Brooklyn Park’s affordable housing stock including hard-to-find deeply affordable units is about to get bigger with help from a multiphase project that will offer hundreds of new apartments for low- and moderate-income renters.
And in an unusual twist, the project could be a case study of sorts on the impact of prevailing wage requirements on affordable housing projects.
St. Paul-based Real Estate Equities and Big-D Midwest announced this week that construction is underway on the 175-unit first phase of Decatur Landing, a 100% affordable housing development at the southwest corner of Highways 169 and 610.
Meanwhile, plans are heating up for the next round of construction. On Monday, the Brooklyn Park City Council will hold a public hearing on a proposal to issue up to $50 million in conduit housing revenue bonds for construction of another 175 units in the second project phase.
Kim Berggren, Brooklyn Park’s community development director, said Thursday that phase two is just getting its financing pulled together.
Cory Schubert, president of Big-D Midwest, the project’s general contractor, said the two buildings will “mirror one another” from a construction standpoint.
But there’s at least one notable difference: Unlike the first project phase, the second building will be subject to a prevailing wage requirement. A prevailing wage agreement is included in the developer’s funding agreement with the city’s Economic Development Authority, Berggren said.
The City Council is also considering a prevailing wage ordinance for all city-funded projects in Brooklyn Park, Berggren said, adding that a second reading for the ordinance is scheduled for Monday night.
Prevailing wage is a hot-button issue at the Minnesota Legislature, where lawmakers are considering a similar requirement for certain affordable housing projects funded with Low-Income Housing Tax Credits or tax increment financing.
Union representatives and others say it’s appropriate to make sure workers are taken care of on publicly supported projects, but critics say the expanded wage requirement would drive up the cost of multifamily housing and discourage housing developers from building in Minnesota.
Adam Hanson, president of the Minnesota and North Dakota chapter of the Associated Builders and Contractors, predicts that the second phase of the Brooklyn Park project will cost “significantly more” thanks to the prevailing wage requirement.
“The proof will be when you look at how much the permits will cost. And that difference will be the new normal statewide” if the state requirement makes it into law, Hanson said in an interview.
Supporters, however, say the requirement would simply ensure that workers are paid the going rate in the local market.
“I would argue, and I think the advocates would argue, that this in fact, does not raise the cost. What we’re doing is just ensuring that there aren’t nefarious ways to undercut the going rate for the workers that are doing this great work,” Sen. Grant Hauschild, DFL-Hermantown, said at a Senate Labor Committee hearing in April.
At Decatur Landing, roughly 5% of the units will be affordable to households at 30% of the area’s median income also known as “deeply affordable” housing. The remaining units will be at 70% AMI (15%) and 60% AMI (80%).
Designed by Kaas Wilson Architects, the project also features in-unit amenities such as walk-in closets and granite countertops and community spaces ranging from an on-site fitness center and a clubhouse to an outdoor play area and grill stations.
Decatur Landing isn’t the only affordable housing project in Brooklyn Park’s pipeline.
Also under construction is the 71-unit first phase of Tessman Ridge, which will include eight efficiency, 12 one-bedroom, 32 two-bedroom, 14 three-bedroom and five four-bedroom units, according to the city.
The Brooklyn Park EDA purchased the site at 6900 85th Ave. N. from Minnesota State Colleges and Universities and sold a portion of the land for the Phase I development to Duffy Development, Sarah Abe, the city’s development project coordinator, said in an email.
Funding sources for Tessman Ridge include Low-Income Housing Tax Credits, a $1.185 million transit-oriented development grant, tax increment financing from the EDA and more.
RELATED: Real Estate Equities plans 356 affordable units in Brooklyn Park
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