7.6. HRSR 02-05-2018
Request for Action
To Item Number
Housing and Redevelopment Authority 7.6
Agenda Section Meeting Date Prepared by
Consent February 5, 2018 Amanda Othoudt, EDD
Item Description Reviewed by
Modifications/Amendments to the Municipal Cal Portner, City Administrator
Housing and Redevelopment Act
Reviewed by
Action Requested
Receive report on modifications or amendments to the Municipal Housing and Redevelopment Act.
Background/Discussion
Housing and Redevelopment Authority Bylaws allow for the review of any modifications or amendments
to the Municipal Housing and Redevelopment Act. The HRA attorney has provided a review as
suggested each year, and it is attached.
These updates will be reflected in ongoing processes and policies.
Financial Impact
N/A
Attachments
EDA attorney memo dated January 8, 2018
The Elk River Vision
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CHARTERED
MEMORANDUM
TO: Elk River HRA Chair and Commissioners
FROM: Jenny Boulton
DATE: January 8, 2018
RE: Housing and Redevelopment Authority Legislative Update
The HRA has historically received an annual update of legislative changes to the Municipal
Housing and Redevelopment Act, Minnesota Statutes, Sections 469.001 to 469.047 and other
legislative changes that are relevant to the HRA. Legislative changes enacted in 2017 pertinent to
the HRA are outlined below.
There was only one change to the Housing and Redevelopment Act.
o Housing and Redevelopment Authority GO Bonds. The omnibus tax bill (First
Special Session, Chapter 1 (HF 1/no SF) modifies Minnesota Statutes, Section
469.034, subdivision 2 to increase the maximum limit on general obligation bonds
allowed to be issued by housing and redevelopment authorities from $3,000,000 to
$5,000,000. Effective July 1, 2017.
Housing and redevelopment appropriations. The omnibus jobs and economic growth bill
(Chapter 94, HF 1620/SF 1456) appropriates $12,925,000 to the Minnesota Housing
Finance Agency (MHFA) for its Economic Development and Housing Challenge Program.
Manufactured Homes Park Redevelopment Program. The omnibus jobs and economic
growth bill (Chapter 94, HF 1620/SF 1456) amends the existing manufactured home park
redevelopment program to include nonprofits and cooperatives as eligible recipients for
grants and loans from MHFA. It also modifies the program for individual assistance grant
usage, and adds a new park infrastructure grant program for improvements in manufactured
home parks and infrastructure, including storm shelters and community facilities. MHFA
must attempt to make grants and loans in approximately equal amounts to applicants outside
and within the metropolitan area and to be provided in a manner consistent with Minnesota
Statutes, Section 462A.02, subdivision 2. It adds a provision requiring recipients receiving a
grant to provide from year to year, on a cumulative basis, for adequate reserve funds to
cover the repair and replacement of the private infrastructure systems serving the
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community. The fund structure and requirements were modified, but not funded. Effective
July 1, 2017.
Workforce Housing Development Grant Program. The omnibus jobs and economic
growth bill (Chapter 94, HF 1620/SF 1456) appropriates $2,000,000 in fiscal years 2017 and
2018 in ongoing funding to the workforce housing grant program and transfers
administration of the program from DEED to the MHFA. Other program requirements
remain the same except that preference is now given to applicants to cities with populations
under 30,000 instead of those with populations under 18,000. Effective July 1, 2018.
Local Housing Trust Funds The omnibus jobs and economic growth bill (Chapter 94,
HF1620/SF 1456) establishes the ability for cities to create a local housing trust fund by
ordinance, or to participate in a joint powers agreement to establish a regional housing fund.
Potential sources of funds include appropriations by a local government, housing and
redevelopment authority levies, and other sources set forth in the law. Permitted uses of the
funds include administrative expenses, grants, loans for development, rehabilitation or
financing of housing to match other federal, state or private funds for housing, or down
payment assistance, rental assistance, and homebuyer counseling. If established, the local
housing trust fund must report annually to the local government that created it, and a report
must be posted on the local government’s website. This provision publicizes the authority
that already exists pursuant to Minnesota law. Effective July 1, 2017.
Public Housing Rehabilitation and Housing Infrastructure Bonds. First Special Session
Chapter 8 (HF 5/no SF) is the omnibus bonding bill and authorizes the MHFA to issue
$35,000,000 in new housing infrastructure bonds and up to an extra $20,000,000 in housing
infrastructure bonds using existing debt service appropriations from the 2014 and 2015
bonding authorizations. In addition, the bonding bill authorizes the issuance of $10,000,000
in general obligation bonds for public housing rehabilitation which will be used to fund the
MHFA’s Publicly Owned Housing Program utilized by local housing and redevelopment
authorities.
Tax Increment Financing (TIF). Modifications to Minnesota Statutes, Section 469.174
through 469.1794 (the “TIF Act”) include the following:
o Workforce housing tax increment financing authority. The omnibus tax bill
(First Special Session, Chapter 1, HF 1/no SF) modifies the TIF Act to create new
tax increment financing (“TIF”) authority for workforce housing. Cities using
workforce housing TIF must make the \\following findings: (1) the city is located
outside the metropolitan area; (2) the average vacancy rate for rental housing in the
municipality and in any statutory or home rule charter city located within 15 miles or
less of the boundaries of the municipality has been 3% or less for at least the
immediately preceding 2 year period; (3) at least one business located in the
municipality that employs a minimum of 20 full-time equivalent employees in
aggregate has provided a written statement to the municipality indicating that the
lack of available rental housing has impeded the ability of the business to recruit and
hire employees; and (4) the municipality and the development authority intend to use
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increments from the TIF district for the development of rental housing to serve
employees of businesses located in the municipality or the surrounding area. The
county board and school district must approve the TIF plan by resolution before it
qualifies for TIF. No requests for workforce housing TIF certification may be made
by a county auditor for request after June 30, 2027. This provision is effective for
TIF districts for which the request for certification was made after June 30, 2017.
o Housing TIF District Changes. The omnibus tax bill (First Special Session,
Chapter 1, HF 1/no SF) modifies Minnesota Statutes, Section 469.1761 to increase
the income limits for housing TIF districts that receive MHFA challenge program
Funds. For projects receiving MHFA challenge program funds, the income limits for
projects receiving TIF assistance increases to 80% of area median income. Current
income limits for housing TIF districts require that 20% of units be at 50% of area
median income or 40% of unit be at 60% of area median income. This provision is
effective for TIF districts for which the request for certification was made after June
30, 2017.
o Interfund Loan Modifications. The omnibus tax bill (First Special Session,
Chapter 1, HF 1/no SF) modifies Minnesota Statues, Section 469.178, subdivision 7
to modify the interfund loan provisions of the TIF Act to make it easier for cities and
development authorities to make and document interfund loans. The changes allow
loans to be made up to 60 days after the money has already been transferred or spent.
Under existing law, the loan terms must be set before the loan is made. In addition,
the changes authorize passage of interfund loan resolutions before the TIF plan is
approved. The amendment authorizes rewriting loan terms after the loan has been
made, but before the TIF district is decertified. Finally, the amendments require
cities to file an annual report of the amount of interfund loans for the year made and
any amendments of terms for loans made in prior years. This provision is effective
May 31, 2017.
o Definition of Increment. The omnibus tax bill (First Special Session, Chapter 1,
HF 1/no SF) amends Minnesota Statutes, Section 469.1763, subdivision 1 of the TIF
Act to clarify terminology related to the tax increment pooling rules. This provision
is effective May 31, 2017.
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