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AGENDA ITEM - 3C <br />-z3�HILLS <br />MEMORANDUM <br />DATE: February 9, 2026 <br />TO: Honorable Mayor and City Councilmembers <br />Jessica Jagoe, City Administrator <br />FROM: Jake Reilly, Community Development Director <br />SUBJECT: Affordable housing policy <br />Budgeted Amount: Actual Amount: Funding Source: <br />N/A N/A N/A <br />Council Should Consider <br />Council should consider and provide feedback on the attached language for addressing <br />affordability in Arden Hills in relation to the included draft proposal for an inclusionary housing <br />ordinance designed to address affordability of new residential construction. <br />Background <br />At the October 27, 2025, work session, the City Council received information about affordable <br />housing in Arden Hills and the relation to the housing market nationwide. At the December 8, <br />2025 work session, the City Council received additional information about local housing market <br />dynamics and discussed various approaches to increasing the supply of affordable places to live in <br />Arden Hills. At the January 12, 2026, City Council work session, direction was to bring back a <br />draft ordinance or policy to address including required affordable units in project proposals. A <br />draft ordinance is included as Attachment A. <br />As established in earlier memos on the subject, housing is considered affordable when it costs the <br />owner or renter not more than 30 percent of their income, including taxes, utilities, and related <br />fees. In today's rental market, separating out different fees from the rent has been a mechanism for <br />multi -family property owners to both right size the cost of living to the tenant and recoup as much <br />of the cost of the development and maintenance of a multi -family property and its amenities as <br />possible, including addressing future property maintenance needs. In some cases, renter and/or <br />homeowner insurance is included in that bundle of costs. <br />There are key factors in ensuring people of all kinds can live in a place, two of which are supply <br />and perception. On the supply side, when there is a sufficient supply of homes available to renters <br />or owners of any kind, scarcity isn't driving up the cost of a place to live. When it comes to <br />Page 1 of 3 <br />