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ARDEN HILLS CITY COUNCIL WORK SESSION — OCTOBER 27, 2025 11 Councilmember Weber said this is a well written report. The most important aspect is creating policy that can effectively get the affordable housing we want. North Heights was an excellent opportunity to get some affordable units. We missed that chance. Council recessed the Work Session at 6: 58 pm. Council reconvened the Work Session at 7.33 pm. Mayor Grant asked if there is any further Council discussion on the Affordable Housing topic. Councilmember Weber asked if Community Development Director Reilly needed any specific discussion from Council before moving forward. Community Development Director Reilly wanted to speak to Councilmember Holden's point. He said research shows that mixed income communities are the most successful. Concentrations of poverty or lower income aren't inherently bad but if there is a way to solve for that, he wondered what that would look like. His other question is "What's a neighborhood?". Councilmember Holden said the first TCAAP plan, had high value homes, medium value homes and lower income homes. In that ideal model, all of the neighbors interact. Mayor Grant echoed that. He said we had The Hill, The Creek and The Town Center for a reason. Councilmember Monson said Rice Creek Commons continues to have these discussions. The JDA is aligned with having those mixed income communities. We are facing constrictions of financing affordable housing. She said affordable housing isn't necessarily low income. It is 30% of your household income. She said having life cycle housing available can fill the gaps for that missing middle. Low -Income Housing Tax Credits (LIHTC) is a tool that could be used. She said we are tackling a lot of the options through the Zoning changes. We're still too far away to be talking about the HRA and levy impacts. If the goal is to allow for a mix of incomes, then our Zoning Code needs to allow for these mixes of uses. Councilmember Weber said it is important to recognize the level of affordability doesn't necessarily mean deeply affordable or low income. He thinks Accessory Dwelling Units (ADUs) will go a long way in addressing the mix of housing affordability in different areas with different income levels. We need to free up some of the single-family housing so younger families can move into them. The seniors in our City want to stay here but don't have anywhere to go that doesn't cost $5,000 a month. Mayor Grant asked about LIGTC. He thought that was a 50% or 60% for fifteen or thirty years. Community Development Director Reilly said low income tax credits come in two different percentages. It is hard to get the credits. They tend to be affordable to people at 50% or below of the AMI and often include subsidized units in the deeply affordable level that are often dedicated to people with disabilities. Working with developers who understand how LIHTC projects work is helpful. LIHTC credits come with less than a 1 % risk to the municipality.