Meeting Date: July 6, 2023
To: Members of the Housing & Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Title
Local Housing Trust Fund and Budget Prep.
Body
Action Requested:
No action is requested at this time.
Summary Report:
The HRA is being provided this information and report before being asked to consider a 2023 budget amendment to provide initial funding to the Local Housing Trust Fund and the Establishment of the Local Housing Trust Fund Subcommittee.
Ordinance Number 1034 (att. 1) passed on April 19, 2022 amending Northfield City Code to establish a Local Housing Trust Fund. The 2023 Minnesota legislative session saw the largest single investment in housing in state history with the passing of $1.065 billion housing omnibus bill. As part of the bill, there will be made available $5.8 million in matching funds, up to $150,000, to communities who have established Local Housing Trust Funds. Minnesota Housing Finance Agency (MHFA) will be the state agency that will be administering the matching funds. There currently is not an application available from MHFA to apply for these funds. As for future funds and grant opportunities through MHFA, if funds are allocated to the Local Housing Trust Fund for future projects, the money is considered “spent” and are not subject to recapture if not immediately allocated to a project. Many grant and funding opportunities also come with a caveat to allow an administering entity administrative fees of up to 10% of allocated funds to the Local Housing Trust Fund for the administration of programming. This new change will allow the HRA an opportunity to build future capacity, both in terms of staffing and money, in order to effectively deploy funds for housing initiatives.
462C.16 Subd.3. of the State Statute spells out what funds in a Local Housing Trust Fund can and cannot be used for; some of the types of programs allowed are already a part of the Northfield HRA portfolio.
Current programs that the HRA administers:
• Down Payment Assistance - this is currently being administered through Northfield’s annual allocation of CDBG funds from Dakota County. In 2021, the HRA made available an additional $150,000 through levy funds for those households purchasing their home through Rice County Habitat for Humanity. Rice County Habitat has let HRA staff know that they would be interested in down payment assistance for their 4 builds in Northfield in 2024.
• Home Rehab Loans - The Single Family Home Rehab and the Manufactured Home Rehab programs have been historically administered through Northfield’s annual allocation of CDBG funds from Dakota County. In May 2022, the HRA made up to an additional $230,000 of reserve funds available, if needed, to cover all eligible Aging in Place Grant applications and Single Family Home Rehab applications that had been received to that date. After screening for eligibility, and the difficulty in finding contractors, only $30,000 was tapped in to.
• Manufactured Homes Emergency Fund - $50,000 was allocated by the HRA board in September 2022 to be used for emergency repairs. Due to staff capacity, the HRA has been coordinating with both the Community Action Center (CAC) of Northfield and Healthy Community Initiative (HCI)/Growing Up Healthy (GUH) to deliver these funds to the community on a reimbursement basis. To date, approximately $10,000 has been reimbursed to both CAC and HCI/GUH for weatherization, replacement and/or repair of furnaces and hot water heaters.
• The HRA also receives community requests for financial assistance related to housing and housing supports. These requests are taken on a case-by-case basis and presented to the HRA board throughout the year; i.e. the requests from Habitat for Humanity for permits and Restore Recovery for deposit and rent assistance that was included in the July 6, 2023 meeting packet.
• The HRA annually dedicates levy funds for the Northfield Union of Youth’s (NUY) Wallflower Project. NUY’s Wallflower Project is a volunteer host-home network for youth to access when home isn’t an option. The HRA was instrumental to the establishment of the Wallflower Project by providing the initial seed money in 2017.
Staff notes that programs such as down payment assistance and rehabilitation loans all have eligibility criteria and overall policy as part of the application/request process. For those financial requests that do not fit within an established HRA program, and depending on the timing of such requests, it could take 6-8 weeks for the request to make it on the HRA agenda and it is not guaranteed that the request will be approved/denied in the same meeting. As a means to improve efficiency of time, staff is proposing the attached policy for those independent requests that accounts for the requirements established in Ordinance as well as the City’s Purchasing Policy (att. 2).
This information is being provided prior to a formal action request and 2024 budget review.
Alternative Options:
N/A
Financial Impacts:
HRA reserves are currently estimated $1,048,201.
Staff has identified approximately $75,000 from 2023 HRA levy, programmed to Low- to Moderate- Income (LMI) programs to dedicate to the Local Housing Trust Fund. This is the LMI fund budgeted annually for the previous Street Assessment Assistance, Northfield Union of Youth/Wallflower Project, prior Viking Terrace Rehab loan program, previous Viking Terrace/Riverside/Northfield Estates fall cleanups, etc. More information to come for August 2023 HRA meeting.
Tentative Timelines:
The City of Northfield has recently begun the annual budgeting process for the next year. More information will be presented at the August 2023 HRA meeting.