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HomeMy WebLinkAbout01(B) - Letter of Support for CDA Housing Trust Fund Ordinance ReportDate: Scott County Board of Commissioners 200 Fourth Avenue West Shakopee MN 55379 Subject: Letter of Support for Local Housing Trust Fund Ordinance Dear Madam Chair Weckman Brekke, Commissioners Beer, Brennan, Ulrich and Wolf: I am writing to express support for the proposed Local Housing Trust Fund Ordinance (LHTF), which is currently under consideration. I believe that the establishment of a LHTF further elevates the importance of housing across the continuum and provides another tool to flexibly respond to local housing needs across the County. According to the most recent Comprehensive Housing Study completed in 2022 by Maxfield Research, Scott County is projected to add 11,214 households by 2030. The study estimated that 25% of the new housing units added would need to be rental. Between 2022 and 2030 rental demand is estimated at 1,690 market rate units (63%), 767 shallow-subsidy units (28%) and 246 deep-subsidy units (9%). As employment has increased across the county, there has been a corresponding increased need for rental housing across all income categories. Current rental vacancy rates in Scott County remain exceptionally low and additional housing is needed to support continued job growth. The study points out that 75% of new housing units added would be owner occupied housing units between 2022 and 2030. Demand for owner occupied homes is estimated at 6,345 single- family homes and 1,956 owned multifamily homes. Demand is broken down into three general price categories of 2,227 modest homes (27%), 4,805 move-up homes (58%) and 1,269 executive homes (15%). The Local Housing Trust Fund Ordinance demonstrates a commitment to ensuring that our community remains accessible to individuals and families of all income levels. By establishing a local housing trust fund, we are taking a proactive approach to meet the housing needs of our residents. This ordinance provides another tool to help address the immediate challenges of housing affordability while also contributing to the long-term stability and well-being of our community. A well-funded housing trust can support initiatives such as the development of affordable housing units, rehabilitation of existing properties, and the provision of rental assistance to those in need. Finally, the establishment of the Local Housing Trust Fund Ordinance supports Scott County and the cities receiving the new affordable housing aid that was passed in the 2023 State legislative session. By having this fund established our communities will be better positioned to ensure that the aid can be used locally in our communities in a timeframe that makes sense for each community. I am hopeful that each of you will lend your support to the passage of this ordinance. If there are any opportunities for further discussion on this matter, please do not hesitate to reach out. Thank you for your time and consideration. Sincerely, [Your Name] Ordinance No. _____ An Ordinance Establishing a Housing Trust Fund in Scott County Section 1: GENERAL PROVISIONS 1.1 Authority. This Ordinance is adopted pursuant to Minnesota Statutes, Section 462C.l6. 1.2 Purpose. Pursuant to Minnesota Statutes, Section 462C.16, there is hereby created and established for Scott County a fund to be known and denominated as the Scott County Housing Trust Fund. The Trust Fund shall be a permanent source of funding and a continually renewable source of revenue to meet, in part, the housing needs of Moderate, Low Income and Very Low Income households of the County. Projects funded by the Trust Fund shall be disbursed throughout the County, and projects and funding allocations shall be administered by Scott County CDA. Eligible Trust Fund activities include: - Acquisition, construction and rehabilitation of affordable and workforce housing units, and single family homes (including Community Land Trust homes). Includes land acquisition and demolition/remediation required for qualified housing developments - Providing loans and grants for the acquisition and rehabilitation costs necessary for the creation and preservation of affordable and workforce housing units (both rental and owner occupied), and single family homes (including Community Land Trust homes) - Housing and related services in support of housing creation and availability for disabled, veteran, and homeless populations, including emergency housing vouchers - Providing first time homebuyers assistance (subject to maximum per applicant) - Enhancement of county, state and federal affordable housing programs - Other activities to support affordable housing as determined by the Commissioners Section 2: DEFINITIONS 2.1 "Affordable" means a housing unit that has an Affordable Housing Cost 2.2 "Affordable Housing Cost" means an amount satisfied by: 2.2.1 For owner-occupied housing, a housing payment inclusive of loan principal, loan interest, property taxes, property and mortgage insurance, and homeowners association dues which allows a moderate, low income or very low income household to purchase a home while paying no more than thirty percent (30%) of their gross household income. 2.2.2 For rental or cooperative housing, a housing payment, inclusive of a reasonable allowance for heating, which allow a moderate, low income or very low income household to rent a unit while paying no more than thirty percent (30%) of their gross household income 2.3 "Area Median Income" means the income guidelines established and published annually by the U.S. Department of Housing and Urban Development. 2.4 "Assisted Unit" means a housing unit that is Affordable because of assistance from the Trust Fund. 2.5 "Grants Supervisor" means the Scott County CDA Executive Director, and his or her designees. 2.6 "CDA" means the Scott County CDA which serves as the Community Development Agency for Scott County. 2.7 "Low Income" means gross household income that is at or below eighty percent (80%) of Area Median Income, but more than fifty percent (50%) of Area Median Income. 2.8 "Moderate Income" means gross household income that is at or below 115 percent (115%) of Area Median Income, but more than eighty percent (80%) of Area Median Income. 2.9 "Permanent Source of Funding" means once funds are allocated to the Trust those funds can only be expended for purposes outlined in section (4) of this document. 2.10 "Project" may mean a single family house (attached or detached) or a multifamily property, either as owner-occupied property or rental property. 2.11 "Recipient" means any homeowner, for-profit, non-profit or local unit of government housing developer that receives funds for eligible activities noted in Section 1, from the Trust Fund Account. A Recipient may be an individual, partnership, local unit of government, joint venture, limited liability company or partnership, association or corporation. 2.12 "Trust Fund" means the Scott County Housing Trust Fund. 2.13 "Very Low Income" means gross household income that is at or below fifty percent (50%) of Area Median Income. 2.14 "Workforce Housing" means owner-occupied or rental housing units that are provided to households with at least one member per unit who is gainfully employed at the time of unit entry 2.15 Workforce housing as noted above may be designed for households that make 50% to 115% of AMI but shall be inclusive of all income level households who meet the definition of gainful employment and can meet the Affordable Housing Cost as defined in Subpart b (1) and (2). Section 3: TRUST FUND ACCOUNT; SOURCE OF TRUST FUNDS 3.1 A. There is also hereby established a Scott County Trust Fund Account, to be maintained by Scott County CDA. All funds received by the CDA on behalf of the Trust Fund shall be deposited in the Trust Fund Account. Principal and interest from loan repayments, and all other income from Trust Fund activities, shall be deposited in the Trust Fund Account. All interest earnings from the Trust Fund Account shall be reinvested and dedicated to the Trust Fund Account. 3.2 The Trust Fund shall consist of funds derived from the following, but not limited to: 3.2.1 Private cash contributions designated for the Trust Fund; 3.2.2 Payments in lieu of participation in current or future Affordable housing programs; 3.2.3 Grants, loans or aid from the federal or state government; 3.2.4 Principal and interest from Trust Fund loan repayments and all other income from Trust Fund activities. 3.2.5 Budgeted payments made by the CDA's tax levy fund as approved by CDA Board. 3.2.6 Employer based funds and matches. 3.2.7 Application Fees - Projects applying for funds. 3.2.8 Donations of land or property or proceeds from sale of designated land or property. 3.2.9 Other sources to be considered; local or regional utility companies, specific local government departments, specific local government program funds (revolving loan fund), tribal governments. 3.3 The Trust Fund may consist of funds derived from any other source, including but not limited to the following: 3.3.1 Any other appropriations as determined by action of the CDA or County Board. Section 4: TRUST FUND DISTRIBUTIONS 4.1 The Trust Fund is to function as a resource to fund eligible activities noted in Section 1, in accordance with this Section. The Trust Fund shall be administered by the Grants Supervisor. 4.2 Disbursements from the Trust Fund Account shall only be issued for eligible activities to assist Recipients in the creation of Assisted Units, with allowable administrative expenses (including Trust Fund administrator expenses) not to exceed 10 percent of the costs of a specific project. Recipients may use the funds to pay for: capital costs, including but not limited to the actual costs of rehabilitating or constructing Assisted Units; preserving Affordable units; demolishing or converting existing non-residential buildings to create new Assisted Units; real property acquisition costs; and professional service costs, including but not limited to, those costs incurred for architectural, engineering, planning and legal services which are attributable to the creation of Assisted Units. 4.3 All projects exceeding $75,000 considered for funding will be reviewed by the CDA staff, and the Executive Director shall submit staff comments and recommendations to the CDA's Board of Commissioners, prior to CDA action. No disbursements over $75,000 may be made from the Trust Fund Account without the prior approval of the CDA' s Board of Commissioners. 4.4 The CDA shall within sixty (60) days following the close of each fiscal year prepare and submit an annual report to the County on the activities undertaken with funds from the Trust Fund. The report shall specify the number and types of units assisted, the amount loaned per Assisted Unit, the amount of state, federal and private funds leveraged, the geographic distribution of Assisted Units and a summary of statistical data relative to the incomes of assisted households, including their monthly rent or mortgage payments, and the sales prices of owner occupied Assisted Units. Section 5: TERM OF AFFORDABILITY 5.1 The minimum term of affordability for assisted rental units shall be fifteen (15) years. The CDA shall give preference to those projects that ensure that the Assisted Units remain Affordable for the longest period possible. 5.2 Assisted Units shall be deed-restricted to ensure long-term affordability. 5.3 The CDA will enter into loan agreements with the Recipients of the Trust Fund monies. Each loan agreement will clearly state the conditions and requirements for the Recipient's use of Trust Fund monies, including the term of compliance, transfer or sale requirements and other requirements as specified. 5.4 In those cases where an Assisted Unit is sold or transferred prior to the expiration of the agreed- upon term, or where an Assisted Unit is no longer Affordable, the initial Recipient of assistance from the Trust Fund shall be obligated to repay to the Trust Fund the original amount of the loan or grant. 5.5 The CDA shall enforce all debt and lien instruments to the fullest extent of the law. The CDA may recommend debt settlement offers, if it is determined to be in the best interest of the Trust Fund. Section 6: SEVERABILITY 6.1 If any provision of this Ordinance or the application thereof is held invalid, said invalidity does not affect other provisions or applications of the Ordinance which can be given effect without the invalid provision or application and for this purpose, the provisions of the Ordinance are severable. Section 7: EFFECTIVE DATE 7.1 This Ordinance shall be in effect from and after the date of its passage by the Scott County Board of Commissioners and publication according to Minnesota Statutes. Section II. This Ordinance shall be in full force and effect from and after its passage and publication. Adopted by the Scott County Board of Commissioners this ___ day of _____2024, by the following vote: Yes: No: Absent: _________________________ Attest: ______________________________________