After a year of surging homelessness, Ramsey County will invest nearly $9 million in affordable housing next year in an effort to stanch the flow of people who find themselves on the doorstep of shelters or sleeping outside in tents.

The county's first-ever Affordable Housing Investment Project will direct $8.9 million in 2021 to apartments and supportive housing for people most in need. The county will also continue spending on an expanded network of emergency shelters.

"This is a total game changer for Ramsey County to continue to better meet affordable housing needs," said Cecile Bedor, executive vice president of real estate for nonprofit developer CommonBond Communities. "They're headed in a fantastic direction."

The work has taken on new urgency as the Twin Cities sees dramatic increases in the number of people experiencing homelessness, including an estimated 300 sleeping outdoors this fall in St. Paul alone. Commissioners have repeatedly voiced their desire — and impatience — to invest in permanent housing in addition to spending on emergency shelters.

"I can't sleep easier knowing that we really haven't made any progress on stemming the tide of homelessness in the last three years other than the county continuing to invest more money in a crisis solution," Commissioner Jim McDonough said during an October meeting.

Board Chairwoman Toni Carter said county leaders are turning that impatience into action in the new year.

"We all have great frustration for the growing poverty and the growing need we see across our community," Carter said. "While frustration is part of it, we are excited to be able to do this great contribution."

The county has cobbled together a year of funding by reallocating money originally earmarked for a golf course study, library upgrades and other capital improvements.

County Manager Ryan O'Connor said the fund will fill holes that show up in the existing stock of affordable housing — namely, units affordable to people in the lowest income brackets.

"There are some significant gaps that emerge particularly at 30% and below of area median income," O'Connor said. "They are some of the most needed options right now, but the financing doesn't quite come together the same way as it does at 80% of area median income."

In Ramsey County, 30% AMI equates to one person making $21,720 or less or two people making $24,840.

Bedor said the need for more affordable housing is tremendous, and it's particularly challenging to build housing for people with very low incomes who are the most vulnerable. Investments by counties and cities can entice other funders to the table and carry projects across the finish line, she said.

"Anytime a city or a county steps forward to financially participate in an affordable housing deal, the likelihood of it actually being built grows exponentially," Bedor said.

Ramsey County officials have already selected two housing developments that together will receive more than $6 million in 2021.

CommonBond will get $4.5 million to build a 60-unit affordable apartment building for low-income seniors at Highland Bridge — the former Ford plant site — in St. Paul's Highland Park neighborhood.

Ramsey County is one of several funders, including Minnesota Housing, that are making the $18 million development possible. The plan is to have units available at 30% of area median income, said Kari Collins, Ramsey County's community and economic development director.

The county will also contribute $1.75 million to replace the roofs, windows, siding and mechanical systems at the 120-room St. Paul Residence and connected St. Anthony Residence. The building is owned by the city of St. Paul but operated by Catholic Charities of St. Paul and Minneapolis. It houses men who have experienced homelessness and men with chronic substance abuse problems.

Tracy Berglund, Catholic Charities senior director of housing stability, said it's this type of housing — one rung above homelessness — that most needs funding.

"It is desperate," she said. "Extremely low-income housing we don't have nearly enough of. That is why the shelters are bursting at the seams."

The final $2.65 million of the county fund will be earmarked for affordable housing preservation or development in suburban Ramsey County, Collins said. Those projects have not yet been publicly identified.

After 2021, the county may replenish the fund by activating its Housing and Redevelopment Authority (HRA) levy, which could generate $11 million or more in property taxes annually. Taxes on a median-valued residential property of $245,700 would increase by $46.

Ramsey County is the only county in the metro that has no dedicated financing tool for affordable housing, O'Connor said. Others already levy through various redevelopment authorities.

Under state law, the oldest cities in the county, including St. Paul, would need to consent to the county activating its HRA levy within city limits.

St. Paul Council Member Chris Tolbert, who chairs the city's Housing and Redevelopment Authority, said he appreciates the new level of partnership and cooperation with Ramsey County on affordable housing.

Tolbert said he doesn't know enough details to take a position on a county HRA levy, but said, "I appreciate that they are talking about it and they are looking at it."

County Commissioner Trista MatasCastillo, who chairs the county HRA, said they are preparing to start talking about the possible levy with cities and residents.

The hard truth is the county can't sit on the sidelines and expect nonprofits and businesses to meet the swell of demand for affordable housing, particularly at the lowest income levels, she said.

"We have to partner in this way," MatasCastillo said. "There is no way a nonprofit or a developer can make those numbers work on their own. The truly affordable housing requires us taking a role or it's not going to happen."

Shannon Prather • 651-925-5037