City-aided projects in St. Louis Park now must include affordable housing

Developers who get a helping hand from the city of St. Louis Park will now be required to give one back.

The city has adopted a new "inclusionary housing" policy requiring developers who get financial aid from the city to include affordable housing in their projects. That includes tax increment financing, or TIF, a popular funding mechanism that allows tax revenue generated by a new development to be reinvested into it. The City Council approved the policy last week.

Although many cities in the metro area encourage the inclusion of affordable housing in city-assisted projects, relatively few require it, housing policy experts said. Minneapolis has a long-standing inclusionary policy, requiring two out of every 10 units on city-assisted projects to be affordable for households earning less than half the median income in the metro area.

Tim Brausen, a St. Louis Park City Council member, said that the city's booming housing market of recent years was almost completely focused on luxury and near-luxury apartments and condos.

"Even though we added hundreds of new units in the past five to 10 years, we hadn't added any affordable housing. It's clear the need was there," he said. "The question was, how were we going to address it?"

Brausen said affordable housing is important to maintaining the vitality of the city.

"The bottom line is, people who go into affordable housing — that's a family of four living on $52,000," Brausen said. "That's not people making subsistence wages. These are working people — our firefighters, our teachers — that really need housing in our community.

"The way the market has changed, I couldn't afford to buy my house in St. Louis Park today," Brausen said of the home he bought 18 years ago.

St. Louis Park's policy will require any city-assisted rental project of 10 units or more to make 8 percent to 10 percent of its units affordable to families making less than $51,960 a year. For-sale developments must include at least 10 percent of units that are affordable to families making $65,800 or less.

"Affordable housing in St. Louis Park means your average St. Louis Park family can afford to live in some of the new high-end developments in the city," said Council Member Jake Spano. "We want to make sure all sorts of folks have opportunities to enjoy living in St. Louis Park."

State law requires cities to provide affordable housing opportunities. The Metropolitan Council establishes how much affordable housing the region needs overall, and allocates a share of that need to communities throughout the region so they can plan for sufficient land to make affordable housing possible. State law does not give authority to the Council to "force or compel the building of affordable housing," said Met Council spokeswoman Bonnie Kollodge.

St. Louis Park has been working on its inclusionary housing policy for several years, said Council Member Anne Mavity.

"Things take a while to come to fruition, but I'm so excited about this," she said.

John Reinan • 612-673-7402