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HRA Meeting Minutes – Tuesday, May 21, 2013 Page 4 1 Ms. Jansen reviewed a map of housing opportunity sites previously identified by the HRA and 2 focused specifically on four (4) areas for short-term possibilities, based on their location, 3 current property owner, and land acquisition potential. Considerations reviewed by Ms. Jansen 4 for each site and their potential included flexibility in selling price, incentives for developers to 5 add 20% affordable units, and area aesthetics and amenities near those sites. 6 7 Ms. Jansen reviewed the challenges and opportunities presented by each of the four (4) sites, 8 including land constraints with the lack of available land in Roseville driving up costs and 9 putting pressure on housing prices; age of existing rental housing stock averaging over forty 10 (40) plus years and lacking amenity demands of today’s renters; difficulties in achieving cash 11 flow based on rents and development costs for new market-rate multi-family developments; 12 and the choices of lifestyle renters today choosing to live in rental housing versus home 13 ownership. Ms. Jansen advised that developing tools to promote private/public partnerships 14 was critical; and some options could include a waiver or reduction of development fees; tax 15 increment financing; land write-downs; tax abatements; livable communities’ grants; 16 renovation credits; and/or density bonuses. 17 18 Ms. Bujold noted that the above list was not exhaustive, but some options used in the past; and 19 suggested the HRA consider how the list of financial tools could be expanded, depending on 20 State legislative actions; opining that there was a definite need for more creative financial 21 options. 22 23 At the request of Ms. Kelsey, Ms. Bujold expanded on renovation credits, an option holding 24 the most potential in first and second tier suburbs, such as Roseville, with older housing stock 25 and used to bridge the gap between Class 1 and Class C products and the disparity between 26 existing rents and improving the overall rental rates in a community. Ms. Bujold advised that 27 this drove the framework to encourage developers of nicer properties to improve their 28 properties even more, by investing in the existing products to bring it up to the next level, the 29 second tier of a middle product, so developers can see the difference in rent levels and make 30 them more amenable to achieve higher rent housing options. 31 32 Ms. Bujold advised that there was currently no existing program out there, and she had come 33 up with renovation credits on her own for those communities having the less favorable 34 properties and needing to incent their improvement. Ms. Bujold noted that many of those 35 properties were developed in the mid to late 1980’s and 1990’s, and sometimes up to 200-300 36 units. Ms. Bujold noted that, from her perspective, there were a lot of institutional investors 37 interested in those types of projects purchasing them as-is, and putting $8,000 or so upgrading 38 each unit and then raising rents and moving market rent up in the marketplace. With interest 39 rates continuing at their current low rates, Ms. Bujold opined that this made sense in many 40 communities. Ms. Bujold noted that, while the HRA may not need to offer the renovation 41 credits, it would encourage recently-sold or target properties to make an investment, with City 42 assistance if possible. Ms. Bujold advised that she was seeing that happen in properties 43 changing hands in Minnetonka, Burnsville, St. Louis Park, Plymouth, Maplewood and New 44 Brighton, all having similar housing stock to that of Roseville. Depending on how pro-active 45 the City chose to be, Ms. Bujold noted that this could be an effective tool for the HRA, or it 46 was possible that the market may take care of it on its own, depending on how vacancy levels 47 continue. Ms. Bujold advised that the point was not to simply increase rents, but to encourage 48 new development to move the entire market up so those wishing to pay a higher amount 49 moved up to those higher priced units with additional amenities. 50 51 Discussion among Ms. Jansen and Ms. Bujold and HRA members included ongoing need to 52 improve housing stock in Roseville; whether or not it was desirable to increase rental rates; 53 demand evidenced with higher priced housing units (e.g. Josephine Woods); and vacated 54 homes available and creating a housing market for those seeking fewer amenities or less 55 expensive housing options.