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The Mounds View Vision <br />A Thriving Desirable Community <br />Item No: 07 <br />Meeting Date: April 1, 2024 <br />Type of Business Council <br />Business <br />City Administrator Review <br /> <br />City of Mounds View Staff Report <br /> <br /> <br /> <br />To: Honorable Mayor and City Council <br />From: Brian Beeman, Assistant City Administrator <br />Item Title/Subject: Local Affordable Housing Options Under the Metro Sales <br />Tax <br /> <br />Introduction: <br />Local Affordable Housing Aid helps metropolitan local governments develop and preserve affordable <br />housing within their jurisdictions to keep families from losing housing and to help those experiencing <br />homelessness find housing. Aid will begin in 2024. Funds must be spent by December 31 of the fourth <br />year after the aid was received. Minnesota Housing plans to release a program guide with further details <br />on frequently asked questions and language clarification sometime in 2024. <br />Metro Cities has been discussing a webinar as a way for cities to share information with one another <br />on how they plan to spend their funds. Some cities are considering implementing the new tax with uses <br />including: <br />• Preserving affordable housing units <br />• Rental assistance <br />• Housing stability <br />• Providing down payment assistance for first time homebuyers <br />• Supporting homeless prevention programs <br />• Constructing new affordable units <br />• Allocating funds to existing HRA programs. <br />Use of Aid: <br />Funds distributed under this aid program must be spent on a qualifying project. Funds will be considered <br />spent if: <br /> <br />• A county or eligible demonstrates to the Minnesota Housing Finance Agency that the city or <br />county cannot expend funds on a qualifying project by the deadline below due to factors outside <br />the control of the city or county <br />• The funds are transferred to a local housing trust fund <br /> <br />If funds are transferred to a local housing trust fund, they must be spent on a project or household that <br />meets the affordability requirements described below under qualifying projects. <br /> <br />Qualifying projects include: <br />• Emergency rental assistance for households earning less than 80 percent of area median <br />income as determined by the United States Department of Housing and Urban Development <br />• Financial support to nonprofit affordable housing providers in their mission to provide safe, <br />dignified, affordable and supportive housing; and <br />• Projects designed for the purpose of construction, acquisition, rehabilitation, demolition or <br />removal of structures, construction financing, permanent financing, interest rate reduction,