First repair, then grow

Meeting the needs of our affordable housing partners.

outside building at night

A challenging climate

The Repair + Grow program is the county’s one-time response to nationally recognized challenges in affordable housing operations. The program awarded $17.3 million to nine nonprofit affordable housing developer-owners with barriers to developing more housing due to the economic impact of the pandemic. The program is the result of extensive engagement, research, and analysis around the root causes of these challenges, and what it will take to stabilize properties and remove barriers to increased affordable housing production.

Repair + Grow uses funding from Local Affordable Housing Aid (LAHA), which is funded by proceeds from the Metro Area Sales and Use Tax for Housing approved by the 2023 State Legislature. Initially, Hennepin County hoped to use these funds to boost affordable housing development in the short-term. Consultations with partners and industry leaders made clear that our affordable housing owner-developers were focusing on keeping their doors open, with little capacity to plan new projects.

“We’re seeing lower rental revenues and operating costs escalating at rates 2 to 5 times that of average inflation,” said Abbie Loosen, Multifamily Housing Development Manager with the county, and the architect of the program. “Some developers are hanging on by a thread or have already closed projects. Among those who are struggling, they're facing staffing gaps, high vacancy, slow unit turnovers, past-due bills, and depleted reserves, leaving no capital to handle the expenses of developing affordable housing.”

This difficult financial climate is resulting in lower quality housing for residents, and a reduced ability to attract the capital needed to create more housing, especially for the lowest-income households.

hennepin county's leadership is rightly diagnosing and meeting the moment through the repair plus grow program. This builds on an already strong foundation of regional, state and national housing leadership.

Meeting the challenge

The only solution to homelessness is housing. Repair + Grow is an important step in supporting our affordable housing ecosystem, meeting developer-owners where they’re at, while communicating—and funding—our vision of where we want to be.

The county received 16 proposals requesting $104 million in assistance, underpinning the challenges developers are facing. Ultimately, the nine developers the county awarded will support over 8,000 7,959 affordable units where the annual income of current renters averages $22,000.

“This funding will allow us to continue offering the essential supportive housing services we provide,” said Caroline E.R. Hood, president and CEO of RS Eden, one of the award recipients. “As owner, operator, property manager, and service provider, we need to ensure both the physical spaces nd essential services we provide are adequately resourced. Without this funding, it puts this work in jeopardy, and therefore, the lives of hundreds of people and families.”

A vision of housing for all

Repair + Grow is a part of Hennepin County’s larger vision to use LAHA funding to build more quality, sustainable, and affordable housing. We will use what we’ve learned to continue to grow our affordable housing ecosystem, beginning with strengthening developer-partners and then accelerating production.

Starting this year, we’ll begin providing capitalized supportive housing services reserves for projects funded under our Supportive Housing Strategy, helping to strengthen this critical resource for people exiting homelessness into housing. Our focus will then turn to affordable housing preservation and production, through pipeline development, a development accelerator, new homeownership opportunities, and ensuring the homes we have are safe, healthy, and climate resilient.

“There is a housing shortage across all income levels both nationally and in Hennepin County,” said Julia Welle Ayres, Housing Development and Finance Director at Hennepin County. “Even if we had enough rental assistance for everyone who’s eligible, we still wouldn’t have enough homes where people could use that assistance. So, in short, we just need more housing and have needed it for a long time.”

Repair + Grow—and the ensuing strategy for the LAHA funds—will strengthen non-profit developers’ ability to stabilize and build upon their housing stock, now and into the future.