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<br /> May 16,2003 ro M ;., a THE BUSINESS JOURNAL I twincities.bizjoumals.com
<br /> 6
<br /> Public funds boost affordable housing
<br /> BY NICOLE GARRISON
<br /> STAFF REPORTER
<br /> New public incentives are drawing more
<br /> developers into affordable multifamily hous
<br /> • ing. While it's a trend low-income housing ai t s�
<br /> advocates would like to see continue, some y
<br /> wonder just how long the building boom can t
<br /> continue.
<br /> In the past year or so, government groups j; f
<br /> such as the Metropolitan Council,the Dakota s
<br /> County Community Development Agency
<br /> and the Minneapolis Community irlr
<br /> Development Agency(MCDA)have reallocat
<br /> ed resources to ensure that more money is
<br /> available to build affordable housing than r , �,•
<br /> ever before. €�
<br /> This January, the MCDA, the housing and K `
<br /> economic redevelopment arm of the city of r,- =* `-
<br /> Minneapolis,issued a$4.7 million request for f
<br /> proposal for its Multi-Family Rental Program •
<br /> t - �
<br /> funds.A total of 30 proposals were received, t •
<br /> representing over $196 million of develop- �3
<br /> ment cost and over 1,639 units. The total
<br /> *mount requested from the MCDA exceeds
<br /> $14 million, which is more than the agency •- t
<br /> A
<br /> can fulfill. - ,
<br /> This was the most positive response the
<br /> agency has seen since it began offering the t M �- ,
<br /> funds, said Cynthia Lee, manager of multi- f `r * } ,� �l"
<br /> family housing development at the MCDA. f }:_� .s
<br /> The increase in interest in affordable housing ,
<br /> funds stems from an increase in the number - f -K•of funds into which developers now can tap. N `"� a ''P
<br /> The money allocated for these programs,at t 0 k 4 )/;;._ � �_
<br /> least in Minneapolis, also is increasing. In R jk.
<br /> 2001, MCDA allocated $8.1 million in direct gr'r '� a . a
<br /> funds, bonds and tax credits for affordable ,0 �, � ��� *r` Vie`
<br /> housing. In 2002, that number increased to p - � {#
<br /> g
<br /> $10.8 million and is expected.to jump to `., r
<br /> almost$15 million this year.
<br /> The increased funding has made a differ
<br /> ence. From Burnsville and Chaska to V a
<br /> Minneapolis and St. Paul, metro-area multi ^ r '`� .„ .: rg `P� ' ct c
<br /> family housing projects that once consisted 7" .'i
<br /> entirely of market-value units are now more f ' „ , � it �
<br /> likely to include some sort of affordable hous- S -
<br /> ing component. t, „ K _ ,
<br /> In 2001, the MCDA financed 1,149 multi- DIANA WAITERS I THE BUSINESS JOURNAL
<br /> family assisted units. Last year the agency The city of Minneapolis gave Steve Minn's company,Lupe Development Partners,
<br /> closed on 2,143 multifamily low-income a tax break for including affordable housing in Stone Arch Apartments.
<br /> units. .
<br /> IltifIn the past five years,1,134 of the 2,342 mul- Minneapolis, which were developed by
<br /> units built in Dakota County were Minneapolis Stone Arch Partners,a joint yen- " MORE...
<br /> amily
<br /> affordable housing units. A large portion of ture between Lupe Development Partners Funding available to developersbuilding'af ,
<br /> those units were developed recently and The Wall Cos.,both of Minneapolis. t .fordable housing `
<br /> "We've seen a significant increase in afford- "The logic behind that ordinance is gold Multifamily Rental Program fund,issued by MC
<br /> able housing production in the county," said plated,"said Steve Minn,project principal for DA $4.7 available in 200
<br /> Mark Ulfers,executive director of the Dakota the Minneapolis Stone Arch Partners. "We Direst funds,bonds,and tax credits,issuedfby
<br /> Community Development Agency. "That certainly used that at Stone Arch." MCIDA,$1 b million available in 2003
<br /> activity has occurred because of additional Stone Arch included 92 affordable units out Tax•Gnctement financing,issued at'city level
<br /> funding resources." of a total of 221 rental units—46 more than Low-income housing tax credits,issued by MCDA
<br /> According to a 2001 report, commissioned what was required by the city. Housing revenue bonds,issue by MCf A-
<br /> by the Family Housing Fund, more than Metro-area counties also have added fund- .Housing Trust Funds,issued at county level' -
<br /> 25,000 new affordable rental units and 7,000 ing for affordable housing development in the State and federal money earmarked for affordable
<br /> affordable ownership homes were needed by seven-county metro area. For example, a housing
<br /> 2006 to house the region's workers who earn number of counties now offer Housing Trust
<br /> between$15,000 and$50,000 a year Funds. These funds are formed when local Affordable housing development incentives.
<br /> governments mark certain sources of revenue Looser stipulations on private activity bonds. =
<br /> Incentives to be used solely for affordable housing. Minneapolis city ordinance granting 2t percent
<br /> The city of Minneapolis recently passed an "In the past you didn't see county funds in tax break
<br /> •ordinance that gives developers a 20 percent the metro area," Ulfers said. "Counties have .Zoning variances
<br /> tax break for putting affordable housing in the always been involved in the administration of City services fee breaks
<br /> projects. That ordinance was a factor in the federal and state money, but the advent of
<br /> construction of the Stone Arch Apartments in AFFORDABLE I PAGE 21
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