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[` 7 DS-6 Housing (B) (cont'd) <br />i HUD <br />Federal tax reform legislation as well as substantial cuts n <br />housing programs have dealt a severe blow to many cities' housing <br />efforts. State legislation preserving.existing tools such as tax exempt <br />finance, interest rate write down, and taxable options in tax increment <br />and revenue bonding are more important than ever. <br />In addition, new state legislation providing cities with new resources <br />must be considered. The Urban Revitalizction Action Program is an <br />example of the new city/state partnership in housing that has a <br />state-wide potential. Cities recognize that incentives for the <br />construction and rehabilitation of housing form a vital part of city <br />redevelopment efforts aria serve the housing needs of its citizens, <br />especially those of low and moderate incomes. <br />The'League also supports new legislation w:,ich includes specialized <br />opportunities for small communities to participate in state housing and <br />development programs. <br />The League, in general, supports amendments to Chapter 462C, necessary <br />to further assist cities in using housing revenue bond programs, both <br />as a redevelopment tool and as a way to provide housing for lowand <br />moderate -income households. <br />As for the Minnesota Housing Finance Agency (MHFA) program, funds <br />should be targeted to cities in a manner consistent with local plans <br />and programs. The MHFA should continue to improve its procedure whereby <br />representatives of a diverse group of cities, chosen in consultation <br />with the League, can participate in targeting funds to cities. <br />DS-7. Economic Develo ment Funds B <br />Recently, cities have sought special legislation to establish special <br />funds intended to be used to promote economic growth within their <br />communities. These "capital seed funds" are financed either through <br />general fund monies or general obligation bond proceeds. Cities have <br />used them for the purposes of making grants, loans, and other <br />development activities. <br />DS 8 Tax Exempt Status of Land Held by Cities for Development (C) <br />Up until recently, almost all property owned by political subdivisions <br />was granted tax-exempt status. In 1979, the Legislature changed the law <br />-7- <br />