Sponsor: Property Tax, Records & Election Services
Title
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Sale of a Tax-forfeited Property Located at 735 Margaret Street to the Housing and Redevelopment Authority of the County of Ramsey, Minnesota
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Recommendation
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1. Approve the sale of the tax-forfeited property located at 735 Margaret Street (32-29-22-11-0017) to the Housing and Redevelopment Authority of the County of Ramsey, Minnesota for $88,750, plus maintenance costs and recording fees, with a deed restriction and/or restrictive covenant limiting purchases of the property for the next seven years to parties qualifying for affordable housing.
2. Authorize the Chair and Chief Clerk to execute the Memorandum of Understanding.
3. Authorize the County Manager to enter into agreements and execute amendments to agreements in a manner consistent with local regulations and requirements as approved by the County Attorney’s Office.
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Background and Rationale
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The Community and Economic Development (CED) department, on behalf of the Ramsey County Housing and Redevelopment Authority (HRA) requests to acquire the tax-forfeited property located at 735 Margaret Street for a price less than its market value. The property is a residential single-family home. The County Assessor’s Office has determined the market value to be $355,000. The property was rehabbed by the department of Property Tax, Records and Elections Services’ (PTRES) Productive Properties Division in collaboration with Workforce Solutions and Goodwill Easter Seals. The HRA has partnered with Twin Cities Habitat for Humanity to sell the rehabbed home to a first-generation homebuyer. The subsequent sale to a first-generation homebuyer is expected to take place within 2023, which meets expectations as set in Ramsey County Administrative Code, section 4.57.60.b.1.
Minnesota Statutes, section 282.01, subdivision 1a (d) allows the county board to sell tax-forfeited land for less than its market value to a government subdivision of the state if it believes that a reduced price will lead to the development of affordable housing. The government subdivision must document its specific plans for developing affordable housing and the specific law or laws that empower it to acquire real property in furtherance of the plans.
PTRES has reviewed the specific plans and authorizations required by statute and recommends that the property be sold to the HRA. A Memorandum of Understanding between Ramsey County and the HRA is in place to enforce a deed restriction and/or declaration of restrictive covenant on the property requiring that it will only be sold to parties qualifying for affordable housing for the next seven years.
On August 20, 2019, the Ramsey County Board approved lowering the maximum threshold to qualify for the owner-occupied affordable housing discount from 115% of the area median household income (AMI) as adjusted for family size to 80% AMI. For this sale, a qualified purchaser is a first-generation homebuyer who continuously occupies and homesteads the property and whose household income does not exceed 80% at the time of application. CED will work with Twin Cities Habitat for Humanity to find eligible first-generation homebuyers who have already qualified for Habitat’s open market lending program, who additional qualifies for Ramsey County’s FirstHome down payment assistance program and/or other special credit programs, who is part of a household with five or more persons, and currently rents in Ramsey County. If multiple homebuyers are eligible and interested, then a homebuyer will be selected through random drawing. Since the development will be for affordable housing the recommended sale price at 25% of the market value or $88,750, plus maintenance costs and recording fees, is consistent with the Ramsey County Board policy describing the terms under which it will sell property for less than market value for affordable housing.
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☐ Opportunity ☐ Accountability
Racial Equity Impact
Residents of 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 connecting the 735 Margaret Street property to an eligible first-generation homebuyer and down payment assistance, is 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
PTRES informed the HRA about the property; HRA passed a resolution to acquire the property for the purpose of removing blight or creating affordable housing.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
Revenue from sales of tax-forfeited property is deposited into the Tax Forfeited Land Sale Fund. Net proceeds from this sale in the Fund, after paying administration costs and assessments, are distributed 40% to the county, 40% to the Saint Paul Public School District 625 and 20% to the city of Saint Paul on an annual basis.
Last Previous Action
On August 15, 2023, the Ramsey County Housing and Redevelopment Authority passed a resolution to acquire the property for the purpose of creating affordable housing (H2023-012).
On July 11, 2023, the Ramsey County Housing and Redevelopment Authority placed the tax-forfeited property on hold for the subsequent sale to a first-generation homebuyer (H2023-009).
On August 20, 2019, the Ramsey County Board lowered the maximum qualifying threshold for the owner-occupied affordable housing discount from 115% of the area median household income as adjusted for family size to 80% AMI. The Ramsey Board also provided that the income qualification requirements will terminate in the case of foreclosure or foreclosure related activity (Resolution B2019-202).
Attachments
1. Resolution No. H2023-012, Housing and Redevelopment Authority, Ramsey County, Minnesota, Dated August 15, 2023
2. Memorandum of Understanding between the HRA and PTRES
3. Map of property