If you own properties in Minneapolis, you could be eligible for a program that saves you money and provides energy efficiency upgrades to your buildings. It's called the 4(D) Affordable Housing Incentive Program.
It offers property tax reductions and energy efficiency upgrades to qualified rental property owners. You could receive up to a 40% tax rate reduction if you agree to keep 20% or more of your rental units affordable.
Owners of market-rate rental properties must meet the following criteria:
At least 20% of the rental units in a building are affordable to households whose family income is at or below 60% of Area Median Income.Existing tenants in units that have program compliant rents do not need to be income qualified.
Going forward, income qualification for tenants is determined upon initial occupancy. Thereafter, increased incomes of tenants in affordable units will not violate the program requirements.
Tier 1 or 2 rental license with no rental housing license revocations or outstanding housing orders.
Buildings can include units with owner occupants, but only rental units are eligible for 4d tax status.
Building does not already qualify for LIRC tax status in Minnesota
Market rate new construction projects with at least 20% affordable units can receive up to a $100,000 incentive if pursuing ENERGY STAR, Zero Energy Ready, or Passive House Institute US (PHIUS) certification.
Property owners must also make the following 10-year affordability declaration on their property:
As units turn over, new tenants must have household incomes at or below 60% of AMI. The property owner must verify new tenant incomes and report them to the City on an annual basis. Building owners do not need to verify incomes of existing tenants.
Rent increases for tenants in affordable units are limited to 6% or less annually, unless the unit is turning over to a new tenant
Property owner or manager commits to accepting tenant based assistance (e.g. Section 8 vouchers) and agrees to affirmatively market vacancies by advertising units on HousingLink.org.
If a building is sold, declarations run with the property.
Property owners who enroll in the program can also receive funding for energy efficiency projects, with a 90% match on projects that cost up to $50,000.
Applications for the 4(D) program are now being accepted and will be reviewed on a first come first serve basis. Housing Hub can help you determine if your property qualifies and even submit your application for you! If you are interested, please contact our COO Ben Herding at 651-488-2437 Ext. 109.