HomeMy WebLinkAbout2026-007OF
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-A EN HILLS
ORDINANCE NO. 2026-007
CITY OF ARDEN HILLS
RAMSEY COUNTY,MINNESOTA
AN ORDINANCE AMENDING CHAPTER 13,
ZONING CODE, SECTION 1320
OF THE ARDEN HILLS CITY CODE TO INCLUDE A NEW SECTION 1320.16
REQUIREMENTS FOR AFFORDABLE HOUSING
THE CITY COUNCIL OF THE CITY OF ARDEN HILLS, MINNESOTA, ORDAINS:
SECTION 1. Chapter 13 -Zoning Code, Section 1320 is hereby amended by adding a new
subsection 1320.16 Requirements for Affordable Housing and the underlined language as follows:
1320.16 Requirements for Affordable Housing.
Subd. 1 The City Council of Arden Hills finds and declares the following:
A. The health, safety, and economic welfare of present and future residents of Arden
Hills depends on the availability of housing choices affordable to people and
families at various income levels, including those earning less than 80% of Area
Median Income (AMI).
B. Stable, safe, and affordable housing provides measurable health and economic
benefits for individuals, families, and the community as a whole.
C. There is a demonstrated need to encourage the development of affordable housing
for Arden Hills' workforce and families.
D. New residential development can accommodate existing demand for affordable
housing for service workers, teachers,public safety personnel, and other essential
community members.
E. The preservation of naturally occurring affordable housing_(NOAH) is critical as
market pressures increase rents and threaten the displacement of existing
affordable units.
F. Economic integration of affordable housing within market-rate developments
creates diverse, stable neighborhoods and prevents the concentration of poverty
and the concentration of wealth.
Subd. 2 Purpose. The purpose of this ordinance is to:
A. Maintain a balanced community that rovides housing opportunities for
households at all income levels.
B. Ensure housing opportunities for employees of businesses located in Arden Hills
and the surrounding region.
C. Implement affordable housing goals and policies contained in the Cit�'s
Comprehensive Plan.
D. Promote economic integration by including affordable units within market-rate
developments.
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E. Create affordable housing without requiring_public subsidies or tax increment
financing.
Subd. 3 This ordinance is adopted pursuant to:
A. Minnesota Statutes � 462.358, subd. la, which authorizes municipalities to adopt
ordinances for the purpose of increasingthe he supply of affordable housing using,
land use mechanisms.
B. Minnesota Statutes § 462.358, subd. 11, which authorizes municipalities to enter
into agreements requiring affordable housing with established pricing and long-
term affordability controls; and
C. Minnesota Statutes & 473.859, which requires municipal comprehensive plans to
promote creation of affordable housing for low- and moderate-income individuals
and families.
Subd. 4 Definitions. The following terms shall have the meanings indicated:
AFFORDABLE. Housing is affordable when a household pays no more than 30% of
gross household income for housing costs, including rent or mortgage payment,utilities,
fees, and charges.
AFFORDABLE RENTS. The rent and utilities for the affordable housing units will be
based on payment standards by Zip code using Small Area Fair Market rents, as
established by the Metro HRA or, as applicable, MN Housing income limits, US
Department of Housing and Urban Development income limits, the Multifamily Tax
Subsidy Projects (MTSP) Income Limits are used to determine qualification levels as
well as set maximum rental rates for projects funded with tax credits or tax exempt
housing bonds authorized under the Internal Revenue Code as adjusted annually_
AFFORDABLE HOUSING UNIT. A dwelling unit that has income and rent restrictions
pursuant to this ordinance to ensure affordability for eligible households.
AREA MEDIAN INCOME(AMI). The median household income as most recently
determined by the U.S. Department of Housing and Urban Development(HUD) for the
Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin Metropolitan Statistical Area,
adjusted for household size and number of bedrooms.
DENSITY BONUS UNIT. A unit as a result of an increase in density permitted above the
per acre limit established by the city code
DEVELOPMENT. A new residential or mixed-use development, including construction
in phases or stages for which city_approvals are being or have been sought.
DWELLING UNIT. One or more rooms designed for residential use by
household containing cooking, living,iving, sanitary, and sleeping facilities.
ELIGIBLE HOUSEHOLD. A household with annual income at or below 80% of AMI
for rental units, or at or below 110% of AMI for ownership units.
MARKET-RATE UNIT. A residential dwelling unit not subject to affordability
restrictions under this ordinance.
NATURALLY OCCURRING AFFORDABLE HOUSING (NOAH). Existingrental
ental
housing that is affordable to households at or below 60%of AMI without public subsidy,
typically constructed between 1940 and 1990 and classified as Class B or C real estate
property_
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SUBSTANTIAL REHABILITATION. Improvements to a property where the cost
exceeds 20%of the property value excluding land after improvements.
TENANT PAID RENT. The monthly rent for an affordable dwelling unit shall include
rent,utility costs and any other non-optional monthly occupancy charges.
WORKFORCE HOUSING. Housing affordable to households earning between 60% and
80% of AMI typically needed by teachers, public safety personnel, healthcare workers,
and other essential workers.
Subd. 5 Applicability.
A. This ordinance applies to the followingdevelopment evelopment types:
1. New multifamily residential developments creating 20 or more dwelling units.
2. Mixed-use developments with a residential component of 20 or more dwelling
units.
3. Substantial rehabilitation or reconstruction of existing buildings containing 20
or more dwelling units.
4. Conversion of non-residential buildings to residential use creating 20 or more
dwelling units.
5. Those developed on property purchased from the City of Arden Hills unless a
waiver is approved by the Arden Hills City Council.
6. The development must comply with this inclusionary housing ordinance as
amended and approved by the city council as of the date the development
enters into a development agreement with the city.
B. Calculation of Units/Payment in Lieu
For phased developments, the affordable housing requirement shall be calculated
based on the total number of units in all phases. Affordable units shall be
provided proportionately across phases.
When calculating the number of affordable units required, any fraction of 0.5 or
greater shall be rounded up to the nearest whole number; fractions less than 0.5
shall be rounded down.
Subd. 6 Affordable Housing Reguirement
A. New Development Requirements
1. Developments subject to this ordinance shall provide affordable housing units
according to the following standards:
Options Affordability Maximum Minimum %
(Choose one) Standard household income of Units
1 Ext. low income 30%AMI 5%
2 Vga low income 50% AMI 5%
3 Low income 60% AMI 7.5%
4 Workforce housing 80% AMI 10%
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2. On-site parking shall be provided (either surface or enclosed) for affordable
units and shall be included within the affordable sales price and/or affordable
rent. At least one enclosed parking stall shall be included in the purchase price
of an affordable for-sale unit in the same manner as offered to buyers
market-rate units.
3. For ownership housing(condominiums, townhomes/twin homes, duplexes,
triplexes, rowhouses, and four-plexes), at least 10%of units shall be
affordable to households at or below 110% of AMI, including any related and
required association or management fees.
B. Naturally Occurring Affordable Housing (NOAH) Replacement Requirement. If a
development demolishes or converts NOAH units, the new development must
replace those units at a minimum rate of 20% of total units affordable at 60%
AMI. Replacement units shall be comparable in bedroom count and total bedroom
square footage to the demolished units.
C. Integration and Design Standards
1. Distribution and Integration. Affordable units:
a. Shall be distributed throughout the development and not concentrated in
any single building, floor, or section.
b. Shall be proportionately distributed across all unit types (studio, 1-
bedroom, 2-bedroom, 3-bedroom, etc.).
c. Shall be indistinguishable from market-rate units in terms of exterior
appearance and quality of construction.
d. May be either"fixed" or"floating." Fixed units are those identified by
unit number and never change. Floating units mange over time as
long as the total number of units and any pecific quantity of bedroom
sizes or total square footage in the property remains compliant with the
original Development Agreement.
2. Comparable Quality. Affordable units shall:
a. Have the same design, materials, and construction quality as market-rate
units.
b. Have comparable square footage and room sizes to market-rate units of
the same bedroom count.
c. Have comparable furniture, fixtures and equipment to market-rate units.
d. Have access to the same amenities, facilities, and services as market-rate
units.
e. Have proportional access to parking, including both surface and enclosed
parking if available.
Subd. 7 Affordability Controls
A. Rent Limits. Maximum rent for affordable units, including utilities,parking and all
mandatory fees, shall not exceed 30% of the applicable AMI level adjusted for
household size and bedroom count. Rent limits shall be based on Metro HRA Small
Area Fair Market Rents or Minnesota Housing income limits, whichever is more
restrictive.
B. Rental affordable dwelling units shall be rented only to income eligible families
during the period of affordability. A household that was income eligible at initial
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occupancy may remain in the affordable dwelling unit for additional rental periods as
long as the income of the household does not exceed one-hundred forty percent
(140%) of the applicable AMI.
C. Period of Affordability. Affordable units shall remain affordable for a minimum of 20
years from the date of initial certificate of occupancy. Affordability shall be secured
through a recorded covenant or deed restriction approved by the City Attorney.
D. Non-Discrimination. Developers, owners and managers shall not discriminate against
prospective tenants on the basis of source of income. Projects subject to this Policy
shall accept tenant-based rental housing assistance including but not limited to
Section 8 Housing Choice Vouchers, HOME tenant-based assistance and Housing
Support. Tenants with rental assistance may occupy an affordable dwelling unit with
the rent charged not exceeding the maximum allowed by Metro HRA or the
assistance provider.
Subd. 8 Regulatory Incentives. To offset the costs of providing affordable housing without
public subsidy, developments meetingthe he requirements of this ordinance, are eligible
for the following regulatory incentives:
A. Density Bonus. Developments providing affordable units at or below 80%AMI may
receive a density bonus of up to 25% above the maximum density otherwise
permitted provided the increase does not negatively impact surrounding properties or
conflict with comprehensive plan goals.
Developments providing affordable units at or below 60%AMI may receive a density
bonus of up to 50% above the maximum density otherwise permitted, provided the
increase does not negatively impact surrounding properties or conflict with
comprehensive plan goals.
The density bonus shall not increase the number of required affordable units. Bonus
units may be market rate.
B. Lot Size and Width Reduction. Minimum lot size and lot width requirements may be
y reduced by up to 25% for developments meeting affordability requirements, subject
to site plan approval and findings that public health, safety, and welfare are protected.
C. Lot Coverage Increase. Maximum lot coverage may be increased by up to 10% for
developments meeting affordability requirements, subject to adequate stormwater
management and site plan approval design review.
D. Expedited Review. Applications for developments providing affordable units shall
receive priority review by city staff and may be placed ahead of other applications in
the review queue.
E. Parking Flexibility. The City may consider parking reductions of up to 25% for
developments meeting affordability requirements, provided adequate parking is
demonstrated through a parking study and subject to conditions ensuring affordable
unit residents have equitable access to parking at no additional charge.
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Subd. 9 Affordable Housing Plan
A. Required Submission. All developments subject to this ordinance shall submit an
Affordable Housing Plan as part of the final development plan application. The plan
shall be approved by the City Council prior to issuance of building permits.
B. Plan Contents. The Affordable Housing Plan shall include:
1. Total number of units and number of affordable units by AMI level.
2. Unit mix showing bedroom counts or total square footage of leasable space for
both market-rate and affordable unit types.
3. Site plan and floor plan showing location and distribution of affordable units.
4. Proposed rent levels for affordable units demonstrating compliance with
affordability limits.
5. Management plan describing marketing, tenant selection, income verification, and
annual reporting procedures.
6. Phasing plan showing proportional development of affordable and market-rate
units (if applicable).
7. Draft affordability covenant or deed restriction in form approved by the City
Attorney.
Subd. 10 Development Agreement
A. Required Agreement. Prior to issuance of building permits, the developer shall
execute a Development Agreement with the City. The agreement shall incorporate the
approved Affordable Housing Plan and set forth all commitments and obligations of
both parties.
B. Recorded Covenant. The developer shall execute and record with the Count
covenant or deed restriction, in form approved by the City Attorney, that runs with
the land and ensures continued affordability of designated units for the required
period. The covenant shall be recorded prior to issuance of certificates of occupancy.
C. Right of First Refusal. The agreement may include a right of first refusal providing
the City or designated affordable housing organization with the option to purchase the
property before it is offered on the open market, to preserve long-term affordability.
_Subd. 11 Monitoring and Compliance
A. Annual Reporting. Property owners shall submit an annual report to the City
Administrator or designee by Febru4a 1 of each year, containing:
1. Total number of units and number of affordable units by AMI level.
2. List of all affordable units or sum total/percentage of leased square footage of
affordable units.
3. Current rent for each affordable unit.
4. Income verification documentation for new tenants.
5. Vacancy information.
6. Certification of compliance with all requirements of this ordinance and the
Development Agreement.
B. Monitoring and Inspection. The City reserves the right to inspect records and
properties to verify compliance with affordability requirements. Inspections shall be
conducted upon reasonable notice and during normal business hours.
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C. Phasing Compliance. For phased developments, certificates of occupancy for market-
rate units shall not be issued until a proportionate number of affordable units in that
phase have received certificates of occupancy and are available for occupancy.
Subd. 12 Alternative Compliance. The City Council may approve alternative methods of
compliance that provide equal or greater public benefit than strict application of this
ordinance. Any alternative proposal shall:
A. Provide at least as many affordable units at the same or lower income levels.
B. Maintain or exceed the quality and design standards required by this ordinance.
C. Demonstrate compelling circumstances justi ing the alternative approach.
D. Be recommended for approval by city staff with detailed findings supporting the
public benefit.
Subd. 13 Enforcement
A. Violations. Failure to comply with the requirements of this ordinance or the
Development Agreement constitutes a violation subject to enforcement action.
Violations may result in withholding of certificates of occupancy, revocation of
permits, civil penalties, or other remedies available under law.
B. Remedies. The city may pursue any remedy available under law or equity to enforce
this ordinance. Remedies are cumulative and not exclusive.
.Subd. 14 Administration
A. Guidelines and Procedures. The City Administrator may adopt administrative
guidelines and procedures to implement this ordinance, subject to approval by the
City Council. Guidelines shall be published and made available to developers and
the public.
B. Annual Evaluation. The City Administrator or designee shall provide an annual
report to the City Council by October 1 of each year evaluatingthe he implementation
and effectiveness of this ordinance, including the number of affordable units created,
compliance rates, and recommendations for amendments.
C. Periodic Review. The City Council shall review this ordinance at least every five
years to ensure it remains responsive to local housing needs, market conditions, and
regional housing goals. Amendments may be adopted following public hearing as
required by state law.
SECTION 2. If any section, subsection,paragraph, sentence, or clause of this ordinance is held
to be unconstitutional or invalid, the remaining portions shall remain valid and in force. The City
Council declares that it would have passed each provision independently.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
publication according to law. A Summary of this Ordinance will be published in accordance with
state statute.
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PASSED and ADOPTED this 27t'day of April, 2026,by the City Council of the City of
Arden Hills, Minnesota.
CITY OF ARDEN HILLS
By i0ai'Zi
David Grant, Mayor
ATTEST:
J ie Hanson, City Clerk
To view the final document, access adopted Ordinances via Arden Hills Public Laserfiche Weblink by visiting
cityofardenhills.org and clicking on Archived Documents under Helpful Links on our main webpage
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