Sponsor: Community & Economic Development
Title
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Obligation of American Rescue Plan Act Funding Towards Deeply Affordable Housing Projects
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Recommendation
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1. Approve recommended projects and funding amounts for the preservation and construction of deeply affordable housing.
2. Authorize the County Manager to enter into the necessary loan or grant agreements and execute amendments to the loan or grant agreements in a manner consistent with American Rescue Plan Act 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 a large and documented need for affordable housing, especially for those making 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 obligated $20 million of the county’s American Rescue Plan Act (ARPA) allocation towards affordable housing as envisioned in the ECI Plan. The transformational investment allows Ramsey County to participate in the funding and development of deeply affordable housing at a new level.
To obligate ARPA funds for this use, developers and property owners were encouraged to apply to a competitive solicitation that opened on November 5, 2021 and closed November 16, 2021. The solicitation process was modeled after Ramsey County’s 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 newsletter and direct outreach to partner organizations. Eight applications were received, and staff reviewed for completeness, eligibility, impact and financial readiness. After review, four projects were recommended for initial funding awards. All four projects will serve communities disproportionately impacted by COVID-19 and all four projects are located in 2020 or 2021 qualified census tracts. Projects will be funded in a manner consistent with federal ARPA regulations and requirements in a form approved by 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 rental limits at 30% AMI. Community & Economic Development staff already monitor rental affordability with HUD funded projects.
The following projects are recommended for the obligation of ARPA funds:
- The Villas at Mounds View, MWF Properties, 4889 Old Highway 8, Mounds View, MN 55112
o $1,550,000 to construct 12 units affordable to those making 30% AMI or below within a 120-unit affordable housing development. The request represents 5% of the total development cost ($30,022,587).
o Project Schedule
Activity Date
Closing on finance May 2022
Construction May 2022 - June 2023
Lease up October 2023
- Lauderdale Senior Housing, Real Estate Equities, 1795 Eustis St, Lauderdale, MN 55112
o $2,950,000 to construct 11 units affordable to those making 30% AMI or below within a 114-unit affordable housing development. The request represents 10% of the total development cost ($29,593,779).
o Project Schedule
Activity Date
Closing on finance June 2022
Construction July 2022 - August 2023
Lease up August 2023 - March 2024
- Preservation of 652 Sherburne Avenue, Model Cities, 652 Sherburne Avenue, Saint Paul, MN 55104
o $1,683,303 to acquire, rehabilitate and preserve 7 units affordable to those making 30% AMI or below with future opportunities for homeownership. The request represents 75% of the total development cost ($2,230,802).
o Project Schedule
Activity Date
Closing on finance February 2022
Construction February 2022 - February 2023
- Ridgewood Apartments, AEON, 1871/1885 Wilson Ave., St. Paul, MN 55116
o $1,800,000 for acquisition and rehabilitation of a 100-unit residential apartment. 10 units to be affordable to households at 30% AMI. The request represents 12% of the total development cost ($15,096,433).
o Project Schedule
Activity Date
Closing on finance January 7, 2022
Construction January 2022 - December 2022
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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.
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
Community & Economic Development (CED) department implemented a robust community engagement process in the creation of ECI Plan and the 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.
☒ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower
Fiscal Impact
The four projects recommended for funding award have a total funding ask of $7,983,303. If approved, CED staff will work with the Ramsey County Attorney’s Office to enter into agreements with the development teams. The agreements will preserve affordability for the length of the loan and will be in accordance with local, state and federal regulations. This leaves $12,016,697 remaining in the 2021 ARPA allocation for deeply affordable housing. The remaining dollars will be obligated to projects in early 2022 as part of a competitive solicitation to leverage additional federal, state, and local resources for affordable housing.
County Manager Comments
No additional comments.
Last Previous Action
On August 17, 2021, the Ramsey County Board of Commissioners allocated $20 million towards the advancement of the Ramsey County Economic Competitiveness and Inclusion Plan (B2021-180).
Attachments
None.