Adopt Resolution #26-227 Authorizing City Staff to Process, Authorize, and Execute Documents Necessary to Implement and Administer the Ramsey local Affordable Housing Aid (LAHA) Program.

The Council discussed drafts of the the policy at its work sessions on February 10 and May 12, 2026, and provided direction to bring forward the attached policy that meets the needs of existing Ramsey residents.  

Background Information
In 2023, a law was enacted that established a metropolitan-area sales tax with revenue only to be used for affordable housing purposes.  This program is called Local Affordable Housing Aid (LAHA).  The law included a provision that cities over 10,000 in population receive their share directly, based upon a formula of each city's portion of cost-burdened households.  The direct allocation allows cities local control over what housing-related assistance it feels its residents need.  Generally speaking, the money can be used for things such as building new affordable housing (entire buildings or a percentage of the units); preservation/renovation of existing affordable housing, and emergency rental assistance.  There is a companion program that is statewide (SAHA) that Ramsey is not eligible for.

The amount of money varies from year-to-year.  The current balance total is $612,611.66. In the first full year of the program, 2025, Ramsey received $317,780.38 and future allocations will likely be similar to this amount.  Funds must be used by their fourth year, meaning that the 2024 allocation must be committed by the end of 2027 and spent by the end of 2028.  Some exceptions can be made for projects in the works.  On September 9, the City Council approved $250,000 to the Elevate Hope House project to construct three apartments limited to residents making under 80 percent area median income (AMI).

Projects can be for both rental and ownership housing and the determining factor of who is eligible is based on Area Median Income (AMI).  It should be noted that AMI is based off of household size.  For 2025, the AMI for a family of four in Ramsey is $132,400.  The ownership projects need to benefit people with household incomes of less than 115% AMI, with preference given to household incomes less than 80% AMI.  Rental projects (construction or emergency renal assistance) are limited only to those incomes below 80% AMI.  The money can be used in the form of a loan or a grant (technically, a no-interest forgivable loan).  There can be a cost-share component.  Any money that is repaid from a loan or a claw-back provision will need to be re-used for affordable housing. 

Staff met to discuss what we are seeing in the field based on code enforcement complaints, business interactions, and other anecdotal information as to what might be beneficial to the community.  Staff also met with Anoka County Housing staff to discuss various program options.  The following are included in the program that staff feels will be beneficial while not majorly impacting staff time.  

Single-Family Home Exterior Improvements
Large-cost projects like new windows, new siding, new roofs, (potentially) repaving driveways, utility connections, and large tree removal can be cost-prohibitive for families at and below 115% AMI.  These types of improvements to a home can have positive effects on the surrounding neighborhood.  These items can usually be planned for several months, and the city can offer an application window scheduled around when staff has more time.  Cost range estimate: $10,000 to $50,000 per house.

Single-Family or Town home Interior Improvements
Having a furnace, water heater, or air conditioner replaced can be an urgent and costly issue.  Cost range estimate: $1,500 to $10,000 per home.  

Issues to Consider
In putting together a program or policy on how to spend the money, staff is taking into account the following issues:

Income Verification: Staff will be responsible for verifying the recipient's income and household size for any of the home-improvement programs.  This commonly-accepted way of doing this is to examine the recipient's most recent tax returns.  Some jurisdictions rely on a "self reporting" form, but that would become extremely time-intensive should allegations of fraud be made.  

Administering Payment: Staff will be responsible for paying the recipients of the funds and then verifying that the money is spent for its intended purpose.  Our program will pay the contractors directly—both down and final payments.  The attached resolution authorizes staff to take the applications and administer payments directly, without going to Council for approval.  This is so that urgent repairs can be handled quickly as well as to prevent publicly exposing our vulnerable residents.  The Council will be able to see the checks cut on the Bills List on each Council agenda.  

Admin Fees: Right now, cities cannot use any of the money to cover staff time in administering these programs.  There may be some legislation introduced this year to allow cities to tack on an administrative charge for the grants or loans.  

Repayment of Loans: Staff does not have the capacity to process monthly loan payments.  Our program is structured as a no-interest/forgivable-after-X-years program (essentially a lien on the home) so that the money is not used to "flip" a house or build resale value instantly before selling.  Should it sell before the specified time, the money is paid back at the time of closing in full or by a reduced amount.  

Not Using the Funds: The funds are meant for helping our residents or potential future residents.  Should the money not be used, it will go back to Minnesota Housing and used in other communities.
 

None required.  Once approved, staff will begin marketing the program.  

Funding for the program will come from a sales tax.  Staff time to process the applications is currently not covered by the sales tax, though time spent reviewing the applications and preparing the necessary paperwork is expected to be minimal.  Additionally, most of the authorized improvements are required to obtain building permits and those costs are authorized.  

In May, the Council provided consensus on the proposed initial allocations:
2026 Interior Improvements — $40,000
2026 Exterior Improvements — $0 (applications to begin in February 2027)
2027 Interior Improvements — $100,000
2027 Exterior Improvements — $100,000

Staff recommends adopting the LAHA program.

Motion to Adopt Resolution #26-227 Authorizing City Staff to Process, Authorize, and Execute Documents Necessary to Implement and Administer the Ramsey local Affordable Housing Aid (LAHA) Program.