Legislative victory bolsters Richfield affordable housing efforts

A long, uphill battle to access funds for affordable housing culminated in a win in the early hours of July 1, when the Minnesota Legislature finally passed the state tax bill. That tax bill, a significant part of the state budget for the next two years, will allow Richfield to free up more than one million dollars for affordable housing initiatives in the community.  

“We are thrilled to finally have this important piece of legislation approved,” stated Mayor Maria Regan Gonzalez. “Affordable housing preservation and stability has been a priority for our community, and the passage of the tax bill will allow us more flexibility and added resources to make those dreams a reality.”

As part of the tax bill, Richfield, along with two partner cities, lobbied for special legislation to move some of the existing pooled tax increment financing (TIF) funds to the established Affordable Housing Trust Fund, providing more flexibility to use the funds for work on affordable housing priorities.

“We’ve been working on this for more than two years,” explained Community Development Director John Stark. “We eventually partnered with the cities of St. Louis Park and Minnetonka, who had similar goals, and identified commonalities we could seek together. This past March, the mayor and Housing Manger Julie Urban both gave compelling testimony to committees of the Minnesota House of Representatives and Senate. They did an outstanding job of representing Richfield at the state level.”

Urban credits a broad team of supporters for this accomplishment.

“The three cities all want to do their fair share of affordable housing, and we put our heads together and got the ball rolling,” remembered Urban. “This victory owes a huge thanks to our local legislators, Representative Michael Howard and Senator Melissa Wiklund, as well as a strong commitment from Governor Walz and the legislature.”

By moving these existing funds into the Affordable Housing Trust Fund, the city will have more flexibility in how it applies TIF funds into affordable housing projects. Previously the funds were available for similar efforts, but were tied to onerous requirements that restricted their use to only a fraction of potential affordable housing projects.

“These funds will be available for the development, rehabilitation or financing of affordable housing,” described Urban. “For example, these funds might help with the acquisition of land for future affordable housing or for grants or loans to cover the rehabilitation of affordable rental units.”

The Affordable Housing Trust Fund was created in 2020 as a tool to facilitate the rehabilitation and preservation of existing affordable housing, develop new affordable housing, and provide rental and down payment assistance.

Currently, the Trust Fund uses local levied funds and federal grants to accomplish its priorities.

In 2020, Richfield’s Affordable Housing Trust Fund funded $125,000 in emergency rental assistance for residents through Volunteers Enlisted to Assist People (VEAP). That funding supported 86 households that were in danger of losing their housing due to the COVID-19 pandemic.

“Having stable and affordable housing is fundamental to our community identity,” acknowledged Regan Gonzalez. “This special legislation allowing us broader use of our TIF funding will truly help us make progress on our goals around affordable housing.”