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ARDEN HILLS CITY COUNCIL WORK SESSION — NOVEMBER 2, 2023 7 Mr. Lux replied they don't have the economics worked out to know whether or not it will be necessary. He suggested the City Council, school district and County be open the tax increment financing. He's not asking for it now, but he won't take it off the table at this point. Mayor Grant said it's important to know the financials are a work in progress and if TIF were included the financials could be substantially impacted. Councilmember Holden asked at what point does an affordable house only pay 25% of their property taxes. City Administrator Perrault said 60% of AMI and below with 4(d) tax credits. Councilmember Holden thought they should know what the cost of that would be to the City. They have a substantial number of homes that will only be paying 25% of their property taxes, and they would be in the hole for many years. If they add more houses that don't pay property taxes, along with TIF, where would the money come from to pay for the development? Councilmember Monson said the 60-80% is full property tax. Mr. Lux said 80% units in Arden Hills is pretty much market rate. Councilmember Rousseau said when she thinks about affordability she wonders if people have to think they would have to turn down a promotion at the risk of losing their housing because they make too much money. Is there a spot where someone can have a 70% AMI and still be in Arden Hills? Councilmember Holden stated most cities have a list of requirements before they put in affordable housing. What guarantee is there that there will be a grocery store for those people? There won't be public transit. Small retail businesses only last 4-5 years. With the number of people and the lack of retail jobs that's a concern. Mr. Lux explained they are currently in discussions with groceries, so he's not concerned about getting a grocer in. Mayor Grant said in terms of affordability he would say 20% overall; take some at 60 and some at 80, rather than add to it to take the total to 22%. The county said something about 30% AMI but they hadn't seen any numbers to support how many units that would be. He was surprised at the open house that there were requests for gas stations. Mayor Grant stated he was a big proponent of commercial, he thought it was better for the individual and the City, perhaps even better for the developer. He thought the County was in favor too. Councilmember Rousseau liked the idea of building equity but wondered what the cost difference between a rental and home ownership was for the City.