1 The $100 Million Partnership: Collaborating for a Record Housing Investment in 2014 NCSHA 2015 Annual Conference

2 Our Mission: Housing is the foundation for success, so we collaborate with individuals, communities and partners to create, preserve and finance affordable housing.

Outcomes 59% of all homebuyers assisted had an annual income under $50,000 Served 59,129 households Provided $754 million in funding for housing Assisted more than 12,014 homebuyers 24.4% were households of color 75% of renters assisted had an annual income under $20,000

4 The Need for Affordable Housing More than 600,000 households in Minnesota pay more than 30% of their income for housing More than 10,000 Minnesotans are homeless on a given day – Children with their parents make up 35% of the homeless population, a 9% increase since 2009 Communities still recovering from foreclosure crisis State’s Section 8 portfolio is aging and in need of capital for rehabilitation to preserve affordability

5 Minnesota Legislature Establishes biennial budget in odd-numbered years – Minnesota Housing receives about $25 - $35 million in state General Fund appropriations each biennium for housing development – This represents less than 1% of state General Fund budget In even-numbered years, typically passes large capital investment package

Capital Investment Bill Legislature approved $100 million in bonding for housing – $80 million in Housing Infrastructure Bonds (HIB) – $20 million in GO Bonds for Public Housing Funding for housing was 10% of overall Capital Investment bill Largest one-time capital investment in housing in state history

7 Housing Infrastructure Bonds (HIB)

8 What are Housing Infrastructure Bonds? Appropriation bonds Minnesota Housing issues the bonds State makes standing appropriation to pay debt service Do not require public ownership

9 Why Housing Infrastructure Bonds? Most housing in the state is privately owned – GO bonds limited to public ownership Properties have limited ability to support amortizing debt Access to 4% tax credits when issued as Private Activity Bonds

10 Eligible Uses of Proceeds 1. Preservation of Federally-Assisted Housing 2. Supportive Housing 3. Foreclosure Recovery 4. Community Land Trusts

11 Awarding Funds Legislature authorizes Housing Infrastructure Bonds Developers compete for funding through competitive RFP process Owners maintain housing affordability for at least 20 years

Housing Infrastructure Bonds Legislature passed capital investment bill in May 2014 Funds awarded to projects in October 2014 Proceeds used to finance 1,200 units of housing in 16 projects across the state

13 Preservation of Federally-Assisted Housing Skyline Tower, St. Paul Preservation of 448 units of project- based Section 8 Home to 246 children and 118 seniors

14 Financing for Skyline Tower Total Development Cost: $12.5 million $10.2 million: HIB proceeds $1.5 million: Property replacement reserves $750,000: City of St. Paul CDBG

15 Supportive Housing Prior Crossing, St. Paul New construction of 44 units of supportive housing for homeless youth Located along the Green Line light rail transit line

16 Financing for Prior Crossing Total Development Cost: $10.1 million $5 million: HIB proceeds $2.9 million: Syndication proceeds (4% credits) $1.1 million: Local funds (St. Paul HRA) $930,000: Metropolitan Council $160,000: Sales tax rebate

17 Foreclosure Recovery Sunwood Village, Ramsey 47 new construction units Family housing Located near Ramsey Northstar Station

18 Financing for Sunwood Village Total Development Cost: $12.5 million $4.2 million: HIB proceeds $3.2 million: Bridge loan $2.2 million: Syndication proceeds (4% credits) $1.4 million: Minnesota Housing first mortgage $800,000: Metropolitan Council $600,000: Anoka County funds $135,000: Sales tax rebate

19 General Obligation Bonds for Public Housing Rehabilitation

20 Public Housing in Minnesota Public housing serves 36,000 low-income Minnesotans – Includes 12,000 children – More than 65% have incomes less than $15,000 per year More than 90% of public housing units are 20+ years old

GO Bond Proceeds $20 million in GO Bond proceeds committed to rehab nearly 2,500 public housing units in 35 developments Nearly 75% of funds went to Greater Minnesota

22 The Impact

23 Impact of the $100 Million Partnership Construction of 526 units of supportive housing Preservation of 582 units of federally-assisted housing Rehabilitation of 2,438 units of public housing

24 Capital Investments in Housing Housing Infrastructure Bonds or nonprofit Housing Bond Proceeds GO Bonds State investment: $100 million

25 Keys to Success Partnership with housing advocates Support from Governor and key legislators Demonstration of need Competitive process – Ability to get money out the door quickly – Individual projects not competing for carve outs in legislation

26 For More Information Contact: Katie Topinka Legislative Director