The city of Plymouth unveiled the final draft of its moderate-income housing policy, which aims to increase the production of housing units in the city available to residents making less than the area median income.

Under the proposal, all types of new housing receiving financial assistance from the city would need to reserve 10% to 20% of units to be affordable, moderate-income dwellings, depending on the affordability standard. All units would need to retain the same construction requirements and interior finishes of market-rate construction.

These requirements would be in place on these units for 25 years after construction.

In its comments, Housing First Minnesota said that structurally, the policy appears to result in a regulatory taking that opens the city to potential legal challenges from property owners and project applicants. The association explained the only way to meet this is to have the other housing units absorb the costs of these units, raising housing costs on all other new residents.

“There seems to be a belief that government can mandate affordability while still mandating high construction and development costs,” said Nick Erickson, senior director of housing policy for Housing First Minnesota. “Government cannot mandate affordability without also offering regulatory relief to help get projects to the desired price point.”

Housing First Minnesota said that more effective approaches would be to work with developers and builders on ways they can reduce construction costs to enable these units to be more affordable. Specific proposals included waiving park fees for projects, reducing parking requirements or reducing other land dedications, fees or other exactions common in the development process.

The city of Plymouth met Sept. 22 to take additional public comments on the policy.