$4 million freed for use in affordable housing

Steve Brandt, Star Tribune

January 29, 2002

Minneapolis neighborhoods and developers will get $4 million to create housing for low-income people now that the governing board of city's Neighborhood Revitalization Program has voted to release the money.

Monday's unanimous decision came six months after worries about the NRP's financial future prompted the board to freeze the sum.

NRP Director Robert Miller said he'll now open nine proposals, locked in his file cabinet since July, to put the money to work. He said he hopes to bring recommended proposals to the board's March 25 meeting. The money's release was urged by Mayor R.T. Rybak, who sits on the board. He's said it's the only new spending he'll allow for affordable housing until the NRP, in addition to the city's planning and development arms, can be reorganized.

The NRP, a city program authorized by the Legislature, allocates millions annually to neighborhood to finance priorities they set. The Legislature directed that housing improvements consume slightly more than half of the money. In 2000, the city redefined the program to take $4 million off the top annually for four years to use for affordable housing.

The money is for proposals by developers who are endorsed by a city-recognized neighborhood organization. It is targeted for people making half or less than half of the region's median income. That means rent levels that consume no more than 30 percent of annual income for a single person making $26, 150 or a family of four making $37,350. Proposals geared toward people making even less will be a priority.

During last year's mayoral campaign, Rybak advocated the immediate release of all $16 million slated to be set aside for affordable housing over a four-year period. But Miller said that was too much too soon: Because lower-rent housing often relies on developers weaving multiple sources of money, it could take as long as two years to build hosuing approved under the first year's dose.

The $4 million constitutes a major share of the city's $10 million annual commitment to affordable housing. The biggest hare comes from federal aid. This year the rest comes from a new development levy that the City Council approved after tax cuts by the Legislature slashed the amount of money yielded from the city's development districts.

At Rybak's urging, the council also recently directed a review of city zoning law and density that could lead to more affordable housing. In addition, the city is assembling a group of legislative proposals aimed at assisting housing development and is working with Hennepin County on getting tax-forfeited, boarded buildings reoccupied sooner.

The action comes amid reports that vacancy rates are rising and rents are leveling, but advocates say affordable housing is still a critical need.

Steve Brandt can be contacted at sbrandt@startribune.com or 612-673-4438.


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