City attorney: Affordable apartments plan illegal
A proposed Milwaukee ordinance forcing downtown area apartment developers to include affordable units in their new projects is illegal, according to a city attorney’s opinion.
The new proposal, sponsored by eight of the Common Council’s 15 members, was to be reviewed at Tuesday’s Zoning, Neighborhoods and Development Committee meeting.
It has been removed from that agenda. That could give the plan’s sponsors time to make changes in response to the opinion issued this week.
The ordinance would require any new development with at least 20 apartments “in the greater downtown area” to set aside 10% of those units at affordable rents. That area would include the Historic Third Ward and parts of the east side and Walker’s Point.
The developer would have the option of instead paying $125,000 for each required affordable unit to the city’s housing trust fund.
Finally, if a developer receives direct financial assistance from the city, the project would instead be required to provide 20% of the apartments at affordable rents, or pay the housing trust fund fee.
The affordable units would be for people earning no more than 60% of the area’s median income. The rents would be below-market, following rules set by the U.S. Department of Housing and Urban Development.
The ordinance is a response to the downtown development boom, and the stagnant or declining property values in other Milwaukee neighborhoods, say its sponsors.
But it would be illegal under a state law that prohibits local communities from regulating rents, according to the city attorney’s opinion.
A 2006 Wisconsin Court of Appeals ruling said a similar Madison ordinance was illegal, the opinion said.
However, it is legal for cities to require affordable apartments in return for developments receiving direct financial assistance, the opinion said.