Inclusionary zoning requirements

Information on inclusionary zoning requirements and the Unified Housing Policy in the City of the Minneapolis.

Guided by the Minneapolis 2040 Comprehensive Plan, inclusionary zoning aims to create mixed-income communities by requiring affordable units within new housing developments. Full details of inclusionary zoning requirements and options may be found:

A summary of the current policy requirements follows below. For questions or additional information please contact staff.

Rental units

Effective January 1, 2020, developers submitting new land use applications for residential rental projects with 20 or more units must choose an on-site compliance option or an alternative compliance option.

On-site compliance options:

  • Provide 8% of units affordable at or below 60% Area Median Income (AMI) for 20 years, with no City financial assistance or
  • Provide 4% of units affordable at or below 30% AMI for 20 years, with no City financial assistance or
  • Seek City Revenue Loss Offset financial assistance from the City, in which case 20% of the units must be affordable at or below 50% AMI for 30 years.

Alternative compliance options:

  • Pay an in-lieu fee or
  • Produce the required units off-site or preserve existing affordable housing, within a ½ mile of the market rate project, subject to additional conditions and City Council approval or
  • Donate land to the City, subject to additional conditions and CPED Director approval.
     

Onsite affordability requirements for projects with 20-49 units will be phased in over time. Projects of 20-49 units are exempt from the above requirements until 6 months after the first 500 units in 20-49 unit projects have been approved and permitted (see Policy Implementation Diagram in the FAQ section below)

The number of required affordable units for projects with less than 100 units is scaled based on the number of units (see Inclusionary Zoning Scaling Table for Smaller in FAQ section below).

Residential projects in the University Overlay District have additional rent and student eligibility considerations.

For sale units

Starting six months after the first 500 for-sale units have been approved and permitted per the Inclusionary Zoning Ordinance, at least 4% of the units must be occupied by households with an income at or below 80% AMI and priced to be affordable to households earning 70% AMI for 20 years. This requirement will be scaled up to 8% of units after the first 1,000 for-sale units have been approved and permitted.

Beginning June 1, 2020 additional compliance alternatives will become available:

  • Pay an in-lieu fee
  • Produce the required units off-site or preserve Naturally Occurring Affordable Housing (NOAH), within a ½ mile of the market rate project, subject to additional conditions. These options require City Council approval.
  • Donate land to the City, subject to additional conditions. This option requires CPED Director approval.

Frequently asked questions and other supporting materials

What is affordable housing under inclusionary zoning?

Rental units

2021 maximum rents

Rent Limit Efficiency 1BR 2BR 3BR 4BR
30% AMI $551 $590 $708 $818 $912
50% AMI $918 $984 $1,181 $1,363 $1,521
60% AMI $1,102 $1,181 $1,417 $1,636 $1,825

Source: Minnesota Housing 2021 Multifamily Rent & Income Limits

Note that the maximum rent limits may be reduced based on utility allowances  for tenant-paid utilities.

2021 income limits

% of Area
Median
Income
Number of People
1 2 3 4 5
30% AMI $22,050 $25,200 $28,350 $31,450 $34,000
50% AMI $36,750 $42,000 $47,250 $52,450 $56,650
60% AMI $44,100 $50,400 $56,700 $62,940 $67,980

Source: Minnesota Housing 2021 Multifamily Rent & Income Limits

For sale units

Information about affordable ownership unit maximum sale prices and income limits will be posted after the first 500 for-sale units have been approved and permitted per the Inclusionary Zoning Ordinance.

Read here for additional background and history of inclusionary zoning policy development.

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Contact us

Community Planning & Economic Development (CPED)

Phone

612-673-5095

Address

Public Service Building
505 Fourth Ave. S., Room 320
Minneapolis, MN 55415

Inclusionary Zoning

Community Planning & Economic Development

 

Phone

612-673-5175

Address

Public Service Center
505 Fourth Ave. S., Room 320
Minneapolis, MN 55415