Brooklyn Center Approves Plan to Finance Affordable Housing Project
The Brooklyn Center City Council took a significant step this week to redevelop a longtime vacant site and turn it into affordable housing for working families and seniors.
The city council Monday night approved the creation of a tax-increment financing district, a tool used to help subsidize developers for redevelopment. Real Estate Equities is proposing to build affordable housing near Bass Lake Road and Xerxes Avenue North, a site that used to be a former Jerry’s Foods grocery store.
Under the development plan, Real Estate Equities would build 127 affordable housing units and another 143 units for independent senior living. The housing would serve people or households making close to 60 percent of Hennepin County’s median income. The median household income in Hennepin County is $74,500. Brooklyn Center’s median income is about $50,000.
An official with Real Estate Equities says the proposed rents would be as follows:
- 1-bedroom, $1,047
- 2-bedroom $1,255
- 3-bedroom $1,447
Project Relies on Complicated Financing
Real Estate Equities will receive tax-exempt bonds from the Minnesota Housing Finance Agency and low-income housing tax credits to help fund the $58.8 million development. The tax-increment financing district (TIF) approved by the city of Brooklyn Center will help the developer pay for upfront costs. According to city officials, there’s no financial risk to the city. They say the risk “falls on the developer.”
“The cost of that construction is extremely high,” said Meg Beekman, Brooklyn Center’s community development director. “This apartment building in say downtown Minneapolis would have rents that are significantly higher than what’s being proposed here. And so in order to help that gap, there’s a lot of financing tools that Real Estate Equities is leaning on in order to help finance the project.”
Construction Costs Rising Faster Than Incomes
Brooklyn Center City Council Member Dan Ryan says this type of project and financing arrangement will help working families struggling to meet their housing needs.
“The general need for any kind of subsidy for this type of construction is simply because the cost of construction has risen so much faster than incomes,” Ryan said. “What we’re really trying to do is to provide housing that’s affordable for those that work in our community and earn the types of income a good many of our residents earn.”
Under the TIF plan, developer tax payments to the city will start after the project is completed.
Artist Rendition of Workforce Housing
Twin Cities “Underserved” with Rental Units
Officials say the housing serves an important need in the Twin Cities. Brooklyn Center City Council member April Graves commented that she doesn’t live in an apartment because she can’t afford it.
“I own a home because my mortgage is less than your rent. I couldn’t afford to live in your apartment with my three kids because I only make about $50,000, that’s it,” said Graves about the rents of the proposed workforce housing. “I think that’s true for a lot of people, but at the same time developers are up against construction costs.”
Graves did vote in favor of the TIF assistance. One resident who spoke at Monday’s meeting also supported the project.
“I think it’s an important addition to our community and I welcome more families and options for seniors as well,” said Barbara Jensen.
