Housing Task Force Report
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Eden Prairie Housing Task Force Recommendations to City Council and Mayor October 6, 2020 “Housing is the foundation of any community. It helps to determine the health and vibrancy of a community.” (Aspire Eden Prairie 2040) According to the Aspire Eden Prairie 2040 Plan1, appropriate housing that meets its citizens’ needs is an integral part of Eden Prairie’s future prosperity and its citizens’ health and wellbeing. The Eden Prairie Housing Task Force was formed in June 2019 to research, evaluate and make recommendations which address the aspirations and challenges of property protection, production and preservation laid out in the Aspire 2040 Plan.2 This Report summarizes that work. Executive Summary After careful evaluation and extensive work, the Task Force has determined that the following recommendations combine best housing practices with the values and needs of our unique and wonderful community. Accordingly, the Task Force strongly recommends that the City Council and Mayor take the following steps (as further detailed herein) to address the goals set forth in the Aspire 2040 Plan: 1. Adopt and implement an Inclusionary Housing Policy and related recommendations; 2. Explore unique housing opportunities in proximity to new public transit development (SWLRT); 3. Adopt and implement an Affordable Housing Trust Fund; 4. Adopt and implement practices to preserve NOAH (Naturally Occurring Affordable Housing); 5. Adopt and implement Tenant Protection Ordinance and Practices; 6. Implement Task Force Recommendations for Seniors; 7. Actively explore various out-of-the-box housing strategies; 8. Implement communication strategies relating to affordable housing and the various Task Force recommendations; and 9. Proceed with next steps. The Task Force’s recommendations, including rationale, are set forth in the following Sections of this Report and are consolidated in Exhibit C. Comparisons to several surrounding communities3 and a variety of options are also included. Background: As the Aspire Plan highlights, Eden Prairie is an affluent, largely developed suburb, with much of its housing stock geared towards ownership of single family, detached homes. Few undeveloped properties remain; the vast majority of these are small (2-5 acres) and nestled in existing neighborhoods. A notable housing shortage exists for lower income, owner-occupied housing and rental properties (including single and multi-family rental units). There is also a significant unmet need for affordable housing and for senior- friendly housing units.4 1 See Exhibit A for the Eden Prairie Aspire Plan Plan: Chapter 4 (Housing and Residential Areas Plan) 2 See Exhibit B for the Housing Task Force Charter 3 See Exhibit D for information on those communities used as comparisons throughout this Report 4 The Aspire Plan also references a need for upper income properties; the Housing Task Force determined that these are not among Eden Prairie’s most pressing needs. 1 5 At the beginning of 2020, Eden Prairie had 906 subsidized affordable housing units , serving a population of 6 approximately 65,000 people. In addition, according to the Aspire Plan, Eden Prairie should expect an 7 influx of 20,000 people, requiring 8,500 new units of various levels of affordability, by 2040. The Metropolitan Council identifies the affordable housing need for the Minneapolis–Saint Paul Metro area and allocates a certain amount to each community in the region. By 2030, Eden Prairie’s allocation is 8 production of 1,408 new affordable units – see below for breakdown by Area Median Income (AMI) categories. Over the next 20 years, we know of the addition of at least 123 affordable units that will count towards those production goals. However, during that same period, the City will lose 821 units as their affordability ages out and the units presumably become market rate. Accordingly, Eden Prairie will suffer a net loss of 698 affordable units. Accordingly, unless we take immediate and decisive actions, our community’s existing housing shortages will only worsen. Met Counc·I Estimate of Ne\N .Affordable Units. N eeded i n Eden Prairie by 2030 1408 Total 1400 • Units needed at80¾. AMI 1200 1000 • Units needed at 50¾. AMI 800 600 • Units needed at 30¾. AMI 400 200 0 Sour c e : M ,etropol it an Counc i l as c ited on page 75 of t he, E den Prair ie Asp i re P lan *See Exhibit H for supporting data for this and all charts included in this Report. The Task Force recognized a need to balance addressing Eden Prairie’s housing needs with the values of the Eden Prairie community. The citizens of Eden Prairie value and want to maintain the desirability of living in Eden Prairie, with its green spaces, outstanding schools and safe neighborhoods. We understand and value the richness that diversity in backgrounds, ages, professions, cultures and income levels bring to a community. We value the stability that housing brings to our resident families and to people who want to age in the same community in which they raised families. We also want to ensure that Eden Prairie remains economically competitive, that businesses (including developers) will want to continue doing business in our City. Finally, the Task Force recognized the need to educate our community about the nature and benefits of affordable housing across all income levels. 5 Please note that page 76 of the Aspire plan incorrectly states that Eden Prairie currently has 1,325 publicly subsidized affordable housing units. The total number of units in buildings with any affordable units was included, not just the affordable units. The correct number is 906. 6 According to U.S. Census Data, Eden Prairie has a population of 64,893 as of July 1, 2019, and a growth rate of 6.7% from April 1, 2010 to July 1, 2019. 7 Aspire Plan page 74 8 Aspire Plan page 75 2 In reviewing Eden Prairie’s housing needs and the Met Council’s affordable housing goals for our Community and given the limited amount of open land for development9, the Task Force recognizes the housing future of Eden Prairie will consist of smaller new developments, including single family homes, and the renovation or redevelopment of larger rental properties (often leading to a loss of affordability). Accordingly, a focus on building and rehabilitation of rental units will create the biggest impact. Building on the success of recent projects that include affordable housing (such as Trail Point Ridge and Elevate), the Task Force recognized that providing developers with economic assistance, potential variances and streamlined entitlement processes provides the City ongoing opportunities to work with developers to implement various housing strategies in an economically sound way. Accordingly, we favored an approach that provides our City administration with a variety of tools that can be tailored to each unique circumstance. Based on our research, the Task Force also identified renter protection strategies as necessary to ensure an acceptable quality of rental housing and the wellbeing of Eden Prairie renters. The City needs to ensure that the larger housing complexes don’t fall into disrepair as they age nor be lost by conversion into higher rate rentals, but rather continue to meet Eden Prairie’s standards. This could also help maintain age, economic and cultural diversity among residents. Next Steps: Accordingly, we bring you, the Eden Prairie City Council and Mayor, our best recommendations for a varied and creative toolbox of strategies from which to address the housing needs of our community as we move confidently into the future of our City together. These recommendations are laid out in the following sections: Section One: Demographics of Affordable Housing in Eden Prairie Section Two: Inclusionary Housing Policy and Related Recommendations Section Three: Housing Opportunities due to Public Transit Development (SWLRT) Section Four: Affordable Housing Trust Fund Section Five: Naturally Occurring Affordable Housing (NOAH) Section Six: Tenant Protection Ordinance and Practices Section Seven: Recommendations for Senior Housing Section Eight: Other Strategies to Consider Section Nine: Communication Strategies Section Ten: Next Steps Acknowledgements Exhibits The Eden Prairie Housing Task Force strongly recommends that the Eden Prairie City Council and Mayor accept and fully embrace our recommendations as a roadmap to fulfill the housing vision and goals set forth in the Aspire Plan 2040 plan. In addition, as discussed herein, the Task Force encourages the City to pursue a robust communication strategy relating to the need and desirability of affordable housing and to the adopted recommendations. 9 According to page 61 of Aspire Plan, adopted in October of 2019 by the City Council, Eden Prairie currently had less than 250 acres of undeveloped land at that time, and that much of this was expected to be developed by 2040. For perspective, Eden Prairie has approximately 2000 acres of open water. 3 Section One Demographics of Affordable Housing in Eden Prairie10 Our recommendations, and indeed any conversation regarding affordable housing needs to be prefaced by an understanding of the housing market in Eden Prairie, including what constitutes “affordable housing” in our community. According to the Metropolitan Council10, the cost of a single-family home in Eden Prairie has increased, from $276K in 2001, to $365kK in 2011 (post-recession) to $394K in 2016. Eden Prairie’s cost of housing has increased beyond historical appreciation levels of approximately 4%.11 Since 2001, the percentage of homes sold in the upper price brackets has increased significantly and since 2011, the percentage of homes sold at prices below $150,000 has decreased. In 2016, 3,136 homes were sold, with 235 homes priced below $150,000. 1769 homes were sold between $300,000-$499,000; the next largest category is 603 homes sold between $500,000 and $1million. Home Sales By Price 2001-2016 35% 30"/o 25% 20% 15% 10"/o 5% 0% l.1 1.