers and reviewed tenant files for the affordable units to confirm compliance with the Policy. Based on questions and concerns that arose, the Guide has been revised in order to add clarity. Ms. Hawkinson said it was important to note that most of the buildings that currently include affordable units were approved prior to the Policy being updated in March 2019 and prior to the approval of the Guide. Therefore, the affordability requirements were based on the resolutions and loan agreements adopted for each individual development and might not include all the requirements in the current Policy or Guide. To assist with these discrepancies, AHC created summary sheets for each development and of note the following updates were shared that included definition of student household, utility allowance and income verification. The Board confirmed building managers were contacted and involved throughout the review then referred to the 60-day notice period in the event of a rent increase and suggested 90 days as an alternative to allow tenants to prepare for a rent increase. Ms. Hawkinson said the time period was discussed by the Task Force but Page I Minutes/HRA/March 12, 2020 concluded most of those tenants tend to be over income at 140 percent AMI, which was twice the median income and a longer period would tie up an affordable unit for up to six months for someone who really needs it. The Board thanked everyone for their work on the Guide and asked about the largest area of concern from property owners. They inquired about the calculations table and expenses that could rise and how the property owner would charge less than the regular $1,200 rent to meet the cap. Ms. Hawkinson said most owners wanted to comply and provide the units to the community and said income verification was the most difficult component of the Guide and how to address Social Security income, child support and other incomes, then explained how the rent cap worked which was calculated at rent minus utilities and parking. She explained how changes were based on HUD documents and streamlined to ensure everyone was complying with the same regulations and confirmed the revised document had not been shared with landlords yet but they were aware of the amendments and noted were included with The Laurient at 4500 project and that future recommendations would be brought forward as received. She spoke about housing choice vouchers and how some properties did not want to accept those vouchers because of the additional verification steps required. The Board further discussed the burden of 60-days notice vs. 90-days notice and noted the issue would always be process and could be addressed. Motion made by Commissioner Fischer, seconded by Commissioner Brindle, to approve the proposed changes to the 2020 Affordable Housing Program Policy Guide with the additional modification to Section 1.08 Rent Increases increasing the time period from 60 days written notice to 90 days written notice. Ayes: Anderson, Brindle, Fischer, Staunton and Hovland Motion carried. VII.B. PRESENTATION ON MAXFIELD HOUSING STUDY— RECEIVED Ms. Hawkinson introduced Mary Bujold, President of Maxfield Research and Consulting, LLC, to present the Edina market study. She explained the study approved in 2019 examined and analyzed growth trends, demographic characteristics and economic factors, current housing market conditions (owned and rental formats) and determine the potential demand to support additional housing products in the City. It would also recommend housing strategies designed to maintain and sustain the existing housing stock. Ms. Bujold shared their work for the past several months and said a presentation was made to the Housing Task Force and their comments were incorporated into the report. She shared a background of Maxfield and project scope that included an analysis of housing needs, approach, project deliverables that included short- and long- term housing needs recommendations for guiding future housing development and commented on existing tools/policies to achieve goals with key dates for completion soon. She shared population growth rates of 12 percent from 2010 to 2020, which was higher than expected and spoke about density and the multi -family development that resulted. She then spoke about Primary Market Area that included the adjacent and surrounding cities and included a portion outside that defined area due to mobility across seven -county metro area. The Board commented about statistics in the U.S. growth rate of metro areas and how 50,000 people per week were moving from rural America to metropolitan areas in response to the robust job market. Ms. Bujold shared the City's highest growth rate would be among seniors ages 65-74 over the next 10 years, which was not unique to Edina and how the housing size increased but was now decreasing and would continue to 2030. She said living alone was the largest group, with married with a child group increasing, which was a little unusual in Edina and how housing prices were higher in Edina. She said reasons for the increase was because people were moving into the community and high ratings of Edina's school district. The Board asked if older residents were moving out to make room for young families. Ms. Bujold confirmed that was the case and said they expected that shift to continue and move at an earlier age than in the past and confirmed preference among married with children to single-family homes and not multi -family housing. Minutes/HRA/March 12, 2020 The Board referred to the 822 tear -downs from 2009-2018 and suggested two-story, four -bedroom homes were created, which accounted for atypical movement of family life and regenerated the City with younger families and how people were not aging in place. Ms. Bujold spoke about median household income that was 39 percent higher than Hennepin County and the Twin Cities area and projected to increase 2 percent annually by 2025 to $1 18,770, then shared 2020 median income for non -seniors was $154,995 and seniors was $71,096, with income disparity by tenure of $129,670 for owners and $59,886 for renters. She shared employment data of roughly 45,000 jobs and key industries that included education and health services, professional and retail and average annual wage of $65,104, similar to Hennepin County and surrounding areas. Ms. Bujold said 92 percent of jobs were held by commuters and 26 percent commute to Minneapolis, then spoke about residential construction being strong and shared data of an average 265 total units per year from 2010 through 2019. She spoke about tear -downs and average values and how nearly all new homes rebuilt were valued at more than $1 million and if that trend would be expected to continue. The Board asked about price burden on single-family homeowners vs. household income. Ms. Bujold spoke about housing affordability and cost burdens and noted low rental housing vacancy would likely change in the future with 5 percent vacancy equaling market equilibrium. She shared data on the numberof market -rate units and affordable/subsidized units and rents and the importance of a vacancy rate that allowed for turnover and households that want to shift. She summarized 42 percent of Edina renters were housing -cost burdened and 22 percent of owners were burdened, which was comparable to the metro area with high proportions being 65+ then shared reasons why, which included lower home values, increased property taxes, and home repairs. She shared senior housing inventory data that included 2,3 11 units in 23 properties with an 5.8 percent overall vacancy rate and how home prices were the highest in surrounding areas with median home values of $465,000 and active listings that showed low inventory. She spoke about new construction and pricing overall then reviewed naturally occurring affordable housing (NOAH) and demand that included household growth and tenure, turnover, demand by product and preferences. The Board asked what was driving the per -square -foot costs for multi -family compared to the metro area. Ms. Bujold replied some was due to the amenities and much larger units as well as more detached villa styles and underground parking and how the demand was based on both an independent look and Metropolitan Council projections and noted demand was for a fully -developed community, which was not able to be satisfied. She shared recommendations based on home rebuilds in 2019 and how lot supply was highly constrained and the increased demand for multi -family for sale and attached products and how condos were malting a comeback. She shared recommendations that included rental housing recommendations of 300 units with 250 affordable and 50 subsidized, senior housing of 1,600 units over the next 10 years across all service levels then summarized findings and ways to produce affordable housing through a mix of tools then commented on economic conditions and unknowns with the current pandemic impacts. The Board discussed gross domestic product and U.S. skepticism, as well as national policies on immigration and jobs and asked questions about demand drivers and overall determining demand. Ms. Bujold outlined the methodology and how it followed industry benchmarks and shared how the metro area had a consistent balance over the past 40 years between ownership and rental, which was just starting to increase now with younger residents staying in rental longer both due to not wanting to own but some who could not afford to own. The Board asked about the recommendation for 3,000 units to 2030 short-term and how that compared to what was in place now and in the pipeline. Ms. Bujold commented about the number of detached single-family homes rented, which tended to be older units and during the 2008 downturn how they went into foreclosure and ended as rental units and the difficulty to move them back to single-family ownership without partnerships or other public intervention and how they were not always successful. She stated Edina would not be able to satisfy all demand itself and how the City needed to be sensitive in terms of recommendations and not flood the market and allow time for units to absorb and create another rent level as well. The Board asked if no changes to additional supply what would happen. Ms. Bujold said prices would just increase because Edina was a very desirable community with a strong single-family ownership market already. She referred Minutes/HRA/March 12, 2020 to one adjustment they would make in the report with regard to one apartment project that would not be moving forward then commented on confidence in lenders and investors in future projects and the Federal Reserve's reaction to lowering interest rates to stave off significant economic downturns that resulted in vacancy rates rising to 10 percent or above as long as mortgage rates remain this low. The Board thanked for the good work and looked forward to the final report, which would be a valuable tool for the City. Vlll. CORRESPONDENCE — RECEIVED IX. HRA COMMISSIONERS' COMMENTS - RECEIVED X. EXECUTIVE DIRECTOR'S COMMENTS XI. ADJOURNMENT Chair Hovland adjourned the HRA meeting at 8:39 a. Respectfully submitted, eal, Exec Live Direct r 2