City attorney: mandating affordable housing in all new developments is illegal

Downtown Milwaukee inclusionary zoning proposal put on hold

The Couture

Last updated on May 15th, 2019 at 04:54 pm

Portions of the Milwaukee Common Council’s proposed inclusionary zoning proposal mandating affordable housing units in all new residential development in or near downtown Milwaukee are illegal, according to the city attorney’s office.

The proposed ordinance would require apartment developments between North and Greenfield avenues, east of the freeway, that are creating at least 20 new apartment units to rent at least 10 percent of those units at below-market rents.

The Couture.

If the project is receiving a subsidy from the city, the developers would be required to lease 20 percent of the units at below market rents.

The ordinance would be illegal and unenforceable unless the developer was receiving “direct financial assistance” from the city, according to City Attorney Grant Langley.

For example, the Goll Mansion project at 1550 N. Prospect Ave., a 27-story, 192-unit apartment tower could not be affected by the ordinance since the $55 million project did not receive any city financing.

Most downtown apartment developments in recent years have been done without subsidies.

A major apartment project expected to break ground soon is getting city subsidy. The Couture development, planned near the lakefront in downtown Milwaukee, is a 44-story luxury apartment tower that will have about 312 apartments could, and is getting nearly $20 million in tax incremental financing. The project has been approved, but has not received its building permits yet, which is when the affordable housing requirement would have to be met.

Developer Rick Barrett said he is not concerned about how the affordable housing requirement would affect The Couture project because he expects to pull the building permits soon, before the ordinance would be adopted.

Alderman Robert Bauman, who sponsored the ordinance and received support from seven other aldermen, told BizTimes earlier this week he did so, in part, because of the Goll Mansion project.

“The Goll project was the last straw for me,” Bauman said in a previous interview. “The developer came in with a lot of promises and we saw they were completely unenforceable. This is something that is enforceable. It is not written in stone. We will accept input.”

Bauman said Friday he is working on modifications.

The city’s Housing Trust Fund Advisory Board met about the issue Thursday, but committee chairman Alderman Michael Murphy, who also sponsored the ordinance, tabled the issue in light of Langley’s opinion.

The city’s Zoning, Neighborhoods and Development Committee was set to review the proposal on Nov. 21. That has also been tabled, said Legislative Liaison Jeffrey Osterman.

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