05-13-2026 Workshop Packet - Laserfiche WebLink

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Staff Report To: Mayor Fischer and Members of the Little Canada City Council From: Ben Harrington, AICP, Community Development Director Bryce Sheeran, City Administrator Date: May 13, 2026 Re: Local Affordable Housing Aid (LAHA) Programming Actions To Be Considered: Motion to recommend approval, table, or denial of the following: • No formal action, however, staff would like to get direction from Council on moving forward with creating the framework for a manufactured home improvement loan program utilizing LAHA funds. This direction will allow staff to finalize program guidelines and return to the council for formal adoption. Background: The Local Affordable Housing Account (LAHA) program serves as a dedicated funding source for the city to address localized housing needs. The Minnesota Legislature established the LAHA program in 2023 to provide a dedicated funding stream for the development and preservation of affordable housing within the seven-county Twin Cities metropolitan area. Funded by a 0.25% metro-area sales tax, the program allows cities and counties significant local discretion to utilize these dollars for qualifying projects such as the rehabilitation and stabilization of existing housing stock. Currently, the city has $280,549.22 LAHA funds available. While the State of Minnesota has not confirmed final 2026 allocation amounts, the city’s distribution factor remains consistent with previous cycles. Staff expects a total 2026 distribution of approximately $196,000, which is received in two installments in July and late December. The city evaluated LAHA program options in 2024 but did not move forward with a formal program at that time. The topic resurfaced during discussions regarding the Lupe development deal, which proposes a $200,000 allocation for the construction of a 106-unit apartment project in lieu of Tax Increment Financing (TIF). Finalizing that agreement would reduce the currently available balance of LAHA funds to $71,974. During the EDA reformulation and the Lupe negotiations, the council expressed a strong interest in a preservation-focused program for LAHA funds. Consequently, staff worked with NeighborWorks Home Partners to formulate a targeted manufactured housing home improvement program for council consideration. Eligible Uses of LAHA Funds The following are the permitted uses of LAHA dollars under State Statute: 1. Emergency rental assistance for households earning less than 80% of area median income (AMI) as determined by the U.S. Department of Housing and Urban Development (HUD)