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TIF rule change removes LMI requirement, staff says it widens housing options
Summary
Participants were told that removal of the low-to-moderate-income (LMI) constraint from the TIF factor will allow tax-increment financing to support a broader set of housing projects; many changes take effect Jan. 1 and council will need to declare projects and adjust urban renewal boundaries first.
Derek told the group that state changes to the tax-increment financing (TIF) rules remove the low-to-moderate-income (LMI) constraint from the TIF factor, which "basically means TIF can be used as any other project for housing." He said most changes take effect Jan. 1 and the city will need to act before that date on a few matters.
Why it matters: Removing LMI from the TIF factor expands how TIF revenue can be applied, potentially allowing the city to use TIF for a wider range of housing projects than previously permitted. Derek said the change "opens it up unexpectedly in a good way."
What officials said: A committee member added that "previously, they were only available for low to moderate income housing," underscoring the change from the earlier constraint. A staff member explained the immediate administrative steps: between now and Jan. 1 (and possibly Dec. 1) council will see items to formally declare projects in urban renewal areas, adjust some urban renewal boundaries and set up repayment structures so the city can receive project repayments.
Next steps: No formal vote or ordinance was taken at the meeting. Staff signaled that several agenda items will appear in coming weeks to allow the city to designate projects and revise urban renewal area boundaries before the rule changes take effect.
