Funding increases for low-income housing in Minnesota

Developers who specialize in supportive housing for the homeless and rehabbing existing low-income apartments say they will have more options for carrying out their missions under the state's recently passed bonding bill, which is predicted to help fund the building or preservation of up to 5,000 units throughout Minnesota.

An effort called Homes for All was launched last year by a coalition of 100 organizations representing housing groups, local government officials and homeless and mental health advocates to push for $100 million in borrowing authority to be included in the bonding bill. After passing the Legislature, it was signed into law by Gov. Mark Dayton on May 16.

Under its terms, the Minnesota Housing and Finance Agency (MHFA) will award funding on a competitive basis for supportive housing, preservation of affordable rental housing, foreclosure recovery and land acquisition by community trusts. Backers say it will leverage private investments to launch hundreds of millions of dollars' worth of projects to make housing available and affordable to low-income renters.

The MHFA last week announced that the bonding authority will immediately boost its capacity by $40 million, raising the 2014 total from $70 million to $110 million. The announcement came as developers were getting set to meet a June 10 deadline for multifamily proposals.

The types of housing projects likely to be favored for funding under the bonding bill are those that deal with the lowest-income tenants, "supportive housing" for the homeless in which housing is paired with social services, and the preservation of apartments subsidized under the U.S. Department of Housing and Urban Development's Section 8 program.

Recent examples of supportive housing include the 80-unit Veterans East project at Fort Snelling from CommonBond Communities, the Crane Ordway building in downtown St. Paul developed by Aeon Management and the University Dale Apartments above St. Paul's Rondo Community Library.

"Right now, it's unclear exactly what will be the outcome in terms of what specifically gets funded … but the main thing is we know the funding is there and will be used for the purposes for which it was approved," said Leigh Rosenberg of the Minnesota Housing Partnership.

While it's a "substantial investment," the new funding is still "incredibly insufficient to actually meet the housing needs that are there," she added. "We know that about half of Minnesota renters are paying more than 30 percent of their income for rent."

Chris Wilson, director of real estate for Project for Pride In Living, says his group has two supportive housing projects seeking MHFA funding — an extension of the Anishinabe Wakiagun housing for chronic inebriates on E. 19th Street in Minneapolis and a proposal for homeless youth housing near the YouthLink headquarters at 41 N. 12th St.

The other main thrust of the bonding money is to preserve and rehab much-sought affordable housing subsidized under the federal Section 8 program, much of is which is under threat of conversion to market-rate rentals.

CommonBond CEO Paul Fate said his nonprofit is seeking funding to maintain the Section 8 units in three high-rise apartments along Interstate 94 in both Minneapolis and St. Paul.

"From a big picture perspective, the $100 million in bonding is unprecedented," he said. "It's critical, especially given that on the national level for every unit of subsidized housing that has been preserved two have been lost through market conversion or ­demolition."

Don Jacobson is a St. Paul-based freelance writer and former editor of the Minnesota Real Estate Journal.