Launched in 2014 by journalist Sean Baker, Med City Beat is an independent news source covering government, business and culture in Rochester, Minnesota.

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Takeaways from Monday's council discussion on affordable housing

Ahead of tonight's "What's on Tap?" event at Forager Brewing Company, I wanted to share some of my notes on affordable housing from Monday's city council meeting. The meeting included a presentation from interim city administrator Gary Neumann outlining possible strategies for addressing the issue. Council members only had time to comment briefly on the presentation, but agreed to continue the discussion at a later time. 

On affordable housing, we are not alone

The issue of affordable housing is not unique to the Rochester area. A survey conducted a few years back found that 46 percent of renters in Olmsted County are paying more than 30 percent of their income for rent. The same report, though, showed a higher percentage in all other mid-size and large metros across the state, including Duluth, Mankato, St. Cloud and the Twin Cities.

“This is a huge issue," said Neumann. "It's likely too big for any single city to address on its own.”

Partners needed

There is no one silver bullet toward fixing the problem. However, Neumann said any strategy would require collaboration.

That means partnering with both developers and philanthropic organizations, notably the Rochester Area Foundation. The city and foundation, with the help of private partners, were able to build hundreds of affordable units in the early 2000s.

Addressing the issue, according to Neumann, will also require additional funding from the state. Minnesota has offered little in recent years to expand the supply of affordable housing.

"I hope they would  provide more than they have been," he said.

What Rochester can do

In recent years, the city has been reliant on tax increment financing (TIF) to support the development of affordable rental units. Since 2016, 783 units have been approved using TIF support. 

Moving forward, the city will likely need to continue to provide incentives for developers in exchange for a set minimum number of affordable units in a particular project.

“Without these developers, we couldn’t do these projects," said Neumann.

Neumann laid out a series of recommendations related to the use of TIF for the council to consider. Since 1999, the city has provided $20 million in TIF support toward affordable housing projects.

Council member Mark Hickey said, while more may need to be done, the recommendations move the city in a positive direction. Meantime, council president Staver said he would like to see the recommendations quantified before taking any vote.

“I don’t know if this is enough or if its moves us in the right direction," said Staver.

Council member Michael Wocjik said the recommendations were "not nearly as complete as they need to be."

“Housing affordability is the number one issue our community faces at the present time," said Wojcik.

Local leaders weigh in

We recently asked three city leaders the question: What can Rochester do to address affordable housing? 

You can read their responses here. All three — Steve Borchardt, Patrick Seeb and Sheila Kidcaden — are scheduled to join us for the "What's on Tap?" discussion on Wednesday, Sept. 20. 5:30 p.m.

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