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Page 6 of 10 Table 2: Inclusionary zoning requirements in suburban communities Minimum % of Units (Rental) Standard Income limit Shoreview Bloomington Eden Prairie Edina Golden Valley Hopkins Minnetonka St. Louis Park Ext. Low Income 30% AMI - 9% 5% or - - - - 5% or Very Low Income 50% AMI 5% or 10% or 10% or 10% or 5% or 5%1 10% or Low Income 60% AMI 7.5% or 15% 20% 15% 10% 10%2 20% Workforce Housing 80% AMI 10% - - - - - - - As established, housing is considered affordable when the cost is not more than 30 percent of the resident’s income, including taxes, utilities, and related fees. In today’s rental market, separating out fees from rent has been a mechanism for property owners to both right size the cost of living to the tenant and recoup as much of the cost of the development and maintenance of the property/amenities as possible, including addressing future needs. In some cases, renter/homeowner insurance is included in that bundle of costs. Many multi-family management firms now require renters to obtain rental insurance. There are key factors in ensuring people of all kinds can live in a place, two of which are supply and perception. On the supply side, when there is a sufficient supply of homes available to renters or owners of any kind, scarcity does not have the effect of driving up the cost of a place to live. However, it is important to note that supply does not inherently impact demand. Both how “easy” a developer perceives a locality is to develop in and neighborhood perception influence whether a developer of any kind will find a place desirable to build in. Ultimately, supply of housing will come when the cost of land plus the cost of construction is of interest to a developer. Higher density buildings are more likely to be profitable in locations that are best able to support them. The Lexington Avenue corridor is one example of a place where developers may desire to build higher density buildings. In that area, the cost of land is somewhat lower than in the existing single-family residential neighborhoods and the location affords more opportunities to walk to and from major employers and many services and businesses. Some of this supply (relative to the cost of land) can be addressed through the pending zoning code update. Discussion Inclusionary housing ordinance Attachment A is the public hearing version of the draft inclusionary housing ordinance that has revisions from the conversation at the February 2026 Council work session. Substantive changes from the Council’s discussion include changes to percentages of required affordable units as shown in Table 1 above, as well as additional language not seen by the City Council designed to clarify the approach and identify additional opportunities to meet the intent of the ordinance, as follows: 1 If no subsidy or if no zoning or comprehensive plan amendment requested 2 If no subsidy and with zoning or comprehensive plan amendment requested