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Preserve and Improve the Condition and Affordability of Existing Housing

Existing housing is typically the most affordable, and preserving it is more cost-effective than building new. Segments of existing affordable housing are at risk of being lost to rent or price increases or deterioration. For example, project-based Section 8 units were built about 40 years ago and often have deferred maintenance. About 7,800 of the 30,000 Section 8 units in Minnesota have contracts that will expire sometime between 2023 and 2027, when they could convert to market-rate rents.  Fortunately, we have had great success in renewing contracts and maintaining affordability. Minnesota also has over 210,000 rental units affordable to households with incomes at or below 50% of AMI that are naturally occurring affordable housing (NOAH) without government subsidies and income/rent restrictions, typically because they are older, lack amenities and are in need of repairs.  About 25% of the state’s owner-occupied homes have a value of less than $250,000.  While affordable for many residents, these homes often need repairs, and the state’s housing stock is getting older. Emerging issues include making homes climate-resilient, losing affordable inventory to investor owners, building the capacity of rental property owners who are preservation-minded, rising interest rates and staying on top of evolving preservation needs.

Key Metrics

Number of existing rental units affordable to households with an income at or below 50% of the statewide median income (coming soon)

Number of units with project-based rental assistance (coming soon)

Number of existing homes valued at $300,000 or less (coming soon)

Actions

Identify and Stabilize the Housing Most at Risk of Being Lost
  • Use data from our systems, U.S. Department of Housing and Urban Development (HUD), U.S. Department of Agriculture – Rural Development, Census Bureau, Minnesota Department of Revenue, HousingLink, CoStar and other sources
  • Work with interagency stabilization teams and preservation groups to assess needs and jointly focus resources on housing projects that are at the most risk of loss with the goal of preventing resident displacement
Streamline and Simplify Programs
  • Carry out the strategies and actions outlined in the earlier section on Making Housing Programs More Accessible and Easier to Use with a focus on preservation, rehabilitation and home improvement programs
  • Increase program flexibility so that funding can be used to meet evolving preservation needs in different situations
Increase Funding and Expand Options
  • Advocate for new or expanded funding from federal and state sources that meet the full continuum of preservation needs, building off the funds made available for preservation by the 2023 Minnesota Legislature
  • Develop and implement NOAH programs with available funding, including the newly available $90 million for community stabilization
  • Explore options for supporting more cooperatively owned housing
  • Leverage new funding streams to help buildings become more climate resilient and energy efficient
  • Expand and refine existing programs, such as the Rehabilitation Loan Program (RLP), Fix Up loan program, Publicly Owned Housing Program (POHP), Preservation Affordable Rental Investment Fund (PARIF) and Rental Rehabilitation Deferred Loan (RRDL) programs
  • Explore options for expanding the availability of purchase-rehabilitation loans for owner-occupied homes
  • Address the limited borrowing options for home improvement that are affordable for homeowners with incomes between 30% and 80% of AMI
  • Explore funding options for Homeowner Associations without sufficient resources to maintain and improve common elements
  • Explore the development of a post-purchase educational curriculum for new homeowners that will help them be more successful homeowners and maintain their homes over the long term
Market and Provide Information about Preservation Resources
  • Find simple ways to summarize and present the full range of preservation resources that are available
  • Focus marketing resources on key demographics (similar to the Agency’s first-time homebuyer focus on renters between the ages of 25 and 44)
  • Make targeted use of the media and social-media options used by key demographics
  • Partner with libraries, social service agencies, employers and other nonprofit and public partners to publicize Agency programs and activities
Increase Preservation Capacity Across the State
  • Help communities identify and build capacity to meet their preservation needs
  • Support efforts to increase the number and geographic reach of: (a) developers, owners and contractors in Greater Minnesota; and (b) developers and contractors who are Indigenous, Black and people of color and/or emerging developers and contractors statewide doing preservation work
  • Explore partnerships with the Department of Employment and Economic Development, the Department of Labor and Industry and trade schools to foster a new generation of contractors and builders