Background:
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, including the appropriation of $5 billion to be administered through the HOME Investment Partnerships (HOME) program to address the need for homelessness assistance and supportive services. Hennepin County has been awarded a one-time allocation of $6,415,971 of HOME American Rescue Plan (HOME-ARP) funding on behalf of the Hennepin County Consortium (all Hennepin County cities, excluding Minneapolis, Bloomington, Eden Prairie and Plymouth).
HOME-ARP funds may be used to perform four activities that must primarily benefit qualifying individuals and families who are homeless, at risk of homelessness, or in other vulnerable populations. These activities include: (1) development and support of affordable housing, (2) tenant-based rental assistance, (3) provision of supportive services; and (4) acquisition and development of non-congregate shelter units. The funds must be expended by September 30, 2030 (CPD Notice CPD-21-10).
In order to receive the HOME-ARP funds, the Consortium is required to create a HOME-ARP allocation plan and submit it to the U.S. Department of Housing and Urban Development (HUD) as a substantial amendment to its Fiscal Year 2021 annual action plan (Resolution 210162, adopted May 18, 2021). The Hennepin County Consortium’s allocation plan follows the priorities and goals outlined in the 2020-2024 Consolidated Plan, and the requirements of the American Rescue Plan Act and HUD Notice CPD-21-10.
The allocation plan proposes to utilize the full allocation to create or preserve affordable housing opportunities for the following populations:
- People experiencing homelessness;
- Other populations requiring services or housing assistance to prevent homelessness and other populations at greatest risk of housing instability; and/or
- People at risk of homelessness and with incomes below 30 percent of the area median income (AMI)
To meet the above goals, the county will first award $4,730,000 to Beacon Interfaith Housing Collaborative to create 50 units of supportive housing at Vista 44 in Hopkins. This project will have 33 units affordable at 30 percent of AMI, and 17 units affordable at 50 percent of AMI, and 32 units will be designated for families exiting homelessness and families with child welfare involvement. Hennepin County HOME funding agreements are typically in the form of a 30-40-year loan and must be expended within five years.
Remaining HOME-ARP funds will be awarded through Request for Proposal processes. Any future program income would be allocated in future Action Plans.
A public hearing for the substantial amendment to the 2021 Action Plan took place on August 9, 2022, before the Administration, Libraries and Budget Committee. In addition, the substantial amendment was made available to the public for more than the HUD required 15-day public comment period between August 1, 2022 and August 30, 2022. The public comment period and public hearing are submission requirements of the Consolidated Plan and the Action Plan; public comments and the county's written response will be incorporated into the final document submitted to HUD.
Current Request: Approve submission of the substantial amendment to the 2021 Action Plan; authorization to negotiate federal entitlement award for HOME-ARP with an estimated receivable amount of $6,415,971, during the period July 1, 2022 through September 30, 2030; authorization to negotiate a HOME-ARP agreement, during the period July 1, 2022 through June 30, 2067 with a not to exceed amount of $4,730,000.
Impact/Outcomes: This funding will assist in the creation of 50 supportive affordable rental units.
Housing Disparity Domain: Households of color are disproportionately housing cost burdened. This request creates housing opportunities for individuals with incomes at or below 30 percent, 50 percent, and 60 percent of the area median income.