|tax levies: overview|
|According to Minnesota Statutes 469.033, Subdivision 6,
an HRA has the authority to levy a special tax upon all taxable
property within the City/county boundaries specifically to fund the
purposes of the housing plan within that City. The maximum HRA levy may
not exceed .0185 percent of taxable market value. |
How do HRA levies work?
As the county treasurer collects the tax it is accumulated and kept in a separate fund controlled by the HRA. The money in the fund is turned over to the HRA at the same time and in the same manner that the general tax is collected for each taxing jurisdiction.
The money collected must be spent according to boundaries set up by the Minnesota State Statutes 469.001 to 469.047 and only through the authority of the HRA Board.
What type of programs can be created with HRA levy funds?
Funds from an HRA levy can be used for numerous things relating to housing as long as they fit within the boundaries set forth by the State of Minnesota. If a city/county is successful in creating an HRA levy, it can make available a dedicated and continuous source of funding to be used on housing issues.
Levy funds can be used to supplement existing housing programs, create new programs, support administration of a housing program, or provide funds for maintaining quality housing. Click here for more ways levy funds can be used.
How to create an HRA.
Creating an HRA can give a city or county much needed power and direction when it comes to shaping the housing outlook for a community. A municipality that has an HRA would have more capacity to set the direction and funding for the preservation and production of a full range of housing choices in their community.
The process to create an HRA can be time consuming and requires public notice throughout the development and implementation process. It is important to establish the goals of the HRA prior to beginning the process. Having established and outlined what the goals are will prevent confusion when the time comes to present the ideas to public officials and residents. For a more detailed outline of how to create an HRA click here. For a sample of HRA formation and organizing documents click here [PDF].
How do HRA levies fund affordable housing in a region?
The unique aspect about HRA levy funds is that they can be used on a wide variety of housing projects, programs, or administrational needs. Cities and counties can levy funds to preserve the quality of rental units in their communities; rental properties are essential to maintaining a wide variety of housing options. Funds can also be put towards programs such as down payment assistance or rehabilitation loans for single-family ownership homes as well.
|Solutions In Action|
Courtesy of Dakota County CDA
Dakota County Community Development Agency (CDA) Housing Levy
Dakota County CDA has experienced great success by using a variety of methods to build and sustain affordable housing. The CDA uses levied funds for its Senior Housing Development Program. Levied funds are used for development related expenses including land and construction costs, as well as for debt service on the bonds issued to finance the buildings. What makes this program noteworthy is the buildings are owned and managed by the CDA.
As a government entity, the CDA does not pay sales tax on building materials and pays a payment in lieu of taxes, both of which allows the CDA to maintain the buildings at lower operating costs; because of this the CDA is able to pass the savings on to tenants through lower rents.
The CDA's Senior Housing Development Program is designed for those 55 years of age and older. Developments are moderately sized and have a mix of one and two bedroom floorplans as well as handicapped accessible units. All buildings are beautifully decorated and include amenities such as a community room with kitchen, sitting and library areas, laundry facilities, underground heated parking, and emergency call systems.
The Dakota Heights, pictured, is a 59 unit senior housing development built by the Dakota County CDA and is located in West St. Paul, MN.
For more information contact Dakota County CDA Senior Housing Development Program: 651-675-4504
|Go back to learn about other policies that generate capital|