Sponsor: Community & Economic Development
Title
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Reallocation of Housing and Redevelopment Authority Program Income Towards a Housing Development Project
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Recommendation
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1. Approve the reallocation of Housing and Redevelopment Authority program income for the recommended project and funding amount for the new construction of affordable rental housing.
2. Authorize the County Manager to enter into 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 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.
In 2021 the Housing and Redevelopment Authority (HRA) approved the area of operation for the HRA levy, which includes the entire county except the city of North Saint Paul. As determined by state statute, HRA levy funding can be used for the preservation and development of affordable housing, redevelopment activities or blight removal. Ramsey County distributes HRA levy funds for affordable rental housing through its annual Housing Development Solicitation, which consolidates multiple funding sources into one competitive application process for developers.
Lupe Development submitted an application to the 2023 Housing Development Solicitation for an affordable rental project located in Little Canada. The proposed project included 106 apartments for low-income seniors, of which 11 were reserved for seniors who make less than 30% of the AMI. The project was awarded $750,000 in HRA Levy funds. In 2024, due to a funding gap the project applied for competitive funding again and was awarded an additional $576,784 in HOME funds and $173,216 in HRA levy funds. In 2026, the project was awarded bonds through Minnesota Management and Budget, which successfully closed the remaining funding gap. The project must start construction by July 2026 due to requirements triggered by the bonds. To meet this deadline Ramsey County seeks to cancel the 2024 HOME awards and replace that award with a reallocation of funds from the HRA program income account in the same amount. This streamlined funding approach will simplify the closing process for the developers and meet the required deadline. The HOME funds are a part of the 2024 Annual Action Plan, which has been amended by the Dakota County CDA to account for the cancelled award. HOME funds will be reallocated to future eligible projects selected through a competitive solicitation.
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County Goals (Check those advanced by Action)
☒ Well-being ☒ Prosperity ☒ Opportunity ☒ Accountability
Racial Equity Impact
HRA Program Income 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 as described in Heading Home Ramsey’s 2024 Needs Assessment. 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 housing projects that increase affordability for cost-burdened renters.
Community Participation Level and Impact
CED implemented a robust community engagement process in the creation of the ECI Plan and approval of the Housing Redevelopment Authority levy. This included engagement with residents, businesses, community organizations, other governmental agencies, elected officials, and local municipalities. Community was informed about the competitive solicitation, 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 hosted at Rondo Library to provide information on the 2023 and 2024 Housing Development Solicitations.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
The affordable rental project in Little Canada by Lupe Development was awarded $750,000 in HRA Levy funds in 2023 and $173,216 in 2024. The project was also awarded $576,784 in HOME funds through the 2024 Housing Development Solicitation. To streamline the closing process to meet a construction start date requirement triggered by state bonds Ramsey County will cancel the HOME award and replace it with a reallocation of unallocated funds from the HRA program income account for an award in the same amount, $576,784.
Last Previous Action
On May 14, 2024 the Ramsey County Housing and Redevelopment Authority approved housing development project awards in the amount of $4,600,000 of HRA levy funding, which included the $173,216 award for the affordable senior project in Little Canada (Resolution H2024-006).
On May 14, 2024 the Ramsey County Housing and Redevelopment Authority approved the 2024 CDBG-HOME Annual Action Plan, which included the $576,784 HOME award for the affordable senior project in Little Canada (Resolution H2024-005).
On June 6, 2023 the Ramsey County Housing and Redevelopment Authority approved housing development project awards in the amount of $3,700,000, which included the $750,000 award for the affordable senior project in Little Canada (Resolution H2023-008).
Attachments
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