The January Minnesota Housing board meeting included discussion of several new initiatives, including the Minnesota Challenge competition to reduce costs of developing rental housing, as well as a program to help ex-offenders find housing. The board talked through tweaks to current scoring for the Low Income Housing Tax Credit program, with a more extensive overhaul planned for 2016. The board also approved the Fort Snelling Homeless Veterans project despite higher than expected costs. Finally Commissioner Tingerthal spoke about work with tribes and introduced the new Chief Financial Officer, Rob Tietz.
Minnesota Challenge Competition
In her opening remarks Commissioner Tingerthal provided the board an overview of the new MN Challenge. Minnesota Housing, in partnership with Enterprise Community Partners, ULI and McKnight Foundation, has created a competition for cost saving concepts in development of affordable housing. This competition was announced formally on January 28. Contestants will form teams to develop strategies for reducing the cost of rental housing, primarily looking at savings that might accrue in soft costs. Entries must be submitted by the end of February. Three teams with the most promising concepts will be selected for (and awarded $10,000 to develop the concepts more fully). The overall competition winner, to be announced on June 5, will receive $75,000 to enact its idea.
Updates on Low Income Housing Tax Credit Program Scoring
The board approved the timeframe for review of two tax credit/QAP or Qualified Allocation Plan processes now underway. The QAP is the document identifying the priorities and scoring criteria for the state's award of federal low income housing tax credits.
First, the board approved draft "clarifications" or small changes for the second year of the current 2014-15 QAP. These included modifications to the geographic areas and the property condition standard in scoring for the housing preservation priority. An additional change would verify that NAHASDA (Indian block grant) funds also qualify as a federal funding source under the preservation criteria. The board will vote on these, along with any modifications resulting from public comment, at their March meeting.
Tingerthal reminded the board that this two year QAP represents a transition document as the Agency moves to a system in which developers will know what the scoring criteria will be approximately 15 months before project proposals need to be submitted. This longer notice period for scoring should result in proposals that better meet the Agency's priorities and better conserve developers' resources. There will be a public hearing on the proposed changes to the 2014-15 QAP on February 20.
Also in February, the board will receive a draft of the 2016 QAP which will lay out major changes for the tax credit round a year and a half out. There will be a public hearing on these in late March with final board approval at its April meeting.
Approval of Homeless Veterans Project
While cost cutting is a major concern of the Agency, the staff did recommend and the board approved a project with costs 28% above what is considered normal under the Agency's Predictive Cost Model. This was for the Fort Snelling homeless veterans' project involving five national historic buildings being transformed into 58 units of supportive housing. Commissioner Tingerthal said that while the model did account for the type and scale of the development, some expenses for the Snelling project were out of the ordinary. The level of lead based paint in the buildings and the cost to renovate the slate roof consistent with historic rehab standards are among them. The board unanimously approved the costs and Agency construction financing. Board member Rebecca Otto commented that "so much good" would come out of the project that the high costs were acceptable.
Helping Ex-Offenders Find Housing
Also related to homelessness, the board approved grants to five agencies that will be helping ex-offenders find and afford housing upon release from correctional facilities. These agencies are Bemidji HRA, Itasca HRA, Mental Health Resources/Ujamaa Pace, Scott and Carver County CDAs, and South Metro Human Services. This program was proposed by Governor Dayton and first funded by the legislature during the 2013 session. The legislature approved $1 million for the initiative, directing $500,000 to The NetWork, a non-profit serving ex-offenders in Minneapolis, and the remaining $500,000 to be competitively awarded by the Agency, along with an additional $113,000 in the Agency's Housing Trust Fund resources. The Department of Corrections worked with the Agency in selecting the five awardees out of the eight submissions. Board member Stephanie Klinzing praised the program, stating that a lot more was needed for this population. Commissioner Tingerthal said that the new program will be soundly evaluated, with the hope that a successful program will receive support from the governor and legislature in 2015.
Miscellaneous: Work with Tribes and New Chief Financial Officer
Commissioner Tingerthal thanked several board members for attending a presentation held earlier in the day on the Agency's work with American Indian tribes. She said that last year Governor Dayton signed an Executive Order directing each state agency to enter into a consultative relationship with Minnesota tribes. Tingerthal said that the Agency will be finalizing a consultation agreement in the next month or so.
Commissioner Tingerthal introduced to the board Rob Tietz the new Chief Financial Officer. Mr. Tietz comes to the Agency from the Iowa HFA.
