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1982-08-31CITY OF MENDOTA HEIGHTS AGENDA ADJOURNED MEETING August 31, 1982 7:30 P.M. 1. Call to Order. 2. Roll Call. 3. Housing Discussion - see attached report. Participants: Orvil J. Johnson, City Administrator Larry Shaugiuiessy, Treasurer Jack Klepp, A.H. Wilder Carol Schultz, Dakota County HRA Mark Ulfers, Dakota County HRA Attorney from Holmes and Graven 4. Other Business. —� Y�� ,�q /���Q�� ��+ �,+�ip p � �/�/�S / 5. Adjourn. CI'1'Y OF NIENDOTA HEIGHTS MEMQ August 27, 1982 TO: Pl.anning Cammissian FRt}M: Orvi2 J'. Johnson Ci�.y Administratar SUBJECT: Special Meeting Invita�ion At a recent City Caunci.l meetinq, staff and City Counci,l agreed special meeting be cai2ed to discuss only housing po2icies and seniox housing by Wilder. The City Gouncil s,peci£ically asked that you be invited to �his meeting ta hear the repart by Mr. Jaak Klepp, af A.H. Wilder, and pa tlie discussion involving other forms of hausing iri Mendota Heigh�s. attached agenda and repart will provide the basic informatian for di purposes. • :.nat a C1�1.2@T2 of ' ' Report on Senior Citizen .Housing for City of Mendota Heights By •� COf?POI?ATION 1100 Northwestem NcHonaf Bcnk Buildfr►g Saint Paul, Minnesota 55101 612/227-9772 � CORPORATION August 27, 1982 � 'i western National 8ank Building, Saint Paui, Mendota Heights Gity Council Jac[c Kl ePF I am pieased io submii a rather concise surr�nary of our research on senior's housing in Mendota He�fights. I kno that the program that we are submitting is rather campl x and I am certain that you wi11 have many questions. We iook forward to discuss�ng this report on August 31. Thank yau far your cor�s�dera�ion. . . .. V .... .. .+ . . ..... ...... liiiiiiid � 55101 b12j227-7691 TA�L� 0� GONT�NTS �ntroducti on , . . � , . . . . . • . . . . . Page 1 Need Program . . , . . . . . . . -. . . . . . . Page 2 . . . . . . . . . . . . . . . . . Page 3 Housing Bond Program . . . . . . . . . . . . Page 4 Si te Analysi s . . . . . . . . . . . . . . Page 8 Ordinance Sample . . . . . . . . . . . . . . Page 9 INTRODUCTION In response to an expressed interest for seniar citizen housing by Mendata Heights City Council, the AHW Corporation agreed to conduct study which would identify options availahle to the city af Mendata Heights. This report includes the result af research conducted by AHW Corporation staff. Research was conducted by consulting with a variety af people and arganizaiians invalved with seniar citizen hol in the meiropolitan area. Some of the people and arganizations wer following: 1. 2. 3. 4. 5. 6. 7. 8. Metropoiitan Council Minnesota Housing Finance Agency Department of Hausing and Urban Deveiopment �ity of Brook7yn Center City of Maplewoad Miiier and Schroeder Municipals, Inc. Hol�es and Graven Dakota County Hausing and Redevelopment Authority a � Develaping affordable housing is very difficult. Federal assistan e programs have become almost non-existent. High interest rates mak housing nonaffordable to the developer and cansumer. We decided that if a need could be established, we had better research ideas that offered ho e of implementing a pragram to meet those needs. Consequently, several meetings were held with peaple representing organizations that are most kno ledgeable in developing programs in hausing. Mr. Stan Kiehl o� the law firm of Halmes and Graven, Ms. Andrea Lubov and Mr. Paul Ekholm of Miller and Sch oeder Munieipals met on�several occasions with Mr. Orval Jahnson, City A ministra- tor of Mendata Heights, Mr. �arry Shaughnessy, Financial Advisar t the City of Mendota Neights, and Mr. Jack Klepp af the AHW Corporation In addition, Ms. Caral Schultz and Mr. Mark Ulfers of ihe Dakata Caun y Housing and Redevelopment Authprity me� the above graup. A17 af t ese peaple have contributed to this report. 1 � � � � � � , � The 1980 Census shows that Dakata County had an increase in seniors 60 per cent during the i970's. The totai senior population, those and older, of Dakata �ounty was 16,769 in 1980. This increase of 6 was the second highest increase in the state of Minnesota. The ave� increase of seniar populatian for Minnesota counties was only 17 pe�. The Joint Housing, Health and Aging Task Force of the Metropolitan Cauncil canducted a comprehensive study on housing services needed of 9�� cent. � preferred by older persons in the metropo7itan area. This task fo ce � identified a need for additional housing for seniors in Dakota Cou ty, and recommended that the lacaiion be in Mendoia/Mendota Heights. , � � , In arder to get further information, the AHW Corporation develaped a quesiiannaire that is to be included in the next issue of the Mend ta Hefghts newsletter. This questionnaire will provide additional in ar- mation on the interest in seniar's housing, the kind of hausing an ameniiies. An additional marketing siudy rnay be necessary. , To aur knowledge there is only one development for elderly peaple hai is being proposed currently. Catholic Services for the Elderly, I c. is propasir�g a developmen� on a site 7ocated at Wentworth and Thom son Avenues in West St. Paul. Their nraposal calls for the develapmen of 100 units af cangrega�e housing a�tached io a i80-bed nursing ho�ne The facilities would include a chapel, medical and dental clinic. This site was chos�n because this 112 acre site was given to this argan zation. This propased developrnent is in the formative stages. Financing h s yet to be arranged. 2 [� � With all of the information that we have accumulated, we have concl , ihat ane option that merits pursuing is a condaminium develapment i Mendoia Neights for people 55 years and older. � u � ' � � � ' � u �I A cond�minium designed for senior citizens is a desirable hausing a' mat3ve for seniors for a variety of reasons. Some of those reasons 1. Reduced maintenance respansibility 2. Enhanced security 3. An enviranment that promotes a better opportunity for social interaction. 4. A iacation which is close to shapping and transparatian 5. Less operating expense {e.g. utilities than single fami7y hom 6. The tax advantages of home ownership In addition, this proposed program provides Mendota Heights senio opportunity to remain in Mendota Heights. One instrument that has been used to make housing affordable in th� few years has been the use of housing revenue bonds. Cities and o governmental agencies have issued bonds wiih the praceeds being la purchasers af housing un9ts. The advantage, of course, is that mo from bond praceeds can be offered at interest rates that are under market raie. We have pursued this avenue because it is the on1y avenue that all moderate incame peop3e a chance of qualifying for a martgage. � However, there are limitations impased by state and federal laws o implemen�ation of the use of hausing revenue bands. The limitatio as fallows: . ' 1. Income of purchasers must be less than $31,460 unless the ho in a targeted area. Adjustments ta family income are allowe � for dependents. 2. The purchase price of an existing house may not exceed $75,6 ' 3. At least 90% of the loan amount m�st be laaned to first-time home buyers. 3 � ter- are: s) an last �• • gages he the s are is ' � ihese limitations preclude their use far mast seni�ors in a candamini � development. Consequently, we are proposing an option that expands he , original gaa1. tWe propose that the housing revenue bonds be used for mortgages for irst . time home buyers who wish io buy homes owned by senior citizens. Th se � r�ortgages w�u1d be affered a� be3ow �narket in�erest ra�es which make them more marketable. This then allows the senior citizen the apportunit to 1 se11 his home and move into tiie condominium development. The gaals of the program then become: (1) to provide condomi'nium type housing in the City of Mendota Neig far senior citizens iiving in Mendota Heights or surrounding communities, and; (2) io assist the purciiasers of the sen%ar citizens' single family houses and atEier hame purcha�ers�. n HOUSING BOND PROGRAM In order for a bond issue to be economically feasibie, it must be o an amauni af $6-10 million.. Mendata Neights does nat have suffici numbers af modest priced properties in its hausing stock �o utilize total amount of the band issue. It would be expected that seniors Eagan and West St. Pau1 would be in�eresied in the condominium deve ment. Therefore, those twa cities would be included in the prograr�. ni the �� • i Since mare than ane camrnuniiy is needed, it becomes necessary for tYakata HRA to participate on behalf of each city and submit the applicati n to the Siate as one package. Therefore, the tax-exempt mortgage reve ue bonds and the tax incremen� districi would be in the name af the D kota County HRA, with specific approval and contrals set by the partici ating cities. � The Dakota County HRA has the authority under state legislation to carry � out ihe tasks described in this program. Tt is the policy of the al:ota County NRA 8oard of Corrmissioners to assist car�rnunities, an an invitation , basis, in meeting a braad range of housing and community develapmerjt needs. � 1'he DaEcota County HRA Board of Co�nissioners at their August 10, 1 82 meeting autharized staff to assist Mendata Heights with this propo ed program because it is consistent with the HRA's obaeciive to assis Dalcota County cammuniiies in praviding housing far seniar citizens In order for the NRA to issue the bands, the follawing events must 1. 2., 3. 4. Each city r�ust adapt a housing plan which has been reviewed ' Metropolitan Counci1. Thirty days published notice of a pub hearing on the plan must be provided. Each ci°ty musi adapt a housing pragram for the housing bond The HRA mus� submit the hausing program to the State Housing Agency (the "Agency") on behaif of the cities an or befare J; 19$3. The Agency must allocate a portion of P9innesota's housing mo band ceiling for the program. � occur: y the ic ssue. Finance nuary 2, tgage � ' ' � � ' ' ' r � , � � � � � C� 1 1 Loans made under the program would be affordable to purchasers with different incomes depending upon the interest rate and the sale price of the ouse. The following chart shows the income necessary to purchase different pr'ced housing units at various interest rates: '. 0 Assumed Interest Rate 11� 12% 13% Table I Income Necessary to Purchase Housing Unit for First Time Home Buyers � .�� , ,.,..... $23,,127 $24,764 Sale Price 75,600 Income Needed 27,163 $29,163 $31,163 � $29, 18 $32, 00 $34, 18 Interest Reduction Program As can be seen from the table above, the housing revenue bonds alon may not reduce interest rates adequately to allow.low and moderate income amilies to purchase moderate priced houses. To solve this problem the HRA could es- tablish a tax increment district which would include the senior ci izen project and the HRA could also establish an interest reduction program to ssist the first-time home buyer who purchase the houses sold by the senior citizens. The tax increment which would be generated by the senior citizen condo inium and which is estimated to be $90,000 per year, would be used to reduce the interest on the loans for the first-time home buyers. The assistance can b provided either as a fixed amount for up to 25 years or as a declining amou t each year. The following table shows the number of buyers which can be assist d at various income levels, purchase prices, and interest rates. In the tables below 80% of program income equals $25,168, 90% of program income equals $28 314 and the maximum program income equals $31,460 as stated above. � , ' � ' Table II Number of Purchasers Assisted Assuming 11% Interest Rate* ' 9i6 of Program Income 80% 90% Maximum ' Sale Price 60,000 -- -- -- $75,600 136 -- -- $83,000 58 182 -- �, Table III Number of Purchasers Assisted Assuming 12% Interest Rate � 9i6 of Program Income 80% 90% Maximum 1 � i � ' ' � ' � ' Sale Price $60,000 $75,600 $83,000 Sale Price 60, 0 $75,600 $83,000 68 326 -- 39 74 500 Table IV - Number of Purchasers Assisted Assuming 13% Interest Rate* % of Program Income 80% 90% Maximum 45 96 -- 30 46 98 * Each table shows the number of purchasers assisted if all of the assis�ance was provided to one income group for one sale price housing unit If the HRA wanted to write down the interest rates on �a graduated payment basis where the payments would increase over each of the first three to five ye s so that at the end of the three to five years there would be no assistance, the HRA could help more people. The HRA would need to sell a tax increment bond a d use the bond proceeds to write down the interest rates. The tax increment gen rated irom the proejet would. then be used to pay off the tax increment bonds. A plus for the HRA is that when each purchaser who received interest re assistance sells his or her house the HRA is entitled to receive a position appreciation in the house. The amount of the HRA�s share is up to the ] determine at the time the assistance is provided. 7 tion the � to SITE ANALYSIS T�e st�ff o.f the AHW Corporation did a siie evaluation. The Planni g Commission of Mendota Heights was very helpful in identifying paten ial sites. They were asked to rank sites of five acres or more for a s nior citzzen deveiop�ent, Several sites were`ident9fied and ranked. Wi h that infarmation the staff of AHW pared the list to three. The following is the evaivation» 7. Pokegwin Site This site is aur first choice for the propased housing. It of easy access to shapping, access to pu�lic transportatian, and space for a mix of structures. For instance, a groUping of to could be located adjacent to a mid-rise tawer similar to �ilde Another asset is the residential setting with the Friendly Hil deveiapment being lacated across Dodd Road. Another asset is praximity ta the Mendakota Golf Course, rs ough hauses Park. � 2. Shopping Center S�te Two possibilities exist here. The Minnesota Department of Tra spor- tation has been asked io consider upgrading the intersectian o Dodd Road and Highway 110. Minnesota Department of Transportation wns land east of the shopping center. Its plans have been io construct a separated grade interseciion, Their preliminary review of tha plan recommends that grade intersection, with an upgrade of Dodd Ro d. Some land could be made available from �he Dadd Road right of ay. Exactly where and how much is not known. When action isita�en on the intersection aad construction of Dodd Road also is unknown. T ese facts preclude making an evaluation at this time. ; 3. Diamond Jim`s Site A five acre site exists across Nighway 13 from Diamond Jim's a property owned by Northern States Power. The disadvantages ar it is isolated from any shopping area. The "Diamond Jim's Sho no essential services far seniars. Additionally, no public tr tation is near this area. R adjoins that " offer .•r , ' ' ' ' � ' ' � � i SAMPLE Ordinance No. AN ORDINANCE AUTHORIZING THE DAKOTA COUNTY HOUSING AND REDEVE OPMENT AUTHORITY TO EXERCISE, ON BEHALF OF THE CITY OF , THE POWERS CONFERRED BY MINNESOTA STATUTES, SECTION 462C.0 to 462C.08, RELATING TO PLANNING AND IMPLEMENTATION OF.A SINGLE FAMILY MORTG GE REVENUE BOND HOUSING PROGRAM WHEREAS, the Dakota County Housing and Redevelopment Authority (th created pursuant to Laws of Minnesota 1971, Chapter 333, as amende Minnesota 1973, Chapter 534 (the "Enabling Statute"), and authoriz thereto to exercise the powers of a housing and redevelopment auth the provisions of the Municipal Housing and Redevelopment Act, Min Statutes, Sections 462.411 to 462.711, as amended (the "Municipaf� wi�n the territorial boundaries of the County; and "HRA") was by L aws of d pursuant rity under esota RA Act"), WHEREAS, the Legislature has enacted Minnesota Statutes, Chapter 4 2C (the "Municipal Housing Finance Act") to regu ate the p anning and impl mentation of single f amily housing programs and has provided for the financing f such programs pursuant to its terms only; and _ WHEREAS, pursuant to the Municipal Housing Finance Act, a city is authorized to make or purchase mortgage loans to finance the acquisition of single f amily housing and to issue revenue bonds to provide funds theref or, such bonds to be issued af ter adoption of a housing plan and program and approval thereof; and WHEREAS, pursuant to the Municipal Housing Finance Act, a city is �uthorized to , delegate its powers pursuant thereto to the housing and redevelopmint authority acting within the City; � NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF Section 1. The HRA is hereby authorized to exercise on behalf of � (the "City"), the powers conf erred by Minni Sections 462C.0 to 462.08, including the power to issue and sell housing revenue bonds. � ' � � ' Q :he City of ;ota Statutes �ingle f amily 6 Table #1 Older Adults in Program Communities1 Population over 55 years Community of age 1970 � 1980 �% change Mendota Heights Eagan West St. Paul 681 1145 +112� 457 1184 +159% 3400 5260 +55� � lBased on data from the 1970 and 1980 U.S. Census �/��/8�� Population over 65 years of ag 1970 � 1980 � o change 285 511 + 9% 180 442 t 46% 1633 2933 0% 0 Table #2 Percentage of Population over 55 and 65 years of agel 1970 % of % of :ommunity population population over over 55 � 65 Mendota Heights Eagan West St. Paul 1980 % of % of population population over over 55 � 65 19. 8% 5.7% 28.4% 9 � hange in group be ween 1970-1980 as a � of population 55 � 65 lBased on data from the 1970 and 1980 U.S. census. Median value for owner occupied non-condominium housing units as of April 19 0. Mendota Heights $87,700 Eagan $70,900 West St. Paul $62,100 Community `�endota Heights Eagan 'nlest St. P�aul �hendota Heights Eagan --------------- nlest St. Paul �lendota Heights ' --------------- �agan --------------- 'nlest St. Paul �lendota Heights --------------- Eagan iJ St. Paul �lendota Heights - Eagan --------------- nlest St. Paul iNendota Heights Eagan --------------- West St. Paul Mendota Heights Eagan --------------- West St. Paul Mendota --------------- Eagan West St. Paul Table #3 Value o�; Owner Occupied Non-Condominium Housing Units Dollar value of homes # of units i ran e Less than 10,000 10,000 to 14,999 15,000 to 19,999 20,000 to 24,999 25,000 to 29,999 � 30,000 to 34,999 35,000 to 39,999 40,000 to 49,999 1 2 0 0 ---4--------I------------ 5 2 ------------------------ 1 ------------------------ • 3 2 ----------- ------------ 6 ----------- ------------ 6 : 6 ----------- ------------ 7 ----------- ------------ 10 19 ----------- ------------ 15 ----------- ------------ 15 19 , ----------- ------------ 32 ----------- ------------ . 17 87 ----------- ------------ 154 62 Mendota Heights --------------- E West St. Paul Mendota Heights --------------- Eagan --------------- West St. Paul Mend�'ta Heights --------------- Eagan --------------- 'rlest St. Paul , Mendota Heights --------------- Eagan --------------- ;Jest St. Paul ,- � 50,000 to 79,999 80,000 to 99,999 100,000 to 149,999 150,000 or more -2- � 650 ------------ -------------- 2523 ------------ -------------- 19 2 362 640 � 452 --------------------------- 498 29 251 � 79