It was a time of transition for Minnesota Housing and its board at the Agency's January meeting, with incoming Commissioner Mary Tingerthal making an appearance and discussions of this year's state budget for housing, the role of the Agency in rural housing, and cooperative ownership of manufactured home parks.
Mary Tingerthal, the incoming Minnesota Housing Commissioner, greeted a board at less-than-full capacity, with two of its seven member slots unfilled. Lee Himle from Spring Valley and Marina Lyon of Minneapolis have elected not to seek reappointment after their terms concluded January 3. Replacement members have not yet been identified.
While Tingerthal's appointment as Commissioner did not begin until February 1, she stopped by the January meeting to introduce herself. She described how her earlier work at the Agency from 1976 to 1985, launched a career that led her from the public, to the for-profit sector, and then to the non-profit sector. She traced her career from the Agency to private mortgage banking firms, to the city of St. Paul as the housing division manager, and then to the non-profit sector from 1996 on, where she initiated and oversaw numerous financing programs. She headed LISC's National Equity Fund brokering investments for housing tax credits. She helped build the lending programs of the Community Reinvestment Fund. She is now leaving a position with the Housing Partnership Network to assume the role of Commissioner. (The Network is a collaboration of the country's most significant non-profit developers.) At the Network, Tingerthal created the National Community Stabilization Trust, the program that helps communities acquire foreclosed properties from national lenders.
Tingerthal said that, as Commissioner, she envisions the Agency and other Minnesota groups helping guide the restructuring of the nation's approach to affordable housing finance. Minnesota is already creating successful models for financing housing, she said, and it will be important for Congress to understand these as it considers tax reform and changes to the quasi-public mortgage purchasers Fannie Mae and Freddie Mac.
Tingerthal concluded her presentation by saying that she had just participated in Governor Dayton's first cabinet meeting, where he emphasized the three themes of his administration: create jobs, fairly balance the budget, and make sure that government works effectively. She said she looks forward to being a part of an administration with these themes, and would carry forward the Governor's emphasis on collaboration and respect for others, even those with whom there are policy disagreements.
Turning attention to the Agency's budget recommendations to the Governor, Assistant Commissioner Tonja Orr said that the Agency was using four principles to help prioritize its programs when it comes to appropriations and policy this legislative session. In order of importance these are: 1) minimal impact on the state's most vulnerable; 2) leverage of non-state resources; 3) no viable alternatives to meeting the need addressed by the program; and 4) program goals can be met by non-financial approaches.
To comply with the Governor's budget instructions, Agency staff recommended that highest priority programs, which serve the most vulnerable, receive a 4% cut. This includes Bridges, Housing Trust Fund, and Family Homeless Prevention. The next tier of programs would be cut by 8% and the lowest tier programs by 20%. Orr said that the Challenge program would have a second tier priority level, but only for the level of funds needed to leverage federal tax credit resources. Otherwise it merits a low priority.
The Governor's staff will review the Agency's budget suggestions in preparing the Governor's budget, which will be released on February 15. In addition to appropriations amounts, the Agency's suggestions will include proposed nonprofit bonding funds again this year. Under this proposal, bonds would be used for rental housing connected with foreclosures and land owned and leased by community land trusts. State appropriations would be used to repay the debt for the bonds.
Concerns about rural housing have been raised by the board in recent months, and in particular in response to Agency staff's recommended draft plan for the allocation of 2011 federal rental housing tax credits. The Board took up this topic in more depth at the meeting. Board member Barb Sanderson expressed concern that the Agency's proposed points for housing near fixed transit stops discriminates against smaller communities. Board members said that they understood the importance of locating housing to help reduce traffic congestion and auto dependence, but recognized that these concerns pertain to larger urban communities. Chair Mike Finch said the role of the Agency should be to help address housing problems where people live, rather than creating policy that incentivizes moving people to other locations. Staff was asked to review how to better serve small communities and to modify the tax credit allocation plan before seeking final board approval in March. There will be a public hearing on the draft plan February 23.
Finally, the board approved Agency participation in a loan to a resident cooperative for the purchase of a manufactured home park in Fridley. The loan was initiated by the New Hampshire-based non-profit ROC (for Resident Owned Communities) USA which supports cooperative ownership of manufactured home parks across the country. ROC USA partners in the upper Midwest with Northcountry Cooperative Foundation, which is assisting the residents of the Fridley park in forming the cooperative and is overseeing redevelopment of the park. Before granting approval, the Board discussed the risk involved with cooperative ownership, the difficult real estate market, and the fact that the Fridley park includes mostly pads for outdated single-wide homes. In approving participation in the $3.4 million loan, the Board was swayed by the importance of preserving the affordable home ownership in the park and the safeguards provided by the partnership of ROC USA and Northcountry.