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Ramsey County awards $8 million to build, preserve affordable housing

31December 2021

Four affordable housing developments will receive a nearly $8 million boost from Ramsey County as part of the $37 million in federal COVID-19 funds that county leaders pledged to spend on preserving and building affordable housing.

The Ramsey County Board just before Christmas approved the allocation, which will help build 234 affordable units and rehab and preserve 107 more. The county is among a number of funders for the projects, which are also supported by local, state, federal, nonprofit and private dollars.

“Two of them are preservation projects in the city of St. Paul and two of them are new construction projects in suburban Ramsey County,” said Max Holdhusen, the county’s senior housing and policy manager.

About 40% of the 341 units will have rents priced for those earning 30% of the area median income (AMI), which is around $22,000 for an individual, Holdhusen said.

Ramsey County leaders have compared spending on affordable housing to investing in critical infrastructure, and estimate that about 15,000 affordable housing units are needed in the county.

“It takes about $36 million to create 300 units of 30 percent of AMI for 30 years,” said Community and Economic Development Director Kari Collins. “It’s going to take government at all levels. It’s going to take private and philanthropic partners to take a big bite out of this apple and create the infrastructure that is so desperately needed.”

County officials solicited applications from developers in November, received eight and selected four that met their criteria:

— A proposed 114-unit senior apartment complex in Lauderdale will receive nearly $3 million from the county, covering 10% of the total development cost. The city owns the development site at 1795 Eustis St., which now has a century-old school that was repurposed as a church. The vacant building will be razed as part of the redevelopment.

Lauderdale City Administrator Heather Butkowski said the affordable senior housing is sorely needed as more aging residents want to downsize. “People want to age in place here in the community,” she said. “We may be small, but people love it here.”

Butkowski said the notion that suburbs spurn affordable housing is antiquated. “Most people have embraced affordable housing as a needed part of the mix,” she said, explaining that the city of 2,500 is contributing tax-increment financing to the project.

She said the county’s contribution allows them to set rents at the 30% and 50% AMI levels, which makes them more competitive when applying for the state money needed to complete the project.

“We’ve been trying to get the state funding for a couple of years. That process is competitive and based on whose final rents will be the cheapest,” Butkowski said. “The county money is making the project more affordable to end users and ultimately to get this project … over the finish line.”

— A proposed 120-unit senior apartment complex in Mounds View will receive nearly $1.6 million from the county, which amounts to 5% of the total development cost. The city owns the property at 4889 Old Highway 8, the former site of the Skyline Motel that was razed in a controlled burn in 2019.

— Nonprofit Aeon will purchase and rehab the 100-unit Ridgewood Apartments, in the 1800 block of Wilson Avenue on St. Paul’s East Side. The county will contribute $1.8 million to increase the units’ affordability, covering 12% of development costs.

— Model Cities is partnering with the Frogtown Neighborhood Association and other nonprofits to acquire, rehab and preserve a seven-unit building at 652 Sherburne Av. in St. Paul. All units will have rents set at 30% AMI. The county is contributing about $1.7 million, which will cover 75% of development costs.

“It’s a site that has needed investment for a long time,” Holdhusen said. “The community identified that, and we wanted to support their mission there.”

Collins said the county will distribute more of the $37 million in COVID funds in 2022.

“We would really encourage projects in the pipeline to give us a call and let us know where things are at and if they are seeing a gap for deeply affordable housing projects,” Collins said. “We want to accelerate, amplify and find a way to make those projects work.”

St. Paul also has pledged $37.5 million of its federal COVID-19 aid to affordable housing. City leaders have not yet identified any specific developments.

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