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City of Little Canada, MN Management Review & Analysis – Tax Increment Financing Districts 9 TIF Management Guide Pooling TIF for Affordable Housing “Pooling TIF” means using TIF from one district to assist projects outside of the district. When there is more TIF available than is required to pay outstanding obligations, some of that excess increment may be “pooled” for another purpose. The rules for pooling are complex, but the most flexibility is provided for housing districts to promote the construction of affordable housing. Specifically, if unobligated funds from a housing district are available, then 100% of the unobligated increment can be pooled for affordable housing projects located anywhere withing the City that meet the TIF District income limitations. Rental housing developments must lease either 20% of the units to families at 50% or less of median income or lease 40% of the units to families at 60% or less of median income, adjusted for family size. Owner-occupied housing must be initially sold to families with incomes at or below 100% of median income for families of two or less or 115% of median income for families of three or more. The rental housing restrictions remain for the life of the TIF district while the owner-occupied restrictions apply only to the first buyers. The City has one housing TIF District, District 3-3, which is administered by the EDA. TIF 3-3 had a 2020 year-end fund balance of $593,694, which is expected to grow to approximately $2.5 million by the end of the TIF district in 2029. All of the projected fund balance, shown in the table below, is available for pooling to assist affordable housing located anywhere within the City of Little Canada. In order to keep the District 3-3 open for the full term through 2029, The Lodge at Little Canada, LLC will need to maintain their income restrictions for the life of the district. Alternately, the City may decertify the TIF District after the PAYGO Note is paid in full in 2024, which would leave an estimated $1.14 million available for affordable housing projects.