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St. Paul tax credit rule change for affordable housing puts new projects on par with rehabs
By Frederick Melo
06:47:52 PM CDT
A rules change on tax credits for affordable housing is pitting preservationists against those pushing new development in St. Paul along the Central Corridor.
Developers apply to the city for low-income housing tax credits, which are then sold on the open market in exchange for private investment in affordable housing projects. The St. Paul City Council on Wednesday, May 8, supported making it easier to sell the tax credits to support new construction, such as Hamline Station, a proposed development at University and Hamline avenues.
A debate over whether to concentrate affordable housing in St. Paul along the Central Corridor Light Rail Transit line or spread it throughout the city added a new wrinkle, with two council members at odds over whether to prioritize preserving and rehabbing existing low-income housing or fund new projects along the light rail.
"There was a heavy preference in the old criteria for preservation," said Stark, who said the new rules will put new construction and the rehab of existing affordable housing on even footing for funding.
The Minneapolis-St. Paul Housing Finance Board will host a public hearing May 15 on the proposed rule changes, which Bostrom maintains will heavily favor Hamline Station over a rehab project on the East Side.
Bostrom would like to see more public investment poured into rehabbing existing buildings, including four buildings on the north side of Rose Street, bordering an unofficial "campus" of low-income housing created by Roosevelt Homes and the Ames Lake Apartments. Real Estate Equities hopes to turn the four buildings into managed affordable housing.
Stark is eager to see the vacant Midway Chevrolet site at Hamline and University avenues redeveloped into the $23 million Project for Pride in Living development that would offer 108 affordable apartments and more than 13,000 square feet of commercial space.
The two projects came up during discussions Wednesday when the council met as the Housing and Redevelopment Authority (HRA) to consider changes to the score sheet that ranks affordable housing projects in St. Paul.
"This council has worked hard to preserve existing housing.... We've got a lot of older stuff out there that needs work," Bostrom said, accusing the council of altering the rules to support Hamline Station.
Stark said the rule changes make "more of an even playing field between preservation and new construction. But clearly there is a lot of pent up interest in new construction, particularly along the Central Corridor." He said city staff had worked to come up with language fair to everyone, while reacting quickly to new opportunities along the corridor that could otherwise disappear overnight and become market-rate housing.
The housing finance board rule changes, prepared by city staff, would serve as an amendment to St. Paul's selection priorities; those for Minneapolis would not be impacted.
The finance board is chaired by St. Paul City Council President Kathy Lantry and includes Bostrom and HRA Chair Dave Thune, as well as three members of the Minneapolis City Council.
Even some of St. Paul's council members who on Wednesday supported the changes feel the rules are being altered too regularly to suit developers as projects pop up.
"There's part of me that's saying this thing has gotten out of hand," said Lantry, referring to the more than 230-point selection criteria.