Provide and Prioritize Investments & Incentives for Maintaining and Increasing Affordability

4d Programs. Support state and local government 4d programs to offer property tax breaks in exchange for owners income restricting 20 percent of their units for 10 years

Affordable Housing Trust Funds. Local housing trust funds are a reliable and flexible resource for supporting a range of different local needs and priorities for preserving and enhancing NOAH.

NOAH Preservation Funds. Local governments can establish and expand funds to assist eligible buyers (typically mission-based non-profit owner-operator) to acquire and preserve NOAH properties that are at risk of losing affordability.

Increase Funding for Reinvestment, Rehabilitation & Recapitalization

Capital and operating subsidies. Local governments can offer subsidies, grants, and other cost supports to help property owners reinvest in and maintain older buildings.

Tax Incentives & Low-income housing tax credits. Local governments can provide tax incentives to building owners who invest in rehabilitation projects and allocate low-income housing tax credits to developers who rehabilitate NOAH buildings and keep them affordable.

Ensure Swift Enforcement, Ongoing Engagement, and Coordinated Collaboration

Create supportive relationships. Local governments can proactively meet with existing NOAH property owners to provide resources for tenants struggling to pay rent, safety, and building maintenance issues before there is a problem.

Supporting responsible housing providers. Work with property owners on code violations and provide access to financial or technical support. This is particularly important for small family owners who have limited access to financial capital and technical resources

Swiftly Enforcing Code Violations. When there are serious code violations and limited response from owners, utilized existing local authority to remedy to protect property values, resident safety and neighborhoods.

Increase assistance for low-income residents to reduce displacement. Local, regional and state governments can provide direct funding to assist households unable to afford the cost of rent or utilities. This includes accessing “Bring it Home” State Housing Voucher program for those experiencing housing instability, rising rents or short-term housing displacement. And provide assistance for the economic mobility of lower income households with increased access to job training and placement programs.

Increase the amount and effectiveness of tenant and project-based vouchers. Tenant Based Vouchers. Local and regional public housing agencies have the authority to issue tenant-based vouchers to households eligible for public housing in order to help them move into market-rate housing instead. Tenant-based vouchers can be especially effective for reducing segregation and other inequities in communities where there is no stock of public housing or deeply affordable existing units in opportunity-rich neighborhoods. However, the Housing Choice Voucher program is significantly underfunded and administratively burdensome. Currently only one in four households who qualify for a federal housing voucher actually receive one. As such, public housing agencies should prioritize increased funding of vouchers and modify criteria to make the vouchers more attractive and financially viable for the private sector market to accept. Source of Income. In some current conditions, requiring acceptance of vouchers is an added burden on housing providers particularly when the payment standards are under the market price and they come with increased monitoring and documentation.  Support increasing source of income standards only under the circumstances where it does not create a hardship for existing property owners.  Support ways to streamline the operational burdens that are tied to voucher programs and provide resources to assist in administration to increase acceptance by property owners. Increasing financial and operational hardships on an already challenged market, will result in reducing the overall quality and management of rental housing.

Enforcement of tenant and fair housing protections including ensuring that unlawful residents and housing providers are held accountable. Local governments can be more proactive and consistent in enforcing protections against unfair housing practices and discrimination. They can also pay for or provide access to legal assistance for residents facing eviction or dealing with unsafe or unlivable housing conditions. And local governments need to support property owner’s efforts to increase housing safety by evaluating if current and proposed tenant protection policies shift the pendulum where residents are not held accountable for unlawful activity that risks the health, safety and livability of residents living in the same building and the safety and security in surrounding neighborhoods.

Elimination of Unnecessary Barriers to Production

Allowing Higher Density. Local governments can be more proactive in eliminating some density restrictions and allowing higher densities by right in areas where such density is supported, such as in resource-rich neighborhoods, commercial corridors and places with access to frequent transportation options.

Support Metropolitan Council Efforts to Expand Housing Choices throughout the Region. The Metropolitan Council is updating its Regional Development Guide, “Imagine 2050” which includes an updated “2050 Housing Policy Plan”. Tools, policies, and resources of the Metropolitan Council can be deployed to support housing production and preservation.

Reducing Local Fees. Multiple impact and permitting fees add significantly to the incremental costs of producing additional units of housing. Local governments can review and modify local fees to reduce the impact on incremental costs while maintaining fiscal responsibility to recover development induced costs.  Where affordability is desired, waiving fees is a positive factor in reducing overall development costs tied to lower rental rates.

Clarifying & Standardizing Approval Processes. Ambiguous approval requirements and processes can be legally and politically exploited by even a small minority of neighbors with NIMBY interests to stall new housing development projects. Local governments can prevent this by increasing the clarity and transparency of the approval criteria and process and by creating clear guidelines and regulations for developers to follow.

Relaxing Parking Requirements. Parking requirements can add significantly to the cost of new housing projects. Local governments should partner with housing providers to reduce or eliminate parking requirements when they do not match the needs of the neighborhood or the specific development.

Increase Public Investment in Housing at all Levels of Government.

Expanded Use of Project-based Vouchers. Project based housing voucher agreements in new privately-owned and managed housing development ensures that those units are affordable for low- and extremely-low-income households. There is a financing advantage when public housing agencies guarantee the value of these vouchers in advance where the private developer can include their value in the financing structure for the development of new housing projects.

Flexible Tax Increment Financing (TIF). Local governments can create TIF districts, utilize pooled funds and issue bonds to pay for public costs necessary to support private development of new income restricted housing. TIF utilization can be especially helpful for stimulating new housing development in communities and to secure commitments from developers to keep a certain number of units affordable for low- and extremely-low-income households.

Expand Utilization of Tax Abatement. Expand the effectiveness of tax abatement as a temporary reduction in property taxes on the portion of assessed value added by new construction or improvements to an existing structure specifically to increase housing affordability. Engage counties to agree to tax abatement when a project meets or exceeds their affordability goals in partnership with cities. 

Housing Trust Funds. Creating and dedicating state and local resources to housing trust funds can fill the gap created in the development of affordable housing production. Cities can utilize local sales tax revenue and housing and redevelopment authority levy power to fund housing trust funds.

Regulatory Incentives & Relief for Qualifying Projects

Density Bonuses. Local governments can allow developers to build more units than allowed by the underlying zoning code in exchange for the commitment to keep a certain number of the units built affordable for low- and extremely-low-income households.

Expedited Permitting. Where a project meets community goals for affordability, reduce the approval process. Fast-tracking the permitting process for projects that meet community affordability goals can reduce development costs and speed up delivery of new units.

Allow Multi Family Housing and Mixed Use Building in existing commercially zoned areas without a rezoning process. Cities utilize their comprehensive planning process to determine locations for mixed use and/or multi family housing in existing commercially zoned areas.  When there is adequate infrastructure, allow development of housing in these areas with administrative approvals to reduce the time and costs of a lengthy rezoning process.

Support tools to encourage the Conversion of Economic Obsolete Buildings to Housing. More and more local, state and federal tools are being developed to revitalize and/or reuse obsolete commercial buildings for housing.  As our industry changes, it is important to provide financial and permitting incentives to encourage the investment in buildings converting to housing which would not occur on its own.

Reduce the Cost to Finance New Income-Restricted Housing.

Simplifying legal negotiations. Income-restricted affordable housing projects that utilize tax credits and local/regional sources of funding tend to be complex deals involving multiple lenders and intermediaries and, as such, requiring multiple legal agreements and closing processes. Local governments, public housing authorities, and other public funding entities, including the state and the Minnesota Housing Finance Agency, can work together to utilize a variety of instruments, such as intercreditor agreements, to simplify and align these legal agreements and processes in order to reduce costs and delays.

Flexible Financing and Cost Reduction Measures. The cost per unit of a market rate housing development and an income restricted tax credit development is significantly different (average $320,000 to over $500,000).  In a time when financing and operating income restricted affordable housing is challenging and costly, Minnesota Housing Finance Agency should remain nimble and flexible in reworking finance agreements and terms, provide more allowances for operating expenses and accept simpler design criteria to reduce overall costs.