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HomeMy WebLinkAbout2021 03-15 CCM Town Hall MeetingMINUTES OF THE PROCEEDINGS OF CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA CITY COUNCIL TOWN HALL MEETING MARCH 155 2021 Mayor Elliott called the meeting to order at 6:00 p.m. The meeting was conducted via Zoom. AFFORDABLE HOUSING Sarah Harris, Executive Vice President, Strategy, Partnerships, and Production at Aeon Corporation, thanked the Brooklyn Center City Council and City Staff for hosting this meeting about affordable housing, an issue that is important for the region as well as the City of Brooklyn Center. She gave a presentation on affordable housing — who needs it and why it matters to the community; and what are the challenges and opportunities related to affordable housing. Ms. Harris stated low income refers to a family of four earning 80% of the Area Median Income (AMI). Low-income housing is generally referred to as affordable housing, and the legal definition is someone paying no more than 30% of their income for all housing costs, including utilities. Ms. Hargis stated, in terms of demographics, most of Brooklyn Center's residents fall within the need for affordable housing. She added most of the housing in Brooklyn Center is considered affordable, with an average vacancy rate of 4%. She noted high demand drives up rents and makes affordability even more of an issue. She reviewed the types of affordable housing, including new construction and naturally occurring affordable housing (NOAH), as well as preservation policies to keep current affordable housing in place. Ms. Harris stated the issues of housing stability and community stability are directly connected. She added housing prices have outpaced income and more people are cost -burdened, causing them to be more mobile and less stable. She noted this causes an increase in costs related to managing displacement. She stressed the importance of stable housing to counter the effects of classism and systemic racism, as a disproportionate number of rental units are found in moderate -income, racially diverse neighborhoods. Ms. Harris stated different levels of affordable housing can be created for different income ranges, whether individuals or families. She added a lack of affordable housing causes a ripple effect in communities, reducing stability and quality of life. .As. Harris stated new development is the most expensive type of affordable housing due to the high cost of construction. In Minnesota, there are 1500 new affordable units developed every year. Naturally occurring affordable housing can be purchased at approxi Nmately half the cost of new construction, but there are fewer funding sources available. 03-15-21 -1- Ms. Harris reviewed the challenges inherent with producing affordable housing: economic challenges including increased fees, too few funding sources, and large operating gaps; community challenges; and issues related to Covid-19 including the disproportionate impact of the pandemic on low-income households, evictions, and homelessness when the eviction moratorium ends. Ms. Hai7is stated there are efforts at the community level to work with a111evels of government to create affordability. Public resources can reduce the cost of capital to build or buy properties and keep rents affordable. A stable workforce relies on stable housing, which reduces demand for services as well as the tax base, and increases job security. Ms. Harris stated sustainability and innovation provide an opportunity for developers to provide environmentally friendly solutions at the front end or provide options to add them later. She added funding is always being sought for innovative solutions. Mayor Milce Elliott asked how affordable new construction compares in terms of build quality with housing that is not necessarily affordable. Ms. Harris stated affordable developments are required by funding sources to meet many, if not more, of the same quality standards as market - rate developments. Mark Allen stated a local realtor indicated that Brooklyn Center is ranked very high among metro communities in terms of the amount of affordable housing. He asked why the City should introduce more affordable housing. He added the affordable housing stock has brought many new people into the community, but as their families and incomes grow, they leave the community. Ms. Harris stated Brooklyn Center has a high range of affordable housing per capita. She added there are many ways of measuring affordability, but most of the housing in Brooklyn Center is considered affordable. She noted most people living in the community need affordable housing, and many people are starting to need affordable housing even though they did not before. Vacancy rates in market -rate units are increasing faster than in affordable housing. There is a full spectrum of the workforce that requires a variety of types of affordable housing. Mr. Allen stated he recently saw development in another city that had a percentage of affordable units, and the rest were market -rate units. Ms. Hai7is stated affordable housing funding sources do not work well for market -rate development. She added cities must know which funding solution will work for them. Some cities have adopted inclusionary zoning that requires a certain number of affordable units in one development. It is difficult, however, to fund the buildings because affordable rents are not sufficient to support the necessary financing. Low-income housing tax credits are the primary source of funding for affordable housing, and they have specific requirements and strict guidelines on how the funding can be used. Mr. Allen stated it seems like discrimination to say that affordable and non -affordable units cannot be together in the same building. Ms. Harris agreed, adding it is a new kind of discrimination. 03-15-21 -2- She added funding sources do not want tax credits for affordable housing to be used to pay for amenities that will be used by market -rate renters. Mayor Elliott stated there is a question in the chat out rents at the Sondes House development. He added half of the Sonder House units will be affordable, or workforce housing and half will be senior units. He asked Community Development Director Meg Beekman for rent information for affordable housing units. Ms. Beekman agreed to post the coi7esponding levels of rent in the chat function. Alfreda Daniels stated, within the community, when people talk about adding affordable housing, they are talking about apartment complexes and low-income housing. She added that notion creates an image of discrimination and crime. She asked how the conversation can move from a focus on apartments and low-income housing for a specific group of people to many different types of affordable housing, including homeownership. She noted this is especially important as the City is planning new rental developments. Mayor Elliott stated, although we are talking about apartments, the issue is how much of a person or family's income is going toward the cost of housing. Ms. Daniels stated just because a house or building is labeled as affordable, does not mean that it is affordable to the people who live there. Ms. Harris stated, about mortgage payments, it should be noted that is mortgage payments and utilities combined. She added residents who pay more than 30% of their income on mortgage payments and utilities combined are cost -burdened. Ms. Harris stated Ms. Daniels is correct in her statement that there are a lot of people living in affordable housing who are cost -burdened. Aiysha Mustapha stated affordable housing is historically supposed to be temporary housing. She asked whether there are regulations or restrictions to ensure that practices of systemic issues related to affordable housing are not on -going. Ms. Harris confirmed this, stating it is not an affordable housing crisis, but rather an income crisis. She added people need affordable housing for many different reasons, and policies to address these issues are being discussed, including minimum wage. She noted, however, these discussions take time, and meanwhile, people need a place to live. She noted Aeon is looping at ways to help its residents continue to have affordable housing and achieve equity that could potentially move them into homeownership, Ms. Mustapha asked whether co-op living is being considered. She added this type of housing has been used on the east coast for elderly and fixed -income residents. 03-15-21 -3- Ms. Harris stated the co-op model is not popular in the Midwest for some reason, but it is being considered. She added the real issue is not affordable housing but reversing inequity and addressing issues of income. Ms. Daniels asked how the current narrative around affordable housing leads to gentrification. Ms. Harris stated there is an assumption that more development will result in an increase in property values, which will force people out. She added funding for affordable housing developments has restrictive agreements that require that properties stay affordable for a specific period, so people can continue to live in the community. She noted market -rate development does not have those types of restrictions, increasing rent and displacing people, which causes gentrification. Ms. Daniels stated there are a lot of people in the community who are saying we don't need any more affordable housing. She added that will lead to gentrification or relocation of folks, and not A a specific race. She noted market -rate housing will bring in new residents and Brooklyn Center residents will no longer be affordable to current residents. Mayor Elliott asked how affordable housing development vs. market -rate development can affect the tax base. Ms. Harris stated affordable housing has a different tax classification, with a lower tax rate, so there is cost containment. She added market -rate apartments may increase the tax base but can also cause displacement, which ripples through the system and causes other problems and issues that create costs for the City and the public sector. Mr. Allen stated he saw a question in the chat fiom Steve Landis, who asked whether fear of gentrification is being overstated, and what percentage of new housing are we talking about. He added Brooklyn Center has one of the most heavily affordable housing stocks in the metro area. Ms. Beekrrian stated Sondes House's 270 units have increased the City's legally binding affordable housing to 6.5%, and 17% of rental housing has some form of rent restriction. She added she is unsure how that compares to other local communities. She noted 90% of the City's housing is considered naturally occurring affordable at 80% AMI or less. She noted she understands Ms. Daniels' point that affordable does not mean accessible. She stressed the importance of preserving the affordable housing that already exists in the community. She noted Ms. Harris's comment that programs that create legally binding affordable housing are just as important as creating new units. Ms. Beekman stated, as noted by Ms. Harris, the State of Minnesota has a limited number of low,,, tax credits, and only 17-19 projects get completed annually throughout the State. She added there is not enough funding to create and build new affordable units at the rate at which they are needed. She noted the importance of creating affordable housing without low-income tax credits. Councilmember Graves stated she appreciates Ms. Beekman's comments, as City Staff and the City Council can do a better job of monitoring affordable properties, and work with organizations 03-15-21 -4- to create and sustain and stability for those units. She added the City Council agrees that there should be a mix of housing in Brooklyn Center to create more options for residents who want to stay in the City. She asked Ms. Harris whether there are any studies available that show the connection between new affordable housing developments and gentrification or displacement. Ms. Harris stated several studies address the relationship between affordable and market -rate housing. She added there is an important role for both types of housing, and they should happen simultaneously. She stressed the importance of creating an environment that successfully encompasses the full spectrum of market -rate and affordable housing in the same community. Councilmember Ryan thanked Ms. Harris for her comments. He stated a recent joint Housing/Planning Commission work session featured a presentation by Jason Aarsvold, Ehlers, Inc., that focused on the challenging financial aspects of new affordable housing. He added the preservation of affordable housing is more cost-effective, and statewide, regional and national solutions should be considered. He noted residents of Brooklyn Center pay 2.7 times higher taxes to cover municipal services than communities like Plymouth because the property tax base is so depleted. He added increased property taxes do not help the City meet its equity goals. He stressed the importance of a mix of development to meet the broad spectrum of needs in the community and build a tax base to sustain that effort. Diane Sannes stated she wanted to mention, about new housing, there are 50 newly built $350,000 homes in the Evergreen area, which sold immediately. She added she spoke with Joe at Sonder House, and 127 of the work -force units are already rented, with occupants moving in on April 1, 2021. She noted Joe indicated there are a total of 300 units, and the development will be full by August 1, 2021. She stressed the importance of remembering that people want to move to Brooklyn Center. She thanked the City Council for having this meeting tonight. Mayor Elliott thanked Ms. Sannes for her continued work in supporting the City of Brooklyn Center and moving the community forward. Ms. Harris thanked all the meeting attendees for their participation and interest in these issues. She stated there is no more important subject than where folks are going to live, as it affects everyone and everything in the community. She noted she looks forward to being a part of the future of Brooklyn Center and working toward the right solutions for the community. She agreed to share her PowerPoint presentation with City Staff. Ms. Daniels stated, through her participation with other local groups over the past few years, she has gotten the sense that people just want affordable housing, but it is a struggle to truly define affordable housing. She added many residents are pushing back and saying we want market -rate and luxury housing, but mixed housing is important. She noted the people who currently live in this community deserve to live here, but at the same time increase the tax base by having market - rate apartments. Councilmember Graves stated the City Council recently had a meeting about potential policy changes around naturally occurring affordable housing and discussed a potential inclusionary housing Ordinance. She added there is concern about unintended consequences and the possibility 03-15-21 -5- that mixed -use housing could stall development. reviewing development on a case -by -case basis. right balance. She noted the City of Brooklyn Park has been She stressed the importance of trying to find the Councilmember Graves stated the City Council has been having these conversations and is committed to being intentional and thoughtful. She added market rate and affordable housing might not be located in the same building due to financing restrictions, but the City is committed to providing housing solutions. Ms. Daniels stated the City of Brooklyn Park is geographically divided, with low-income housing in one area and wealthy people in another area. She stressed the importance of ensuring that both types of housing occur in all areas of Brooklyn Center, to avoid separating low-income people. Mayor Elliott thanked everyone who joined the meeting this evening. He thanked Ms. Harris for her presentation. He stated there will be more community conversations on critical topics, including a meeting focused on youth. He encouraged residents and Commissioners to forward other ideas for town hall conversations. Mayor Elliott stated there has been a lot of information tonight, and the conversation has moved toward the need for a mix of housing. He added Councilmember Graves noted that we are gathering information to make smart decisions and avoid unintended consequences. He thanked everyone who joined the meeting. ROLL CALL Mayor Elliott requested a Roll Call of Councilmembers. Councilmembers Marquita Butler, April Graves, Kris Lawrence -Anderson, and Dan Ryan were present. ADJOURNMENT There was a motion by Mayor Elliott, seconded by Councilmember Lawrence -Anderson, to adj ourn the Town Hall Meeting. The motion passed unanimously. The meeting adjourned at 7:23 p.m. 03-15-21 -6- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Town Hall Meeting of the City Council of the City of Brooklyn Center held on March 15, 2021 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its April 26, 2021, Regular Session. City Clerk Mayor 03-15-21 -7-