Agenda - Council - 01/12/1982 - Laserfiche WebLink

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I I I I I I I I I I I I I where the property has been acquired by the city or HRA. Such housing redevelopment programs would not be subject to the limitations contained in Chapter 462C, as they would be part of a city's revitalization and redevelopment efforts. The League further recommends that cities have th'e power to carry out a single family and multi-family rehabilitation program, including the re-financing of existing mortgages or the financing of an acquisition if either or both are incidental to rehabilitation work. The League further recom- mends that cities be permitted to do less than sub- stantial rehabilitation for multi-family structures, as long as they are located in or could qualify as a redevelopment district under the tax increment statute. Because of the federal Mortgage Subsidy Bond Tax Act of 1980, the ability of cities to conduct housing programs has been severely constrained. Federal law now has placed a cap on the dollar amount of mortgage bonds that may be issued in the State of Minnesota for 1981, 1982, and 1983. Unless federal law is changed, tax-exempt housing bonds will cease to be after 1983, unless they fall within the specific exceptions set up by the federal law. The federal law also includes tight limits on arbitrage, which have the effect of pro- hibiting the great majority of cities from issuing housing bonds on their own. Federal law currently specifies that 50% of the annual state ceiling is allocated to the state, and 50% is allocated to local issuing authorities. The legislature will have to act to change that allocation. The League recommends that the Legislature enact the fol- lowing allocation system: 1) MHFA shall be allocated 100% of the state ceiling, except that any city that is able to issue locally and wishes to claim its local share of the state ceiling may do so through special legislative action. Such city's shares shall be 4~% of the average annual aggregate principle amount of mortgages executed during the immediately preceding three calendar years for single family owner-occupied residences located within the city's jurisdiction. 2) The League recommends that the MHFA re-examine its allocation system and priori- ties such that a share of the annual state ceiling is targeted to cities in proportion to the percentage of Minnesota households located in cities. Monies targeted to cities should be spent in conjunction with city housing plans or programs, where such plans or programs have been completed. The League recommends that MHFA institute a pro- cedure whereby representatives of a diverse group of cities can participate in decision-making as to MHFA priorities in targeting funds to cities. Such representative group shall be chosen in consulta- tion with the League. The League further recom- mends that the Legislature amend M.S. 462A to require MHFA to consider city housing needs and to incorporate city housing plans an programs I~ement Financing (A) Tax increment financing has permitted many cities in various parts of the state to define and carry out rehabilitation, redevelopment, housing, and economic development projects on their own initiative. It represents the most feasible and effec- tive legal strategy which is currently available to cities to preserve and improve their physical and economic environment. The League commends the 1979 legislature for passing one of the most flexible and compre- hensive tax increment laws in the nation. The legislation incorporates substantially the League's position. The League believes that presently no substantive changes are necessary other than a clarification relating to the qualification of un- improved land as a "redevelopment district" under Minnesota Statutes 273°73, Subdivision 10, Paragraph (3). The League supports legislation to clarify that only costs due to unusual terrain or soil deficiencies may be counted in qualifying unimproved land as a "redevelopment district," and that costs related to road improvements and other improvements which can be paid for by special assessments be specifically excluded from computing "the estimated cost of preparing the land for use" when qualifying unimproved land as a redevelopment district. The League further supports legislation which would clarify that property consisting of vacant, unused, underused, inappropriately used or infre- quently used railyards, rail storage facilities or excessive or vacated railroad rights-of-way would qualify as a "redevelopment district." I-8. Hazardous Buildings (C) The hazardous building law, providing a proce- dure for repair or removal of hazardous build- ings and the filling or protection of hazardous excavations, has been useful to cities in elimi-