HF5025

Purpose

• The bill would authorize counties to use housing aid payments to cover administrative costs of qualifying housing aid expenditures, and expands what counts as a qualifying project under local government aids for housing. It amends Minnesota statutes to broaden and fund housing initiatives and associated services.

Main Provisions

• Qualifying projects list:
  • Emergency rental assistance for households earning less than 80% of the area median income (AMI) as determined by HUD.
  • Financial support to nonprofit affordable housing providers for safe, dignified, affordable, and supportive housing, including various financing stages (construction, acquisition, rehabilitation, demolition, financing, gap financing) for both homeownership and rental housing.
  • Supportive housing operations: funding operations and management of financially distressed residential properties and funding of supportive services or staff for supportive housing (as defined by law).
  • Operating costs for emergency shelter facilities, including related services.
  • Administrative costs incurred by counties administering qualifying projects (subject to a cap; exact percentage not specified in the excerpt).
  • Costs of transferring aid payments to a local housing trust fund (not eligible under the “qualifying project” clause, but expending funds transferred to the trust fund is eligible under the cap).
• Income targeting and priority:
  • For homeownership projects, the eligible target income is up to 115% of the greater of state or area AMI (per HUD).
  • For rental housing projects, up to 80% of the greater of state or area AMI.
  • Recipients must prioritize projects serving households with incomes up to 80% AMI (homeownership) or up to 50% AMI (rental).
  • Priority may also be given to projects that reduce disparities in homeownership, reduce housing cost burden, reduce housing instability or homelessness, improve housing habitability, and create accessible or energy- and water-efficient homes.
• Gap financing:
  • Defined as either the difference between project costs (including acquisition, demolition, rehabilitation, construction) and the market value at sale, or the difference between project costs and what the targeted household can afford based on industry standards.
• Demolition/removal requirements:
  • If aid is used for demolition/removal, the cleared land must be used to build housing for households meeting the income limits.
• Accessibility requirements for larger new buildings:
  • If a project on new construction contains more than four units, the loan recipient must ensure either:
  • At least one unit (or 5% of units) is accessible with features such as a roll-in shower, accessible water closet, and kitchen work surface meeting the State Building Code accessibility provisions; and
  • At least one unit (or 5% of units) is sensory-accessible, including soundproofing between shared walls, no fluorescent lighting in units/common areas, low-fume paint, low-chemical carpet and carpet glue, etc.
  • These accessibility measures do not override other applicable accessibility requirements.

Significant Changes to Existing Law

• Adds and expands what qualifies as a local housing aid project, including:
  • Emergency rental assistance and a broader set of housing-related financing and operations.
  • Funding for supportive housing and supportive services.
  • Operating costs for emergency shelters.
• Introduces caps on administrative costs (with the exact percentage to be specified in the final language).
• Allows counties to incur costs related to transferring funds to local housing trust funds while maintaining eligibility for other project costs under the cap.
• Establishes income-based targeting and priority rules for homeownership and rental housing projects.
• Requires new accessibility and environmental standards for larger multi-unit projects, including both physical accessibility (roll-in showers, accessible fixtures) and sensory accessibility features (soundproofing, lighting, low-toxicity materials).

Relevant terms - emergency rental assistance - area median income (AMI) - HUD (U.S. Department of Housing and Urban Development) - state median income (SMI) - local housing trust fund - qualifying projects - affordable housing - nonprofit housing providers - supportive housing - supportive services - financially distressed residential properties - gap financing - demolition or removal of structures - new construction with more than four units - accessible units - roll-in shower - water closet - kitchen work surface - Section 1002 - State Building Code Accessibility Provisions for Dwelling Units (Minnesota) - sensory-accessible units - soundproofing - low-fume paint - low-chemical carpet and carpet glue - income targeting (80% AMI for priority homeownership; 50% AMI for rental)