Work SessionItem 1Discussed
Local Affordable Housing Aid (LAHA) Program Overview and Planning
The City Council, HRA, and Planning Commission were scheduled to receive a staff presentation on the new Local Affordable Housing Aid (LAHA) program, stemming from a 2023 Minnesota Legislature-approved 0.25% metro area sales tax dedicated to affordable housing. Richfield was expected to receive an estimated $453,000 annually beginning in October 2024, with funds to be administered by the HRA. The work session was intended to review spending guidelines, eligible uses, and income restrictions, and to gather feedback from elected and appointed officials on how to direct the funds.
informational or procedural item — no vote taken
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Key figure: $453,000 — Estimated annual LAHA allocation Richfield was expected to receive, funded by the statewide 0.25% metro area sales tax; actual amount varies with consumer spending.
Potential benefit
If the city moves forward with LAHA-funded programs, Richfield could deploy approximately $453,000 per year toward affordable housing assistance for low- and moderate-income residents — with some existing programs focused specifically on serving BIPOC households. This represents a new, recurring revenue stream that does not require local tax increases.
Concern to consider
LAHA funds cannot cover administrative costs, meaning the city would need to fund program administration from other sources. Spending deadlines defined in state statute add pressure to act promptly, and actual annual allocations will fluctuate based on consumer spending rather than being guaranteed.
What happens next: The city was expected to be notified of its actual LAHA payment amount in September 2024 and receive its first payment in October 2024. An estimated amount was to be included in the 2025 Budget, with that process beginning in May 2024. Staff was expected to incorporate feedback from the work session into a formal program plan.
Sources: Work Session agenda (city portal) ↗
Work SessionItem 2Outcome pending
Proposed Affordable Housing Development at 6501-6525 Penn Avenue South
Developer Johnny Opara of JO Developers was scheduled to present a concept for approximately 40 units of affordable housing on HRA-owned property at 6501 Penn Avenue South and adjacent tax-forfeited property at 6525 Penn Avenue South. The proposal would target deep affordability, with some units accessible to households earning as little as 30% of the Area Median Income (AMI) — a level exceeding the city's standard 20%-at-60%-AMI inclusionary requirement. The work session was intended to gather feedback ahead of a potential Low Income Housing Tax Credit (LIHTC) application due in mid-July 2024.
final tally arrives when the city publishes the minutes
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Key figure: 40 units — Estimated number of affordable housing units to be developed
Potential benefit
If the project advances and receives financing, it could add approximately 40 deeply affordable units in the Penn Corridor — an area that has seen recent market-rate development — providing housing options for Richfield's lowest-income residents. The proposal exceeds the city's baseline affordability requirements and could include accessible units.
Concern to consider
LIHTC financing is highly competitive and rarely awarded in the first application cycle, meaning the project could take several years to materialize if it moves forward at all. The developer is anticipated to request HRA financial assistance — potentially including Tax Increment Financing (TIF), grants, or a land write-down — which would involve public subsidy decisions to be made in future meetings.
What happens next: If the developer decided to move forward after the work session, the anticipated next steps were: submission of an HRA financial assistance request (April 2024), HRA financial consultant review (April/May), HRA consideration of a Preliminary Development Agreement (June), and a LIHTC application due mid-July 2024. Funding decisions were expected in December 2024, with land use entitlements potentially sought in 2025 if financing is awarded.
Sources: Work Session agenda (city portal) ↗