Sponsor: Community & Economic Development
Title
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Obligation of Housing and Redevelopment Authority Levy for Wealth Generation Initiatives
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Recommendation
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1. Approve the obligation of Housing and Redevelopment Authority levy towards wealth creation initiatives, including the First Home down payment assistance program in the amount of $2,350,000.
2. Authorize the County Manager to enter into the necessary loans or other agreements and execute amendments to loans or other agreements in a manner consistent with local regulations and requirements, in a form approved by the County Attorney’s Office.
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Background and Rationale
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Homeownership remains a key tool for individuals and families to create wealth and pass wealth on to future generations. Ramsey County residents, particularly racially and ethnically diverse residents, experience barriers to affordable homeownership including high home prices, high interest rates as well as disparities in income, employment and access to capital. Historical barriers to homeownership for racially and ethnically diverse residents was founded on practices such as, “redlining,” restrictive covenants and the destruction of neighborhoods in the urban renewal era. The historic exclusion of residents from homeownership threatens the region’s economic growth and well-being.
Ramsey County’s Economic Competitiveness and Inclusion Plan lays out strategies to “ensure place-based inclusion and create resilient and equitable communities.” To actualize this goal Ramsey County aims to “expand affordable homeownership opportunities and improve housing stability for communities that have experienced historic wealth extraction.”
Since the 2022 addition of the first-generation model to the Ramsey County’s existing down payment assistance (DPA) program, there has been a steady increase in the number of DPA loans to eligible homeowners. Additionally, the first-generation model has been so well received that three other partner organizations, including Minnesota Housing, have implemented their own first-generation programs. In the period between December 1, 2023, to April 30, 2024, Ramsey County approved 21 loans with:
• 81% of borrowers being racially or ethnically diverse.
• 90% of borrowers qualifying as first-generation buyers.
• An average homebuyer income at 71% of the area median income.
First Home policies and procedures are adjusted annually to create a more efficient process and better match the demand for funds with eligible homebuyers. Adjusted policies and procedures will further ensure that Ramsey County is assisting those buyers most in need and increase the number of homebuyers that are served.
Additional HRA levy funds dedicated to wealth generation initiatives will allow staff to continue the success of programs like First Home and connect eligible buyers to other homeownership opportunities.
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☒ Opportunity ☐ Accountability
Racial Equity Impact
Ramsey County experience large racial disparities in homeownership. According to Ramsey County’s 2022 Community Indicators, approximately 69% of non-Hispanic White households own a home, 47% of Asian households, 41% of Hispanic/Latino households, 38% of American Indian households and 20% of Black/African American households. The gap between White households and Black/African American households is 49 percentage points and is a main contributor to the racial wealth gap. In addition, renters, who are more likely to be racially/ethnically diverse, are also more likely to be cost-burdened by their housing costs.
Wealth creation initiatives, like the First Home DPA program, are one tool to help undo these disparities. CED tracks borrowers by race and ethnicity and aims to increase the number of diverse borrowers. Additional investments in the housing supply of owner-occupied units are needed to further reduce these disparities.
Community Participation Level and Impact
CED staff actively and regularly engage with residents, lenders, real estate agents, community groups and city staff to promote housing programs like First Home. Staff will continue to partner with staff from other local and state agencies as they implement new DPA programs that can be layered with First Home funds. This will ensure maximum wealth creation opportunities across the entire county.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
The 2024 HRA levy has approximately $11,061,000 available for eligible housing and redevelopment projects and programs. $2,350,000 of the $11,061,000 will be used for wealth generation initiatives including the First Home downpayment assistance program. The remaining funds available for programming will go towards recommended projects from the 2024 Housing Development Solicitation, the Emerging and Diverse Developers program, and existing redevelopment programs like Critical Corridors.
Last Previous Action
On December 12, 2023, the Ramsey County Housing and Redevelopment Authority approved $1,100,000 of levy funds towards wealth creation initiatives, including the First Home down payment assistance program (Resolution H2023-016).
On April 4, 2023, the Ramsey County Housing and Redevelopment Authority allocated $1,500,000 of the levy towards wealth generation initiatives including the First Home downpayment assistance program (Resolution H2023-005).
Attachments
None.