Loading...
HomeMy WebLinkAbout2017-11-27 PACKET 9.2i.MmCottage Grove here Pride and Prosperity Meet To: Planning Commission From: Christine Costello, Economic Development Director Date: November 6, 2017 Subject: Legends of Cottage Grove Income Requirements At the October Planning Commission a request was made to clarify how potential residents of the Legends of Cottage Grove qualify to rent at the 184 -unit affordable apartment complex located at 6999 East Point Douglas Road. The Dominium, the developer for the Legends of Cottage Grove, applied for financing through the Section 42 Affordable Housing Tax Credits program. The national program was created under the Tax Reform Act of 1986 and is regu- lated under the Internal Revenue Code. The developer receives tax credits to build affordable housing and receive a reduction in the tax liability in return for providing housing that meets the needs of the community. The intent of the program is to build housing for those who fall in the medium to lower income brackets. One of the conditions of housing tax credit program requires the developer to keep units af- fordable. The affordability requirement is set federally (not by the city, county, or state) and is based on the median household income figures that are published annually by the U.S. De- partment of Housing and Urban Development (HUD). The income limits are then broken down by county for each state. To maintain the affordability component of the program, residents pay rent based on a fixed rental fee for the unit size that is lower than the market rate rent in the area. The median rental rate in Cottage Grove is approximately $1,130 for a one -bedroom unit (based on American Community Survey 5 -Yr. Estimate 2011-2015). The income qualifications for the housing tax credit program are based on GROSS annual income (before any deductions) earned from all sources including wages, social security pay- ments, public assistance, pensions, annuities, interest income, etc. The renter will complete an application to verify their income qualifications during the application process to become a resident at the Legends of Cottage Grove. The Legends of Cottage Grove will have roughly 95 percent of the units rented to those mak- ing less than 60 percent of the area median income (adjusted for family size). The remaining units will be rented to those making less than 50 percent area median income. The table below provides the income limits set forth nationally. Income Limits By Household Size 1 2 3 4 5 6 50% $31,650 $36,200 $40,700 $45,200 $48,850 $52,450 60% $37,980 1$43,440 1$48,840 $54,240 $58,620 $62,940 Housing tax credits are awarded to developers based on a scoring point system. Housing that qualifies as "senior" receives priority when the housing tax credits are awarded. Therefore, having the Legends of Cottage Grove intended for occupancy by persons 55 years of age or Planning Commission Legends of Cottage Grove Income Requirements November 6, 2017 Page 2 of 2 older allowed the project to score higher and was one of the qualifiers in receiving the housing tax credit. The developer will be required to comply with the rules of the program regarding age by providing verification of occupancy by reliable surveys and affidavits, and publish and follow policies and procedures demonstrating the intent to provide housing for persons 55+. The pro- gram also requires that the housing provide facilities and services specifically designed to meet the physical and social needs of older persons. It is important to remember that though the development is considered affordable, it is still built to the standards of a market rate complex as well as having many of the same amenities. The Legends of Cottage Grove will have many community amenities such as several community spaces including a centrally located clubroom with a spacious kitchen and gathering areas, outdoor grilling and dining space, a card/craft room, theater room, and library on the main floor. The lower level of the building will include a fitness center and salon. The apartment units in- clude one-, two-, and three-bedroom units and will feature amenities such as a private balcony or patio, washer/dryer in every unit, large walk-in closets, nine -foot ceilings, and a kitchen bar or island. The complex will open in early 2018, and interested individuals can view models of the one - and two-bedroom units, every Wednesday in November from 3 pm to 5 pm, and Saturday, November 18, from 10 am to noon. For more information or questions on the application pro- cess, contact the Community Manager for the Legends of Cottage Grove, Bailey England. Ms. England can be reached at 763-452-3169, and she has a temporary leasing office located at 8063 Hadley Avenue South.