RESO 24-063 - HIA Policy - Housing Improvement AreaRESOLUTION NO. 24-063
A RESOLUTION APPROVING THE GOLDEN VALLEY HOUSING IMPROVEMENT
AREA (HIA) POLICY
WHEREAS, the City Council of the City of Golden Valley (hereinafter “City”) have
elected to provide a Housing Improvement Area (HIA) policy for common interest
communities in the City of Golden Valley; and
WHEREAS, maintaining housing quality is a goal in the 2040 Comprehensive
Plan; and
WHEREAS, the preservation of Naturally Occurring Affordable Housing (NOAH)
within the community is an important component of the City and HRA’s overall affordable
housing goals; and
WHEREAS, the Policy identifies certain goals, eligible uses, and evaluation criteria
that the City and/or HRA intends to require, in connection with the consideration of
potential City and/or HRA approvals for financing of common element housing
improvements of a condominium, townhome, or other common interest community such
as a manufactured home park.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Golden
Valley, Minnesota that this Council adopts the Golden Valley Housing Improvement Area
(HIA) Policy attached hereto as Exhibit A.
Adopted by the City Council of the City of Golden Valley, Minnesota this 15th day of
October, 2024.
____________________________
Roslyn Harmon, Mayor
Attested:
Theresa Schyma, City Clerk
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O FFICIAL C ITY P OLICY
C ITY OF G OLDEN V ALLEY
General Informa�on
Policy Title: Housing Improvement Area (HIA) Policy Department: Community Development
Policy Owner (job �tle): Housing & Economic
Development Manager
Policy ID: 24-XXX
Council & HRA Approval Date: 10/15/2024 Resolu�on Number: 24-XXX
Effec�ve Date: 10/15/2024 ☒New ☐ Updated
Policy Overview
Policy Descrip�on:
This policy is to establish the City and HRA's posi�on rela�ng to the use of Housing Improvement Area (HIA) financing
for private housing improvements.
Purpose & Scope:
This Housing Improvement Area Policy (this “Policy”) establishes the condi�ons under which HIAs may be approved by
the Golden Valley City Council or Housing and Redevelopment Authority (HRA) and provides a framework within
which requests for the establishment of HIAs will be considered.
Defini�ons:
• Associa�on means a homeowners associa�on or similar en�ty.
• Blight or Blighted Area has the meaning given to it in Minn. Stat. § 469.002, as may be amended from �me to
�me.
• Enabling Ordinance means the ordinance adopted by the City Council or HRA establishing the Housing
Improvement Area.
• Housing Improvement Area (“HIA”) means a defined area within the city where housing improvements are made
or constructed and the costs of the improvements are paid in whole or in part from fees imposed within the area.
• Housing improvements has the meaning given in the city's enabling ordinance. Housing improvements may
include improvements to common elements of a condominium or other common interest community or to a
manufactured home park.
• Housing Unit means real property and improvements thereon consis�ng of a one-dwelling unit, or an apartment
or unit as described in chapter 515, 515A, or 515B, respec�vely, or a manufactured home in a manufactured home
park that is occupied by a person or family for use as a residence.
• Naturally Occurring Affordable Housing (NOAH) means exis�ng owner-occupied or rental residen�al housing (a)
where at least 20% of the units are affordable to 60% AMI; (b) that is classified in the Class B or C real estate
categories; or (c) was constructed between 1940 and 1990.
Related Documents, Materials & Resources:
• HIA Procedure and instruc�ons
• HIA Applica�on
• Minnesota Statutes, Chapter 148A
Policy
I. Authority
Pursuant to Minnesota Statutes, Sec�ons 428A.11 to 428A.21, the City of Golden Valley (“City”) and the Housing and
Redevelopment Authority (“HRA”) are authorized to establish HIAs within its corporate limits. Within an HIA the City or
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HRA may lend funds to an Associa�on for the purpose of funding the cost of improvements made to common elements
of their property(s). The City or HRA may lend funds to the Associa�on from either available City or HRA cash or
proceeds from the City or HRA’s issuance of taxable bonds. Loan repayment is accomplished through the imposi�on of
HIA fees on the owners of units included in the HIA.
It is the judgement of the Council and HRA that HIAs shall be created on a selec�ve basis. The City or HRA will consider
the establishment of a HIA only when the applicant can demonstrate a benefit to the public and only on a last resort
basis, when the Associa�on is unable to obtain other financing for needed repairs or improvements.
The Council and HRA consider the crea�on of a HIA to be a privilege, not a right. Although approval for another HIA may
have been granted previously by the City or HRA for a similar project, the Council and HRA are not bound to approve
subsequent requests based on earlier approvals. Each applica�on will be considered separately based on the criteria in
this Policy and the City or HRA’s financial posi�on.
II. HIA Goals and Eligible Uses
The City and HRA will consider using HIA financing to assist private property owners only in those circumstances in which
the proposed private project addresses one or more of the following goals:
A. To promote neighborhood stability and revitaliza�on removal or remedia�on of blight or the upgrading of the
exis�ng Housing Units in the City.
B. HIA Financing shall not be used to remove, displace or disenfranchise communi�es, including, but not limited to
communi�es of color, low socio-economic status, immigrant, and those at the intersec�on of these or similar
iden��es.
C. To correct housing or building code viola�ons.
D. To maintain or obtain FHA mortgage eligibility for an Associa�on within the designated HIA.
E. To increase or prevent the loss of the tax base of the City in order to ensure the long-term ability of the City to
provide adequate services for its resident.
F. To preserve Naturally Occurring Affordable Housing (NOAH).
G. To preserve a variety of housing styles and values within the community.
H. To stabilize or increase the number of owner-occupied Housing Units within a neighborhood or associa�on.
I. To meet other public policy goals of the City Council as adopted from �me to �me, including but not limited to
the promo�on of quality urban design, quality architectural design, energy efficiency or conserva�on, or
decreasing the capital or opera�ng costs of the City.
III. Evalua�on Criteria
The City and HRA will only consider establishing a HIA if all of the following criteria are met:
• The project is compliant with the City’s Comprehensive Plan, zoning ordinances, City code and state and federal
laws, regula�ons and policies.
• The project meets one or more of the HIA goals listed in sec�on II herein.
• The HIA financing complies with all applicable City financial policies.
• The HIA funds will not provide 100% of the funding for the Associa�on’s long range replacement schedule and
the Associa�on is also contribu�ng its own current and future funds to the project.
• The association must have a third party conduct a facility needs assessment to determine and prioritize the
scope of improvements. The association may be required to make changes to its bylaws to ensure
adequate enforcement authority to protect common area improvements financed through the HIA from
substandard building components for which the homeowner is responsible.
• The association must adopt a financial plan that has been prepared by an independent third party with
designation as a Community Associations Institute (“CAI”) certified reserve specialist which must conform
to CAI reserve study standards and comply with Minnesota Statutes 515B.3-114 through 515B.3-1141.
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• The Associa�on has explored all other funding sources and has provided evidence that none are feasible. HIA
financing is last resort financing and shall not be provided to projects unless no other financing op�ons are
available. The Associa�on must provide at least the following to show that no other financing op�ons are
available:
o Verifica�on that the Associa�on has completed an assessment showing that no other financing op�ons
are available; and
o Leters from at least two private lenders confirming a lack of financing op�ons.
• The term of any bonds or other debt incurred for the HIA mature in 20 years or less. The term shall be
determined by the City or HRA in its sole discre�on.
• The HIA financing is structured so that it is paid in the shortest term possible while remaining affordable for
Associa�on members.
• The Associa�on enters into an agreement with the City or HRA (the “Development Agreement”) that requires, at
a minimum, the following terms:
o Establishment of a reserve fund
o Staffing requirements
o Annual repor�ng and financial audi�ng requirements with regular updates to the financial plan not less
than once every five years
o Condi�ons of disbursement
o Required dues increases
o No�fica�on to new owners of levied fees, including the individuals that purchase property a�er the
ini�al development
o Limita�ons on prepayment of fees, if any
o Minimum number of bids to be submited for the project work
o Development and construc�on plans rela�ng to the project
o Hiring of a construc�on manager and/or owner’s representa�ve to monitor performance of the general
contractor
• The Associa�on provides the City or HRA adequate financial guarantees to ensure the repayment of the HIA
financing and its performance of all its obliga�ons in the Development Agreement. Financial guarantees may
include, but are not limited to, the pledge of the Associa�on’s assets, including its reserves, opera�ng funds or
property.
• The project, including the use of HIA financing, is supported by a majority of the owners within the Associa�on.
The Associa�on shall provide official verifica�on of the results of a vote of the Associa�on’s membership.
• The Associa�on has adopted a financial plan that provides sufficient financing for the con�nued maintenance
and opera�on of the Associa�on’s common elements and a long-range plan to complete and finance capital
improvements therein. Said financial plan shall not rely on HIA financing.
• All improvements financed by the HIA are solely to the Associa�on’s common elements, as that term is defined
in Minnesota Statutes, Chapter 515B, and are primarily exterior improvements and other improvements integral
to the habitability of the building, for example, boilers, HVAC, structural improvements and the like. All
improvements must be permanent in nature and the scope of improvements must be determined and
documented by a facility needs assessment conducted by a third party.
• The project must:
o Provide significant improvement to the HIA;
o Comply with all applicable federal, state and local laws, regula�ons, and policies;
o Provide a significant increase to the tax base or prevent the loss of tax base; and
o Not be of poor quality.
• The financial structure of the project must receive a favorable review by the City’s Finance Director, or their
designee, the City’s Municipal Advisor, and the City’s Bond Counsel. The review must include a review of the
performance and level of outstanding debt of previous HIAs.
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• The association shall provide adequate financial guarantees to ensure repayment of the financing and the
performance of the administrative requirements of the development agreement. Financial guarantees may
include but are not limited to the pledge of the homeowner association’s assets including reserves,
operating funds and/or property.
• The Associa�on must be current on all charges, fees, taxes, special assessments and other debts and obliga�ons
payable to the City and HRA.
IV. Other Provisions
• The Associa�on shall submit the required applica�on, along with all required suppor�ng documenta�on,
including a pe��on signed by at least 60% of the property owners of the Associa�on, prior to any City or HRA
review. Coordina�on and partnering with other lending agencies to finance the Improvements is allowed and
encouraged.
• The City Council will establish an applica�on fee , which shall be included in the City’s fee schedule.
• HIA is responsible to pay all City third party consul�ng costs, including but not limited to Municipal Advisor and
Bond Counsel rela�ng to the review of the feasibility of the HIA and dra�ing of all legal documents related to
establishment of the HIA.
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