Sponsor: Community & Economic Development
Title
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Allocate State Affordable Housing Aid for Housing Development Projects by Emerging and Diverse Developers
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Recommendation
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1. Approve the recommended project and funding amount for a housing development project selected in the Emerging and Diverse Developers Solicitation.
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 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 housing affordable to individuals and families with household incomes less than 30% of Area Median Income (AMI) and less than 50% 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 or below 30% AMI. This lack of affordable housing supply leads to greater housing instability for residents and exacerbates the county’s ongoing homelessness crisis.
To help build and preserve needed housing supply, Ramsey County seeks to expand the pool of affordable housing developers, so they better reflect the racial and ethnic diversity of Ramsey County. To accomplish this, Community & Economic Development (CED) created the Emerging and Diverse Developers (EDD) Program. Ramsey County defines emerging developers as individuals or entities that have owned or developed no more than 25 units of housing or 15,000 square feet of commercial space in the last 10 years.
The EDD Program is a single program with two parts. CED contracts with NEOO Partners to provide technical assistance through a classroom cohort model, one-on-one coaching, and small-group sessions. Thirty participants graduated from the program and their journey was celebrated at the November 12, 2024 board meeting.
The second component of the EDD Program was a competitive solicitation specifically for emerging and diverse developers. The solicitation opened on September 5, 2024, and closed on October 31, 2024. Eligible applicants could apply for development funds for the acquisition, rehabilitation, and construction of affordable housing with requested amounts not to exceed $500,000. Developers who already owned the property that they were applying for could also qualify for up to $20,000 of funding for eligible pre-development costs.
Twenty-four eligible applications were received with a total requested amount of $10,011,972. An internal scoring team reviewed and scored each application in a manner consistent with the annual housing development solicitation process, Ramsey County marketed the solicitation through its contracted technical assistance partner, two in-person community meetings, on the Ramsey County website, through the CED newsletter, and direct outreach to partner organizations and municipalities.
One project totaling $401,080 from the EDD Solicitation is recommended for awards funded with Statewide Affordable Housing Aid (SAHA). SAHA is a funding source made available through the state of Minnesota to all counties, as well as cities in Greater Minnesota. In 2024 Ramsey County was allocated $802,161 in SAHA funds.
The following project is recommended for SAHA funding:
2024 Obligations from the 2024 Emerging and Diverse Developers Solicitation:
Lexington Deluxe, ARRA Properties $401,080
Total 2024 SAHA Allocation: $401,080
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☒ Opportunity ☒ Accountability
Racial Equity Impact
SAHA 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 obligation of SAHA funds also diversifies the pool of housing developers.
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, residents of color 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, investment is needed in communities where wealth has historically been extracted.
Community Participation Level and Impact
The co-design on the EDD Program started in January of 2023 by consulting with organization that support emerging developers. Staff learned what supports are needed to compete in competitive government development solicitations. Lessons learned were shared back out with the community and incorporated into the procurement process that was used to select technical assistance (TA) providers. The TA partners hosted small group sessions to hear directly from emerging developers on the barriers they face in the development process, which informed the eligible uses and scoring criteria in the solicitation. This included the availability of pre-development funding. Furthermore, community was invited to two public in-person meetings at the Rondo Community Library to learn more about the EDD Program and the solicitation. This solicitation is another step towards the implementation of the community driven ECI plan.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
The one project from the Emerging and Diverse Developers Solicitation recommended for SAHA funding has a total funding amount of $401,080. Staff recommend that a portion of the 2024 SAHA funds be used for this project. The remaining 2024 funds and the 2025 SAHA funds will be allocated to eligible housing projects at a later date.
Last Previous Action
On December 17, 2024 the Ramsey County Board of Commissioners approved $500,000 of the 2023 HRA Levy to be reallocated towards housing development projects by emerging and diverse developers. (Resolution H2024-012).
On December 19, 2023 the Ramsey County Board of Commissioners allocated 2023 State Affordable Housing Aid for housing development projects in the amount of $802,161 (Resolution B2023-264).
Attachments
1. Narrative Project Descriptions