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Letter to the City of Minneapolis: Emerson Village and the Affordable Housing Trust Fund

Dan Gregory April 7, 2021

Background: Beacon is requesting that the City of Minneapolis prioritize investment in low-income housing development through the Affordable Housing Trust Fund (AHTF). Though we are centering our proposed development at Emerson Village, this concern applies to all similar (and difficult to fund) projects. The City has opened a time of Public Comment on the issue, and we encourage residents to write in and demonstrate your support for these changes. Please contact Emily for more information on how to get involved.

We wanted to share the letter below to provide greater detail around our request and in the spirit of transparency:

Andrea Brennan, Interim Director
Community Planning and Economic Development Department
City of Minneapolis
505 Fourth Ave. S., 320
Minneapolis, MN 55415

(sent by email)

Dear Andrea,

Thank you for the opportunity to provide comments to the proposed Affordable Housing Trust Fund Notice of Available Funding (NOFA). We believe that you share our deep concern for residents facing homelessness in Minneapolis, and the many more who are housed but paying far more than they can afford. We know that you share in our joy that Great River Landing is thriving and Bimosedaa and Lydia Apartments are close to beginning construction, thanks to contributions from the City’s AHTF.

As a developer and a collaborative of faith communities throughout the metro, we have come to see the AHTF as one of the most powerful tools the city already has to address homelessness and systemic racism. Those most likely to be homeless or cost-burdened in Minneapolis are Native American, African American, and other residents of color, living with the legacy of generations of racism in housing systems which we have yet to repair.

We commend the increased investment under Mayor Frey’s and CPED leadership. However, we believe that given the community need for deeply affordable housing, that this investment could be more strategically targeted to have the greatest community impact. The City of Minneapolis needs to make bold, significant changes to produce more housing that meets the need for people earning low wages and advance equity in this system.

We believe that the funding should follow the need. In Hennepin County, 66% of renters who are severely cost burdened have very low incomes (at or below 30% AMI). Yet, in 2020, in the midst of a crisis in unsheltered homelessness and the coronavirus pandemic, fewer than 20% of the units produced with AHTF were income restricted at 30% AMI. We believe that the City should establish a clear target goal for deeply affordable housing. This goal should drive the criteria and process within the NOFA.  Mayor Frey has recently suggested the goal of 50% of the units targeted for those at 30% AMI or below.

We request that the Affordable Housing Trust Fund be more targeted for residents with the lowest incomes and have the greatest challenges affording a place to live. We request that the AHTF should seek to incentivize housing proposals that have the most lowest income units. We request that the City follow a transparent scoring system to award funding.

Specific recommendations to the NOFA:

1. The city should change the definition of the primary purpose of the AHTF to better target resources.

Current language

INTRODUCTION:  The primary purpose of the AHTF Program is to assist in financing the production and preservation/stabilization of affordable and mixed-income rental housing projects in Minneapolis

Proposed change

The primary purpose of the AHTF Program is to assist in financing the production and preservation/stabilization of deeply affordable (at 30% area median income) and affordable (at 50% area median income) rental housing developments in Minneapolis. Funds may serve a secondary purpose of encouraging the inclusion of deeply affordable and affordable units in otherwise non-affordable developments.

2. We support utilizing the scoring criteria as the most transparent and effective way to award funding. For example, in 2020, Emerson Village that had the 4th highest score was not one of the 10 projects that actually received funding last year. We do not support layering in multiple optional criteria outside of the scoring process.

Current City proposed language

VIII      Scoring helps identify the level to which a project meets the objectives and goals adopted by the City. The City does not make awards based on scores alone. [emphasis added] Additional factors are taken into consideration including, but not limited to, timeliness, significance of funding gaps, comprehensive plan guidance, anti-displacement policies, geographic location and distribution, and emerging developer status.

Proposed Change

Scoring is the primary determinant to evaluate which projects best meet the objectives and goals adopted by the City.

The scoring system that the city has developed and continues to nuance is very comprehensive and should be sufficient to award funding on this basis. Here is the list of the scoring criteria already being weighed:

  • Secured Funding: Up to 10 Points 
  • Capacity of Property Manager and Quality of Property Management Plan: Up to 5 Points
  • Capacity of Owner and Developer’s Comparable Project Experience: Up to 5 Points
  • City Owned Land or City Issued Request for Proposal Priority: 15 Points
  • Economic Integration: Up to 5 Points
  • Ratio of Soft Costs to Total Project Costs: Up to 6 Points
  • Large Family Housing:  Up to 20 Points
  • Provision of Resident Support Services:  Up to 10 Points
  • Projects Utilizing Average Income Test (30% Units):  Up to 15 Points
  • Project-Based Rental Program Assistance:  Up to 15 Points
  • Cost Containment: Up to 6 Points
  • Housing for Homeless (at 30% or less of AMI):  Up to 10 Points 
  • Senior Housing:  Up to 10 Points
  • Neighborhood Support: 1 Point
  • Community Housing Development Organization:  5 Points
  • Preservation, Rehabilitation, Stabilization: 10 points 
  • New Construction or Positive Conversion:  10 Points
  • Sustainable Building Policy Energy Efficiency Points: up to 10 points
  • Alignment with Minneapolis 2040 Goals: up to 50 points 
    • Efficient Site Utilization (5 8 points)
    • Transit Access (10 points)
    • Parking (10 points):
    • Parks and Open Space (10 points)
  • Cultural Districts (5 points)
  • Plazas (5 points)
    • Environmental Remediation (3 points)
    • Through-Block Connections (2 points)
    • Equitable Development (5 points)

With this extensive list, it does not seem necessary to add another layer of criteria as proposed that includes the criteria already listed within the scoring. When the City distributes Low Income Housing Tax Credits, it follows the scoring very closely as required by law. It allows for a small amount of discretion for those projects that score close together. A similar parameter could also be applied to the Affordable Housing Trust Fund.

Proposed Change

Projects that are within 10 points of each other will be considered substantially equivalent and preference can be granted among the similar scoring projects based on additional analysis of feasibility or geographic distribution.

III. S. Minneapolis 2040 alignment:  In addition to our overall changes, we would request the following change in the Minneapolis 2040 section. We support placing affordable housing near Parks and Open Space but we are concerned that this disadvantage sites like Emerson Village that are already under development and do not meet this criteria. 10 points could make the difference of a development moving forward or not.

City proposed language

Parks and Open Space (10 points): Projects will receive 10 points for Parks and Open Space if the application materials demonstrate that the site is:

  • Within one quarter mile of a regional park or trail as defined by the Metropolitan Council, or
    • Within one block (660 feet) of any Minneapolis Park and Recreation Board park, Gold Medal Park, or The Commons

Proposed change

  • Within one mile of a regional park or trail as defined by the Metropolitan Council, or,
  • Within one quarter mile of any Minneapolis Park and Recreation Board park, Gold Medal Park, or The Commons

3. We support the changes to the NOFA and RFP that incentivize equitable development and other criteria focusing resources on those most disadvantaged in our housing system.

We would be interested in meeting with you to share our vision of the Affordable Housing Trust Fund having a strategic focus where there is the greatest community need. We know that your leadership and expertise would be invaluable in achieving this goal.

Sincerely,

Lee Blons

cc: Carrie Goldberg, Mayor Jacob Frey