Minnesota Statewide Housing Impact Fund
To tackle the housing shortage issue, the Saint Paul & Minnesota Foundation is partnering with Greater Minnesota Housing Fund to develop the Minnesota Statewide housing impact fund.
Minnesota's Affordable Housing Shortage
Minnesota’s persistent affordable housing shortage requires a continued push for solutions. In the Twin Cities region alone, we have a gap of over 100,000 units of rental housing that is affordable to working families without the use of government subsidies.
This gap in so-called NOAH or naturally occurring affordable housing widens by several thousand units per year as landlords sell their properties at a gain, and new owners increase rents to market rates that are unaffordable for current tenants. Loss of these affordable units increases the demand for even more scarce housing units typically reserved for very low-income families.
A New Affordable Housing Strategy
To tackle the housing shortage issue, the Saint Paul & Minnesota Foundation is partnering with Greater Minnesota Housing Fund to develop a long-term housing-impact fund that would provide regional affordable housing developers access to a new source of capital to finance both preservation and production of housing for working families.
This fund aims to provide timely and affordable capital for building and preservation at scale, enabling developers to plan and move quickly on acquiring affordable housing sites. At the same time, it will provide investors with a socially responsible investment option targeting market rate returns.
The fund will:
- Be a long-term, $150 million fund that combines $100 million of mezzanine debt with $50 million of equity to finance 4,150 units of Workforce Housing (affordable new construction) and NOAH over 20-plus years.
- Target approximately 25 properties or portfolios including Workforce Housing and NOAH at risk of losing affordability status due to location in opportunity neighborhoods with quality amenities.
- Finance qualifying nonprofit and for-profit developers to develop and operate Workforce and NOAH properties.
- Finance a mix of property sizes and locations including the seven-county Twin Cities area, as well as outlying communities including Duluth, Mankato, Moorhead, Rochester and St. Cloud.