City Council Meeting Date: January 18, 2022
To: Mayor and City Council
City Administrator
From: Melissa Hanson, Housing Coordinator
Mitzi Baker, Community Development Director
Title
Presentation on Potential Local Housing Trust Fund including State Matching Grant Opportunity.
Body
Action Requested:
Discussion only.
Summary Report:
In 2017, Minnesota became the 14th state to pass legislation to formally recognize local trust funds for housing development (Minn. Stat. 462C.16: Housing Trust Funds for Local Housing Development). In July 2021, Minnesota passed the Omnibus Housing Finance bill that includes $1 million over the next fiscal year for state matching grants (to be administered through Minnesota housing Finance Agency) for Local Housing Trust Funds (LHTF) up to $150,000. A grantee is eligible to receive a grant amount equal to 100 percent of the new public revenue committed to the LHTF from any source other than the state or federal government, up to $150,000. And, depending on funding availability, an amount equal to 50 percent of the new public revenue committed to the LHTF from any source other than the state or federal government that is more than $150,000 but not more than $300,000.
Local Housing Trust Funds (LHTF) are established via an official action by local government. Minn. Stat. 462C.16 says that "a local government may establish a local housing trust fund by ordinance or participate in a joint powers agreement to establish a regional housing trust fund." Public revenues from one or more sources must be dedicated to the LHTF. The allocated revenues are protected for housing uses in the community (they are held in "trust"). Money in a LHTF may only be used to pay for authorized expenditures which are:
a) Administrative expenses (not to exceed 10 percent of the fund's balance);
b) The making of grants, loans, and loan guarantees for the development, rehabilitation, or financing of housing;
c) Matching other funds from federal, state...
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