HF 1162

as introduced - 90th Legislature (2017 - 2018) Posted on 02/13/2017 12:18pm

A bill for an act
relating to housing; establishing workforce housing challenge grants; requiring
reports; proposing coding for new law in Minnesota Statutes, chapter 462A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [462A.331] HOUSING CHALLENGE PROGRAM; WORKFORCE
HOUSING GRANTS.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "City" means a statutory or home rule charter city.
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new text begin (c) "Eligible project area" means an area that meets the following criteria:
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new text begin (1) a census block with a population density over 200 persons per square mile according
to the most recent United States census data available, or located in an area served by a joint
county-city economic development authority;
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new text begin (2) located in a greater Minnesota city with at least 500 jobs, as measured in the QCEW;
and
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new text begin (3) the average vacancy rate for market rate residential rental properties, as defined in
paragraph (f), located in the municipality and in any statutory or home rule charter city
located within 15 miles or less of the boundaries of the municipality has been four percent
or less for any two of the last five years, based on a market housing analysis that supports
demand for the proposed development.
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new text begin (d) "Greater Minnesota" means the area of Minnesota located outside the metropolitan
area as defined in section 473.121, subdivision 2.
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new text begin (e) "Joint county-city economic development authority" means an economic development
authority, formed under Laws 1988, chapter 516, section 1, as a joint partnership between
a city and county and excluding those established by the county only.
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new text begin (f) "Market rate residential rental properties" means properties that are rented at market
value and excludes properties constructed with:
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new text begin (1) financial assistance requiring the property to be occupied by residents that meet
income limits under federal or state law of initial occupancy; and
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new text begin (2) federal, state, or local flood recovery assistance, regardless of whether that assistance
imposed income limits as a condition of receiving assistance.
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new text begin (g) "Program" means the economic development and housing challenge program in
section 462A.33.
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new text begin (h) "QCEW" means the Quarterly Census of Employment and Wages with the most
recent annual data published by the commissioner.
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new text begin (i) "Qualified investment" means a cash investment or the fair market value equivalent
for common stock, land, a partnership or membership interest, preferred stock, debt with
mandatory conversion to equity, or an equivalent ownership interest as determined by the
commissioner that is made by a project investor in a qualified workforce housing project.
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new text begin (j) "Qualified workforce housing project" means a project:
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new text begin (1) for market rate residential rental properties with a minimum of three dwelling units;
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new text begin (2) with an average construction cost per unit of no more than $250,000 and no less than
$75,000;
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new text begin (3) located in an eligible project area;
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new text begin (4) that has more than 50 percent nonstate funding proposed to fund the project; and
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new text begin (5) that has been designated by the commissioner as a qualified workforce housing
project.
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new text begin (k) "Workforce Housing Undersupply Ratio" means the total number of full-time jobs
in an eligible project area, as reported in the QCEW, divided by the total number of persons
over the age of 16 who are employed and living in the eligible project area, as reported by
the United States Census "EMPLOYMENT STATUS" dataset or similar United States
Census dataset.
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new text begin Subd. 2. new text end

new text begin Project investor grants. new text end

new text begin (a) Notwithstanding any contrary provision under
section 462A.33, the program shall provide grants to a project investor that makes a qualified
investment in a qualified workforce housing project equal to 40 percent of the amount of
the qualified investment. The requirements of section 462A.33 do not apply to grants awarded
under this section.
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new text begin (b) Any portion of funds not allocated by the commissioner from money appropriated
for the purposes of this section for any year does not cancel and shall be carried forward to
the subsequent year. The commissioner must not allocate more than 40 percent of the funds
available for this purpose each year to any one project investor.
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new text begin (c) Applications for grants must be made available by the commissioner by November
1 of each year. The commissioner must make every effort to provide applications and
relevant data to applicants in a simple, concise manner using plain language, and distribute
relevant eligibility information on the MHFA Web site. In allocating the grant funds, the
commissioner must give preference to projects with the highest Workforce Housing
Undersupply Ratio, except where the commissioner determines the investment is
circumventing the spirit of the law or where little or no local economic growth would occur
as a result of the investment. The commissioner must approve or reject a grant application
within 15 days of receiving the application. The investment specified in the application
must be made within one year of the allocation of the grant. If the investment is not made
within one year, the commissioner may determine that the grant is revoked and the investor
must repay the grant funds. A project investor who fails to invest as specified in the
application must notify the commissioner immediately and no later than five business days
after the expiration of the one-year investment period. The commissioner may require an
application fee for the applications submitted under this subdivision.
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new text begin Subd. 3. new text end

new text begin Reporting. new text end

new text begin Beginning in 2019, the commissioner must annually report by
March 15 to the chairs and ranking minority members of the committees in the senate and
house of representatives with jurisdiction over housing and economic development, in
compliance with sections 3.195 and 3.197, on grants issued under this section. The report
must include:
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new text begin (1) information about the availability of workforce housing in greater Minnesota;
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new text begin (2) information from employers and communities in greater Minnesota about whether
or not workforce housing needs are being met;
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new text begin (3) which projects have been funded by the challenge grant workforce housing program
under this section and whether previously funded projects have created economic growth;
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new text begin (4) any suggested legislation to accelerate construction of workforce housing;
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new text begin (5) the number and amount of grants issued and the identity of the recipients;
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new text begin (6) the number and amount of grants revoked under subdivision 2, paragraph (d);
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new text begin (7) the location, total cost of, and expected rent to be received as a result of qualified
workforce housing projects funded under this section; and
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new text begin (8) any other relevant information needed to evaluate the effect of the challenge grant
workforce housing program.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
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Sec. 2. new text begin APPROPRIATION.
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new text begin Of the existing appropriation to the commissioner of housing finance for the purposes
of housing challenge grants under Minnesota Statutes, section 462A.33, $6,600,000 in fiscal
year 2018 and $6,600,000 in fiscal year 2019 are for the workforce housing challenge grants
under Minnesota Statutes, section 462A.331.
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