Sponsor: Community & Economic Development
Title
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Obligation of American Rescue Plan Act Funding for 2024 Housing Development Projects
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Recommendation
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1. Approve the obligation of American Rescue Plan Act funding for recommended projects and funding amounts for the preservation and construction of affordable housing in the amount of $4,127,970.
2. Authorize the County Manager to enter into the necessary loan or other agreements and execute amendments to loan or other agreements in a manner consistent with the American Rescue Plan Act regulations and requirements, federal, state and 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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Ramsey County has an urgent and evident need for affordable housing, especially for individuals and families with household incomes less than 30% of the area median income (AMI). According to Ramsey County’s Economic Competitiveness and Inclusion (ECI) Plan the county has a deficit of 15,000 units affordable to those at 30% AMI or below. The lack of affordable housing supply leads to greater housing instability for residents and exacerbates the county’s ongoing homelessness crisis.
On August 17, 2021, the Ramsey County Board of Commissioners allocated $20 million of American Rescue Plan Act (ARPA) funding and allocated an additional $17 million of ARPA on May 17, 2022, totaling $37 million, towards affordable housing as envisioned in the ECI Plan. Of this $37 million, $31,692,030 is currently allocated towards specific housing development projects, authorized through previous board actions. $1,850,000, or 5% of the $37 million is designated for administrative and planning expenses. This leaves $3,457,970 of ARPA funds available for reallocation towards projects in the 2024 Housing Development Solicitation. CED also recommends reallocating $670,000 from the amount designated for administrative and planning expenses towards projects in the 2024 Housing Development Solicitation to ensure compliance with the federal obligation and spending deadlines. A total ARPA investment of $4,127,970 is recommended for allocation to projects in the 2024 Housing Development Solicitation. The transformational investment will preserve and construct deeply affordable housing across Ramsey County.
To obligate ARPA funds for this use, private, non-profit, and governmental developers were encouraged to apply to the competitive 2024 Housing Development Solicitation that was published on February 2, 2024, and responses were due on March 15, 2024. The 2024 Housing Development Solicitation was modeled after Ramsey County’s previous housing development solicitations and the existing process for obligating funding from the U.S. Department of Housing and Urban Development (HUD). Ramsey County marketed the solicitation on the Ramsey County website, through the Community & Economic Development (CED) newsletter, an in-person community meeting, and direct outreach to partner organizations.
Ramsey County received 27 applications, which were evaluated using the competitive solicitation’s scoring criteria. CED staff recommend advancing six projects for funding consideration. Projects will be funded in a manner consistent with ARPA and other applicable federal, state, and local regulations and requirements in a form approved by Finance and the County Attorney’s Office. A declaration will be recorded against each property’s title that requires rental affordability for 30 years. Affordability will be monitored through an annual compliance review to ensure that property owners are maintaining units at 30% AMI.
Summary of Proposed Distribution of ARPA Funds for 2024 Housing Development Projects
Dayton’s Bluff Acquisition,
Thurmond Real Estate Holdings (Saint Paul) $160,000
1609 Saint Anthony Acquisition,
Midway Green LLC (Saint Paul) $230,000
Magnolia Flats, Outlaw Development (Saint Paul) $1,411,850
690 Stewart CoLiving, GRO LLC (Saint Paul) $485,000
Youngman Flats, Hourglass Homes (Saint Paul) $450,000
Rockwood Apartments, Presbyterian Homes (Saint Paul) $1,391,120
Total: $4,127,970
Source of ARPA Funds
Reallocation of Award from Panorama,
Presbyterian Homes (Saint Paul) $2,500,000
Reallocation of Award from Laurel Flats,
Outlaw Development (Saint Paul) $957,970
Reallocation of Administration and Planning Set Aside $670,000
Total: $4,127,970
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☒ Opportunity ☒ Accountability
Racial Equity Impact
ARPA funds will be used to implement eligible strategies from the ECI Plan by investing in projects and programs that specifically aim to reduce racial disparities in housing. These strategies include increasing the supply of deeply affordable rental units and the preservation of naturally occurring affordable housing. The recommended projects will preserve rental units where most renters are racially and ethnically diverse and add new affordable rental units to communities that lack affordable rental options.
Ramsey County has large racial disparities between residents of color and white residents in the housing sector. These disparities include a disproportionate number of African American and American Indian residents experiencing homelessness compared to white residents. Generally, racially and ethnically diverse residents are more likely to rent than own their own home and be cost-burdened by housing costs compared to white residents. To undo these historical and lasting inequities, inclusive investment is needed in communities where wealth has been extracted over time.
Community Participation Level and Impact
CED implemented a robust community engagement process in the creation of ECI Plan and the approval of the Housing Redevelopment Authority (HRA) levy. This included engagement with residents, businesses, community organizations, other governmental agencies, elected officials, and local municipalities. Community was informed about the competitive solicitation through an in-person community meeting, this is one step towards the implementation of the community driven ECI Plan. Additional engagement with housing organizations that directly serve residents facing housing instability and homelessness occurred during the planning stage of the Deeply Affordable Housing Initiative. A community meeting was also held at Rondo Community Library to inform residents about the 2024 Housing Development Solicitation.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
A total ARPA investment of $4,127,970 is recommended for allocation to projects in the 2024 Housing Development Solicitation. As of May 1, 2024, approximately $11,462,320, or 31%, of the total ARPA allocation for affordable housing has been spent. Per federal guidance, all ARPA funding needs to be obligated and under contract by December 31, 2024, and spent by December 31, 2026.
As of June 6, 2023, all $37,000,000 of ARPA funds allocated by the Ramsey County Board for deeply affordable housing was connected to a specific use:
• $35,150,000 was awarded to specific housing development projects through board actions.
• $1,850,000 was designated for the administrative and planning uses to implement the Deeply Affordable Housing Initiative.
In March 2024, two projects, Laurel Flats by Outlaw Development and Panorama by Presbyterian Homes, returned their awards to Ramsey County. The projects could not line up other required financing to complete the projects by the federal obligation deadline of December 31, 2024. The two awards total $3,457,970 and will be reallocated to projects that are able to meet the federal obligation deadline. Also, $670,000 will be reallocated from administrative to uses to a specific project to ensure full spend by the federal spending deadline of December 31, 2026.
Last Previous Action
On June 6, 2023 the Ramsey County Board of Commissioners approved $14,400,000 of American Rescue Plan Act funding for affordable housing projects (Resolution B2023-084).
On December 20, 2022, the Ramsey County Board of Commissioners approved $6,750,000 of American Rescue Plan Act funding for affordable housing projects (Resolution B2022-300).
On May 17, 2022, the Ramsey County Board of Commissioners approved $12,816,697 of American Rescue Plan Act funding for affordable housing projects (Resolution B2022-125).
On May 17, 2022 the Ramsey County Board of Commissioners obligated an additional $17,000,000 in American Rescue Plan Act funding for affordable housing investments as laid out in the Economic Competitiveness and Inclusion Plan (Resolution B2022-124).
On May 10, 2022, the Ramsey County Housing Redevelopment Authority approved the recommended projects and awards for the 2022 Annual Action Plan and substantial amendment to the 2021 Annual Action Plan (Resolution H2022-007).
On December 21, 2021, the Ramsey County Board of Commissioners approved $6,183,303 of American Rescue Plan Act funding for affordable housing projects (Resolution B2021-291).
On August 17, 2021, the Ramsey County Board of Commissioners obligated $20 million of American Rescue Plan Act funding for affordable housing investments as laid out in the Economic Competitiveness and Inclusion Plan (Resolution B2021-180).
Attachments
1. 2024 Housing Development Project Narratives