At the January Minnesota Housing board meeting, the highlights included the governor's budget, the proposed 2014
Qualified Allocation Plan, and an announcement that Joe Johnson, a bank executive from Duluth, has been appointed to another four-year term on the board.
Weighing in on the governor's budget
Commissioner Tingerthal described the governor's budget as providing sound financial footing for the state after years of scrambling to patch budget holes. The governor's plan to reform taxes and raise revenues both erases the $1 billion budget deficit and provides resources for priority education and economic development initiatives. Tingerthal added that without the revenue raisers, the Agency would likely have had a cut to its base budget.
For housing, Commissioner Tingerthal continued, the governor's proposed budget would also increase efficiency by moving state-based preservation (PARIF) funds to the home rehab program. An equal amount of money from a federal block grant fills this hole in preservation funding. Preservation projects often use funding sources that require compliance with complicated federal regulations, and are typically owned by sophisticated developers. This shift in funds enables the Agency to use less restrictive state dollars for home rehab, and the more regulated federal funds for preservation, without adding another layer of federal compliance requirements for developers.
The governor did embrace the Agency proposals for $13 million in new initiatives. $10 million will be earmarked for
creating new housing where a lack of workforce housing restricts economic growth. $2 million will be used to provide rent subsidies to homeless or near-homeless families, thereby enabling school children to benefit from stable housing. The final $1 million will provide rent subsidies to ex-offenders, an important tool to providing the stable housing that reduces the rate of recidivism.
Board member Joe Johnson asked the Commissioner for her level of confidence that the governor's budget proposals would be passed by the legislature. Tingerthal responded by saying that the Agency has been well received by both political parties, and having these funds in the governor's budget lessens the possibility of a "push down" by the
legislature.
In response to a question about a bonding bill, Tingerthal said that only in March, after the February forecast is released, does she expect the governor to decide whether to promote bonding in the 2013 non-bonding year.
Board member Stephanie Klinzing said from her Greater Minnesota perspective the governor's housing initiatives were very much needed to prevent homeless children from losing hope.
Unveiling the proposed 2014 Qualified Allocation Plan
Staff presented to the board the proposed 2014 Qualified Allocation Plan ("QAP"). The QAP consists of the rules and scoring criteria for awarding the $12 million in tax credits that will be committed to Minnesota in 2014 by the federal government. The Agency will administer about 70% of the tax credits, and the remainder will be committed by four jurisdictions: the cities of Minneapolis and St. Paul, and the counties of Dakota and Washington.
Agency director of planning, analysis, and evaluation John Patterson said that there are 18 scoring criteria, and that staff reviews them for their efficacy and fairness each year after tax credits are awarded. As an example, one change proposed this year is to provide a separate scoring criterion for Greater Minnesota projects claiming foreclosure points. The prior statewide scoring criteria put Greater Minnesota projects at a disadvantage compared to metro projects, where foreclosures were highly concentrated by comparison, he said.
In a significant change to the tax credit calendar, staff proposes that the QAP criteria endorsed this year will be in place for two years, rather than a single year. Thereafter, developers will know scoring criteria 15 months in advance of the deadline to submit proposals. This will enable better planning by the developers, who currently have only three months from the time scoring criteria are finalized until they need to submit proposals.
Many additional QAP criteria were changed after considerable staff consideration. For instance, scoring factors such as "cost containment" (which scores additional points for lower cost projects) and preservation of federally assisted housing were given a lot of scrutiny by staff in the formation of their recommendations.
Member Gloria Bostrom wanted to know the impact of these changes on Agency goals. Staff said that they would be unable to know the consequences of the change to QAP until proposals come in.
From now through February 20, the date of the public hearing on the QAP, the Agency will take comments on the proposed changes. At their April 4 meeting, the board will review the comments and adopt the QAP. Developers will have until June 18 to submit projects and the Agency will award the 2014 tax credits, Round 1, at its October 2013 meeting. See http://www.mnhousing.gov/housing/tax-credits/allocation/index.aspx for info.
Board Member Johnson appointed to another term
Commissioner Tingerthal announced that the governor had appointed director Joe Johnson to another term on the board. Johnson, a bank executive from Duluth, will serve until 2017.
