BE IT RESOLVED, that the Hennepin County Board of Commissioners hereby authorizes up to $46,000,000 of its federal funding from the Coronavirus Local Fiscal Recovery Fund available under section 603 of the Social  Security Act, as added by section 9901 of the American Rescue Plan Act (“Federal Pandemic Funds”), to be utilized for eligible costs, operations, staffing, and services to advance equitable housing recovery strategies; and

BE IT FURTHER RESOLVED, in order to implement the above resolving clause, the County Administrator is authorized to negotiate agreement(s) with vendor(s) of eligible services to advance equitable housing recovery strategies from August 15, 2021 through December 31, 2026 with a total combined not to exceed amount of $46,000,000; this includes but is not limited to negotiating amendments and increasing the not to exceed amounts for existing agreements, negotiating new agreements, or transferring funds to constituent units of government; that following review and approval by the County Attorney’s Office, the Chair of the board be authorized to sign the agreements on behalf of the county; and the Controller be authorized to disburse or transfer funds as directed; and

BE IT FURTHER RESOLVED, that a supplemental appropriation to the 2021 Housing and Economic Development department operating budget in the amount of $46,000,000, and the addition of 2.0 FTEs, be approved; and

BE IT FURTHER RESOLVED, that the County Administrator is directed to seek alternative funding sources for these purposes; and that to the extent other state or federal funding is received for the expenditures by this Resolution, the County Administrator is delegated authority to reduce the above authorization of Federal Pandemic Funds if necessary to ensure there is no duplication of assistance; and

BE IT FURTHER RESOLVED, in order to implement the above resolving clauses and pursuant to Minn. Stat. §§ 383B.101 et seq., the County Administrator is authorized to effectuate the goals of this resolution, including but not limited to directing and coordinating county personnel and resources as needed to implement the immediate strategies to address housing recovery; and

BE IT FURTHER RESOLVED, that the above-­referenced authorization of Federal Pandemic Funds by the Hennepin County Board of Commissioners does not imply a continued funding commitment by the county for these costs, operations, or services when Federal Pandemic Funds are no longer available; and

BE IT FURTHER RESOLVED, that the County Administrator is directed to provide an update to the County Board within 120 days regarding the above efforts to address equitable housing recovery in Hennepin County, including any long-term strategies.

History: On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, including the appropriation of more than $130 billion to the Coronavirus Local Fiscal Recovery Fund, for making payments to metropolitan cities, counties, and other units of local government to mitigate the fiscal effects stemming from the public health emergency. Hennepin County expects to receive direct payments from the U.S. Treasury totaling more than $220 million and received the first half payment of $122.9 million in May of 2021.

The American Rescue Plan Act provides that money from the Coronavirus Local Fiscal Recovery Fund may only be used to cover certain costs, including costs to respond to the public health emergency or its negative economic impacts. The funds must be obligated by December 31, 2024 and expended to cover such obligations by December 31, 2026. Under the available Treasury guidance, this category of eligible costs can include assistance to households, small businesses and nonprofits, including loans, grants, in-kind assistance, technical assistance or other services that respond to the negative economic impacts of the pandemic.

Additional programs, services, or other assistance may be an eligible use of Federal Pandemic Funds where provided to households, businesses, or populations disproportionately impacted by the COVID-19 public health emergency, including programs or services that address housing insecurity, lack of affordable housing, or homelessness, including:

• Supportive housing or other programs or services to improve access to stable, affordable housing among individuals who are homeless;

• Development of affordable housing to increase supply of affordable and high-quality living units; and

• Housing vouchers and assistance relocating to neighborhoods with higher levels of economic opportunity and to reduce concentrated areas of low economic opportunity.

The above examples center on building stronger communities through investments in housing and neighborhoods as a way to address the disproportionate negative economic effects of the public health emergency. In addition, for populations disproportionately impacted by the pandemic, funds can be used to facilitate access to health and social services, to address or mitigate impacts to education, or to address or mitigate impacts to childhood health or welfare.

Beyond the repercussions to the health and safety of county residents, the unprecedented economic environment created by the COVID-19 pandemic has resulted in massive business closings, income loss, and unemployment. For low-income Hennepin County residents, any break in income can have serious financial consequences, making it even harder to pay for already unaffordable housing costs. Ensuring stable housing is important for our individual and community health.

The economic impacts of COVID-19 were most heavily felt by people with low incomes, and Black, Indigenous, or People of Color (BIPOC). Of individuals requesting emergency rental assistance in Hennepin County, nearly 2/3 have incomes below 30% of the area median income (AMI), and 4/5 are BIPOC.

In 2020, Hennepin County deployed over $22 million in state and federal CARES Act funding towards emergency rental assistance, serving approximately 6,500 households. 

Currently, the county is administering $56.7 million in Emergency Rental Assistance from the U.S. Department of Treasury (Resolution 21-0051 and Resolution 21-0188), expected to serve over 15,000 county households.

On May 11, 2021, the Hennepin County Board of Commissioners, acting as the Housing and Redevelopment Authority, approved $17.1 million to support 27 affordable housing and development projects—the largest amount of funding ever awarded by the board at once to support affordable housing. The historic action will help to create or maintain 2,270 units of housing, including 1,550 affordable units, of which 360 will be affordable to households with the lowest incomes earning less than 30% of the AMI, or about $31,450 for a four-person household.

Even with these actions, there will still be unmet needs in our community. These unmet needs will be greatest with lowest income households, and households not eligible for federal and state programs.

Staff has the following preliminary recommendations for the use of Federal Pandemic Funds for equitable housing recovery:

• Investments to immediately increase affordable multifamily housing production, such as:

• Gap funding for affordable housing projects serving populations disproportionately impacted by the COVID-19 public health emergency
• Investments to address a backlog of deferred rehab need in Naturally Occurring Affordable Housing (NOAH) properties (a primary source of housing for populations disproportionately impacted by the COVID-19 public health emergency) and support for additional non-profit preservation acquisition of at-risk NOAH properties

• Acquisition of properties supporting affordable housing along the housing continuum, especially single adults who were disproportionately impacted by the COVID-19 public health emergency and are now struggling with homelessness/housing instability

• Homeownership programs targeting populations disproportionately impacted by the COVID-19 public health emergency

Impact/Outcomes: Create or preserve approximately 2,000 units of affordable housing; and support more than 100 households in buying homes.