1.1                          A bill for an act
  1.2             relating to housing; authorizing municipalities to 
  1.3             include affordable housing requirements in subdivision 
  1.4             regulations; requiring cities to offer regulatory 
  1.5             relief to housing developers who voluntarily meet 
  1.6             housing affordability thresholds; appropriating money; 
  1.7             amending Minnesota Statutes 2000, section 462.358, 
  1.8             subdivision 2a, by adding a subdivision. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 462.358, 
  1.11  subdivision 2a, is amended to read: 
  1.12     Subd. 2a.  [TERMS OF REGULATIONS.] (a) The standards and 
  1.13  requirements in the regulations may address without limitation:  
  1.14  the size, location, grading, and improvement of lots, 
  1.15  structures, public areas, streets, roads, trails, walkways, 
  1.16  curbs and gutters, water supply, storm drainage, lighting, 
  1.17  sewers, electricity, gas, and other utilities; the planning and 
  1.18  design of sites; access to solar energy; and the protection and 
  1.19  conservation of flood plains, shore lands, soils, water, 
  1.20  vegetation, energy, air quality, and geologic and ecologic 
  1.21  features.  The regulations shall require that subdivisions be 
  1.22  consistent with the municipality's official map if one exists 
  1.23  and its zoning ordinance, and may require consistency with other 
  1.24  official controls and the comprehensive plan.  The regulations 
  1.25  may prohibit certain classes or kinds of subdivisions in areas 
  1.26  where prohibition is consistent with the comprehensive plan and 
  1.27  the purposes of this section, particularly the preservation of 
  2.1   agricultural lands.  The regulations may prohibit, restrict or 
  2.2   control development for the purpose of protecting and assuring 
  2.3   access to direct sunlight for solar energy systems.  The 
  2.4   regulations may prohibit, restrict, or control surface, above 
  2.5   surface, or subsurface development for the purpose of protecting 
  2.6   subsurface areas for existing or potential mined underground 
  2.7   space development pursuant to sections 469.135 to 469.141, and 
  2.8   access thereto.  The regulations may prohibit the issuance of 
  2.9   permits or approvals for any tracts, lots, or parcels for which 
  2.10  required subdivision approval has not been obtained.  
  2.11     (b) The regulations may permit the municipality to 
  2.12  condition its approval on the construction and installation of 
  2.13  sewers, streets, electric, gas, drainage, and water facilities, 
  2.14  and similar utilities and improvements or, in lieu thereof, on 
  2.15  the receipt by the municipality of a cash deposit, certified 
  2.16  check, irrevocable letter of credit, or bond in an amount and 
  2.17  with surety and conditions sufficient to assure the municipality 
  2.18  that the utilities and improvements will be constructed or 
  2.19  installed according to the specifications of the municipality.  
  2.20  Sections 471.345 and 574.26 do not apply to improvements made by 
  2.21  a subdivider or a subdivider's contractor. 
  2.22     (c) The regulations may permit the municipality to 
  2.23  condition its approval of residential subdivisions of 20 
  2.24  residential units or more on the inclusion of at least 20 
  2.25  percent affordable units within the proposed subdivision.  
  2.26  One-half of the subdivision's affordable units must be 
  2.27  affordable at or below 80 percent of the greater of state or 
  2.28  area median income and the other one-half of the subdivision's 
  2.29  affordable units must be affordable at or below 50 percent of 
  2.30  the greater of state or area median income.  Municipalities with 
  2.31  regulations requiring that 20 percent of a subdivision's 
  2.32  residential units be affordable under this paragraph must give 
  2.33  the subdivision a density bonus of at least 30 percent.  
  2.34  Municipalities may also offer additional regulatory incentives 
  2.35  to reduce the cost of producing housing units.  The regulations 
  2.36  under this paragraph must contain resale limitations on 
  3.1   affordable units receiving public subsidies, and may also place 
  3.2   resale limitations on affordable units not receiving public 
  3.3   subsidies.  Any profits on resale that do not go to the owner of 
  3.4   an affordable unit must be deposited in (1) the inclusionary 
  3.5   housing account under section 473.255 for developments in 
  3.6   municipalities in the seven-county metropolitan area or (2) the 
  3.7   housing development fund for use in the inclusionary housing 
  3.8   program under section 462A.2093 for developments not within the 
  3.9   seven-county metropolitan area. 
  3.10     The regulations may permit the municipality to condition 
  3.11  its approval on compliance with other requirements reasonably 
  3.12  related to the provisions of the regulations and to execute 
  3.13  development contracts embodying the terms and conditions of 
  3.14  approval.  The municipality may enforce such agreements and 
  3.15  conditions by appropriate legal and equitable remedies. 
  3.16     Sec. 2.  Minnesota Statutes 2000, section 462.358, is 
  3.17  amended by adding a subdivision to read: 
  3.18     Subd. 2c.  [DENSITY BONUSES; ADDITIONAL REGULATORY 
  3.19  INCENTIVES.] (a) A municipality shall give a density bonus 
  3.20  allowing at least 30 percent more units to be built than would 
  3.21  otherwise be permitted, as well as additional regulatory 
  3.22  incentives, to subdivisions of 20 residential units or more 
  3.23  meeting the requirements of paragraphs (b) to (e).  Additional 
  3.24  regulatory incentives may include reduced setback and parking 
  3.25  requirements, decreased road width, flexibility in site 
  3.26  development standards or zoning code requirements, waiver of 
  3.27  permit or impact fees, fast-track permitting, or any other 
  3.28  regulatory incentive that would result in identifiable cost 
  3.29  avoidance or reductions and that contributes significantly to 
  3.30  the economic feasibility of developing affordable housing. 
  3.31     (b) In order to qualify to receive regulatory incentives, a 
  3.32  subdivision must include at least 20 percent affordable housing 
  3.33  units.  If the affordable units in the subdivision do not 
  3.34  receive public subsidy, half of the affordable units must be 
  3.35  affordable at or below 80 percent of the greater of state or 
  3.36  area median income and the other half of the affordable units 
  4.1   must be affordable at or below 50 percent of the greater of 
  4.2   state or area median income.  If the affordable units receive 
  4.3   public subsidy, all affordable ownership units must be 
  4.4   affordable at or below 60 percent of the greater of state or 
  4.5   area median income, while half of the affordable rental units 
  4.6   must be affordable at or below 50 percent of the greater of 
  4.7   state or area median income and the other half of the affordable 
  4.8   rental units must be affordable at or below 30 percent of the 
  4.9   greater of state or area median income.  Cost savings from 
  4.10  regulatory incentives must be reflected in the sale prices of 
  4.11  all units in the development. 
  4.12     (c) A development may also qualify to receive regulatory 
  4.13  incentives if land adjacent to the proposed development is given 
  4.14  to a local housing and redevelopment authority or nonprofit 
  4.15  housing developer with an agreement that the authority or 
  4.16  nonprofit developer will commit to construct the requisite 
  4.17  affordable units on that land and ensure that the affordable 
  4.18  units will be architecturally compatible with the market-rate 
  4.19  units. 
  4.20     (d) A city housing and redevelopment authority shall have 
  4.21  the first option to purchase the affordable units in a 
  4.22  development within its jurisdiction at fair market value, 
  4.23  followed in order of preference by the county housing and 
  4.24  redevelopment authority, nonprofit organizations, and the 
  4.25  metropolitan council, for units built within the seven-county 
  4.26  metropolitan area. 
  4.27     (e) Affordable rental units under this subdivision must 
  4.28  remain affordable for at least 30 years after initial 
  4.29  occupancy.  For the first ten years after initial sale of an 
  4.30  affordable ownership unit, all profits on resale must be 
  4.31  deposited in the inclusionary housing account under section 
  4.32  473.255 for developments in municipalities in the seven-county 
  4.33  metropolitan area, or in the housing development fund for the 
  4.34  inclusionary housing program under section 462A.2093 for 
  4.35  developments not within the seven-county metropolitan area.  
  4.36  After ten years following the initial sale of an affordable 
  5.1   ownership unit, half of the profits on resale must be deposited 
  5.2   in the inclusionary housing account for developments in the 
  5.3   seven-county metropolitan area, or in the housing development 
  5.4   fund for the inclusionary housing program for developments not 
  5.5   within the seven-county metropolitan area. 
  5.6      Sec. 3.  [APPROPRIATION.] 
  5.7      (a) $4,000,000 in fiscal year 2002 is appropriated to the 
  5.8   housing finance agency from the general fund for transfer to the 
  5.9   housing development fund for the innovative and inclusionary 
  5.10  housing program under Minnesota Statutes, section 462A.2093. 
  5.11     (b) $15,000,000 in fiscal year 2002 is appropriated to the 
  5.12  housing finance agency from the general fund for transfer to the 
  5.13  metropolitan council for deposit in the inclusionary housing 
  5.14  account under Minnesota Statutes, section 473.255.