Hennepin County approves largest financial commitment to affordable housing

Hennepin County will spend more than $27 million to create and preserve 1,900 affordable housing units, the county's largest-ever funding initiative for housing.

The 22 projects approved by the County Board last week include new housing led by developers of color and housing in neighborhoods affected by the civil unrest after the police killing of George Floyd in 2020. The money will assist projects delayed by rising costs due to the pandemic, preserve existing affordable housing buildings and create a home ownership assistance program.

"This investment is next level," said Board Chair Marion Greene. "We're not just responding to the impacts of the pandemic with these investments, we continue our work to respond to and dismantle historic racial injustice — in the scale of these investments, and by being deliberate in how, where and with whom we invest in affordable housing."

The county joins local governments across the country grappling with housing shortages, soaring rents and increased homelessness. As developers scramble to build homes, billions of dollars in federal aid have been pouring into mostly low-income housing initiatives.

The board's action comes on top of $12.6 million the Hennepin County awarded this year to boost its affordable housing stock by 900 units. One of the projects will convert two existing buildings into single-room occupancy units.

The total of 2,800 units surpasses the county's pandemic goal of increasing affordable housing by 2,000 units. Federal pandemic recovery aid is paying for the projects. The board still has another $13 million to spend on new housing by the end of the year.

The money will create 884 affordable rental units, preserve 986 units and create 73 affordable homeownership opportunities, like converting tax-forfeited property into new housing.

The county will buy and covert existing properties to long-term single-room occupancy housing. It also boosted direct subsidies to projects to lower the costs and increase the number of affordable units.

In addition, the county launched initiatives to reduce disparities in homeownership rates and increase options for people with extremely low incomes and other challenges to stable housing.

"Cities can leverage this money with private investment and grow it for housing," said Board Member Jeff Lunde, the former mayor of Brooklyn Park. "They can also use their own money and federal funds to leverage other investments and expand the housing impact."

The county aimed nearly two-thirds of the $27 million to projects led by developers of color or in neighborhoods affected by the unrest after Floyd's death.

Most of the projects are focused in Minneapolis, Brooklyn Center, Brooklyn Park, St. Louis Park and Edina. The housing ownership funding is targeted throughout the county.

The largest grant was $5.8 million to build the Calvary Apartments in Minneapolis, which will create 41 units for people far below federal poverty guidelines.

A development by Project for Pride in Living at 3030 Nicollet Av. S. in Minneapolis received $4.9 million, and Huntington Place apartment complex in Brooklyn Park was awarded $3.5 million. More than $600,000 will be spent to convert 17 tax-forfeited houses in Minneapolis for subsidized ownership.

The inclusion of single-room housing in the funding is important to Board Member Angela Conley, who said it's an excellent way to deal with homelessness. The sheer amount of funding awarded really gets to the goal that housing is certainly a fundamental human right, she said.

"Making this investment right now meets so many needs when you talk about wealth creation and closing the equity gap," Conley said.

Board Member Chris LaTondresse said the county's commitment to affordable housing is critical to meet the challenges facing the region right now. Even with the historic one-time federal dollars being used to fund the projects, he said, the scale of this spending was only a modest down payment required to meet the needs.

LaTondresse said 1 in 3 county residents have burdensome housing costs that exceed recommended guidelines for their income. More than 73,000 people are in extremely low income households, he said, and there are only 15,000 housing units available to them.

"We are being responsible for stewarding the federal dollars," LaTondresse said. "The challenge ahead is how we maintain the scale of these investments."