The St. Paul City Council this week approved financing for 60 units of deeply affordable rental housing for seniors age 55 and older at Highland Bridge, the new development in Highland Park.
The Lumin, a five-story apartment building to be developed by CommonBond Communities at 830 Cretin Ave., will be targeted to residents earning no more than 30 percent of the Twin Cities area median income. That income limit would equate this year to about $24,000 for an individual or $35,000 for a family of four.
The Lumin will span 48 one-bedroom units and 12 two-bedroom units. Seven apartments will be reserved for high-priority homeless residents.
The $22.3 million project relies on a variety of funding sources, including a $10.6 million first mortgage loan from the Minnesota Housing Finance Agency. The city’s Housing and Redevelopment Authority will contribute up to $5.4 million in tax increment financing, which will take the form of a “pay as you go” financial note to help fund the first mortgage loan. That translates to about $400,000 in payments on an annualized basis.
To fund deeply affordable housing, the city has organized a series of tax increment financing districts, or TIF districts, that pair affordable projects with market-rate projects, somewhat like Russian nesting dolls. In the case of the Lumin, “Ford Site Housing
TIF District No. 2” relies on tax revenues from a 118-unit market-rate senior housing project to be developed by Presbyterian Homes.
To maintain long-term affordability, every apartment in the Lumin will also rely on project-based federal Section 8 housing vouchers, which are expected to cover the majority of rents.
Other funding sources for the Lumin include tax credits, tax-exempt revenue bonds provided through the Minnesota Housing Finance Agency, a $4.5 million Ramsey County capital improvement loan that defers both principal and interest for 40 years, a deferred developer’s fee, a sales tax rebate and energy rebate.
The city, through an agreement with master developer the Ryan Cos., expects that at least 20 percent of all the housing units built at Highland Bridge will qualify as affordable housing at a variety of income tiers, including a mix of rental and owner-occupied housing. At full build-out, that would translate to 760 affordable units.