It was best not to have been late for the July Minnesota Housing board meeting; the closing gavel came less that 45 minutes from the meeting start. In this quick meeting, discussion ranged from efforts to keep HUD's Minneapolis multi-family office open, funding awards, and Met Council housing policy.
Met Council Housing Policy
Commissioner Tingerthal's opening statements to the board provided most of the meeting's content. Tingerthal reported on progress being made in the formation of the Metropolitan Council's new housing policy document. She predicted that over the next six months a lot of attention would be given to the Council's role in affordable housing. On a related note, she pointed to a recent MinnPost article that reviews a study on factors connected with upward economic mobility. The article draws a linkage between mobility and the location of affordable housing in the Twin Cities.
Board to see 2014-15 Affordable Housing Plan in August
The commissioner alerted the board to the agenda for its upcoming August meeting when the board will have a first look at the 2014-15 Affordable Housing Plan. This plan includes the budget for all Agency program spending over the biennium, including the programs in which the Agency will invest its own funds. Tingerthal said one area of new investment will be a program responding to the "credit crunch" now facing first time homebuyers.
Efforts to retain HUD Minneapolis multi-family office
Commissioner Tingerthal also reported to the board on a series of meetings held on July 12 which were intended to persuade HUD to keep its Minneapolis multi-family office open. HUD had announced in April that the office would be closing. The commissioner reported that a broad array of owners of HUD financed rental housing joined Representative Keith Ellison and other public officials to make the case for retaining the office. They argued that the Minneapolis HUD multi-family office is needed for its innovation and that it has a history of working closely with local public and private funders to preserve Minnesota's federally subsidized rental housing. Flying into town to hear this case were HUD's FHA head Carol Galante and Assistant Secretary Maurice Jones. There's no word yet on the outcome of Minnesota's appeal.
Funding for tenant advocacy, support services, and gaps created by rising interest rates
The board approved funding for tenant advocacy and support services. $30,000 was set aside in the Family Homeless Prevention and Assistance Program to be used in conjunction with the newly appropriated funding for rental assistance initiatives intended to house ex-offenders and highly-mobile families with school-age children. The $30,000 would be used for tenant education, resolving tenant-landlord issues, and identifying landlords willing to rent to tenants with imperfect rental histories.
Additional board action reflected challenges ahead with rising interest rates. Rapidly increasing rates have reduced the amount of mortgage debt a property can support, which therefore increases the required subsidy (or gap funding) to make the housing affordable. The board approved gap-funding increases for two projects slated for 4 percent tax credits and the Agency's housing infrastructure bonds. Staff told the board that an increase in bond interest rates of approximately 130 basis points (1.3 percent) had created a $426,691 funding gap for Concordia Arms (by CommonBond, in Maplewood) and a $545,302 funding gap for The Square on 31st (Weis Builders, Rochester). The board approved increases to the infrastructure bond commitment for Concordia Arms and the PARIF funding for The Square on 31st to fill the funding gaps.
