Sponsor: Community & Economic Development
Title
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Allocate 2024 Housing and Redevelopment Authority for Housing Development Projects by Emerging and Diverse Developers.
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Recommendation
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1. Approve recommended projects and funding amounts for the preservation and construction of affordable housing by emerging and diverse developers.
2. Authorize the County Manager to enter into the necessary loan or other agreements and execute amendments to loan or other agreements, 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) 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 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.
To help build and preserve needed housing supply, Ramsey County seeks to expand the pool of affordable housing developers to reflect the racial and ethnic diversity of Ramsey County. To accomplish this Community & Economic Development created the Emerging and Diverse Developers (EDD) Program. Ramsey County defines emerging developers as an individual or entity that has 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 one 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 board meeting on November 12, 2024.
The second component of the 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.
10 projects totaling $2,896,862 of HRA levy funds are recommended for HRA levy awards and will be funded with $2,396,862 of 2024 unallocated HRA funds and $500,000 of reallocated 2023 HRA funds. $500,000 of 2023 HRA levy dollars that were awarded to the Hazelwood Acquisition by Reign Development will be reallocated to the 1200 Grand Acquisition project by New Verticals. Reign Development was unable to move forward with their planned acquisition.
All projects will be funded in a manner consistent with federal 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 20 years. Affordability will be monitored through an annual compliance review to ensure that property owners are maintaining income-restricted rental limits.
The following projects are recommended for HRA levy funding:
2024 Obligations from the 2024 Emerging and Diverse Developers Solicitation:
Merriam Park Acquisition, Goshen LLC $430,000
White Bear Acquisition-Rehab, Bungalow Boss Holdings LLC $397,312
Taylor Acquisition, Aventus Holdings $370,000
University Acquisition-Rehab, T&L Partners $330,000
Reaney Acquisition-Rehab, Noelle Vertina $330,000
1609 Saint Anthony Rehab, Midway Green Development LLC $320,000
Aurora Revitalization, Thurmond Holdings LLC $179,550
Horace House Pre-Development, Horace Investment Group LLC $20,000
Hewitt Pre-Development, Shakir Consulting LLC $20,000
Total 2024 HRA Levy: $2,396,862
Reallocation from 2023 HRA Levy
1200 Grand Acquisition-Rehab, New Verticals LLC $500,000
Total 2023 HRA Levy Reallocation: $500,000
Additional information on each project can be found in the attachment titled “Narrative Project Descriptions.”
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☒ Opportunity ☒ Accountability
Racial Equity Impact
HRA levy 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, the preservation of naturally occurring affordable housing, and increasing homeownership opportunities for residents of color.
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, inclusive investment is needed in communities where wealth has been extracted over time.
Community Participation Level and Impact
The co-design of the EDD Program started in January 2023 by consulting with organizations 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 a technical assistance (TA) provider. The TA partner 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 and Maplewood 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 10 projects from the Emerging and Diverse Developers Solicitation recommended for HRA awards have a total funding amount of $2,896,862 with $2,396,862 from unallocated 2024 HRA Levy and $500,000 of funding reallocated from the 2023 HRA Levy. An additional project from the Emerging and Diverse Developers Solicitation will be recommended for State Affordable Housing Aid funding at a later date.
Last Previous Action
On November 12, 2024 the Ramsey County Board of Commissioners hosted a presentation of the Emerging and Diverse Developers program graduation.
On December 19, 2023 the Ramsey County Board of Commissioners approved $721,945 of State Affordable Housing Aid towards housing development projects by emerging and diverse developers (Resolution B2023-264).
On December 12, 2023 the Ramsey County Housing and Redevelopment Authority approved $2,750,000 towards housing development projects by emerging and diverse developers (Resolution H2023-015).
Attachments
1. Narrative Project Descriptions