Hennepin County Board approves a record $17 million for affordable housing projects

Hennepin County is spending a record $17 million for 27 affordable housing and development projects this year to create nearly 2,300 units and the county's first low-income rent-reduction subsidy program.

The grants are the largest amount ever awarded by the board at one time to support affordable housing, officials said. The awards represent more than double the funding approved for affordable housing in 2018, and it's part of the county's 10-year plan to bolster housing for its poorest families and most vulnerable residents.

The projects are sprinkled throughout the county and will consist of 1,550 new or improved affordable housing units. There will also be another 800 units in major transit corridors with commercial and community space. Nearly 400 units are designated for households with the lowest income of less than 30% of the area median income, or about $31,450 for a four-person household.

The county is also piloting a predevelopment technical assistance strategy to work with developers, service providers and social workers to develop a pipeline of supportive housing projects that serve target populations such as families with children in county protection and people leaving mental health treatment.

"This is a historic investment to match an unprecedented and challenging affordable housing crisis," said Commissioner Chris LaTondresse, who is chairman of the Housing and Redevelopment Authority. "It's a time of tremendous innovation as it relates to our work."

The newest piece of the county's affordable housing strategy is a 15-year annual subsidy for CommonBond's Rise on 7 housing and day care project in St Louis Park. The initiative aims to reduce rents from 60 to 30% of area median income for 19 units, putting them within reach of lower-income tenants. The five-story complex is being built on Hwy. 7 on the former Prince of Peace Lutheran Church site. The total subsidy amounts to $1.8 million.

More than one-third of households in the county spend 30% of their income on rent, said Julia Welle Ayres the county's manager of housing development and finance. More than 41,000 low-income households devote half of their paychecks to rent, she said.

"Rents keep going up, but incomes are not," she said. "People need housing stability to succeed."

Hennepin County spends $146 million annually on supportive housing services and operations, emergency shelters, funding for affordable housing, short-term housing and home repair assistance. The county builds or updates about 1,000 affordable units a year.

While the 27 new projects were approved by the board in May, it has taken several years to develop housing plans, said Welle Ayres. The pilot initiative works with developers up front to help fill the gaps for low-income households with the highest needs, she said.

"Since it's the most difficult to find, we are trying this year to get more developers to build housing for households at the 30 percent area median income" she said.

The $17 million for the projects is funded by five county housing and development programs. The support housing strategy received $5 million to construct 205 affordable housing units. Two of the projects, Aeon in downtown Minneapolis and Vista 44 in Hopkins, will house families involved with child protection and people leaving mental health treatment.

"Somebody exiting treatment may have lost housing and have nowhere to go," said Welle Ayres. "They might go back to a shelter or unhealthy living situation that would exacerbate mental health issues."

Another $7.8 million was awarded to 11 projects from the county's affordable housing incentive fund. The developments include rehabbing houses in Minneapolis, Minnetonka and other parts of the county, and new apartment buildings in Brooklyn Park, Edina and Plymouth.

County officials are hoping all of these programs and new spending have lasting benefits in the community.

"With the possible end of the eviction moratorium and emergency rent assistance during the COVID-19 pandemic, there is going to be a greater need for housing for people experiencing homelessness," LaTondresse said. "But the pandemic also taught us how well programs can work during a crisis."

David Chanen • 612-673-4465