Hennepin County OKs $6.35 million to finance affordable rentals

Hennepin County gave the green light to $6.35 million in grants and loans to help build or preserve 733 affordable rental apartments throughout the county.

The units are scattered among 20 mixed-use and commercial projects, half of which are apartment buildings to be built or renovated along several major transit corridors.

Several of the projects will cater to underserved populations, including an 80-unit apartment building by RS Eden in south Minneapolis and housing for low-income artists by Artspace in north Minneapolis.

The County Board's latest funding round, which usually takes place once a year, was announced by the Housing and Redevelopment Authority. It included $3.5 million from the Affordable Housing Incentive Fund (AHIF) and $2.85 million from the Transit Oriented Development (TOD) Program.

Demand far exceeded availability of funding this year, according to Hennepin County spokesman Kyle Mianulli. He said the county typically gets three to four times more requests than it can fund, but this year there was a slight uptick in applications.

The AHIF is a program unique to Hennepin County that's funded through a countywide property tax levy.

The $3.5 million that's provided through the AHIF program will fund 10 affordable-housing projects that include 438 units for people experiencing homelessness, households with income less than 30% of the area median income and those that qualify for rental assistance.

The projects include RS Eden's Amber Apartments at 4525 Hiawatha Av. in the Longfellow neighborhood, which will target those who might be moving out of supportive housing and are working, but could otherwise not afford rent.

It's near a light-rail station and is also served by several bus routes. That project will replace a warehouse that once housed Bell International Laboratories, which moved to Eagan.

On top of funds awarded through the AHIF program, the county is providing $2.85 million for 10 transit-oriented development projects that will include 501 rentals, with 295 set aside for lower-income renters.

That includes Northside Artspace Lofts, a mixed-use redevelopment at 221 N. Irving Av. in the Harrison neighborhood in Minneapolis. The site is in a brownfield area that's in need of costly cleanup, but it's near Metro Transit bus service and the planned Blue and Green Line LRT extensions.

The project will have 100 live/work apartments, including several two- and three-bedroom units, that are affordable for residents earning 60% or below of the area median income. The money will also fund 200,000 square feet of commercial space and four infrastructure projects.

The county's funds aren't intended to cover the entire cost of building these projects. For most, the grant or forgivable loan — sometimes both — will be used to bridge the gap between construction costs and whatever financial commitments the developer has already assembled.

"When a project has a hole to fill, this makes it feasible," Mianulli said.