Housing Improvement Area

1. The City of Bloomington and Housing and Redevelopment Authority in and for the City of Bloomington (HRA) staff may provide the applicant’s designated Administrator with an explanation of the policy and process for establishing a Housing Improvement Area (HIA). Staff will provide the criteria for City approval of permanent HIA project financing.
    
2. The applicant submits a complete application which will include the following elements:
   1. Description of the project and how it will meet goals listed in the Bloomington HIA Policy.
   2. Explanation of why HIA financing is necessary and documentation that permanent private financing is unavailable.
   3. Proposed housing improvement project timeline and description of the association’s process.
   4. Petitions in support of the project application provided from at least 65% of association members.
   5. A replacement reserve study (Reserve Study) prepared by an independent third party, with designation as a Community Associations Institute (CAI) certified reserve specialist. The Reserve Study must conform to CAI Reserve Study standards. The components of the Reserve Study must include a thirty-year replacement reserve plan (Reserve Plan).
   6. An independent third party prepared thirty-year reserve plan (HIA Reserve Plan) with the components of the proposed project for housing improvements removed from the Reserve Plan.
   7. An independent third party prepared thirty-year financial plan (Financial Plan) that reflects the annual replacement reserve contributions based on the HIA Reserve Plan. The Financial Plan will provide a plan for the association’s operating budget with cost increases over time to finance maintenance and operation of the common elements within the association and a long range plan to conduct and finance capital improvements therein, that does not rely upon the subsequent use of the HIA tool.
   8. A $5,000.00 non-refundable HIA application fee, as set from time to time by resolution of the City Council. 
   9. Evidence of preliminary approval of construction financing
   10. Copies of the following:
       1. Recorded Association Declaration
       2. Association Bylaws
       3. Audited financial statements for previous two years
          1. If the association has not had the practice of having its annual financial statements audited, then audited financial statements for the immediately preceding fiscal year along with unaudited financial statements for the fiscal year before that.
       4. Certificate of Good Standing from Minnesota Secretary of State
           
3. City and HRA staff review an HIA application for completeness and compliance with policy requirements.
    
4. If preliminary approval is granted by City and HRA staff, the applicant shall submit a deposit of $15,000 for the City and HRA legal and consultant fees and expenses. Additional deposits from the applicant may be required to pay all fees and expenses incurred by the City and HRA.
    
5. City inspection staff visit the site to:
   1. Assess the physical condition of the property to verify that proposed housing improvements are necessary; and
   2. Identify potential housing improvements that have not been included in the scope of work but that are not in compliance with the City code and the HIA property standards.
       
6. The City’s financial advisor reviews the Reserve Study, Reserve Plan, HIA Reserve Plan, and Financial Plan, provides findings, and makes recommendations to be included in the development agreement.
    
7. The proposed housing improvement project’s financial structure will be reviewed by the City’s Chief Financial Officer, Financial Advisor and the legal components will include a review by City and HRA legal counsel.  The review will include a review of performance and level of outstanding debt of any previous HIAs at the same property. If bonds are to be issued, legal and public financing components will be reviewed by the City and HRA bond counsel.
    
8. The City or HRA will draft a development agreement which may include, but is not limited to, the following terms:
   1. 1. Establishment of a reserve fund
      2. Staffing requirements for the proposed housing improvement project
      3. Submission of annual financial statements and other annual reports
      4. Conditions of disbursements
      5. Required dues increases
      6. Notification to new association members of levied fees, to be completed by a specified party
      7. Requirement of multiple bids for proposed housing improvement project construction; and
      8. Assessments, including interest and City and HRA fees
          
9. The HRA Board of Commissioners will review each applicant information, or an appropriate summary thereof, for each HIA application proposed housing improvement project at a public meeting. If approved by the HRA Board at a public meeting, the relevant applicant information will be provided to the City Council for review at a public hearing.
   1. If the HRA Board does not approve an HIA proposed housing improvement project, the applicant may appeal the decision of the HRA to the City Council by submitting a written appeal with supporting materials to the HRA within three business days of the HRA denial.
       
   2. If the HRA Board action results in a tie vote, the HIA proposed housing improvement project applicant information, or an appropriate summary thereof, is automatically sent to the City Council for final action, without an HRA recommendation.
       
10. The City Council schedules a public hearing and notice of public hearing published in the official City publication at least 10 days prior to the meeting. Notice is also mailed to each association member at the same time of publication.
     
11. The City Council holds a public hearing and may adopt an ordinance declaring a Housing Improvement Area and designating the Implementing Entity.
     
12. Notice to association members of fee resolution is mailed within five (5) business days of the City Council public hearing, if an HIA project ordinance is adopted.
     
13. Upon expiration of the statutory 45-day veto period, the applicant finalizes construction financing from a private lender. The private lender and its inspecting agent approve draw requests and monitor the construction process.
     
14. Sixty days after issuance of a certificate of completion and receipt of final lien waivers, the City may issue bonds or notes to satisfy the construction loan.
     

Adopted by the City of Bloomington City Council December 20, 2021

Adopted by the Housing and Redevelopment Authority in and for the City of Bloomington November 23, 2021

1.    PURPOSE

1.01    The purpose of this policy is to establish City of Bloomington and Housing and Redevelopment Authority in and for the City of Bloomington (HRA) conditions for the use of Housing Improvement Area (HIA) financing for privately owned townhome and condominium housing improvement projects. This policy shall be used as a guide in processing and reviewing housing improvement project applications requesting HIA financing. The HRA will accept these applications for review and make a recommendation to the City Council. Requests for the establishment of HIAs will be reviewed in accordance with state law and this HIA Policy.

2.    AUTHORITY

2.01    The City/HRA has the authority to establish HIAs under Minnesota Statutes, Sections 428A.11 to 428.21, as amended. Such authority expires June 30, 2028, unless extended by the legislature.

2.02    Within a HIA, the City has the authority to:
A.    Make housing improvements.
B.    Issue bonds or use other funds to pay for housing improvements.
C.    Levy fees and assessments, including interest.

3.    RESPONSIBILITY

3.01    The HRA has the authority to review each HIA request through an application process, which includes a petition, scope of proposed housing improvements, association’s finances, long term financial plan, and the support of at least 65% of the private property association members, except that in the case of extreme financial burden, the support of at least 85% of the private property association members is required. The HRA Board of Commissioners will review applicant information, or an appropriate summary thereof, for each HIA proposed housing improvement project at a public meeting. If approved by the HRA Board, the applicant information, or an appropriate summary thereof, will be provided to the City Council for review prior to a public hearing before the City Council. If the HRA Board does not approve an HIA proposed housing improvement project, the applicant may appeal the decision of the HRA to the City Council by submitting a written appeal with supporting materials to the HRA within three business days of the HRA denial. If the HRA Board action results in a tie vote, the HIA proposed housing improvement project applicant information, or an appropriate summary thereof, is automatically sent to the City Council for final action, without an HRA recommendation.

3.02    For purposes of this Policy, the term “private property association member” means the housing unit owner.  Such that if one owns more than one housing unit in the housing improvement area, then the owner gets one vote per owned housing unit; and a tenant/occupant of a housing unit that is not also an owner does not get a vote.

3.03    For purposes of this Policy, the term “extreme financial burden” means that the minimum assessment required to finance the housing improvements would be two times (2x) or more than the current assessed value of the unit at the time of HIA application.

4.    ELIGIBLE USES OF HIA FINANCING

4.01    As a matter of adopted policy, the City/HRA will consider using HIA financing to assist private property association members only in circumstances in which the proposed privately owned housing improvement project will address one or more of the following goals:

A.    To promote neighborhood stabilization and revitalization by removing blight and/or upgrading the existing housing stock in a neighborhood.
B.    To correct housing or building code violations and address health and safety violations as identified by the City code enforcement staff.
C.    To maintain or obtain Federal Housing Administration (FHA) mortgage eligibility for a particular condominium or townhome association within the designated HIA.
D.    To preserve or increase valuation and provide for the long‐term maintenance of the property.
E.    To preserve naturally occurring affordable housing.
F.    To stabilize or increase the owner‐occupancy level within a neighborhood or association.
G.    To meet other goals of stated public policy as adopted by the City of Bloomington from time to time, including promotion of quality urban design, quality architectural design, energy conservation, or decreasing the capital and operating costs of local government.

5.    HIA APPROVAL CRITERIA

5.01    In order to be eligible for HIA financing through the City, the association must submit a housing improvement project application and follow the HIA review process set forth in this Policy, along with all required fee(s) as set from time to time by resolution of the City Council. All Housing Improvement Area loans financed through the City of Bloomington must meet the following minimum criteria. A proposed housing improvement project that meets these criteria is not automatically approved. Meeting these criteria creates no contractual rights on the part of an association.

A.    The proposed housing improvement project must be in accordance with the Comprehensive Plan and Zoning Ordinances, or required changes to the Plan and Ordinances must be under active consideration by the City at the time of application.
B.    The HIA financing shall be provided within applicable state legislative restrictions, debt limit guidelines, and City/HRA financial requirements and policies.
C.    The proposed housing improvement project must meet one or more of the above adopted HIA Goals of the City of Bloomington, as noted in Section 4.
D.    The association shall designate an administrator, a separate party with no other financial or legal interest in the proposed housing improvement project, who will be the City’s point of contact throughout the process for HIA financing.
E.    The term of the HIA should be the shortest term possible while still making the annual fee affordable, as to not cause an economic hardship, to the association members. The term of any bonds or other debt incurred for the HIA shall mature in 20 years or less. The City has the sole discretion to determine the source(s) of financing, and sources other than issuing bonds may be used.
F.    Service charges (including, but not limited to, construction/housing improvement project costs, cost of issuance of bonds and other pertinent costs associated with the proposed housing improvement project) will be imposed on the association members in the same ratio as common elements or other such uniform method as proposed by the applicant.
G.    The association applying for HIA must provide adequate financial guarantees to ensure the repayment of potential HIA 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 association’s assets, including reserves, operating funds and/or property.
H.    The proposed housing improvement project, including the use of HIA financing, must be supported, in writing, by at least sixty‐five percent (65%) of the association members, except that in the case of extreme financial burden when the support of at least 85% of the private property association members is required. The association must include with its HIA proposed housing improvement project application, the results of a vote of support by a minimum of 65% of association members (or 85% in the case of extreme financial burden) along with the petitions to create the area.
I.    The minimum housing improvement project cost is $250,000.
J.    The association must have a replacement reserve study (the “Reserve Study”) prepared by an independent third party, with designation as a Community Associations Institute (CAI) certified reserve specialist. The Reserve Study must conform to CAI Reserve Study standards. The components of the Reserve Study must include a thirty‐year replacement reserve plan (the “Reserve Plan”), and the Reserve Study and Reserve Plan must be submitted with the proposed housing improvement project application and will be reviewed by the City’s financial advisor. The association must also have an independent third party prepare a thirty‐year reserve plan (the “HIA Reserve Plan”) with the components of the proposed project for housing improvements removed from the Reserve Plan. The independent third party must also prepare a thirty‐year financial plan (the “Financial Plan”) that reflects the annual replacement reserve contributions based on the HIA Reserve Plan. The Financial Plan will provide a plan for the association’s operating budget with cost increases over time to finance maintenance and operation of the common elements within the association and a long-range plan to conduct and finance capital improvements therein, that does not rely upon the subsequent use of the HIA tool. The HIA Reserve Plan and the Financial Plan must be submitted with the proposed housing improvement project application and will be reviewed by the City’s financial advisor.
K.    HIA financial assistance is last resort financing and will not be provided to proposed housing improvement projects that have the financial stability to proceed without the benefit of HIA financing. Evidence that the association has sought other permanent financing for the proposed housing improvement project must be provided at time of application and should include an explanation and verification that an assessment by the association is not feasible, along with rejection letters from at least two private lenders or other evidence indicating a lack of financing options.
L.    The association shall obtain temporary construction financing from a private lender and the City shall provide a take‐out commitment to the lender, detailing the terms for the payoff of the construction financing. Upon final approval of the housing improvement project and issuance of a certificate of completion, the City will issue bonds or notes to satisfy the temporary construction loan.
M.    The association must be willing to enter into a development agreement, prepared by the City/HRA, which may include, but is not limited to, the following terms:
i.    Establishment of a reserve fund;
ii.    Staffing requirements for the proposed housing improvement project;
iii.    Submission of annual financial statements and other annual reports;
iv.    Conditions of disbursements;
v.    Required dues increases;
vi.    Notification to new association members of levied fees by specified party;
vii.    Requirement of multiple bids for proposed housing improvement project construction; and
viii.    Assessments, including interest and City/HRA fees.
N.    Any project for housing improvements financed through the HIA shall address all items not in compliance with the HIA Property Standards. Items defined within the governing documents of the association as common elements are eligible for HIA financing. Limited Common Elements may be eligible for HIA financing if the costs of proposed project for housing improvements are prorated among association members in the same ratio as common elements or such other uniform method as proposed by the applicant. The proposed components for housing improvement projects must be of a permanent nature and must normally be reflected in the Reserve Study.
O.    HIA financing will not be provided to a proposed housing improvement project that is not in the public interest, as determined by the City, including but not limited to: poor project quality; a project that is not in accordance with the Comprehensive Plan, zoning, redevelopment plans, and City policies; projects that provide no significant improvement to the neighborhood and/or the City; and projects that do not provide a significant increase in the tax base and/or prevent the loss of tax base.
P.    The financial structure of the proposed housing improvement project must receive a favorable review by the City’s Chief Financial Officer, Financial Advisor and the legal components reviewed by City/HRA legal counsel. If applicable, the review will include analysis of performance and amount of outstanding debt related to any previously approved HIA project.
Q.    If bonds are to be issued, legal components will be reviewed by the City/HRA bond counsel.
R.    All rental units within the HIA must be licensed according to Bloomington ordinance.
S.    The City/HRA reserves the right to deny funding for specific components of proposed housing improvement projects if any are determined not to be in accordance with the intent of this Policy.

5.02    The City will receive and process housing improvement area project applications between July 1 and September 1 of each year (“Application Open Period”). Applications submitted outside of the Application Open Period will be considered on a case-by-case basis due to demonstrated unforeseen circumstances.

Revision by the City of Bloomington City Council December 20, 2021; June 3, 2024
Revision by the Bloomington Housing and Redevelopment Authority November 23, 2021; June 11, 2024
 

These City standards provide a basis for assuring that a project meets minimum conditions established by the City. The scope of work for the project must include all items necessary to bring the association into compliance with all property standards. Only items that are the responsibility of the association (as determined by the association bylaws) are subject to these requirements. The following minimum standards are hereby accepted for implementation in the Housing Improvement Area (HIA) Program.

Site

The condition of exterior stairways, walkways, driveways, etc., shall not present a danger of tripping or falling. All sidewalks, walkways, stairs, driveways, parking spaces and similar areas shall be kept in sound and good repair and maintained free from hazardous conditions.

The appearance of the site, after rehabilitation, should make a positive contribution to the general appearance of the association. To this extent, other items identified as deficient (including but not limited to, play areas, exterior lighting, landscaping, signage, and common spaces) should be included as part of the scope of work.

Grass maintenance on private property

Lawns of grass or weeds shall not exceed a height of 8”, or be allowed to go to seed as required in Chapter 10 of Bloomington City Code.

Refuse Storage & Disposal

Refuse, trash, or residential solid waste must be properly stored and collected according to the requirements in Chapter 10 of Bloomington City Code.

Vehicles / Junk Vehicles / Furniture / Household Appliances

Vehicles must be parked or stored on driveways or other approved off driveway areas. It is unlawful to park or store a vehicle that is unlicensed, inoperable, or displaying expired registration tabs outside of a garage. Household furnishings or appliances, unless intended and constructed for outdoor use, must not be stored outdoors.

Fence Maintenance & Paint

All exterior fence wood surfaces shall be protected by paint or other protective surface covering or treatment, which shall be maintained in good repair. No fence section shall have peeling, cracked, chipped or deteriorated surface finish. The fence shall not be leaning or in the stage of collapse; firmly fastened and anchored. In addition, all fences must comply with standards in Section 21.301.08 of Bloomington City Code.

Pool Maintenance / Fence Requirements

All swimming pools and spas shall be City-licensed and maintained according to the requirements of the State Pool Code, MN Rules Chapter 4717 and Bloomington City Code Chapter 14, Article V.

Structure and Materials

The general appearance of the outside of the structure, after rehabilitation, should make a positive contribution to the general appearance of the association.

Surface Condition

No part of exterior surface shall have deterioration, holes, breaks, or loose or rotting siding. All exterior surfaces shall be maintained in good condition and wood shall be protected from decay by painting or other protective treatment.

Paint / Finish Condition

Every exterior surface shall be maintained to avoid noticeable deterioration of the finish. No wall or other exterior surface shall have peeling, cracked, chipped, or otherwise deteriorated finish.

Siding / Masonry Joints Condition

All siding and masonry joints, including joints between the building envelope and the perimeter of windows, doors, and skylights, shall be maintained weather resistant and watertight.

Foundation Walls Condition

All foundation walls shall be maintained so as to prevent the entry of rodents as well as structural stability and intrusion of water.

Roofs & Drainage Condition

Roof structures, including but not limited to: drains, gutters and downspouts, fascia and trim, shall be maintained in good repair. All roof drainage systems shall be attached securely.

Building Projections Condition

Chimney, antennae, air vents, and other similar projections shall be structurally sound and in good repair. Such projections shall be attached securely, where applicable, to an exterior wall or roof.

Window / Door / Light Fixture Condition

Every window, exterior light fixture, skylight, door and frame shall be kept in sound condition; good repair, weather tight, and shall be maintained free from cracks and holes.

Decorative Features Condition

All cornices, moldings, decorative features, lintels, sills, bay or dormer windows, and similar projections shall be kept in good repair and free from cracks and defects which make them hazardous or unsightly.

Stairway & Exterior Safety Conditions

Every exterior stairway, ramp, deck, porch, balcony, etc. shall be kept in sound and good repair, maintained structurally sound and free of hazardous conditions, anchored and capable of supporting the imposed loads for which it was designed.

Handrails / Guardrails Condition

Every handrail and guardrail shall be firmly fastened and capable of supporting normally imposed loads and shall be maintained in sound and good repair and free from hazardous conditions

Building Numbers Require

Buildings shall have approved address numbers placed in a position to be plainly legible and visible from the street or road fronting the property. These numbers shall contrast with their background. Address numbers shall be Arabic numeral or alphabet letters. Numbers shall be a minimum of 4 inches in height with a minimum stroke width of 0.5 inch.

Compliance with other codes/regulations/bylaws

• The completed Rehabilitation must meet the Minnesota State Building Code as well as all other state codes that have been adopted by the City of Bloomington.
• The contractor will be responsible for applying for and fulfilling any and all applicable building and trade permits and meeting the local building codes.
• Lead based paint-all work performed on structures built before 1978 shall be in compliance with the Environmental Protection Agency (EPA) Renovation, Repair, and Painting Rule (RRP).

Various state and federal laws, rules, and regulations and certain other codes are adopted by reference into these Standards.  At least one copy of the adopted item will be kept for public review by the city clerk or the clerk's designee.  Adoption of a state and federal law, rule, or regulation includes any subsequent amendments unless expressly stated otherwise.

Last Updated December 20, 2021