A planned tax break targets keeping 100 apartments affordable for the next decade.
The Olmsted County Housing and Redevelopment Authority unanimously approved a pilot program to test the effort, which seeks to help property owners maintain naturally affordable housing.
“It really is a preservation tool for existing units to make sure they don’t flip to market rate,” Olmsted County Housing Director Dave Dunn said.
The program would be open to owners of apartment complexes with at least eight units, who are willing to keep rents below rates established by the county. Additionally, new renters will be subject to income verification to ensure they are earning less than 60 percent of the average median income.
Olmsted County Board Chairman Jim Bier, who serves on the HRA board with his fellow commissioners, asked whether the income guidelines could be lowered to reach people facing greater need.
“We already have the workforce stuff,” he said, noting new state-supported housing has been built for people in the 60 percent income bracket.
Dunn said it could be adjusted, but noted lowering the income guidelines could limit participation by local landlords.
As approved, rents would be capped at $600 for studio apartments to $1,515 for a four-bedroom apartment. One-bedroom and two-bedroom units could be rented at $760 and $940 a month.
Michele Merxbauer, Olmsted County housing program manager, said it’s likely that participants are already keeping their rents at the allowable levels, which are required to accept tenants participating in federal housing programs.
The program would also limit potential rent increases to 5 percent each year throughout the expected 10 years of participation.
“Even going up 5 percent a year, they are more affordable than the rest of the market,” Dunn said.
Commissioner Sheila Kiscaden said working with landlords to keep rents low could help slow a trend seen in the community.
“We’ve had a lot of affordable housing that has disappeared,” she said.
With the approval, the pilot program would be in place for the 2021 tax year, providing a March deadline for final details.