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From YouTube: October 16, 2019 Housing Policy & Development Committee
Description
Minneapolis Housing Policy & Development Committee Meeting
https://lims.minneapolismn.gov
A
Good
afternoon,
everybody
welcome
I'll
call
to
order
our
meeting.
This
is
a
meeting
of
the
Housing
Policy
and
Development
Committee
I'm,
the
chair
of
the
committee
kam
Gordon
and
joined
today
by
council
members,
goodman
bender
and
Schrader
we're
a
quorum
of
the
committee.
So
we
can
do
our
business
and
I
see
councilmember
Ellison
is
also
arriving.
We
may
also
know
I
think
this
is
it
councilmember
Reich
is
doing
City
business
elsewhere,
there's
only
three
items
on
our
agenda
today
to
consent
items
and
then
a
discussion
item
I'll
move
the
consent
items.
First.
A
First
item
is
a
resolution
granting
approval
for
Hennepin,
County,
Housing
and
redevelopment
authority
to
undertake
the
housing
project
at
14th
and
central
and
also
using
housing
revenue.
Bonds.
Second
item
is
a
resolution
approving
our
modified
housing
improvement
fee
for
the
condos
on
Blaisdell
improvement
area.
Would
anyone
like
to
pull
any
of
those
seeing
none?
Then
I'll
move
both
forward
for
approval
all
those
in
favor,
please
say
aye,
any
opposed,
say
no.
The
consent
agenda
is
approved
and
now
we'll
move
on
to
our
discussion
item,
which
is
going
to
take
up
the
remainder
of
our
meeting.
A
B
Know
mr.
chair
members
of
the
committee,
so
I'm
going
to
be
very
brief
here.
As
you
all
know,
the
City
Council
directed
staff
to
develop
a
comprehensive
inclusionary
zoning
policy
for
consideration.
We
have
engaged,
grounded
Solutions
Network
as
a
consultant
to
help
us
develop
this
policy.
They
were
here
before
this
committee
in
in
July,
presenting
on
compliance
alternatives
to
inclusion,
airy
housing
policies.
We
also
did
some
stakeholder
engagement
during
that
site
visit
they're
here
today
to
present
draft
rep
stations
for
the
the
full
policy.
B
So
the
idea
is
to
take
input
from
yesterday
input
from
you
today
during
the
discussion,
as
well
as
other
input
that
we've
gathered
and
consider
any
additional
revisions
or
changes
to
the
draft
recommendations
and
then
come
back
before
you
December
4th,
with
the
request
to
approve
the
policy.
So
with
that
introduction,
I
would
then
like
to
ask
Stephanie
Reyes
to
come
up
and
present
the
draft
recommendations.
C
You
well
good
afternoon.
Mr.
chair
and
committee
members,
Stephanie
Reyes
has
grounded
Solutions,
Network
and
I'm
here
with
my
colleagues,
Victor
Kobus
and
Neiman
Freeman.
We
have
a
lot
of
material
to
go
through
today,
so
I
would
highly
encourage
you
to
jump
in
with
any
questions
or
comments
as
I
go
along
to
break
things
up
and
keep
things
interesting.
C
So
I
want
to
start
with
a
very
quick
reminder
about
where
we
have
been
with
inclusionary
zoning
here
in
Minneapolis.
As
you
all
recall,
back
in
December
2018,
the
City
Council
adopted
two
things.
One
was
a
framework
for
our
comprehensive
inclusionary
zoning
policy.
You
can
see
those
provisions
here
and
the
second
was
an
interim
inclusionary
zoning
policy
that
took
effect
January
1st
of
this
year.
C
As
grounded
solutions
was
pulling
together
our
recommendation
as
we
kept
in
mind
three
main
goals
we
were
trying
to
achieve
with
this
policy.
The
city
policy
makers
have
set
a
high
priority
on
ensuring
that
the
new
inclusionary
zoning
policy
does
not
negatively
impact
the
economic
feasibility
of
residential
development
and
does
not
negatively
impact
housing
production.
C
So,
let's
start
out
with
the
rental
requirement
you
may
require.
You
may
recall
that
the
policy
framework
you
adopted
back
in
December
included
a
rental
requirement
for
a
certain
percentage
of
units
to
be
set
aside
as
affordable.
There
has
been
some
new
information
that
has
come
to
light
since
December
2018.
That
is
moving
us
to
modify
that
recommendation.
C
We
did
an
economic
analysis
where
we
created
a
series
of
development
prototypes,
so
these
were
a
prototypical
development
that
represented
different
types
of
construction
across
different
neighborhoods,
with
different
strengths
of
housing
markets
and
for
each
of
those
prototypes,
we
evaluated
whether
they
were
economically
feasible
to
build
based
on
a
yield
on
cost
metric,
which
is
what's
commonly
in
use
here
in
Minneapolis.
So
projects
that
would
have
a
yield
on
cost
of
five
point.
C
Nine
percent
or
more
would
be
feasible
a
yield
between
five
point,
seven
and
five
point:
nine
percent
would
be
more
marginal,
meaning
projects
of
that
type
might
or
might
not
end
up
moving
forward
and
a
project
with
the
yield
on
cost
of
lower
than
five
point.
Seven
percent
would
not
be
feasible
to
build.
So
what
are
these
numbers
you're?
Seeing
on
this
particular
slide?
C
So
these
are
our
feasibility
results
with
no
affordability
requirement
at
all,
just
straight
market
rate
development,
and
you
can
see
that
wood
frame
and
high-rise
rental
projects
in
the
downtown
and
straw
market
areas,
those
prototypes
were
quite
feasible.
Under
our
model,
mid-rise
mental
product
was
less
feasible
across
the
board,
meaning
that
developers
will
just
tend
to
choose
one
of
those
more
feasible
products.
Wood
frame
or
high-rise
can.
C
So
these
are
basically
construction
types,
so
wood
frame
is
generally
up
to
about
six
stories.
Mid
rises,
concrete
construction
which
I
want
to
say
is
like
six
to
ten
or
twelve
stories
and
then
high-rises
steel
construction,
so
higher
buildings.
Thank
you
and
then
in
the
emerging
market
areas,
feasibility
was
more
marginal,
so
some
projects
are
moving
forward
and
those
types
of
areas
others
are
not,
and
in
software
housing
markets
nothing
is
feasible
at
the
moment.
So
an
inclusionary
requirement,
couldn't
you
know,
take
a
feasible
project
and
move
it
to
infeasible.
C
So
what
this
meant
for
us
is
that
you
know
we
looked
at
this
data
and
said
well
as
we're
designing
the
inclusionary
policy.
Let's
focus
on
what
the
impacts
of
a
policy
might
be
on:
wood
frame
and
high-rise,
rental
in
downtown
strong
market
and
emerging
markets,
primarily
and
before
I,
move
on
to
a
little
bit
of
those
results.
I
want
to
talk
a
little
bit
about
what
the
prototypes
are
and
aren't.
C
So
we
pulled
together
these
different
prototypes
by
looking
at
actual
pro
formas
of
real
projects
of
these
types
in
these
types
of
neighborhoods
in
Minneapolis
and
the
prototype
represents.
You
know
one
theoretical
project,
it's
representative
of
a
typical
project
that
might
move
forward
in
Minneapolis,
but
it's
not
exactly
the
average
and
not
every
development
project
is
gonna.
Look
exactly
like
our
prototype
right.
C
Some
will
have
higher
rents,
some
will
have
lower
rents,
some
will
have
higher
construction
costs
or
lower
construction
costs
or
different
financing
or
whatever,
but
the
point
being
that,
while
our
prototype
project
might
have
a
feasibility
number
of
a
six
point,
two
nine
percent
yield
on
cost.
Not
every
project
of
that
type
will
have
that
exact
same
yield
on
costs,
so
some
will
have
a
lower
yield.
Some
will
have
a
higher
yield.
There's
some
variance.
This
is
relevant.
C
When
you
look
at
cells
in
this
table
that
change
color
with
the
affordability
requirement
right,
so
if
you
look
at
high-rise
rental
in
an
emerging
market
that
was
in
our
marginal
bucket
before
we
had
an
affordability
requirements
drops
down
to
infeasible
as
a
product
type
in
a
certain
market,
but
there's
also
the
case
that
there
may
be
some
projects
in
one
of
those
prototype
buckets
that
are
listed
as
green
on
this
chart
where
our
prototype
is
feasible.
But
individual
projects
of
that
type
might
not
be
feasible.
C
So
if
you
look
at,
for
example,
high-rise
rental
in
a
strong
market,
our
prototype
project
has
a
5.9
7
percent
yield,
that's
above
our
feasibility
threshold,
a
5.9
percent,
but
it's
quite
close
to
that
threshold,
meaning
that
there
are
likely
a
reasonable
number
of
potential
high-rise
rental
projects
in
potential
strong
market
areas
that
might
actually
fall
below
that
5.9
percent
threshold
and
not
be
feasible
to
build
in
this
scenario.
So
what
do
we
do
with
that
information?
C
For
that
second
option:
they're
just
a
little
higher
across
the
board
right,
it
means
there's
a
little
more
wiggle
room
and
more
projects
of
that
type
are
likely
to
be
able
to
achieve
feasibility
if
they
also
that
second
option
available.
So
long
and
short,
our
policy
recommendations
for
the
framework
back
in
December
really
relied
on
this
second
option
of
the
tax
increment
financing
option
to
achieve
the
goal
of
maintaining
feasibility
and
housing
production
in
the
state.
C
So
what's
new,
what's
new
since
then,
so
since
December
2018
that
option
the
tax
increment
financing
option
was
available
to
developers
as
part
of
the
interim
inclusionary
zoning
ordinance.
None
of
them
took
advantage
of
that
option,
even
in
cases
where
it
might
have
been
financially
beneficial
to
choose
that
option
instead
of
the
other
option.
So
that
gave
us
pause.
C
We
did
so
this
is
that
you
were
rating
here
right
in
front
of
me
so
who
really
well
what's
going
on
with
that,
so
we
started
asking
around
and
it
turns
out
that
some
of
the
developers
didn't
even
know
about
that
option.
They
said
what,
if
optionally,
could
we
could
have
gotten
access
to
TIF
I
wish
we'd
known
right
so
part
of
it
is
just
you
know,
information
spreading,
but
there
were
definitely
a
series
of
developers
who
looked
into
the
TIF
option
and
had
different
concerns
with
it.
C
C
If
it
has
this
encumbrance
of
this
TIF
district,
if
I
need
TIF
to
achieve
feasibility,
will
the
maximum
available
to
be
sufficient
to
cover
that
20%
of
units
of
50%
ami
and
make
sure
my
project
in
pencil
out
and
what
about
the
time
it
takes
to
set
up
this
TIF
district?
You
know
I
have
a
business
model
that
depends
on
getting
to
market
after
a
certain
time,
at
cetera.
C
C
We
do
think
there
is
a
very
real
risk,
at
least
in
the
short
term,
that
projects
that
are
not
feasible
with
10%
at
60,
of
which
there
are
a
good
number,
would
not
would
just
decide
to
not
move
forward
at
all
in
Minneapolis
instead
of
going
forward
and
trying
to
take
on
using
the
TIF
option.
So
because
of
those
concerns,
here's
our
recommendation
right
now
for
the
rent
of
requirement
for
Minneapolis
we're
recommending
that
developers
provide
8%
of
units
affordable
at
60%
of
area
median
income.
C
The
TIF
option
would
basically
remain
the
same
with
one
small
tweak,
I'll
mention
in
a
minute,
or
we
added
a
third
option
that
developers
can
provide
4%
of
units
affordable
at
30%
of
area
median
income,
so
they
think
it'll
be
half
of
the
60%
ami
requirement
and
if
the
60%
requirement
ends
up
changing
the
30%
requirement
would
remain
half
of
that,
and
then
we
are
also
recommending
that
the
city
take
a
look
at
what
happens
over
the
next
year
or
so.
Our
projects,
starting
to
use
TIF,
is
the
market
getting
used
to
TIF.
C
A
So
could
I
ask
just
generally
then,
how
often
do
you
think
we
need
to
relook
at
it?
I
mean
it
looks
like
this
is
a
very
if
we're
gonna,
lock
ourselves
into
some
feasibility
erring
on
the
side
of.
Are
they
making
enough
money
off
of
it?
You
know
this
priority
that
you
have.
First
of
all,
it
may
make
it
a
lot
harder
to
make
it
simple.
A
C
A
great
giving
to
my
absolute
last
slide
of
my
whole
presentation,
but
I'm
going
to
go
ahead
and
answer
it
and
in
general,
for
most
policies,
and
for
you
guys,
we
recommend
the
following:
an
annual
update
of
anything
fees,
if
they're
in
lieu
fees
to
make
sure
that
those
in
lieu
fees
are
keeping
keeping
pace
with
the
cost
of
building
on
site.
So
basically
recommend
indexing
the
in
lieu
fees
to
the
construction
cost
index,
so
they
keep
pace.
C
And
then
we
recommend
that
cities
take
a
broader
look
at
their
policy,
know
more
frequently
than
every
three
to
five
years,
because
if
you're
starting
to
look
at
your
policy
more
frequently
than
every
three
to
five
years,
that
can
create
tons
of
uncertainty
in
the
marketplace,
you
know
a
landowner
might
say
well
heck.
The
city
could
change
their
policy
next
year,
I'm
gonna
hold
onto
my
land
and
see
if
they,
you
know,
reduce
their
requirements
and
I
can
get
a
better
deal
for
my
land.
Then
you
know
the
housing
market
is
not
functioning.
C
D
I'm,
just
wondering
about
this
issue
of
developers,
attitude
about
yield
and
you're,
probably
like
estimating
what
the
lowest
level
of
the
yield
is,
that
they
could
afford,
but
is
that
are
willing
to
afford?
But
is
there
a
range?
Have
you
looked
at
projects?
Have
you
been
able
to
look
at
projects
that
private
developers
have
done
where
their
yields
is
actually
much
higher
and
there's
room
there
I
mean
I
hear
a
lot.
D
We
just
can't
do
it
mm-hmm
and
my
approach
has
always
been
trying
to
force
them
to
do
it,
but
they
won't,
which
is
why
I've
warmed
up
to
this,
because
I
feel
like
no
matter
how
you
ask
them
to
do
it,
how
afraid
of
the
city
they
are
or
not
or
individuals
they
just
won't
and
I.
Think
part
of
the
reason
is:
most
of
them
want
to
sell.
D
I
guess
I'll
try
not
to
generalize,
but
it's
been
my
experience
that
a
developer
in
a
private
development
really
wants
to
come
in
because
at
some
point,
whether
it
be
at
15
years
or
whether
it
be
at
five
years,
they're
waiting
for
full
occupancy
to
turn
around
and
sell
to
an
investor,
and
so
can
you
could
you
just
give
me
your
best
cents
or
someone
on
your
team.
Give
me
your
best
sense
of
that.
D
What
what
is
the
general
yield
amount
that
would
make
a
development
feasible
or
what
kind
of
profit
do
they
have
to
have
to
make
it
feasible
and
then
also?
How
does
this
business
model
of
selling
already
built
buildings,
even
those
who
say,
I
hold
on
all
my
buildings?
I,
never
sell
we'll
sell
at
some
price,
and
the
prices
have
been
very
high
recently.
So
I'm
just
wondering
if
you
could
kind
of
give
me
a
sense
of
that.
This.
C
Peak
to
it
briefly,
and
then
I
probably
will
ask
Rick
to
come
up
and
say
a
few
more
words
about
that
latter
piece.
But
you
know
in
general,
this
is
being
driven
by
the
investors
in
these
projects
right,
so
investors
are
saying
what
kind
of
yield
or
return
can
I
get
from
a
variety
of
investments,
and
they
said
these
are
like
little
pension
funds.
You
know
people
who
are
investing
lots
of
money
and
so
they're.
C
Looking
at
real
estate
projects,
they're
looking
at
stocks,
they're
looking
at
a
bunch
of
different
options
and
they're
looking
many
of
them
are
looking
across
the
country
right.
So
they
have
a
lot
of
different
investment
options.
They
say
we
want
a
minimum
yield
and
then
you
know
if
developers
can't
make
that
minimum
yield,
no
one's
gonna
finance
their
project
and
they
can't
build
anything.
So
our
experience,
looking
at
a
set
of
pro
formas
in
minneapolis
recently,
was
that
you
know
most
projects
that
could
make
a
yield
of
5.7
5.9
we're
getting
funded.
C
There
were
a
few
that
were
getting
investors
if
they
had
a
yield
between
5.7
and
5.9,
but
you
know
not
that
many
and
then
no
no
investor
was
willing
to
invest
in
a
project
that
you
have
a
yield
of
less
than
5.7
percent.
That
was
last
year
in
Minneapolis.
You
know
many
market
teams
shift
right,
like
real
estate
returns
elsewhere
in
the
country
shift
the
stock
market
shift,
so
those
yields
can
shift
over
time,
but
it's
really
driven
by
the
larger
external
factors.
Anything
you
want
to
add.
E
So
there's
there's
a
range
as
you
suggested,
and
there
are
projects
that
you
can
find
that
have
much
higher
yields
than
what
you
see
in
our
studies
and
it's
the
investors
that
are
setting
kind
of
a
floor.
It's
the
landowners
that
are
setting
a
cap.
So
if
you
imagine
everybody's
earning
6%
yield
and
somebody's
got
a
project
and
they're
earning
10,
you
know
that
says
they
got
the
land
really
cheap
from
somebody
who
wasn't
paying
attention.
You
know
like
they
were.
E
They
bought
it
a
long
time
ago
or
some
other
special
circumstance,
but
if
they
were
going
to
be
buying
land
today
and
everybody's
doing
six,
the
landowner
has
the
same
information,
and
so
they
tend
to
cluster
within
a
you
know,
a
range
of
about
one
point.
So
you
get
five
point,
seven
to
six
point:
seven!
There's
a
cluster.
D
E
It
doesn't
have
to
be
that
anybody's
lying
it
doesn't.
I
mean
I
think
that
the
the
the
development
process
is
incredibly
risky
and
when
developers
say
we
can't
make
it
work.
Often
you
later
see
them
make
it
work
right.
You
said
we
can't
make
it
work.
If
you
do
this,
then
you
do
this
and
then
you
find
that
they
make
it
work,
and
it's
not
necessarily
the
case
that
they
were
lying
when
they
said
they
couldn't
make
it
work.
E
It's
just
that
in
order
to
make
it
work,
they
had
to
do
something
else,
so
they
make
the
unit's
smaller.
They
push
the
land
prices
down.
They
renegotiate
some
other
deal
there,
but
there
is
a
breaking
point
and
the
problem
is
we
don't
know
what
that
breaking
point
is,
so
we
do
have
to
take
the
feedback
from
the
developers
about
what
they
can
and
can't
do,
but
we
also
have
to
acknowledge
that
there's
no
reason
for
them
to
tell
us.
E
Oh
yeah,
that's
not
a
problem
right,
it's
so
we
everywhere
we
go
no
matter
what
we
find
in
the
market.
The
the
real
estate
industry
says
we
can't
go
any.
We
happen
to
be
exactly
at
what's
feasible
now
and
if
you
increase
your
requirements
a
little
bit,
nothing
will
be
feasible
and
we
don't
see
that
happen,
but
I
think
that
we
should
be
cautious.
That's
and
that's.
E
D
E
D
Increasing
tax
changes
at
other
levels,
and
so
that
lack
of
understanding
of
what
will
come
in
the
future
also
puts
them
at
higher
risk.
And
you
know:
I
have
many
friends
who
are
in
the
development
business
who
are
not
doing
work
anymore
because
they
just
inherently
don't
want
to
take
on
the
risk.
At.
D
It's
unfortunate
that
we're
at
this
point
in
the
market.
We
don't
want
to
stop
the
market.
We
certainly
don't
want
something
like
this
to
be
blamed
for
completely
stopping
the
market.
So
it's
very
important
that
the
statistics
that
you
bring
forward
as
you
study
yields
are
meaningful
to
them,
as
well
as
to
us
yeah.
D
With
regard
to
the
4%
30%,
can
those
projects
take
section
8
vouchers,
and/or,
other
public
assistance,
I'm
unaware
of
people
just
offer
it
not
grant
at
30%
of
the
metro
ride
median.
We
wouldn't
count
that
as
an
additional
subsidy
that
would
count
against
them.
Or
how
do
you
see
section
8
vouchers
playing
into
that
30%
yeah.
C
That
is
a
great
question
and
something
that
should
be
part
of
this
policy.
I'm,
not
sure.
We've
made
a
firm
recommendation
on
that
that
detail
at
this
point,
because
there
are
benefits
either
way
right.
There
kind
of
pros
and
cons
of
saying
yes,
you
can
use
section
8
or
no.
You
cannot
use
section
8.
D
Basically,
putting
30%
units
and
their
projects
and
not
taking
sections
so
I've
not
heard
of
one
in
22
years,
so
I
just
think.
We
have
to
think
that
through
a
first
thing,
no
other
development
subsidy.
We
can't
really
count
if
you're
lucky
enough
to
get
a
section
8
voucher,
a
good
developer
might
be
able
to
go
to
public
housing
or
the
Met
Council
and
get
four
vouchers
they're
not
going
to
build
30%
units
without
it
it's
just
too
little
of
a
payment.
Ultimately,
so
I
would
urge
us
to
think
about
that.
I
mean.
C
What
this
is
these
numbers
here
when
I
ran
them
through
our
model,
it's
basically
equivalent
financial
feasibility
to
provide
8%
at
60
or
4%
at
30.
Financial
is
not
the
only
consideration
that
developers
go
into
as
they
make
these
choices.
So
my
guess
is
that,
just
with
this
by
itself,
without
the
ability
to
use
section
8,
we
would
not
see
a
lot
of
developers
choosing
that
latter
option.
Thank.
D
A
G
You
mr.
jereth
I,
had
sort
of
a
similar
thought
process
of
questions
and
I
wondered
if
you
could
go
back
to
the
chart,
because
I
think
so
much
careful
detail
has
gone
into
this
recommendation
and
you
wondered
without
going
into
a
black
hole
of
land
economics.
I
do
think
it's
worth
taking
a
minute
to
talk
about.
G
If
you
look
at
the
feasibility
of,
for
example,
a
six-story
wood
frame
rental
building
in
different
parts
of
town
sort
of
breaking
down
for
us,
what
are
the
factors
that
make
a
six-story
wood
frame
building
that
might
be
exactly
the
same
feasible
in
one
neighborhood
and
not
in
another
mm-hmm,
so
we've
land
cost.
We
have
assessed
value
of
land
which
translates
to
property
taxes.
We
have
rent
meant,
yeah
and
I.
G
Think
it's
worth
noting
those
things,
because
we
have
competing
goals
so,
for
example,
in
order
to
make
a
project
feasible
and
some
neighborhoods
the
rent
would
need
to
go
up.
But
as
a
city,
we
don't.
If
our
goal
is
to
make
sure
that
people
can
be
housed
at
all
incomes.
We
don't
particularly
want
rent
to
go
up
right,
so
I
just
know.
G
I've
said
a
lot
I'm,
just
letting
you
answer
the
question,
because
we
had
some,
but
you
know
I
think
it's
one
of
the
examples
of
ways
that
we
have
sort
of
competing
pressures
and
competing
goals,
which
is
yes,
we
want
more
housing,
but
do
we
want
more
housing
at
all
costs?
No
I,
don't
think
we
do
and
I
don't
think
that's
what
this
policy
is
designed
to
deliver.
So
I
think
that's
one!
G
C
You
articulated
it
very
well,
in
terms
of
you
know,
the
major
drivers
of
feasibility
are
the
rents
and
construction
costs
and
land
costs.
I
mean
those
are
kinds
of
big
pieces
that
go
into
any
kind
of
project,
and
we
have
seen
not
only
in
Minneapolis
but
really
across
the
country.
Construction
costs
increasing
at
an
alarming
rate
over
the
last
few
years,
which
is
a
real
problem
for
feasibility.
Right
I
mean
it's.
C
You
know
it's
bad
news
for
everybody
who
wants
to
find
an
affordable
place
to
live,
and
so
you
know
it
is
possible
that
with
changes-
and
you
know,
tariffs
and,
like
you
know,
more
skilled
laborers
entering
the
workforce-
that
construction
cost
could
go
down,
which
could
improve
usability
without
having
to
see
rents
go
up.
So
there
are
some
other
options
for
how
that
could
happen.
G
And
then
it
might
be
worth
highlighting
here,
one
other
attention
we've
seen
even
in
the
interim
policy
which
has
around
Labor
Standards
and
to
share
that
we've
been
hearing
anecdotally
and
through
complaints
to
our
civil
rights
Department
into
the
state
agency.
Is
that
that
investigate
and
enforce
labor
laws
that
you
know
labor
costs
are
rising
in
our
market
and
we're
starting
to
see
a
lot
of
pressure
in
labor,
and
so
one
of
the
consequences
is
I
think
folks
may
be
cutting
corners
or
subcontracting
with
subcontractors
are
subcontracting
and
we're
starting
to
get
some
alarming.
G
Reports
of
of
human
trafficking
and
intimidation
and
those
things
aren't
being
investigated.
I
just
want
to
say
that
I'm,
not
you
know
trying
to
you,
know
they're.
Those
complaints
will
be
investigated
either
by
the
state
agencies
or
by
the
city
agencies
that
are
responsible
for
enforcing
those
laws,
but
as
a
general
trend,
I
also
known
as
the
goal
of
the
council
to
make
sure
that
our
workers
are
treated
fairly
and
paid
what
they
have
earned,
and
you
know
so.
We've
created
a
new
wage
theft
law.
G
C
Thank
you,
lady.
We
got
thirty
three
I'm
sure
we
can
do
it.
Okay,
so
here
is
a
rental
recommendation.
I
mentioned
that
we
are
recommending
one
tweak
to
the
TIF
policy,
so
you
may
recall,
back
in
the
spring,
the
council
adopted
a
revenue
loss,
offset
policy
which
basically
defines
if
a
developer
chooses
20%
at
50%.
Am
I
with
TIF?
What's
the
maximum
TIF,
they
can
get
right.
How
is
that
going
to
be
calculated?
What's
the
formula
and
we
were
recommending
now
you
know
for
the
cases
of
those
projects.
C
I
won't
go
back
to
the
slide,
but
those
projects
that
are
not
feasible
with
ten
at
sixty
and
then
even
when
they
say.
Okay,
we're
going
to
do
20
at
50
with
TIF
the
maximum
TIF
isn't
quite
enough
to
push
them
over
the
feasibility
hump
we're
recommending
those
the
city
determines
that.
That
is
indeed
the
case
that
neither
of
those
options
are
feasible.
C
C
So
now
we
can
move
on
from
rental
to
the
ownership
requirement,
so
the
policy
framework
that
was
adopted
in
December
said
we
want
to
include
for
sale
projects
in
the
inclusionary
policy.
We
didn't
have
a
number
for
that.
Yet
so
what
were
some
of
the
things
that
grounded
solutions
was
thinking
about
as
we
came
up
with
the
ownership
recommendation,
so
Minneapolis
has
not
seen
very
many
condo
developments
in
recent
years,
not
a
lot
of
stuff
moving
forward.
C
There
are
a
variety
of
factors
behind
that,
including,
but
not
limited
to
concerns
about
construction
defect
litigation,
but
should
those
factors
resolve
themselves,
it's
entirely
possible
that
the
condo
market
could
take
off
quite
quickly
and
just
return
to
a
healthy
market.
So
should
the
condo
market
pick
up
quickly?
What
you
don't
want
to
do
is
wait
to
put
in
place
your
inclusionary
housing
requirements.
Until
you
know,
the
condo
boom
is
almost
over
and
you've
lost
out
on
your
opportunity
to
make
sure
that
there
are
affordable
units
included.
C
C
Actually,
no
I
have
one
more
thing
to
say
about
this,
which
is
you?
May
ask
well:
how
did
you
come
up
with
8%,
given
that
there
haven't
been
many
condo
projects
in
the
market
to
date?
So,
ideally,
we
would
have
done
the
same,
very
in-depth
economic
analysis
that
we
did
for
rental
projects,
collecting
dozens
of
pro
formas
from
actual
projects
and
making
the
prototypes
across
the
different
neighborhoods
and
evaluating
feasibility
with
an
appropriate
metric
for
ownership
projects
etc.
But
we
don't
have
those
dozens
of
prototypes
right.
C
There
haven't
been
kind
of
projects
in
recent
years
that
we
can
use
to
say
what
is
the
feasibility
of
condo
projects
so
for
right
now
we're
setting
the
requirement
to
be
8%,
it's
the
same
as
the
rental
requirement,
and
it
probably
makes
sense
for
the
city
once
the
market
starts
to
take
off
like
this
to
go
back
and
do
an
economic
analysis
and
really
figure
out.
Ok,
what's
a
more
precise
number,
that
would
make
more
sense
for
for
sale
projects
and
given
what
we're
actually
seeing
in
the
market.
A
D
D
C
Mean
to
some
extent
we
sort
of
did
right,
I
mean
you
can
pick
almost
whatever
number.
You
want
to
say
we're
gonna
phase
this
in
we
did
look
at
the
speed
and
frequency
of
the
rental
pipelines.
Thinking.
Okay,
your
rental
pipeline
right
now
is
quite
healthy,
right,
you're,
getting
a
certain
number
of
units
in
the
rental
pipeline
is
roughly
average
2500
units
every
six
months,
so
that.
D
C
D
Lost
exactly
and
the
construction
defects,
litigation
that
was
changed
did
not
spur
the
market.
What
spurred
the
market
was
one
wealthy
person
really
wanting
to
do
a
high-end
project
and
another
really
wealthy
person
who
had
money
to
do
a
high-end
project,
so
no
risk
was
there
was
no
risk
and
no
one's
taking
any
risk
to
both
condos.
In
fact,
one
of
the
only
risky
ones
is
actually
now
not
happening.
So
I'm
just
worried
that
this
500
numbers
just
pulled
out
of
thin
air
and
I.
C
Mean
I
was
yeah,
I,
believe
I'm,
sorry
I
mean
our
goal
with
this
is
that
we
don't
want
to
just
be
one
project
right
like
if
you
just
have
it
be
one
project
it
could
be
just
you
know.
Some
you
know
random
wealthy
guy
comes
in
is
like
I
want
to
make
this
project
work.
That
project
works,
but
it's
not
actually
a
recovery
in
the
overall
market
right.
So
we
want
to
make
sure
that
there's
enough
of
an
indication
that
hey
you
know,
many
projects
can
move
forward
again.
C
Looking
at
the
rental
pipeline,
average
project
size
was
about
120
units,
and
here
so
you
know,
500
units
be
five
projects.
A
thousand
units
would
be
ten
projects
that
can
give
you
a
sense.
You
know
if
again,
if
the
condo
projects
are
similar
size,
you
know
it
can
give
you
a
little
more
confidence
that
the
market
is
actually
back
and
it's
not
just
kind
of
a
one-off
I
mean.
D
I
guess
mr.
chair
I
guess:
I
would
actually
hope
that
knowing
the
first
500
wouldn't
have,
this
requirement
would
spur
some
development
of
condos.
That
would
be
good.
We've
seen
that,
but
we
know
that
there
are
approximately
120
condos
coming
online
at
a
million
dollars
or
more
in
the
next
12-18
months,
or
something
like
that,
and
so
there's
really
nothing
between
that
and
there's
some
conversions
and
some
very
small
projects.
D
But
ultimately
the
condo
market
at
the
very
high
end
is
doing
well
and
then
there's
nothing
anywhere
else,
and
so
I
just
worry
that
we
might
not
see
even
more
of
that,
because
you
might
get
enough
very
high-end
ones
to
put
this
into
place
now.
You
always
I
can
justify
voting
for
something
like
this.
If
I
feel
like
what
you're
doing
is
based
on
actual
data,
this
number
to
me
does
not
feel
like
it's
based
on
actual
data
I,
just.
E
Wanted
to
validate
your
assertion
that
we
we
don't,
we
don't
see
any
reason
to
believe
that
I
even
have
a
No
Fee
will
cost
contest
to
happen.
The
market
is
so
far
from
feasibility
that
we
didn't
see.
Any
reason
that
that
whatever
you
do
here
is
going
to
change
the
feasibility
of
contest.
What
we're
talking
about
is,
if
some
day
other
factors
come
into
play
with
state
law
changes,
prices
change
whatever
and
conda's
suddenly
do
become
feasible,
but
this
policy
won't
be
what
drives
that.
Thank.
A
That's
interesting
because
it
makes
me
think
that
we
are
indeed
you're
relevant.
So
why?
Wouldn't
we
just
put
something
in
place
before
the
first
project,
but
because
we
don't
I
mean
the
little
thing
that
we're
gonna
do
I,
don't
think
is
gonna
be.
This
is
just
my
opinion.
I'm,
not
an
expert
like
you
guys,
but
it
isn't
gonna
be.
What's
gonna
make
or
break
somebody's
project,
it's
just
gonna
be
a
little.
A
G
But
if
you
take
into
consideration
of
all
of
the
different
ways
that
this
policy,
as
as
being
recommended,
is
working
to
accommodate
project
feasibility,
including
allowing
an
in
lieu
fee
to
be
paid.
I,
think
you
know
these
very
high-end
condo
projects,
rather
than
including
projects
on
site,
would
likely
pay
an
in
lieu
fee,
and
so
we've
we've
given
projects
a
number
of
ways
to
comply
with
the
policy
based
on
these.
G
If
we
adopt
the
recommendations
that
are
coming
forward
today
or
some
version
of
them,
so
I
think
that's
another
factor
to
consider
when
we're
taking
any
one
of
these
questions
which
is
like
should
condos
be
included,
and
how
should
they
be
included
in
that
bigger
picture
of
there's
an
aloof
e
option?
There's
a
land
donation
option,
there's
a
linked
project
option.
So
this
recommendation
has
so
many
different
ways
of
complying
with
the
policy
that
it
seems
to
me
reasonable
to
include
ownership
in
the
future
and.
A
I
wasn't
trying
to
say:
we
shouldn't
include
ownership,
I,
guess
the
point
that
I
looked
at
I
said:
wow,
there's
one
five
hundred
units
we
potentially
didn't
get
any
affordable
unit
team
because
we
decided
that
we
were
afraid
of
some
power.
We
don't
have
so
that's
my
point.
It
would
have
been
better
to
have
the
policy
in
place
and
then
the
five
hundred
came
on
board
and
at
least
we
would
have
gotten
a
handful
and
a
half
of
affordable
units
in
it
or
whatever.
A
D
You
could
explain
to
everybody
how
you
actually
make
money
selling
condos,
because
a
few
of
a
hundred
condos
for
sale,
the
developer,
doesn't
make
any
money
till
the
96th
one
is
sold.
So
if
the
hundred
they
have
to
have
four
percent
at
eighty
percent,
where
is
the
place
for
them
to
actually
make
any
money?
We
talk
to
anyone
who
builds
condos.
You
have
a
construction
loan,
you
interim
financing.
All
of
that
has
to
be
paid
back,
so
all
of
those
condos
have
to
be
sold.
D
It
takes
a
really
long
time
and
then
they
only
make
money
at
the
very
very
end,
so
I
mean
that's
how
it
works.
Then.
Please
correct
me:
if
I'm
wrong,
if
they're
making
money
on
the
first
one,
they
sell
I,
don't
think
so
because
they're
paying
back
their
construction
loan
to
be
able
to
make
money.
So
I
do
think
that
this
could
be
one
more
thing
that
makes
it
more
difficult
for
ownership
in
the
city,
certainly
not
on
multi-million
dollar
condos,
but
like
we're,
trying
to
figure
out
a
way
to
have
middle-class.
D
Families
have
home
ownership
and
we
think
density
is
good,
so
condos
would
be
density.
I
don't
object
to
this,
because
I
think
it
will
give
the
market
a
chance
to
work
itself
out,
but
I
feel
like
we're
just
a
little
bit
ignorant
of
how
we
collectively
might
mitts
on
it.
So
myself
included,
don't
understand
what
it
takes
to
build
100
condos
and
when
someone
actually
makes
money
on
them-
and
that's
at
this-
that's
kind
of
cutting
into
our
point
about
density
is
good
and
living
and
both
my
family
is
good.
C
Okay,
so
this
upcoming
is,
like
the
most
complicated
part,
remember
I,
said
you're
trying
to
get
simplicity.
These
next
few
slides
like
no
did
not
achieve
simplicity,
so
apologies
in
advance.
So
another
question
we
have
to
think
about
is:
what's
what
size
projects
of
you
know?
How
many
units
will
the
inclusionary
zoning
policy
apply,
and
there
are
like
a
million
things
to
think
about
when
you
think
about
that,
so
I'll
lay
out
six
things
that
we
kept
in
mind.
C
C
The
city
has
expressed
an
interest
in
seeing
more
missing
middle
housing
being
built
basically,
projects
between
single-family
and
large
multi-family.
We
found
that
the
economics
of
projects
of
under
100
units
are
just
a
different
animal
than
the
economics
of
projects
of
over
100
units,
different
financing,
different
rents.
They
could
command,
etc,
and
then
projects
of
under
50
units
might
only
get
one
or
two
units
on-site
thinking
about
complicity.
C
It
can
take
a
lot
of
effort
to
manage
and
monitor
those
units
over
time
if
you
set
any
threshold
beneath
which
the
policy
does
not
apply
and
above
which
the
policy
does
apply.
That
creates
an
incentive
for
projects
just
one
unit
shy
of
that
threshold.
So
we've
definitely
seen
that
one
under
effect
in
other
communities
and
then,
of
course,
the
higher
you
set
you
threshold.
C
This
is
what
you
were
referring
to:
councilmember
Gordon,
the
higher
you
set
you
threshold,
the
more
units
you
exempt
the
fewer
affordable
units
you
produce
right,
so
you're
losing
out
on
producing
some
affordable
units.
So
thinking
about
that
last
consideration
granted
solutions
a
little
analysis
of
Minneapolis
rental
development,
history
from
2015
to
2017
for
major
developments,
and
what
we
found
was
that
of
all
those
units
permitted
during
that
time.
1%
of
those
units
were
in
projects
below
2020
units
in
size.
C
This
is
rental,
the
rental
time
line
only
yeah
and
then,
but
if
you
look
at
projects
from
twenty
to
forty
nine
units,
those
projects
were
a
somewhat
more
substantial
5%
of
the
total
rental
units
built
over
that
time
period.
So
let's
say
you
thought
about
setting
a
project
threshold
of
50
units
you'd
be
losing
out
on
more
affordable
units
over
time.
This
is
all
assuming
that
your
development
pipeline
looks
similar
in
future
years,
as
it
did
the
previous
years,
which
it
may
or
may
not.
C
So,
given
these
considerations,
we're
recommending
that
all
projects
of
twenty
units
or
more,
the
eysie
policy
applies,
but
that's
not
all
so
that
addresses
some
of
the
concerns
we
just
talked
about,
but
it
doesn't
really
address
missing
little
housing.
It
doesn't
address
the
economics
of
smaller
projects
under
100
units,
there's
still
a
1-under
affect
that
that's
one
unit
threshold,
so
we
thought
what
else
can
we
do?
And
we
came
up
with
this
idea
of
scaling
up
the
requirement
for
smaller
projects
between
twenty
and
a
hundred
units
and
I'm
going
to
show
you
a
table.
C
That
kind
of
explains
us
a
little
bit
better.
Here's
our
chart,
whose
the
first
chart
and
no
charts
until
now
so
just
for
fun.
Let's
look
at
this
line.
The
forty
unit
project
is
the
third
line
down
right,
so
we're
basically
saying
for
projects
of
20
up
to
85
units.
The
first
15
units
market
rate
units
in
that
project
are
exempt
from
the
inclusionary
requirements,
so
those
15
exempt
market
rate
units.
You
don't
have
to
provide
8%,
affordable
units.
So
that
means
for
that.
C
Forty
unit
project
25
units
would
be
subject
to
the
eysie
requirements
and
8%
of
25
is
two
units,
so
that
would
be
their
requirement.
But
if
you
then
think
about
okay
well,
two
units,
what
percentage
is
that
of
actual
project
size?
Forty
units?
That's
five
percent,
so
you're
in
effect,
putting
in
place
a
five
percent
requirement
for
that
forty
unit
project,
and
you
can
see
in
that
last
column
the
IV
requirement
really
does
scale
up
from
two
percent
for
a
20
unit
project,
all
the
way
to
8
percent
for
a
hundred
unit
project.
C
We
kind
of
taper
off
the
exemption
as
we
get
closer
to
100
units
in
order
to
reduce
that
kind
of
one.
Under
effect
at
that
hundred
unit
threshold,
so
this
does
a
bunch
of
things
that
helps
with
the
one
under
effect
at
20
units.
It
helps
with
missing
middle
housing
feasibility.
It
helps
with
feasibility
of
smaller
projects
up
to
100
units
and
it's
more
helpful
for
the
smaller
projects
than
for
the
larger
projects
which
need
it
more.
C
So
this
is
our
scaled
requirement
recommendation
and
one
more
slide
see
if
you
have
any
questions
in
addition
to
this,
because
the
city
has
this
particular
interest
in
the
missing
middle
housing
product
and
it's
sort
of
a
new
ish
type
for
the
city.
You
know
you
have
this
missing
middle
pilot
and
you're
really
thinking
about
how
to
make
those
those
projects
work.
We're
also
suggesting
that
projects
of
twenty
to
forty
nine
units
stay
that
requirement
also
phases
in
based
on
a
market
trigger.
C
C
If
you
have
an
auto
cific
proposal
for
dealing
with
fractional
units
which
I
didn't
put
in
here,
because
it
kind
of
jumps
ahead,
but
we're
basically
saying
that,
if
there's
a
fractional
unit,
the
developer
can
either
around
up
to
the
next
whole
number
of
unit.
So
that
would
mean
that
the
20
unit
project
would
have
a
1
unit
required
or
they
can
pay
an
in
lieu
fee
for
that
fraction
of
the
unit
all
right.
Well,
you
guys
get
PhD
for
understanding
that
without
a
lot
of
questions
well,.
C
So
another
topic
that
was
part
of
the
interim
ordinance
was
student
housing,
so
the
intro
ordinance
exempted
student
housing
based
on
a
certain
definition.
So
again,
what
was
grounded
solutions
thinking
about
when
we
thought
about
how
to
treat
student
housing
in
the
inclusionary
ordinance?
Well,
one
is
thinking
about
the
students
themselves
right,
Eric
early
students
who
need
affordable
housing
places
to
live
huge
problems
across
the
country,
student,
homelessness,
etc.
C
There's
also
the
case
that
there
are
some
students
who
might
not
be
receiving
any
income,
but
maybe
they
don't
need
assistance
with
their
housing
because,
for
example,
their
parents
are
helping
them
through
college,
so
those
are
some
dynamics
hard
to
tell
which
students
are
genuinely
in
need
of
horrible
housing
man.
What
do
you
think
about
the
building's?
It
can
be
exceedingly
difficult
to
determine
whether
a
given
housing
development
should
be
called
student
housing
right.
C
They
need
to
make
sure
that
anyone
who
enters
those
affordable
units
meet
federal
eligibility
requirements
for
affordable
housing,
which
those
eligibility
requirements
basically
say
you
have
to
be
income
qualified
right.
You
have
to
meet
the
target
income
and
then
you
have
to
meet
one
of
a
series
of
other
criteria
for
full-time
students
that
are
generally
geared
toward
non-traditional
students.
So
you
know
someone
who's
already:
an
independent
household,
a
single
parent
who's,
non-dependent
of
someone
else,
those
types
of
situations
so.
C
B
B
G
A
C
C
G
I
could
think
when
Penn
were
Schrader
and
I
got
a
chance
to
hear
about
this.
We
did
ask:
how
common
is
it
for
cities
to
have
the
amount
of
privately
built
student
housing?
That's
really
specifically
for
students
and
marketed
to
students
that
we
have
seen
here
in
the
last
decade
or
so
in
Minneapolis.
C
C
So
housing
owned
and
operated
by
an
educational
institution
exempts
eyes
II
would
apply
to
privately
built
housing,
even
if
it
is
kind
of
primarily
marketed
to
or
intended
for
students,
and
then
students
would
be
eligible
for
those
inclusionary
units
if
they
meet
those
federal
eligibility
requirements,
and
we
spent
some
time
looking
into
should
there
be
different
eligibility
requirements
for
students
and
we
looked
into
what
would
it
look
like
if
we
said?
Okay,
if
students
are,
for
example,
eligible
for
Pell
grants
right
based
on
their
FAFSA,
then
they
could
be
eligible
for
inclusionary
zoning
ordinance.
C
A
C
A
C
C
A
C
Talked
about
whether
we
could
use
a
different
subsidy
source
for
that
for
that
second
option
right:
the
20%
at
50%
option.
One
thing
we
talked
about
was
tax
abatement,
but
my
understanding
is
that's
not
actually
an
option
here
in
Minneapolis,
also
due
to
state
law.
So
really
tip
is
kind
of
our
only
workable
subsidy
option
at
the
moment,
which.
C
A
I'll
just
know,
I
think
it's
really
important
that
we
include
students.
So
when
we
got
a
lot
of
surprised
people
when
we
exempted
this
student
housing
and
around
campus,
we
just
Kasich
aliy
a
geographic
exemption
and
there
are
lots
of
people
who
really
need
and
want
more
affordable
housing
near
campus.
So
they
can
live
there
and
there's
lots
of
developers
that
are
quite
a
bit
of
money
off
of
all
that
student
housing.
So
I
appreciate
it.
We've
worked
hard
to
find
a
pathway
here.
Hopefully,
we've
landed
on
the
right
place.
F
They
keep
working
for
letting
me
see.
This
I
appreciate
you
I'll,
just
Express
having
been
working
with
students
were
active
on
this
issue
and
really
looked
pretty
closely
at
the
University
of
Minnesota
context.
University
Minnesota
is
by
far
the
biggest
university
that
has
built
the
least
housing.
If
you
look
around
the
country,
we're
a
very
unique
market
and
that
we
really
did
leave
this
to
the
private
market,
and
this
housing
is
some
of
the
most
expensive
per
square
foot
of
any
housing
stock
anywhere.
F
But
it
is
my
belief
that
there
is
room
for
an
Icee
policy
that
is
specific
to
students
that
would
have
different
eligibility
and
affordability
thresholds
that
are
specific
to
students
that
there's
a
room
in
the
market
to
allow
that
to
still
be
viable
and
I
really
I.
Think
we
need
to
look
at
that
option,
and
if
this
comes
through
based
on
this
recommendation,
I
will
not
be
supporting
it.
I'll
be
proposing
an
amendment.
C
We
had
an
initial
conversation
about
these,
so
I
want
to
start
again
with
the
goal,
so
we
looked
at
our
same
three
goals
as
we
have
for
the
policy
overall
feasibility,
mixed
income,
communities,
simplicity
and
we
added
another
goal
when
we
thought
about
compliance
alternatives,
which
is
we
want
to
make
sure
that
if
a
project
uses
alternative
compliance
instead
of
building
units
on
site,
it
needs
to
the
equivalent
number
of
affordable
units
would
be
built
through
the
alternative
compliance,
as
would
be
built
on
site.
So
that
was
an
important
to
require
goal.
C
So
let
me
start
out
with
the
in
Luffy.
This
is
my
other
more
complicated
part
of
the
presentation.
There
are
two
numbers
that
cities
often
think
about
when
they're,
establishing
and
in
Lucy
and
setting
that
number.
The
first
number
is
the
difference
in
monthly
rent
between
a
market
rate
unit
and
an
affordable
unit.
So
here
you
can
see,
market
rate
unit
is
$1,800
rent
a
month.
Affordable
unit
is
1300.
That
difference
is
called
the
affordability
gap
and
a
couple
really
important
things
about
this
number.
C
C
The
second
number
is
something
called
the
production
cost
and
that's
the
average
amount
that
the
public
has
historically
invested
to
produce.
One
affordable
unit
off-site
so
again
you
look
at
this
example:
you
have
this
affordable
unit,
it
costs
$250,000,
build
those
costs
are
covered
by
a
hundred
and
fifty
thousand
dollars
in
revenue
from
rents.
C
So
what
do
these
considerations?
I
just
threw
out
mean
for
our
goals
for
the
in
Luffy?
Well
before,
if
we're
thinking
about
feasibility
of
development,
that's
a
relatively
straightforward,
the
lower
the
fee,
the
more
people
can
access
it.
The
more
does
for
feasibility
thinking
about
our
goal
of
creating
mixed
income
communities.
It's
a
little
more
complicated,
so
we
talked
a
little
bit
earlier
if
you
want
to
see
affordable
units
built
in
the
same
area
as
market
rate
units.
C
The
easiest
way
to
do
that
is
to
have
those
units
be
built
on-site
in
the
same
building,
it's
possible
to
collect
fees
and
then
try
to
spend
those
fees
right
in
that
same
neighborhood,
but
it
can
be
difficult
right.
There's
less
land
available,
often
where
market
rate
development
is
happening.
Land
costs
are
higher,
so
it's
harder
for
an
affordable
developer
Tagen
to
get
in
there.
C
So
we're
basically
using
on-site
compliance,
that's
kind
of
a
proxy
for
how
we
can
best
achieve
our
mixed
income
communities
goal
so
to
incentivize
on-site
compliance,
the
higher
the
fee,
the
more
likely
you're
gonna
get
on-site
compliance,
so
mixing
communities
points
toward
a
higher
fee
simplicity.
You
might
point
toward
a
lower
fee,
it's
easier
for
developers,
certainly
to
pay.
C
A
fee
may
or
may
not
be
easier
for
city
staff
to
manage
the
fee
revenue
then
to
manage
units
over
time,
but
we'll
just
put
it
on
the
kind
of
the
lower
end
of
the
spectrum
and
then
thinking
about
the
equivalent
number
of
affordable.
If
you
want
to
make
sure
that
the
same
number
of
units
or
more
ability,
you
have
to
make
sure
you're
in
Luffy's
at
least
your
production
cost
number
right,
you're
collecting
at
least
as
much
as
it
cost
to
build
and
you're
doing
it
elsewhere,
generally
points
toward
a
higher
and
luffy.
C
So
we
have
some
tension
tomorrow.
Our
goals
as
council
president
mentor
was
talking
about
earlier
conceptually.
So
how
did
grounded
solutions
was
all
this
tension?
Well,
we
have
this
whole
series
of
recommendations.
We
just
went
through
that
talked
about
how
we
were
trying
to
ensure
feasibility
with
our
rental
requirement,
with
our
threshold
with
our
scale
requirement,
etc.
C
So
because
we
leaned
pretty
heavily
toward
feasibility
with
some
other
parts
of
the
policy
were
able
to
lean
more
heavily
towards
the
goals
of
mixed
income
communities
and
equivalent
number
of
affordable
units,
as
we
set
our
and
Lucy
and
I
just
want
to
pause
for
a
moment
here
to
say
that
inclusionary
zoning
is
this
like
tightly
woven
web
of
policy
considerations
that
holistically
can
address
goals.
But
you
know
as
soon
as
you
try
to
like
pick
out
one
piece
of
the
policy
it
might
have
to
change
another
piece.
C
C
But
wait
there's
more
so
then
the
question
is
okay,
I,
say
moderately
higher
than
the
affordability
gap
what's
moderately
higher.
How
do
we
actually
pick
a
number?
So
for
that
we
said
if
the
on-site
requirement
is
to
provide
eight
percent
of
units
affordable
at
60%
ami,
let's
set
that
in
Luthi,
based
on
what
it
would
cause
the
developer
to
provide
ten
percent
of
units,
that's
50
percent
AMI.
C
That's
our
way
of
just
kind
of
happened
that
moderate
increase
and
when
we
do
the
math
behind
that
that
pencils
out
to
an
in
lufia
$15
per
square
foot
of
market
rate
development,
but
there's
one
more
thing
on
the
in
lieu
fee,
which
is
that
that
affordability
gap
number
is
not
the
same
across
all
development
types
and
all
development
prototypes
generally.
What
we
saw
when
we
did
our
analysis
from
Minneapolis
was
that
higher
buildings
could
command
higher
rents,
which
means
that
that
affordability
gap
is
bigger
for
higher
buildings.
A
It's
hard
to
transfer,
so
you
were
just
talking
about
per
unit
cost
and
500
dollars,
and
so
it's
a
little
bit
hard
to
translate
the
$15
per
square
foot.
Did
you
do
anything
that
was
in
the
22?
What
so,
how
many
square
feet
is?
A
typical
unit
did
cost
a
1,800
I'm
I'm
also
unclear
if
that's
a
one-bedroom,
a
2-bedroom.
Yes,.
C
A
D
C
B
D
D
C
20%,
he
didn't
think
through
that
I'm,
so
glad
you
asked
it
was
such
a
detail
that
I
didn't
actually
end
up,
putting
it
on
a
slide,
but
right
now
the
city's
unified
housing
policy
says
that
for
any
affordable
unit,
that
is
part
of
the
unified
housing
policy.
You
know,
city,
financial
assistance,
land
or
isay
units
have
to
be
reasonably
distributed
throughout
the
project
and
have
to
have
similar
finishes
and
similar
number
of
bedrooms
and
size
of
units
and
all
that
kind
of
stuff.
C
We
basically
kept
that
general
philosophy,
but
we
had
we
added
some
more
specific
definitions
for
what
exactly
that
could
look
like
so
now,
I'm,
not
remembering
name
into
this
piece.
So
it's
something
like
data
I
had
to
be
evenly
distributed
across
the
floors
for
how
many,
but
how
many
floors
for
the
bottom
2/3
of
projects
over
10
stories,
with
it
yeah
bottom
2/3
of
floors
for
projects
over
10
stories
and
throughout
the
development.
D
Other
question
I
had
was
you
know,
starting
maybe
like
20
years
ago,
we
said
any
project
that
the
city
is
financially
involved
in.
You
need
to
have
20%,
affordable
or
you
have
to
pay
in
and
Luffy
and
I.
Think
it's
I
think
please
correct
me.
If
I'm
wrong,
like
no
one
pays
the
fee,
everyone
pretty
much
builds
the
affordable.
Did
you
guys
look
at
that
to
see
what
had
happened
over
the
past
20
years
and
did
more
people
pay
the
fee
or
did
more
people
just
building
affordable?
These
are
in
projects.
D
B
That's
a
really
good
question.
Mr.
chair
councilmember
Goodman,
the
that
has
not
been
in
the
policy
for
the
last
five
years.
So
it's
not
and
I
understand
that
it
was
in
the
policy
at
one
point,
but
it
has
been
since
I've
been
here.
It's
not
it's
not
been
part
of
the
unified
housing
policy.
So
at
some
point
a
council
decided
to
take
it
out.
Okay,
okay,.
C
So
that's
rental,
and
then
you
know
we
also
asked
well
what
about
ownership
and
of
course,
we
banded
the
same
problem
that
we
don't
have
any
ownership
projects
the
basin
and
Mufi
on.
So
for
now,
we're
recommending
the
in
lieu
fee
for
ownership
project
be
the
same
as
the
rental
in
Luffy
and
that
that'd
be.
You
know
proportional
to
the
requirement
right.
So
during
that
phasing
period,
if
the
ownership
requirement
is
half
of
what
it
will
eventually
be,
the
in
Luffy
will
be
half
of
what
it
will
eventually
be.
C
So
that
includes
a
number
of
affordable
units,
depth
of
affordability,
so
target
income,
z'
length
of
affordability,
all
that
has
to
be
the
same
or
better,
with
off-site
compliance,
and
also
that
the
market
rate
developer
has
to
make
a
meaningful
contribution
to
that
off-site
project.
They
can't
just
say:
look
those
you
know
Aeons
building
a
project
over
there.
Those
are
those
are
my
units.
H
About
the
implementation
that
you
mentioned
timeline
that
you
mentioned
a
lot
earlier,
I
know
that
a
number
of
folks
on
the
council,
members
of
the
council
are
we're
looking
to
implement
this
sort
of
to
coincide
with
our
2040
plan
and
that
that's
also
going
to
be
coming
up
and
then
I
think
is
going
to
be
coming
up
sooner
than
the
first
of
next
year.
Is
there
any
reason
we
wouldn't
implement
these
at
the
same
time?
Or
you
know,
I
just
wanted
to
get
your,
or
is
that
relatively
arbitrary
or
I.
C
G
You
mr.
chair
I,
have
been
having
conversations
with
see
patent
about
the
dates
of
and
with
chair
trader
I'm,
seeing
peach
air
about
the
dates
of
the
effective
date
of
Minneapolis
2040
and
how
it
lines
up
with
inclusionary
zoning
taking
effect
and
really
trying
to
make
sure
that
there
isn't
a
gap,
even
even
if
it's
a
couple
of
weeks.
Just
because
we
made
such
a
strong
commitment
to
our
constituents
that
they
would
be
coming
together.
So
you
know
we're
working
those
details
through.
C
And
then
the
last
compliance
alternative,
we're
recommending
the
opportunity
to
donate
land
with
some
criteria
so
as
a
developer
donates
lands
that
land
has
to
have
an
appraised
value
that
is
greater
than
or
equal
to
what
they
would
have
paid
as
an
in
lieu
fee.
If
they
have
a
parcel
of
land
that
appraises
for
somewhat
less,
they
can
make
up
that
difference
in
cash.
And
then
we
were
thinking
about
what
the
city's
needs
were
around
affordable
housing
and,
of
course,
there
are
needs
for
affordable
housing
and
every
neighborhood
across
the
city.
C
But
there
are
some
neighborhoods
where
the
city
has
access
to
lots
of
plots
of
land
that
they
can
use
for,
affordable
housing
in
other
neighborhoods,
where
there's
less
land
availability.
So
we
wanted
land
donation
to
be
focused
in
locations
with
a
high
need
for
sites
for
affordable
housing,
and
we
also
wanted
to
make
sure
that
any
parcel
that's
donated
is
actually
developer
for
for
affordable
housing.
C
A
A
A
If
it's
big
enough-
and
you
don't
have
an
alternative
to
do
that,
and
so
I
just
want
us
to
be
careful
when
we're
thinking
about
it
and
and
what
what
maybe
maybe
there's
some
bigger
hoops
people
who
go
through
so
I'm,
not
sure
how
we
decide
that
that's
acceptable.
They
make
an
alternative
because
I
could
see
them
just
doing
it.
I
forget
what
you
call
that,
because
they're
willing
to
pay
that
no
hassle.
H
A
I
Right,
it's
funny
on
to
that,
because,
while
I
agree
with
the
concept
of
that,
the
other
part
of
the
balance
is
trying
to
get
as
many
affordable
units
as
possible,
and
so
that's
the
hard
choice
and
the
tension
is:
do
you
do
one
unit
on
that
site
in
that
spot,
when
the
option
could
be
making
to
somewhere
else,
we
had
a
different
cost,
and
it's
never
that
simple.
It
all
depends
on
the
development,
but
that
is
part
of
the
the
balance
that's
going
on
there
of
help.
What
do
we
want?
G
Thank
you
sure
I
had
something
on
another
go
ahead.
I
do
I,
do
think.
That's
a
good
question,
though,
and
one
that
we
asked
last
time.
Chronic
solutions
was
in
town
and
I
do
think
this
committee
and
the
council
well,
this
committee,
at
least
in
that
meeting,
gave
pretty
strong
prioritization
to
on
site.
So
I
think
this
recommendation
reflected
that
direction
and
but
I
think
it's
good.
That
people
like
house
might
ask
questions
about
that,
and
we
did
ask
a
lot
of
questions.
I
did
anyway
about.
G
But
I
do
wonder
if
this
policy
could
be
strengthened
beyond
what
was
recommended
today
to
ensure
that
that
scenario
doesn't
happen,
that
we
don't
tear
down
16
units
of
housing,
that's
affordable
at
50
percent
AMI
and
get
four
units
of
how
they
met
are
affordable
at
60%
ami
as
part
of
a
new
construction,
and
we
get
we
do
get
we
get
all
the
other
units
too
in
our
city
has
a
housing
shortage.
We
need
more
housing,
but,
as
we
think
through
how
to
balance
that
I
have
had
the
question.
G
Is
there
a
way
for
us
to
make
sure
that
that
8%
requirement
doesn't
result
in
a
scenario
where
more
naturally
occurring
affordable,
housing?
More
older,
more
affordable
units
are
being
torn
down
than
what
we're
getting
back
in
this
relatively
you
know-
and
this
is
in
this
project
in
this
policy
that,
as
recommended,
has
been
designed
to
make
projects
more
feasible.
So
to
me
you
know
there
are
some
scenarios
where
I
can
imagine
us
saying
you
know.
G
If
you
have
X
number
of
units
in
a
building
that
was
built
before
a
certain
year,
then
you
have
to
replace.
Then
you
know,
then
the
eight
percent
becomes
whatever
number
of
units
is
in
that
building
or
something
as
an
interim
as
we
contemplate,
you
know
a
more
complicated
policy
when
it's
an
open
question
and
I
understand.
That
is
another
layer
that
would
affect
a
project
feasibility
and
that
we
directed
staff
and
the
consultants
and
really
consider
project
feasibility
is
one
of
the
highest
goals,
so
I'm.
Just
putting
that
scenario
out
there
very.
D
Have
a
point,
an
idea,
first
of
all,
I
appreciate
that
we're
not
going
to
take
yet
another
complicated
issue
and
add
to
this
complicated
issue,
but
why
don't
we
just
simply
say
donated
London:
it's
not
exist
currently
have
existing,
affordable
or
no
housing
on
it
or
hasn't
been
on
it
for
five
years.
So
someone
can't
go
up
by
a
bunch
of
duplexes
tear
through
town
and
then
donate
this
land
that
would
solve
that
problem,
correct.
That
would
solve
the
problem
for.
D
See
just
because
they're
gonna
well,
then
we
then
we
should
talk
about
no
net
loss
which
I
brought
up
in
1999
I,
see
councilmember
cherry
I'm
sitting
there
laughing
at
me,
because
there
was
a
big
advocate
for
no
net
loss
at
that
time
and
that
is
and
I
think
that's
something
we
should
look
at
overall,
isn't
a
separate
policy
initiative.
But
if
we're
worried
about
it
at
least
for
this,
that's
what
I
heard
counselor
Gordon
saying.
Why
don't
we
just
simply
say
you
can't
donate
land
that
currently
has
existing
housing
on
it?
D
C
I
think
you're
right
there,
I
mean
what
we've
generally
found
across
the
country
is
that
this
is
an
option
that
is
not
frequently
used,
but
when
it
is
used,
it
can
be
a
real
benefit
to
the
city,
so
it
seems
worth
including
on
the
list,
but
I
wouldn't
anticipate
that
you
would
get
a
lot
of
land
donation
as
a
Norfolk
Alliance
alternative.
Okay,
thank.
D
C
All
right
last
line
last
line
home
stretch,
so
I
mentioned
this
before
our
proposal
around
effective
dates
and
updates.
So
what
we're
describing
can
basically
take
effect
as
soon
as
you
adopt
it,
with
the
exception
of
the
land,
dedication
and
off-site
compliance
alternatives,
which
just
need
a
little
bit
more
work
before
behind
the
scenes
before
they
can
go
into
effect.
C
Another
thing
I
think
I
mentioned
this
earlier.
We
recommend
annual
updates
to
the
in
luffy
index
to
the
construction
cost
index,
just
to
make
sure
that
your
fees
are
not
falling
below
what
it
costs
to
produce
things
on
site
and
people
are
choosing
the
fee.
Instead,
I
mentioned
the
idea
of
doing
an
initial
review
after
18
months
to
see
if
you're
getting
the
mix
of
on-site
and
off-site
you
want
if
people
are
starting
to
use,
TIF,
etc,
and
then
I
mentioned
beyond
that,
every
three
to
five
years,
but
probably
not
any
more
frequently.
A
Well,
thank
you
very
much.
I,
don't
see
any
other
comments
or
questions
up
here,
any
closing
comments
from
seabed
staff
or
anything
okay,
then
I
will
move
to
receive
and
file.
This
report
and
we've
got
a
lot
to
think
about,
want
to
work
on
we'll
have
to
share
with
our
colleagues
any
further
discussion,
seeing
none
all
those
in
favor,
please
say
aye
any
opposed,
say
no.
That
motion
carries
ten
and
this
meeting
is
a
judge.
Thank
you
for
buddy.