Relato Bloomington apartment complex will pay $1,040,000 to the city Housing Development Fund after the developer and city officials said they can’t fill workforce housing they agreed to set aside before its construction.
The Bloomington City Council narrowly approved, 5-4, the payment in lieu after a third reading Wednesday.
"I’m really, really frustrated about developers promising one thing and delivering another,” Council President Hopi Stosberg said at the meeting.
Under the original terms of the planned unit development adopted by the council in 2020, the developer agreed to set aside 15% of their units — 52 total — as workforce housing.
Workforce housing is available to households between 80-120% of the area median income. Those are people whose income falls above eligibility for affordable housing but below market-rate housing, according to Bloomington Housing Resources.
In 2024-25, a single person household at 80% AMI would earn $50,600 per year, according to the U.S. Department of Housing and Urban Development. A single person at 120% AMI would earn $75,960 annually.
Housing and Neighborhood Development Director Anna Killion-Hanson said at the meeting other requirements include working at least 35 hours per week and not being on a parent’s Free Application for Federal Student Aid.
In 2023, when Relato was completed, it only leased 17 workforce housing units, Tom Jasin, representative from property owner Bloomington SPCW JV, said. Relato signed eight more in 2024, for a total of 25. Jasin said they worked with HAND to also qualify 17 of those renters under 80% AMI, as well.
Jasin said at the ordinance’s second reading Jan. 22 that the rest of the complex, which has around 180 market rate units, was about 95% occupied.
Under the terms of the agreement, Relato will allow the 25 tenants to renew their leases if they remain eligible for workforce housing.
The council made the in-lieu payment option more viable for development incentive agreements in June 2022, after the Relato’s agreement, Development Services Manager Jackie Scanlan said.
The in-lieu payment, totaling $20,000 per unit, will go to the Bloomington Housing Development Fund. Killion-Hanson said the fund currently has around $4 million and in 2025 will be used for pilot programs like tenant-based rental assistance and eviction prevention.
“We have a housing problem,” Killion-Hanson said. “I’m trying to get people housed now, not in two years. With that payment in-lieu, we can take it, we can house those that are most at need.”
She said though workforce housing has been successful in smaller batches, larger complexes that may be furnished and give off the perception of student housing have struggled. Another complex, The Standard, has 140 vacancies.
According to its zoning commitment, she said, The Standard only needs to market its workforce housing for six months before turning them to the market rate.
Killion-Hanson said the AMI target would need to come down to reach the Bloomington workforce.
“Our wages are not in line with our housing prices currently,” she said.
Relato’s original affordable housing commitment was for 99 years. Councilmember Matt Flaherty, who voted against the ordinance, questioned whether the in-lieu payment would bring as much value to addressing housing affordability as keeping the workforce housing.
Several councilmembers emphasized a need for more mixed-income housing in Bloomington. Kate Rosenbarger, who voted against the ordinance, said she worried about signaling that developers can rework already established plans.
Councilmember Isak Asare said he doesn’t think the rules in the Unified Development Ordinance are designed correctly but does not want to start a precedent of renegotiating what’s in paper at the council.
Relato at first marketed itself to young professionals, like those at IU Health’s Regional Academic Health Center, according to a 2021 Herald-Times article. In the 2020 PUD approval, developers said the property would be “multi-family residential use.”
Jasin said Wednesday the Relato has a wide range of tenants but doesn’t “shy away” from the fact that some are students.
Stosberg, who voted against the ordinance at the planning commission meeting in December and again Wednesday, criticized the developer for seemingly going back on how Relato was promoted to the council and community by becoming a student-centric complex.
“And so, I feel like a yes vote on this is also just a capitulation to developers that you can come in and you can sell us whatever you want to sell us, and they’re going to build something different,” Stosberg said. “And that just is really, really frustrating and infuriating.”
Sydney Zulich, who voted for the ordinance, said students are not a monolith and can be in financial situations that require workforce housing.
Asare said the $1 million provides some immediate benefits, but the ordinance is also a call to action for the council to make changes to the UDO relating to workforce housing going forward.
