Bloomington explores co-living to boost affordable housing

Bloomington explores co-living to boost affordable housing

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Like other metro area cities, Bloomington is making progress on its affordable housing goals. But adding more deeply affordable dwellings — those within the reach of households at 30% of the area’s median income — has been a tougher nut to crack.

To fill that gap in its housing stock, the city is considering ways to create more flexibility in its zoning code to allow the development of dorm-style housing units — also known as “co-living” or “single room occupancy” spaces — with shared kitchen, bathroom and common areas.

The idea is to encourage private development of deeply affordable housing without the steep public subsidies that usually come with that type of construction, city officials say.

Monday night, the Bloomington City Council reviewed potential ordinance language that would apply to co-living spaces. Considerations run the gamut from parking and minimum square footage requirements to the definition of “family” as it relates to housing.

No specific projects have been proposed in Bloomington, but the city envisions a scenario where co-living units could be carved out of an existing building or built from the ground up, Nick Johnson, Bloomington’s planning manager, said in an interview.

“This use type is a little bit on the leading edge or untested in the Minnesota market, so we’re trying to gather more information in the Twin Cities region as to what might be feasible,” but also “looking at other regions around the country where some of these uses have been more readily created,” Johnson said.

Co-living space isn’t a new concept.

As Finance & Commerce reported, a study released last fall by architecture firm Gensler and The Pew Charitable Trusts showed how office buildings in Denver, Seattle and Minneapolis, could be “repurposed” to create low-cost, dorm-style housing.

The study revealed, among other things, that about 313 studio apartment units could be built for every $100 million in public subsidies, while that same amount of funding could create 1,157 “adaptive-reuse co-living spaces.”

In 2021, a task force of city officials, planners, architects and builders in Hennepin County studied the potential of single-room occupancy units to create more low-cost housing.

A September 2021 report from the task force found that single-room occupancy housing “presents an opportunity to provide basic, dignified, independent housing that is deeply affordable to people experiencing homelessness who can afford modest rents.”

Renovations of existing buildings — such as hotels, motels and office buildings — “likely includes repairs and updates to meet zoning and federal habitability requirements, covering deferred maintenance, and conversions to ‘housing’ units,” according to the report.

Since the report was published, Hennepin County has created 85 units of single-room occupancy housing, Abbie Loosen, a multifamily housing development manager for Hennepin County, said in an interview Tuesday.

“We had purchased some hotels as a pandemic response, and two of those were converted into permanent housing, so we actually have a very small SRO housing program ourselves,” Loosen said. The converted hotels are in Minneapolis and a city zoning update allowed for the conversions, she added.

For its part, Bloomington says it has “recently had great success adding new rental units in the 60% and 50% AMI bands. Providing new units in the 30% AMI band has been difficult given the large financial costs involved in bridging the gap between construction costs and rents.”

“One of the most effective non-financial tools available to cities to encourage deeply affordable units is co-living, which can function as important transitional housing along the housing continuum,” the staff report continues.

Based in part on information from the Pew research, Bloomington Mayor Tim Busse said older office buildings are “perfectly suited” for conversion to co-living spaces.

“They have windows on the outside and all the plumbing in the middle for the restroom facilities and for shared kitchens … [and] an office building would already have parking,” Busse said at the council meeting.

One of the challenges is making sure any new city regulations — such as strict minimum parking or floor area requirements — don’t scare off potential developers.

“I’m just concerned that if we go into this having too high of a standard, sometimes developers just skip your entire city and go to another city where it’s easier to build it,” Busse said.

The council didn’t take any formal action Tuesday, but it agreed to continue the conversation and revisit the issue with a public hearing in April. The planning commission is expected to host a public hearing in March.

RELATED: Co-living spaces pitched as option for office conversions

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