Title
RESOLUTION OF SUPPORT FOR ONE ROOF COMMUNITY HOUSING ORGANIZATION’S REQUEST TO THE STATE OF MINNESOTA FOR LOW INCOME HOUSING TAX CREDITS AND THE CONDITIONAL COMMITMENT OF UP TO $3,857,143 OF AMERICAN RESCUE PLAN ACT FUNDING FROM THE CITY OF DULUTH FOR CONSTRUCTION OF THE 72 UNIT BRAE VIEW SENIOR HOUSING DEVELOPMENT.
Body
CITY PROPOSAL:
RESOLVED, that the City of Duluth hereby expresses its support for One Roof Community Housing Organization’s request to the Minnesota Housing Finance Agency (MHFA) for the allocation of low-income housing tax credits and/or for other funding provided by MHFA, to construct a 72-unit affordable multifamily housing development in the Central Hillside neighborhood of Duluth (the "Project").
BE IT FURTHER RESOLVED the City Council of the City of Duluth does hereby conditionally commit up to $3,857,143 of American Rescue Plan Act (ARPA) funding to fund a portion of the cost of the Project, subject to the Developer, One Roof Community Housing Organization, successfully securing the necessary funding from MHFA and other funding sources to ensure project completion by 2024 and to the approval of a development agreement between the City and the Developer.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution expresses the City Council’s support of an application to be submitted to MHFA by One Roof Community Housing Organization for low-income housing tax credit and other Super RFP funding that may be awarded by MHFA as well as a conditional commitment of $3,857,143 in ARPA funding for the construction of a 72-unit affordable multifamily housing development.
On May 9, 2022 Council approved resolution 22-0368R which provided support for One Roof Community Housing’s request to MHFA for low income housing tax credits, a conditional commitment of $4.5 in American Rescue Plan Act (ARPA) funding, and an intent to approve Tax Increment Financing in an amount not to exceed $975,000 for the construction of the 70-84 unit Brae View Senior housing development proposed at 404 E 5th Street in the Central Hillside neighborhood. Since submission of their intent to apply to MHFA, One Roof has completed additional design and cost modeling to solidify their project unit count. Their application to MHFA on July 15, 2022 will be for a 72-unit affordable senior housing development. To ensure their support resolution from Council matches their application scope, this resolution provides support for their tax credit application and a reduced ARPA allocation of up to $3,857,143 which matches One Roof’s reduced unit count. Additionally, City and One Roof staff have determined the need for Tax Increment Financing may not be necessary and have decided to remove that from their application’s funding sources.
The Brae View project will be located at 404 E 5th Street in the Central Hillside neighborhood. The Project includes construction of a 72-unit apartment building for seniors 55+ making 30 to 80% of Area Median Income, with at least nine (9) units reserved as supportive housing units serving high priority homeless adults. In addition to the housing in the building, the property anticipates, eight (8) units as respite housing as well as community services space to be utilized for childcare for 60-120 children in partnership with Essentia Health.
MHFA requires tax credit applicants for housing developments in Duluth to receive the support of the City Council. The support is required to assure that a given proposal is a priority for the City of Duluth and that it meets locally identified housing needs. A 2019 Maxfield Research Inc. housing analysis reported that Duluth could absorb up to 3,509 additional units of affordable housing by 2024. The demand for this type of housing has been further substantiated through staff research and analysis during both the Image Duluth 2035 comprehensive plan update and annual Housing Indicator Reports.