The April meeting of the Minnesota Housing board included approval of several new pilot programs: two to reduce disparities in home ownership, and one to provide rental assistance to young families in Hennepin County who have experienced homelessness. The final point scoring criteria for Low Income Housing Tax Credits were also finalized, taking into account thoughtful public comments.
Commissioner Tingerthal announced that Marcia Kolb, the Assistant Commissioner for Multifamily, is retiring after 32 years at the Agency. Barb Sporlein, Deputy Commissioner, will lead the division while a permanent multifamily leader is recruited. Also in her opening remarks, Tingerthal said that the Agency's annual Request for Proposals had been issued with a deadline of June 9. $70 million in deferred financing will be available for both ownership and rental developments. And the Agency is soliciting comments for how it should prioritize funding in the 2015 Affordable Housing Plan. May 8 is the deadline.
Pilot Programs to Reduce Home Ownership Disparities
The board approved two pilot programs intended to help address the large disparity in home ownership rates between white non-Hispanic households and other populations.
- The Targeted Mortgage Opportunity Program will enable borrowers of color with credit scores of 620, or lower with justification, to qualify (normal minimum is 640). The Agency budgeted $10 million, including a $2 million reserve, for this targeted loan program which provides up to 100% loan-to-value financing. In July the board is to approve the lenders who will make mortgage loans under this program.
- Through the Enhanced Financial Capacity Homeownership Initiative, the Agency will make grants to non-profit or public agencies to offer financial and empowerment training for low-income prospective home buyers with a focus on increasing home ownership among non-white and Hispanic households. The Agency is providing $500,000 for this program; awards to agencies will be made in July. Families would receive up to three years of training.
Rental Assistance through new "Young Families Pilot"
On the rental side of Agency operations, the board approved a $250,000 commitment to Hennepin County to provide rental assistance under the Young Families Pilot. This pilot is intended to address rapidly increasing use of Hennepin County shelters by families. Eligible families will be parents aged 25 and younger who have accessed shelters twice in a three-year period. Services and housing assistance will be available for up to 24 months. Housing Trust Fund resources will be used for the program starting July 1. Staff also mentioned that two additional pilots will be coming to the board at a later date: one will be similar to the Young Families Pilot but be offered statewide; the second will be a Twin Cities rental assistance program to help move people out of supportive housing.
2016 Tax Credit QAP Scoring Approved
The board approved the 2016 QAP (federal tax credit allocation plan) as presented by staff. This plan governs tax credit awards to be made in the fall of 2015. Agency staff reviewed significant changes to the QAP from the draft presented to the board in February, which were made in response to public comments received by the Agency. Staff described comments as "very thoughtful" and contributing to a more equitable approach to the use of tax credits. Board member Rebecca Otto asked about the cost containment criterion and expressed that she did not want to see lower quality as a result. Staff responded that they are closely watching the impact of this criterion, and that they hope costs could be lowered through efficiencies in reducing non-construction costs. Board chair Ken Johnson said that he was pleased to see how responsive the staff had been to the submitted comments.
Below are examples of comments made on the draft QAP and the Agency's response.
- Economic Integration -- Comments suggested that scoring did not emphasize economic integration enough, particularly in comparison to points awarded for access to transit. Job and education rich communities would lose out, commenters wrote. The final QAP increased the eligible points for economic integration to a maximum of 9 (up from 7), and the scoring was revised to put economic integration on par with locational efficiency.
- Location Efficiency (includes access to transit) -- While comments suggested that the Agency not rely on national Walk Scores for awarding points; the QAP retains this standard with the caveat that developers should approach staff if they think the Walk Score is inaccurate for a proposed development site. Also, the point levels in this section were lowered to equal points that could be earned for economic integration.
- Community Revitalization Areas – Some comments stated that the detailed criteria in the draft QAP describing the types of community plans that qualify for revitalization points could potentially work against small communities or provide arguments for communities that do not want affordable housing. Staff agreed; the final QAP removes the detailed criteria for plans which could qualify for points, but does state that plans need to be more focused than typical comprehensive or general land use plans.
- Cost Containment -- In spite of several comments calling for scrapping the criterion to award points for containing costs, Agency staff did not propose any changes to the draft. Staff promises to monitor closely the impact of this criterion in achieving other Agency objectives.
- Universal Design (and Special Populations) -- Commenters expressed concerns about dropping eligible points for serving special populations, instead providing points for following Universal Design Standards. (Universal Design Standards promote physical accessibility but not necessarily design for other disabilities such as mental illness, noted a commenter.) In response, the standard for non-elevator buildings was changed so that 10% of units must meet the design criteria, rather than 20% in the draft QAP, to receive points. Also, rehab projects will not have to meet as many of the Universal Design criteria to earn points. And the final QAP reduced the number of points overall that can be awarded for this criterion. Points for Special Populations (i.e. people with mental illness, mobility impairments, developmental disabilities, brain injuries, and chemical dependency) were reinstated for 2016, but in light of the Olmstead settlement, no more than 25% of the units can be set aside for the identified population. (Olmstead requires that people with disabilities be placed in the most integrative setting possible.)
- Senior Housing -- While commenters advocated for an award of tax credits for some senior-only developments, this suggestion will not be supported through the 2016 QAP. Agency staff pointed out that if a senior project is a priority of a suballocator (a local government allocating tax credits), a senior project would be eligible for an award in the second funding round. Further, staff wrote that the Agency has funded "numerous developments targeting seniors in recent funding rounds," and that seniors will also be served by the Universal Design criterion. Staff also clarified that, under current state law, Twin Cities projects may be designated as senior-only if they serve a population of seniors with incomes at or below 30% of median income.