At the June Minnesota Housing board meeting, the board considered public comments on several relevant topics in response to its proposed 2016-19 strategic plan. Operating subsidy awards for supportive housing programs were approved. The board heard an end-of session legislative report as well as a report on a recent meeting with Congressman Walz. Board Member Klinzing was approved for another term, the Agency will be hiring several new staff, and research interns will be working on studies over the summer.
Reviewing the Strategic Plan
The Agency took another step toward adopting its 2016-19 strategic plan with the board’s review of public comments. Eighteen individuals and organizations submitted recommendations. One commenter was board member George Garnett, who wrote that too little progress was being made in expanding home ownership among households of color. He said that there needs to be a “robust discussion” delivery of homeownership services, particularly about outreach to the African American community. Director of Planning, Research and Evaluation John Patterson responded that the Agency’s share of the homebuyer mortgage market is very small, and that the Agency needs to move the overall market toward increased lending to minority communities.
Reacting to strategic plan comments about rental housing production, Patterson said that the Agency will review design factors in coming months and will look more at life-cycle costs. In response to board interest in reducing developer costs, Tingerthal said that the Agency will also look at shortening the amount of time and costs needed to move projects more quickly from funding commitment to ground breaking. This includes having common documents agreed to by all gap funders. Tingerthal told the board that the Agency had received a grant from the McKnight Foundation to fund a consultant to help the process of creating common documents. In addition, Tingerthal said that staff has reported that cycle times for project funding are already improving.
Patterson also responded to plan comments requesting greater emphasis on senior rental housing development. He said that nearly half of seniors needing rental housing had incomes under 30% of AMI, and that it is hard to make projects work funding-wise for populations with such low incomes. Over the next several years the Agency does expect to initiate pilots to test strategies for low-income senior rental development.
With respect to workforce housing, Patterson emphasized that nearly all jobs in Greater MN pay amounts that would qualify under Challenge Program income guidelines. The Challenge Program will remain the Agency’s primary vehicle for helping communities house their workers, he said.
Operating Subsidies for Supportive Housing Approved
The board approved distribution of $2.9 million in operating subsidies for supportive housing developments. The Agency’s commitment is augmented by $2.4 million from Department of Human Services targeted to supportive housing residents facing mental illness. These funds will provide two years of operating subsidies for 43 existing supportive housing developments, the bulk of the state’s supportive housing inventory.
Program staff Vicki Farden said that the Agency had been providing this type of operating support in partnership with the Department of Human Services for the past six years. Contracts are for two years each and no new properties have received like commitments from the Agency during the last three years. Owners of supportive housing are encouraged to find alternative sources of operating support; some are successful but this is very competitive, added Tingerthal.
The average annual per-unit subsidy awarded is $1,900. Board member George Garnett asked why there was a large variance in amounts awarded among properties, pointing to $4,300 per unit proposed for Beacon’s Nicollet Square development. Staff responded that their funding recommendations depended on the type of property being funded and other resources a developer was able to secure. The Nicollet project was recommended at a higher funding level because it housed homeless youth, a population with extremely low incomes and a high need for services.
End of Session Update
Assistant Commissioner for Policy and Community Development Ryan Baumtrog provided a summary of the legislative session. In the special session the Agency’s program budget held at the level included in the bill vetoed by the governor just after the regular session. However, the Agency received an additional $2.5 million for the Bridges program (to help with the state’s Olmstead response). In total, the Agency was appropriated $6.5 million over its base budget, and $3.5 million above what it received in the prior biennium. Also, $10 million was allocated for Housing Infrastructure Bonds in the bonding bill passed in the special session (5% of the overall bonding bill, said Baumtrog).
Roundtable on Housing with Congressman Walz
In another announcement Tingerthal described a recent roundtable discussion covering first Congressional District housing issues hosted by Rep. Tim Walz. In part, the roundtable was held because of the housing challenges facing Rochester, the district’s largest city. Due to the growth spurred by the Destination Medical Center activity, the Rochester area needs to increase annual production of affordable housing by a factor of ten. Local government officials said that they were proposing a property tax levy for housing; which was passed by the county board shortly after the roundtable. Tingerthal said that the Olmsted board joins just a few other counties that take advantage of the housing levy authorized by state statute.
At the June Minnesota Housing Board meeting, the board was informed that the Agency’s operating budget is up 9.5% this year which allows for an increase of 4.8 FTEs. This budget keeps the overall level of Agency operating costs at about 3% of its program-related investment level, a low amount compared to other housing agencies, staff noted. Commissioner Tingerthal announced that Stephanie Klinzing, a former legislator from Elk River and an enrolled member of the Lac Courte Oreille Band of the Lake Superior Chippewa, had been reappointed for an additional board term, running through January 2019. Tingerthal also reported on a press conference held June 19 at which announced the state’s largest decline in homelessness since 2007 (based on the HUD point-in-time homeless count held each January).
Looking into voucher utilization and hard-to-house populations
Planning, Research and Evaluation Director John Patterson introduced the Agency’s summer interns. Patterson said that the interns are pursuing two research topics 1) the utilization of housing choice vouchers and a review of best practices nationally and 2) strategies to accommodate “hard-to-house” populations (e.g., individuals with criminal records).