Ramsey County weighing $10 million in new property taxes to fund more affordable housing

Ramsey County officials are considering levying more than $10 million annually in new property taxes, starting in 2022, to spark more affordable housing and redevelopment.

At a workshop Tuesday, county commissioners discussed activating existing taxation authority for its Housing and Redevelopment Authority (HRA). Hennepin, Anoka and Washington counties already levy similar taxes through their HRAs or community development agencies, with those funds earmarked for development and housing.

"Our peer counties are already levying for affordable housing," said Kari Collins, Ramsey County's economic development director. "We are in an affordable housing crisis."

Officials talked about completing an in-depth housing needs assessment across the county and then creating a sweeping affordable housing and redevelopment blueprint in partnership with cities, with the goal of instituting the new tax in 2022.

"We want to understand what the needs are in the community," said Collins, noting that many cities already have HRA and economic development authorities working in the same areas.

Max Holdhusen, Ramsey County's interim manager of housing stability, said he believes many cities would welcome the county's additional financial resources and partnership in their efforts to meet affordable housing goals.

The potential $10.6 million HRA levy would amount to less than 1% of Ramsey County's proposed property tax levy of $327.1 million in 2020, officials said.

"Redevelopment is a key piece of this," Collins said. "We can use it for both affordable housing and the removal of blight."

One big hurdle: A handful of Ramsey County cities that created their own HRAs before 1971 could seek exemption from the county levy if they do not have an interest in county HRA programs. If those cities all chose to opt out, the HRA levy would collect only an estimated $4.3 million a year.

St. Paul is considered exempt. The others that may be exempt are New Brighton, North St. Paul and White Bear Lake; Collins said the dates they created their HRAs need to be verified. But commissioners were optimistic that they and county staffers can illustrate the benefits of a new HRA tax to all the county's cities.

Cities that opted out would not benefit from the HRA tax, said County Manager Ryan O'Connor at Tuesday's workshop. "We would not create a freeloader problem."

Commissioner Trista MatasCastillo expressed some frustration that it could take years to make the funds available when the housing crisis is coming to a full boil now.

"This a long timeline. This is a slow approach," she said, while acknowledging it would take time to draft a blueprint and build partnerships with cities.

Board Chairman Jim McDonough said the county also will need that time to look at the entire budget and see if there are ways to lessen the impact.

"That's a big hit for our taxpayers," McDonough said. "We can't overburden the people who are going to be paying for this."

Ramsey County already is considering a 4.75% levy increase in 2020 and another 4.5% increase in 2021.

McDonough urged staffers to brainstorm a variety of ways to help people secure safe housing while stretching county funding. Possibilities include down-payment assistance for home buyers, rent subsidies, property improvements and collaborations with landlords.

"We have an opportunity. We can go into areas we've never gone before, partnering with our cities," McDonough said.

Roseville Mayor Dan Roe said he appreciated the county's interest in providing more funding for affordable housing and that he was glad county officials wanted to discuss community needs with city leaders.

"While Shoreview is definitely committed to providing affordable housing, I would definitely want more information about how the levy would be distributed and what sort of criteria would have to be met," said Shoreview Mayor Sandy Martin in an e-mail.

"Clearly, we would like to see the plan. Funding is always the biggest obstacle for developers, and county assistances could be very helpful. We are, of course, supportive of local control and we feel that we know our community best."

Officials in other counties say their development and redevelopment agencies are moving the needle on affordable housing in meaningful ways. The Hennepin County HRA levied $10.5 million in property taxes this year.

"Since 2000, Hennepin County's HRA has contributed to the creation or preservation of more than 15,000 units of housing through their levy-funded affordable housing and transit-oriented development programs," said spokesman Kyle Mianulli.

The Washington County Community Development Agency owns and operates more than 1,100 units of affordable housing throughout the county.

Shannon Prather • 651-925-5037