Request for Committee Action
A briefing memo explaining the purpose, background, and impact of the requested action.
Preliminary Reservation of Additional Year 2025 9% Low Income Housing Tax Credits (RCA-2025-00148)
ORIGINATING DEPARTMENT
To Committee(s)
| # | Committee Name | Meeting Date |
|---|---|---|
| 1 | Business, Housing & Zoning Committee | February 4, 2025 |
Action Item(s)
| # | File Type | Subcategory | Item Description |
|---|---|---|---|
| 1 | Action | Housing | Approving an additional $51,869 in Year 2025 9% Housing Tax Credits (HTC) for the 2116 Nicollet Housing project located at 2116 Nicollet Ave S. |
Ward / Neighborhood / Address
| # | Ward | Neighborhood | Address |
|---|---|---|---|
| 1. | Ward 10 | Whittier | 2116 Nicollet Ave S, Minneapolis, MN |
Background Analysis
Every year, CPED administers an allocation of 9% Low Income Housing Tax Credits (HTC), acting on behalf of the Minneapolis/Saint Paul Housing Finance Board. The HTC program provides a reduction in federal tax liability to investors in qualified low-income rental housing developments that comply with federally-imposed rent and income restrictions for a minimum of 30 years.
On November 19, 2024, the Business, Housing, and Zoning Committee approved an allocation of $1,504,185 in Year 2025 9% HTC for the 2116 Nicollet housing project. After publication of the Committee agenda, staff received notice that the federal government increased the 9% HTC per capital multiplier, resulting in an increase of $51,869 in the amount of available 2025 9% HTC for the City of Minneapolis. Staff recommend allocating this additional $51,869 in credits to the 2116 Nicollet project, for a total allocation of $1,556,054 in Year 2025 HTC. The 2116 Nicollet project will need to apply for additional 9% HTCs to close its remaining funding gap, and this additional award will lessen the amount of additional credits needed.
This tax credit reservation is contingent upon the selected project meeting certain application and program requirements and deadlines. If these requirements are not met, staff will review projects that were not selected to determine the next project best able to receive a tax credit allocation and complete a carryover. The project data worksheet for the 2116 Nicollet project is attached to this report.
The tax credit amounts shown are based on estimates only. Final credit amounts are determined at the time the commitment is entered into or at the time the building is placed in service. In the unlikely event that credits are not allocated or are returned, they will be distributed among feasible, eligible projects as scored in the attachments, and any remaining credits after this step may be returned to Minnesota Housing.
FISCAL NOTE
- No fiscal impact anticipated