Housing & Redevelopment AuthorityItem 11aApproved
Adoption of 4d(1) Tax Classification Policy for Affordable Housing
The HRA ratified a policy governing use of the state 4d(1) property tax classification, which cuts the tax rate on qualifying affordable rental properties from 1.25% to 0.25%. The policy treats 4d(1) as a 'tool of last resort,' prioritizing preservation of existing naturally occurring affordable housing (buildings of 40+ units undergoing at least $20,000/unit in rehab) over new construction, and only after other funding sources are exhausted. Current 4d(1) properties already reduce the city's tax capacity by $445,456 for Payable 2026 (0.46% of total capacity), a cost that shifts onto other taxpayers; the City Council approved the same policy June 9, and Council retains final approval authority over any project.
Passed 5-0
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Key figure: $445,456 — Reduction in the city's tax capacity for Payable 2026 caused by current 4d(1)-classified properties
Potential benefit
Establishes clear, consistent rules for when the city will use a tax-reduction tool to preserve or create affordable rental housing, protecting against ad hoc, unbudgeted tax shifts.
Concern to consider
Any use of 4d(1) reduces the city's overall tax capacity and shifts some tax burden onto other property owners, even though the policy limits its use.
What happens next: HRA staff will apply the policy when evaluating financial assistance requests that could qualify properties for 4d(1); any HRA financial decision enabling 4d(1) will still go to the City Council for final approval.
Sources: Housing & Redevelopment Authority agenda (city portal) ↗
Economic Development AuthorityItem 7aApproved
4d(1) Tax Classification Policy for Affordable Housing
The EDA ratified a policy, already approved by the City Council on June 9, 2026, governing when the City, HRA, or EDA will use the 4d(1) property tax classification — which cuts a qualifying affordable rental property's tax rate from 1.25% to 0.25% — as a last-resort tool to preserve Naturally Occurring Affordable Housing (NOAH) and, in limited cases, support new affordable construction. Existing 4d(1) properties already reduce the City's tax capacity by $445,456 (Payable 2026), a cost shifted to other Richfield taxpayers.
Passed 5-0
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Key figure: $445,456 — Current reduction in the City's tax capacity from existing 4d(1)-classified properties (Payable 2026), a cost shifted to other taxpayers
Potential benefit
Sets clear rules limiting an 80% property tax break to cases that genuinely preserve or create affordable housing, such as buildings with two-bedroom units or accessibility upgrades.
Concern to consider
Every dollar of tax capacity given up by a 4d(1) property shifts costs onto other Richfield taxpayers, and the policy allows continued, if limited, use of the tool.
What happens next: EDA staff will apply this policy when structuring future financial assistance; any resulting 4d(1)-enabling decisions will also go before the City Council for final approval.
Sources: Economic Development Authority supplement (city portal) ↗
Economic Development AuthorityItem 11aApproved
Transformation Home Loan Program Guideline Revisions
The EDA approved revisions to the Transformation Home Loan Program, which gives Richfield homeowners undertaking major remodels (over $50,000) a no-interest, forgivable loan worth 15% of project cost (up to $25,000, or 20% up to $30,000 for ADU/duplex projects). The updated guidelines cap eligibility at 200% AMI (e.g., $264,800 for a household of four) or 250% AMI for projects with ADUs, duplex conversions, or major accessibility/energy upgrades, cap standard project costs at $200,000, and limit eligibility to homes valued under about $402,000 (120% of the city's $335,689 median), which still covers roughly 91% of Richfield homes.
Passed 5-0
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Key figure: $25,000 — Maximum standard loan amount (15% of project cost) for eligible major remodeling projects
Potential benefit
Eligible homeowners can receive up to $25,000-$30,000 in no-interest, eventually-forgiven loan funds to remodel small or outdated homes.
Concern to consider
New income and cost caps mean some higher-income households or larger renovation projects will no longer qualify for assistance.
What happens next: Staff will finalize updated program guidelines and application materials ahead of the December 1, 2026 to January 31, 2027 application window for the 2027 loan cycle.
Sources: Economic Development Authority supplement (city portal) ↗
Economic Development AuthorityItem 14Approved
Approval of EDA Claims
The EDA approved payment of its outstanding claims for the period, a routine financial action authorizing previously incurred expenses to be paid.
Passed 5-0
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Potential benefit
Ensures vendors and program obligations are paid on time.
Concern to consider
None; this is a routine procedural action.
What happens next: Approved claims are processed for payment by the finance department.
Sources: Economic Development Authority supplement (city portal) ↗