ARP funding could help create 400 Duluth housing units | www.WDIO.com

ARP funding could help create 400 Duluth housing units

The City of Duluth is looking for developers who want to create affordable housing with help from American Rescue Plan funding. The City of Duluth is looking for developers who want to create affordable housing with help from American Rescue Plan funding. |  Photo: WDIO-TV file

Jon Ellis, WDIO-TV
Updated: November 30, 2021 04:30 PM
Created: November 30, 2021 04:27 PM

It's an opportunity that Duluth has never had before: The city is looking for developers who want to create affordable housing with help from federal American Rescue Plan funding.

The city has committed $19.2 million of its ARP funding for affordable housing, and the dollars do not come with as many requirements as most other money for housing. The city plans to choose up to four developers with the hope of creating about 400 new housing units by May 2024.

Jason Hale, the Senior Housing Developer for the City of Duluth, says they've never had this amount of money to work with.

"The really exciting thing about this amount of money is that we're basically jump-starting projects that may have happened over the next four or five years but the need is now, so this enables us to get them going now and get more affordability in them than otherwise they would have," he said.

The funding will cover a portion of the project costs, and developers will cover the rest through traditional means such as mortgages. Hale explained that the ARP funding could help convert projects that might've been constructed as market-rate housing to affordable housing instead.

"They could do an entirely market-rate project. What we're offering here is to partner with them to build that same project but then buy the rents down effectively for an extended period of time so they're affordable to more people. That works well, I think, for both of us. That helps as a city secure more affordable housing units. That also helps them have better odds of renting their units out because the reality is if they can offer them at lower rents, there would be more people who would probably be interested in renting those apartment units, so I think it's a win-win in that sense," he said.

Hale said an ideal project would have more than 100 units and the majority would have rents that are considered affordable to people who earn less than 70% of the median income. However, Hale said projects of fewer than 100 units will be considered for projects that are good fits.

Projects would ideally be located in "qualified census tracts" identified by the Deparment of Housing and Urban Development as having been disproportionately impacted by the COVID-19 pandemic, since those areas have already been determined to be automatically eligible for ARP funding. The qualified census tracts cover portions of the Lincoln Park, Downtown, Central Hillside, East Hillside, Chester Park, and Kenwood neighborhoods.

Developers can also be propose projects outside of qualified census tracts but must provide evidence that the neighborhood was negatively impacted by the pandemic and show how the project would reduce that impact.

Hale said he anticipates receiving some proposals from developers he's already been working with but said they want to hear from any interested qualified developer. The decision on who gets the money will be made using a scoring process, and Hale said the best-case scenario is that they have a lot of projects to choose from.

He encouraged residents who are concerned about the need for more affordable housing to "be excited and have patience."

"These things take time. We're getting up and going as fast as we can. We know the need was yesterday but we have to go through these processes to make sure we're getting the best thing for our community as we can," he said.

The city is accepting proposals from qualified developers through January 30, 2022. More information is available in the city's request for proposals.
 

Credits

Jon Ellis, WDIO-TV

Copyright 2021 WDIO-TV LLC, a Hubbard Broadcasting Company. All rights reserved

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