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Affordable housing units in financial distress would receive aid under House proposal

Affordable housing units are at risk of collapse or closure across the state. The House Housing Finance and Policy Committee approved a bill Tuesday that aims to create financial stability and housing constancy.

Sponsored by Rep. Michael Howard (DFL-Richfield), HF4819, as amended, would authorize the Minnesota Housing Finance Agency to use bonds to assist affordable housing organizations whose buildings are in financial distress and where residents earn at or below 60% of the area median income.

Funds could be used for recapitalization, which includes both capital restructuring, operational costs, and building improvements.

Howard said the state has a vested interest in providing what are essentially long-term loans to nonprofit housing providers. If not for them, no one else would provide affordable housing, he said. “Their success is our success as a state.”

The committee’s approval came on a split-voice vote. The bill will next be before the House Commerce Finance and Policy Committee.

Bonds are the state’s most flexible tool because the biggest barrier to affordable housing is the lack of funding capital, said Electra Skrzydlewski, director of Shared Ownership at the Metropolitan Consortium of Community Developers.

Hope Community, a not-for-profit affordable housing organization, closed a 25-unit housing building last year due to ongoing security and safety concerns, said Maggy Otte, the community development projects manager. Ironically, the organization was ordered to demolish the building. The $200,000 cost matched the amount it would have cost to keep it open.

The bill would also establish a task force to evaluate the state housing agency’s process of awarding and closing housing infrastructure bonds and low-income tax credits.

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