HomeMy WebLinkAbout05(J) - Approve Contribution of Local Affordable Housing Aid to Habitat for Humanity ReportCITY COUNCIL AGENDA REPORT ITEM: 5J
MEETING DATE:
PREPARED BY:
PRESENTED BY:
AGENDA ITEM:
February 25, 2025
Jason Wedel, City Manager
Jason Wedel
Approve Contribution of Local Affordable Housing Aid to Habitat
for Humanity
RECOMMENDED ACTION:
Approve the contribution of $31,190 in Local Affordable Housing Aid Funds to Habitat for
Humanity
BACKGROUND:
In 2023, the Minnesota Legislature approved new state funding for housing, including a first-ever
tax dedicated to affordable housing. The new 0.25% Metro Area Sales and Use Tax for Housing
provides a separate funding source called Local Affordable Housing Aid (LAHA) to cities located
within the seven-county metropolitan area with a population over 10,000. The City received two
payments in 2024 totaling approximately $110,000. These funds can only be used to support
affordable housing.
Twin Cities Habitat for Humanity is currently in the process of constructing three 4-unit townhome
buildings near Ponds Park on 170th Street SE. The first building was completed last year. As part
of the construction financing for that building, the City contributed $30,280 in LAHA funds. Since
then, three of the four units in that building have been sold.
Habitat is now working on the second building and they are requesting City LAHA funds to assist
with the construction costs. They are requesting a similar amount to last year's request with a 3%
escalator to cover inflationary increases. Their request is therefore $31,190.
The Habitat for Humanity town homes are being sold to residents making 80% of the Area Median
Income (AMI) or less. The underlying land beneath the townhomes will be owned by the Scott
County CDA land trust in perpetuity. As such, the use of LAHA funds to support this project would
be consistent with the state requirements to use these funds for affordable housing projects.
FINANCIAL IMPACT:
The city currently has $79,544.67 in LAHA funds available. If this request of $31,190 is
approved the remaining balance would be $48,354.67.
ALTERNATIVES:
1.Motion and second as part of the consent agenda to approve the contribution of $31,190
in LAHA funds to Twin Cities Habitat for Humanity as outlined in their request dated
February 11, 2025.
2.Motion and second to remove this item from the consent agenda for further discussion.
City of Prior Lake I 4646 Dakota Street SE I Prior Lake MN 55372
ATTACHMENTS:
1.Habitat for Humanity LAHA Funding Request
ltem5J Page 12
11 February 2025
Mr. Jason Wedel
City Manager
City of Prior Lake
4646 Dakota Street SE
Prior Lake, MN 55372
RE: Request for Local Affordable Housing Aid
Dear Mr. Wedel:
Thank you for your previous financial support for the construction of the first building of Towering Woods.
As you know, Towering Woods is a three-building new construction development of 12 for-sale townhomes
located at 4661 170th Street SE in Prior Lake. The first building is complete with three of the four
townhomes in that building now sold to first-time homebuyers.
Please let this letter serve as our formal request for $31,190 to assist with the construction of the second
building, which is scheduled to be completed by mid-to-late summer. The City of Prior Lake’s support will
help ensure these townhomes are attractive not just today, but long into the future.
Each townhome will be sold to income eligible homebuyers earning 80% of area median income or below
and will become part of the Scott County Community Land Trust administered by the Scott County
Community Development Agency. Inclusion in the Land Trust is a great tool to ensure these homes remain
affordable if and when the homeowner chooses to sell.
Please let me know if you need additional information. Thank you for your thoughtful consideration of this
request and for your support of affordable homeownership opportunities within the City of Prior Lake.
Sincerely,
Cecile Bedor
Chief Real Estate Officer