04-08-2026 PC Packet - Laserfiche WebLink

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Page 4 of 10 Increase densities where appropriate: Construction costs are highly sensitive to building type. There is a financially optimal "sweet spot" – duplexes through small apartment buildings of up to roughly six stories – where wood-frame construction keeps costs low. Above six stories, steel- frame construction, dual stairwells, and elevators add significant expense. Allowing more units per lot by right (including accessory dwelling units, subdividing large lots, and reducing minimum lot sizes) spreads land costs across more households without requiring costly construction upgrades. In-process draft zoning code revisions consider increasing minimum densities in appropriate portions of the city. Increasing maximum densities in other portions of the city are more likely than not to have similar effects. An additional effect of this approach may be to encourage the Metropolitan Council to consider additional transit service to and from Arden Hills, including regular route transit. Adopt density bonuses: Embedded in the zoning code, density bonuses allow developers to build more units than permitted in exchange for public benefits such as affordable units, additional green space, or sustainable design. Examples from Cottage Grove, Woodbury, Forest Lake, and Golden Valley illustrate how this can be structured at minimal cost to the city. Adopt inclusionary housing ordinance: These ordinances require or encourage developers to set aside a fraction of newly constructed housing units to be affordable to lower-income households and is an affordable housing tool used by hundreds of jurisdictions nationwide and dozens in the region to address historic inequities as they support residential growth and development. Typically, a city or county will adopt an inclusionary zoning ordinance to both add more affordable homes to its inventory and ensure that lower-income households can live in neighborhoods that have been well-resourced and invested in by the public and private sectors — where they would otherwise be priced out, and in neighborhoods where housing supply is increasing. Inclusionary zoning policies may also minimize adverse effects of gentrification such as displacement of families with low incomes. This memo addresses this approach. At the January 12, 2026, City Council work session, staff were directed to bring back a draft ordinance or policy to address requiring affordable units in project proposals. The attached draft “Attachment C” was presented to the Council at its February 9, 2026, work session. The draft ordinance was developed for discussion purposes and is tailored to Arden Hills' market conditions and addresses concerns raised in previous discussions, including design standards, municipal subsidy, enforceability, and maintenance-related affordability for existing residents. It covers both new residential construction and rehabilitation of existing multi-family homes and is intended to be market-sensitive, avoid negative impacts to the tax base, and address stated concerns about community character. Further, based on January's Council direction, staff confirmed two zoning code updates will be pursued as part of the broader code revision: 1. Reducing required parking: Addressing existing parking minimums remains a top priority, freeing up land and reducing development costs for housing and businesses alike. 2. Selectively increasing maximum densities: Targeted density increases in specific zoning districts – particularly R-4 Multiple Dwelling, B-2 General Business, and High Density/Mixed Use future land use areas – are expected to make mixed-income development financially viable without requiring city subsidy. This aligns with the 2040 Comprehensive Plan goals around lifecycle housing and aging in community. 3. Selectively increasing minimum densities/reducing minimum lot sizes: Targeted minimum density increases and/or reducing minimum lot sizes in appropriate portions of the city’s single-family residential neighborhoods, perhaps through adopting an Accessory Dwelling Unit provision to the zoning code, and/or by allowing for smaller scale homes on