2002 Minnesota Statutes

     273.126 Qualifying low-income rental housing. 

    Subdivision 1.    Qualifying rules.  The market value of 
 a rental housing unit qualifies for assessment under class 4d if:

    (1) it is occupied by individuals meeting the income limits 
 under subdivision 2; 

    (2) a rent restriction agreement under subdivision 3 
 applies; 

    (3) the unit meets the minimum housing quality standards 
 under subdivision 4; and 

    (4) the Minnesota housing finance agency certifies to the 
 local assessor that the unit qualifies. 

    Subd. 2.    Income limits.  (a) In order to qualify 
 under class 4d, a unit must be occupied by an individual or 
 individuals whose income is at or below 60 percent of the median 
 area gross income.  If the resident's income met the requirement 
 when the resident first occupied the unit, the income of the 
 resident continues to qualify.  If an individual first occupied 
 a unit before January 1, 1998, the individual's income for 
 purposes of the preceding sentence is the income for calendar 
 year 1996. 

    (b) For purposes of this section, "median area gross income"
 means the median gross income for the area determined under 
 section 42 of the Internal Revenue Code of 1986, as amended 
 through December 31, 1996. 

    (c) The median gross income must be adjusted for family 
 size. 

    (d) Vacant units qualify as meeting the requirements of 
 this subdivision in the same proportion that total units in the 
 building are subject to rent restriction agreements under 
 subdivision 3 and meet minimum housing standards under 
 subdivision 4.  This paragraph applies only to the extent that 
 units subject to a rent restriction agreement and meeting the 
 minimum housing quality standards are vacant. 

    (e) The owner or manager of the property may comply with 
 this subdivision by obtaining written statements from the 
 residents that their incomes are at or below the limit. 

    Subd. 3.    Rent restrictions.  (a) In order to qualify 
 under class 4d, a unit must be subject to a rent restriction 
 agreement with the housing finance agency for a period of at 
 least five years.  The agreement must be in effect and apply to 
 the rents to be charged for the year in which the property taxes 
 are payable.  The agreement must provide that the restrictions 
 apply to each year of the period, regardless of whether the unit 
 is occupied by an individual with qualifying income or whether 
 class 4d applies.  The rent restriction agreement must provide 
 for rents for the unit to be no higher than 30 percent of 60 
 percent of the median gross income.  The definition of median 
 gross income specified in this section applies.  "Rent" means 
 "gross rent" as defined in section 42(g)(2)(B) of the Internal 
 Revenue Code of 1986, as amended through December 31, 1996.  

    (b) Notwithstanding the maximum rent levels permitted, 20 
 percent of the units in the metropolitan area and ten percent of 
 the units in greater Minnesota qualifying under class 4d must be 
 made available to a family with a section 8 certificate or 
 voucher.  For applications for class 4d made before July 1, 
 1999, the required percent of units for an applicant is 
 increased to 40 percent and the maximum rent that may be charged 
 on a unit occupied by a family with a section 8 certificate or 
 voucher is limited to the fair market rent for the area, as 
 established by the United States Department of Housing and Urban 
 Development, if within the five-year period ending January 2 of 
 the assessment year: 

    (1) 40 percent or more of the units in the project or 
 development were covered by a section 8 project-based housing 
 assistance contract and the contract has been canceled or no 
 longer applies; or 

    (2) the units were in a project or development financed 
 with a direct federal loan or federally insured loan made 
 pursuant to Title II of the National Housing Act and the loan 
 has been paid or prepaid, eliminating the restrictions on rents 
 under Title II of the act. 

    (c) The rent restriction agreement runs with the land and 
 binds any successor to title to the property, without regard to 
 whether the successor had actual notice or knowledge of the 
 agreement.  The owner must promptly record the agreement in the 
 office of the county recorder or must file it in the office of 
 the registrar of titles, in the county where the property is 
 located.  If the agreement is not recorded, class 4d does not 
 apply to the property. 

    Subd. 4.    Minimum housing standards.  In order to 
 qualify under class 4d, a unit must be certified by the housing 
 finance agency to meet the minimum housing standards established 
 under section 462A.071. 

    Subd. 5.    Monitoring rent levels.  The housing finance 
 agency is directed to monitor changes in rent levels and the use 
 of section 8 certificates in units qualifying under class 4d. 

    Subd. 6.    Penalties.  Notwithstanding the provisions 
 of section 273.01, 274.01, or any other law, if the Minnesota 
 housing finance agency notifies the assessor that the provisions 
 of this section have not been met for any period during which a 
 unit was classified under class 4d, a penalty is imposed as 
 provided in section 462A.071, subdivision 8. 

    HIST: 1997 c 231 art 1 s 4; 1Sp1997 c 5 s 34; 1998 c 389 art 3 
 s 9; 1999 c 248 s 18 

*   NOTE:  This section is repealed by Laws 2001, First Special 
*Session chapter 5, article 3, section 96, effective for property 
*taxes payable in 2004 and any agreement entered into pursuant to 
*the provisions of this section and section 462A.071 expires, 
*effective January 1, 2004, regardless of the term of the 
*agreement.  Laws 2001, First Special Session chapter 5, article 
*3, section 96, paragraph (d).