Affordable Housing (getting into the business or staying out)

Right now what is needed is for all parties to calm down and start a meaningful dialogue about all housing. There seems to be a kaleidoscope of approaches and the expected county's role in it. Dollars for leveraging, dollars for gap financing, dollars for 0% revolving loans, dollars for HRA and dollars for supportive housing and managed care project pilot. What does it all mean?

In June Charles Laszewski, (Pioneer Press 6/7/00) reported Commissioner Haigh introduced a proposal to sell $5 million in bonds (tax levy) to help build affordable housing. After nearly two hours of debate which included a heated exchange between St. Paul Deputy Mayor Susan Kimberly and Commissioner Haigh, the agreement of the Commissioners was to have further meetings on housing questions. Laszewski reported that (Haigh's) colleagues, even those concerned about the lack of housing affordable to people earning $9 or $10 an hour, were unwilling to commit to an increase in taxes. Under Haigh's proposal, the bonds would be paid off through $515,000 payments for 15 or 16 years. That money would come from county taxpayers.

Janice asked Kimberly about the Mayor's thoughts on the proposal.

Kimberly responded that Coleman opposed the idea if the property taxes are needed to pay off bonds. She said it would double tax St. Paul residents who already pay taxes for $25 million in housing programs. Any increased taxes, she said, would hurt the low-income people whom officials are trying to help.

At the 8/8/00 meeting, Haigh introduced a revised Housing Incentive Fund; one that would be paid for out of county budget reserves: Down from a $5 million dollar level to $2 million, and property being rental for low-income families, and supportive houses for individuals; i.e., homeless individuals that face multiple barriers to self-sufficiency.

Commissioners who questioned the proposal said, it amounts to more taxation, even though the method is more indirect than paying a loan with an increase in property taxes. (Virginia Rybin, Pioneer Press 8/9/00)

``This is a shell game,'' Commissioner Dino Guerin said. "I really think we're complicating a very simple issue—are we going to fund a new program with $2 million (tax dollars)?''

Haigh's second proposal would increase the amount the county sets aside in anticipation of "property taxes that are not paid." This is now proposed at 1% of tax collections, the actual amount in 1999. To accommodate the proposal, it would increase gradually by ˝% a year over four years. In previous years, the percentage rate has been 2-3%.

Theoretically, under this proposal, the money not needed to cover uncollectible taxes would be used to replace the $2 million in reserves. In an economic downturn, however, the amount of uncollectible taxes increases, so there might be no money to replenish the reserves.

"I think it's unfair to say this isn't coming from property taxes,'' Commissioner Tony Bennett said, "because the reserves in the general fund come from property taxes.''

"This is like paying your rent out of your savings,'' Commissioner Victoria Reinhardt said.

And Janice's position since the discussions began? "The municipalities in the county should be formulating housing plans of their own. None have come forward to ask the county to use its HRA levying capabilities. St. Paul has a housing policy and as the Deputy Mayor explained in June, 'In 2000, the city will commit over $25 million for housing. A substantial portion of that is for the populations being discussed today (6/7/00 Board Meeting). A 3-year goal is to produce 2,500 new housing units. A commitment is that 10% would be affordable at 50% or less of median income and another 10% would be affordable at 30% or less of median income. There is also a commitment to preserve the inventory of affordable housing units, approximately 15,000, as long as the current decade-long comprehensive plan is in effect.' (note: Janice was on the City Council when the Comprehensive Plan was adopted.)

That is a plan and a commitment that should be looked at by the suburban communities. I cannot in good conscience go along with the plan presented today (8/8/00) because it may jeopardize the county's bond rating and in a downturn economy, it may force this Board to apply an unfair tax levy on all county residents—fund balance shortfalls must be paid. And as stated by Ms. Kimberly, a tax on the population that we are trying to help."

In a related issue, the state has made TANF dollars available for supportive housing. The county has developed a Supportive Housing and Managed Care Pilot proposal and has applied for funding. Janice said, "I know that this is just one idea, but it's a start. Let's calm down and bring suburban community leaders and county and city staff together to formulate a housing plan—its time to be creative and to come up with a funding source that will not burden taxpayers."



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Author: Commissioner Rettman's Office / Information Services