Adopt Tax Levies in Support of Housing Strategies

What is an HRA levy?

Under Minnesota Statutes 469.033, Subdivision 6, an HRA has the authority to levy a special tax upon all taxable property within the City/county boundaries specifically to fund the purposes of the housing plan within that City. The maximum HRA levy may not exceed .0185 percent of taxable market value. Port Authorities may requires cities to levy up to 0.01813 percent, and Economic Development Authorities may request cities for a levy of up to 0.01813 percent.

How do HRA levies work?

As the county treasurer collects the tax it is accumulated and kept in a separate fund controlled by the HRA. The money in the fund is turned over to the HRA at the same time and in the same manner that the general tax is collected for each taxing jurisdiction.

The money collected must be spent according to boundaries set up by the Minnesota State Statutes 469.001 to 469.047 and only through the authority of the HRA Board.

What type of programs can be created with HRA levy funds?

Funds from an HRA levy can be used for numerous things relating to housing as long as they fit within the boundaries set forth by the State of Minnesota. If a city/county is successful in creating an HRA levy, it can make available a dedicated and continuous source of funding to be used on housing issues such as the creation of a housing trust fund.

Levy funds can be used to supplement existing housing programs, create new programs, support administration of a housing program, or provide funds for maintaining quality housing. Click here for more ways levy funds can be used.

How to create an HRA

Creating an HRA can give a city or county much needed power and direction when it comes to shaping the housing outlook for a community. A municipality that has an HRA would have more capacity to set the direction and funding for the preservation and production of a full range of housing choices in their community.

The process to create an HRA can be time consuming and requires public notice throughout the development and implementation process. It is important to establish the goals of the HRA prior to beginning the process. Having established and outlined what the goals are will prevent confusion when the time comes to present the ideas to public officials and residents. For a more detailed outline of how to create an HRA click here. For a sample of HRA formation and organizing documents click here [PDF].

How do HRA levies fund affordable housing in a region?

The unique aspect about HRA levy funds is that they can be used on a wide variety of housing projects, programs, or administrational needs. Cities and counties can levy funds to preserve the quality of rental units in their communities; rental properties are essential to maintaining a wide variety of housing options. Funds can also be put towards programs such as down payment assistance or rehabilitation loans for single-family ownership homes as well.

Related Case Studies

Dakota County Community Development Agency (CDA) Housing Levy

Dakota County CDA has experienced great success by using a variety of methods to build and sustain affordable housing...