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Business and Economic News
Martin Moylan
Minneapolis

Minneapolis refines affordable housing requirement

Developers say they're skeptical of panel's effort

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The Minneapolis City Council housing committee Wednesday heard about alternative ways developers could comply with a requirement to boost the supply of affordable apartments in the city. But developers say the requirement will likely stifle construction and make the affordable housing crunch worse.

The City Council is working toward finalizing an ordinance to require that 10 or 20 percent of apartments in many developments be affordable for low-income renters. An interim ordinance is now in effect.

Consultant Stephanie Reyes told council members that in many cities, developers have several ways to satisfy such quotas.

"About half of programs offer the option to pay a fee in lieu of building units on site," she said. "Half of programs offer the opportunity to build units off-site in another location. About a quarter of programs offer the opportunity to dedicate land."

But developers say the building requirement sets unrealistically high targets and could backfire.

Developer Steven Minn told council members that the affordability goal needs to be less ambitious.

"Your policy could — probably likely — will have the completely opposite effect on the production and preservation of affordable housing," he said. "We're trying to convey that message to you, and we think we're being ignored."

He urged the council to "stop what you're doing, toss out your schedule, embrace us as an industry partner and actually adopt a policy that the industry can embrace."

Council members lamented that developers are not coming close to producing the affordable housing residents need. Council president Lisa

Bender said she's disappointed with developers' "disingenuous rhetoric."

"I don't know how many times a developer has told me they couldn't possibly build a building and follow our rules and then magically came back with a building that was feasible and did follow our rules," she said.