Developer MWF Properties has interest in developing a new workforce housing complex in Mounds View. MWF Development Manager Chris Stokka presented a proposal to the council about a potential multi-family housing project at the Jan. 3 work session. The property sites, located at the corner of Mounds View Boulevard and Groveland Road, is 2.3 acres and will consist of solely workforce housing units.
Workforce housing is designed for working class families, often for residents in entry-level positions, food service, retail, or seniors. These homes are aimed at households that earn a maximum of 60 percent of the area’s median income.
This form of housing is not to be confused with Section 8 housing. Workforce housing residents are responsible for paying 100 percent of their rent.
MWF has a strong reputation as long term property owners, having not sold a property in company history. The company has developed many affordable housing developments across the Midwest, including projects in the suburban metro areas of Ramsey County.
Stokka said the current project proposal will consist of 52 units, with 50 percent two bedroom units, 25 percent one bedroom, and 25 percent three bedroom. The project amenity plans that include a community room, exercise room, underground parking, and a children’s playground.
To fund this housing, there is a competitive application process among other developers throughout the state to earn federal tax credits. The state allocates these tax credits that are sold to an investment bank that provides equity for the project. Through the application process, points are given to determine which developer will receive funding.
“[This funding] basically makes up for the difference for a high end apartment and an affordable apartment,” Stokka said at the meeting. “It allows us to keep our rents modest, it’s the commitment that we make in exchange for that funding.”
Stokka said that about 1 in 3 applications are selected for this federal funding, and the application cycle only occurs once a year in June.
Mounds View Business Development Coordinator Brian Beeman said that MWF Properties said they will need Tax Increment Financing (TIF) in order to make the project successful. TIF is a public financing method that is used as a subsidy for redevelopment or other community-improvement projects. Through TIF, cities divert future property tax revenue increases from certain areas toward a development project. Having the city’s support will also give MWF a better chance of receiving the housing tax credits when scoring their application because this would allot more points.
In their presentation to the council, MWF said they would need up to $600,000 in housing TIF spread out over 15 years, although the number and terms cold vary depending on where the numbers come in and the direction of the council.
Contact Sarah Burghardt at [email protected]