U.S. Bank is making a big investment in a low-income rental housing development in St. Paul.
Project for Pride in Living Inc. has already started building Hamline Station, a 108-unit affordable apartment project along a light-rail stop.
The project is being financed by U.S. Bank's community lending division with about $15 million in construction loans, while U.S. Bancorp's Community Development Corporation (USBCDC), the community development subsidiary of U.S. Bank, is putting $15.8 million in equity raised from federal low-income housing tax credits into the nearly $30 million project.
"We invested in Hamline Station because it will spark other new development in the Midway neighborhood," Vihar Sheth, senior vice president of USBCDC, said in a statement. "We are also committed to providing affordable housing that helps alleviate homelessness and serves those struggling with health issues."
Hamline Station, along W. University Avenue, will have 15 studio units, 36 one-bedroom, 44 two-bedroom units and 13 three-bedroom units in two four-story buildings. Fourteen units will be for homeless or disabled people. PPL and others will provide on-site services.
The apartments are aimed at those earning 30 to 60 percent of the area's median income, with monthly rent from about $550 to $1,190.
Demand for inexpensive rentals is intense, partly because most of the apartment construction in the region is for upscale and luxury units.
Mary Bujold of Maxfield Research in Minneapolis said that only about 30 percent of the planned units in the Twin Cities metro area meet some definition of affordable.
"There is huge market demand," said Barb Halverson, president of Steven Scott Management. "Every time we open a workforce project, we end up with hundreds of people on the waiting list."
She said that affordable rental housing along the light-rail line is especially important because it enables people to live without having to own a car. "This gives people so much flexibility on where to live and where to work," she said.
The project is the 61st affordable-housing project developed in the Twin Cities by USBCDC in the past two decades. That includes more than 3,600 apartments, with an equity investment of nearly $300 million.