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IEDC Agenda - 09/06/2022AGENDA INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE (IEDC) Tuesday, September 6, 2022 7:00 a.m. at Monticello Community Center Participants who choose to attend remotely may join via Microsoft Teams: Click here to join meeting; Teams Members: Chairperson Liz Calpas, Vice Chairperson Sarah Kortmansky, Joni Pawelk, Bill Fair, Darek Vetsch, Kevin Steffensmeier, Steve Johnson, Wayne Elam, Luke Dahlheimer, Don Roberts, Andrew Tapper, Randy Skarphol, Eric Olson, Kathleen Massmann Liaisons: Rachel Leonard, Angela Schumann, Jim Thares, Marcy Anderson, Jolene Foss, Dave Tombers, Tim Zipoy 1. Call to Order 2. Approve Minutes: a. August 2, 2022, meeting minutes 3. Consideration of Adding Items to the Agenda 4. Table Topic— Housing Developments Review— City Development Services Staff 5. 2022 Manufacturing Appreciation Breakfast— 7:00 a.m., Thursday, Oct. 13th— Update Vicki -Jim 6. Reports (Verbal Reports): a. Economic Development • Prospects List • Project Update • Upcoming Meeting Reminder— Date: September 27, 2022 b. Planning Commission Agenda (attached) c. City Council d. Wright County Economic Development Partnership (WCEDP) e. Chamber of Commerce 7. Adjournment (B:OOam) (Draft) MINUTES INDUSTRIAL & ECONOMIC DEVELOPMENT COMMITTEE (IEDC) Tuesday, August 2, 2022 — 7:00 a.m. Monticello Community Center Participants who chose to attend remotely joined via Microsoft Teams. Members: Chairperson Liz Calpas, Vice Chairperson Sarah Kortmansky, Joni Pawelk, Bill Fair, Luke Dahlheimer, Wayne Elam, Don Roberts, Andrew Tapper, Randy Skarphol, Kathleen Massman Liaisons: Rachel Leonard, Jim Thares, Jolene Foss, Dave Tombers 1. Call to Order Chairperson Liz Calpas called the meeting to order at 7:00 a.m. 2. Approve Minutes: WAYNE ELAM MOVED TO APPROVE THE JUNE 7, 2022, MINUTES. MOTION SECONDED BY SARAH KORTMANSKY. MOTION CARRIED UNANIMOUSLY. Consideration of Adding Items to the Agenda Chairperson Liz Calpas added an item to the agenda. 3.5 Announcement JONI PAWELK announced that she is leaving CentraCare to start a new business called IFFI Creative. Discussion was held to address the continuance of Ms. Pawelk's membership as she lives west of the City of Monticello in the Silver Creek Township and will be working out of her home. The consensus was that this situation would be addressed in Item 4. 4. Consideration of proposed Industrial and Economic Development Committee (IEDC),Chapter 10, Ordinance Amendment (membership language clarification) Chairperson Calpas introduced the item. Mr. Thares presented the consideration of amending Chapter 32, Organizations, Section 32.077 Membership — Industrial Economic Development Committee (IEDC) to clarify membership eligibility. Membership of guidelines includes "greater Monticello". Mr. Thares suggested this would have an immediate impact as several current members who have recently changed employment are seeking to remain involved with the IEDC. The current Ordinance is somewhat confusing and more restrictive than the Organizational and Membership Guidelines ("Guidelines") which provide a broader interpretation of residency. The guidelines allow individuals engaged in key professions typically involved in economic development to participate in the IEDC regardless of residency in the city limits. The proposed amendment clarifies the membership criteria and a definitive status by deferring to the "Guidelines" to broaden the eligibility criteria. The amendment would also be helpful as over the past several years, the IEDC has struggled to keep its membership at the total of 16 members (non -students). It was also suggested that for new prospective members, it would be helpful to have them participate in an interview process and clarify duties and expectations. This would be an opportunity if the considered member does not live or work within the city limits to share how they feel their profession -job is supportive to the IEDC and the city. MOTION WAS MADE BY VICE -CHAIR SARAH KORTMANSKEY TO AMEND LANGUAGE CLARITY AND CONSISTENCY IN THE TWO KEY DOCUMENTS, ORDINANCE, CHAPTER 32, SECTION 32.077 AND THE ORGANIZATIONAL AND MEMBERSHIP GUIDELINES, CHAPTER 210-3. SECONDED BY LUKE I97—AliIAilaI A Ia1*0 5. Table Topic — Guest Speaker, Brian Koslofsky, Executive Director, Wright County Technical Center. Mr. Koslofsky shared information regarding the impact that Wright County Technical has had on the current lives of youth and their futures. The Wright County Technical Center serves District School 966 as a vocational operative with eight -member school districts in both Wright and Sherburne counties. The eight local districts include: Annandale, Big Lake, Buffalo -Hanover - Montrose, Delano, Howard Lake-Waverly-Winsted, Maple Lake, Monticello, and St. Michael - Albertville. The WTC provides students with fourteen different career and technical program choices to meet their needs, skills, and career interests. It is also a grade 7-12 alternative s school program servicing students from our eight member districts. It offers many different educational options to meet the unique needs of students. Programs offered include automotive, early childhood & elementary careers, construction technology, law enforcement, horticulture, and welding to name a few. WTC offers a Practical Assessment Exploration System (PAES) where students can learn through hands-on job exploration activities. WTC provides job -simulation classroom experiences using up-to-date equipment to prepare students for either a career upon graduation or to provide students a first-time experience in a variety of career and technical classes. Students receive postsecondary credits. Cooperative agreements with Hennepin Community College and Bridgewater Community College are aimed at supporting tarting Adult Technical classes as well as Bridgewater and St Cloud Tech bringing other classes to WCT. CEO program is different from the traditional classroom instruction. This gives student exposure to real-world experiences provided by business leaders in the community. Mr. Koslofsky offered to lead a tour of the WTC facilities -campus for the IEDC members after the meeting. 6. 2022 Manufacturing Appreciation Breakfast - 7:00 a.m., Thursday, October 13t". Chair Liz Calpas and Vice -Chair Sarah Kortmansky agreed to meet with staff to plan the event. Staff will report the plans and status and the next meeting. 7. 8. Reports (Verbal Reports): a. Economic Development • Prosect List Mr. Thares provided an overview of current projects prospects highlighted on the staff report. Two key projects are: Block 52 -The Purchase and Development Contract (TIF Development) will be considered by the EDA at the August 10th meeting. If it is approved, building demolition could begin in mid-September with construction activities excavation) starting in October. The project completion goal is spring of 2024. The project meets many of the goals outlined in the Small Area Plan adopted by the EDA and the City Council in late 2017. The total project cost will be approximately $26,000,000. Wiha Tools New Facility Expansion —The Tax Increment Financing (TIF) and Job Creation Fund (JCF) Grant have been approved. The MIF (Minnesota Investment Fund) Grant application is under review by Minnesota DEED staff. Wiha Tools is proposing to build a new 78,400 square foot warehouse and assembly facility and add 61 new FTE jobs over 5 years. The total project cost, including land acquisition, is approximately $13,000,000. A future second phase expansion of the new facility would increase the size to approximately 156,800 square feet and create an additional 35 new FTE jobs. b. Planning Commission Agenda (attached) Mr. Thares provided an overview of the Planning Commission Regular Meeting agenda scheduled for August 6, 2022. c. City Council Rachel Leonard, City Administrator, presented an update on recent Council actions including the budget process, Council Member Gabler and Ms. Leonard went to Washington D.C. to advocate for funding to support 3 lanes from Albertville to Monticello, Public approval for the Walnut Street Corridor to Block 52. d. Wright County Economic Development Partnership (WCEDP) Jolene Foss, Executive Director at Wright County Economic Development Partnership provided a summary report of recent activities and events. e. Chamber of Commerce A short report about Riverfest was and the upcoming August meeting was provided. 9. Adjournment LUKE DAHLHIEMER MOVED TO ADJOURN. JONI PAWELK SECONDED THE MOTION, MOTION CARRIED UNANIMOUSLY. MEETING ADJOURNED AT 8:06 A.M. Recorder: Vicki Leerhoff Approved: September 6, 2022 Attest: James Thares, Economic Development Manager IEDC Agenda: 09/06/22 4. Consideration of Update of Housing Developments (JT) A. REFERENCE AND BACKGROUND: At the June 6, 2022, IEDC meeting, it was suggested that an update of the housing development activity in the city be provided to the IEDC. A spreadsheet has been prepared noting recently completed and proposed new multi -family and single-family housing development activity in the city. The spreadsheet is accompanied by a map indicating the location of the projects -proposals. A total of 883 multi -family units and 510 single family units (total of 1,393 units) are identified in the various projects - proposed developments. The projected increase in the city population associated with these housing developments (if they are all completed over the next four or five years), is approximately 3,200. It should be noted that some of these developments are already completed and open. Staff is offering the information in this report as requested in the June 2022 meeting and as an awareness building effort and a resource in facilitating discussion and/or feedback as needed/warranted. Al. Staff Impact: Minimal; Report preparation time. A2. Budget Impact: None B. ALTERNATIVE ACTIONS: 1. No motion; for discussion only. C. STAFF RECOMMENDATION: There is no recommended motion. Staff is providing comprehensive housing development (recent and proposed) information to the IEDC. This information may be useful in formulating future plans and/or policy recommendations related to community facilities and infrastructure (parks, trails, schools, etc.). D. SUPPORTING DATA: a. Housing Development Spreadsheet b. Aerial Photo showing locations of developments c. Housing Study Excerpts Completed Residential Projects Project Name 1 Rivertown Apartments 2 Deephaven Apartments 1st, 2nd Buildings 3 Haven Ridge 1st Addition 4 Carlisle Village 6th Addition 5 Willow's Landing Senior Living (65+) Residential Projects in Progress Project Name 6 Deephaven 3rd Building 7 StonyBrook Village 8 Featherstone 5th Addition 9 Edmonson Ridge 10 Featherstone 6th Addition Approved Projects Yet to Break Ground Project Name 11 Monticello Lakes 12 Twin Pines 13 Block 52 First Addition 14 Headwaters Twinhome Senior Living (55+) 15 Headwaters West Senior Apartments (55+) 16 Haven Ridge 2nd Addition Concepted-Proposed Projects Project Name 17 Tamarack Development 18 Duffy Development LIHTC Total Multi -Family Unit Count From Above 883 (10 Affordable Non -Senior) Senior Multi -Family Unit Count From Above 227 (41 Affordable) Monticello Residential Developments Since 2020 Housing Type Unit Count Multi -Family Apts 47 Units (10 Aff) Multi -Family Apts 114 Units Single -Family Homes 27 Units Single -Family Townhomes 73 Units Multi -Family Apts 125 Units Housing Type Unit Count Multi -Family 51 Units Single -Family Twinhomes 28 Units Single -Family Homes 26 Units Single -Family Homes 54 Units Single -Family Homes 21 Units Housing Type Unit Count Multi -Family Apts 200 Units Multi -Family Apts 93 Units Multi -Family Apts 87 Units Single -Family Twinhomes (40% Affordable) 60 Units (24 Aff) Multi -Family Apts (40% Affordable) 102 Units (41 Aff) Single Family Homes 59 Units Housing Type Unit Count Single -Family Homes 162 Units Multi -Family Apts and Two Unit Townhomes 64 Units Total Single -Family Unit Count From Above 510 Senior Multi -Family Unit Count From Above 60 (24 Affordable) Completion Date 6/1/2020 May -22 Oct -21 May -22 Sep -21 Construction Start Oct -21 Apr -22 22 -Jul Jun -22 Aug -22 Est. Construction Start Fall 22/Spring 23 Spring 2023 Fall 2022 Fall 2022 Spring 2023 TBD Est. Completion Date Sep -22 Summer 2023 TBD TBD TBD Est. Completion Date Fall 2024 TBD Summer 2024 Summer 2024 Fall 2023 TBD Est. Entitlment Approval Timeline Nov -22 TBD Aug -23 Mar -25 8 POPULATION PROJECTIONS zc-nzk sr,�, wva�e t.- 6 4C9 r4 + 3,Z0o MONTICELLO POPULATION (�6 GROWTH SCENARIO o -r Zo Z Monticello 2040 1 13,9881 15,2551 16,6371 18,1451 19,738 PROJECTING Monticello's population growth into the future is somewhat uncertain - and due to its location and amenities is partially dependent upon the availability and development of housing units. For a community of this size, large multi -unit developments or new subdivision development could be absorbed into the market on an annual basis, though would impact long-term projections. As new development occurs, and new amenities are added, demand will likely continue to increase with overall desirability of location and access. POPULATION PROJECTIONS The community's current comprehensive planning process identified a plan for growth of 2% annually, with the plan offering development availability and appropriate densities with potential to draw regional households into the local housing market. Ranges displayed show impact of growth scenarios at 2% annually, consistent with Monticello 2040 growth projections. 20,000 dV f� 15,000 a.��""'"e°� +����� �• 10,000 5,000 0 �° o do yo �o do yo �o yo do oti oti oti oti oti oti oti oti oti oti oti o� o� o� 03 0� °� o'� o� o� o� o ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti Monticello Monticello 2040 City of Monticello Housing Needs and Demand 28 [Following the Great Recession], household growth has finally returned to a more normal pace. Housing production, however, has not. The shortfall in new homes is keeping the pressure on house prices and rents, eroding affordability—particularly for modest -income households in high-cost markets. While demographic trends should support a vibrant housing market over the coming decade, realizing this potential depends heavily on whether the market can provide a broader and more affordable range of housing options for tomorrow's households. - Joint Center for Housing Studies of Harvard University; State of the Nation's Housing 2019 30 TENURE IN THE HOUSING MARKET REGIONAL PEER COMMUNITIES, while part of the commuter shed and larger Monticello housing market, display different trends in rates of homeownership. Income is generally higher for residents of these communities - and considering higher income ranges it is expected that they have higher rates of homeownership. Coupled with ease of transportation access and amenities found in Monticello, rental housing is more accessible and affordable as situated regionally. Monticello has the 2nd highest rate of renter households of peer communities, with only Buffalo having a higher share of rental housing. This reflects not only income differences between these communities, but how the built environment has adjusted to market demand. With a higher share of ownership options available, households who want to purchase homes outside of the metro without the direct access to the Interstate have historically driven this market - and are more likely to be households with higher incomes and more purchasing power. REGIONAL TENURE COMPARISONS Buffalo Becker Big Lake Source: American Community Survey 5 -Year Estimates St. Michael AX o w 42 ^ & -6a TENURE - MONTICELLO 0%43&Q -J1 ■ Owner Households ■ Renter Households Wright County ■ Owner Households Renter Households City of Monticello Housing Needs and Demand 31 RENTAL HOUSING STRESS RENTAL HOUSING STRESS Municipality Monticello of Renter Households' with Cost Burden •. of Cost urdened enter F ouseholds Michael Wright• '. Source: Americon Community Survey 5 -Year Gstimotes Renter Households HOUSING STRESS is measured by cost burden, which reflects the amount of income a household pays for total housing costs. Generally municipalities with larger stock of rental housing and very little vacancy would show higher housing costs for consumers and increasing rates of cost burden. This does not hold true in Monticello when compared to peer communities, which show similar rates of rental burden overall (with the exception of Becker). This also represents a share of older rental housing stock that is naturally more affordable to households through a combination of age, amenities, and "wear- and tear" on the units themselves. There is some evidence of higher - income households "renting down" within the market (spending less than 30% income toward rent), which in this case lowers rates of cost burden overall. As is typical due to income disparities between tenure types, cost burden is much more prevalent in Monticello for renter than owner households, indicative of generally higher owner income and tight lending standards. Owner Households 0 Cost Burden <=30% n Cost Burden >30% to <=50% Cost Burden >50% 32 RENTAL STRESS BY INCOME RENTAL STRESS in Monticello exists almost entirely within low-income City households. While there are renter households over 80% AMI that experience cost burden, higher -income cost burdened households often have the option to spend more than 30% of income toward housing while still maintaining the ability to cover fixed costs - cost burden by choice. Due to the structure of the rental market in the City, there are gaps in unit availability at appropriate price points to serve specific incomes in the market. Overall, there is a general oversupply of low-cost units that serve households between 31% and 80% AMI (approx. $800 - $1,300 monthly rent) . These units represent natural appreciation of units within the market - they do not have subsidies that allow them to alleviate cost burden for the lowest - income households, while also not filling demand for the highest -income users in the market. There are significant housing gaps at both the top and bottom of the rental housing market, with an undersupply of market -rate units for households earning over 80% AMI (rental housing cost $1,500+) as well as affordable units with rents below $800 monthly. Although there is a high market gap, there is an upwards limit to income that can realistically be spent on housing. Many higher income households also value affordability (spending less than 30%), so this does not display true unit for unit demand for high cost housing. It does create some additional market tension, where some high income households rent significantly below what they could afford, using units otherwise affordable to lower-income households. RENTAL UNIT MISMATCH Income Range Renter Households; Units voila Avalla Oho - 30% AMI 480 215 -265 31% - 50% AMI 200 650 450 51% - 80% AMI 405 460 55 > 81% AMI 285 45* -240 *most recent available data - does not include Monticello Crossings Source: American Community Survey 5 -Fear Estimates 33 RENTAL HOUSING STRESS COST BURDENED RENTER HOUSEHOLDS Municipality _ . rth Cos urden 30%-50%) with evere: urden ; 50%j Severely Cost urdened Wright• ::. :•. source: American uommumryburvey5- year tsnmates LEVELS OF COST BURDEN (2018) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Monticello Buffalo Becker ■ Cost Burden (30%-50% Income Toward Rent) RATES OF RENTER COST BURDEN may be low in Monticello overall, but those renters who are cost burdened are much more likely to be severely cost burdened (spending more than 50% income toward rental costs). Of those experiencing cost burden in the City, 73% are severely cost burdened. This rate is significantly higher than in regional peer communities, 21.7 points higher than the next closest community. While rates of cost burden are low overall, higher income households "renting down", as well as increased demand in the market overall increases competition for units in the moderate- and middle- market segments. This also indicates a lack of appropriately - priced units for the lowest income households already living in the community, and indicates opportunity to better serve low-income households through income -restricted and subsidized units that ensure affordability levels not currently provided within the market. Big Lake St. Michael Wright County Severe Cost Burden (>50% Income Toward Rent) Source: HUD Comprehensive Housing Affordability Strategy Renta( Market OWNER DEMAND - LOW ESTIMATE Growth projections for the City of Monticello indicate that current household growth rates will continue - and may have the potential to increase. More commuters are looking to call Monticello home. More area residents would like more options in the housing market. This demand analysis identifies a need to increase the number of ownership units in the City - creating more opportunity for ownership that can serve residents and newcomers alike. There are two pages of demand analysis per housing tenure type (ownership and rental) - this is done to illustrate the range of potential growth that the City may undergo. In general, low estimates are based on 1.7% household growth, and high estimates are based upon 2.4% household growth. Some assumptions in each are the same - such as the need to bring vacancy back to healthy levels, and decrease the rapid speed of cost increases on housing. Other estimates differ based on current best projections. The low estimate should be used as a baseline - a minimum threshold for unit construction, not just plats. New Ownership Housing Demand from Household Growth Within the City D- - Household Growth in Owner Demographics 294 additional households Demographic Ownership Rate 630 Demand for New Construction 185 ownership units Demand from Existing Resident Households Current Owner Households looking to Step -Up 2,183 households Current Owners Actively Looking for New Housing 12.60 Increased Demand from Existing Residents 275 ownership units Desire for New Construction 56% Existing Resident Demand for New Construction 154 ownership units Total Demand for New Construction Ownership Units = 339 units Preference for SF -Detached 70% Preference for SF -Attached 30% # 237 # 102 Existing Platted SF -D Lots 84 Existing Platted SF -A Lots 69 SF -Detached Supply Gap 153 units SF -Attached Supply Gap 33 units Additional Need for Vacancy 43 units Additional Need for Vacancy 18 units Total SF -Detached Need 196 units Total SF -Attached Need 51 units Total Unit Need for New Developed lots (not platted= 247 units *) City of Monticello Housing Needs and Demand 97 OWNER DEMAND - HIGH ESTIMATE This high estimate should be used as a goal - a measure of units that could be constructed in the market to provide additional housing choice - in location, type, and price point for buyers at any given point in time. Community feedback through this process indicated the desire that there be multiple areas under different stages of development at the same time, so that buyers who want to move to the City have areas to choose in where to call home. This estimate would likely require multiple active subdivisions in order to have the demand met and fully constructed by 2025. Development interest and demand drive the housing market. Due to lending requirements and market analyses needed for large-scale developer investment, if there is developer interest, there is also likely demand. New Ownership Housing.- Demand from Household Growth Within the City - Household Growth in Owner Demographics 626 additional households Demographic Ownership Rate 630 Demand for New Construction 394 ownership units Demand from Existing Resident Households Current Owner Households looking to Step -Up 2,183 households Current Owners Actively Looking for New Housing 12.6% Increased Demand from Existing Residents 275 ownership units Desire for New Construction 56% Existing Resident Demand for New Construction 154 ownership units Total Demand for New Construction Ownership Units = 548 units Preference for SF -Detached 70% Preference for SF -Attached 30% # 384 # 164 Existing Platted SF -D Lots 84 Existing Platted SF -A Lots 69 SF -Detached Supply Gap 300 units SF -Attached Supply Gap 95 units Additional Need for Vacancy 46 units Additional Need for Vacancy 19 units Total SF -Detached Need 346 units Total SF -Attached Need 114 units Total Unit Need for New Developed Lots (not platt ) = 460 units Demand & Recommendations 98 OWNERSHIP FINDINGS GENERAL CONDITIONS IMPACTING THE HOUSING MARKET: • Recent increase in average household size indicates more households with young children (p. 6) • Aging households are the fastest increasing demographic since 2010 (p. 7) • Aging households will be a significant portion of households through 2050 (p. 10) • Households with children will continue to increase, driving need for larger units (p. 10) • Monticello residents have lower average incomes compared to peer communities (p. 11) • Monticello residents have lower degrees of educational attainment compared to the County (p. 12) • Common occupation groups in the City indicate a need for affordable housing, especially for entry-level positions (p. 14) • Large shares of residents (42% as of 2015) commute into metro counties daily for work. Forty-eight percent of survey respondents indicated Twin Cities or a suburb as place of employment (p. 15) • Housing unit production has not kept pace with new households moving to the area, decreasing vacancy and increasing cost (p. 17) WHAT RESIDENTS WANT: • Increase in zero -entry, patio, and rambler style homes • Detached, accessory, missing middle, and townhome units for aging populations • Higher -cost "upper scale" housing in addition to starter -home development • Areas with different development options to build in MAJOR OWNERSHIP MARKET FINDINGS: • Though the majority of ownership housing is single-family detached, there are also many attached ownership units (p. 48) • Owners make up a smaller portion of the overall housing market than in most regional communities (p. 50) • The majority of owners in Monticello (53%) have incomes above the median for the entire Metro region ($103,400 in 2020) (p. 51) • Most homeowners can comfortably afford their current housing costs (p. 55) • There is an ample supply of homes affordable to households at 50% AMI - though 4 out of 5 are owned by higher -income households (p. 55) • Though affordable homes exist in the market, residents still identified the largest negative aspect of the market as lack of affordability, with more than half of survey respondents indicating that affordable housing is becoming harder to find (p. 55) • There are generally more affordable ownership opportunities in the city core, though attached ownership units are affordable in many areas (p. 57) • Many households are remaining in their housing longer than the 7 -year national average (p. 58) • Since 2014, home costs have drastically outpaced income growth, reducing affordability and access for potential homebuyers (p. 59) • The median home cost has more than doubled since 2010 (p. 59) • Cost per square foot has increased more in Monticello than in peer communities studied (p. 60) • The median starter home in the City is approximately affordable to households earning 80% AMI and above (p. 61) • Monticello has the current highest Sales:List price ratio among peer communities (p. 65) • There is an opportunity for missing middle townhouse redevelopment in the core city (p. 67) City of Monticello Housing Needs and Demand OWNERSHIP RECOMMENDATIONS For residents who already live in the City, there are several key issues. Moderate -income residents who previously would have been able to afford homeownership are now finding themselves being outpriced in an appreciating and competitive market. There are areas of the core city with low home values and low improvement ratios. And the average days on market is holding steady at one month, well below a healthy market. CONTINUE TO PLAT AND SERVICE NEW SUBDIVISIONS AND DEVELOPMENTS While construction activity has been ongoing, residents and prospective residents have indicated a need for more choices within the market. In order to meet the housing construction demand outlined above, it will likely require multiple subdivisions in various stages of build -out at any given point. The City should Continue to work with developers who are bringing forward housing - at all price ranges - to serve needs of the community. PARTNER WITH DEVELOPERS TO DELIVER A MIX OF HOUSING OPTIONS While small -lot and large -lot new development is a need, so are unit -type mixes within new subdivision development. Integrating a mix of housing types (attached/detached, 4-19 unit rental, etc.) within subdivision plans allows more choices and options in the housing market - ensuring that households of all income can call new development home. This can work to encourage more natural community character, and help preserve the neighborhood and small-town feel of the community through personal connection. THERE IS A MARKET FOR "LUXURY" HOUSING - BUT THE MARKET IS LIMITED There are households in Monticello who can afford $450,000+ new construction homes. We have heard through this process that large - lot availability and acreage are reasons those seeking higher -cost homes choose to live in the region. While there are certainly opportunities for development in this price range, sales would likely be targeted to residents from the larger region - where incomes are higher and households have more choice in this competitive market sector. ASSESS REQUIREMENTS, MINIMUM LOT SIZES, AND AVERAGED MINIMUMS The City has the ability to review parking requirements, minimum lot sizes, and averaged minimums to further bring down new ownership costs that can help maintain Monticello's affordability. Both small -lot and large -lot units have been identified as needs. The City should actively work to ensure developers take advantage of lot - averaging that can offer a full scope of options for potential homeowners in new development. This step toward continued affordability will provide options for both existing and prospective residents. ACTIVELY PROMOTE REPAIR ASSISTANCE FROM MHFA, USDA, AND WCCA Wright County Community Action (WCCA) provides assistance in homebuyer training, rehabilitation, and other housing -financing issues that can prove a stumbling block to lower- income owners. WCCA is also prepared to assist homeowners in securing financing through the Minnesota Housing Finance Agency (MHFA) and USDA Rural Development, and can guide owners through complicated processes to improve their homes. KEEP IN MIND AGING HOMEOWNERS The large share of senior persons projected through 2050 is a national trend - and households will need continued options. Whether promoting accessibility programs to retrofit homes to age - in -place, developing zoning flexibility to develop Accessory Dwelling Units for caretakers, or tracking the need for continued senior -living options in the community, this demographic represents a large share of specialized housing need moving toward 2050. Unit Demand & Recommendations • • 100 RENTAL DEMAND - LOW ESTIMATE Within the rental market, projections are based on projected household growth, current rates of household tenure for demographics likely to be seeking rental housing, and then focused based on rates of affordability to current residents who rent within the housing market. This demand analysis indicates a slow shift from ownership to renter markets, consistent with changes in rates of tenure over the past decade. Gradual and thoughtful demand -driven outcomes will likely see more a higher percentage of rental units created in an average year than the current overall percentage of renters in the community. The low estimate for rental housing in the next 5 years assumes fewer new units than have been created in the past 5 -year period, and should be treated as a baseline for unit development, not a target that should preclude development when the baseline has been met. New - .- Demand from Household Growth Within the City - Household Growth in Rental Demographics 329 additional households Demographic Renter Rate 370 Demand from New Construction 122 rental units Demand from Existing Resident Households Current Renters in Market 1,162 households Percent of Renters Seeking New Housing 28% Increased Demand from Existing Renters 325 rental units Renters with Preference for New Construction 20% Existing Renter Demand for New Construction 65 rental units Total Demand for New Construction Rental Units = 187 units Affordable Units 50% Mid -Level Units 40% High Market Units 10% New Affordable Demand 93 units New Mid -Level Demand 75 units New High Market Demand 19 units Additional Need for Vacancy 52 units Additional Need for Vacancy 32 units Additional Need for Vacancy 19 units Total Affordable Need 145 units Total Mid -Level Need 107 units Total High Market Need 38 units Total Unit Neer=290 units City of Monticello Housing Needs and Demand RENTAL DEMAND - HIGH ESTIMATE 101 High estimates for rental demand assume continued, strong demand within the market - and matches approximately the same number of units that have been created over the past 5 -year period. This suggests continued demand for development types that have been coming forward in the City, and planning for the trend to continue will allow the City to identify sites and areas through downtown and key corridors. The City can balance market demand for more rental housing with small town character through smart siting and design regulations. This estimate of demand may come to be met if growth pressures increase further than current projections indicate, and developments should be considered based on their own merits and demonstrated need on an annual basis. New - D- Demand from Household Growth Within the City - Household Growth in Rental Demographics 510 additional households Demographic Renter Rate 370 Demand from New Construction 189 rental units Demand from Existing Resident Households Current Renters in Market 1,162 households Percent of Renters Seeking New Housing 280 Increased Demand from Existing Renters 325 rental units Renters with Preference for New Construction 200 Existing Renter Demand for New Construction 65 rental units Total Demand for New Construction Rental Units = 254 units Affordable Units 50% Mid -Level Units 40% High Market Units 10% New Affordable Demand 127 units New Mid -Level Demand 102 units New High Market Demand 25 units Additional Need for Vacancy 54 units Additional Need for Vacancy 34 units Additional Need for Vacancy 20 units Total Affordable Need 181 units Total Mid -Level Need 136 units Total High Market Need 45 units Total Unit Ne = 362 units Unit Demand & Recommendations 104 RENTAL FINDINGS GENERAL CONDITIONS IMPACTING THE HOUSING MARKET: • Recent increase in average household size indicates more households with young children (p. 6) • Aging households are the fastest increasing demographic since 2010 (p. 7) • Aging households will be a significant portion of households through 2050 (p. 10) • Households with children will continue to increase, driving need for larger units (p. 10) • Monticello residents have lower average incomes compared to peer communities (p. 11) • Monticello residents have lower degrees of educational attainment compared to the County (p. 12) • Common occupation groups in the City indicate a need for affordable housing, especially for entry-level positions (p. 14) • Large shares of residents (42% as of 2015) commute into metro counties daily for work. Forty-eight percent of survey respondents indicated Twin Cities or a suburb as place of employment (p. 15) • Housing unit production has not kept pace with new households moving to the area, decreasing vacancy and increasing cost (p. 17) WHAT RESIDENTS WANT: • Housing for young adults and early -career households • Affordable housing for those who work in the community, and higher -amenity options to move up to as income increases • Larger units for families and/or spaces to have an office • Ranges of housing types (structures/sizes) to provide a range of options City of Monticello MAJOR RENTAL MARKET FINDINGS: • There is good geographic distribution of rental units throughout the City (p. 26) • Renter households have been increasing slightly as a total percentage of City households since 2010 (p. 29) • Lower-income households are much more likely to be renters (p. 29) • Rental housing in the City is easily accessible within the region, with good access and amenities (p. 30) • Monticello has the 2nd highest rate of renter households among peer communities studied (p. 30) • Rates of cost burden is much higher for renter than owner households (p. 31) • There are significant housing gaps at both the top and bottom of the rental housing market (low- and high-cost) (p. 32) • There is a lack of units appropriately priced for low-income households already living in the City (265 units), indicating need for subsidized, income -restricted units (p. 32) • Most renters that are housing cost burdened pay more than 50% of their income toward housing costs (p. 33) • There are very few rental options in 2-4 unit structures in the City (p. 36) • New units are needed to bring the vacancy rate back to healthy and balanced levels (p. 39) • 3+ bedroom units will be needed at all price points for projected household growth (p. 40) • Fiber internet is a key rental amenity that is attractive to households throughout the region (p. 41) • Housing subsidies (both local and state/ federal) will be needed to offset increasing construction costs and ensure lower-income households can afford rental costs (p. 44) Housing Needs and Demand RENTAL RECOMMENDATIONS Households in the rental market, as well as local housing experts, have identified a need for middle -cost housing options in the City. Due to a large share of older rental housing stock, there are more affordable options than in other areas of the Metro. However, incomes of many local residents are also below high - market housing cost. Employers are seeing that their growth and employment base needs a middle - ground in the rental market that offers both amenities and reduced unit pricing. TAKE ADVANTAGE OF OPPORTUNITIES FOR TAX CREDIT & SUBSIDIZED DEVELOPMENT Though referred to as "affordable housing", tax credit developments offer new construction at rents that fit within the limits and demand of the community. Local employers are reporting that their workers need a middle -option, often fitting inside income categories for these units. These developments that offer opportunity to increase density in key areas, and can also be utilized for mixed-use developments that provide amenities in central, walkable areas. The City can also directly encourage more affordable rental costs through programs such as Tax Increment Financing. THERE IS A MARKET FOR "LUXURY" HOUSING - BUT THE MARKET IS LIMITED Though there are at least 285 renter households in the City that could afford luxury -unit rents, both data and interviews indicate that the reason these households move to the City is to save on housing cost, as opposed to living in other more central areas with more amenity options. This is especially true for commuter households. While there is potential for an increase in high -market rental housing, the market over the next 5 years is likely capped at one development. CONTINUE TO FOCUS ON UNIVERSAL DESIGN IN CENTRAL AREAS As households continue to age, and many wanting to age in the community, providing a range of options that have accessibility features and follow universal design will promote healthy neighborhoods. This is needed throughout the City, as well as in key walkable central areas that increase access to amenities. Many homeowners who downsize, as well as those with differing levels of ability, live in private market units and prefer walkable areas with access to amenities. ENCOURAGE REHABILITATION, REDEVELOPMENT, AND REINVESTMENT Maintaining housing affordability across a range of incomes is vital for community health - and is one of the reasons that some households choose to live in Monticello in the first place. However, aging housing stock requires upkeep in order to maintain desirability. Many rehabilitation programs offer deferred -loan assistance to landlords of small properties (such as MHFA's Rural Rehabilitation Deferred Loan program). These incentivized loans often come with income restrictions. Though not an immediate solution, increased investment in new unit development in key areas (e.g. downtown), and new unit development in genera can work to relax vacancy in the market, allowing households to select units that meet their balance of affordability & amenity - and structures with rehab needs will require maintenance investment to maintain market share. MAINTAIN A MIX OF BEDROOM SIZES IN NEW DEVELOPMENT Household size is expected to grow in coming years, both in ownership and rental markets. Important to this growth is ensuring households have access to a variety of both new and older stock options that meet their need for family size - and perhaps for home offices as telecommuting becomes more common. In practice, this means incorporating 3 -bedroom units as a significant portion of the rental market, whether in townhome, detached, or multi -unit construction. Encouraging larger unit construction balanced with small unit construction ensures needs of all household types are served through new units. ENCOURAGE MISSING MIDDLE HOUSING Structures with 2-19 units fill a gap that exists in the market, providing more options for residents, and reduced construction costs for development compared to single -unit detached structures. Unit design fits well among both existing and new structures, and will fill in missing unit types. Unit Demand & Recommendations soy io6 AGING HOUSEHOLDS Senior households live in homes in both the rental and ownership markets, but as they continue to age, many need more specialized care or prefer alternate options. Nationally, HUD reports that 930 of medicare -enrollees age 65 and older are already aging in place. This vast majority of the market is remaining in their current housing - staying in non -age restricted housing until life events necessitate a move. Once households do move, many rental options offer combinations of active living, independent living, assisted living, and memory care within the same campus. Within the market, there are several options to help older households find options that work for them: Ensuring a Variety of Options in the Private Market Easing access to Accessory Dwelling Unit construction, whether internal or external to the existing primary residence, helps aging households remain in their home. Some older households design the unit with accessibility standards in mind and look to downsize into it themselves, while other households plan on it as a space for family or a caretaker who can assist them with daily tasks. Ensuring there is access to or developing non -age restricted smaller apartments in more central locations is another method of ensuring older household options in the market. This allows households to live in new construction that has a mix of access and privacy, while still having friends and other households close by. One more option is small lot size development, either in central areas or cottage court communities. These allow both rental and ownership options as households continue to age - as long as the housing is built with aging and universal design in mind (such as patio homes). Active AduLt Housing Active Adult Communities are specially -designed developments with accommodations for aging households in mind. They provide upkeep -free housing, easing maintenance burden. They also often provide a sense of community for others who prefer neighbors their own age, as opposed to smaller and accessible unit options in market rentals. And, they can offer a variety of tenure choices, with many allowing residents to own or lease their housing. Independent Living Independent Living is designed for households who can - and want to - accomplish the majority of daily tasks on their own, but need assistance from time to time. These facilities often are inclusive of food and medical care, as well as other potential on-site amenities such as cleaning, laundry, and general housekeeping. These housing units are operated most similarly to a rental unit - and as amenities go above and beyond typical housing cost, are not subject to the typical 30% affordability standard. Assisted Living Assisted Living is designed to make it easy for residents who need assistance with everyday activities in accomplishing tasks that they would not be able to do in their own homes. This is often provided through scheduled, regular support that runs a spectrum from cooking and cleaning to in -unit medical visits, transportation, and medication management. City of Monticello Housing Needs and Demand 107 SENIOR UNIT TYPE DEMAND Active Adult Housing Demand f rate, active living senior housing comes from those household that prefer this type df unit and can afford it, either because they have sufficient current income or because they have sufficient savings, most often in the form of home sale equity. All households in this demand category, both current and projected, have at least one household member above the age of 55. Many active adult housing communities are age -restricted and become available once a household member reaches the limit (typically 55), while other are not restricted - solely marketing themselves as active adult communities to ensure inclusivity. It is important to note that indicated demand for this market type does not include units that already exist within the market, and should be adjusted accordingly. Market Rate Active Adult Demand Demand 2020 2025 2020 2025 Number of Households with Qualifying Incomes 437 641 Potentially Qualifying Households with Home Sale Equity 110 112 Base Demand 547 753 Unit Type Preference 6.50 6.50 Existing City Resident Demand 36 49 w CiiResident Demand Ney 24 34 Total unit demand 60 units $3 units Subsidized Independent Living Subsidized independent living refers o income -restricted independent living developments. offers opportunity for incom ' ited and fixed-income households to have access to those service continue to age. Demand is calculated by measure of fixed- and income -restricted households without the potential for home sale equity. This is then adjusted to the average percentage of households who prefer or need to live in this style housing in 55+ age categories. It is important to note that indicated demand for this market type does not include units that already exist within the market, and should be adjusted accordingly. Subsidized Independent Living Demand 2020 2025 Number of Households with Qualifying Incomes 493 548 Base Demand 493 548 Unit Type Preference 12.5% 12.5% Existing City Resident Demand 62 69 New City Resident Demand 30 34 Total unit demand 92 units 103 units Unit Demand & Recommendations 108 SEM-aR UNIT TYPE DEMAND Market Rate Independent Living Market Rate independent living ers to non -income restricted independent living developments. T is er-income senior households and those with potential home sale equity to have access to required services as they continue to age. It is important to note that indicated demand for this market type does not include units that already exist within the market, and should be adjusted accordingly. Market Rate Independent Living Demand 2020 2025 Number of Households with Qualifying Incomes 219 246 Potentially Qualifying Households with Home Sale Equity 74 84 Base Demand 293 3300 Unit Type Preference 10% 10 Existing City Resident Demand 29 33 New City Resident Demand 18 22 Total unit demand 47 units 55 units CMarket Rate Assisted Living a ' ted liv' assisted living development for households with a higher - income or access to potential home sale equity. Demand is calculated by measure of income - qualified households, as well as potentially qualifying household with access to home sale equity. This is then adjusted based on the local number of single -person senior households in Monticello, and filtered by the estimated percent of households who can continue in-home care as opposed to assisted living. It is important to note that indicated demand for this market type does not include units that already exist within the market, and should be adjusted accordingly. Market Rate Assisted Living Demand 2020 2025 Persons in Need with Potential Home Sale Equity 368 480 Percent of Households with Qualifying Incomes 41% 41% Number of Income Qualified Households 221 221 Base Demand 370 416 Demand from Current Single Person Households 167 187 Demand from Current Two Person Households 204 229 Unit Type Preference/Need 400 400 Existing City Resident Demand 148 166 City Resident Demand 60 76 'Total unit demand 1 208 units 242 units City of Monticello Housing Needs and Demand DATE: September 30, 2021 TO: Rachel Leonard, City Administrator City of Monticello FROM: Susan Brower Minnesota, State Demographer SUBJECT: 2020 Census Population and Household Counts Here are the April 1, 2020 counts from the U.S. Census Bureau: Total Population: 14,455 Household Population: 14,300 Group Quarters Population: 155 Total Housing Units: 5,664 Occupied Housing Units (Households): 5,485 Vacant Housing Units: 179 These data are provided as a courtesy by the State Demographic Center. The State Demographic Center cannot make any changes to these numbers. Questions about the accuracy or quality of these numbers should be directed to the Census Bureau. If you have any questions or comments about using or interpreting these counts, the State Demographic Center is here to help. Please contact the State Demographic Center by mail at 300 Centennial Office Building, 658 Cedar Street, St. Paul, MN 55155, phone (651) 201-2474 or send an e-mail to local.estimates(a,state.mn.us. IEDC Agenda: 09/06/22 6. Project Update Block 52 Redevelopment: The Block 52 redevelopment site land sale transaction is expected to occur on September 8 or 9, 2022. The developer plans to begin demolishing buildings on September 14, or 15, 2022. The construction timeline for the $26,000,000 development is about 20 months, placing the completion date in early June 2024. When completed, the development will bring online 87 new market rate residential apartment units and almost 30,000 square feet of ground floor commercial (office -retail) space. The developer has been in discussions with several restaurant operators. The goal is to have a restaurant occupy the northeast end of the building which features an outdoor patio overlooking West Bridge Park. A total of 53 new jobs are expected to be generated by the development (by the new businesses that locate in the building). Suburban Manufacturing Expansion: The EDA land sale to Suburban Manufacturing was finalized in mid-July. A small parcel of EDA owned property in Otter Creek Business Park was conveyed to Suburban Manufacturing which will allow the firm to construct a 21,400 square foot addition onto its 43,840 square foot facility. Excavation activities are expected to begin at the site in late September 2022. Construction of the new building is planned for spring 2023 with completion by late summer 2023. Suburban Manufacturing is involved engineering and manufacturing critical functional and safety products used in fluid power -hydraulic equipment and machinery. The specific industrial sectors that utilize their products include: Construction, Agricultural, Transportation, Industrial and Utilities. Date of Contact 6/22/2017 5/22/2018 11/29/2018 3/28/2019 5/9/2019 8/16/2019 1/20/2020 8/27/2020 30-22 11/5/2020 2/16/2021 3/19/2021 PROSPECT LIST 09/02/2022 Company Name Business Category Project Description Project #6580 Metal Mfg. New Facility Constr. Karlsburger Foods Food Products Mfg. Facilty Expansion Project Blitzen Precision Machining Exist Bldg or New Const. Building -Facility Retained lobs New lobs Total Investment Project Status 70,000 sq. ft. 0 49 $5,480,000 On Hold 20,000 sq. ft. +/- 42 10 to $4,500,000 On Hold Project Panda v3 20 New Construction _ 12,000 sq. ft. 10 $1,200,000 Concept Stage Project Nutt Co -Working Space Existing Building ? ? Project FSJP Light Mfg -Res. Lab New Construction 20,000 sq. ft. 0 Project Jaguar Office New Construction 22,000 sq. ft. 22 Project Panda v3 Service -Child Care New Construction 10,500 sq. ft. 0 Project Nuss Combo Service -sale New Construction 30,000 sq. ft. 0 Project TDBBST Industrial New Construction 10,000 to 15,000 sq. 0 21 $12,000,000 Concept Stage ft. Project Flower Office Existing 7,000-8,000 sq. ft. 0 Project Cold Industrial -Warehouse -Di New Construction 80,000 sq. ft. 0 stri Project Orion Warehouse-Distributi New Construction 832,500 sq. ft. 0 on ? ? Concept Stage 20+/- $1,400,000 Active Search 4 $2,700,000 Active Search 21 $4,100,000 Active Search 20 to $3,500,000 Almost Done 30 9 $1,850,000 Concept Stage 12 $750,000 Concept Stage 21 $12,000,000 Concept Stage 500 $125,000,000 Active Search 2/28/2022 Project Emma II Light Ind -Assembly New Construction 20,000 sq. ff. 0 4 $1,350,000 Active Search 6/16/2021 Project UBAA Child Care Services New Construction or Exist 5,000 sq. ft. 0 14 to 19 $2,000,000 Act Search 6/30/2021 7/29/2021 10/28/2021 Project Ecosphere Industrial Tech Mfg. New Construction 1,000,000 sq. ft. 0 1122 $85,000,000 Act Search Project BA710 Lt Assem-Distribute New Construction 6,500 to 7,000 sq. ft 0 10 $650,000 Active Search Project Stallion Technology Service New Construction WW000 sq� � $3,600,000 Active Search 2/7/2022 Project Shepherd III Lt Assembly Distribution New Construction 75,000 sq. ft. 4/28/2022 Project Cougar Precision Machining -Mfg. New Construction 35,000 to 45,000 sq. ft. 75 $10,500,000 Active Search 38 $4,700,000 Active Search 8/11/2022 Project Sing Precision Machining New Construction 400,000 sq. ft. 0 500 $90,000,000 Active Search Contacts: M = 03 YTD = 21 AGENDA REGULAR MEETING - MONTICELLO PLANNING COMMISSION Tuesday, September 6, 2022 - 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners: Paul Konsor, Andrew Tapper, Alison Zimpfer, Eric Hagen and Teri Lehner Council Liaison: Charlotte Gabler Staff: Angela Schumann, Steve Grittman (NAC), Hayden Stensgard, and Ron Hackenmueller 1. General Business A. Call to Order B. Consideration of Accepting the Resignation of Commissioner Alison Zimpfer C. Consideration of approving minutes a. Regular Meeting Minutes —August 2, 2022 D. Citizen Comments E. Consideration of adding items to the agenda F. Consideration to approve agenda 2. Public Hearings A. Consideration of an Amendment to the Spaeth Industrial Park Planned Unit Development as Related to Building Design Applicant: Ken Spaeth B. Consideration of a Conditional Use Permit for Detached Accessory Structure— Major in an R-1, Single Family Residence District Applicant: Wes Olson C. Consideration of a Conditional Use Permit for Home Occupation for a proposed dog daycare as an Accessory Use in the R-1, Single Family Residence District Applicant: Tim & Jessi Ingle - APPLICATION WITHDRAWN 3. Regular Agenda A. Consideration of Community Development Director's Report 4. Added Items 5. Adjournment