11-27-23-R - Laserfiche WebLink

Home Browse Search

ARDEN HILLS CITY COUNCIL WORK SESSION — NOVEMBER 2, 2023 8 Mr. Lux explained that the cost of building a 200-300 unit project starts at about $275,000 per unit. The affordability depends on how you layer on the programs. The single family side is a challenge because of current costs. Councilmember Rousseau asked why they wouldn't want to do 100% of those as ownership, what was the benefit or negative of doing that? Mr. Lux said the challenge as a developer in multi -family, multi -story home ownership (condo) is that you open yourself up to litigation for a 10 year period. The market has pretty much stopped building wood framed multi -family condos. Concrete prices have gone up and continue to go up, while wood is starting to settle down. The pricing would have to start more in the $700,000 range and that would be a challenge. The City will be zoning for density, and the JDA will give guidelines within the term sheet regarding home ownership and for rent products. Mr. Stutz said from the for -sale side they build a number of products that didn't exist when they started discussions a few years ago; single family build to rent. The cost of building them is no different than if it were a for -sale so for tax purposes it probably wouldn't be any different. Until the recent interest rate increases people were actually paying more for rent than if they owned the home. Councilmember Rousseau asked if building equity would stop people from being on affordable homes programs. Mr. Stutz replied they are anticipating having some long term affordability covenants as it becomes problematic with for -sale properties versus rental which is fairly specific. Councilmember Monson said the County has down payment programs too. Councilmember Rousseau said it was a big difference to go from 65% AMI to 80% to market value. Mr. Stutz thought rentals were easy to figure out, for sales were more of a challenge because they actually own the property and have a right to sell it. Covenants may restrict what they can sell it for, but those details need to be worked through in the case of a for sale affordable unit. Councilmember Fabel said his understanding of the subsidy is that it goes to the individual, they get assistance from programs that helps them buy into the house, and the affordability doesn't follow the house, it follows the individual. Similar to first time home buyer assistance. Councilmember Holden felt they should go as high as they could with home ownership. The 1,460 didn't have rental houses in the plan. It's a lot easier to be part of a community if you're an owner. Mayor Grant said in regard to schools, it seemed to him if you asked the school district if they have the resources they're going to say yes. He thought from the school district's perspective they probably didn't have to worry about it for ten years.