Many Minneapolis council members have trumpeted the $4 million boost to the city’s affordable housing fund following Monday’s committee vote on the budget.
But how the money came to be is more complicated and offers a deeper look at the myriad tools available to city development officials hoping to grow or improve the city’s housing stock.
The Affordable Housing Trust Fund uses local, state and federal dollars to help pay for low-income rental units across the city. The city has had an annual goal of allocating $10 million to the account, which it never has met.
Monday’s increase brings the fund’s 2015 allocation to $10.5 million, said Wes Butler, the city’s residential finance manager. That’s more than it’s ever been and significantly more than the city’s typical contribution of about $8 million.
Affordable housing has taken on new importance this year following the election of several new council members who made it a prominent component of their campaign platforms. Advocates also turned out in large numbers at a recent hearing on the budget, pushing for a $20 million investment in the fund.
Council Member Jacob Frey, who authored the motion, proclaimed to his Facebook followers that the change amounted to “a $4 MILLION INCREASE TO AFFORDABLE HOUSING in our city! And, for the very first time, we can meet our stated goal of $10 million in the affordable housing trust fund.”
However, officials confirm that some of the new money in the trust fund came from existing programs for low-income homeowners — sometimes considered part of the city’s overall affordable housing effort.
The mayor’s budget proposal called for $9.1 million for affordable housing for next year, but that included more than just the trust fund.
Sandy Christensen, the city’s deputy chief financial officer, said the initial $9.1 million figure also included funding for homelessness prevention initiatives and the Emergency Solutions Grant Program, which helps rehab homeless shelters. It also factored in $1.5 million for emergency home rehabilitation grants for low-income residents, money that Frey’s motion moved into the Affordable Housing Trust Fund.
The emergency home rehabilitation grants won’t be cut, however, because a significant amount of money is left over from the 2014 allocation, Christensen said.
The rest of Monday’s $4 million boost to the Affordable Housing Trust Fund came from an account fueled primarily by development loan repayments and land sales.
The Affordable Housing Trust Fund typically pays to build or rehab about 600 units a year, scattered across six or seven projects, all intended for occupants below 50 percent of the median income. Thirty percent is set aside for senior housing projects in particular.