2022.09.08 Work Session Packet
4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
Posted: Sept. 2, 2022
City Council Work Session Agenda
Thursday, Sept. 8, 2022 at 7 p.m.
Council Chambers/Zoom
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City
Charter, the work session of the Crystal City Council was held on Thursday, Sept. 8, 2022 at
______ p.m. in the Council Chambers at City Hall, 4141 Douglas Dr. N., Crystal, MN. The public
may attend the meeting via Zoom by connecting to it through one of the methods identified on
the Notice of Sept. 8, 2022 Work Session.
I. Attendance
Council members Staff
____ Budziszewski ____ Norris
____ Cummings ____ Therres
____ Kiser ____ Gilchrist
____ LaRoche ____ Elholm
____ Parsons ____ Larson
____ Adams ____ Ray
____ Banks ____ Revering
____ Sutter
____ Serres
II. Agenda
The purpose of the work session is to discuss the following agenda item:
1. Blue Line Extension anti-displacement policies.
III. Adjournment
The work session adjourned at ______ p.m.
Auxiliary aids are available upon request to individuals with disabilities by calling the city clerk at
(763) 531-1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529.
4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
Posted: Sept. 2, 2022
CRYSTAL CITY COUNCIL
NOTICE OF SEPT. 8, 2022 WORK SESSION
NOTICE IS HEREBY GIVEN that the City Council of the City of Crystal will hold a work session on
Thursday, Sept. 8, 2022 at 7 p.m. in the Council Chambers at City Hall, 4141 Douglas Dr. N.,
Crystal, MN, and via Zoom.
The public may attend the meeting via Zoom by connecting to it through one of the methods
identified below.
Topic: City Council Work Session
Time: Sept. 8, 2022, 7 p.m. Central Time (US and Canada)
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___________________________________________________________________________________
FROM: John Sutter, Community Development Director
TO: Anne Norris, City Manager (for September 8 work session)
DATE: August 30, 2022
SUBJECT: Discuss potential anti-displacement policies and programs related to the
Blue Line Extension project
___________________________________________________________________________________
The Blue Line Extension project has formed an Anti-Displacement Working Group (ADWG)
comprised of representatives from stakeholders and communities along the proposed route
including the City of Crystal. The stated purpose of the ADWG is, “Provide Hennepin County,
Metropolitan Council, corridor cities and other agency and community partners with action-
oriented recommendations for strategies and policies to prevent displacement, promote
equitable development, and create community wealth-building opportunities.” More information
about the ADWG can be found at https://mybluelineext.org/anti-displacement.
The ADWG consultant provided the attached “What-Why-How-Where?” chart containing 27
anti-displacement policies and programs. They are asking each city along the Blue Line
Extension to review and comment about the policies and programs as they relate to their city.
Staff’s proposed comments are in red in the left-hand column of the chart.
•Items 1, 2, 3, 8, 19, 21 and 24 are either already in place by Crystal, not applicable to
Crystal, or the city is not a barrier to implementation by other agencies and private parties.
•Items 14 and 15 related to affordable housing income limits would require state and federal
action, but the Council could decide to formally support either or both of these changes.
•For the other 18 policies and programs, implementation by the city would require
increasing city expenditures, increasing the city’s regulatory footprint or hiring additional
city staff, or the city’s legal authority to implement the policies is questionable, or some
combination of these.
At the September 8 work session, staff will seek Council feedback and discussion regarding
these policies and programs. Staff will then provide the city’s comments to the ADWG
consultant for the next ADWG meeting on September 24.
COUNCIL STAFF REPORT
Blue Line Extension - Anti-Displacement
Working Group Policies and Programs
Anti-Displacement Policies & Programs
Pre-Development: Policies and Programs to Prevent Harm & Be Proactive
What
What is the policy
or program?
Why
Why is it necessary?
How
How does it work?
Where
Where has it been done
before?
1. Land
disposition policy
City owns no
vacant land in the
station area.
Land is a valuable asset and often the biggest
barrier to development. Surplus publicly-owned
land should be prioritized for uses that promote
housing affordability and stability.
A government entity (local, regional, or state)
identifies all surplus publicly-owned land and
prioritizes parcels for affordable housing projects by
making them available to non-profit affordable
housing developers or local housing development
agencies.
California
2. Land trusts
(residential and
commercial)
WHAHLT (Homes
Within Reach)
already operates
in Crystal.
As new development accelerates, land values
skyrocket, making long-term ownership
challenging. Land trusts keep residential and
commercial properties affordable in perpetuity.
A land trust (typically a non-profit) owns a parcel of
land. An individual or household owns the house or
commercial building on the land. Because the land
value is separated from the building value, the cost of
the property is much lower. Owners sell the building
to a new buyer at a restricted price to keep it
affordable, while the land trust keeps ownership of
the land.
Minneapolis, St. Paul,
250+ land trusts across
the country
3. Cooperatives
(residential and
commercial)
City is not a
barrier to
cooperative
ownership.
Cooperative ownership is a less speculative
model of ownership that allows for multiple
parties or households to share ownership of a
residential or commercial building. Cooperative
members can decide to keep rents affordable
since they own the building.
Instead of paying rent, members of a cooperative buy
a share of the building. Members make decisions
about budget planning and building improvements.
Cooperatives often operate “at cost” (only raising
rents enough to cover operating expenses) because
there is no landlord to demand profit – thus making
them more affordable in the long-term.
Minneapolis, St. Paul,
across the country
4. Tenant
opportunity
purchase
(residential and
commercial)
As land values rise, owners of residential and
commercial properties will sell to capture the
growth in value. Often, the new owner will evict
current tenants, non-renew leases to turn over
tenants, or rapidly raise rents on tenants to
maximize profit. This gives tenants the
TOPA allows residential or commercial tenants to
come together and purchase their building from the
owner when it is put on the market, giving them the
opportunity to transition from tenant to owner, and
thus, greater long-term stability.
Washington D.C., San
Francisco, 12+ states (see
report here)
Not sure city is
right entity to do
this - should this
be considered at
the state level?
Would likely
require a new
staff position to
monitor and
enforce
compliance.
opportunity to buy their building and become the
owner.
5. Land
acquisition
investment fund
Should be done
by county or Met
Council if needed
due to their
project.
Land is expensive and often the biggest barrier to
development. Financial resources and financing
are difficult to obtain, especially affordable
residential and commercial developments. Land
acquisition funds provide developers with the
means to act quickly to acquire land as they
become available rather than having to wait for
public funding cycles or grant cycles.
Land acquisition funds require the assembly of capital
from public funds, foundations, banks, community
development financial institutions and socially-
conscious investors. These funds are then managed by
a CDFI to be made available to borrowers for
affordable residential and commercial developments.
New York City, Denver,
Boston
6. Right to
counsel
HOMELine and
others already
provide legal
services to
tenants. If
additional,
targeted
resources are
needed due to the
project, should be
funded by the
county or Met
Council.
As neighborhoods gentrify and displacement
pressures increase, low-wealth renters and
renters of color are more likely to experience
mass evictions as landlords seek to “flip”
buildings to find higher-income tenants. Legal
protection in housing court is critical to
protecting renters from displacement.
Right to counsel laws ensure that tenants who are
facing the complex process of an eviction proceeding
are guaranteed legal representation, which gives
tenants a fair chance to access legal protections and
stay in their homes.
Minneapolis, New York
City, San Francisco,
Newark, Cleveland,
Philadelphia, Baltimore
7. Just cause
eviction
City doesn't
regulate what's in
leases. Would
likely require a
new staff position
to monitor and
enforce
compliance.
As neighborhoods gentrify and displacement
pressures increase, low-wealth renters and
renters of color are more likely to experience
mass evictions as landlords seek to “flip”
buildings to find higher-income tenants. Just
cause ensures that landlords can only evict
renters for specific reasons.
Just cause requires landlords to cite specific reasons
(or just causes) when evicting renters. This prevents
discriminatory, retaliatory and discriminatory
evictions. Examples of just causes are failure to pay
rent and lease violations.
Brooklyn Center, Seattle,
Oakland, Berkeley,
Washington D.C.
8. Proactive code
enforcement
City has existing
rental
inspections.
Landlords can take retaliatory action against
tenants for reporting maintenance issues, which
can result in evictions. Proactive code
enforcement lifts the burden on tenants to report
issues, which decreases the likelihood of
retaliatory action against them.
Create a system of code enforcement that prioritizes
or increases the frequency of inspections in historically
disinvested or rapidly gentrifying neighborhoods, thus
making it more likely that issues will be found by city
staff (and not require tenants to put themselves at risk
by reporting).
Texas
9. Tenant
screening reform
City doesn't
regulate tenant
application
process or
screening criteria.
Would likely
require a new
staff position to
monitor and
enforce
compliance.
Tenant screening criteria such as criminal
records, income requirements, eviction histories
and credit scores are used as a proxy for race,
which lead to discrimination and disparate
outcomes in the rental housing market. Changing
tenant screening criteria helps decrease barriers
to accessing housing.
Changes to tenant screening criteria consist of:
- limiting the lookback period for criminal
history to 3 years for misdemeanors, 7 years
for felonies, 10 years for certain felonies
- limiting the lookback period for eviction
history to 3 years
- banning the use of credit score alone to screen
out tenants
Portland, Seattle,
Minneapolis
10. Rent
stabilization
AKA "rent
control". Do we
want to "go
Egregious and predatory rent hikes are often
used to displace tenants. Tenants who are least
likely to be able to afford rent increases are low-
wealth and BIPOC renters. Rent stabilization
ensures that renters are protected from
Rent stabilization laws set a cap to maximum annual
rent increases.
St. Paul, 180+ cities across
the country
there"? Would
likely require a
new staff position
to monitor and
enforce
compliance.
egregious and predatory rent increases and thus
increases housing stability.
11. Small business
grants
If needed due to
project, then
county and Met
Council should
fund and
administer.
Small businesses along construction corridors
experience drops in traffic and transactions and
accessibility as construction takes place around
them for extended periods of time. Grants are
needed to mitigate those harms and provide a
financial buffer for impacted businesses.
Grants can provide support for:
- lost earnings
- façade improvement or signage to direct
customers around construction
- funds for acquiring alternate parking options
for customers
Green Line development,
Austin
12. Community
benefits
agreements
City would not be
a party to the
agreement; city
approval process
must focus on
land use issues.
People in historically disinvested neighborhoods
are often subject to the negative impacts of large
urban development projects and investments but
have only limited access to the new economic
opportunities that emerge. Community benefits
agreements are a tool that empowers negotiation
with developers for local benefits.
A community benefits agreement is a legally
enforceable contract between a coalition of
community-based organizations and the developer of
a proposed project. In exchange for the coalition’s
public support of the project in the approval process,
the developer agrees to contribute benefits to the
local community if the project moves forward.
Benefits include affordable housing goals, local and
targeted hiring goals, and living wage requirements.
Detroit, Los Angeles,
Nashville, Palo Alto
13. Value capture
mechanisms
Inclusionary
zoning
exacerbates
supply problem.
Mn law does not
allow city to levy
a construction
excise tax or
require
Public investment and government action, such
as a train line extension, increase property value
for private landowners. This increase in value can
be measured, collected, and returned to the
public by being put to use to develop projects
that the community wants.
Policies that can capture increased value are:
- inclusionary zoning
- construction excise tax
- requiring affordability for zoning variances
Portland, Seattle
affordability in
exchange for a
zoning variance.
During Development: Policies and Programs to Mitigate Harm and Leverage Growth
What
What is the policy or
program?
Why
Why is it necessary?
How
How does it work?
Where
Where has it been done
before?
14. Change definition of
“affordable”
Not under the city's
control, but would the
City Council be willing
to formally support
change by other
agencies? (May also be
applicable to senior
housing, as AMI is
driven by wage income
but Social Security
COLAs are calculated
differently.)
Our current metric for affordability is based
on “area median income” (AMI) which
looks at the median income of households
across an entire metropolitan area.
Because suburban households often earn
higher incomes than urban households,
area median income does not reflect the
reality of neighborhood-level income data.
Regional AMIs are much higher than city or
neighborhood AMIs, which disadvantage
people in less affluent neighborhoods.
Shifting from “area median income” – which is
measured regionally across a metropolitan area – to a
“neighborhood median income” or “city median
income” would more accurately reflect the needs of
the residents living near the development.
15. Change
prioritization of
affordability
Not under the city's
control, and also not
sure if the city agrees
with shifting more
resources to deeply
affordable units at the
expense of funding for
workforce housing at
around 50-60% AMI.
The highest need for affordable housing
exists at the 0-30% AMI range, yet most of
the affordable housing production in our
region serves the 60-80% AMI range. Every
year, the need for deeply affordable
housing economically accessible to
households earning the lowest incomes
grows.
Local and regional governments must shift from
prioritizing 50-80% AMI housing developments to
focus on 0-30% AMI housing developments. This shift
to deeper affordability will require increased public
investment from various levels of government, and
will serve those most in need.
16. Anti-displacement
property tax funds
If funded at the city
level, this merely shifts
the burden from some
residents to others. City
may support if funding
comes from the state's
general fund. Could be
similar and in addition
to existing property tax
relief programs, but
more targeted.
As new investments enter a neighborhood
and property values rise, it can lead to large
increases in property taxes for long-time
residents. Anti-displacement property tax
breaks are necessary to ensure that long-
time residents aren’t priced out of their
homes.
Anti-displacement property tax break programs
generally target specific neighborhoods and have a set
of requirements to ensure that the people who benefit
are below a certain AMI level, have lived in the
neighborhood before development accelerated, and
live in the home as their primary residence. Financial
support usually comes in the form of grants.
Atlanta, Milwaukee
17. Mandatory
relocation assistance
Unsure of legal basis for
city to require landlords
to pay relocation
benefits. Would likely
require a new staff
position to monitor and
enforce compliance.
As neighborhoods gentrify and
displacement pressures increase, low-
wealth renters and renters of color are
more likely to experience mass evictions as
landlords seek to “flip” buildings to find
higher-income tenants. Relocation
assistance ensures that tenants have a right
to be paid relocation assistance from their
landlord if certain triggering events take
place.
The list of “triggering events” that mandate relocation
assistance from a landlord vary, but some examples
are: no-cause eviction, rent increase of 10% or more
over a 12-month period, substantial change of lease
terms. Relocation assistance amounts are meant to be
significant enough to assist tenants in finding new
housing (equivalent to 1-2 month’s rent).
Portland
18. Inclusionary
zoning/housing
Without govt funding
for affordable units, the
effect is to raise the
other units’ rents,
reduce development
feasibility, or both, thus
exacerbating the supply
problem.
Increased public investments in historically
disinvested neighborhoods generate
increased land value, and therefore,
increased potential for profit for
developers. Inclusionary zoning or
inclusionary housing is a tool to capture a
portion of the increased value by requiring
developers to include affordable units in
developments that would otherwise be
entirely market-rate.
Cities with inclusionary housing programs require a
certain percentage of units in a residential
development to be affordable to lower-income
residents. For example, 10% of units must be
affordable to 50% AMI households.
Portland, Minneapolis,
900+ cities
19. Tax increment
financing (TIF) districts
Crystal is already doing
this: 130 units opened
in 2015, 58 units
opening in 2024, 60
units planned for 2025.
New investments in a neighborhood
increase property values, which lead to
increased property tax revenue. TIF
districts are a tool to capture the increase
in property taxes and re-invest them in
public goods such as affordable housing in
the development area.
Cities designate a specific geographic area to be a TIF
district for a set number of years (15+). Any additional
property tax revenue from the development for that
time period is re-routed to subsidize developments in
the TIF district itself, such as deeply affordable housing
or affordable commercial space.
Minnesota, Nationwide
20. Construction excise
tax
Mn law does not allow
a city to levy a
construction excise tax.
Also has similar market
effects as inclusionary
zoning (exacerbating
the supply problem).
Public investment and government action
increase property value for private
landowners. This increase in value can be
measured, collected, and returned to the
public by being put to use to develop
projects that the community wants. A
construction excise tax is a tool to ensure
that developers benefiting from increased
value also contribute to public good
projects.
Cities levy a small tax (below 2%) on the value of new
developments. These funds can be dedicated to a
variety of uses, such as subsidizing affordable housing
production.
Oregon, San Jose, North
Dakota, Sacramento
21. Land use restrictive
agreement (LURA)
City does not have
vacant land to sell in
the station area.
There are few mechanisms to mandate
specific types of development on a parcel
of land. Unless required, developers will
build market-rate apartments because that
creates the highest return on investment.
LURAs attach development requirements
to deeds and are a way to require income-
restricted housing on a parcel of land.
A land use restrictive agreement subjects the buyer of
a parcel of land to certain restrictions. Because land
use restrictions are attached to the land via deed
restriction, the requirements remain even if the parcel
of land is sold. LURAs can require developers to
provide affordable housing by limiting the maximum
rent or requiring that a portion of units be made
available to certain income levels.
Low Income Housing Tax
Credit system
22. Naturally occurring
affordable housing
(NOAH) preservation
funds
City is not a barrier to
creation of NOAH
funds. But city also does
not have financial
capacity to contribute
NOAH is an important source of affordable
housing for low- and moderate-income
households. As the buildings age, the risk of
them being torn down, sold and flipped
increases. NOAH funds are a tool to give
mission-oriented developers the ability to
compete and bid for NOAH buildings and
keep them affordable, reducing the risk of
displacement for tenants.
An entity, often a CDFI, acts as the intermediary
between investors and developers. The CDFI recruits
investors to acquire capital and works with developers
to match them with the right capital for NOAH
acquisition deals. Investors range from government
partners and foundations to socially motivated
investors who are looking for below market-rate
returns.
Minneapolis, Minnesota,
Oregon, Nationally
to a NOAH fund. If
targeted to station
areas, should be funded
by the county or Met
Council.
23. Regulate growth of
investor-owned homes
Crystal’s experience
confirms large
corporate investors’
generally poor
management and
maintenance when
compared to small,
local landlords, but
unsure if city has legal
authority to limit such
ownership. Would likely
require a new staff
position to monitor and
enforce compliance.
Corporate landlords emerged as a threat
after the foreclosure crisis, buying up
foreclosed homes at record-low prices and
renting them as single-family rentals. They
are more likely to raise rents, evict tenants
and poorly maintain their properties. They
have continued to grow their share of
ownership in the single-family home
market by targeting historically disinvested
and gentrifying neighborhoods.
Policies are needed at the federal, state and local level
to restrict the growth of corporate and investor
ownership of single-family homes. Proposals have
consisted of: limiting the size and concentration of
holdings of private equity landlords, enacting out-of-
state transaction fees to target corporate landlords
buying property in Minnesota.
Proposed bill at the
federal level, California
report
Post-Development: Policies and Programs to Repair Harm
What
What is the policy or
program?
Why
Why is it necessary?
How
How does it work?
Where
Where has it been
done before?
24. Right to return or
community
preference policies
Could be negotiated
as part of TIF
assistance if
residential
displacement will
New development has the potential to displace
long-term residents, especially renters who
cannot keep up with rising costs. Right to return
or community preference policies ensure that
residents who were displaced from their homes
can return to their neighborhood and have access
to an affordable home.
Programs give priority placement in new publicly-
funded housing developments to applicants who were
displaced, at risk of displacement, or descendants of a
displaced household. New publicly-funded housing
developments set aside a portion of units to those who
qualify for priority placement.
Portland,
Minneapolis, Austin,
New York City,
Chicago
occur due to the
development. We do
not anticipate any
development projects
that would displace
existing residents.
25. Affordable
housing trust funds
City is not a barrier to
creation of such a
fund, but does not
have financial
capacity to contribute
to such a fund. If
targeted to station
areas, should be
funded by the county
or Met Council.
At the federal, state and local government, there
is no guarantee that any amount of money will be
dedicated to creating and preserving affordable
housing. Affordable housing trust funds require
consistent and annual budget commitments to
housing.
Housing trust funds are distinct funds established by
city, county or state governments that receive ongoing
dedicated sources of public funding to support the
preservation and production of affordable
housing. Housing trust funds systemically shift
affordable housing funding from annual budget
allocations to the commitment of dedicated public
revenue.
120+ cities
26. Zero to low-
interest rehabilitation
loans
City has home
improvement grants
for low-mod income
households
throughout the city.
Other agencies have
programs but they
are not targeted to
the station areas or
limited to long-time
residents. Targeted
programs should be
funded and
By definition, historically disinvested
neighborhoods have less access to capital,
including loans for home repairs. As private and
public investments enter an area for
redevelopment, it is critical to make low-interest
financing available to long-term residents who
are need of home improvement or repair.
States, cities and local development agencies create
funds for low-interest loans for long-time residents.
Application requirements can target geography, income
levels, length of time living in the neighborhood, etc.
Some loans become forgivable if the homeowner
continues living in the home for a certain amount of
time, which disincentivizes the flipping of properties.
Minnesota,
Cleveland, Detroit,
St. Louis
administered by the
county or Met Council
if they are in
response to project
impacts.
27. Limit condo
conversions
Crystal is seeing
condos & townhomes
turned into rentals;
it’s unlikely that
apartments would go
the other way.
But if they did,
conversions can
provide opportunities
for affordable
homeownership and
intergenerational
wealth building.
Would likely require a
new staff position to
monitor and enforce
compliance.
The conversion of multifamily rental housing to
condominiums for ownership can result in a
decrease in the supply of units affordable to low-
and moderate-income renters. Ordinances
regulating the conversion process can provide
renters with protections and additional rights.
Cities have passed ordinances that require property
owners to:
- pay relocation assistance if the tenant is forced
to move because of conversion
- get approval from the majority of tenants to
convert
- provide adequate notice periods (one year)
Boston, Bay Area