The Eden Prairie City Council has directed city staff to make tax-increment financing (TIF) a part of the final-approval documents for The Ellie apartment project proposed along Eden Prairie Road at Lincoln Lane.
The decision Feb. 8 ensures that the financing tool, frequently used by cities – including in Eden Prairie, for several other apartment projects – will increase the number of apartments with lower rents, part of a broader effort to meet affordable-housing goals in the metro area.
Using TIF, a city diverts a portion of a project’s increase in property taxes to support a public improvement, in this case lower-than-market rents for 60 of The Ellie’s proposed 239 units. Forty-eight units would be affordable to residents earning at or below 50 percent of the Area Median Income (AMI), while an additional 12 units would be affordable to residents earning at or below 80 percent of the AMI. The remaining 179 units would be market rate.
Most of those lower rents would expire at the end of the TIF project, in 26 years, with a smaller number extending into perpetuity.
Final city council approval of the financing and the project overall are scheduled for March 1.