Olmsted County is hoping to put a dent in the 5,400 new senior housing units expected to be needed by 2030.

“We’re at the beginning of a long process,” Olmsted County Housing Director Dave Dunn told the county’s Housing and Redevelopment Authority on Tuesday.

The HRA board unanimously approved moving forward with plans to create 40 age-based independent living apartments on land the county owns at 1025 Mayowood Road.

The apartments will be the second phase of housing for the site, with Duluth-based Center City Housing planning a grand opening for the first phase next week. That project will provide 30 units of supportive housing for people facing homelessness and behavioral health needs.

Dunn said the work done to complete the Center City project means some preliminary planning for the new apartment building has been completed.

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A preliminary site plan shows placement two housing facilities planned for 1025 Mayowood Road in Rochester. (Olmsted County Housing and Redevelopment Authority)
A preliminary site plan shows placement two housing facilities planned for 1025 Mayowood Road in Rochester. (Olmsted County Housing and Redevelopment Authority)

It doesn’t mean ground-breaking is in the near future.

Dunn said the goal is to seek state funds for construction of the planned county project, which will take time.

“To get the funding from the state, you delay a project by two years,” he said, noting the county plans to submit a funding request in July, with the hope to be part of state support announced in early 2023.

If approved, construction would start that year with an anticipated opening in 2024.

Without state funding, the project schedule would have construction starting in May, with a completed project by the end of 2022.

Dunn said tapping state housing infrastructure bonds will be key in keeping rents affordable.

“If we’re able to secure those, that will pay for the vast majority, if not all of the construction, which allows us to serve people on the very low end of the income spectrum,” he said.

He said maintaining county ownership of the project also provides flexibility needed to serve residents with the greatest need.

While the county sold the land for the first phase to Center City, commissioners said they prefer to maintain ownership of the remaining area.

County commissioner Gregg Wright, who serves on the HRA board with the rest of the commission, said it also puts the county in a position to build equity that could be used to build more housing in the future.

“We should move forward as fast as we can,” he said.

During a recent county board retreat, Dunn said the county expects to generate a $83,000 profit from housing it owns, even with keeping rents affordable to households with low incomes.

Olmsted County Deputy Administrator Travis Gransee said adding to those efforts will help cover ongoing housing costs.

“If we don’t start investing in projects that provide capital long term, at some point the HRA levy will be eaten up by everything we currently have,” he said.

Dunn said the indirect costs of the county’s housing programs continue to increase, but the county’s housing levy is capped under state rules.

Commissioner Sheila Kiscaden said it reinforces the decision to maintain ownership of the site while providing needed senior housing.

“We can make a contribution in that area and have some more benefits to the HRA in other areas,” she said.