07-12-2017 Council Packet - Laserfiche WebLink

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7 making sure you have the underlying financing and subsidies in place,” said CommonBond’s Paul Fate. The tool that affects the largest expansion of affordable housing is the Low Income Housing Tax Credit, (LIHTC) which gives developers tax incentives for including affordable housing in their projects, generally up to 60% Area Median Income (AMI). (Minnesota Housing prefers 50%.) Tax credits come through the Federal Government Treasury Department and are administered by local housing authorities. Credits are only applicable if there is land available for development or redevelopment and usually require givebacks from the city as well. NIMBYs (Not in My BackYard) discourage developers because they lead to “slow nos,” where the city doesn’t say no right way, but rejects a project later in the negotiations process. Delay is costly for the developer who may be paying for an option on the land, own the land or be paying a holding cost. Developers learn which cities do this and gravitate to other cities. Minnesota Housing Finance Agency The Minnesota Housing Finance Agency distributes funds to cities through a consolidated Request for Proposal (RFP) to facilitate one-stop shopping. It partners with the Met Council, Section 8 vouchers, and Greater Metropolitan Housing to offer this funding, which comes from state and federal sources. Cities rarely apply for funding for a building entirely devoted to Section 8 renters because the funding is hard to put together and make work. However, Minnesota Housing encourages local housing authorities to allocate at least some units for Section 8 vouchers within workforce housing projects. It’s valuable to do so in terms of Housing Performance Scores for state funding, according to Commissioner Tingerthal. Landlords Section 8 voucher renters are not protected under Fair Housing regulation. Even when receiving a housing voucher, they can’t easily find a landlord who will accept them. Section 8’s reputation is negative. Landlords don’t want to deal with the extra inspections and paperwork that are a part of the voucher program. In today’s current competitive housing market, they don’t need to bother with the hassle or accept applicants who have bad credit ratings or misdemeanors, which many low-income people and people with mental illness have. The Minnesota Legislature is currently examining policies that would encourage landlords to take a risk on the poorest and most vulnerable rental applicants. Legislators recently allocated a small amount of money to provide a backstop to landlords renting to families who have criminal backgrounds or mental illness, to compensate for damages beyond what insurance covers. Current state policy discussions focus on how to prevent “three calls from police and then you get evicted” policies if the calls are due to a mental health crisis. Some housing non-profits are compiling data with the hope of giving landlords more accurate screening processes to enable them to better determine who would be a good tenant.