NORTH MANKATO — North Mankato hopes a new housing trust fund will allow the city to build up funds for emergency rental assistance, preserving existing affordable housing and developing additional affordable housing stock.
North Mankato and other cities are beginning to get state affordable housing funds, approved in last year’s legislative session.
The funding, aimed at improving affordable housing statewide, was part of the 2023 housing finance and tax bills.
It provides direct funding to cities with populations of 10,000 or more to help in the development and preservation of affordable housing.
The Minnesota Department of Revenue has certified that North Mankato will get a total of $132,000 by the end of this year.
The city has been told by state officials that funding will continue on a biannual basis for the foreseeable future.
City staff looked at a variety of ways the funds could be used and recommended the city create a Local Housing Trust Fund.
City Planner Matt Lassonde said that without a trust set up the city is under pressure to spend the money within a few years of getting it, or lose it.
“We need to have it spent after four years or have it in a trust fund where it can build up.”
Mayor Scott Carlson liked the idea of creating a trust.
“It secures the funds and lets us accumulate the funds if we have a bigger project.”
Requirements for how the funds can be spent are the same whether the trust fund is created or not.
Staff said having the trust is the best way to build up funds while the city determines the best way to use the money for housing.
The city of Mankato, along with at least a dozen other Minnesota cities have or are establishing a housing trust fund.
Projects are focused on providing affordable housing for owner-occupied households with income at 80% or less of the median income or affordable rentals for those making 50% or less of the median income.
The city isn’t currently working on any affordable housing projects, but staff has been meeting with housing advocates on options for the best ways to use the funds.