This report covers both the meeting of the Minnesota Housing board on August 29 and the subsequent September 3, policy and program committee. For the August board meeting, the draft Affordable Housing Plan which lays out how the Agency will use the $854 million available for 2014, was the primary topic. The program committee meeting focused on reviewing public comments made on that plan. In other board business, housing counseling grants were approved and a new Family Homeless Prevention and Assistance Program staff person was introduced.
The Affordable Housing Plan: Proposal and Comments
The Affordable Housing Plan (AHP) is the annual business or work plan for the Agency. It lays out priorities and program initiatives for the coming year. The plan identifies how the resource available to the Agency for 2014, $854 million in total, will be split among the Agency's programs. For many of these resources, program use is predetermined, such as for legislative appropriations, Agency bond issues, and the Section 8 payments that the Agency is under federal contract to administer.
Of greatest interest to housing advocates, the AHP reveals how the Agency will use both its federal HOME block grant and its own "foundation" resources to achieve its goals. These two sources represent $35 million in new funding commitments, including $11 million for HOME and $24 million from Minnesota Housing.
Roughly, the Agency is proposing to invest its $24 million as follows: $4M to address homelessness; $7M to subsidize and keep viable rental housing for which it has made loans; $5M to help people buy homes (with focus on addressing racial disparities in home ownership); $3M home rehab; $1M for home construction; $2M for supporting Community Housing Development Organizations (CHDOs) and funding activities like the Wilder statewide homeless survey; and $2M reserved as contingency.
In response to this proposal, nine representatives of housing-related agencies, including MHP, submitted comments by the August 30 deadline. Comments concerned use of Agency funds, the program to end homelessness and the AHP process itself.
- Regarding the process, MHP and Catholic Charities both wrote that the two weeks the Agency provided for review of the plan allowed too little time to respond to such a significant commitment of public resources.
- Comments asking for a new use of funds came from Housing Preservation Project, MHP, NAHRO and Catholic Charities. These agencies asked for a set aside of funds to minimize the loss of Section 8 vouchers facing the state. Because of sequestration and other budget cuts, the state will likely lose hundreds of vouchers in 2014. Commenters said that because HUD bases each year's funding on the prior year's funding use, a one-time commitment of state funds to ensure usage of all authorized vouchers would increase the state's voucher availability over multiple years.
- Regarding homelessness, several commenters asked that a greater percentage of the Agency funds be allocated to programs connected to homelessness, such as the Housing Trust Fund and Family Homeless Prevention and Assistance. Some sought to address needs of particular populations, including seniors and those with mental illness.
- Integrated Community Solutions sought funding for fair housing testing.
- The Metropolitan Consortium of Community Developers called for funding for increased rental production.
- Commenter and developer John Duffy asked whether the investments in preservation rewarded those that were poor stewards of the affordable housing that they owned.
Agency Response to Comments
Agency staff told the board that they did not believe that the comments required any significant change to the AHP. They said that the comments were generally favorable regarding the program investments proposed by
the Agency. Specific responses are as follows:
- With respect to the suggestion that Agency funds be used to retain a higher Section 8 voucher level in the face of cuts, staff said more due diligence is needed. Should that assessment lead to a decision to invest in the Section 8 Voucher program or additional rental assistance, funds from the Housing Trust Fund could potentially be used for that purpose. Staff will report to the board in November on this possibility. Board members cautioned staff about this potential use of funds and asked for details. The board also queried whether other states were considering such a move (staff was unaware of any). Gloria Bostrom and other board members also wanted to make sure that the Agency was advocating with the federal government for a restoration of Section 8 funding.
- Regarding homelessness, Commissioner Tingerthal said that the comments will be considered as the state creates a new plan to end homelessness. The recently reinvigorated Minnesota Interagency Council on homelessness (MICH) has committed to create such a plan by year end, said Tingerthal. This plan will be backed by action plans for each of the 11 participating state agencies, with the results completed before the 2015 legislative session begins. Board member Stephanie Klinzing said that the phase "prevent and end homelessness" was too broad and could represent everything done by the Agency. Commissioner Tingerthal responded that the members of the MICH voiced a similar concern, and plan to take a "bite sized approach" so the task would not be overwhelming.
- Regarding fair housing, staff told the board that they will look at options in this area after final adoption of the proposed federal rule on Affirmatively Furthering Fair Housing, now available in draft for public comment. Auditor Rebecca Otto said that the Agency should review its legal authority before funding fair housing testing and other activities.
- Staff said that they would examine the schedule for the 2015 AHP and see if more time can be provided for public comment.
- Regarding the comment on preservation, Tingerthal said that the Agency closely reviews each preservation proposal and has found many different reasons additional investments are needed. She added that the Agency needs to better communicate to the broader public the nature and outcome of its preservation investments.
The AHP will be back before the board for final adoption at its September 26 meeting.
Finally, at the August board, Commissioner Tingerthal announced that the first Housing Infrastructure Bonds had been sold. Also, the board was introduced to Kim Bailey, the new program coordinator for the Family Homeless Prevention and Assistance Program.
The board accepted staff's recommendations for counseling funding under HECAT (Homeownership Education, Counseling and Training). $1.4 million is being awarded to 38 agencies, pending approval of the Agency's funding partners, the Homeownership Center and the Greater Minnesota Housing Fund. Minnesota Housing is contributing $906,000 of the $1.4 million. Of this total, $418,000 is allocated to nonprofit agencies for homebuyer education, $320,000 for homebuyer counseling, $622,000 for foreclosure counseling, and $45,000 for home equity conversion counseling.
Commissioner Tingerthal told the board that the Agency was happy to see that eight of the awardees primarily serve households of color. She added that the funding distribution might be different next year as homebuyer counseling increasingly shifts to on-line rather than in-person delivery.