Council authorizes loans to cities to buy land now for affordable housing in the future
Projects approved for funding in Lakeville, Minneapolis and St. Paul, and Washington County
ST. PAUL—Nov. 19, 2008--The Metropolitan Council has authorized up to $3.6 million in loans to help some metro-area cities buy land now for affordable housing in the future. The loans will be made through the Council’s Livable Communities program--marking the first time the funds will be loaned to communities to help them purchase land for housing projects.
Earlier this year, the Council partnered with Minnesota Housing and the Family Housing Fund to establish the new Land Acquisition for Affordable New Development (LAAND) initiative. It is a statewide initiative, designed to encourage communities to meet their affordable housing needs.
The Council, however, awards its funding only to local units of government in the metro area that participate in the Livable Communities program. Funding for the initiative is from a one-time allocation of dollars from the Livable Communities Demonstration Account. The funds are typically awarded for projects that promote mix-use development and land uses that connect housing, jobs and services, including transit.
According to a Council-led research effort in 2005, metro-area communities will need 51,000 new affordable units by 2020 to accommodate the region’s need for affordable housing.
“The price of land is among the biggest obstacles to creating housing that’s affordable to lower-income families and individuals,” said Council Chair Peter Bell. This program will help communities purchase land at today’s prices and hold it for future development of affordable housing, helping to avoid the inevitable escalation in the price of the property that we expect to occur between now and some point in the future.”
Bell says the awards are loans, rather than grants, to generate a revolving fund for the purpose of affordable housing, similar to the Right-of-Way Acquisition Loan Fund that’s used for purchasing highway right-of-way.
Priority was given to projects in which the land is located close to areas with job growth and significant numbers of lower-wage jobs, and which is in close proximity to transit and allows for the kind of density that helps to promote affordability.
The four projects awarded LAAND funding include:
Washington County Land Acquisition Project—$1,060,000 to help with land acquisition at two locations in the county, including Forest Lake and Woodbury. The Forest Lake property is in the Headwaters development and would be used for 36-units of multi-family rental housing. The Woodbury site has yet to be determined in the I-494/I-94 corridor and would be purchased to develop rental properties.
Lakeville Cedar Transit, Lakeville--$1 million to help the Dakota County Community Development Agency acquire 10 acres for housing development next to a park-and-ride serving Bus Rapid Transit on Cedar Avenue. The county indicates at least 40-percent of the medium-density housing at the location, about 50 units, will be affordable to households earning up to 60-percent of the region’s median income, which is currently $34,000.
Central Corridor LAAND Program, St. Paul--$1 million to help with land acquisition for affordable housing near the Central Corridor Light Rail alignment along University Avenue. The city’s application indicates at least 30 percent of the housing that will be developed will be affordable.
Franklin Station/Bystrom Brothers Redevelopment in Minneapolis--$500,000 to help with land acquisition for the four-acre Bystrom development near the Franklin Avenue LRT station on the Hiawatha line. The planned development includes 187 housing units and 28,000 square feet of commercial space in mixed-use, mixed-income buildings. Nearly 30 percent of the housing will be affordable and include a mix of rental and ownership housing.
The LAAND initiative is intended to help acquire property for future development; not property that is currently owned by the applicant or developers, or part of an active development project.
Applicants must purchase the property within one year of being awarded the loan. Development of the land for affordable housing must begin after one year of the execution of the loan agreement, but within five years of the loan agreement.
The Metropolitan Council is the regional planning agency for the seven-county metro area. The Council runs the regional bus and light rail system; collects and treats wastewater and manages water resources preservation; plans regional parks and administers funds that provide housing opportunities for low- and moderate-income individuals and families. The 17-member Metropolitan Council is appointed by and serves at the pleasure of the Minnesota Governor.
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