The city of Rochester will explore in more detail a policy change that could incentivize affordable housing creation in the city with the help of a national expert in affordable housing issues.
The Rochester City Council on Monday took action to hire a consultant firm, Grounded Solutions Network, to provide recommendations on an inclusionary housing policy. The firm has provided consultations to more than 50 U.S. cities and organizations, according to a proposal it submitted to the city April 15.
Olmsted County housing staff and a representative of the Greater Minnesota Housing Fund in May met with the city council and advised the city would need to create about 4,500 units of affordable housing in the next five years to keep up with growing demand.
Market rate housing creation has kept pace with demand in Rochester but the majority of units, about 89 percent, are above affordable housing standards, John Errigo, a syndication officer with the housing fund, said in a May meeting. About 60 percent of area renters are unable to afford market rate rent, Errigo said at the time.
The city has considered an inclusionary housing policy to address these issues and at a Monday city council meeting, council member Michael Wojcik asked for a decision on whether to hire a consultant to assist city staff in researching and drafting a policy.
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"This is a very simple, low-cost step to educate ourselves and bring in an organization that has a tremendous amount of capability in this, has designed these programs all over the country, and more importantly, they're engaging with the key stakeholders here," Wojcik said.
Two council members maintained their earlier skepticism at the proposal after hearing inclusionary housing policies had been implemented in other Minnesota cities and had since been removed.
"I've seen several examples of cities where this policy has failed or is in trouble, but I haven't seen any success stories," council member Mark Hickey said. "So just at a cursory level there should be some success stories out there that we can review before we decide if we want to go forward and hire a consultant to start the implementation process."
Council member Ed Hruska said the $30,000 contract could be a "slippery slope" toward future spending. Hruska was in favor of Olmsted County leading the effort for a housing policy, with cities opting to join later.
Council member Sandra Means supported the city's effort with the hope it would lead to more housing options for residents of mixed incomes. That type of housing could be incentivized by an inclusionary policy.
"My issue is the concentration of affordable housing," Means said. "We want a more integrated approach to living and at this point those options are not evident to me."
The council voted 5-2, with Hickey and Hruska dissenting, to pursue a contract with Grounded Solutions Network.
The consulting firm provided a scope of work to include: engagement of stakeholders like housing developers, advocates and neighborhood leaders; a financial feasibility analysis; discussion of policy design considerations with an advisory group; and development of initial recommendations; presentation of recommendations to the advisory group and stakeholders; revision of recommendations; and presentation of recommendations to the council.
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The work was valued at $30,000. If the city later decided to implement an inclusionary housing policy, Grounded Solutions Network would offer to consult with city staff on ordinance development at an added cost of $2,400.
The consultant's work was projected to last six months, including ordinance development, according to the group's proposal.
Grounded Solutions Network is a nonprofit formed from a merger of Cornerstone Partnership and the National Community Land Trust Network.
