Ramsey County’s push to establish a property tax levy for affordable housing programs received the blessings of the Saint Paul City Council on May 26.
The levy is expected to raise as much as $11.6 million annually for various affordable housing efforts in the county, including home ownership programs, property acquisition and “gap” financing for affordable housing projects, and assistance for projects competing for affordable housing grants.
The levy would add about $45 annually to the property tax bill of a median-valued home of $245,700. The Saint Paul City Council approved the levy on the condition that the county spend at least half of the money raised for affordable housing in Saint Paul. The City Council also stipulated that its consent be required for projects in Saint Paul that are funded by the county levy.
Saint Paul and North Saint Paul are the only municipalities in Ramsey County that have their own Housing and Redevelopment Authority (HRA), and their approval is required before the county HRA may impose the tax levy in those cities. North Saint Paul officials have indicated that they will not allow the levy to be imposed in their city.
The levy would add about $45 annually to the property tax bill of a median-valued home of $245,700. The Saint Paul City Council approved the levy on the condition that the county spend at least half of the money raised for affordable housing in Saint Paul. The City Council also stipulated that its consent be required for projects in Saint Paul that are funded by the county levy.
Ramsey County has had the statutory authority to establish an HRA since the 1970s. It set up its own HRA more than 20 years ago, but it is the only HRA in the Twin Cities that does not impose its own property tax levy. Ramsey County’s HRA has been funded through property sales, federal Community Development Block Grants and other sources.
Kari Collins, Ramsey County’s director of economic development, said the levy would allow the county to tap “critical resources” for housing, especially for Black, indigenous and other people of color who are most affected by the shortage of affordable housing.
Nearly half of renters in city are ‘cost-burdened’
The goal of the levy is to create housing that is affordable to households making 30 percent or less of the Twin Cities area’s median income (AMI). The AMI is about $103,400 per year for a family of four.
A housing shortage is putting new homes out of reach for homeowners and renters alike in Ramsey County. Nearly half of the renters and 20 percent of the homeowners in Ramsey County are considered to be “cost-burdened,” meaning they spend more than 30 percent of their income on rent or mortgage payments.
County officials have estimated that at the current pace of new home construction, it would take more than 20 years to build enough affordable housing even if all housing construction were dedicated to affordable housing.
According to City Council president Amy Brendmoen, Saint Paul especially needs affordable housing for seniors who are often forced to move outside the city to find a home they can afford.
Collins said there is a growing recognition in Ramsey County that affordable housing can be a boon for business as the need to attract and retain employees grows.
Saint Paul HRA Board chair Chris Tolbert conceded that the additional property tax may not be welcome news to many property owners. The city, he said, does have the right to withdraw its consent for the tax levy at any time.
—Jane McClure
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