St. Paul and Ramsey County officials plan to spend $74.5 million in federal American Rescue Plan funding on new housing affordable for the area's poorest residents.
Under the plan city and county leaders unveiled Monday, St. Paul will commit $37.5 million and Ramsey County will commit another $37 million, for a combined total that will be among the largest investments in affordable housing in the nation, leaders said.
The investment will pay for construction of 1,000 permanent affordable units in St. Paul at 30% area median income (AMI) — about $34,000 a year for a family of four. Nearly 40% of St. Paul renters have incomes at or below that level.
The COVID-19 pandemic exacerbated an ongoing housing crisis in St. Paul and across the country — and people cannot afford to wait for help much longer, Mayor Melvin Carter said during Monday's virtual press conference.
"This is a giant step forward as we continue to engage in the broad array of efforts to ensure everyone in our community can secure stable housing as we continue to invest in deeply affordable housing alongside housing at all ends of our community," Carter said.
The announcement comes as leery developers weigh whether to do business in St. Paul, after voters approved a stringent rent control ordinance in November. City Council President Amy Brendmoen said the capital city will need adopt a "yes in my backyard" attitude if they're going to successfully add new units.
In Ramsey County, more than 37,000 families live at or below 30% AMI, said County Board Chair Toni Carter. The county estimates that it needs 15,000 new affordable units.
"The commitment and partnership from the federal government will help us add hundreds of new affordable units to the development pipeline in 2022 alone," she said. "All residents of Ramsey County should have a safe and stable place to call home."
The city and county will also join the Biden administration's House America initiative, a U.S. Department of Housing and Urban Development (HUD) partnership that seeks to address the nationwide homelessness crisis. Federal elected officials including U.S. Sen. Amy Klobuchar, U.S. Sen. Tina Smith and U.S. Rep. Betty McCollum appeared alongside local leaders at Monday's press conference.
"A family of four on $34,000 — how much of your income goes to housing, what's left for food, what's left for school supplies, what's left for just daily expenses?" McCollum said.
County funds will be split between St. Paul and suburban communities, Ramsey County Commissioner Trista MatasCastillo said in an interview. The money will be used to preserve existing affordable housing, build new units and potentially help first-time homebuyers, she said.
"When we talk about affordable housing, people have kind of this idea of who that is in their mind," MatasCastillo said. "This is for our working-class families, our seniors, kids aging out of foster care, you name it — people need to be able to afford their housing so that they can stabilize everything else in their lives."
The county funds, which MatasCastillo said will be distributed early next year, will allow for about 300 new and existing units at 30% AMI. In suburban Ramsey County, Maplewood, Shoreview and Roseville are particularly in need of affordable housing, she said.
And despite concerns about what the new rent control measure will entail, there's already interest from local developers in snagging a piece of the pie.
The county started soliciting affordable housing project proposals in November, and received a dozen applicants in 10 days, MatasCastillo said. There have already been inquiries from developers about the next round, which will open in February, she said.
"To have this large of an investment at the local level is really going to be a springboard for our community," MatasCastillo said. "It has gone unfunded for so long that we are in a crisis and now we have the opportunity to actually address it, and to make sure that every member of our community has the opportunity to have an affordable, safe, dignified place to live."
