At the March Minnesota Housing Board meeting, the board touched upon many upcoming events. A new board member was introduced, and Commissioner Tingerthal discussed legislative updates and a recent workforce housing editorial. The board weighed in on a draft of the 2016-2019 Strategic Plan, and the April meeting agenda was also discussed.
New board member Craig Klausing welcomed
At the meeting outset, Craig Klausing was introduced as a new board member. Klausing takes the seat of retiring board member and former board chair, Ken Johnson. Klausing is senior assistant director with Office of Lawyers Professional Responsibility, an agency of the Minnesota Supreme Court, and also a former city council member and two-term mayor of Roseville. Mr. Klausing’s appointment is effective Monday, March 30. He joined this meeting as a visitor.
Commissioner Mary Tingerthal gave an update on the legislative session. To the positive, she said, Governor Dayton proposed a supplemental budget that includes $2 million for rent assistance for highly mobile families and $10 million for the Housing and Job Growth Initiative. The initiative is a sub-fund within the Challenge program focused on providing new housing in communities with low vacancies and job growth. The negative news was that the House budget allocation for the committee with jurisdiction over the Agency’s budget is below the base budget. This means that the House is proposing a cut to the budget below the amount passed by the legislature in 2013, for the upcoming biennium.
Response to Star Tribune workforce housing editorial
Tingerthal shared her perspective on the March 24 Star Tribune editorial concerning workforce housing. She was happy the editorial reinforced the importance of the Challenge program in providing housing for an expanding workforce. But the editorial’s statement that she wanted to decouple the Challenge program from tax credits was a misleading truncation of a much longer explanation she gave the paper; she had told the editorial writer that her intent was to make sure that project proposals that did not include tax credits would not be penalized in the Agency’s scoring process. Furthermore, Tingerthal said, the paper’s implication that the Agency was unresponsive to the need in Greater Minnesota for workforce housing was not borne out by the facts.
Scoring changes to Community Homeownership Impact Fund
The board approved point scoring changes for the Community Homeownership Impact Fund, the homeownership component of the Challenge program. Under the new scoring the “location efficiency” factor gains a point (from 5 to 6); this requires a Walk Score of 50 or more. (A score below 50 means an area is car-dependent.) Tingerthal said that concerns about accuracy of the licensed Walk Score system had been raised by developers in rural areas, so the Agency has set up a process to appeal and add additional information. The board asked about a second point change, which counts philanthropic and employer financial support more favorably than local government support. Staff responded that this change was intended to increase private funding invested in these developments.
Possible strategic priorities for 2016-2019
John Patterson, Director of Planning, Research and Evaluation, updated the board on the 2016-2019 strategic planning process now underway. From external and internal input, the Agency has drafted eight potential strategic directions:
- Finance housing for low-income seniors
- Use affordable housing as a tool to promote community and economic prosperity
- Prevent and end homelessness
- Provide housing choices for people with special needs or large barriers
- Address shortage of rental assistance options
- Preserve affordability and physical condition of existing affordable housing
- Provide equitable access to successful homeownership
- Address rising housing costs
Auditor Rebecca Otto challenged the strategy of promoting prosperity; she said she views as an outcome of the Agency’s work but not directly a goal. In contrast, she views the other strategies as housing-specific. Patterson responded that the Agency’s mission does include fostering strong communities. Member Stephanie Klinzing hoped the plan would reflect both the changing housing priorities of the baby boom generation, and technology solutions needed to keep an aging population in their homes.
Member Joe Johnson questioned whether addressing high housing costs should be a strategy, for the Agency largely cannot impact market forces driving interest rates and other costs. There was a lot of discussion about costs in the marketplace, the Agency’s role in promoting cost saving practices in development, and other means to increase the supply of lower cost housing (e.g., inclusionary zoning). Member George Garnett said that Agency requirements do add costs to projects, and that the board would like to better understand the cost-benefit equation of these requirements. Board members will have the opportunity to rank the potential strategic priorities.
The proposed plan will be available for public comment on May 21, and will go back to the board for adoption July 23, 2015.
Looking ahead to the April board meeting, Tingerthal let the board know that the Agency will be examining several issues related to the federal housing tax credit program. First, the final 2017 Qualified Allocation Plan governing scoring for tax credits will be up for approval; staff is considering possible revisions to the draft QAP based on the 20 comments it has received.
Secondly, the board will vote on the staff’s proposal regarding the distribution of tax credits to the sub-allocators. Under Minnesota law, seven local governments in Minnesota receive sub-allocations of the state’s total tax credit allocation from the federal government. Tingerthal said the calculation governing those sub-allocations was last completed in 1991, and was based on population, and that an update of those calculations way past due. She added that the new calculations will mean reduced credits for Minneapolis and St. Paul. The Agency will be meeting with sub-allocators to listen to their concerns before the board votes on the new distribution.