City Council approves expansion of program assisting property owners in securing tax incentives to preserve affordable housing
Today, the City Council approved expanding an innovative strategy to preserve naturally occurring affordable housing in Minneapolis by helping property owners obtain property tax reductions for agreeing to keep a portion of rental units affordable.
The expanded Minneapolis 4d Affordable Housing Incentive Program follows on the heels of a successful 4d pilot program the City that launched in May. As part of the pilot, property owners committed to preserving 207 units of affordable housing through 10-year affordability commitments.
The expanded 4d program has the potential to preserve 700 or more additional units of naturally occurring affordable housing in 2019.
Participants in the Minneapolis 4d Affordable Housing Incentive Program agree to keep a minimum of 20 percent of units per building affordable to households making 60 percent of the Area Median Income (AMI) for 10 years. The qualifying units are eligible for a 40 percent reduction in property taxes. Property owners of all buildings or tax parcels with two or more units are eligible to participate.
In addition to reduced property taxes, program participants benefit from payment of the first year State of Minnesota application fee for certification of the 4d property tax classification; a $100 grant per affordable unit (capped at $1,000 per property); free or low-cost energy assessments; and City cost sharing for solar energy installations and energy efficiency improvements.
The Minneapolis 4d Affordable Housing Incentive Program is one of several strategies the City is deploying to address the City’s affordable housing crisis.
“Addressing our housing crisis will require creative options to preserve existing affordable housing,” said Mayor Jacob Frey. “That’s what our 4d pilot program is all about. Over the last several months City leadership has had the opportunity to test the pilot and measure results. The early success and promise of 4d is crystal clear and expanding the program will help more people in Minneapolis find more affordable housing.”
“In order to preserve naturally occurring affordable housing we need to partner with property owners as they are a big part of the solution in preserving affordability,” said City Council Member Lisa Goodman. “Government has been quick to regulate and mandate and that hasn’t worked so well, incentives such as a property tax reduction like 4d, just like the system all nonprofit affordable housing developers get now, need to be part of the path forward. I am proud of the success of the pilot and excited to see what could happen once this is expanded to more properties.”
“This 4d program helps the City accomplish two very important goals: preserving naturally occurring affordable housing and improving energy efficiency in our rental housing,” said City Council Member Cam Gordon, chair of the Housing Policy & Development Committee. “It provides significant benefits for property owners and tenants. I’m grateful to the landlords who have stepped forward to be part of this initiative so far and those who plan to be involved next year.”
Published Nov 2, 2018