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Minn. Stat. § 474A.047 and Section 2 of the Regulatory Agreement, requiring 20% of the units to be within the fair market rents (FMRs) for the area established by HUD. The rents, after the increase, on most units will substantially exceed the FMRs and the owner's tax credit application indicates that even the minimum rents proposed would be somewhat higher than the FMRs ($705 projected gross rent vs. $699 FMR for 1-BR units; $850 vs. $848 for 2-BR units). The City has the authority under Section 7 (a) and (b) of the Regulatory Agreement to demand, and inspect, any information deemed necessary to substantiate continuing compliance with the Regulatory Agreement. So the City can certainly demand the information necessary to determine compliance with § 474A.047 after the current rent increases are implemented. More substantively, the City must make a final determination that the tax credits requested by the owner aze necessary for the project's long term feasibility and viability as low income housing. The tax credit allocation to the project may not exceed an amount determined by the City to be necessary. IRS Code § 42(m)(2)(D); MHFA Housing Tax Credit Program Procedural Manual, § 8.G. "Determination of Credits." It is difficult to see how both the rent increase and the credit amount proposed are "necessary" when the developer proposes to walk off with a $1.2 million developer fee. The owner has terminated the tenancies of large numbers of current residents effective at the end of this month, with no cause given. The attached letter to the owner demonstrates that such no-cause terminations are not permitted by the IRS Code in tax credit projects. Pursuant to Section 7(b) of the Regulatory Agreement, the City has the right to determine the owner's continuing compliance with the Code. We would ask you to do so immediately with respect to the terminations of tenancy effective in a few weeks. In doing so, you should note that the owner's tax credit proposal is for 161 out of 190 units to be low income. Therefore, simply being over-income for the tax credit units does not constitute cause for lease termination. Finally, the owner's refusal to permit tenants to meet with public officials, including State Senatory Marty and City Council member Ihlan, to discuss these issues is a violation of Section 1(f) of the Regulatory Agreement, which guarantees "unrestricted access to all common facilities." The City is entitled to enforce the Regulatory Agreement (see Section 13). Moreover, the City's authority to make the necessity determination gives it substantial leverage to negotiate a reasonable resolution of all of the issues discussed above. Please call me to set up a meeting with residents to discuss these issues. Yours truly, Jack Cann cc: Councilmember Ihlan