I'd like to uh call this uh joint citycouncil and housing redevelopment authority meeting of April 20th, 2026uh to order. Uh tonight we'll be discussing in a work session thecontinued discussion of 4D tax classification impacts and potentialpolicy. And with that, I will uh turn the discussion over to assistantcommunity development director uh >> thank you chair uh Hansen. Sorry, got topractice the new it's no longer chair Daniels. Chair Hansen, members of the HAand council member, do you want to start up the presentationplease? You can see this one. Are you able to see? It would be it ispossible since we are not all here to have folks move if it's easier. No,>> I guess I'm good. >> Okay. >> All right. So, you go to the next slide.There we go. So, just a reminder, back in February, we met and we covered somebackground, reminded everyone why we're talking about this topic. We providedsome definitions of 4D and property taxes. We looked at the tax impacts ofboth preservation and new construction and we included some housing data toprovide some context. We posed some questions for you. You asked for moreinformation and we gave you some homework. We asked you to rankpriorities for housing as it relates to the use of 4D as a tool. Next slide. Sotonight we're going to go over your information requests. She had asked forsome info on geographic distribution, um the resources that might be availablefor costburdened homeowners, comparison to other communities, the impact of tiffdescertification. I'm also going to provide you some updated impact numbersusing the 2026 tax capacity and classificationand um we'll show the uh results of the priorities rankings and then um based onthat what direction we see a potential council policy taking. and then we'llalso talk about what what comes next. So, next slide. So, this is the thegeographic distribution. The map shows where uh current 4D properties, the onesin pink, um are located as well as potentials and these are the Noahproperties over 40 units that we talked about last time. I would say we don'treally see a geographic distribution as a significant factor. um that theclustering down along 494 there is really just a function of where ourmultif family properties are located and I think we have felt over time thatthose properties located along 494 have historically um struggled more thanperhaps other properties I think just due to the changing nature of that uhfreeway. >> Could I ask a question?>> Sure. >> The No, I thought there were a lot moreNoah properties in Richfield. >> So I think there are just these are only40 units and more. Okay. >> So, we didn't look at we have a lot of11 unit buildings, 10 unit buildings, a lot of smaller properties when umcouncil member um Hayford or Liry had called Richfieldsized properties. I think are those smaller properties. I thought that was areally good way to think about some of our apartment.>> So, this may not be a comprehensive >> right. Um, I think if we were toconsider a 4D program, which some communities have to really try toencourage preservation, we would want to look at those. I think that we um I Iwill argue that I I think we continue to not want to create a specific program,but instead to respond to if some of these larger complexes say we're goingto be at risk of converting to non-affordable, then that's where 4Dwould come into play. So, this was kind of the the marker I used was 40 unitsbecause that's what preservation buyers have typically said would be the veryminimum that they would consider. All right. So, in terms of homeownerresources, um because 4D shifts the tax burden onto others, includinghomeowners, um that was that question was asked, you know, are there resourcesavailable when that property tax gets higher? And we found that programs tendto be focused on prevention or in the case of down payment assistance, it'sabout setting people up for success to begin with so that you're in a a housingthat you can afford. Um, but there is a t a property tax deferral program that'savailable through the state for seniors on uh with lower incomes. And then ingeneral, the general population can um apply in through your taxes, right? Youcan get state tax refunds on your property taxes.Next page. So, you asked how Richfield compares to other communities in avariety of different ways. And so, the next three slides show both our currentlevel of affordability and the affordability of a handful of othercommunities. The first slide is all housing, both ownership and rental. AndI put the yellow line on there just to help you compare us visually to othercommunities. And that's at 80% of the area median income, which is sort of a ageneral marker of affordability. So, I won't go into in into depth uh onthe comparison. I don't think there are many surprises here. We're moreaffordable than St. Louis Park in Bloomington. We're less affordable thanRobinsdale and Brooklyn Center. Next slide. And this is uh thoseaffordability affordability levels for ownership housing. And again, we use 80%as sort of a marker of affordability. And I would just note that these arehome values as reported through the American Community Survey. So it's notnecessarily what it would cost to own the home and to maintain it. So yourtaxes, insurance, utilities, or the cost to purchase something. Now, so justremember that this has some limits. We talked last time that maybe cost burdenis a better measure, especially when we think about one of our goals being tokeep Richfield as an affordable place to live. Next slide. The next slide is umrenter affordability. And it's really small up on the screen, but you've hadin your packet. Hopefully you can take a look at those numbers if you areinterested in um thinking about this some more. In terms of rental housing,60% of the area median income is the more standard affordability measure,especially in Richfield. And so that's where that yellow line is. There's someslight differences here, just that we are slightly more affordable in rentalhousing than say Robinsdale. Uh also keep in mind that these are 2023numbers. The census um just recently um put out the 2024 um ACS data and we needto wait for the Metropolitan Council to do some manipulation of that data beforeit's available for us to use. Somebody else asked the question about uhsubsidized housing and I would say that what that encompasses are those unitsthat have an actual rental subsidy attached to the unit and Richfield hasin fact a very small amount of this type of housing. and we have 191 units andall of which are restricted to either seniors or people with disabilities. Sothe last time we did a rental housing study which was back in 2012, we uhfound that we had a much smaller number of subsidized units than our peercommunities. For example, Edina has 462 units of subsidized housing in St. LouisPark 771. And again, that's subsidies that areattached to a unit. On the next slide uh is information about 4D as a percentageof all rental housing. And so you can see that um we are at 11% and that'sincluding Hemple which technically won't be part of 4D until next year. But asyou can see compared to other communities 11% is very similar toothers where there's 12 and 13%. It's just Brooklyn Center that has asignificantly higher percentage of its uh rental units in the 4D program. The next chart is about taxexempt land.It's another thing that came up just, you know, how that um how much land dowe have that is taxexempt and therefore not um paying property taxes. And again,we really are not out of line with other communities, although there's a muchmore of a a variety here. But just a reminder, this includes parkland. Andso, um you know, that can be a significant difference amongcommunities. Some have golf courses and other things that are going to take up alot of land. The next slide, next information isabout tax capacity. That was another question about how do we compare toothers in terms of our tax capacity. And I put this down as a per capita amountbecause I thought that um was a little easier to compare because of course ourtax capacity is not going to be as large as Minneapolis's, right? But when youlook at it on a per capita basis, we're not that far below um city ofMinneapolis for example. So then the next slide uh also includesthat tax capacity compares to a slightly different group of communities, but thisshows um also the percentage of that tax capacity that's in a tax incrementfinancing district. So you can see that we are at the uh it actually has let'ssee 2023 information back from the last time we had a tiff management planprepared and as we talked about um last time or a couple times ago that we arehaving that updated and we did have this particular page updated just so you canhave that information. So you can see in 2026 that we are now um we still have atthe higher end in terms of number of districts but our um percentage of thetax base is just under 8%. And I do want to call out and remind you that taxincrement is one of those few tools that we have to encourage investment in thecommunity in the terms of new development and redevelopment. So so thethe use of tax increment can also be seen as an indicator of investment inthe community. And we would note that the last tiff management plan in 2023 wefound that the market value of properties within our tiff districtshave increased by nearly 300%. All right. In the next page, uh questionwas asked is do we have some districts that we'll be descertifying? Because oneof the things that we looked at when we considered the Hemple um ask was thefact that we had two TIFF districts that came on back onto the um full tax rolesum this year. And so are there others um upcoming? And again, this is from ourTIFF management plan. So we had this page updated as well. And there are twodistricts that we expect to descertify in 2029 and 2030 which will add half amillion dollars to our tax capacity. So I wanted to update the numbers um ofthe the sort of the financial impact of um using 2026 numbers and classificationum rates um or tax rate pardon me because this wasn't available lastmonth. So, you can see that um the cost of all of our current properties plusHemple in the 4D program, there's a $445,000tax shavings or cost or shift to other property owners. This is actuallyslightly less than the 2025 number, which was $477,000.Um you and I think that's a reminder, umthat there are lots of things that go into valuation and tax values. it isn't,you know, not everything is held constant. So, you can't really measurefor sure the exact um impact that way. But, so the cost to the median valuedhome of all those 4D properties is about $28 a year. The cost to an 11 unitapartment building is about $175 a year. And the cost of the Hemple um threeproperties is $745 a year. And that is about a dollar less than our estimatesfrom last year. So those two dis tiff districts um being descertified did havethat impact. Uh we were hoping maybe we'd see a little bit more of an impactbut it turns out that apartment values went down about 1.5% from last year andthe commercial properties went down about4%I believe it was or 66% sorry I have it right in front of me. So again there arejust lots of factors that go into that. we can't really point to um just onething. Umoh, and the other thing we talked about, of course, is that it's not just animpact of city taxes. That's the thing that we have most control over, but wedid have them run on um the impact on county taxes, and it was about 9 cents.So again, it's that small small amount um of a shift, but again, in terms ofthe county, there's lots of stuff going on throughout the county um that'spotentially having an impact. All right. Um the other one of the otherthings you asked us to look at was just, you know, what are other cities, othercommunities concerned about 40? What are they thinking? What are they doing? AndI just did sort of a very small sampling of cities. They didn't go out and askeveryone, but in the case of Edina, St. Louis Park, Golden Valley, which if yougo back to their tax capacities are higher than ours, um they have actualprograms trying to encourage um owners to sign up for 40 and preserveaffordability. Uh in the case of Minneapolis and St.Paul, they both have programs as well. St. Paul has shut down the program toany new applications. Um in the case of Minneapolis, they have reduced um theirrequirement to 50% of the area median income. So actually made it stricter. Umand they also did a study that was quite interesting in looking at the cost perunit um of subsidy for various um types of housing in their community. In termsof Brooklyn Park, they've had similar work sessions just like this, and theyhave decided they really would prefer to use other tools rather than 4D. Uh,Columbia Heights, I'd heard their mayor talk at some various um events thatthey're concerned about it, but when I reached out to their staff, they theyreally aren't studying it or looking at it right at this point. So I I don'tthink it hasn't necessarily sunk into a lot of communities yet that that thisthis reduction has an impact. So on the next slide, um we took a look last timea little bit at the difference um of using uh 4D for new development and alsofor Noah preservation. So TIFF and 4D are two tools that we can use to supportboth Noah preservation and new housing development. And this slide takes a lookat it as um the cost difference between TIFF and 4D on a perunit basis. So on aperunit basis, the cost of TIFF is actually higher than 4D. However, whenyou look at the total subsidy over time, 4D could in theory be more expensivedepending on the length of affordability. So, and for example, inthe case of 4D being used for an allaf affordable tax credit development likePenn Station, 40 years is the length of time that they will likely beaffordable. So then when you add that up versus a 26-year tax increment district,um it ends up being a larger per unit subsidy.uh you know something to consider though isof course while we might want to provide a lesser subsidy and therefore support ashorter period of time what happens to residents and the affordability of theproperty at the end of the affordability period do we end up with displacementbecause all of a sudden rents go way up and is that something that we areconcerned about in the case of Noah preservation it'scertainly a much lower per subsidy cost um per unit I'm sorry subsidy cost perunit but again we have older buildings things and they don't necessarilyprovide some of our housing priorities like accessible units and units withmore bedrooms. And then also this is just a cost comparison. It doesn'taddress who bears the cost. So the next page is where we took yourhomework that you provided. Thank you for that. So these are the results ofyour homework where you ranked the different housing priorities.>> Uh Mr. Chair, could I could I ask a question on the subsidy slide?>> Yes, sure. Um, >> I'm just having trouble wrapping my headaround the comparison. So, like at the end of the 26 year period of tiff, youhave a 26 year old building that's paying full tax.>> But the Noah preservation thing, like we had a building that was wortha million dollars and it's it pays less for a period of time during theaffordability and then it's still worth a million dollars, whatever it's gone upor down to over that time. So, like this isn't accounting for like the assetthat's left over at the end, right? This is just sort of the subsidy for thatdefined period. >> Right. Right. Okay. Yep. Exactly.>> And then one other question. I assume that if a building were to combine 4Dand TIFF, would that be possible if it were an exceptional increase in valuelike a gas station on a 5acre lot became a giant apartment building or would theypretty much never be combined? >> So, you could use both in theory. umwhen we took a look at um so I don't know if you remember back or if you wereon one of these boards back when MWF was proposing a development for the old CityGarage South site. um we looked at it and looked at it as a tax incrementdistrict and there was a certain amount of increment that was going to begenerated and then they changed the tax rate the tax classification down andrealized okay I don't know if this the amount of increment went down so muchthat it's I don't know if it would have been it would have made sense to do bothso it will dep and same with Astro Commons there it's expensive to create atax increment district for just a small amount of money,>> you just wouldn't do it. >> So now we have been hearing from likethe Legion potentially they might be asking for they might qualify for 4Dautomatically, right, if they were to go the bond route.>> Um and then to also do a tax increment district. We'd have to see the numbers.I just don't know if it's going to be worth it. There has to be just a certainamount to make it worth. But just in case the skepticism comes up, we wewould account for the much lower rate of tax when we're considering how muchavailable increment there is. >> Sorry, was I maybe I wasn't answeringthe question he was asking. >> No, no, no. I think this was a differentquestion. Sorry, this is a related question just to confirm.>> Sorry, >> you did answer my question correctly.>> Okay, so ask your second question again. Sorry.>> If if we were to somehow combine these, we would be accounting for much lowerrate when we when we determine how much increment is available for the newproperty. Is that right? the base value would be>> like the the improved value is it like just based on the value of the land oris it based on the tax capacity as >> Oh, I see what you're saying. Would the4D would be based on the total? That's a really good question.>> So, Sean, I think what you're getting at is um would we be accounting for thatwhen we're putting together the development agreement?>> Yeah. >> Yes, we would look at that. And one ofthe things that we've talked about at a staff level is that um developers shouldnot be able to and they they can't we don't believe according to HR attorneysum that they can't come back after the fact and ask for 4D because we havenegotiated a deal uh based on previous assumptions. So they could certainlyapproach us. We could look at new numbers and make sure that the H stillends up in the same place or something like that. But in in theory, if we wereto combine, we would combine to begin with so that everyone was uh fully uminformed about what the impacts of that lower tax rate were going to be on thedistrict as a whole. >> Okay. Thank you.>> Now, we'll go on to the next page. >> So, these are this is your homeworkresults. Um the colors are the range of the ranking numbers. So what I took thatas is sort of level of agreement. So in the case of the colors yellow or greenis the highest level of agreement followed by yellow and um orange andthen purple is the sort of the least amount of agreement on those topics. Sothe highest priority with moderate agreement is to maintain Richfield as anaffordable place to live. Rehabilitate and preserve Noah housing were the nexttwo priorities also with moderate agreement. diversify the tax base was ahigh priority, but there were a couple of outliers lo which lowered itspriority ranking. And I call I use outliers in the statistical term, nottrying to insult somebody um for having their opinion, right? Umdeeper affordability ranked as one of the lowest priorities overall, but therewere a couple of much higher rankings in there as well. all affordable housingranked as the lowest priority with uh some level of agreement among everybody.And I just want to say too, I believe these are all priorities. Um we don'tbelieve that people are saying that lower priorities aren't important,right? But it's a matter of making some choices, right? Because resources arelimited. And I want to say if you hear thingstonight or have heard things that make you want to reconsider your rankings,please feel free to resubmit. Um, we've used the results as a way to think aboutthe 4D policy and the goals that we want to use potentially 4D to help us meet.So, I'm happy to um consider other rankings if you'd like. I just like itby Friday of this week. Next page.So, considering the priorities that you shared with us and our previousconversation, this is what we want to tell you that we've heard. Uh, we'veheard that you feel that maintaining affordability for existing residents,Noah preservation and rehab, and diversifying the tax base are yourhighest priorities. We've heard that mixed income housing is preferred, thatthere is less support for prioritizing all affordable housing. We've heard thataccessibility and units with a large number of bedrooms are high prioritiesfor new construction over deeper affordability. And we've heard thatdeeply affordable, supportive, and all affordable housing are lower priorities. And kind of what we would say this meansis that you sorry, next slide.You would like us to prioritize mixed income housing and commercialdevelopment, but given current market conditions, you need to be aware thatthat means development will likely remain slower. You should also be awarethat the biggest priority of Henipin County, Minnesota housing, and themetropolitan council is for deeply affordable housing. So that means thatgrant applications to them for funding that don't provide deeply affordablehousing may be less competitive for those grant dollars. And you should alsoremember be aware that there are some HR properties where all affordable may bethe highest and best use even with a 4D tax classification rate. So while thatranked as a lesser priority, there may be situations where we want to considerall affordable developments in order to get those vacant properties back on thetax roles. And next page, we have some lingeringquestions that we would like to hear more from you about. The first is lengthof time. So as we talked about, all affordable properties or projects umwith uh tax credits are likely to be affordable for 40 years. A tiff districtthe maximum is 26 years but sometimes they could be finished sooner. In thecase of Hemple the time period is 15 years and while they won't receive 4Dafter 15 years there's no guarantee then that affordability will continue. So toremind you also the primary financing often dictates the length of thataffordability period. So we we may not have a choice, but I I do want you tothink about it and also think about it in the context of given the prioritythat you all have placed on maintaining Richfield as an affordable place tolive, should we be working for as long an affordability period as possible orshould we be looking to minimize that subsidy or that amount that we we arecontributing? So that's kind of the first question. Um the second is thatthe priority rankings indicate that preserving what we have is the greatestpriority. And in terms of new construction, we we want to hear, do youhave a goal for a number of new affordable units that we should beworking towards? And just a reminder I put up there that these are what theMetropolitan Council considers to be our fair share of new uh construction thatwe put forward. And the third question we'd like you to wrestle with a littlebit is just what do you see as a desirable mixed uh amount of affordablehousing in a mixed income building? If that's your priority, what what doesthat mean to you? I think we could stop at this point and have a little bit ofdiscussion. I maybe putting you on the spot, although I put it in the staffreport, so maybe you've been able to give a little bit of thought to that.Um, but so I welcome any feedback you have at this point or you can alwaysshare feedback that comes to you later with us. via email.>> Okay. Any uh any feedback or questions? >> Mr. Chair, I have a question.>> Commissioner, >> uh are you hearing from developers whatthe hold up or what the the obstacle is from market rate development? Is itstill interest rates and construction costs? Is that still the primary reasonor have things changed? that continues to be what I'm hearingfrom market rate developers. um liquidity at banks um also um has beenbrought up but generally yes it's construction costs interest rates uh andlabor >> correct>> and uncertainty >> rents are flat uncertainty um duringoperation metro surge I did hear from developers who could not get lenders tolook at projects in the Twin Cities areas>> um so hope you know hopefully those concerns um have lessened And but I Idid hear that >> I was I was surprised earlier in thepresentation you mentioned that the value market value of apartmentbuildings has gone down. Now we all know that office buildings has gone down butwhat what is causing the value of apartment buildings to decrease? >> We're not sure. Yeah. Is that just aRichfield thing? I um I don't know because we don't have because so many ofour buildings are older. Um I don't know. Do you have any>> some of our newer buildings have been challenging their market values? Um inin petitioning for lower values. Um yeah, I I can't really say. I don't itis not a Richfield thing. This is happening throughout uh throughout themetro. >> Okay. Commissioner Hay for Deliri.>> U I know you know a theme we've had in like Richfield housing goals in the pastis that 2011 or whenever it was that project was proposed on the north sideof the city garage site um and that was rejected and there was housing studyafter that and mixed income housing was a big priority of a goal I think of 80%market rate and 20% within a single building. And then I recall in the yearssince that we heard from developers that just like they have affordable housinginvestors and they have market rate investors and for the most part they'renot interested in collaborating in one building. So I guess my my question isdoes that still exist and then I have thoughts based on your answer like do doyou still hear that people who would have trouble doing that at one building?Well, I we've successfully done several buildings since that time, right, withthe 20% at 50% AMI because that is the requirement of a tax increment district.So, I do think that it certainly is possible.>> Can it get higher than that? I mean, the numbers, yeah, may or maynot work out. >> Okay.>> Yeah, I don't I don't have anything to add. I mean, typ typically when we'reasking for uh in our redevelopment districts, when we're getting some levelof affordability, you're see you're seeing the subsidy go up, right? So,that amount of increment is really playing into whether or not those unitscan be provided. So, um, on districts where it looks like it's going to takeus the full 26 years or for to to pay back um the investment, no, there isn'ta capacity to to provide more affordability in thatbuilding. The numbers aren't supporting it.>> Okay. Um, I guess it just and I'm sort ofspeculating. It it seems like the goal of having mixed income housing might beincomplete with the goal of having richfieldsized buildings. Like it seemsmore challenging to do that in a 40 unit building to have 10 of the unitsaffordable and 30. So I guess I would just reiterate I think a mix of a mix ofhousing options in an area and in the city is important to me, but having itspecifically all within one structure is not that important to me. So I thinklike Pen Avenue is a good example where we had two market rate projects and nowwe have a more heavily subsidized affordable project. In a perfect world,maybe everything would be mixed income, but when we also have this goal ofsupporting smaller buildings and more incrementalism, I think it's it'sperfectly fine to have some separate buildings as long as we're creating abalanced portfolio. >> Well, I I know one of the issues of theclassifications. It shifts some of the tax burden to other property owners. Umwould you say does TIF do that or is that that not really characteristic ofTIF? >> I mean those buildings are payingthey are still paying their full property taxes upfront and then they'rebeing issued in refund depending on what the city is levying. Yes, that money isstill getting paid somewhere. I think the difference is that um at the end ofthose tiff districts, the the value of those new projects has increased, youknow, um I think the number that Julie cited was 300%. And so over time, theidea is that yes, there's a little upfront, but it's coming to you at theend of the district. In a in a 4D project, that isn't necessarilygoing to be the case. >> And I guess that's kind of what I wasthinking is that with a tiff project is they are paying at the originalrate or level. And so that uh with that I I guess I guess trying to clarify myown thinking, but I was thinking that a tip district does not shift the uh theburden. >> It it does for a time. Um I I think thethinking on it though is that the overall market rate of the of theproject is going to increase enough um to pay the community back in some way.Um that obviously doesn't always happen. Um you know there are market forces thatnone of us can control. Uh none of us could have predicted the pandemic thathurt those uh office and commercial property values like they did. >> Commissioner Young,>> um I I'm a supporter of development and I'm a supporter of of creatingaffordable units. Um I really wrestle with this 4D question and I wrestledwith it with the Hemple development because it does shift the tax burden toothers. Yes, it's $28 or whatever it is. That's not a lot, but but some peopleare going to feel that. So, I like your policy thoughts. The last page of yourpresentation, I think I agree with everyone there that is approving 4D as atool of last resort, uh, encouraging other tools first, not having a policyencouraging it, but but using it on a case- by case basis where it's required.I don't see the benefit to Richfield taxpayers from a large building that has4D tax status and then we also put money in from the housing affordability trustfund. So additional I don't see the payback to Richfield taxpayers exceptthat we're creating affordable units for the sake of creating affordable unitsand I think that's a worthy goal but we ought to also be able to find a way tohave some other benefit to it also. And so like the Richfield size units thatCommissioner Hayford was talking about that you've talked about, I think that'sgreat. Or an HA or city-owned property where we're trying to encourage abuilding to be built is great. Um but only in limited cases would I feelcomfortable supporting it. >> Could you go to the next slide,Michelle? >> I jumped ahead.>> No, thank you. There we go. we can segue to that and then and continue to reflecton the previous questions and ask your questions. But I can just say these arekind of where we are throwing these thoughts out, our initial thoughts. Um um so the um again the number of toolsavailable to us are limited. So I think we do feel like there may be some caseswhere 4D is is appropriate. It's not our favorite, right? But um maybe it'ssomething we we need to use. Um, so the idea of but approving it as a tool oflast resort and perhaps prioritizing it for that Noah preservation when it meansespecially meeting our priorities. I think with Hemple we found it had lotsof section 8 clients that lived there. It had um three-bedroom units and hadmet some of our priorities, right? And and also including rehab. Those thosebuildings need investment. And so if we can encourage investment and multiplyour um you know we're investing with with matching investment. Continue toconsider 4D on a case- by case basis. In other words, no program to encourage itsuse. Uh any project must further high housing priorities and your prioritiescame back with um large numbers of of bedrooms, accessibility, and section 8friendly buildings or owners. In the case of new construction, maybe it'spossible to use it in the case where we get richfieldsiz buildings or where umtiff isn't an option. And in those cases where all affordable is really the bestchoice for the site and then that really new development should look to othertools first, TIFF and the trust fund. Um a quick reminder about 4D is thatprojects can automatically qualify for 4D. for example, if they were to receiveLITC, which would be really unusual without some contribution from you. Butif it were to happen or bonding or other way, really our only control is to notprovide any assistance to those projects through the HR. If a project were tomake it through land use approvals, for example, and move forward without thatlocal assistance, 4D could be automatic. So there might be no control. So I justalways want to keep that in mind. Um, so yeah, if other people have questions onthe policy thoughts, >> if I could just say one more thing.>> Yes, please. >> I think a mixed income building for thefor the foreseeable future is how much up each affordability level as opposedto how much is market rate because I don't think interest rates orconstruction costs are coming down relative to rents. So, we're probablynot going to get market rate development. It's probably going to behow much is 80%, how much is 60%. So, I think that's the the situationwe're going to be in is evaluating these projects that are all affordable, butthere are different levels of affordability.>> And just just to clarify there, I want to make sure I understand what you'resaying. Um I think when we are saying an all affordable building, we're saying anincome a building that is uh income restricted at all levels. So whetherthat be 80%, 60%. I think when we are using the term market rate, we're sayingthat there are some buildings, some units within a building that don't uhrequire uh an income qualification. >> And so I I want to make sure that we'reall speaking the same language. Are you saying that um you would be supportive?You're are you looking for some unrestricted units in a building,whatever level that might be? >> Some unrestricted units in a building.For sure. >> Okay.>> Absolutely. >> Okay. Thank you, Mr. Chair.>> Mr. Chair, >> well, I I guess I would say that, youknow, I certainly think we need to keep 4D as a tool in the tool box because, asit's been said, there are limited number of tools we have. Um,but I I do kind of like the idea of, you know, using it on a limited basis, youknow, for special cases. You know, looking at the Hemple project, Isupported that because I thought it was a very unique opportunity to preserve,you know, three Noah properties. Um, you know, and when you look at, youknow, the cost to the average median valued home of $745, that's a prettymodest amount. But I do have to admit at the time I was a little concerned aboutsetting a precedent. And what I don't want to do is open the floodgates, so tospeak. Um, because I think if we get into too much shifting of uh taxation toother properties, you know, that's a problem. and and property taxes, youknow, for some people who are we don't have evenidentified in our own minds, you know, is a is a burden. I know so that'scertainly always a consideration. Um, council member,>> yeah, first my apologies for being so late, but I persisted and insisted onbeing here because this is such an important topic. So, my apologies and Iappreciate your patience. Um, second, I want to thank you both u for thisinformation that I've requested. Um, I found it very useful. Um, especially theone where 4D as percentage of all rental, that Richfield in the citiesthat you selected was the lowest. Uh, and I'm gratified to hear that, um, themembers here are encouraging continued use of 4D. And I agree, it should becarefully used, but it still should be something that's left in the toolbox. Westill have some capacity based on that stat. Um, to be quite honest, the restof the stats as far as I mean, I was really amazed at how widely differentthe different cities are as far as different ranges of percentages foraffordability. And so, to be quite honest, I wasn't it wasn't clear to mewhat kind of result to make from that. But the one that did stick out was thatof the cities you selected, we're still fairly low as far as percentage of uh 4Dproperties. So on the one, I hope that encourages us to continue to use it. Uhit's good to hear that we're going to be selective about using it. Um I just wantto give you that feedback that I do appreciate the work you did and I didfind it useful. Thanks. >> Um I so I agree with pretty much all ofthe policy ideas. Um I think it's a good approach. I think my only concern isjust thinking about like the way he had worked with Hemple and like planningthat out for other Noah properties because it's not like we're going tohave a pool of like 20 properties and we'll get to pick like the 12 that arethe best. They're going to come one at a time and each time likely there will beorganized support to approve it. So, how do we have a policy that is likeclear-cut enough that it's realistic to say no even if there is organizedsupport in favor of approving it? And I mean one idea might be that itrather than saying prioritize uh rehab or physical renovation thatlike that would be a prerequisite for any 40 applied to an existing property.But if you have other ideas to like really have teeth that we can rely on tobe objective as these come in one at a time and not having the luxury of justgetting to pick on the whole city level all at once. >> Yeah. I um have thoughts oftesting with you know we we I sort of have the list right and I think we canlook at the list and say you know that we we see that as an important propertybecause it's it meets a lot of goals it's a well-run property you know andmaybe run some scenarios and we could do that um and maybe it's just for usinternally to know kind of um yeah it's really hard to know who who wemight hear from in the future. I have heard from folks. Um,of the people I've heard from, I would say onemaybe would have considered, but um, they're kind of well into theirrenovations and clearly showing that they were able to somehow find financeit without us. Um, so yeah, I mean, I have kind of the samethoughts, too. It's like which property would come next where it would feelimperative like it felt like um the Hample properties were to us.I was just going to add that internally within our department we work with umwe've got the folks that are providing housing assistance. We've got the folksthat are working on improving housing and then we've got the folks that aredoing the inspections. We have a wealth of information to help us identify and II think that we already know some particular buildings that are reallyimportant to our community for a variety of reasons. So um you knowJulie's thoughts on testing them I think there are some good test cases to runit. Why is this so important to us? And then documenting that so that we cangive you some clear direction. These are the things that you should be we thinkyou should be looking for. These are the reasons this community is of particularum importance. They're all obviously important to our housing ecosystem, butthis is where we think you should use your limited uh funding. All right. Any uh any final comments orquestions? >> Go to the last slide. Michelle, I wouldjust say our next steps will be to draft a policy. Uh and we welcome continuedfeedback from you if you as you are pondering to think about um and we'llespecially the folks who couldn't be here make sure that they know that ouremail boxes are open for um more feedback. I think based on some of thepriorities um I think we may also want to update our inclusionary housingpolicy. It's been a long time since we've done that. We may want to upd upupdate our trust fund priorities and then these would items be brought backto uh in some cases there'll be council priority or policies that they wouldadopt but in all cases keep you all informedum about what new directions we might have. >> All right. And with that, I will callthis meeting ajourned. >> Thank you for your work on this.>> Great.