This report covers the October Minnesota Housing board meeting and a special November 7th meeting. Top news from October included the Agency was nationally recognized by HUD Secretary Shaun Donovan. At the November 7th meeting, awards totaling $54 were made for affordable housing development. Other items of note from the November meeting included the launch of the Rental Assistance for Highly Mobile Students Initiative and the adoption of the 2014 Consolidated Action Plan.
October Minnesota Housing Board Meeting
National Recognition
While most of the board's time was committed to arriving at a process for selecting the Agency's auditor, the highlight of the meeting came in the commissioner's report. Commissioner Tingerthal had just returned from the annual meeting of National Council of State Housing Agencies, where Minnesota Housing received the "Best in Management Innovation Technology" award for the Agency's Community Profiles. She also said that Secretary Donovan presented an award to the Agency and other HFAs who participated in HUD's federal alignment pilot program, where participating HFAs work with public and private funders to eliminate redundant property inspections.
New Hires
New staff introductions could be seen as recognition of the quality of individuals working for nonprofits and the symbiotic relationship between the Agency and nonprofits. Introduced were Karen Anderson, coming from Twin Cities Community Land Bank. Karen will be responsible for the Neighborhoods Stabilization Program (NSP) investments and also Agency loans to nonprofit intermediaries. Rose Carr, coming over from City of Lakes Community Land Trust, will work to strengthen supportive housing providers and their properties. And Jennifer Wille, formerly of CommonBond, will underwrite multi-family project loans.
Progress Report: Housing Infrastructure Bonds
The board received a report on progress made in distributing the $30 million in housing infrastructure bonds awarded by the legislature in 2012. With these bonds, the legislature pledges to pay debt service with a "standing appropriation," without further action by the legislature needed to authorize the debt payments. The bond proceeds are used by the Agency as 0% interest, 30 year gap loans. Bonds for the first $15.5 million of this allocation have been sold and will fund these projects: Square on 31st (Rochester), Concordia Arms (Maplewood), Eastport Apartments (Mankato), West Broadway Curve (Minneapolis), VA Housing Fort Snelling, VA Housing St. Cloud, Urban Homeworks Rental Reclaim (Minneapolis), Giwanakimin (Naytahwaush) and one or more community land trust developments.
November 7 Minnesota Housing Board Meeting
The Agency held an additional November meeting to discuss home ownership and rental housing funding recommendations. This is the time during the year when the vast majority of Agency resources are committed for new construction or rehab projects. The board will convene for its regular November meeting on the 21st.
Rental Assistance for Highly Mobile Students Initiative
The Board approved $2 million in funding commitments under the new Agency pilot program to stabilize housing for homeless or highly mobile families with school age children. This program was part of Governor Dayton's package of new initiatives approved by the 2013 legislature. Staff from Minnesota Housing, Department of Education and DHS collaborated in the program design.
Rental Assistance for Highly Mobile Students Initiative funding will go to PPL in Minneapolis and Wilder Foundation in St. Paul (where the new resource will be linked to the federal Promise Neighborhood program underway in the two cities), and to a third program administered by the Clay County HRA in Moorhead. Commissioner Tingerthal said that she was excited about the possibilities with this new resource and that the Promise Neighborhood Program parents were very engaged and committed to bettering their children's lives. She added that for this pilot the application bar was set very high because the Agency wanted to quickly get the program off the ground. About 130 families will be housed for 24 months under the pilot.
Consolidated RFP - $52 Million Awarded
For Consolidated RFP awards the Agency and its funding partners committed just over $52 million. In all, this funds development or redevelopment of about 2,000 rental and ownership homes. In introducing the staff recommendations to the board, Commissioner Tingerthal stated that the projects being considered followed a planning process that started in 2012 with the adoption of the Agency's Strategic Plan.
Assistant Commissioner Mike Haley said that the awards for home ownership were for the first time being made through the Agency's newly named Impact Fund (formerly "CRV"). With the new program name came new scoring criteria and emphasis on funding "action based applications." The Agency worked closely with applicants to get the best proposals. For home ownership $8 million was awarded, $7.4M from the Agency and $300,000 each from Greater Minnesota Housing Fund and the Metropolitan Council.
Regarding funding trends, Haley said that foreclosure remediation, while still a priority, was less about getting homes back on the market than it was to help overall community recovery. He said that for the first time since 2008, the Agency was funding new construction, which was "encouraging." Finally, in Roseau, Duluth and Worthington the Agency was awarding funds under its new "housing plus jobs" priority. Funding for this priority came through the 2013 $10 million Challenge Fund appropriation for communities facing a shortage of workforce housing.
Board chair Ken Johnson asked why there was only one application from Southeast Minnesota; he queried whether there was a capacity issue. Tingerthal said that in future years she expected more applications to come from Rochester as part of that community's major reinvestment program. Research Director John Patterson added that the Agency reviews funding relative to population for subparts of the state over five year time spans, and that funding and population have been fairly proportionate across the state. However, Paterson said that there was some skewing toward the Twin Cities, so before the Agency issues its next RFP, it will review its funding formula for geographic bias. Commissioner Tingerthal added that the Agency's Community and Housing Dialogue events likely will help to strengthen Greater Minnesota applications, and that Community Development Director Margaret Kaplan also was helping on this end. But "we cannot create capacity," Tingerthal concluded.
On the multifamily side, Assistant Commissioner Marcia Kolb described rental housing funding trends. She mentioned that this was first time the Agency ranked preservation projects according to new risk system, which will be reviewed for next funding round. 48% of units assisted were categorized as preservation; this will help retain $540 million in federal rent assistance said Kolb. In addition to tax credits and first mortgage financing, the Agency awarded $17.7 million in deferred loans. Rental funding partners included Family Housing Fund ($1.2M), DEED ($400,000), Met Council ($1.2M), and Greater MN Housing Fund ($600,000).
Kolb was happy to announce that with the funding of 91 supportive housing units, the Agency was at last surpassing the 4,000 unit goal of the business plan to end long term homelessness.
Commissioner Tingerthal pointed out that two existing developments specific to seniors are being assisted, and many of the other projects funded will include units accessible to the senior population to allow for aging in place.
263 units in workforce rental housing will be funded, as will be 311 units characterized as Transit Oriented Development. Emphasizing the value to communities of the new workforce development funding, RFP Coordinator Kayla Schuchman read to the board excerpts of a letter submitted by Polaris Industries, endorsing housing developments for workers being hired for its plant expansion in Roseau. The letter stated that Polaris would do its part and provided as an example that the company was purchasing housing tax credits at premium price to support the developments.
Kayla Schuchman, coordinator for the housing tax credit program, said the credits on average will cover 47% of the project development costs. This funding round, the Agency paid close attention to project costs and utilized a new point structure to reward lower cost projects. She said that none of the recommended proposal exceeded the Agency's predictive cost model by more than 25%. Board member John DeCramer asked for other ways that the Agency could hold down costs, such as bulk purchasing of windows and other building components. Tingerthal responded that that type of approach required coordination in development timing that was not realistic. John Patterson added that the Agency is working with Enterprise Partners and McKnight Foundation to develop creative solutions to reduce construction and development costs.
2014 Consolidated Action Plan Adopted, 2013 Action Plan Amended
Not discussed at the board meeting but adopted through approval of the consent agenda was the 2014 Consolidated Plan "Action Plan," and an amendment to the 2013 Action Plan. The Agency's 2013 amendment and language for the 2014 plan newly enable it to use federal HOME dollars for new rental construction. While the Agency does not commit to using HOME funding for this purpose, it wanted to have that flexibility. The 2014 Action Plan anticipates $5.9 million in HOME and $138,000 in HOPWA (Housing Opportunities for Persons with AIDs) funding from HUD. Under the plan, the HOME dollars can be used for financial assistance for homebuyers and rehabilitation of rental housing.
